exv4w1



 








Exhibit 4.1




CEC ENTERTAINMENT, INC.

NON-EMPLOYEE DIRECTORS RESTRICTED STOCK PLAN




     The CEC Entertainment, Inc. Non-Employee Directors Restricted Stock Plan (hereinafter called
the “Plan” as amended, from time to time) was adopted by the board of directors of CEC
Entertainment, Inc., a Kansas corporation (hereinafter called the “Company”), on March 28, 2005 and
will be effective upon its approval by the stockholders of the Company (the “Effective Date”).



Article 1




PURPOSE




     The purpose of the Plan is to attract, retain and award the services of the non-employee
directors of the Company and to provide such persons with a proprietary interest in the Company
through the granting of restricted stock that will further align their interests with the interests
of the Company’s other stockholders. Upon the approval of the Plan by the stockholders of the
Company, the Company intends to use the Plan as the primary means through which the Company issues
equity to its non-employee directors for their service to the Company as directors and to
discontinue issuing stock options to such directors pursuant to the Company’s Non-Employee
Directors Stock Option Plan.



Article 2




DEFINITIONS




     For the purpose of the Plan, unless the context requires otherwise, the following terms shall
have the meanings indicated:



     2.1 “Board” means the board of directors of the Company.



     2.2 “Change of Control” means any of the following: (i) any consolidation, merger or share
exchange of the Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company’s Common Stock would be converted into cash, securities or
other property, other than a consolidation, merger or share exchange of the Company in which the
holders of the Company’s Common Stock immediately prior to such transaction have the same
proportionate ownership of Common Stock of the surviving corporation immediately after such
transaction; (ii) any sale, lease, exchange or other transfer (excluding transfer by way of pledge
or hypothecation) in one transaction or a series of related transactions, of all or substantially
all of the assets of the Company; (iii) the stockholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company; (iv) the cessation of control (by
virtue of their not constituting a majority of directors) of the Board by the individuals (the
“Continuing Directors”) who were members of the Board for the immediately preceding two (2) years
(unless the election, or the nomination for election by the Company’s stockholders, of each new
director was approved by a vote of at least two-thirds (2/3)



 









 




of the directors then still in office who were directors at the beginning of such a period);
(v) the acquisition of beneficial ownership (within the meaning of Rule 13d-3 under the 1934 Act)
of an aggregate of 30% of the voting power of the Company’s outstanding voting securities by any
person or group (as such term is used in Rule 13d-5 under the 1934 Act) who beneficially owned less
than 15% of the voting power of the Company’s outstanding voting securities on the date of this
Plan, or the acquisition of beneficial ownership of an additional 15% of the voting power of the
Company’s outstanding voting securities by any person or group who beneficially owned at least 15%
of the voting power of the Company’s outstanding voting securities on the date of this Plan;
provided, however, that notwithstanding the foregoing, an acquisition shall not
constitute a Change of Control hereunder if the acquiror is (A) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company and acting in such capacity, (B) a
Subsidiary of the Company or a corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their ownership of voting securities of the
Company or (C) any other person whose acquisition of shares of voting securities is approved in
advance by a majority of the Continuing Directors; or (vi) in a Title 11 bankruptcy proceeding, the
appointment of a trustee or the conversion of a case involving the Company to a case under Chapter
7.




     2.3 “Code” means the Internal Revenue Code of 1986, as amended.



     2.4 “Committee” means the committee designated to administer the Plan in accordance with
Article 3 of this Plan.



     2.5 “Common Stock” means the common stock of the Company, par value $ 0.10 per share, which
the Company is currently authorized to issue or may in the future be authorized to issue.



     2.6 “Date of Grant” means the effective date on which a Restricted Stock Award is made to an
Eligible Director as set forth in the applicable Restricted Stock Agreement.



     2.7 “Director” means a member of the Board.



     2.8 “Eligible Director” means a Non-employee Director who was previously appointed or elected
to the Board and who continues to serve in such capacity at the time for granting Restricted Stock
Awards pursuant to Section 6.1.



     2.9 “Employee” means a common law employee, including an employee who is also an Officer or
Director, (as defined in accordance with the Regulations and Revenue Rulings then applicable under
Section 3401(c) of the Code) of the Company or any Subsidiary. “Employee” does not include
Non-employee Directors.



     2.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor
statute. Reference in the Plan to any section of the Exchange Act shall be deemed to include any
amendments or successor provisions to such section and rules and regulations relating to such
section.



 









 





     2.11 “Fair Market Value” of a share of Common Stock means the average of the closing prices of
the Common Stock as reported by the New York Stock Exchange for the five trading day period ending
on and including the date of a Restricted Stock Award.



     2.12 “Officer” means a person who is an “officer” of the Company or a Subsidiary within the
meaning of Section 16 of the Exchange Act (whether or not the Company is subject to the
requirements of the Exchange Act).



     2.13 “Non-employee Director” means a member of the Board who is not an Employee.



     2.14 “Removal” means removal of a Non-employee Director from the Board, with or without cause,
in accordance with the Company’s Certificate of Incorporation, Bylaws or Kansas General Corporation
Code.



     2.15 “Restriction Period” means the period during which the Common Stock under a Restricted
Stock Award is nontransferable and subject to “Forfeiture Restrictions” as defined in Section 6.2
of the Plan and set forth in any related Restricted Stock Agreement.



     2.16 “Restricted Stock” means shares of Common Stock issued to an Eligible Director pursuant
to Section 6.1 of this Plan which are subject to restrictions or limitations set forth in this Plan
and in any related Restricted Stock Agreement.



     2.17 “Restricted Stock Agreement” means the written agreement evidencing the grant of a
Restricted Stock Award executed by the Company and the Eligible Director, including any amendments
thereto. Each Restricted Stock Agreement shall be subject to the terms and conditions of the Plan.



     2.18 “Restricted Stock Award” means an award granted under Section 6.1 of this Plan of shares
of Common Stock issued to an Eligible Director.



     2.19 “Securities Act” means the Securities Act of 1933, as amended, and any successor statute.
Reference in the Plan to any section of the Securities Act shall be deemed to include any
amendments or successor provisions to such section and any rules and regulations relating to such
section.



     2.20 “Subsidiary” means (i) any corporation in an unbroken chain of corporations beginning
with the Company, if each of the corporations other than the last corporation in the unbroken chain
owns stock possessing a majority of the total combined voting power of all classes of stock in one
of the other corporations in the chain, (ii) any limited partnership, if the Company or any
corporation described in item (i) above owns a majority of the general partnership interest and a
majority of the limited partnership interests entitled to vote on the removal and replacement of
the general partner, and (iii) any partnership or limited liability company, if the partners or
members thereof are composed only of the Company, any corporation listed in item (i) above or any
limited partnership listed in item (ii) above. “Subsidiaries” means more than one of any such
corporations, limited partnerships, partnerships or limited liability companies.



 









 





     2.21 “Termination of Service” occurs when an Eligible Director shall cease to serve as a
Non-employee Director for any reason.



Article 3




ADMINISTRATION




     The Plan shall be administered by the Compensation Committee of the Board unless and until
such time as the Board appoints other members of the Board to serve as the Committee.



     Subject to the express provisions of the Plan, the Committee shall have power and authorities
which are exclusively ministerial in nature, including the authority to construe and interpret the
Plan, to define the terms used in the Plan, to prescribe, amend, and rescind rules and regulations
relating to the administration of the Plan and to make all other determinations necessary or
advisable for the administration of the Plan. The determination of the Committee on all such
matters referred to in the Plan shall be conclusive. No member of the Committee shall be liable
for any action, failure to act, determination or interpretation made in good faith with respect to
the Plan or any transaction under the Plan.



Article 4




ELIGIBILITY




     Non-employee Directors, including Non-employee Directors who are members of the Committee,
shall be eligible to participate in the Plan. Each Eligible Director shall, if required by the
Company, enter into an agreement with the Company in such form as the Committee shall determine
consistent with the provisions of the Plan for purposes of implementing the Plan or effecting its
purposes. In the event of any inconsistency between the provisions of the Plan and any such
agreement, the provisions of the Plan shall govern.



Article 5




SHARES SUBJECT TO THE PLAN




     Subject to adjustment as provided herein, the maximum number of shares of Common Stock that
may be issued pursuant to Restricted Stock Awards granted under the Plan is 50,000 shares. Shares
of Common Stock previously subject to Restricted Stock Awards hereunder which are forfeited or
cancelled may be reissued pursuant to Restricted Stock Awards.



Article 6




GRANT OF RESTRICTED STOCK AWARD




     6.1 Awards. Following the Effective Date, on every fifth Business Day in January each
Eligible Director shall be granted a Restricted Stock Award for the number of shares of Common
Stock having a Fair Market Value as of the Date of Grant equal to $75,000.00 (the “Annual Grant”).
If a person first becomes an Eligible Director between the date of Annual Grants, such Eligible
Director shall be granted a Restricted Stock Award for the number of



 









 




shares of Common Stock having the Fair Market Value as of the date he or she becomes an
Eligible Director equal to $75,000.00 multiplied by a fraction the numerator of which is the number
of days from the date such person becomes an Eligible Director until the date of the next Annual
Grant and the denominator of which is 365. For the purposes of the Plan, the term “Business Day”
shall mean a day on which the New York Stock Exchange is open for business and is conducting normal
trading activity.




     6.2 Forfeiture Restrictions. Shares of Common Stock that are the subject of a
Restricted Stock Award shall be subject to restrictions on disposition by the Eligible Director and
to an obligation of the Eligible Director to forfeit and surrender the shares to the Company under
certain circumstances (the “Forfeiture Restrictions”). The Forfeiture Restrictions shall be
determined by the Committee, in its sole discretion, and the Committee may provide that the
Forfeiture Restrictions shall lapse on the passage of time or the occurrence of such other event or
events determined to be appropriate by the Committee. The Forfeiture Restrictions applicable to a
particular Restricted Stock Award (which may differ from any other such Restricted Stock Award)
shall be stated in the Restricted Stock Agreement.



     6.3 Vesting. The Forfeiture Restrictions referred to in Section 6.2 above for any
particular Restricted Stock Award shall include the following vesting schedule:



	 	 	 
	 	 	Portion of Shares That
	 	 	Are Vested On or After
	Anniversary of	 	Such Anniversary and
	Date of Grant	 	Before Next Anniversary
	First	 	25%
	Second	 	50%
	Third	 	75%
	Fourth	 	100%






     If an Eligible Director’s membership on the Board is terminated pursuant to his or her
(i) Removal, (ii) not being re-nominated for Board membership for the next succeeding period, (iii)
being nominated for Board membership for the next succeeding period but not being reelected for
Board membership for such period by the Company’s stockholders, or (iv) resignation from the Board,
in any such case, prior to the actual vesting or lapse of any other Forfeiture Restrictions, if
any, applicable to such Restricted Stock Award, then such unvested Restricted Stock shall
immediately be cancelled and the Eligible Director (and such Eligible Directors estate or legal
representative) shall forfeit any rights or interests in and with respect to any such unvested
Restricted Stock. If an Eligible Director ceases to be a Director due to death, then all of such
Eligible Directors Restricted Stock shall immediately vest in full.



     Furthermore, if an Eligible Director ceases to be a Director because of voluntary retirement
after a lengthy period of service on the Board or because of health reasons, the Eligible Directors
may, in their sole discretion, take action, which action would exclude the participation of the
affected Eligible Director, to vest in full the affected Eligible Director’s Restricted Stock that
was awarded at least one year prior to the affected Eligible Director’s cessation of Board service.



 









 





     6.4 Restricted Stock Awards. Shares of Common Stock awarded pursuant to a Restricted
Stock Award shall be represented by a stock certificate registered in the name of the Eligible
Director of such Restricted Stock Award or by a book entry account with the Company’s transfer
agent. The Eligible Director shall have the right to receive dividends with respect to the shares
of Common Stock subject to a Restricted Stock Award, to vote the shares of Common Stock subject
thereto and to enjoy all other stockholder rights with respect to the shares of Common Stock
subject thereto, except that, unless provided otherwise in the Restricted Stock Agreement, (i) the
Eligible Director shall not be entitled to delivery of the certificate evidencing the shares of
Common Stock covered by a Restricted Stock Award until the Forfeiture Restrictions have expired,
(ii) the Company or an escrow agent shall retain custody of the certificate evidencing the shares
of Common Stock (or such shares shall be held in a book entry account with the Company’s transfer
agent) until the Forfeiture Restrictions have expired, (iii) the Eligible Director may not sell,
transfer, pledge, exchange, hypothecate or otherwise dispose of the shares of Common Stock until
the Forfeiture Restrictions have expired, and (iv) a breach of the terms and conditions set forth
in the Restricted Stock Agreement shall cause a forfeiture of the Restricted Stock Award. At the
time of such Restricted Stock Award, the Committee may, in its sole discretion, prescribe
additional terms, conditions or restrictions relating to the Restricted Stock Award, including
rules pertaining to the Eligible Director’s Termination of Service prior to expiration of the
Forfeiture Restrictions. Such additional terms, conditions or restrictions shall also be set forth
in the Restricted Stock Agreement made in connection with the Restricted Stock Award.



     6.5 Rights and Obligations of Eligible Director. One or more stock certificates
representing shares of Common Stock, free of Forfeiture Restrictions, shall be delivered to the
Eligible Director promptly after, and only after, the Forfeiture Restrictions have expired and the
Eligible Director has satisfied all applicable federal, state and local income tax withholding
requirements, if any. Each Restricted Stock Agreement shall require that (i) the Eligible Director,
by his or her acceptance of the Restricted Stock Award, shall irrevocably grant to the Company a
power of attorney to transfer any shares so forfeited to the Company and agrees to execute any
documents requested by the Company in connection with such forfeiture and transfer, and (ii) such
provisions regarding transfers of forfeited shares of Common Stock shall be specifically
performable by the Company in a court of equity or law.



     6.6 Restriction Period. The Restriction Period for a Restricted Stock Award shall
commence on the Date of Grant of the Restricted Stock Award and, unless otherwise established by
the Committee and stated in the Restricted Stock Agreement, shall expire upon satisfaction of the
conditions set forth in the Restricted Stock Agreement pursuant to which the Forfeiture
Restrictions will lapse.



     6.7 Securities Restrictions. The Committee may impose other conditions on any shares
of Common Stock subject to a Restricted Stock Award as it may deem advisable, including (i)
restrictions under applicable state or federal securities laws, and (ii) the requirements of any
stock exchange or national market system upon which shares of Common Stock are then listed or
quoted.



     6.8 Payment for Restricted Stock. The Committee shall determine the amount and form
of any payment for shares of Common Stock received pursuant to a Restricted Stock



 









 




Award; provided, that in the absence of such a determination, the Eligible Director shall not
be required to make any payment for shares of Common Stock received pursuant to a Restricted Stock
Award, except to the extent otherwise required by law.




     6.9 Withholding Taxes. The Committee may establish such rules and procedures as it
considers desirable in order to satisfy any obligation of the Company to withhold applicable
federal, state and local income taxes with respect to the lapse of Forfeiture Restrictions
applicable to Restricted Stock Awards. Prior to delivery of shares of Common Stock upon the lapse
of Forfeitures Restrictions applicable to a Restricted Stock Award, the Eligible Director shall pay
or make adequate provision acceptable to the Committee for the satisfaction of all tax withholding
obligations of the Company, if any.



Article 7




AMENDMENT OR DISCONTINUANCE




     Subject to the limitations set forth in this Article 7, the Board may at any time and from
time to time alter, amend, revise, suspend, or discontinue the Plan in whole or in part; provided,
however, that any amendment to the Plan must be approved by the stockholders of the Company if the
amendment would (a) materially increase the aggregate number of shares of Common Stock which may be
issued under the Plan, (b) materially modify the requirements as to eligibility for participation
in the Plan, or (c) materially increase the benefits accruing to Eligible Directors under the Plan.
Any such amendment shall, to the extent deemed necessary by the Committee, be applicable to any
outstanding Restricted Stock Awards theretofore granted under the Plan, notwithstanding any
contrary provisions contained in any Restricted Stock Agreement. In the event of any such
amendment to the Plan, the holder of any Restricted Stock Awards outstanding under the Plan shall,
upon request of the Committee and as a condition to the applicable lapse of Forfeiture Restrictions
thereon, execute a conforming amendment in the form prescribed by the Committee to any Restricted
Stock Agreement relating thereto. Notwithstanding anything contained in this Plan to the contrary,
unless required by law, no action contemplated or permitted by this Article 7 shall adversely
affect any rights of Eligible Directors or obligations of the Company to Eligible Directors with
respect to any Restricted Stock Awards theretofore granted under the Plan without the consent of
the affected Eligible Director.



Article 8




TERM




     The Plan shall be effective as of the date that the Plan is approved by the stockholders of
the Company. Unless sooner terminated by action of the Board, the Plan will terminate on May 1,
2020, but Restricted Stock Awards granted before that date will continue to be effective in
accordance with the terms and conditions of the respective Restricted Stock Agreement.



 









 





Article 9




CAPITAL ADJUSTMENTS




     If at any time while the Plan is in effect, or Restricted Stock Awards are outstanding, there
shall be any increase or decrease in the number of issued and outstanding shares of Common Stock
resulting from (1) the declaration or payment of a stock dividend, (2) any recapitalization
resulting in a stock split-up, combination, or exchange of shares of Common Stock, or (3) other
increase or decrease in such shares of Common Stock effected without receipt of consideration by
the Company, then and in such event:




     (a) An appropriate adjustment shall be made in the maximum number of shares of Common
Stock then subject to being awarded under the Plan and in the maximum number of shares of
Common Stock that may be awarded to an Eligible Director to the end that the same proportion
of the Company’s issued and outstanding shares of Common Stock shall continue to be subject
to being so awarded.




     (b) Appropriate adjustments shall be made in the number of outstanding shares of
Restricted Stock with respect to which Forfeiture Restrictions have not yet lapsed prior to
any such change.



     Except as otherwise expressly provided herein, the issuance by the Company of shares of its
capital stock of any class, or securities convertible into shares of capital stock of any class,
either in connection with direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall be made with
respect to the number of outstanding shares of Restricted Stock.



     Upon the occurrence of each event requiring an adjustment with respect to any Restricted Stock
Award, the Company shall communicate by reasonable means intended to reach each affected Eligible
Director its computation of such adjustment which shall be conclusive and shall be binding upon
each such Eligible Director.



Article 10




RECAPITALIZATION, MERGER AND

CONSOLIDATION; CHANGE IN CONTROL




     10.1 The existence of this Plan and Restricted Stock Awards granted hereunder shall not affect
in any way the right or power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital
structure and its business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or preference stocks ranking prior to or otherwise affecting the Common Stock
or the rights thereof (or any rights, options, or warrants to purchase same), or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or otherwise.



 









 





     10.2 Subject to any required action by the stockholders, if the Company shall be the surviving
or resulting corporation in any merger, consolidation or share exchange, any Restricted Stock
Awards granted hereunder shall pertain to and apply to the securities or rights (including cash,
property, or assets) to which a holder of the number of shares of Common Stock subject to the
Restricted Stock Awards would have been entitled.



     10.3 In the event of any merger, consolidation or share exchange pursuant to which the Company
is not the surviving or resulting corporation, there shall be substituted for each share of Common
Stock subject to the outstanding Restricted Stock Awards, that number of shares of each class of
stock or other securities or that amount of cash, property, or assets of the surviving, resulting
or consolidated company which were distributed or distributable to the stockholders of the Company
in respect to each share of Common Stock held by them, such outstanding Restricted Stock Awards to
be thereafter applicable to such stock, securities, cash, or property in accordance with their
terms. Notwithstanding the foregoing, however, all such Restricted Stock Awards may be canceled by
the Company as of the effective date of any such reorganization, merger, consolidation, or share
exchange by giving notice to each holder thereof or his personal representative of its intention to
do so and by permitting the purchase by the Company during the thirty (30) day period next
preceding such effective date of all of the shares of Common Stock subject to such outstanding
Restricted Stock Awards at a price equal to the Fair Market Value of such shares on the date of
purchase.



     10.4 In the event of a Change of Control, then, notwithstanding any other provision in this
Plan to the contrary, all Restricted Stock Awards outstanding shall thereupon automatically be
vested. The determination of the Committee that any of the foregoing conditions has been met shall
be binding and conclusive on all parties.



Article 11




LIQUIDATION OR DISSOLUTION




     In case the Company shall, at any time while any Restricted Stock Award under this Plan shall
be in force and remain unexpired, (i) sell all or substantially all of its property, or (ii)
dissolve, liquidate, or wind up its affairs, then each Eligible Director shall be thereafter
entitled to receive, in lieu of each share of Common Stock of the Company in which the Eligible
Director is vested, pursuant to the terms of the Eligible Director’s Restricted Stock Agreement, as
of the date the Company sells all or substantially all of its property, or dissolves, liquidates or
winds up its affairs, the same kind and amount of any securities or assets as may be issuable,
distributable, or payable upon any such sale, dissolution, liquidation, or winding up with respect
to each share of Common Stock of the Company. Notwithstanding the foregoing, the Committee may, in
its sole and absolute discretion accelerate the vesting of any Eligible Director’s Restricted Stock
Award in connection with any sale, dissolution, liquidation, or winding up contemplated in this
Article 11.



 









 





Article 12




MISCELLANEOUS PROVISIONS




     12.1 Investment Intent. The Company may require that there be presented to and filed
with it by any Eligible Director under the Plan, such evidence as it may deem necessary to
establish that the shares of Common Stock to be received from a Restricted Stock Award are being
acquired for investment and not with a view to their distribution.



     12.2 No Right to Continued Board Membership. The grant of Restricted Stock shall not
be construed as giving an Eligible Director the right to be retained as a Director of the Company.
The Board may at any time fail or refuse to nominate an Eligible Director for reelection to the
Board, the stockholders of the Company may at any election fail or refuse to reelect any Eligible
Director to the Board or an Eligible Director may be subject to Removal, in each case, free from
any liability or claim under the Plan or any Restricted Stock Award except as expressly set forth
herein.



     12.3 Indemnification of Board and Committee. No member of the Board or the Committee,
nor any Officer or Employee acting on behalf of the Board or the Committee, shall be personally
liable for any action, determination, or interpretation taken or made in good faith with respect to
the Plan, and all members of the Board or the Committee and each and any Officer or Employee acting
on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the
Company in respect of any such action, determination, or interpretation.



     12.4 Effect of the Plan. Neither the adoption of this Plan nor any action of the
Board or the Committee shall be deemed to give any person any right to be granted a Restricted
Stock Award or any other rights except as may be evidenced by a Restricted Stock Agreement, or any
amendment thereto, duly authorized by the Committee and executed on behalf of the Company, and then
only to the extent and upon the terms and conditions expressly set forth therein.



     12.5 Severability And Reformation. The Company intends all provisions of the Plan to
be enforced to the fullest extent permitted by law. Accordingly, should a court of competent
jurisdiction determine that the scope of any provision of the Plan is too broad to be enforced as
written, the court should reform the provision to such narrower scope as it determines to be
enforceable. If, however, any provision of the Plan is held to be wholly illegal, invalid, or
unenforceable under present or future law, such provision shall be fully severable and severed, and
the Plan shall be construed and enforced as if such illegal, invalid, or unenforceable provision
were never a part hereof, and the remaining provisions of the Plan shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its
severance.



     12.6 Governing Law. The Plan shall be construed and interpreted in accordance with
the laws of the State of Kansas.



     12.7 Compliance With Other Laws and Regulations. Notwithstanding anything contained
herein to the contrary, the Company shall not be required to sell or issue shares of



 









 




Common Stock under any Restricted Stock Award if the issuance thereof would constitute a
violation by the Eligible Director or the Company of any provisions of any law or regulation of any
governmental authority or any national securities exchange or inter-dealer quotation system or
other forum in which shares of Common Stock are quoted or traded (including without limitation
Section 16 of the Exchange Act); and, as a condition of any sale or issuance of shares of Common
Stock under a Restricted Stock Award, the Committee may require such agreements or undertakings, if
any, as the Committee may deem necessary or advisable to assure compliance with any such law or
regulation. The Plan, the grant and exercise of Restricted Stock Awards hereunder, and the
obligation of the Company to sell and deliver shares of Common Stock, shall be subject to all
applicable federal and state laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required.




     12.8 Legend. Each certificate representing shares of Restricted Stock issued to a
Eligible Director shall bear the following legend, or a similar legend deemed by the Company to
constitute an appropriate notice of the provisions hereof (any such certificate not having such
legend shall be surrendered upon demand by the Company and so endorsed):



          On the face of the certificate:





“Transfer of this stock is restricted in accordance with
conditions printed on the reverse of this certificate.”



          On the reverse:




“The shares of stock evidenced by this certificate are
subject to and transferable only in accordance with that
certain CEC Entertainment, Inc. Non-Employee Directors
Restricted Stock Plan, a copy of which is on file at the
principal office of the Company in Irving, Texas. No
transfer or pledge of the shares evidenced hereby may be
made except in accordance with and subject to the provisions
of said Plan. By acceptance of this certificate, any
holder, transferee or pledgee hereof agrees to be bound by
all of the provisions of said Plan.”



     The following legend shall be inserted on a certificate evidencing Common Stock issued under
the Plan if the shares were not issued in a transaction registered under the applicable federal and
state securities laws:




“Shares of stock represented by this certificate have been
acquired by the holder for investment and not for resale,
transfer or distribution, have been issued pursuant to
exemptions from the registration requirements of applicable
state and federal securities laws, and may not be offered
for sale, sold or transferred other than pursuant to
effective registration under such laws, or in transactions
otherwise in compliance with such laws, and upon evidence
satisfactory



 









 







to the Company of compliance with such laws, as to which the
Company may rely upon an opinion of counsel satisfactory to
the Company.”



     A copy of this Plan shall be kept on file in the principal office of the Company in Irving,
Texas.