Document:

ex10-3.htm

EXHIBIT 10.3

 

 

CEC ENTERTAINMENT, INC.

AMENDED AND RESTATED 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, became effective in 2005 as of
the date the Plan was approved by the stockholders of the Company, and was amended by the Board of Directors of the Company on April 17, 2007 and became effective in 2007 as of the date the amendments to the Plan were approved by the stockholders of the Company (the “Amendment Effective Date”). Further amendments to the Plan were approved by the Board of Directors of the Company on April 15, 2008 and became effective in 2008 as of the date the amendments to the Plan were approved by the stockholders
of the Company.  The amendments to the Plan reflected in this amendment and restatement do not require stockholder approval and, accordingly, became effective on May 8, 2009, the date such amendments were approved by the Compensation Committee of the Board of Directors of the Company.

ARTICLE 1

PURPOSE

The purpose of the Plan is to attract, retain and reward 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 will 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 Exchange Act, as defined in Section 2.10) 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 Exchange Act, as defined in Section 2.10) 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.

 

  

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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 document evidencing the grant of a Restricted Stock Award executed by the Company, including any amendments thereto. Each Restricted Stock Agreement shall be subject to the terms and conditions of the Plan and need not be executed by the Eligible Director receiving the Restricted
Stock Award pursuant to the Restricted Stock Agreement.

 

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 interests 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

 

 

  

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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 165,000 shares. Shares of Common Stock previously subject to Restricted Stock Awards hereunder which are forfeited or cancelled or are withheld for payment of any applicable
employment taxes and/or withholding obligations may be reissued pursuant to Restricted Stock Awards.

 

ARTICLE 6

GRANT OF RESTRICTED STOCK AWARD

6.1 Awards. Following the Amendment 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 $100,000.00 (the
“Annual Grant”). In addition, on the fifth Business Day following the Amendment Effective Date, each Eligible Director who received the 2007 Annual Grant shall be granted an additional Restricted Stock Award for the number of shares of Common Stock having a Fair Market Value as of the Date of Grant equal to $25,000.00. If a person first becomes an Eligible Director between the date of Annual Grants and after the Amendment Effective Date, such 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 he or she becomes an Eligible Director equal to $100,000.00 (or, if the date on which the person first becomes an Eligible Director is after the 2007 Annual Grant but prior to the fifth Business Day following the Amendment Effective Date, $75,000.00 and, on the fifth Business Day following the Amendment Effective Date, $25,000.00) 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 

 

  

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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:

 

	  	  	  
	
Anniversary of

Date of Grant
	
  
	
Portion of Shares That

Are Vested On or After

Such Anniversary and

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 Director’s 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 or the Company’s
transfer agent.  To the extent and on the terms and conditions authorized by the Committee and set forth in the Award Agreement, 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, except as otherwise provided herein, 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.  The right to vote and receive dividends on the shares of Common Stock shall be subject to such limitations and restrictions as may be determined by the Committee and set forth in the
Award Agreement (including, without limitation, whether any dividends that are authorized to be paid under the Restricted Stock Award shall be paid to the Eligible Director at the time the dividends are declared on the shares of Common Stock or held in escrow and paid to the Eligible Director at the time the related shares of Common Stock subject to the Restricted Stock Award vest).  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.

 

 

  

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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 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 Forfeiture 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, (c) materially increase the benefits accruing to Eligible Directors under the Plan, or (d) otherwise require stockholder approval due to the requirements of any securities exchange or inter-dealer quotation system on which the Common Stock is listed or traded or in order for the Plan or Restricted Stock Awards to continue to comply
with sections of the Code or any other laws applicable to Restricted Stock Awards made under this 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.

 

 

  

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ARTICLE 8

TERM

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 

 

 

  

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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 provisionor by its severance.

 

 

  

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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 an 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 and the related  Restricted   Stock  Agreement,
copies of which are 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 and Agreement. By acceptance of this certificate, any holder, transferee or pledgee hereof agrees to be bound by all of the provisions of said Plan and Agreement.”

 

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.

 

 

  

8ex10-4.htm

EXHIBIT 10.4

 

FORM OF RESTRICTED STOCK AGREEMENT

 

CEC ENTERTAINMENT, INC.

AMENDED AND RESTATED NON-EMPLOYEE DIRECTORS

RESTRICTED STOCK PLAN

 

 

UNLESS GRANTEE REFUSES TO ACCEPT THIS RESTRICTED STOCK AGREEMENT BY RETURNING THE AGREEMENT TO THE COMPANY WITHIN FIVE (5) BUSINESS DAYS OF RECEIPT OF THIS AGREEMENT, GRANTEE IS DEEMED TO HAVE ACCEPTED THE AWARD OF RESTRICTED STOCK EVIDENCED BY THIS AGREEMENT WITHOUT REQUIRING GRANTEE’S SIGNATURE, SUBJECT TO AND
OTHERWISE IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT AND THE TERMS AND CONDITIONS SET FORTH IN THE PLAN.

 

 

	
Grantee:
	  
	
Address:
	  
	  	  
	
Number of Awarded Shares:
	  
	
Grant Date:
	  

 

 

 

 

	
Vesting of Awarded Shares:
	
Date
	
Aggregate Vested Shares
	
Vested %

	  	  	  	
25%

	  	  	  	
50%

	  	  	  	
75%

	  Total:	  	  	
100%

 

CEC Entertainment, Inc., a Kansas corporation (the "Company"), hereby grants to the individual whose name appears above ("Grantee"), pursuant to the provisions of the CEC Entertainment, Inc. Amended and Restated
Non-Employee Directors Restricted Stock Plan, as amended from time to time in accordance with its terms (the "Plan"), for good and valuable consideration, a restricted stock award (the "Award") of shares (the "Awarded Shares") of its common stock, par value $.10 per share (the "Common
Stock"), effective as of the date of grant as set forth above (the "Grant Date"), upon and subject to the terms and conditions set forth in this Restricted Stock Agreement (the “Agreement”) and in the Plan, which is incorporated herein by reference.  Unless otherwise defined in this Agreement capitalized terms used in this Agreement shall have
the meanings assigned to them in the Plan.

 

  

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1. Effect of the Plan.  Grantee acknowledges that the Plan and this Agreement have been made available to Grantee, and represents that he or she is familiar with
the terms and provisions thereof and hereof, and hereby accepts the Awarded Shares that were granted to Grantee, subject to all of the provisions of the Plan and of this Agreement, together with all rules and determinations from time to time issued by the Committee pursuant to the Plan.  The Company, by action of the Board, hereby reserves the right to alter, amend, revise, suspend, or discontinue the Plan without the consent of Grantee, so long as such alteration, amendment, revision, suspension or
discontinuance, unless otherwise required by law, shall not adversely affect the rights and benefits available to Grantee hereunder, and this Award shall be subject, without further action by the Company or Grantee, to such alteration, amendment, revision, suspension, or discontinuance unless provided otherwise therein.

 

2. Grant.  This Award shall evidence the grant of Awarded Shares to Grantee.  The Awarded Shares shall be subject to all of the terms and conditions
set forth in this Agreement and the Plan, including the forfeiture conditions set forth in Section 4 of this Agreement, the restrictions on transfer set forth in Section 5 of this Agreement and the satisfaction of the Required Withholding as set forth in Section 8(a) of this Agreement.  At the sole discretion of the Committee, the Awarded Shares will be issued in either (i) uncertificated form, with the Awarded Shares recorded in the name of Grantee in the books and records of the Company
or the Company’s transfer agent with appropriate notation regarding the restrictions on transfer imposed pursuant to this Agreement, and upon vesting and the satisfaction of all conditions set forth in this Agreement, the lapsing of transfer restrictions shall be reflected in the books and records of the Company or the Company’s transfer agent, as applicable, and upon request by Grantee, the Company shall cause certificates representing the Awarded Shares to be issued to Grantee, or (ii) certificated
form pursuant to the terms of Section 12.8 of the Plan.  Grantee will in no case receive a stock certificate representing the Awarded Shares unless and until the Awarded Shares vest as provided in this Agreement and all tax withholding obligations applicable to the Vested Awarded Shares (as defined below) have been satisfied.  Any stock certificates evidencing the Awarded Shares will be held in custody for Grantee by the Company until the Awarded Shares have vested in accordance with Section 3
of this Agreement.  In accordance with the terms of Section 12.8 of the Plan, if Awarded Shares are issued in certificated form, stock certificates for the Awarded Shares will be endorsed with the legends contained in such Section.  Upon vesting of the Awarded Shares, the Company shall, unless otherwise paid by Grantee as described in Section 8(a) of this Agreement, withhold that number of Vested Awarded Shares necessary to satisfy any applicable tax withholding obligation of Grantee
in accordance with the provisions of Section 8(a) of this Agreement, and thereafter shall deliver to Grantee all remaining Vested Awarded Shares.

 

3. Vesting Schedule; Service Requirement.  Except as provided otherwise in Section 4 of this Agreement, the Awarded Shares shall vest unless Grantee's membership
on the Board is terminated as a result of Grantee's (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 (each a "Forfeiture Event") during the period commencing with the Grant Date and ending with the applicable date that
such portion of the Awarded Shares vests (each, a "Vesting 

 

  

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Date"). Awarded Shares that have vested pursuant to this Agreement are referred to herein as "Vested Awarded Shares" and Awarded Shares that have not yet vested pursuant to this Agreement are referred to herein as "Unvested
Awarded Shares." Subject to the provisions of Section 4 of this Agreement, if the Grantee does not experience a Forfeiture Event prior to an applicable Vesting Date, the Awarded Shares will vest in accordance with the Vesting Dates set forth on the first page of this Agreement under the heading "Vesting of Awarded Shares."  If an installment of the vesting would result in a fractional Vested Awarded Share, such installment will be rounded to the next lower Awarded Share, as determined by the
Company, except the final installment, which will be for the balance of the Awarded Shares.

 

4. Conditions of Forfeiture.

 

(a) Upon the occurrence of a Forfeiture Event (the "Termination Date"), all Unvested Awarded Shares as of the Termination Date shall, without further action of any kind
by the Company or Grantee, be forfeited.  Unvested Awarded Shares that are forfeited shall be deemed to be immediately transferred to the Company without any payment by the Company or action by Grantee, and the Company shall have the full right to cancel any evidence of Grantee's ownership of such forfeited Unvested Awarded Shares and to take any other action necessary to demonstrate that Grantee no longer owns such forfeited Unvested Awarded Shares automatically upon such forfeiture.  Following
such forfeiture, Grantee shall have no further rights with respect to such forfeited Unvested Awarded Shares.  Grantee, by his acceptance of the Award granted pursuant to this Agreement, irrevocably grants to the Company a power of attorney to transfer to the Company Unvested Awarded Shares that are forfeited and shall execute any documents requested by the Company in connection with such forfeiture and transfer.  The provisions of this Agreement regarding transfers of Unvested Awarded Shares
that are forfeited shall be specifically performable by the Company in a court of equity or law.

 

(b) Notwithstanding anything to the contrary in this Agreement, the Unvested Awarded Shares shall become vested (i) on the death of Grantee while Grantee is still an Eligible Director, (ii) in accordance with the provisions
of Article 10 of the Plan relating to a Change in Control event, or (iii) at the direction of the Board, in accordance with the provisions of Section 6.3 of the Plan.

 

5. Non-Transferability.  Grantee may not sell, transfer, pledge, exchange, hypothecate, or otherwise encumber or dispose of any of the Unvested Awarded Shares,
or any right or interest therein, by operation of law or otherwise.  Any transfer in violation of this Section 5 shall be void and of no force or effect, and shall result in the immediate forfeiture of all Unvested Awarded Shares.  The Company shall not be required (i) to transfer on its books any Unvested Awarded Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or the Plan, or (ii) to treat as owner of such Unvested
Awarded Shares, or accord the right to vote or pay or deliver dividends or other distributions to, any purchaser or other transferee to whom or to which such Unvested Awarded Shares shall have been so transferred.

 

6. Dividend and Voting Rights.  Subject to the restrictions contained in this Agreement, Grantee shall have the rights of a stockholder with respect to the Awarded
Shares, including the right to vote all such Awarded Shares, including Unvested Awarded Shares.  In addition, Grantee shall have the right to accrue all dividends paid or delivered thereon, from and after the date hereof on the Unvested Awarded Shares, but shall not be entitled to receive any 

  

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such dividends,  if paid to stockholders, until and to the extent the Unvested Awarded Shares towhich the dividends relate become vested.  Moreover, in the event of forfeiture of Unvested Awarded Shares, Grantee shall have no further rights in and shall forfeit any accrued dividends with respect to such Unvested Awarded Shares.  Notwithstanding
the foregoing sentence, the forfeiture of the Unvested Awarded Shares pursuant to Section 4 hereof shall not invalidate any votes given by Grantee with respect to such Unvested Awarded Shares prior to forfeiture.

 

7. Capital Adjustments and Corporate Events.  If, from time to time during the term of this Agreement, there is any capital adjustment affecting the outstanding
Common Stock as a class without the Company's receipt of consideration, the Unvested Shares shall be adjusted in accordance with the provisions of the Plan.  Any and all new, substituted or additional securities to which Grantee may be entitled by reason of Grantee's ownership of the Unvested Awarded Shares hereunder because of a capital adjustment shall be immediately subject to the forfeiture provisions of this Agreement and included thereafter as "Unvested Awarded Shares" for purposes of this Agreement.

 

8. Tax Matters.

 

(a) The Company's obligation to deliver Awarded Shares to Grantee upon the vesting of such shares shall be subject to the satisfaction of all applicable federal, state and local income tax withholding requirements (the "Required
Withholding").  If the Company has not received from Grantee payment for the full amount of the Required Withholding within five (5) business days after the Company has notified the Grantee of the amount of such Required Withholding, the Company shall withhold from the Vested Awarded Shares that otherwise would have been delivered to Grantee a number of Vested Awarded Shares of sufficient value necessary to satisfy Grantee's Required Withholding, and deliver the remaining Vested Awarded Shares
to Grantee.  The amount of the Required Withholding and the number of Vested Awarded Shares to be withheld by the Company, if applicable, to satisfy Grantee's Required Withholding, as well as the amount reflected on tax reports filed by the Company, shall be based on the closing price on the New York Stock Exchange Consolidated Tape (or in the absence of reported sales on such day, the most recent previous day for which sales were reported), for the Vested Awarded Shares on the applicable Vesting Date
(with the number of Vested Awarded Shares withheld to satisfy the Required Withholding limited to the number of Vested Awarded Shares based on the minimum statutory withholding rates applicable to such taxable income).  The obligations of the Company under this Award will be conditioned on such satisfaction of the Required Withholding.

 

(b) Grantee is urged to review with Grantee's own tax advisors the federal, state, and local tax consequences of this Award.  In accepting this Award, Grantee is relying solely on such advisors and not on any statements or representations
of the Company or any of its agents.  Grantee (and not the Company) shall be responsible for Grantee's own tax liability that may arise as a result of the Award.  Section 83 of the Code taxes as ordinary income the fair market value of the Awarded Shares as of the Vesting Date.  Grantee may elect to be taxed on the Grant Date rather than at the time the Awarded Shares vest by filing an election under Section 83(b) of the Code with the Internal Revenue Service and by providing
a copy of the election to the Company.  Grantee further understands that an additional copy of such Section 83(b) election form should be filed with his or her federal income tax return for the 

  

  

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calendar year in which the date of this Agreement falls. Grantee further acknowledges that the foregoing is only a summary of the effect of the United States federal income taxation with respect to the Award hereunder, and does not purport to be complete.  BY ACCEPTING THIS AWARD AND THE TERMS AND CONDITIONS SET FORTH HEREIN,
GRANTEE HAS BEEN INFORMED OF THE AVAILABILITY OF MAKING AN ELECTION IN ACCORDANCE WITH SECTION 83(b) OF THE CODE; THAT SUCH ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE (AND A COPY OF THE ELECTION GIVEN TO THE COMPANY) WITHIN 30 DAYS OF THE GRANT OF AWARDED SHARES TO GRANTEE; THAT GRANTEE IS SOLELY RESPONSIBLE FOR MAKING SUCH ELECTION, THAT THE COMPANY IS NOT RESPONSIBLE FOR FILING GRANTEE’S SECTION 83(b) ELECTION FORM, AND THAT THE COMPANY HAS DIRECTED GRANTEE TO SEEK INDEPENDENT ADVICE
REGARDING THE APPLICABLE PROVISIONS OF THE CODE, THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR NON-U.S. JURISDICTION IN WHICH GRANTEE RESIDES OR IS OTHERWISE SUBJECT TO TAXATION.

 

9. Entire Agreement; Governing Law.  The Plan and this Agreement contain all of the terms and provisions regarding the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Grantee (collectively, the “Parties”) with respect to the subject matter hereof.  If there is any inconsistency between the provisions of this Agreement and of the Plan, the provisions of the Plan shall govern.  Nothing in the Plan and this Agreement (except as expressly provided therein or herein) is intended to confer any rights or remedies on any
person other than the Parties hereto.  The Plan and this Agreement are to be construed in accordance with and governed by the laws of the State of Kansas, without giving effect to any choice-of-law rule that would cause the application of the laws of any jurisdiction other than the laws of the State of Kansas to apply to the rights and duties of the Parties hereto.  Should any provision of the Plan or this Agreement relating to the Awarded Shares be determined by a court of law to be illegal
or unenforceable, such provision shall be enforced to the fullest extent allowed by law, and the other provisions shall nevertheless remain effective and shall remain enforceable.

 

10. Amendment; Waiver.  Subject to the terms and conditions of the Plan, this Agreement may be amended or modified by means of a written document or documents
signed by the Company.  If such amendment or modification shall adversely affect any rights of the Grantee, such amendment or modification shall not be effective unless it is signed by the Grantee or otherwise agreed to pursuant to applicable law, unless such amendment or modification is required by law.  Any provision for the benefit of the Company contained in this Agreement may only be waived in writing, either generally or in any particular instance, by the Board.  A waiver on
one occasion shall not be deemed to be a waiver of the same or any other breach on a future occasion.

 

11. Notice.  Except for any notice provided pursuant to Section 8(a) of this Agreement, any notice or other communication required or permitted hereunder shall
be given in writing and shall be deemed given, effective, and received upon prepaid delivery in person or by courier or upon the earlier of delivery or the third business day after deposit in the United States mail if sent by certified mail, with postage and fees prepaid, if to the Company at its address as shown beneath its signature in this Agreement, and if to the Grantee at the address shown on the Company’s records, unless either party shall designate in writing from time to time a different address,
by notice to the other party in accordance with this Section 11.

 

  

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12. Conditions to Issuance of Certificates.  Any other provision in this Agreement to the contrary notwithstanding, the Company shall not be required to issue
or deliver any certificate or certificates for any Awarded Shares (or remove transfer restrictions on the Awarded Shares to the extent issued in uncertificated form) prior to the fulfillment of all of the following conditions:  (A) the admission of the Awarded Shares to listing on all stock exchanges on which such Common Stock is then listed, (B) the completion of any registration or other qualification of the Awarded Shares under any state or federal law or under rulings or regulations of the Securities
and Exchange Commission or other governmental regulatory body, which the Committee shall, in its sole and absolute discretion, deem necessary and advisable, (C) the obtaining of any approval or other clearance from any state or federal governmental agency that the Committee shall, in its absolute discretion, determine to be necessary or advisable and (D) the lapse of any such reasonable period of time following the Vesting Date as the Committee may from time to time establish for reasons of administrative convenience.

 

13. Not a Contract for Continued Service.  Nothing in this Agreement or in the Plan shall confer upon Grantee any right to continue to serve as a member of the
board of directors (or other service provider) of the Company or any of its Subsidiaries.

 

14. Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the
benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer herein set forth in the Plan and this Agreement, this Agreement shall be binding upon Grantee and his or her heirs, executors, administrators, successors and assigns.

 

	 	CEC Entertainment, Inc.	 
	 	 	 	 
	 	By:     	 	 
	 	
Name: 
	 	 
	 	Title:	 	 
	 	Address:	4441 W. Airport Frwy      	 
	 	 	 Irving, TX 75062	 

 

  

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