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EXHIBIT
10.2
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, 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. The amendment to Section 6.1 of the Plan will be
effective upon its approval by the stockholders of the Company (the
“Amendment Effective Date”).
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 acquirer
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 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 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 75,000 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 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 Restriction
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