SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.      )

Filed by the Registrant  x                              Filed by a Party other than the Registrant  ¨

Check the appropriate box:

CEC ENTERTAINMENT, INC.

(Name of Registrant as Specified In Itsin its Charter)

(Name of Person(s) Filing Proxy Statement, if other thanOther Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

CEC ENTERTAINMENT, INC.

4441 West Airport Freeway

Irving, Texas 75062

(972) 258-8507

March 22, 201018, 2013

Dear Stockholder:

You are cordially invited to attend the annual meeting of stockholders of CEC Entertainment, Inc. to be held at 8:00 a.m., Central time,Time, on Tuesday, May 4, 2010,April 30, 2013, at Chuck E. Cheese’s, 3903 West Airport Freeway, Irving, Texas 75062. At the annual meeting you will be asked to (1) elect Richard M. Frank, General (ret) Tommy Franks, Michael H. Magusiak, LarryTim T. McDowell andMorris, Louis P. Neeb, Cynthia Pharr Lee, Bruce M. Swenson, Walter Tyree and Raymond E. Wooldridge as continuing Class I directors to serve for a term of three years or until their successors are elected and qualified or until their earlier resignation or removal,one year, (2) consider andan advisory vote upon a proposed amendment toon the compensation of our Restated Articles of Incorporation to eliminate classification of the Board of Directors, if the elimination of cumulative voting pursuant to Proposal 3 is approved,named executive officers as disclosed in these materials, (3) consider and vote upon a proposed amendment to our Restated Articles of Incorporation to eliminate cumulative voting, if the elimination of the classified board pursuant to Proposal 2 is approved, (4) consider and vote upon a proposed amendment to our Second Amended and Restated 2004 Restricted Stock Plan adding 300,000 shares to the maximum number of shares that may be issued under the plan, (5) consider and vote upon a proposed amendment to our Amended and Restated Non-Employee Directors Restricted Stock Plan adding 50,000 shares to the maximum number of shares that may be issued under the plan, (6) ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the 20102013 fiscal year and (7)(4) transact such other business as may properly come before the annual meeting or any adjournments or postponements of the annual meeting.

The formal notice of the annual meeting of stockholders and proxy statement accompanying this letter provide detailed information concerning matters to be considered and acted upon at the meeting.

Your vote is important. We urge you to vote as soon as possible, whether or not you plan to attend the annual meeting. You may submit your proxy vote by telephone or Internet as described in the following materials or, if you request that proxy materials be mailed to you, by completing and signing the proxy card enclosed with those materials and returning it in the envelope provided. Voting over the Internet, by telephone or by written proxy will ensure that you are represented at the annual meeting if you do not attend in person. If you decide to attend the meeting and wish to change your proxy vote, you may do so by voting in person at the meeting in accordance with the procedures set forth in the proxy statement.

Thank you for your continued support of and interest in CEC Entertainment, Inc. We look forward to seeing you at the annual meeting and discussing the business of your company with you.

CEC ENTERTAINMENT, INC.

4441 West Airport Freeway

Irving, Texas 75062

(972) 258-8507

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

OF CEC ENTERTAINMENT, INC.

PROXY STATEMENT FOR THE

ANNUAL MEETING OF STOCKHOLDERS OF

CEC ENTERTAINMENT, INC.

TO BE HELD ON MAY 4, 2010APRIL 30, 2013

TABLE OF CONTENTS

CEC ENTERTAINMENT, INC.

4441 WEST AIRPORT FREEWAY

IRVING, TEXAS 75062

(972) 258-8507

PROXY STATEMENT

GENERAL INFORMATION

This proxy statement is furnished to stockholders of CEC Entertainment, Inc., a Kansas corporation (the “Company”), in connection with the solicitation of proxies by our Board of Directors for use at the annual meeting of stockholders to be held at 8:00 a.m., Central time,Time, on May 4, 2010April 30, 2013 at the Chuck E. Cheese’s located at 3903 West Airport Freeway, Irving, Texas 75062. The term “Company” when used in this proxy statement refers to CEC Entertainment, Inc. but may also, as the context may require, refer to CEC Entertainment, Inc. and its subsidiaries. In this proxy statement, we may also refer to the Company as “CEC,” “we,” “our” or “us.”

We invite you to attend the meeting in person and if you need special assistance at the meeting or directions to the meeting place, you may contact our Secretary, Meredith W. Bjorck,General Counsel, Jay Young, by writing herhim at 4441 West Airport Freeway, Irving, Texas 75062, by telephone at (972) 258-5499258-8507 or by email atmbjorck@cecentertainment.com. jyoung@cecentertainment.com.

Under rules adopted by the United States Securities and Exchange Commission, we have chosen to provide our stockholders with the choice of accessing the 20102013 annual meeting proxy materials over the Internet, rather than receiving printed copies of the materials through the mail. A Notice Regarding the Availability of Proxy Materials is being mailed to our stockholders who have not previously requested electronic access to our proxy materials or paper proxy materials. The notice contains instructions on how you may access and review our proxy materials on the Internet and how you may vote your shares over the Internet. The notice will also tell you how to request our proxy materials in printed form or by e-mail, at no charge. The notice contains a 12-digit control number that you will need to vote your shares. If you received the notice, please keep the notice for your reference through the meeting date.

We anticipate that the Notice Regarding the Availability of Proxy Materials and any paper proxy materials previously requested will be mailed to stockholders beginning on or about March 22, 2010.18, 2013.

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VOTING INFORMATION

Q: What items of business will be voted on at the annual meeting?

A: The items of business scheduled to be voted on at the annual meeting are:

Q: How does the Board of Directors recommend that I vote?

A: Our Board of Directors recommends that you vote your shares “FOR” the nominees to the Board of Directors, “FOR” the amendments to our Restated Articles of Incorporation, “FOR” the amendments to our Second Amended and Restated 2004 Restricted Stock Plan and Amended and Restated Non-Employee Directors Plan, and “FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the 2010 fiscal year.shares:

Q: What shares can I vote?

A: You may vote all shares owned by you as of the close of business on the record date, March 8, 2010,4, 2013, including (1) shares held directly in your name as the stockholder of record and (2) shares held for you as the beneficial owner through a broker, bank or other nominee (by instructing the broker, bank or nominee). The record date for stockholders entitled to notice of, and to vote at the annual meeting is March 8, 2010.4, 2013. At the close of business on the record date, the Company had issued and outstanding 22,361,12718,091,445 shares of common stock, $0.10 par value. No other class of securities of the Company is authorized or entitled to notice of, or to vote at, the annual meeting. Except in the case of director elections, youYou are entitled to one vote for each share of common stock owned by you at the close of business on the record date. You may elect to cumulate your votes for the election of directors. See “Is cumulative voting allowed in the election of directors?” for information on cumulative voting.

Q: How can I vote?

A:You can vote by telephone, by Internet, by mail (if you have requested paper copies of the proxy materials) or at the annual meeting, as described below. We encourage you to vote promptly. Internet and telephone voting is available from the time of mailing the Notice Regarding the Availability of Proxy Materials through 11:59 p.m., Eastern Time on Monday, May 3, 2010.April 29, 2013. You may vote in any of the following ways:

By Telephone.    You have the option to vote your shares by telephone. In order to vote your shares by telephone, please go tohttp://www.proxyvote.com and log in using the 12-digit control number provided on your Notice Regarding the Availability of Proxy Materials. You will be provided

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with a telephone number for voting at that site. Alternatively, if you request paper copies of the proxy materials, your proxy card will have a toll-free telephone number and 12-digit control number that you may use to vote your shares. When you vote by telephone, you will be required to enter your 12-digit control number, so please have it available when you call. You may vote by telephone 24 hours a day. The telephone voting system has easy-to-follow instructions and allows you to confirm that the system has properly recorded your votes. If you hold your shares in street name, please follow the telephone voting instructions you receive from your broker, bank or other nominee.

By Internet.    You can also vote your shares by the Internet. The Notice Regarding the Availability of Proxy Materials indicates the Web site you may access for Internet voting using the 12-digit control number included in the notice. Alternatively, if you request paper copies of the proxy materials, your proxy card will indicate the Web site you may access for Internet voting using the 12-digit control number included on the proxy card. You may vote by the Internet 24 hours a day. As with telephone voting, you will be able to confirm that the system has properly recorded your votes. If you hold your shares in street name, please follow the Internet voting instructions you receive from your broker, bank or other nominee. You may incur telephone and Internet access charges if you vote by the Internet.

By Mail.    If you elect to receive your proxy materials by mail and you are a holder of record, you can vote by marking, dating, and signing your proxy card and returning it by mail in the postage-paid envelope provided to you. If you elect to receive your proxy materials by mail and you hold your shares in street name, you can vote by completing and mailing the voting instruction form provided by your broker, bank or other nominee.

At the Meeting.    The way you vote your shares now will not limit your right to change your vote at the annual meeting if you or your proxy attend in person and vote at the annual meeting. If you hold your shares in street name, you must obtain a proxy, executed in your favor, from the holder of record if you wish to vote these shares at the meeting. A list of stockholders eligible to vote at the annual meeting will be available for inspection at the annual meeting and for a period of ten days prior to the annual meeting during regular business hours at our principal executive offices which are located at 4441 West Airport Freeway, Irving, Texas 75062.

All shares that have been properly voted and not revoked will be voted as you have directed at the annual meeting.If you sign and return your proxy card without any voting instructions, your shares will be voted as the Board of Directors recommends.

Q: Once I have voted, can I change my vote?

A: You can revoke your proxy and change your vote, as desired, at any time before your shares are voted if you (1) submit a written revocation to our SecretaryGeneral Counsel, Jay Young, before the shares are voted at or before the meeting, (2) submit a timely later-dated proxy (or voting instruction form if you hold shares in street name), (3) provide timely subsequent telephone or Internet voting instructions or (4) vote in person at the meeting. Your attendance at the annual meeting alone will not revoke your proxy or change your vote.

If you are the beneficial owner of shares held in “street name” by your broker, bank or other nominee and you have instructed such broker, bank or other nominee to vote your shares, you must follow directions received from such broker, bank or other nominee to change those instructions.

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Q: What is the difference between holding shares as a “stockholder of record” and as a “street name” holder?

A: Most of our stockholders hold their shares through a broker, bank or other nominee rather than directly in their own names and their shares are said to be held in street“street name.” Some distinctions between shares held of record and shares held in street name are summarized below.

Stockholder of Record.    If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered the stockholder of record with respect to those shares and these proxy materials are being sent or made available to you directly by the Company. As the stockholder of record, you have the right to grant your voting proxy directly to us or to vote in person at the annual meeting.

Shares Held in Street Name.If your shares are held in a brokerage account or by another nominee, you are considered to be the beneficial owner of shares held in street name, and these proxy materials, together with a voting instruction card, are being forwarded to you by your broker, bank or other nominee. As the beneficial owner of the shares, you have the right to direct your broker, bank or other nominee how to vote and are also invited to attend the annual meeting.vote.

If you are a beneficial owner whose shares are held in street name, you are not the stockholder of record and you may not vote these shares in person at the annual meeting unless you obtain a “legal proxy” giving you the right to vote your shares at the annual meeting from the broker, bank or other nominee that holds your shares in street name. If your shares are held in street name, your broker, bank or other nominee has enclosed or provided voting instructions for you to use in directing the broker, bank or other nominee how to vote your shares.

Q: Who can help answer my questions?

A: If you have any questions about the annual meeting or how to vote or revoke your proxy or if you need additional copies of our annual report, this proxy statement or voting materials, you should contact our SecretaryGeneral Counsel, Jay Young, at (972) 258-5499.258-8507.

Q: How many shares must be present or represented to conduct business at the annual meeting?

A:A quorum must be present or represented to conduct business at the annual meeting. A majority of the number of outstanding shares of common stock entitled to vote at the annual meeting, present in person or represented by proxy, will constitute a quorum at the annual meeting for purposes of all proposals listed in this proxy statement. As of March 8, 2010,4, 2013, there were 22,361,12718,091,445 shares of

common stock, $0.10 par value issued, outstanding and entitled to vote. If a quorum is not present or represented at the annual meeting, but holders of at least 25 percent of the outstanding shares of common stock entitled to vote at the annual meeting are present in person or represented by proxy, the holders of a majority of such shares have the power to adjourn the annual meeting from time to time, without notice, other than by announcement at the annual meeting, until a quorum is present or represented. In addition, the chairperson of the meeting has the power to adjourn the annual meeting to another place, date and time. At any such adjourned annual meeting at which a quorum is present or represented, any business may be transacted that might have been transacted on the original date of the annual meeting.

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Q: Who will count the votes?

A: Votes cast by proxy or in person shall be counted by a person or persons appointed by the Company to act as our inspector or inspectors of election for the annual meeting. The inspector of election appointed for the annual meeting will certify the results.

Q: How are votes counted?

A: In the election of the directors, you may vote“FOR” “FOR” the Company's nominees or you may“WITHHOLD “WITHHOLD AUTHORITY” with respect to one, twoany or all three of the nine Company nominees. You may elect to cumulate your votes. See “Is cumulative voting allowed in the election of directors?” for information on cumulative voting.

For the other items of business, you may vote“FOR,” “AGAINST” or“ABSTAIN. “ABSTAIN.”

If you provide specific instructions with regard to certain items, your shares will be voted as you instruct on such items. If you sign your proxy card or voting instruction card without giving specific instructions, your shares will be voted in accordance with the recommendations of the Board of Directors. In the case of this annual meeting, where specific instructions are not indicated, the Board of Directors’ proxy holders will vote the shares represented by all valid proxy or voting instruction cards received (1) “FOR”“FOR” the election of Richard M. Frank, General (ret) Tommy Franks, Michael H. Magusiak, LarryTim T. McDowell andMorris, Louis P. Neeb, Cynthia Pharr Lee, Bruce M. Swenson, Walter Tyree and Raymond E. Wooldridge as continuing Class I directors to serve for a term of three years or until their successors are elected and qualified or until their earlier resignation or removal,one year, (2) “FOR” “FOR”the approval, on an advisory basis, of the amendment to the Company’s Restated Articlescompensation of Incorporation to eliminate classification of the Board of Directors, if the elimination of cumulative voting pursuant to Proposal 3 is approved,our named executive officers as disclosed in these materials and (3) “FOR” the approval of the amendment to the Company’s Restated Articles of Incorporation to eliminate cumulative voting, if the elimination of the classified board pursuant to Proposal 2 is approved, (4) “FOR” the approval of the amendment to the Company’s Second Amended and Restated 2004 Restricted Stock Plan adding 300,000 shares to the maximum number of shares that may be issued under the plan (5) “FOR” the approval of the amendment to the Company’s Amended and Restated Non-Employee Directors Restricted Stock Plan adding 50,000 shares to the maximum number of shares that may be issued under the plan and (6) “FOR”“FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the 20102013 fiscal year.

If you are a beneficial owner and hold your shares in street name through a broker, bank or other nominee and do not return the voting instruction form, the broker, bank or other nominee will determine if it has the discretionary authority to vote on the particular matter. Under applicable rules, brokers, banks and other nominees have the discretion to vote on “routine” matters, but do not have discretion to vote on matters that are not considered “routine.” The proposalsproposal relating to the amendment of the Company’s Restated Articles of Incorporation to eliminate classification of the Board of Directors and the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the 20102013 fiscal year areis considered a routine matters.

matter. As a result, brokers, banks and other nominees holding shares for a beneficial owner in street name may vote on these proposals,this proposal, even if no voting instructions are provided by the beneficial owner. The proposals relating to the election of directors and the amendmentapproval, on an advisory basis, of the compensation of the Company’s Restated Articles of Incorporation to eliminate cumulative voting and the amendments to the Company’s Second Amended and Restated 2004 Restricted Stock Plan and Amended and Restated Non-Employee Directors Restricted Stock Plannamed executive officers as disclosed in these materials are not considered routine matters. Consequently, if you do not provide your broker, bank or other nominee with your voting instructions for any one of these proposals, the broker, bank or other nominee cannot vote your shares on that proposal, which is referred to as a “broker non-vote.”

The enclosed proxy card or voting instruction form also grants the proxy holders discretionary authority to vote on any other business that may properly come before the meeting as well as any procedural matters.

Q: Is cumulative voting allowed in the election of directors?

A:Under Kansas corporate law, each stockholder may elect to cumulate his or her votes in the election of directors. Cumulative voting is a method of voting for directors where stockholders multiply their number of shares by the number of directorships being voted on to determine the number of votes they may cast. A stockholder may cast all of the stockholder’s votes for one director or allocate them among all or a selected group of directors. You may also withhold your votes for one or more of the nominees. If you withhold your votes, these withheld votes will be distributed equally among the remaining director nominees, unless you indicate otherwise. To elect a director at the annual meeting, a candidate must be among the three candidates who receive the most votes out of all votes cast for the election of directors at the annual meeting. The Board of Directors’ proxy holders reserve the right to cumulate their votes and cast such votes in favor of the election of all or some of the applicable director nominees in their sole discretion.

Q: What vote is required to approve each of the proposals?

A:The proposals to be voted on at the annual meeting and the required vote for each proposal’s approval are set forth below.

Proposal 1:    To elect Richard M. Frank, General (ret) Tommy Franks, Michael H. Magusiak, LarryTim T. McDowell andMorris, Louis P. Neeb, Cynthia Pharr Lee, Bruce M. Swenson, Walter Tyree and Raymond E. Wooldridge as continuing Class I directors to serve for a term of three years or until their successorsone year. Directors are elected by a plurality of the

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votes cast for the election of directors at the annual meeting and qualified or until their earlier resignation or removal. The threethe nine Company nominees receiving the greatest number of votes out of all votes cast for the election of directors will be elected. See “Is cumulative voting allowed in the election of directors?” for information on cumulative voting.

Proposal 2:    To approve, on an advisory basis, the amendment tocompensation of our named executive officers as disclosed in these materials. This proposal represents an advisory vote and the Company’s Restated Articles of Incorporation to eliminate classification of theresults will not be binding on our Board of Directors ifor the elimination of cumulative voting pursuant to Proposal 3 is approved. The affirmative vote of the holders of at least two-thirds (2/3) of all the issued and outstanding shares of the Company’s common stock entitled to vote thereon will be required to approve this proposal.

Proposal 3: To approve the amendment to the Company’s Restated Articles of Incorporation to eliminate cumulative voting, if the elimination of the classified board pursuant to Proposal 2 is approved. The affirmative vote of the holders of a majority of all the issued and outstanding shares of the Company’s common stock entitled to vote thereon will be required to approve this proposal.

Proposal 4: To approve the amendment to the Company’s Second Amended and Restated 2004 Restricted Stock Plan adding 300,000 shares to the maximum number of shares that may be issued under the plan.Company. The affirmative vote of the holders of a majority of the shares of the Company’s common stock entitled to vote thereon and present in person or represented by proxy at the annual meeting and entitled to vote thereon will be requiredconstitute the stockholders’ non-binding approval with respect to approve this proposal.the compensation of our named executive officers as disclosed in these materials. The Board of Directors and the Compensation Committee, which is comprised of independent directors, will take into account the outcome of the vote when considering future executive compensation decisions.

Proposal 5: To approve the amendment to the Company’s Amended and Restated Non-Employee Directors Restricted Stock Plan adding 50,000 shares to the maximum number of shares that may be issued under the plan. The affirmative vote of the holders of a majority of the shares of the Company’s common stock entitled to vote thereon and present in person or represented by proxy at the annual meeting will be required to approve this proposal.

Proposal 63:    To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the 20102013 fiscal year. The affirmative vote of the holders of a majority of the shares of the Company’s common stock entitled to vote thereon and present in person or represented by proxy at the annual meeting and entitled to vote thereon will be required to approve this proposal.

Q: How are abstentions and broker non-votes counted?

A:Abstentions or withhold votes and broker non-votes will be counted to determine whether there is a quorum present. Directors are elected by a plurality of the votes cast forThe proposal relating to the election of directors at the annual meeting, with the nominees obtaining the most votes being elected.is determined by plurality vote. Because there is no minimum vote required for the electionapproval of directors,this proposal, abstentions or withhold votes and broker non-votes will be entirely excluded from the vote and will have no effect on its outcome.

Abstentions are counted in determining the total number of shares present in person or represented by proxy and entitled to vote thereon with respect to a proposal that requires the affirmative vote of a majority of such shares and, therefore, will have the same effect as a vote against the proposalsproposal to approve, on an advisory basis, the proposed amendmentscompensation of our named executive officers as disclosed in these materials and a vote against the proposal to the Company’s Second Amended and Restated 2004 Restricted Stock Plan and Amended and Restated Non-Employee Directors Restricted Stock Plan and the ratification ofratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the 20102013 fiscal year.year . Broker non-votes are not counted in determining the number of shares present in person or represented by proxy and entitled to vote thereon with respect to a proposal that requires the affirmative vote of a majority of such shares and, therefore, will not affect the outcome of the voting on these proposals.

Because approval by the stockholders of the proposals relating to the amendments to the Company’s Restated Articles of Incorporation is based on the total number of shares issued and outstanding and entitled to vote thereon, abstentions and, in the case of the amendment to eliminate cumulative voting, broker non-votes, will have the same effect as a vote against these proposals.

Q: What happens if additional matters are presented at the annual meeting?

A:We are not aware of any business to be acted upon at the annual meeting other than the items of business described in this proxy statement. If you grant a proxy on the form used in the solicitation by the Board of Directors that is attached to this proxy statement, the persons named as proxy holders, Jay A. Young Darin E. Harper and Meredith W. Bjorck,David Deck, will each have the discretion to vote your shares on any additional matters properly presented for a vote at the annual meeting. If for any unforeseen reason one or more of our nominees are not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate(s) as may be nominated by the Board of Directors.

Q: Who will bear the cost of soliciting votes for the annual meeting?

A:The Company is making this solicitation on behalf of the Company’s Board of Directors and will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials and soliciting votes. Upon request, we will reimburse brokers, banks or other nominees for reasonable expenses incurred by them in forwarding the proxy materials to the beneficial owners of our shares of common stock.

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Q: Is this proxy statement the only way that proxies are being solicited?

A: No. In addition to distributing these proxy materials, certain of our directors, officers or employees may solicit proxies by telephone, facsimile, e-mailemail or personal contact. They will not be specifically compensated for doing so. The Company has also retained The Altman Group,Georgeson Inc. to assist in the solicitation of proxies for a fee of approximately $6,500,$7,500, plus administrative costs and any other reasonable out-of-pocket disbursements.

Q: Where can I find the voting results of the annual meeting?

A: We intend to announce preliminary voting results at the annual meeting and disclose final results in a current report on Form 8-K or quarterly report on Form 10-Q filed with the Securities and Exchange Commission within four business days after the annual meeting. If final results are not yet known within that four business day period, we will disclose preliminary voting results in the Form 8-K and file an amendment to the Form 8-K to disclose the final results within four business days after such final results are known.

Q: What is the deadline to propose actions for consideration or to nominate individuals to serve as directors at the 20112014 annual meeting of stockholders?

A: Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), stockholders may present proper proposals for inclusion in our proxy statement relating to, and for consideration at, the 20112014 annual meeting of stockholders, by submitting their proposals to us in a timely manner. Such proposals will be included if received at our principal executive offices not later than November 22, 201019, 2013 and if they otherwise comply with the requirements of Rule 14a-8.

Notice of any director nomination or other stockholder proposal that you intend to present at the 20112014 annual meeting of stockholders, but do not intend to have included in our proxy statement relating to, and for consideration at, the 20112014 annual meeting of stockholders, must be received at our principal executive offices not earlier than the close of business on January 4, 2011December 31, 2013 and not later than the close of business on February 3, 2011.January 30, 2014. In addition, your notice must set forth the information required by the Company’sCompany's Amended and Restated Bylaws (the “Bylaws”) with respect to each director nomination or other proposal that you intend to present at the 20112014 annual meeting of stockholders.

Q: How may I obtain CEC’s Annual Report for the year ended January 3, 2010?December 30, 2012?

A:If you requested paper copies of the proxy materials by mail, the Annual Report was included with such materials. The proxy materials and Annual Report are also available on the Internet athttp://www.proxyvote.com. Stockholders may obtain a copy of the Annual Report, including the financial statements and financial statement schedules, without charge, by writing to our SecretaryGeneral Counsel, Jay Young, at our principal executive offices located at 4441 West Airport Freeway, Irving, Texas 75062. Our Annual Report and our other filings with the Securities and Exchange Commission can also be accessed on our website athttp://www.chuckecheese.com under “Company Info–Investor Information.“Investor Relations–Annual Reports.” You must not regard theThe Annual Report as additionalis not part of the proxy solicitation material.soliciting materials.

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PROPOSAL 1:

ELECTION OF DIRECTORS

The Board of Directors currently consists of tennine directors. TheAt the 2010 annual meeting of stockholders, the Board of Directors is divided into three classes, Classes I, IIrecommended and III. Classes I and III each have three directors and Class II has four directors. The directors in each class servethe Company’s stockholders approved an amendment to the Company’s Second Restated Articles of Incorporation (the “Articles of Incorporation”) that eliminated the Board of Director’s classified structure over a three-year term.period. The terms of each class expire at the third2013 annual meeting afteris the annualfirst meeting at which the class was last elected so that the stockholders elect one classentire Board of directors at each annual meeting. TheDirectors will be up for reelection to serve for one-year terms of the three existing Class I directors will expireexpiring at the next annual meeting in 2010. meeting.

The Board of Directors has nominated Richard M. Frank, General (ret) Tommy Franks, Michael H. Magusiak, LarryTim T. McDowell andMorris, Louis P. Neeb, Cynthia Pharr Lee, Bruce M. Swenson, Walter Tyree and Raymond E. Wooldridge for election as continuing Class I directors, and each have expressed their willingness to serve as directors if elected. However, if any nominee becomes unavailable to serve at the time of the annual meeting, the Board of Directors may provide for a lesser number of directors or designate substitute nominees. If substitute nominees are designated, the persons named in the enclosed proxy will vote proxies for the remaining nominees and any substitute nominees, unless otherwise instructed by a stockholder.

Stockholders may elect to use cumulative voting in the election of directors. Cumulative voting is a method of voting for directors where stockholders multiply their number of shares by the number of directorships being voted on to determine the number of votes they may cast. A stockholder may cast all of the stockholder’s votes for one director or allocate them among all or a selected group of directors. To be elected as a Class I director at the annual meeting, a candidate must be among the three candidates who receive the most votes out of all votes cast for the election of directors at the annual meeting.

The Board of Directors is proposing to eliminate the classification of directors in Proposal 2, if the proposed elimination of cumulative voting pursuant to Proposal 3 is approved. If stockholders approve Proposal 2 and Proposal 3, all of the present Class II and Class III directors whose terms expire in 2011 and 2012, respectively, and the nominees for Class I directors named in this proxy statement for terms expiring in 2013, if elected, will each serve out their remaining terms. If Proposal 2 and Proposal 3 are approved by stockholders, all directors elected in 2011 and at future annual meetings will be elected to serve one-year terms, and stockholders will no longer be entitled to elect to use cumulative voting in such elections.

The following table lists the names and ages, as of March 22, 2010,18, 2013, of the director nominees and the other directors whose terms of office will continue after the annual meeting, the year in which each director was first elected as a director of the Company, the class to which each director has been or will be elected, and the annual meeting at which the term of each director will expire.Company.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE NAMED NOMINEE DIRECTORS.

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CORPORATE GOVERNANCE

Board Leadership Structure and Risk Oversight

Our Company is led by Michael H. Magusiak and Richard M. Frank. Messrs. Magusiak and Frank have a combined tenure with the Company of over 4650 years. Mr. Magusiak served as President of the Company from June 1994 to December 2008 and since December 2008 has served as President and Chief Executive Officer of the Company. Mr. Magusiak has been a member of the Board of Directors since 1988. Mr. Frank served as Chairman of the Board of Directors and Chief Executive Officer of the Company from March 1986 to December 2008 and since December 2008 has served as Executive Chairman of the Board of Directors and remained as an employee of the Company. The Company’s Board of Directors is currently comprised of Mr. Frank,Magusiak, Mr. Magusiak, Richard T. Huston, Executive Vice President of Marketing and Entertainment,Frank and seven independent directors.

In December 2008, based upon the recommendation of the Nominating/Corporate Governance Committee, the Board of Directors approved the separation of the positions of Chief Executive Officer and Chairman of the Board upon the promotion of Mr. Magusiak to Chief Executive Officer. The Board of Directors believes that by separating the duties of Executive Chairman of the Board from the President and Chief Executive Officer it is able to achieve a greater degree of independence in terms of the leadership of the Board of Directors without losing the benefit of Mr. Frank’s long tenure with the Company and leadership capabilities. Further, the Board of Directors believes this separation improves the Board’s oversight of management, provides greater accountability of management to stockholders and allows the President and Chief Executive Officer to focus on runningmanaging the Company’s business, while allowing the Executive Chairman to focus on more effectively leading the Board of Directors and overseeing the Company’s general strategic direction.

During 2009 and 2010, the Nominating/Corporate Governance Committee evaluated the Company’s corporate governance policies and determined that it would be desirable to implement a counterbalancing governance structure since the Executive Chairman of the Board is a former Chief Executive Officer of the Company and still employed with the Company. In February 2010, based upon the recommendation of the Nominating/Corporate Governance Committee, the Company amended its Corporate Governance Guidelines to provide for the electionannual appointment of a Lead Independent Director, by the Company’s independent directors. Indirectors, for a one-year term. Since February 2010, the independent directors elected Raymond E. Wooldridge to servehas served as the Company’s Lead Independent Director for a one year term.Director. The Board of Directors believes that a Lead Independent Director improves corporate governance and strengthens the integrity of the Board of Directors by ensuring that a strong, independent director helps guide the Board of Directors and provides independent oversight of management. Further, athe Company’s Lead Independent Director helps facilitate dialogue between the Board of Directors and stockholders by specifically identifying an independent director available for consultation and communication.

Pursuant to the Company’s Bylaws, the Chairman of the Board of Directors is responsible for (a) presiding over all meetings of the Board of Directors and stockholders and (b) setting the agendas for all Board of Director and stockholder meetings. Pursuant to the Company’s Corporate Governance Guidelines, the Lead Independent Director (a) has the separate authority to call for and conduct executive sessions of the Board of Directors at which only outside, independent directors are permitted to be present, along with other persons invited to attend such sessions by the Lead Independent Director or a majority of the outside, independent directors, (b) presides at all meetings of the Board of Directors at which the Executive Chairman of the Board is not present, including executive sessions of

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independent directors, (c) serves as a liaison between the Executive Chairman and the independent directors, (d) approves meeting agendas and materials sent to the Board of Directors that are initially prepared by or under the direction of the Executive Chairman, (e) approves meeting schedules that are

initially prepared by the Executive Chairman in order to assure that there is sufficient time for discussion of all agenda items, (f) makes recommendations to the Executive Chairman or the Board of Directors regarding matters for consideration by the Board of Directors and (g) if requested by major stockholders, is available for consultation and direct communication.

The Board of Directors has three standing committees: Audit, Compensation and Nominating/Corporate Governance. Each of the committees is comprised solely of independent directors, with each of the three committees having a separate chair. While the Audit Committee has primary responsibility for risk oversight, both our Audit Committee and our entire Board of Directors are actively involved in risk oversight on behalf of the Company and both receive a report on the Company’s risk management activities from our executive management team on a regular basis. Members of both the Audit Committee and the Board of Directors also engage in periodic discussions with our Executive Chairman, President and Chief Executive Officer, Chief Financial Officer, General Counsel and other officers of the Company as they deem appropriate to ensure that risk is being properly managed at the Company. In addition, each of the committees of the Board of Directors considers risks associated with its respective area of responsibility. For example, the Company’s Compensation Committee considers the risks that may be associated with how the Company’s executive compensation programs are structured and the Company’s Nominating/Corporate Governance Committee is responsible for ensuring the Company’s corporate governance practices are structured in a way that ensures the Board of Directors is able to execute on its risk oversight responsibilities effectively.

Corporate Governance Guidelines

The Board of Directors, based upon the recommendation of the Nominating/Corporate Governance Committee, has adopted the CEC Entertainment, Inc. Corporate Governance Guidelines which are designed to assure that the Board of Directors will have the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of the Company’s management. The Corporate Governance Guidelines are also intended to align the interests of directors and management with those of our stockholders. Among other matters, the Corporate Governance Guidelines include the following items concerning the Board:Board of Directors:

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ShareholderStockholder Access to Corporate Governance Information

The Corporate Governance Guidelines, as well as the charters for the Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee may be viewed on our website athttp://www.chuckecheese.com under “Company Info–Investor Information”“Investor Relations–Governance�� and are available in print to any stockholder who requests them from the Company.

The Code of Business Conduct and Ethics applicable to all of our directors and employees may be viewed on our website athttp://www.chuckecheese.com under “Company Info–Investor Information”“Investor Relations–Governance” and is available in print to any stockholder who requests it from the Company. We will disclose any amendments to or, with respect to directors and executive officers, waivers from the Code of Business Conduct and Ethics on the Company’s website.

The Code of Ethics applicable to our Chief Executive Officer, President and senior financial officers may be viewed on our website athttp://www.chuckecheese.com under “Company Info–Investor Information”“Investor Relations–Governance” and is available in print to any stockholder who requests it from the Company. We will disclose any amendments to or waivers from the Code of Ethics on the Company’s website.

Director Attendance; Access to Management and Outside Consultants

Directors are expected to attend all meetings of the Board of Directors and each committee on which they serve, and the Board of Directors encourages all its members to attend each annual meeting of stockholders. In April 2009,May 2012, the entire Board of Directors, excluding Ms. Pharr, was present at the 20092012 annual meeting of stockholders.

Non-employee directors have access to individual members of management or to other employees of the Company on a confidential basis. Directors are authorized to conduct independent investigations and to hire outside consultants or experts at the Company’s expense. Directors also have access to our records and files, and directors may contact other directors without informing management of the purpose or even the fact of such contact.

Nominations of Directors

The Nominating/Corporate Governance Committee identifies, considers and, if appropriate, recommends candidates for election to the Board of Directors, whether such candidate is submitted by a director, management or a stockholder. In making its selection of candidates to recommend for election, the Nominating/Corporate Governance Committee seeks persons who have achieved prominence in their field and who possess significant experience in areas of importance to the Company. Although no search firm has been used to date, the Nominating/Corporate Governance Committee may engage a search firm to assist in identifying qualified candidates.

The minimum qualifications that the Nominating/Corporate Governance Committee believes must be met for a candidate to be nominated include integrity, independence, forthrightness, analytical skills and the willingness to devote appropriate time and attention to the Company’s affairs. Candidates

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should also demonstrate a willingness to work as part of a team in an atmosphere of trust and a commitment to represent the interests of all the stockholders rather than those of a specific constituency.

Specifically, in identifying and evaluating nominees for director, the Nominating/Corporate Governance Committee seeks to ensure that the Board of Directors possesses, in the aggregate, the strategic, managerial and financial skills and experience necessary to fulfill its duties and to achieve its

objectives, and seeks to ensure that the Board of Directors is comprised of directors who have broad and diverse backgrounds, possessing knowledge in areas that are of importance to the Company. The Nominating/Corporate Governance Committee looks at each nominee on a case-by-case basis regardless of who recommended the nominee. In looking at the qualifications of each candidate to determine if his or her election would further the goals described above, the Nominating/Corporate Governance Committee takes into account all factors it considers appropriate, which may include strength of character, mature judgment, career specialization, relevant technical skills or financial acumen, diversity of viewpoint, industry knowledge and the qualifications described above.

The Nominating/Corporate Governance Committee believes that significant consideration should be given to having a diversity of backgrounds, skills, and perspectives among the directors. In the selection of directors, the Nominating/Corporate Governance Committee may consider the diversity of Board of Directors membership in terms of expertise, age, gender, race, education, experience, knowledge, and other attributes which contribute to the Board of Directors’ diversity.

The Nominating/Corporate Governance Committee will consider director candidates recommended by stockholders. If a stockholder has a suggestion for candidates for election to the Board of Directors at the 20112014 annual meeting of stockholders, the recommendation should be submitted in writing to the SecretaryGeneral Counsel, Jay Young, of the Company at 4441 West Airport Freeway, Irving, Texas 75062, not earlier than the close of business on January 4, 2011December 31, 2013 and not later than the close of business on February 3, 2011January 30, 2014 to allow the Nominating/Corporate Governance Committee sufficient time to evaluate the candidate and his or her qualifications. Submissions should include each of the following:

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The Nominating/Corporate Governance Committee may request that the stockholder submitting the proposed nominee furnish additional information to determine the eligibility and qualifications of such candidate to serve as a director of the Company. The Nominating/Corporate Governance Committee intends to apply the same standards in considering candidates submitted by stockholders as it does in evaluating candidates submitted by members of the Board of Directors.

Qualifications of Director Nominees and Directors

All of the directors and director nominees were selected to serve on the Board of Directorsnominated for re-election because the Nominating/Corporate Governance Committee believes that they have the requisite integrity, independence, business and analytical skills, and forthrightness, as well as a willingness to devote appropriate time and attention to the Company’s affairs, work as a team, and represent the interests of all of the stockholders. In addition, the Nominating/Corporate Governance Committee believes that the directors and director nominees possess, in the aggregate, the strategic, managerial and financial skills and experience necessary to fulfill the Board of Director’s duties and to achieve its objectives. The Nominating/Corporate Governance Committee also believes that the Board of Directors is comprised of directors who have broad and diverse backgrounds, possessing knowledge in areas that are of importance to the Company.

In addition, the Nominating/Corporate Governance Committee also took into consideration certain individual characteristics and qualifications of the directors and director nominees in determining whether that individual should servebe nominated for re-election as a director of the Company. The Nominating/Corporate Governance Committee nominated Mr. Frank for re-election based on his extensive restaurant operations experience, his highly specialized family dining and entertainment industry experience and his leadership skills. Mr. Frank possesses approximately 40 years of significant restaurant operations experience, including 28 years of experience with the Company, bringing substantial knowledge to the Board of Directors regarding operational issues and a unique

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understanding of what is required to successfully operate in the family dining and entertainment industry. Mr. Frank served as Chief Executive Officer of the Company for over 20 years and brings to the Board of Directors exceptional leadership qualities in his role as Executive Chairman.

The Nominating/Corporate Governance Committee nominated General (ret) Franks for re-election based on his extensive leadership and international experience obtained throughout his over 35 year military career. General (ret) Franks is a retired four-star General who served as Commander-in-Chief for the United States Central Command responsible for leading American and Coalition troops in Operation Enduring Freedom in Afghanistan and Operation Iraqi Freedom in Iraq. As the Company continues to expand internationally, the Board of Directors will continue to seek the guidance of General (ret) Franks in formulating the Company’s global strategic direction.

The Nominating/Corporate Governance Committee nominated Mr. Magusiak for re-election based on his extensive restaurant industry experience, his highly specialized family dining and entertainment industry experience, his accounting experience and his leadership skills. Mr. Magusiak possesses over 25 years of significant restaurant industry experience, including over 20approximately 25 years of experience with the Company. During Mr. Magusiak’s tenure with the Company he has served in such capacities as Chief Executive Officer, President, Chief Financial Officer, Treasurer and Controller providing the Board of Directors with a unique understanding of what is required to successfully operate in the family dining and entertainment industry. In addition, Mr. Magusiak is a certified public accountant.

The Nominating/Corporate Governance Committee nominated Mr. McDowellMorris for re-election based on his ability to provide valuable insight to the Board of Directors regarding accounting, tax and financial reporting matters.matters, as well as his experience in the finance industry. Mr. McDowellMorris brings to the Board of Directors over 3020 years of experience at thevarious public accounting firm of Arthur Andersen, LLP,firms, including 23 years as a tax partner.Deloitte & Touche where he was Office Managing Partner. Mr. McDowell is a certified public accountant andMorris was also selectednominated for re-election based uponon his ability to serve as a member of the Company’s Audit Committee and as an “audit committee financial expert.” In addition, Mr. Morris has over 20 years of private equity experience and has been President of two investment firms. The Board of Directors relies on Mr. Morris to provide it with key strategic input regarding decisions related to evaluating and accessing the capital markets.

The Nominating/Corporate Governance Committee nominated Mr. Neeb for re-election based on his extensive restaurant operations experience and his leadership skills. Mr. Neeb possesses over 35 years of significant restaurant industry experience bringing substantial knowledge to the Board of Directors regarding issues facing companies in the restaurant industry. In addition, Mr. Neeb has served as Chief Executive Officer at Mexican Restaurants, Inc. and Spaghetti Warehouse, Inc. and is currently serving on the Board of Directors of Denny’s Corporation, bringing to the Board of Directors substantial leadership experience.

The Nominating/Corporate Governance Committee nominated Ms. Pharr Lee for re-election based on her leadership skills and her extensive marketing, public relations and issues management experience. Ms. Pharr Lee has served as Chief Executive Officer/President at several public relations firms and counseled numerous restaurant companies, bringing to the Board of Directors exceptional leadership qualities. In addition, Ms. Pharr Lee is able to offer unique insight and direction to the Board of Directors regarding the Company’s public relations strategy and risk management because she has more than 20 years of experience in corporate counseling and ongoing board education in risk management and governance.

The Nominating/Corporate Governance Committee nominated Mr. Swenson for re-election based on his experience in the financial services and accounting industries. Mr. Swenson has over 30 years of

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experience in the investment banking industry and has served in senior leadership roles at several investment banking firms. Mr. Swenson also has accounting experience and was formerly a certified public accountant with Peat Marwick, a public accounting firm and a predecessor firm to KPMG LLP. Mr. Swenson was also nominated for re-election based on his ability to serve as a member of the Company’s Audit Committee and as an “audit committee financial expert.”

The Nominating/Corporate Governance Committee nominated Mr. Tyree for re-election based on his extensive restaurant operations experience. Mr. Tyree possesses over 30 years of significant restaurant operations experience at various companies including Steak & Ale, Boston Market Corporation and CBRL Group, Inc., bringing substantial knowledge to the Board of Directors regarding operational issues. Specifically, during Mr. Tyree’s tenure at Steak & Ale, Mr. Tyree was promoted from an assistant manager to a regional director, spending 18 years in various operational leadership positions. At Boston Market Corporation, during Mr. Tyree’s time as an area developer in Texas, he grew the Boston Market concept by 70 units in five years. In addition, during his 13 year tenure at Boston Market Corporation, Mr. Tyree consolidated all of the company’s area developers into one operational platform nationwide, as well as assembled and managed an operations field leadership, training group and human resources department. During the last fourfive years, Mr. Tyree has been focused on field operations leadership at CRBL Group, Inc. as a Regional Vice President.

The Nominating/Corporate Governance Committee selected Mr. Frank as a member of the Board of Directors based on his extensive restaurant operations experience, his highly specialized family dining and entertainment industry experience and his leadership skills. Mr. Frank possesses over 35 years of significant restaurant operations experience, including 25 years of experience with the Company, bringing substantial knowledge to the Board of Directors regarding operational issues and a unique understanding of what is required to successfully operate in the family dining and entertainment industry. Mr. Frank served as Chief Executive Officer of the Company for over 20 years and brings to the Board of Directors exceptional leadership qualities in his role as Executive Chairman.

The Nominating/Corporate Governance Committee selected General Franks as a member of the Board of Directors based on his extensive leadership and international experience obtained throughout his over 35 year military career. General Franks is a retired four-star General who served as Commander-in-Chief for the United States Central Command responsible for leading American and Coalition troops in Operation Enduring Freedom in Afghanistan and Operation Iraqi Freedom in Iraq. As the Company continues to expand internationally, the Board of Directors will continue to seek the guidance of General Franks in formulating the Company’s global strategic direction.

The Nominating/Corporate Governance Committee selected Mr. Huston as a member of the Board of Directors based on his extensive experience dealing with strategic marketing issues in the restaurant industry and his highly specialized family dining and entertainment industry experience. Mr. Huston possesses over 35 years of experience in the restaurant industry at various companies such as Jack In the Box, Shakey’s Pizza and El Chico Mexican Restaurants, including 25 years of experience with the Company, bringing substantial knowledge to the Board of Directors regarding strategic marketing issues and a unique understanding of the family dining and entertainment industry.

The Nominating/Corporate Governance Committee selected Mr. T. Morris to serve as a member of the Board of Directors based on his ability to provide valuable insight to the Board of Directors regarding accounting, tax and financial reporting matters, as well as his experience in the finance industry. Mr. T. Morris brings to the Board of Directors over 20 years of experience at various public accounting firms, including Deloitte & Touche where he was Office Managing Partner. Mr. T. Morris was also selected as a member of the Board of Directors based on his ability to serve as a member of the Company’s Audit Committee and as an “audit committee financial expert.” In addition, Mr. T. Morris has over 20 years of private equity experience and has been President of two investment firms. The Board of Directors relies on Mr. T. Morris to provide it with key strategic input regarding decisions related to evaluating and accessing the capital markets.

The Nominating/Corporate Governance Committee selected Mr. Neeb as a member of the Board of Directors based on his extensive restaurant operations experience and his leadership skills. Mr. Neeb possesses over 35 years of significant restaurant industry experience bringing substantial knowledge to the Board of Directors regarding issues facing companies in the restaurant industry. In addition, Mr. Neeb has served as Chief Executive Officer at Mexican Restaurants, Inc. and Spaghetti Warehouse, Inc. and is currently serving on the Board of Directors of Denny’s Corporation, bringing to the Board of Directors substantial leadership experience.

The Nominating/Corporate Governance Committee selected Ms. Pharr Lee as a member of the Board of Directors based on her leadership skills and her extensive marketing, public relations and issues management experience. Ms. Pharr Lee has served as Chief Executive Officer/President at several public relations firms and counseled numerous restaurant companies, bringing to the Board of Directors exceptional leadership qualities. In addition, Ms. Pharr Lee is able to offer unique insight and direction to the Board of Directors regarding the Company’s public relations strategy and risk management because she has more than 20 years of experience in corporate counseling and ongoing board education in risk management and governance.

The Nominating/Corporate Governance Committee selectednominated Mr. Wooldridge to serve on the Board of Directorsfor re-election based on his experience in the finance industry. Mr. Wooldridge has over 30 years of experience in the securities and investment banking industry and served as President and Chief Executive Officer at two securities firms. The Board of Directors relies on Mr. Wooldridge to provide it with key strategic input regarding decisions related to evaluating and accessing the capital markets.

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ADDITIONAL INFORMATION REGARDING THE EXECUTIVE OFFICERS

The following table sets forth the names and certain other information regarding the executive officers of the Company as of March 22, 2010:18, 2013:

We refer to Messrs. Frank, Magusiak, Cardinale and McDaniel and Ms. Kice collectively as our “named executive officers” in this proxy statement.

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BUSINESS EXPERIENCE OF EXECUTIVE OFFICERS AND DIRECTORS

A brief description of the business experience of the directors and executive officers of the Company is provided below.

RICHARD M. FRANK has been Executive Chairman of the Company since December 2008. From March 1986 to December 2008, Mr. Frank served as Chairman of the Board and Chief Executive Officer of the Company and has been a member of the Board of Directors of the Company since June 1985. He served as President and Chief Operating Officer from June 1985 until October 1988. He joined the Company in 1985. Also, Mr. Frank currently serves as a director of Westwood Holdings Group, Inc., a New York Stock Exchange listed company, and Westwood Trust Company.

MICHAEL H. MAGUSIAK was elected President of the Company in June 1994 and Chief Executive Officer in December 2008. He previously served as Executive Vice President, Chief Financial Officer and Treasurer of the Company from June 1988 to June 1994. He has also served as a member of the Board of Directors of the Company since 1988. He was Vice President of the Company from October 1987 to June 1988 and Controller of the Company from July 1987 to January 1989. He joined the Company in July 1987. Mr. Magusiak is a Certified Public Accountant.

RICHARD M. FRANK has been Executive Chairman of the Company since December 2008. From March 1986 to December 2008, Mr. Frank served as Chairman of the Board and Chief Executive Officer of the Company and has been a member of the Board of Directors of the Company since June 1985. He served as President and Chief Operating Officer from June 1985 until October 1988. He joined the Company in 1985. Since February 2006, Mr. Frank has served as a director of Westwood Holdings Group, Inc., a New York Stock Exchange listed company, and Westwood Trust Company.

J. ROGER CARDINALE has served as Executive Vice President of Development and Purchasing of the Company since December 1999. In 2013, he was named President of the Company’s International Division. He previously served as Senior Vice President of Purchasing from March 1998 to December 1999 and Senior Vice President of Real Estate from January 1999 to December 1999. From January 1993 to March 1998, he served as Vice President of Purchasing and, from September 1990 to January 1993, he served as Director of Purchasing. Mr. Cardinale also held various other positions with the Company from November 1986 to September 1990.

RANDY G. FORSYTHE has served as Executive Vice President, Director of Operations of the Company since September 2008. Prior to that time he served as Senior Vice President from February 2000 to September 2008. Mr. Forsythe served as a Regional Vice President from November 1997 to February 2000. From November 1982 to November 1997, Mr. Forsythe held various positions in operations with the Company.

DARINTIFFANY B. KICE has served as Executive Vice President, Chief Financial Officer and Treasurer of the Company since August 2010. From September 1995 to August 2010, Ms. Kice was employed by KPMG LLP, a public accounting firm, where she served as an Audit Partner from October 2006 through August 2010. During her tenure at KPMG, Ms. Kice performed financial statement audits, audits of internal controls, and other related services for several large public companies, including a significant number of multi-location companies in the restaurant and retail industries. Ms. Kice is a Certified Public Accountant.

SCOTT A. MCDANIEL has served as Executive Vice President, Chief Marketing Officer of the Company since October 2011. From 1996 to 2011, Mr. McDaniel was employed by PepsiCo, Inc., a global food, snack and beverage company, where he held various sales and marketing leadership roles with respect to some of PepsiCo’s largest food and beverage customers, including most recently serving as Vice President/GM National Sales for PepsiCo’s Walmart customer team.

LAURIE E. HARPERPRIEST has served as Vice President, Controller of the Company since December 2007.March 2012. Prior to that time, hejoining the Company, Ms. Priest served as DirectorManager of Accounting Pronouncements and Research for RadioShackStandards at Kimberly-Clark Corporation, a consumer electronics retailer and a New York Stock Exchange listed company engaged in the manufacturing and marketing

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of essential products made from natural or synthetic fibers, from January 20052010 to December 2007. PriorFebruary 2012. From October 2003 to RadioShackNovember 2009, Ms. Priest held various financial positions including Director, Financial Reporting with Centex Corporation Mr. Harper was(a predecessor to PulteGroup, Inc.), a New York Stock Exchange listed company in the residential homebuilding and mortgage lending industry. From September 1996 to October 2003, Ms. Priest worked for public accounting firms, where she held various roles, including most recently Audit Senior Manager of Financial Reporting for FedEx Kinko’s Inc., an operating unit of FedEx Corporation, from August 2002 to January 2005. Additionally, Mr. Harper served as Controller of Apptricity Corporation,with KPMG LLP. Ms. Priest is a software company, from June 2000 to August 2002 and was employed by PricewaterhouseCoopers, a public accounting firm, from June 1997 to May 2000.Certified Public Accountant.

RICHARD T. HUSTON has served as Executive Vice President of Marketing and Entertainment of the Company since November 2006. Prior to that time, Mr. Huston served as Executive Vice President of Marketing from July 1986 to October 2006. Mr. Huston served as Vice President of the Company from October 1985 to July 1986. Mr. Huston joined the Company in 1985. Mr. Huston has also served as a member of the Board of Directors of the Company since 1999.

CHRISTOPHER D. MORRIS has served as Executive Vice President and Chief Financial Officer of the Company since January 2006. In August 2007, Mr. C. Morris was appointed as Treasurer of the Company. From January 2004 to January 2006, he served as Senior Vice President and Chief Financial

Officer of the Company. Prior to joining the Company, Mr. C. Morris was Senior Director of Finance for NPC International, Inc., a Pizza Hut franchisee, from March 1999 to January 2004. From May 1996 to March 1999, Mr. C. Morris held various accounting/finance positions at Applebee’s International, Inc. From 1992 to 1996, Mr. C. Morris was employed by Deloitte & Touche, a public accounting firm. Mr. C. Morris has no relation to Tim T. Morris.

GEN.GENERAL (RET) TOMMY FRANKS retired, was elected as an independent director of the Company in March 2008. General (ret) Franks has operated Franks & Associates, LLC, a private consulting firm, since 2003. General (ret) Franks served in the United States Army from 1965 to 2003. In August 2003, he retired as a four star general. From 2006 to 2009, General (ret) Franks served on the Board of Directors and Audit Committee of Bank of America, NA, a New York Stock Exchange listed company. From 2005 to 2007, General Frank(ret) Franks served on the Board of Directors of OSI Restaurant Partners, Inc., a New York Stock Exchange listed restaurant company.

LARRY T. McDOWELL was elected as an independent director of the Company in February 2005. Mr. McDowell retired in 1997 from Arthur Andersen, LLP, a public accounting firm. Mr. McDowell was employed by Arthur Andersen, LLP from 1963 to 1997 and served as a Tax Partner from 1974 through 1997. In addition, he held the position of head of U.S. Financial Institutions Tax Specialty Team and was a member of the firm’s Tax Division’s Long-Range Planning Committee. Mr. McDowell is currently a member of the Audit and Ethics Committee of United Way of Metropolitan Dallas, and had previously served as a Treasurer and as one of its board members. Mr. McDowell is the Chairman of our Audit Committee.

TIM T. MORRIS was elected as an independent director of the Company in June 1997. Mr. T. Morris has been the President of Morris Capital Management, LLC, an investment firm since January 1992. From 1990 through 2002, Mr. T. Morris was the President of River Associates, LLC, an investment firm. From 1981 through 1990, Mr. T. Morris was an Office Managing Partner of Deloitte & Touche, a public accounting firm. From 1977 through 1981, Mr. T. Morris was a Partner of Rogers, Morris, Millsaps & Underwood, CPA’s, a public accounting firm. From 1968 through 1977, Mr. T. Morris was a Partner of Hazlett, Lewis & Bieter, CPA’s, a public accounting firm. From December 2010 through February 2011, Mr. T. Morris has no relation to Christopher D. Morris.served on the Board of Directors and Audit Committee of First Security Group, Inc., a Nasdaq listed company.

LOUIS P. NEEB was elected as an independent director of the Company in August 1994. Mr. Neeb has served as Chairman of the BoardEmeritus of Mexican Restaurants, Inc. (f/k/a Casa Olé Restaurants, Inc.), a restaurant company, since May 2010 and was Chairman of the Board from October 1995.1995 to May 2010. Mr. Neeb also served as Chief Executive Officer of Mexican Restaurants, Inc. from February 1996 through May 2002, and as Interim Chief Executive Officer from December 2006 through April 2007. From August 1982 to present, Mr. Neeb has been President of Neeb Enterprises, Inc., a management consulting firm specializing in consulting to restaurant companies. From July 1991 through January 1994, Mr. Neeb was President and Chief Executive Officer of Spaghetti Warehouse, Inc., a restaurant company. Mr. Neeb also served as Chairman of the Board of Burger King Corporation from September 1980 to June 1982. From January 2008 to present, Mr. Neeb has also served as a director of Denny’s Corporation. Mr. Neeb also served as a member of the board of directors of both the Franchise Finance Corporation of America, a publicly-traded real estate trust that provides real estate for restaurants from 1994 through 2001, and Silver Diner, Inc., a restaurant company, from 1994 to 2007. Mr. Neeb is the Chairman of our Nominating/Corporate Governance Committee.

CYNTHIA PHARR LEE was elected as an independent director of the Company in August 1994. Since 1993, Ms. Pharr Lee has served as President of C. Pharr & Company, a communications and

marketing consulting firm. A co-founder of Texas Women Ventures Fund, Ms. Pharr Lee serves on the Fund’s Investment Advisory Committee and is also a board member of Southwest Venture Forum. Ms. Pharr Lee is a former President of Executive Women of Dallas and National Chairman of the Counselor’s Academy of the Public Relations Society of America. From May 1989 through February 1993, Ms. Pharr Lee was President and Chief Executive Officer of Tracy Locke/Pharr Public

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Relations, a division of Omnicom, a New York Stock Exchange listed company. From August 1986 through April 1989, Ms. Pharr Lee was President and Owner of C. Pharr & Company, a public relations agency. Ms. Pharr Lee served as a Director of Spaghetti Warehouse, Inc., a restaurant company, from August 1991 through January 1999. In 2008, Ms. Pharr Lee was elected to the board of directors of Behringer Harvard Opportunity REIT II, Inc., a real estate investment trust.

BRUCE M. SWENSON was elected as an independent director of the Company in June 2011. Mr. Swenson currently serves as a Managing Director for the investment banking firm Stephens Inc. Prior to joining Stephens Inc. in 1999, Mr. Swenson served as Senior Managing Director for the investment banking firm Everen Securities, Inc. from 1998 to 1999. From 1992 to 1998, Mr. Swenson worked for Principal Financial Securities, Inc., an investment banking firm, where he was Senior Vice President and head of the Corporate Finance Department from 1996 to 1998. Mr. Swenson was a Senior Vice President at Southwest Securities, Inc., an investment banking firm, from 1990 to 1992. From 1980 to 1990, Mr. Swenson was a Senior Vice President and Managing Director at Rotan Mosle Inc., an investment banking firm. Mr. Swenson was an accountant from 1976 to 1980 at Peat Marwick, a public accounting firm and a predecessor firm to KPMG LLP, where he worked in the audit and private business advisory departments. Mr. Swenson is the Chairman of our Audit Committee.

WALTER TYREE was elected as an independent director of the Company in June 1997. Since September 2006, Mr. Tyree has served as Regional Restaurant Vice President of CBRL Group, Inc., a holding company that, through its subsidiaries, is engaged in the operation and development of the Cracker Barrel Old Country Store. Mr. Tyree was Chief Operating Officer of Boston Market Corporation, a restaurant company, from March 2004 until June 2005. He previously held the positions of Divisional President for Boston Market from October 1999 until March 2004, and Vice President of Operations for Boston Market from October 1998 until October 1999. Mr. Tyree served as Chief Operating Officer of BCBM Southwest, Inc., a Boston Market franchisee, from January 1993 until October 1998. From 1975 to 1992, Mr. Tyree served in various positions with Steak and Ale, a restaurant company, including as a Regional Director.

RAYMOND E. WOOLDRIDGE was elected as an independent director of the Company in June 1997. Mr. Wooldridge currently serves as a Lead Director of Westwood Holdings Group, Inc., a New York Stock Exchange listed company, and Westwood Trust Company. Mr. Wooldridge previously served as a memberVice Chairman of the Board of Governors of the National Adjudicatory CommitteeAssociation of Securities Dealers, Chairman of the National Securities Dealers Association—RegulationClearing Corporation and as a director of Security Bank, N.A. Mr. Wooldridge also served as Vice Chairman and Chairman of the Executive Committee of Southwest Securities Group, Inc., a publicly traded securities firm, from 1996 to 1999, and as President, Chief Operating Officer and Chief Executive Officer thereof from 1986 until 1996. Prior thereto, from 1964 through 1986, Mr. Wooldridge served in various positions with Eppler, Guerin and Turner, Inc., a regional brokerage and investment banking firm, most recently as the firm’s President and Chief Executive Officer. Mr. Wooldridge serves as Chairman of the Board of Reeves Bancshares, Inc., the holding company for Stockmans Bank with offices in Southwest Oklahoma.Oklahoma and Dallas. From 1993 to 2009, Mr. Wooldridge served as a director of Davidson Cos., Inc. Mr. Wooldridge also served as a director of Davidson Trust Company from 2001 to 2005. Mr. Wooldridge is the Lead Independent Director of the Board of Directors and the Chairman of our Compensation Committee.

Except as set forth above, none of the directors of the Company hold, or held within the past five years, directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.

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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

It is the policy of the Company that a majority of the Board of Directors consists of non-employee directors who meet the criteria for independence required by the listing standards of the New York Stock Exchange. The Board of Directors has determined that all of the following non-employee directors are independent under these standards: Gen.General (ret) Tommy Franks, retired, Larry T. McDowell, Tim T. Morris, Louis P. Neeb, Cynthia Pharr Lee, Bruce M. Swenson, Walter Tyree, and Raymond E. Wooldridge. The Board of Directors has also determined that each of Tim T. Morris and Larry T. McDowellBruce M. Swenson is an “audit committee financial expert” as defined by the Securities and Exchange Commission.

Five (5) regularly scheduled and three (3) specialNine meetings of the Board of Directors were held during 2009.2012. During 2009,2012, all directors attended at least 75% of the aggregate number of meetings of the Board of Directors and all committees on which they served. The non-employee directors also meet periodically in executive session without management present. The Company’s Lead Independent Director, Raymond E. Wooldridge, serves as the presiding director at all executive sessions of the Board of Directors.

The Board of Directors has established a Nominating/Corporate Governance Committee, an Audit Committee, and a Compensation Committee. The responsibilities and composition of each of these committees are described below. The charters for the Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee may be viewed on our website athttp://www.chuckecheese.com under “Company Info–Investor Information.“Investor Relations–Governance.”

Nominating/Corporate Governance Committee

The Nominating/Corporate Governance Committee currently consists of five directors, each of whom is independent as defined by the listing standards of the New York Stock Exchange. The Nominating/Corporate Governance Committee is responsible for: (a) identifying individuals qualified to become members of the Board of Directors and recommending a group of director nominees to the Board of Directors for each annual meeting of the Company’s stockholders; (b) ensuring that the Audit, Compensation and Nominating/Corporate Governance Committees of the Board of Directors have the benefit of qualified and experienced independent directors; (c) developing and recommending to the Board of Directors a set of effective corporate governance guidelines applicable to the Company; (d) overseeing the evaluation of the Board of Directors and management; (e) recommending the director thatwho should fill the Lead Independent Director rolerole; and (f) taking a leadership role in shaping the Company’s corporate governance.

Under its charter, the Nominating/Corporate Governance Committee is also charged with, among other things, the following responsibilities:

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For further discussion of the Nominating/Corporate Governance Committee’s consideration of nominees for director, see “Corporate Governance—Governance–Nominations of Directors” and “Corporate Governance—Governance–Qualifications of Director Nominees and Directors.Nominees.”

The Nominating/Corporate Governance Committee held threefour meetings in 2009.2012. During 2009,2012, the committee was comprised of General (ret) Franks and Messrs. McDowell, Neeb, Swenson, Tyree and Wooldridge. Mr. Neeb is the current chairmanChairman of the Nominating/Corporate Governance Committee.

Audit Committee

The Audit Committee currently consists of fourfive directors, each of whom is independent as defined by the listing standards of the New York Stock Exchange and applicable Securities and Exchange Commission regulations. Additionally, the Board of Directors has determined that Messrs. T. Morris and McDowell,Swenson, are “audit committee financial experts” as defined under the rules of the Securities and Exchange Commission. The Audit Committee provides assistance to the directors in fulfilling their fiduciary responsibility to the stockholders, potential stockholders, and investment community relating to corporate accounting and financial controls, risk assessment and risk management policies, compliance with legal and regulatory requirements, reporting practices of the Company, and the quality and integrity of the financial reports of the Company.

The primary role of the Audit Committee is to provide financial oversight. Our management is responsible for preparing financial statements, and our independent registered public accounting firm is responsible for auditing those financial statements. The Audit Committee does not provide any expert or special assurance or certifications as to our financial statements or as to the work of our independent registered public accounting firm. The Audit Committee is directly responsible for the selection, engagement, compensation, retention and oversight of our independent registered public accounting firm.

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The Audit Committee’s responsibilities also include, but are not limited to, the following:

The Audit Committee has established a procedure whereby complaints or concerns regarding accounting, internal controls or auditing matters may be submitted anonymously to the Audit Committee by email atauditcomm@cecentertainment.com.

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The Audit Committee held four meetings in 2009.2012. During 2009,2012, the committee was comprised of Ms. Pharr Lee and Messrs. McDowell, T. Morris, Neeb, Swenson and Neeb.Wooldridge. Mr. McDowellSwenson is the current chairmanChairman of the Audit Committee.

Compensation Committee

The Compensation Committee currently consists of five directors, each of whom is independent as defined by the listing standards of the New York Stock Exchange, qualifies as a “non-employee director” for purposes of the Exchange Act and satisfies the requirements of an “outside director” for purposes of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder. The Compensation Committee is responsible for approving the compensation, including performance bonuses, payable to the executive officers and other employees of the Company, and administering the Company’s equity compensation plans (collectively, the “Employee Stock Plans”).

The Compensation Committee acts on behalf of the Board of Directors to establish or recommend the compensation of executive officers of the Company and to provide oversight of our overall compensation programs and philosophy. The Compensation Committee also acts as the oversight committee with respect to the Company’s Employee Stock Plans, including selection of participants, determination of award levels within plan parameters, and approval of award documents. The Compensation Committee may delegate authority for day-to-day administration of the Employee Stock Plans to officers of the Company. However, the Compensation Committee may not delegate any authority under those plans for matters affecting the compensation of our employees, including our executives.

In view of the current economic and financial environment, the Compensation Committee has reviewed the design and operation of the Company’s incentive compensation arrangements, including the performance objectives and target levels used in connection with incentive awards, with management and evaluated the relationship between the Company’s risk management policies and practices and these arrangements. The Compensation Committee believes that the combination of cash and equity incentives reflected in the Company’s executive compensation program is consistent with the Company’s agreed-upon risk profile as maintained by these policies and practices and does not encourage our executives to take excessive or unnecessary risks that threaten the value of the Company.

In this regard, the performance objectives contained in our annual incentive compensation plan have been balanced with those contained in our long-term incentive compensation plan to ensure that both are aligned and consistent with our long-term business plan, our mix of equity-based awards have been allocated to ensure an appropriate combination of incentive and retention objectives, and our stock ownership guidelines have been established to ensure that the interests of our executives have been aligned with the interests of our shareholders.stockholders.

The Compensation Committee is also responsible for, among other things, the following:

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The Compensation Committee met sevensix times in 2009.2012. During 2009,2012, the Compensation Committee agendas were established in consultation with the committee chair and Mr. Frank, our Executive Chairman. The Compensation Committee also periodically met in executive session without non-members present following the Compensation Committee meetings. In 2009,2012, at the request of the committee, Mr.Compensation Committee, Messrs. Frank and Mr. Magusiak our President and Chief Executive Officer, each provided the Compensation Committee with a performance assessment and compensation recommendations for each of the Company’s executive officers other than themselves. Those recommendations were then considered by the Compensation

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Committee, along with the information and analysis ofan executive compensation analysis from Longnecker &

Associates, an independent executive compensation consulting firm.firm retained by the Compensation Committee. As required under applicable SEC rules, the Company has reviewed the relationships among its compensation consultant, Longnecker & Associates, and the Company and its directors and executives officers in order to assess whether the work done by Longnecker & Associates raised any conflicts of interest. The Company did not identify any such conflicts of interest in its inquiry of these parties as a part of this assessment. In 2009,2012, Mr. Frank typically attended the Compensation Committee meetings, but he was not present for the executive sessions, or for any discussion of his own compensation. In 2010,2013, the Compensation Committee utilized a similar process for establishing compensation, including an updated executive compensation analysis from Longnecker & Associates. compensation.

The Compensation Committee’s processes for establishing and overseeing executive compensation and the role of the Company’s compensation consultant are discussed further in the “Compensation Discussion and Analysis” section below.

During 2009,2012, the Compensation Committee was comprised of Ms. Pharr Lee, Gen.General (ret) Franks, (retired), and Messrs. T. Morris, Tyree and Wooldridge. Mr. Wooldridge is the current chairmanChairman of the Compensation Committee.

Compensation Committee Interlocks and Insider Participation

None of the Compensation Committee members (Ms. Pharr Lee, Gen.General (ret) Franks, (retired), and Messrs. T. Morris, Tyree and Wooldridge) havehas ever been officersan officer or employeesemployee of the Company, nor have theyhas any of them had any relationship requiring disclosure by the Company under any paragraph of Item 404 of Regulation S-K. There have been no relationships during the last fiscal year requiring disclosure by the Company under any paragraph of Item 407(e)(4) of Regulation S-K.

Stockholder Communications with the Board of Directors

The Board of Directors has established a means by which stockholders and interested parties may communicate directly with the Board of Directors or individual members of the Board of Directors. Stockholders may contact the Board of Directors or any committee of the Board of Directors by sending an email to the non-management directors as a group atnonmanagementdirectors@cecentertainment.com or to one of the committees atauditcomm@cecentertainment.com,corpgovcomm@cecentertainment.com orcompcomm@cecentertainment.com. Communications will be distributed to the Board of Directors, as appropriate, based on the facts and circumstances outlined in the communication. This policy and procedure is also posted on the Company’s website athttp://www.chuckecheese.com under “Company Info–Investor Information.“Investor Relations–Governance.”

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COMPENSATION DISCUSSION AND ANALYSIS

In this Compensation Discussion and Analysis, we discuss our compensation objectives, our decisions and the rationale behind those decisions relating to 20092012 compensation for our named executive officers and provide a summary of our decisions to date regarding 20102013 compensation. The discussion and analysis also contains statements regarding future individual and Company performance targets and goals. These targets and goals are disclosed in the limited context of our compensation programs and should not be understood to be statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts. This discussion and analysis also explains the current compensation policies of the Company, which may change in the future in certain circumstances that the Board of Directors or the Compensation Committee consider advisable. A substantial majority of the votes cast by stockholders in an advisory “say on pay” vote were voted in favor of our 2011 executive compensation at our 2012 annual meeting of stockholders.

The brief summary of certain decisions regarding compensation for 2013 in this Compensation Discussion and Analysis is intended to provide additional information to stockholders in their review of the Company’s compensation program for 2012. A more detailed description of compensation for 2013 will be included in the proxy statement for the 2014 annual meeting of stockholders.

Objectives of Our Compensation Program

The objectives of our compensation program include the following:

Our ability to hire and retain executives with the requisite skills and experience to implement our strategic plan is essential to our success and the successon behalf of our stockholders. The goals encompassed in our strategic plan include both improving sales and profits from our existing stores and increasing the number of Company-owned and franchise stores. We believe that if we successfully execute this strategic plan, we can enhance stockholder value by increasing our free cash flow over the long termlong-term through increased earnings and careful management of capital expenditures.

We believe that our success in recruitment and retention of executives is dependent upon our ability to offer a work environment in which our executives can find attractive career challenges and opportunities. We also understand that our executives have a choice regarding where they pursue their careers, and that the compensation we offer plays a significant role in their decision to work for CEC.the Company.

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What Our Compensation Program Is Designed to Reward

Our executive compensation program is designed to reward strong financial performance of the Company that results from quality execution of our strategic plan on both a short-term and long-term basis. In addition, we want to reinforce those core values that we believe help us achieve our strategic goals, including teamwork, integrity, and the importance we place on each individual.

Elements of Our Compensation Program and Why We Pay Each Element

Our compensation program is primarily comprised of three elements: base salaries, cash bonuses and long-term equity-based incentive compensation.

Our annual cash bonuses are an integral component of compensation that link and reinforce executive decision-making and performance with the annual objectives of the Company. The Compensation Committee may award cash bonuses through the Incentive Bonus Plan or on a discretionary basis. Our Incentive Bonus Plan provides annual cash bonuses to our named executive officers and other eligible employees based upon comparable store sales and diluted earnings per share results for the applicable fiscal year. Each executive’s bonus will beunder our Incentive Bonus Plan represents an amount equal to a specified percentage of the executive’s gross base salary.

Prior to 2006, we provided long-term equity based incentive compensation in the form of stock options. However, because of the evolution of regulatory, tax and accounting treatment and the desire to reduce the dilution to our current stockholders, beginning in 2006, we began issuingWe currently issue restricted stock with typically a four year ratable vesting schedule rather than issuing stock options.schedule. By typically providing a four yearfour-year ratable vesting schedule, the recipients of the restricted stock have an incentive to remain employed over the vesting period. For several years, the Compensation Committee has also included a performance-based component to restricted stock awards to Messrs. Frank and Magusiak. In February 2013, the Compensation Committee approved a performance-based criterion for the restricted stock grants to the named executive officers other than Messrs. Frank and Magusiak. The performance-based components for certain of the restricted stock awards are discussed below under“Long-Term Equity-Based Incentives.”We believe that our restricted stock plan serves as a vehicle for providing performance-based incentives where applicable, long-term incentives and also serves as a retention tool.

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How We Determine the Amount and Material Terms of Each Element of Compensation

The Compensation Committee of our Board of Directors oversees our compensation programs. The Compensation Committee’s primary purpose is to assist the Board of Directors in the discharge of its fiduciary responsibilities relating to determining the compensation of the Company’s executive officers. Consistent with the listing requirements of the New York Stock Exchange, the Compensation Committee is composed entirely of independent members of our Board of Directors. The Compensation Committee typically meets in the first quarter of each year to review the Company’s compensation program and to determine compensation levels for the ensuing fiscal year.

As part of its process, the Compensation Committee utilizes the assistance of Longnecker & Associates, an executive compensation consulting company (“Longnecker”), to assist the Compensation Committee in evaluating executive compensation programs and in evaluating executive officers’ compensation compared to an established peer group of similar public companies selected by the Compensation Committee in consultation with Longnecker. TheWhile the Compensation Committee considers many factors in determining compensation, including Company and individual performance, the use by the Compensation Committee of an independent consultant is intended to provide some additional assurance that the Company’s executive compensation programs are reasonable and consistent with the Company’s compensation objectives and market compensation levels. Longnecker reports directly to the Compensation Committee, communicates with the Compensation Committee to discuss compensation trends and best practices, and does not perform any services for management. Approximately every other year Longnecker is asked to produce a report (the “Longnecker Report”) to the Compensation Committee assessing the competitiveness of our executive compensation as compared to executive compensation of other companies in the restaurant/entertainmentrestaurant industry that we believe are comparable in terms of industry and size and are reflective of the type of companies with whom we compete for executive talent.

In determining compensation for 2009, the Committee considered the Longnecker Report completed at the end of 2007 (the “2007 Longnecker Report”), which reviewed, assessed and compared a variety of compensation surveys, and compared our executive compensation to that of a peer group of 11 public companies from the restaurant/entertainment industry.

The 11 companies included in the peer group for the 2007 Longnecker Report were as follows:

From a business perspective at the time of the 2007 Longnecker Report, as compared to these 11 companies on average, CEC generally had lower revenue, higher margins, a similar market capitalization, slightly smaller workforce and a higher amount of assets.

In December 2009,October 2011, the Compensation Committee engaged Longnecker for the purpose of evaluating the compensation of: (i)of the Company’s top nine executives; (ii)10 executives. The Compensation Committee selected Longnecker as its independent compensation consultant for 2012 primarily as a result of Longnecker’s familiarity with the Board of Directors; (iii) a Lead Independent Director;Company and (iii) chairpersons ofits executive compensation program as well as the committees ofCompensation Committee’s satisfaction with the Board of Directors.compensation consulting services Longnecker has provided in the past. The evaluation resulting from this engagement was submitted to the Compensation Committee in January 20102012 (the “2010“2012 Longnecker Report”) and was utilizedconsidered by the Compensation Committee along with a number of factors in the process of determining the 20102012 compensation for the Company’s executives and directors.executives. The 20102012 Longnecker Report reviewed, assessed and compared a variety of compensation surveys, and compared our executive compensation to that of a peer group of 10 public companies from the restaurant/restaurant industry. The peer group utilized by Longnecker was selected based on companies in the leisure, hospitality and entertainment industry.services industry with revenues and market capitalization similar to that of the Company’s.

The 10 companies included in thisthe peer group for the most recently completed survey2012 Longnecker Report are as follows:

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From a business perspective at the time of the 20102012 Longnecker Report, as compared to the 50^th percentile of our selected peer group, the Company generally has a higher amount of assets,enterprise value, higher annual operating cash flow, higher enterprise value, lower revenues,gross profit percentage, lower gross profit, lower revenues and higher gross profit percentage.lower amount of assets.

In reviewing total compensation of executives, the 2007 Longnecker Report and 20102012 Longnecker Report analyzed total compensation of amounts generally in the range between the 50^th and 75^th percentile of our selected peer group. The 50^th percentile, or midpoint range of our peer group, is intended to provide compensation at a level appropriate for an executive who meets expectations and is fully qualified for the responsibilities of a given position. Compensation approximating the 75^th percentile of the range is intended to provide compensation at a level appropriate for a seasoned incumbent who typically exceeds expectations.

Base salary.    During 2009,2012, the Compensation Committee our Executive Chairman,and Mr. Frank and our President and Chief Executive Officer, Mr. Magusiak, met to review the base salaries of the Company’s executive officers at a regularly scheduled meeting of the Compensation Committee. Messrs.officers. Mr. Frank and Magusiak participated in some preliminary discussions with the Compensation Committee about the base salary levels of the Company’s other executive officers, including the performance of the other executive officers. Thereafter, Messrs.Mr. Frank and Magusiak werewas excused and the Compensation Committee met in an executive session to consider any potential change to theirMessrs. Frank and Magusiak’s respective base salaries. Following this executive session, Messrs. Frank and Magusiak rejoined the meeting, and participated in the concluding discussions about the base salary levels of the Company’s other executive officers. Neither Mr. Frank nor Mr. Magusiak made a recommendation on their respective base salaries, although they renegotiated their salaries with the Compensation Committee pursuant to their employment agreements.salaries. For 2009,2012, the Compensation Committee set the base salary of Messrs. Frank, Magusiak, Morris, HustonCardinale and CardinaleMcDaniel, and Ms. Kice at $750,000, $750,000, $310,000, $310,000$800,000, $360,000, $325,000 and $310,000,$300,000, respectively. In considering the factors described below, the Compensation Committee determined that Mr. Frank’s salary should be reduced from $900,000 to $750,000 as a result of his retirement as Chief Executive Officer as of December 29, 2008. Mr. Frank agreed to reduce his salary. In considering the factors described below, the Compensation Committee determined that Mr. Magusiak’s salary should be increased from $650,000 to $750,000 as a result of his assuming the duties of Chief Executive Officer as of December 29, 2008. The Compensation Committee agreed to increasemaintained the same base salaries of each offor Messrs. Frank and Magusiak for 2012 and increased the base salaries for the other named executive officers by approximately 3% infor 2012 based upon consideration of the factors below, including in particular the difficult economic conditions in the Company’s industry.below.

In 2010,2013, the Compensation Committee utilized a similar process for establishing executive compensation, including the participation of Messrs.Mr. Frank and Magusiak with respect to the review of base salaries of the Company’s other executive officers and their excusal from any Compensation Committee discussions regarding their respective base salaries.officers. For 2010,2013, the Compensation Committee set the base salary of Messrs. Frank, Magusiak, Morris, HustonCardinale and CardinaleMcDaniel and Ms. Kice at $750,000, $775,000, $340,000,$600,000, $800,000, $375,000, $325,000 and $315,000, and $340,000, respectively. The above base salaries are effective December 31, 2012 except for Mr. Frank’s which is effective April 1, 2013. The Compensation Committee agreed to increaseset the salaries of each of the other named executive officers in consideration of the factors below.

In setting base salaries in 2012 and 2013, the Compensation Committee took into account a combination of subjective factors, as well as Company performance and the information in the 20102012 Longnecker Report.Report, respectively. Subjective factors the Compensation Committee considers include individual achievements, level of responsibility, experience, leadership abilities, increases or changes in duties and responsibilities, and contributions to the Company’s performance.performance and the recommendations of Messrs. Frank and Magusiak with respect to the other named executive officers. The Compensation Committee does not consider wealth accumulation in its evaluation.

The Compensation Committee generally establishes base salaries in conjunction with the cash bonus and long termlong-term incentive elements of the compensation program that create a compensation package that meets the Compensation Committee’s goals for an appropriate mix of compensation discussed below, and to the extent consistent with the other factors considered by the Committee, also affords the individual an opportunity which generally approximates the 50^th to 75^th percentile of the competitive market.

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Cash Bonus.

The Compensation Committee may award cash bonuses through the Incentive Bonus Plan and on a discretionary basis, or both.basis.

Incentive Bonus PlanPlan.

The Company has established the Incentive Bonus Plan whereby executive officers and employees in general have the potential to receive a cash bonus if the Compensation Committee’s pre-established comparable store sales goal and diluted earnings per share goal for a fiscal year are met. The Compensation Committee believes that comparable store sales and diluted earnings per share targets are the appropriate measures for determining Company performance for purposes of determining the annual incentive compensation under the Incentive Bonus Plan.

The Compensation Committee determines by at least March 15^th of each fiscal year the applicable percentage of an executive’s gross base earnings that may be earned under the Incentive Bonus Plan for such year (the “Bonus Potential”). Executives will receive a bonus under the Incentive Bonus Plan if our comparable store sales and diluted earnings per share for the applicable fiscal year reach the target levels established by the Compensation Committee. In no event would a cash bonus be paid under the 20092012 Incentive Bonus Plan unless certain minimum comparable store sales for the fiscal year as predetermined by the Compensation Committee are attained. As discussed below, Scott A. McDaniel, who joined the Company in October 2011 was guaranteed a minimum bonus under the 2012 Incentive Bonus Plan in connection with his offer of employment letter. The guaranteed minimum bonus was determined based upon the negotiations of the parties and the Company’s desire to retain the services of Mr. McDaniel.

TheFor 2012, the actual bonus payout for an executive is equal to the gross base earnings of such executive multiplied by theirhis or her Bonus Potential, multiplied by the sales multiplier for the fiscal year, multiplied by the diluted earnings per share multiplier for the fiscal year. If the comparable store sales target for a fiscal year is obtained, the sales multiplier for that fiscal year will be the number one. If the diluted earnings per share target for a fiscal year is obtained, the earnings per share multiplier described below for that fiscal year will be the number one. The sales multiplier and the diluted earnings per share multiplier for a fiscal year will be lower or higher than the number one if the comparable store sales and the diluted earnings per share are lower or higher, respectively, than the targeted results. The amount of bonus may be adjusted, as determined by the Compensation Committee, for anycertain specific material unusual transactions that may occur outside of the normal, regular course of business, which we define to mean any unusual transaction that isif such transactions are equal to or greater than 0.5% or 5.0% of total revenues or pre-tax budgeted earnings.earnings, respectively, in 2012 and 2013. No such adjustments were made in 2009.2012. Based on this formula, the comparable store sales and diluted earnings per share criteria offor our Executive Chairman, President and Chief Executive Officer, and the other named executive officers is the same for any given fiscal year but the targets may be adjusted from year to year.

For 2009,2012, the Compensation Committee set the target increase infor comparable store sales at 2.0% and the target for diluted earnings per share at 16% (excluding$3.16. To the estimated impact of any share repurchases byextent the Company duringrepurchased Company shares in fiscal year 2009) and2012, actual diluted earnings per share figures in fiscal 2012, for purposes of the targetIncentive Bonus Plan, were adjusted to exclude the effects of such share repurchases. The Compensation Committee believes that comparable store sales at flat compared to 2008.and diluted earnings per share targets are the appropriate measures for determining Company performance and established the diluted earnings per share and comparable stores targets for 2012, which were higher than 2011, after taking into consideration the Company’s recent performance, the continuing difficult economic environment

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and continuing pressures on consumer discretionary spending. The Compensation Committee established lower performance targets in 2009 than in 2008 as a result of the difficult economic conditions encountered in the Company’s industry, determiningwhat it considered to be ambitious, yet achievable goals, and determined that the lower targetsdiluted earnings per share target and the comparable store sales target established the appropriate short-term incentive for the named executive officers. The Compensation Committee maintainedset the target bonus amount of 100%for each named executive officer based upon a percentage of gross base salary for 2009, determining that it provided the appropriate mix with the amounts of salary described above and long-term incentives described below. earnings.

For purposes of the 20092012 Incentive Bonus Plan, gross base earnings equal the amount of taxable earnings paid to the executive as salary during fiscal year 2009.2012. This is distinguished from the Base Salary set forth in the “Summary Compensation Table” which is the annual base salary established by the Compensation Committee. For each executive, the Compensation Committee set a percentage of gross base salaryearnings that such executive would receive if the target comparable store sales and the target diluted earnings per share were met

in 2009.2012. Our named executive officers had a target percentage of gross base earnings of 100% under the 2012 Incentive Bonus Plan (except Mr. Magusiak who had a target percentage of gross base earnings of 125%), which would have been earned if the comparable store sales and diluted earnings per share targets were met but not exceeded. The Compensation Committee retained the same target bonus amounts from those in 2011 for the persons who were named executive officers in both years, determining that the target amounts provided the appropriate mix of short-term incentive with the amounts of base salary described above and long-term incentives described below. The Compensation Committee continued the higher target bonus percentage for the Chief Executive Officer than the other named executive officer based upon the importance of his role in Company performance. The actual percentage of gross base salaryearnings payable to each executive for 20092012 could have been higher or lower than the set percentage depending on whether the actual comparable store sales and diluted earnings per share were higher than or lower than the 20092012 targets. The maximum multiplier of the target percentage that could have been earned in 20092012 was 2.0. The minimum multiplier of the target percentage that could have been earned in 20092012 was .24.0.33, which was increased from 0.27 in 2011. No cash bonus wouldcould have been paidearned in 20092012 if comparable store sales declined by more than 4.0%3.0%. Our executive officers hadThe Compensation Committee raised this minimum requirement from a target percentage of gross base salary of 100% under the 2009 Incentive Bonus Plan, which would have been paid if the4.0% comparable store sales decline in 2011 to set a more difficult minimum performance requirement. As discussed further below, for 2013 the Compensation Committee raised the minimum requirement to a 1.0% comparable store sales decline in 2013 to set a more difficult minimum performance requirement.

For 2012, comparable store sales decreased 2.9% and diluted earnings per share targets were met but not exceeded. For 2009, comparable store sales were negative 2.78% and earnings per share growth was 12.02% after excluding the estimated impact from share repurchases during 2009.$2.47. Under the 20092012 Incentive Bonus Plan, the corresponding multiplier for a decrease in comparable store sales of negative 2.78%2.9% was .580.61 and the corresponding multiplier for earningdiluted earnings per share growth of 12.02%$2.47 was .92.0.55. Therefore, the actual bonus payout to our named executive officers (excluding Messrs. Magusiak) was .534 (.580.336 (0.61 multiplied by .92)0.55) multiplied by 100%, which resulted in 53.4%33.6% of their Bonus Potential. For the named executive officers this also equaled 53.4%The actual bonus payout to Mr. Magusiak was 0.42 (0.61 multiplied by 0.55) multiplied by 125%, which resulted in 33.6% of theirhis Bonus Potential, or 42.0% of his gross base earnings. Thus, our named executive officers received the following bonuses for 20092012 under the Incentive Bonus Plan:

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The grantingdetermination of the awardsbonus eligibility and targets pursuant to the Incentive Bonus Plan at the beginning of the year to any individual or to the officers as a group is entirely at the discretion of the Compensation Committee.Committee, except in unusual situations such as the guaranteed minimum bonus negotiated with Mr. McDaniel in his employment offer letter.

For 2010,2013, the Compensation Committee set the target increase for comparable store sales at 2.0% on a same calendar week basis (i.e. fiscal weeks 1 through 52 in fiscal 2010 compared to weeks 2 through 53 in fiscal 2009)2.5% and the target for diluted earnings per share at $2.66, representing a growth rate of 6.4%, excluding the $0.17 benefit of an extra operating week from fiscal 2009 and the estimated impact of any share repurchases by the Company during fiscal 2010.$2.89. To the extent the Company repurchases Company shares in fiscal 2010,2013, actual diluted earnings per share figures in fiscal 2010,2013, for purposes of the Incentive Bonus Plan, will be adjusted to exclude the effects of such share repurchases. For each named executive officer except for Mr. Frank, the Compensation Committee set a percentage of gross base earnings that such executive would receive as incentive bonus if the target comparable store sales on a same calendar week basis and the target diluted earnings per share are met in 2010.2013. The Compensation Committee excluded Mr. Frank from incentive bonus plan eligibility for 2013. Mr. Magusiak has a target percentage of gross base earnings of 93.75% under the 2013 Incentive Bonus Plan and the other executive officers have a target percentage of gross base earnings of 75% under the 2013 Incentive Bonus Plan, which would be earned if the comparable store sales and diluted earnings per share targets were met but not exceeded. The actual percentage of gross base earnings payable to each executive for 20102013 may be higher or lower than the set percentage depending on whether the actual comparable store sales and diluted earnings per share are higher than or lower than the 20102013 targets. TheIn 2013, the maximum multiplierbonus potential for Messrs. Cardinale and McDaniel and Ms. Kice is 200% of gross base earnings and for Mr. Magusiak is 250% of gross base earnings. In 2013, the target percentage that could be earned in 2010minimum bonus potential for Messrs. Cardinale and McDaniel and Ms. Kice is 2.0. The minimum multiplier20% of the target percentage that could be earned in 2010gross base earnings and for Mr. Magusiak is .24.25% of gross base earnings. No bonus will be paidearned in 20102013 if comparable store sales decline by more than 4.0%1.0%. Mr. Magusiak has a target percentage of gross base earnings of 125% under the 2010 Incentive Bonus Plan and the other executive officers have a target percentage of gross base earnings of 100% under the 2010 Incentive Bonus Plan, which would be paid if the comparable store sales and earnings per share targets were met but not exceeded.

Discretionary Bonuses

The Compensation Committee, in its discretion based on the collective business judgment of its members, may also choose to award a bonus other than pursuant to the Incentive Bonus Plan, and decide on the actual level of the award in light of all relevant factors during or after completion of the fiscal year. No discretionary bonuses were paid to named executive officers in 2009.2012.

Long-Term Equity-Based Incentives.

Our SecondThird Amended and Restated 2004 Restricted Stock Plan is administered by the Compensation Committee. The Compensation Committee selects award recipients, determines the timing of grants, assigns the number of shares subject to each award and sets the vesting schedule which is usually over a period of four years. The Compensation Committee determines the amount of the restricted stock grants based on the level of job responsibility, individual performance, Company performance, the retention feature provided by such awards and Company performance.the increase in the alignment of executives and stockholders. The Compensation Committee also considers recommendations from Messrs. Frank and Magusiak for the value of restricted stock to be granted to the other named executive officers. The Compensation Committee will meet between two and ten10 business days after our quarterly earnings release, and these four meetings will be the only times during the year that grants of restricted stock will be awarded. The Compensation Committee believes it is a better practice to make awards at consistent times when material information regarding our performance has been recently disclosed.

In February 2009, Messrs. Frank and Magusiak provided recommendations to the Compensation Committee for the value of restricted stock to be granted to the other named executive officers.

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For 2009,2012, the Compensation Committee granted to named executive officers an aggregate of 169,444116,567 shares of restricted stock with a four year vesting schedule.schedule (excluding Mr. Frank’s grant which had a three year vesting schedule pursuant to his employment agreement). The number of shares subject to awards granted in 2012 was substantially the same as the number in 2011, with increases in the value of awards granted to Ms. Kice and Mr. Cardinale. The Compensation Committee considered the current compensation levels, the existing compensation mix, individual contributions and Company performance in increasing the value of certain awards for 2012. On February 24, 2009,28, 2012, the Compensation Committee granted the named executive officers (excluding Mr. Frank) shares of restricted stock with a four year vesting schedule with 25% of the shares granted vesting on the first anniversary date of the grant and thereafter with 25% of the shares granted vesting on February 24, 2011,28, 2014, February 24, 201228, 2015 and February 24, 2013,28, 2016, provided the named executive officer is still employed by us on those dates. Mr. Frank’s 2012 restricted stock grant vests 33% on February 28, 2013, 33% on February 28, 2014 and 33% on February 28, 2015, provided Mr. Frank is still employed by us on those dates, and provided further, that if Mr. Frank retires as Executive Chairman at the end of the term of his employment agreement the unvested portion of his restricted stock award will automatically vest at that time. On February 24, 2010,28, 2013, 25% of the shares granted in 20092012 to the named executive officers (excluding Mr. Frank) vested. On February 28, 2013, 33% of the shares granted in 2012 to Mr. Frank vested. The Compensation Committee granted the named executive officers the following value and number of shares of restricted stock on February 24, 2009:28, 2012:

In addition, the restricted stock awards granted to Messrs. Frank and Magusiak in 20092012 included additional, performance-based vesting conditions based on the achievement of total revenue targets during fiscal year 2009.2012. Under the performance-based vesting conditions, no restricted stock award would be retained if total revenuerevenues during fiscal year 2009 was $751,245,0002012 were $759,589,999 or less. In addition, under the performance-based vesting conditions, the entire restricted stock award would be retained if total revenuerevenues during fiscal year 2009 was $806,000,0002012 were $821,178,000 or more. In the event total revenue wasrevenues were equal to or between $751,245,001$759,590,000 and $805,999,999,$821,177,999, a portion of the restricted stock award would be retained and a portion would be forfeited. The performance based awards established by the Compensation Committee are based 100% on the achievement of revenue objectives set by the Compensation

Committee which the Compensation Committee believes are the appropriate performance-based inducement for the executive to retain some or all of his restricted stock award. For 2009,2012, the performance-based vesting conditions were only satisfied with respect to 92.8% of the 20092012 performance-based revenue objective and corresponding restricted stock awards andawards. Thus Messrs. Frank and Magusiak retained all92.8% of their restricted stock grants which were valued at $1,500,000or $1,392,290 (92.8% of $1,500,000) totaling 36,268 shares for Mr. Frank and $1,500,000$1,670,733 (92.8% of $1,800,000) totaling 43,520 shares for Mr. Magusiak.

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In January and February 2010, our Executive Chairman, Mr.2013, Messrs. Frank and our President and Chief Executive Officer, Mr. Magusiak provided recommendations to the Compensation Committee for the value of restricted stock to be granted to the other named executive officers. On February 26, 2013, the Compensation Committee approved the Company’s restricted stock grant for 2013. For 2010,2013, the Compensation Committee granted to named executive officers an aggregate of 119,245142,017 shares of restricted stock with a four year vesting schedule. On March 2, 2010, the Compensation Committee approved the Company’s restricted stockschedule (excluding Mr. Frank’s grant for 2010.which had a three year vesting schedule). The restricted stock subject to the 20102013 stock grants (excluding Mr. Frank’s) will vest as follows: 25% on March 2, 2011,February 26, 2014, 25% on March 2, 2012,February 26, 2015, 25% on March 2, 2013February 26, 2016 and 25% on March 2, 2014,February 26, 2017, provided the named executive officer is still employed by us on those dates. As provided in Mr. Frank’s employment agreement and his 2013 restricted stock award agreement, Mr. Frank’s 2013 restricted stock grant will vest 33% on February 26, 2014, 33% on February 26, 2015, and 33% on February 26, 2016; provided, however, if Mr. Frank retires as Executive Chairman at the end of the term of his employment agreement the unvested portion of his restricted stock award will automatically vest at that time. The Compensation Committee granted the named executive officers the following value and number of shares of restricted stock on March 2, 2010:February 26, 2013:

In addition, the restricted stock awards granted to Messrs. Frank and Magusiak in 20102013 include additional, performance-based vesting conditions based on the achievement of total revenue targets during fiscal year 2010.2013. Under the performance-based vesting conditions, no restricted stock award will be retained if total revenuerevenues during fiscal year 2010 is $720,750,0002013 are $762,372,999 or less. In addition, under the performance-based vesting conditions, the entire restricted stock award will be retained if total revenuerevenues during fiscal year 2010 is $775,000,0002013 are $821,229,000 or more. In the event total revenue isrevenues are equal to or between $720,750,001$762,373,000 and $774,999,999,$821,228,999, a portion of the restricted stock award will be retained and a portion will be forfeited. The 2010 revenue ranges are below

In addition, the 2009 revenue ranges as there were 53 weeksrestricted stock awards granted to Messrs. Cardinale and McDaniel and Ms. Kice in 2013 include additional, performance-based vesting conditions based on the achievement of comparable store sales targets during fiscal year 2009, compared to 52 weeks2013. Under the performance-based vesting conditions for Messrs. Cardinale and McDaniel and Ms. Kice, ninety percent (90%) of the restricted stock award will be retained in the event comparable store sales during fiscal year 2010.2013 are less than 0.0%. For Messrs. Cardinale and McDaniel and Ms. Kice the entire restricted stock award will be retained in the event comparable store sales for fiscal year 2013 are 0.0% or higher.

Benefits.    We provide Company benefits, or perquisites, that we believe are standard in the industry to our executive officers. We provide a group medical and dental insurance program for the executives and their qualified dependents, group life insurance for the executives and their spouses, accidental death and dismemberment coverage and a Company sponsored cafeteria plan. A major portion of these benefits are paid for by the Company. Employee life insurance amounts surpassing the Internal

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Revenue Service maximum are treated as additional compensation to all employees. The named executive officers participate in a separate medical, dental and life insurance benefits program that is fully-funded by the Company. Messrs. Frank Magusiak and HustonMagusiak are also reimbursed for all out-of-pocket expenses related to their life insurance premiums, as well as all out of pocket medical and dental expenses for them, their spouses and dependent children. We pay all administrative costs to

maintain the medical and dental benefit plans. Our executive officers are also entitled to certain benefits that are not otherwise available to all of our employees, including car allowances and subsidized annual physical exams.

How Elements of Our Compensation Program Are Related to Each Other

We view the various components of compensation as related but distinct and emphasize “pay for performance” with cash bonuses and equity awards as a significant portion of total compensation reflecting a risk aspect that is tied to long-term and short-term financial and strategic goals. Our compensation philosophy is to foster entrepreneurship and alignment of the interests of executives and stockholders by making equity compensation a significant component of executive compensation. We determine the appropriate level for each compensation component based in part, but not exclusively, on our view of internal equity and consistency, retention of executive officers and other considerations we deem relevant, such as rewarding extraordinary performance.performance and the other factors discussed above. Our Compensation Committee has not adopted any formal or informal policies or guidelines for allocating compensation between long-term and currently paid out compensation, between cash and non-cash compensation, or among different forms of non-cash compensation.

Role of Executive Officers in Compensation Decisions

Messrs. Frank and Magusiak and other executive officers attended portions of Compensation Committee meetings throughout the year in order to provide information and help explain data relating to matters under consideration by the Compensation Committee. Executive officers, however, did not participate in deliberations or determination of their respective compensation or during executive sessions. In addition, Mr. Frank and Mr. Magusiak submitted recommendations to the Compensation Committee regarding certain elements of the compensation for the other named executive officers. All decisions regarding the compensation of executive officers ultimately were made solely by the Compensation Committee, which considered these recommendations and exercised its discretion to modify certain recommended adjustments or awards based on a number of factors considered by the Compensation Committee, as described above. The Committee’s determinations regarding compensation for the other named executive officers were generally consistent with the recommendations of management.

Accounting and Tax Considerations

In general, we have structured our compensation program to attempt to satisfy certain provisions of the Internal Revenue Code of 1986, as amended (the “Code”), including Sections 162(m) and 409A.. Under Section 162(m) of the Code, a limitation was placed on tax deductions of any publicly-held corporation for individual compensation to certain executives of such corporation exceeding $1,000,000 in any taxable year, unless the compensation is performance-based. While the Compensation Committee considers the deductibility of compensation and awards as one factor in determining executive compensation, the Compensation Committee also considers other factors in approving compensation and retains the flexibility to pay compensation, such as base salary, and to grant awards, such as service-based restricted stock, that it determines to be consistent with our goals for our executive compensation program even if the

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compensation or award is potentially not deductible by us for tax purposes. In addition, because of the uncertainties associated with the application and interpretation of Section 162(m) of the Code and the regulations issued thereunder, there can be no assurance that compensation intended to satisfy the requirements for deductibility under Section 162(m) of the Code will in fact be deductible. If an executive is entitled to nonqualified deferred compensation benefits that are subject to Section 409A of the Code and do not comply with the provision, the service providerexecutive will be subject to regular federal income tax, interest and an additional federal income tax of 20% of the benefit includible in income. We reserve the right to use our judgment to authorize compensation payments that do not comply with the exemptions in Section 162(m) when we believe that such payments are appropriate and in the best interest of the stockholders, after taking into consideration changing business conditions or the executive’s individual performance and/or changes in specific job duties and responsibilities.

All equity awards to executive officers have been reflected in our consolidated financial statements, based upon the applicable accounting guidance, at the fair market value on the grant date in accordance with FASB ASC Topic 718 (formerly Statement of Financial Accounting Standards No. 123R)accounting principles generally accepted in the United States (“GAAP”).

Stock Ownership Guidelines

The Compensation Committee strongly believes that executive officers should own appropriate amounts of the Company’s Common Stockcommon stock to align their interests with those of the Company’s stockholders. The Company’s equity incentive plans provide ample opportunity for executives to acquire such Common Stock.common stock. The Compensation Committee also has adopted stock ownership and retention guidelines for the Executive Chairman, President and Chief Executive Officer, all Executive Vice Presidents and all non-employee directors. The ownership targets under the current policy are as follows:

New directors and officers have five years to attain such ownership thresholds. All of the directors and executive officers have attained such ownership thresholds.

Termination of Employment Arrangements

We have “change of control” severance provisions in the employment agreements negotiated with our Executive Chairman and our President and Chief Executive Officer. Our Board of Directors and Compensation Committee believe that providing these agreements to our Executive Chairman and our President and Chief Executive Officer should serve to help protect stockholder’sstockholders’ interests. The Agreementsagreements provide that the executives would only receive “change of control” severance in the event that both a “change of control” occurred and the executive left the Company within one year of the “change of control.” Our Board of Directors and Compensation Committee believe that providing these agreements to our Executive Chairman and our President and Chief Executive Officer should serve to help protect stockholders’ interests in the event of a change of control event affecting the Company, by enhancing the likelihood of management continuity through the closing of any transaction. Our Board of Directors and Compensation Committee further believe that these provisions are appropriate given the combined tenure of the two executives with the Company exceeds 45is approximately 50 years and that in the event of any “change in control,” Messrs. Frank and Magusiak would likely be asked to remain as members of the executive management team of the Company. Finally, the Board of Directors and Compensation Committee believe that the remuneration for any “change of control” severance, which approximates one year of total target compensation for Mr. Frank and amounts to less than one year of

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total target compensation for Mr. Magusiak, is fair and appropriate given their long-term service with the Company and provides the appropriate incentive to continue service to the Company during any pending change of control. See “Potential Payments Upon Termination or Change-in-Control”

The employment agreements with Messrs. Frank and Magusiak also provide the executives with certain additional severance and deferred compensation benefits. The Board of Directors and Compensation Committee believe that such benefits, which are less than those for more information on the Company’sany “change inof control” severance, provisions.

See “Potential Payments Upon Termination or Change-in-Control”are fair and appropriate given their long-term service with the Company. The Board of Directors and Compensation Committee also believe that such benefits provided an appropriate incentive for more information on the Company’s “change in control” severance provisions.executives to enter into their employment agreements and continue their service to the Company.

In addition, our Employee Stock Plans have provisions allowing for the vesting of awards granted under those plans following a change of control (as defined in the applicable Employee Stock Plan), which would apply to awards granted to our executive officers. Generally, awards granted under the Employee Stock Plans provide that the award will vest in the event that there is a change in control (as defined in the applicable Employee Stock Plan).

See “Potential Payments Upon Termination or Change-in-Control” for more information on the benefits payable to the Company’s executives upon termination of employment.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

THE COMPENSATION COMMITTEE

Raymond E. Wooldridge, Chairman

Gen.General (ret) Tommy Franks retired

Tim T. Morris

Cynthia Pharr Lee

Walter Tyree

This Compensation Committee Report is not “soliciting material,” is not deemed “filed” with the Securities and Exchange Commission and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, regardless of date or any general incorporation language in such filing.

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EXECUTIVE COMPENSATION

The following tables and accompanying narrative disclosure should be read in conjunction with the Compensation Discussion and Analysis, which sets forth the objectives of the Company’s executive compensation program.

Summary Compensation Table

The Summary Compensation Table below summarizes the total compensation of each named executive officer earned and awarded during fiscal years 2007, 20082012, 2011 and 2009:2010:

(4)(3)

This column includes payments pursuant to the 20072012 Incentive Bonus Plan earned in 20072012 and paid in 2008,2013, payments pursuant to the 20082011 Incentive Bonus Plan earned in 20082011 and paid in 20092012 and payments pursuant to the 20092010 Incentive Bonus Plan earned in 20092010 and paid in 2010.2011 for each of the executives. For all of the years provided, the incentive bonus computation is based on the annual base compensation amounts that were paid on a bi-weekly basis to the named executive officers during the calendar year. Based on the timingIn fiscal year 2010, Ms. Kice was guaranteed a minimum bonus of bi-weekly payroll dates during calendar$50,000. In fiscal year 2009, 2009 contained an additional pay period as compared to 2007 and 2008.2012, Mr. McDaniel was guaranteed a minimum performance bonus of $250,000.

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All Other Compensation in Fiscal 20092012

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Grants of Plan-Based Awards in Fiscal 20092012

The following table summarizes the 20092012 grants of non-equity awards under the Company’s Incentive Bonus Plan and all restricted stock awards:

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(3)

This column represents restricted stock awards granted to our executive officers under the SecondThird Amended and Restated 2004 Restricted Stock Plan. The restricted stock awards ratably vest annually over four years.years except for Mr. Frank’s which vest as set forth in Footnote 2 above. The awards for Mr. Frank and Mr. Magusiak reported in this column are the same awards as those reported under “Estimated Possible Payouts Under Equity Incentive Plan Awards” and were reduced at the end of 2012 as described in Footnote 2 above. The awards are reported under both columns because the awards have both performance-based and service-based vesting requirements. See the discussion in the section entitled “Incentive Bonus Plan”“Long-Term Equity-Based Incentives” in the “Compensation Discussion and Analysis” section for a further description of these awards.

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Narrative Disclosure to Summary Compensation Table and

Grants of Plan-Based Awards in Fiscal 20092012 Table

Employment Agreements or Arrangements

Employment Agreement with Mr. Frank

On February 23, 2010, Mr. Frank entered into an employment agreement with the Company providing for a forty-nine (49) month term commencing on February 23, 2010 and ending on March 31, 2014. The employment agreement replaces Mr. Frank’s prior employment agreement with the Company dated March 29, 2005, as amended. The employment agreement provides for (i) a base salary of $750,000 (which may be increased from time to time by the Compensation Committee), (ii) a cash bonus, payable annually, if earned, based upon the achievement of corporate objectives pursuant to the Company’s Incentive Bonus Plan, (iii) the grant of performance-based restricted stock or restricted stock unit awards (“Restricted Stock Awards”) in accordance with the terms of the Company’s SecondThird Amended and Restated 2004 Restricted Stock Plan or any successor plan (the “Restricted Stock Plan”) in such number of shares and under such terms as may be determined by the Compensation Committee, in accordance with the terms of the Restricted Stock Plan, with any such awards vesting over the term of the employment agreement (subject to the Restricted Stock Plan), (iv) the reimbursement of reasonable business expenses, (v) an automobile allowance of $24,000 annually and a reimbursement of automobile insurance premiums of $1,000 annually, (vi) at least $500,000 in life insurance coverage, (vii) at least five (5) weeks vacation and (viii) such additional benefits and/or compensation as may be determined by the Compensation Committee. The employment agreement also provides for certain severance and change-in-control payments. See “Potential Payments Upon Termination or Change-In-Control.”

In November 2005, the Company implemented the CEC Entertainment, Inc. Policy for Reimbursement of Business Travel on Private Aircraft. At the February 13, 2007 meeting of the Compensation Committee, the policy was amended to reimburse Mr. Frank for the lesser of the fair market value of the fractional use of a comparable aircraft or his direct operating costs. Mr. Frank is only reimbursed for the use of his aircraft for business purposes and must submit appropriate documentation to the Chief Financial Officer or the Chairman of the Compensation Committee whose approval is required for any such reimbursement. For 2009,During 2012, the reimbursement toCompany reimbursed Mr. Frank wasa total of $16,117.00 for three (3) business trips he took using his personal aircraft. Based on average $987 per hourMr. Frank’s suggestion and the Compensation Committee’s approval, the amount of reimbursement was based on histhe estimated fair market value of comparable commercial airline tickets or at a significant reduction from the fair market value of the fractional use of a comparable aircraft or Mr. Frank’s direct operating costs for a totalassociated with the use of $17,276.his personal aircraft.

Employment Agreement with Mr. Magusiak

On February 23, 2010, Mr. Magusiak entered into an employment agreement with the Company providing for a seventy-three (73) month term commencing on February 23, 2010 and ending on March 31, 2016. The employment agreement replaces Mr. Magusiak’s prior employment agreement with the Company dated March 29, 2005, as amended. The employment agreement provides for (i) a base salary of $750,000 (which may be increased from time to time by the Compensation Committee), (ii) a cash bonus, payable annually, if earned, based upon the achievement of corporate objectives pursuant to the Company’s Incentive Bonus Plan, (iii) the grant of Restricted Stock Awards in accordance with the terms of the Company’s Restricted Stock Plan in such number of shares and under

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such terms as may be determined by the Compensation Committee, in accordance with the terms of the Restricted Stock Plan, (iv) the reimbursement of reasonable business expenses, (v) an automobile allowance of $24,000 annually and a reimbursement of automobile insurance premiums of $1,000 annually, (v) at least $500,000 in life insurance coverage, (vi) at least five (5) weeks vacation and (vii) such additional benefits and/or compensation as may be determined by the

Compensation Committee. On March 2, 2010, theThe Compensation Committee increasedset Mr. Magusiak’s base salary from $750,000 to $775,000.at $800,000 for 2012. The employment agreement also provides for certain severance and change-in-control payments. See “Potential Payments Upon Termination or Change-In-Control.”

Employment Arrangements with other Named Executive Officers

The other named executive officers do not have an employment agreement with the Company, and are “at will” employees who receive an annual salary, incentivecash bonus and equity compensation awards as approved annually by our Compensation Committee.

Indemnification Agreements

In addition, senior officers and directors of the Company have entered into indemnification agreements with the Company, each in a form approved by the Company’s Board of Directors and previously disclosed by the Company. The Board of Directors also authorized the Company to enter into Indemnification Agreements with future directors and senior officers of the Company that may be designated from time to time by the Board. The indemnification agreements supplement and clarify existing indemnification provisions of the Company’s Articles of Incorporation and Bylaws and, in general, require the Company, to the extent permitted under applicable law, to indemnify such persons against all expenses, judgments and fines incurred in connection with the defense or settlement of any actions brought against them by reason of the fact that they are or were directors or officers of the Company or any other enterprise to the extent they assumed those responsibilities at the direction of the Company. The indemnification agreements also establish processes and procedures for indemnification claims, advancement of expenses and costs and other determinations with respect to indemnification.

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Outstanding Equity Awards at 20092012 Fiscal Year-End

The following table provides information on the stock option and restricted stock awards held by our named executive officers as of January 3, 2009.December 30, 2012. Each equity grant is shown separately for each named executive officer. The vesting schedule for each grant is shown following this table, based on the stock option or restricted stock award grant date. The market value of the restricted stock awards is based on the closing market price of our common stock as of December 31, 200928, 2012 (the last trading day in the 20092012 fiscal year), which was $31.92.$32.19. See “Compensation Discussion and Analysis” for additional information about the stock option and restricted stock awards.

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Option Exercises and Stock Vested in Fiscal 20092012