Exhibit 10.1

 

EXHIBIT A

 

AMC Entertainment Holdings, Inc.

Management Profit Sharing Plan

 

Section 1.  Purpose.  The AMC Entertainment Holdings, Inc. Management Profit
Sharing Plan (the “Plan”) is intended to provide incentive bonus awards to
certain eligible employees of AMC Entertainment Holdings, Inc. (the “Company”)
and its subsidiaries or affiliates in order to attract, retain and incentivize a
talented management team.

 

Section 2.  Eligibility.  Each employee who receives a letter (an “Award
Letter”) from the Company promptly following the Closing Date, as defined in the
Agreement and Plan of Merger, dated as of May 21, 2012, by and among AMC
Entertainment Holdings, Inc., Dalian Wanda Group Co., Ltd. (“Wanda”) and, solely
with respect to Section 2.11, Article 12 and Section 13.01 and Section 13.06
thereunder, Apollo Management V, L.P. as the “Stockholder Representative” (the
“Merger Agreement”) that sets forth his or her allocation of the Aggregate
Incentive Bonus (as defined below) as of the Closing Date (individually an
“Initial Participant”, and collectively the “Initial Participants”), and any
additional employee proposed by the President and Chief Executive Officer of the
Company (the “CEO”) and approved by the Company’s Board of Directors (the
“Board”) who receives an Award Letter from the Company (any such additional
employees, together with the Initial Participants, “Participants”), shall be
eligible to participate in the Plan.  Attachment A hereto sets forth the names
of the Initial Participants, their respective titles and allocations of
Aggregate Incentive Bonus.  The Company shall not be required to disclose
Attachment A to Participants; provided that, at the written request of a
Participant at or promptly following the payment of the Aggregate Incentive
Bonus, the Company shall provide to such Participant the percentage of the
Aggregate Incentive Bonus that was unallocated for the Plan Year (as defined
below) in respect of which the payment was made.

 

Section 3.  Duration.  This Plan shall become effective on the Closing Date,
and, subject to Section 11, shall terminate following the payment of all amounts
required to be paid under the Plan (including payment of each Incentive Bonus
(as defined below) and each Catch-Up Payment (as defined below) to which any
Participant becomes entitled pursuant to the terms of the Plan and the
Additional Incentive Bonus (as defined below) if payable pursuant to the terms
of the Plan).

 

Section 4.  Administration; Participant Representatives.  The Plan shall be
administered by the Board and, subject to Section 5(e)(ii) and Section 18(b),
any action of the Board shall be final, conclusive and binding on all persons,
including the Company and its subsidiaries and affiliates, Participants and
their beneficiaries, and any other persons claiming rights from or through a
Participant.  For purposes of this Plan, the “Participant Representatives” shall
be (a) the CEO and the Chief Financial Officer of the Company (the “CFO”), if
each of the then-current CEO and CFO has an interest in the Aggregate Incentive
Bonus at least equal to 6.98% or (b) if any of the then-current CEO or the
then-current CFO has an interest in the Aggregate Incentive Bonus less than
6.98%, (i) the two Participants with the largest interest in the Aggregate
Incentive Bonus (determined on an individual basis), (ii) if multiple
Participants have the largest interest in the Aggregate Incentive Bonus
(determined on an individual basis) (the “Interested Participants”), the two
Participants appointed by a majority of the Interested Participants or (iii) if
one Participant has the largest interest in the Aggregate Incentive Bonus and
multiple Participants have the second largest interest in the Aggregate
Incentive Bonus (determined on an individual basis) (the “Secondary Interested
Participants”), the

 

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Participant with the largest interest in the Aggregate Incentive Bonus and the
Participant appointed by a majority of the Secondary Interested Participants. 
For the avoidance of doubt, only a then-current employee of the Company is
eligible to be a Participant Representative, an Interested Participant or a
Secondary Interested Participant.

 

Section 5.  Incentive Bonus; Catch-Up Payment; Additional Incentive Bonus; “Net
Profit”.  (a)  Each Participant shall be eligible to receive an Incentive Bonus
(as defined below) for each year ending on December 31, 2012, 2013, 2014 and
2015 (each such year, a “Plan Year”, and the period from the Closing Date
through and including December 31, 2015, the “Applicable Period”), calculated as
described in Section 5(b), payable in a single lump sum as soon as reasonably
practicable following the issuance of the Company’s audited financial statements
for the Plan Year to which the Incentive Bonus relates, but in no event shall
any Incentive Bonus be paid after May 15th of the year following the Plan Year
to which such Incentive Bonus relates.  Each Incentive Bonus and Catch-Up
Payment and the Additional Incentive Bonus shall be paid in cash; provided,
however, that the Board may determine that such payments be paid in a form other
than cash, including payment in marketable securities, subject to the consent of
both of the Participant Representatives.  The Board and the Participant
Representatives will determine the form of payment, the amount to be received in
such form and the terms and conditions of using such form of payment.

 

Section 1.01For each Plan Year that the Company achieves the applicable Net
Profit target set forth on Attachment B hereto (the “Net Profit Target”), the
Company shall pay to Participants an aggregate amount equal to 10% of the Net
Profit (as defined below) for the applicable Plan Year (the aggregate amount for
each such Plan Year, the “Aggregate Incentive Bonus”).  For any Plan Year in
which the Company achieves the applicable Net Profit Target, the Aggregate
Incentive Bonus for such Plan Year shall be unlimited.  Except as provided in
Section 5(c), if the Company does not achieve the applicable Net Profit Target
for a Plan Year, no Aggregate Incentive Bonus shall be payable for such Plan
Year.  Subject to Sections 5(a), 6, 7 and 10, for each Plan Year, the Company
shall pay to each Participant an amount equal to the percentage of the Aggregate
Incentive Bonus allocated to such Participant as set forth in such Participant’s
Award Letter (each such payment, an “Incentive Bonus”).  Notwithstanding
anything to the contrary herein, if the Reported Net Profit (as defined below)
is less than zero for any Plan Year, no Aggregate Incentive Bonus shall be paid
for such Plan Year.

 

Section 1.02Notwithstanding Section 5(b), if the Company fails to achieve the
applicable Net Profit Target for one or more Plan Years, each Participant shall
be eligible to receive Catch-Up Payments (as defined below) as set forth in this
Section 5(c).

 

(a)                                 The following definitions shall apply for
purposes of this Section 5:

 

(i)                                     “Cumulative Net Profit Surplus” shall
mean, as of the end of any Plan Year, the aggregate Net Profit Surplus for all
Qualified Surplus Years as of the end of such Plan Year.

 

(ii)                                  “Net Profit Deficit” shall mean, for each
Qualified Deficit Year, the difference between the applicable Net Profit Target
for such Qualified Deficit Year and the Net Profit achieved by the Company for
such Qualified Deficit Year.

 

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(iii)                               “Net Profit Surplus” shall mean, for each
Qualified Surplus Year, the excess of the Net Profit achieved for such Qualified
Surplus Year over the applicable Net Profit Target for such Qualified Surplus
Year.

 

(iv)                              “Qualified Deficit Year” shall mean each
Qualified Year in which the Company achieves Net Profit that is less than 100%
of the applicable Net Profit Target for such Qualified Year.

 

(v)                                 “Qualified Surplus Year” shall mean each
Qualified Year in which the Company achieves Net Profit that is more than 100%
of the applicable Net Profit Target for such Qualified Year.

 

(vi)                              “Qualified Year” shall mean each Plan Year in
which the Company achieves Net Profit that is at least 80% of the applicable Net
Profit Target for such Plan Year (for the avoidance of doubt, “Qualified Year”
includes any Plan Year in which Net Profit exceeds 100% of the applicable Net
Profit Target for such Plan Year).

 

(b)                                 For each Qualified Year, if the Cumulative
Net Profit Surplus (measured as of the end of such Qualified Year) equals or
exceeds the Net Profit Deficit for any one or more Qualified Deficit Year(s)
(including, if applicable, such Plan Year), the Company shall pay to
Participants an amount equal to 10% of the Net Profit achieved for such
Qualified Deficit Year(s) in which the Cumulative Net Profit Surplus applied to
such Qualified Deficit Year(s) equals or exceeds the Net Profit Deficit for such
Qualified Deficit Year(s) (the “Aggregate Catch-Up Payment”).  Any Cumulative
Net Profit Surplus shall be applied first to the most recently completed
Qualified Deficit Year in which such Cumulative Net Profit Surplus equals or
exceeds the full amount of the Net Profit Deficit for such Qualified Deficit
Year, and successively thereafter to each preceding Qualified Deficit Year in
which such Cumulative Net Profit Surplus (subject to Section 5(c)(iv)(B)) equals
or exceeds the full amount of the Net Profit Deficit for such Qualified Deficit
Year.  Following the Plan Year ending December 31, 2015, the Cumulative Net
Profit Surplus for all Plan Years shall be reapplied in a manner in which
results in the largest Aggregate Catch-Up Payment (see Section 5(c)(v)(J) for an
example of such reapplication).

 

(c)                                  Subject to Sections 6, 7 and 10, the
Company shall pay to each Participant an amount equal to the percentage of the
Aggregate Catch-Up Payment allocated to such Participant as set forth in such
Participant’s Award Letter (each such payment, a “Catch-Up Payment”).  For the
avoidance of doubt, subject to Sections 6 and 7, each Participant’s allocated
percentage of the Aggregate Catch-Up Payment shall be equal to such
Participant’s allocated percentage of the Aggregate Incentive Bonus for the year
of payment of the Aggregate Incentive Bonus that gave rise to the Aggregate
Catch-Up Payment.  Each Catch-Up Payment shall be payable in a single lump sum
as soon as reasonably practicable following the issuance of the Company’s
audited financial statements for the Qualified Year in which such Catch-Up
Payment is earned, but in no event later than May 15th of the Plan Year
following the Qualified Year in which such Catch-Up Payment is earned.  Except
as provided in Section 5(a), each Catch-Up Payment shall be paid in cash.  For
purposes of this Plan, a Catch-Up Payment shall be deemed to be earned in a
Qualifying Year if, at the end of such Qualifying Year, the right to the
Aggregate Catch-Up Payment is

 

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established pursuant to this Section 5(c) through the application of Cumulative
Net Profit Surplus.

 

(d)                                 For the avoidance of doubt, (A) for any
Qualified Year in which the Company achieves at least 100% of the Net Profit
Target, any Aggregate Catch-Up Payment shall be paid in addition to the
Aggregate Incentive Bonus for such Qualified Year and (B) any portion of the
Cumulative Net Profit Surplus that is applied to the Net Profit Deficit for a
Qualified Deficit Year shall not be applied to the Net Profit Deficit for any
other Qualified Deficit Year during the Applicable Period, but any portion of
the Cumulative Net Profit Surplus that is not applied to the Net Profit Deficit
for a Qualified Deficit Year may be applied to the Net Profit Deficit for any
other Qualified Deficit Year during the Applicable Period.

 

(e)                                  Examples.  The following examples are
intended to demonstrate the principles of this Section 5(c) and, in each case,
are presented for illustrative purposes only.  For the avoidance of doubt, the
Net Profit Target in each of the following examples has been fictionalized for
ease of calculation.

 

(i)                                     If for the Plan Year ending on December
31, 2012 the Company achieves the Net Profit Target and the applicable Net
Profit is equal to US$ 10,000,000, Participants would be entitled to an
Aggregate Incentive Bonus equal to US$ 1,000,000.  The US$ 1,000,000 will be
distributed to Participants based on the allocations set forth in their Award
Letters.  If the Company did not achieve the Net Profit Target for the Plan Year
ending on December 31, 2012, then the Aggregate Incentive Bonus will be US$ 0,
regardless of the Net Profit achieved by the Company.

 

(ii)                                  If for the Plan Year ending on December
31, 2012 the Company achieves 80% of the Net Profit Target of US$ 10,000,000
(i.e., US$ 8,000,000), and for the Plan Year ending on December 31, 2013 the
Company achieves 110% of the Net Profit Target of US$ 20,000,000 (i.e., US$
22,000,000), then (1) the Plan Year ending on December 31, 2012 would be a
Qualified Deficit Year, (2) the Aggregate Incentive Bonus for the Plan Year
ending on December 31, 2012 would be equal to US$ 0, (3) the Plan Year ending on
December 31, 2013 would be a Qualified Surplus Year, (4) the Cumulative Net
Profit Surplus as of December 31, 2013 would be equal to US$ 2,000,000 (5) the
Aggregate Incentive Bonus for the Plan Year ending on December 31, 2013 would be
equal to US$ 2,200,000 (i.e., 10% of the Net Profit achieved for the Plan Year
ending December 31, 2013) and (6) the Aggregate Catch-Up Payment for the Plan
Year ending on December 31, 2013 would be equal to US$ 800,000 (i.e., 10% of the
Net Profit achieved for the Plan Year ending December 31, 2012 due to
application of US$ 2,000,000 of the Cumulative Net Profit Surplus as of the end
of the Plan Year ending December 31, 2013 to the Net Profit Deficit for the Plan
Year ending December 31, 2012).

 

(iii)                               If for the Plan Year ending on December 31,
2012 the Company achieves 120% of the Net Profit Target of US$ 10,000,000 (i.e.,
US$ 12,000,000) and for the Plan Year ending on December 31, 2013 the Company
achieves 90% of the Net Profit Target of US$ 20,000,000 (i.e., US$ 18,000,000),
then (1) the Plan Year ending

 

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December 31, 2012 would be a Qualified Surplus Year, (2) the Cumulative Net
Profit Surplus as of December 31, 2012 would be equal to US$ $2,000,000, (3) the
Aggregate Incentive Bonus for the Plan Year ending December 31, 2012 would be
US$ 1,200,000 (i.e., 10% of the Net Profit achieved for the year ending December
31, 2012), (4) the Plan Year ending December 31, 2013 would be a Qualified
Deficit Year, (5) the Aggregate Incentive Bonus for the Plan Year ending
December 31, 2013 would be equal to US$ 0 and (6) the Aggregate Catch-Up Payment
for the Plan Year ending December 31, 2013 would be equal to US$ 1,800,000
(i.e., 10% of the Net Profit achieved for the Plan Year ending December 31, 2013
due to application of US$ 2,000,000 of the Cumulative Net Profit Surplus as of
the end of the Plan Year ending December 31, 2012 to the Net Profit Deficit for
the Plan Year ending December 31, 2013).

 

(iv)                              If for the Plan Year ending on December 31,
2012 the Company achieves 85% of the Net Profit Target of US$ 10,000,000 (i.e.,
US$ 8,500,000), for the Plan Year ending on December 31, 2013 the Company
achieves 100% of the Net Profit Target of US$ 20,000,000 and for the Plan Year
ending on December 31, 2014 the Company achieves 105% of the Net Profit Target
of US$ 30,000,000 (i.e., US$ 31,500,000), then (1) the Plan Year ending December
31, 2012 would be a Qualified Deficit Year, (2) the Aggregate Incentive Bonus
for the Plan Year ending December 31, 2012 would be equal to US$ 0, (3) the Plan
Year ending on December 31, 2013 would be a Qualified Year (but not a Qualified
Surplus Year or a Qualified Deficit Year), (4) the Aggregate Incentive Bonus for
the year ending December 31, 2013 would be equal to US$ 2,000,000 (i.e., 10% of
the Net Profit achieved for the Plan Year ending December 31, 2013), (5) the
Aggregate Catch-Up Payment for the Plan Year ending December 31, 2013 would be
equal to US$ 0, (6) the Plan Year ending on December 31, 2014 would be a
Qualified Surplus Year, (7) the Cumulative Net Profit Surplus as of December 31,
2014 would be equal to US$ 1,500,000, (8) the Aggregate Incentive Bonus for the
Plan Year ending December 31, 2014 would be equal to US$ 3,150,000 (i.e., 10% of
the Net Profit achieved for the Plan Year ending December 31, 2014) and (9) the
Aggregate Catch-Up Payment for the Plan Year ending December 31, 2014 would be
equal to US$ 850,000 (i.e., 10% of the Net Profit achieved for the Plan Year
ending December 31, 2012 due to application of US$ 1,500,000 of the Cumulative
Net Profit Surplus as of the end of the Plan Year ending December 31, 2014 to
the Net Profit Deficit for the Plan Year ending December 31, 2012).

 

(v)                                 If for the Plan Year ending on December 31,
2012 the Company achieves 85% of the Net Profit Target of US$ 10,000,000 (i.e.,
US$ 8,500,000), for the Plan Year ending on December 31, 2013 the Company
achieves 70% of the Net Profit Target of US$ 20,000,000 (i.e., US$ 14,000,000)
and for the Plan Year ending on December 31, 2014 the Company achieves 105% of
the Net Profit Target of US$ 30,000,000 (i.e., US$ 31,500,000), then (1) the
Plan Year ending December 31, 2012 would be a Qualified Deficit Year, (2) the
Aggregate Incentive Bonus for the Plan Year ending December 31, 2012 would be
equal to US$ 0, (3) the Plan Year ending on December 31, 2013 would not be a
Qualified Year (or a Qualified Surplus Year or a Qualified Deficit Year),

 

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(4) the Aggregate Incentive Bonus for the year ending December 31, 2013 would be
equal to US$ 0, (5) the Aggregate Catch-Up Payment for the Plan Year ending
December 31, 2013 would be equal to US$ 0, (6) the Plan Year ending on December
31, 2014 would be a Qualified Surplus Year, (7) the Cumulative Net Profit
Surplus as of December 31, 2014 would be equal to US$ 1,500,000, (8) the
Aggregate Incentive Bonus for the Plan Year ending December 31, 2014 would be
equal to US$ 3,150,000 (i.e., 10% of the Net Profit achieved for the Plan Year
ending December 31, 2014) and (9) the Aggregate Catch-Up Payment for the Plan
Year ending December 31, 2014 would be equal to US$ 850,000 (i.e., 10% of the
Net Profit achieved for the Plan Year ending December 31, 2012 due to
application of US$ 1,500,000 of the Cumulative Net Profit Surplus as of the end
of the Plan Year ending December 31, 2014 to the Net Profit Deficit for the Plan
Year ending December 31, 2012).

 

(vi)                              If for the Plan Year ending on December 31,
2012 the Company achieves 90% of the Net Profit Target of US$ 10,000,000 (i.e.,
US$ 9,000,000), for the Plan Year ending on December 31, 2013 the Company
achieves 90% of the Net Profit Target of US$ 20,000,000 (i.e., US$ 18,000,000)
and for the Plan Year ending on December 31, 2014 the Company achieves 110% of
the Net Profit Target of US$ 30,000,000 (i.e., US$ 33,000,000), then (1) the
Plan Year ending December 31, 2012 would be a Qualified Deficit Year, (2) the
Aggregate Incentive Bonus for Plan Year ending December 31, 2012 would be equal
to US$ 0, (3) the Plan Year ending December 31, 2013 would be a Qualified
Deficit Year, (4) the Aggregate Incentive Bonus for the year ending December 31,
2013 would be equal to US$ 0, (5) the Aggregate Catch-Up Payment for the year
ending December 31, 2013 would be equal to US$ 0, (6) the Plan Year ending
December 31, 2014 would be a Qualified Surplus Year, (7) the Cumulative Net
Profit Surplus as of December 31, 2014 would be equal to US$ 3,000,000, (8) the
Aggregate Incentive Bonus for the Plan Year ending December 31, 2014 would be
equal to US$ 3,300,000 (i.e., 10% of the Net Profit achieved for the Plan Year
ending December 31, 2014) and (9) the Aggregate Catch-Up Payment for the Plan
Year ending December 31, 2014 would be equal to US$ 2,700,000 (i.e., the sum of
10% of the Net Profit achieved for the Plan Year ending December 31, 2013 (due
to application of US$ 2,000,000 of the Cumulative Net Profit Surplus as of the
end of the Plan Year ending December 31, 2014 to the Net Profit Deficit for the
Plan Year ending December 31, 2013) and 10% of the Net Profit achieved for the
Plan Year ending December 31, 2012 (due to application of US$ 1,000,000 of the
Cumulative Net Profit Surplus as of the end of the Plan Year ending December 31,
2014 to the Net Profit Deficit for the Plan Year ending December 31, 2012)).

 

(vii)                           If for the Plan Year ending on December 31, 2012
the Company achieves 130% of the Net Profit Target of US$ 10,000,000 (i.e., US$
13,000,000), for the Plan Year ending on December 31, 2013 the Company achieves
70% of the Net Profit Target of US$ 20,000,000 (i.e., US$ 14,000,000) and for
the Plan Year ending on December 31, 2014 the Company achieves 90% of the Net
Profit Target of US$ 30,000,000 (i.e., US$ 27,000,000), then (1) the Plan Year
ending on December 31, 2012 would be a Qualified Surplus Year, (2) the

 

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Cumulative Net Profit Surplus as of December 31, 2012 would be $3,000,000, (3)
the Aggregate Incentive Bonus for Plan Year ending December 31, 2012 would be
equal to US$ 1,300,000 (i.e., 10% of the Net Profit achieved for the Plan Year
ending December 31, 2012), (4) the Plan Year ending on December 31, 2013 would
not be a Qualified Year (or a Qualified Surplus Year or a Qualified Deficit
Year), (5) the Aggregate Incentive Bonus for the Plan Year ending December 31,
2013 would be equal to US$ 0, (6) the Aggregate Catch-Up Payment for the Plan
Year ending December 31, 2013 would be equal to US$ 0, (7) the Cumulative Net
Profit Surplus as of December 31, 2013 would be $3,000,000, (8) the Plan Year
ending December 31, 2014 would be a Qualified Deficit Year, (9) the Aggregate
Incentive Bonus for the Plan Year ending December 31, 2014 would be equal to US$
0 and (10) the Aggregate Catch-Up Payment for the Plan Year ending December 31,
2014 would be equal to US$ 2,700,000 (i.e., 10% of the Net Profit achieved for
the Plan Year ending December 31, 2014 due to application of US$ 3,000,000 of
the Cumulative Net Profit Surplus as of the end of the Plan Year ending December
31, 2012 to the Net Profit Deficit for the Plan Year ending December 31, 2014).

 

(viii)                        If for the Plan Year ending on December 31, 2012
the Company achieves 80% of the Net Profit Target of US$ 10,000,000 (i.e., US$
8,000,000), for the Plan Year ending on December 31, 2013 the Company achieves
80% of the Net Profit Target of US$ 20,000,000 (i.e., US$ 16,000,000), for the
Plan Year ending on December 31, 2014 the Company achieves 100% of the Net
Profit Target of US$ 30,000,000 and for the Plan Year ending on December 31,
2015 the Company achieves 115% of the Net Profit Target of US$ 40,000,000 (i.e.,
US$ 46,000,000), then (1) the Plan Year ending December 31, 2012 would be a
Qualified Deficit Year, (2) the Aggregate Incentive Bonus for Plan Year ending
December 31, 2012 would be equal to US$ 0, (3) the Plan Year ending December 31,
2013 would be a Qualified Deficit Year, (4) the Aggregate Incentive Bonus for
the Plan Year ending December 31, 2013 would be equal to US$ 0, (5) the
Aggregate Catch-Up Payment for the Plan Year ending December 31, 2013 would be
equal to US$ 0, (6) the Plan year ending December 31, 2014 would be a Qualified
Year (but not a Qualified Surplus Year or a Qualified Deficit Year), (7) the
Aggregate Incentive Bonus for the Plan Year ending December 31, 2014 would be
equal to US$ 3,000,000 (i.e., 10% of the Net Profit achieved for the Plan Year
ending December 31, 2014), (8) the Aggregate Catch-Up Payment for the Plan Year
ending December 31, 2014 would be equal to US$ 0, (9) the Plan Year ending
December 31, 2015 would be a Qualified Surplus Year, (10) the Cumulative Net
Profit Surplus as of December 31, 2015 would be equal to US$ 6,000,000, (11) the
Aggregate Incentive Bonus for the Plan Year ending December 31, 2015 would be
equal to US$ 4,600,000 (i.e., 10% of the Net Profit achieved for the Plan Year
ending December 31, 2015) and (12) the Aggregate Catch-Up Payment for the year
ending December 31, 2015 would be equal to US$ 2,400,000 (i.e., the sum of 10%
of the Net Profit achieved for the Plan Year ending December 31, 2013 (due to
application of US$ 4,000,000 of the Cumulative Net Profit Surplus as of the end
of the Plan Year ending December 31, 2015 to the Net Profit Deficit for the Plan
Year ending December 31, 2013) and 10% of the Net Profit achieved for the Plan
Year ending December 31, 2012 (due to

 

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application of US$ 2,000,000 of the Cumulative Net Profit Surplus as of the end
of the Plan Year ending December 31, 2015 to the Net Profit Deficit for the Plan
Year ending December 31, 2012)).

 

(ix)                              If for the Plan Year ending on December 31,
2012 the Company achieves 80% of the Net Profit Target of US$ 10,000,000 (i.e.,
US$ 8,000,000), for the Plan Year ending on December 31, 2013 the Company
achieves 105% of the Net Profit Target of US$ 20,000,000 (i.e., US$ 21,000,000),
for the Plan Year ending on December 31, 2014 the Company achieves 130% of the
Net Profit Target of US$ 30,000,000 (i.e., US$ 39,000,000) and for the Plan Year
ending on December 31, 2015 the Company achieves 80% of the Net Profit Target of
US$ 40,000,000 (i.e., US$ 32,000,000), then (1) the Plan Year ending on December
31, 2012 would be a Qualified Deficit Year, (2) the Aggregate Incentive Bonus
for Plan Year ending December 31, 2012 would be equal to US$ 0, (3) the Plan
Year ending on December 31, 2013 would be a Qualified Surplus Year, (4) the
Cumulative Net Profit Surplus as of December 31, 2013 would be equal to US$
1,000,000, (5) the Aggregate Incentive Bonus for the Plan Year ending December
31, 2013 would be equal to US$ 2,100,000 (i.e., 10% of the Net Profit achieved
for the Plan Year ending December 31, 2013), (6) the Aggregate Catch-Up Payment
for the Plan Year ending December 31, 2013 would be equal to US$ 0, (7) the Plan
Year ending December 31, 2014 would be a Qualified Surplus Year (8) the
Aggregate Incentive Bonus for the year ending December 31, 2014 would be equal
to US$ 3,900,000 (i.e., 10% of the Net Profit achieved for the Plan Year ending
December 31, 2014), (9) the Aggregate Catch-Up Payment for the Plan Year ending
December 31, 2014 would be equal to US$ 800,000 (i.e., 10% of the Net Profit
achieved for the Plan Year ending December 31, 2012 due to application of US$
2,000,000 of the Cumulative Net Profit Surplus as of the end of the Plan Year
ending December 31, 2014 to the Net Profit Deficit for the Plan Year ending
December 31, 2012), (10) the Cumulative Net Profit Surplus as of December 31,
2014 (after application of the Cumulative Net Profit Surplus to the Net Profit
Deficit for the Plan Year ending December 31, 2012) would be equal to US$
8,000,000 (i.e., US$ 1,000,000 Cumulative Net Profit Surplus as of December 31,
2013 plus US$ 9,000,000 Cumulative Net Profit Surplus as of December 31, 2014
minus US$ 2,000,000 Net Profit Deficit for the Plan Year ending December 31,
2012), (11) the Plan Year ending December 31, 2015 would be a Qualified Deficit
Year, (12) the Aggregate Incentive Bonus for the Plan Year ending December 31,
2015 would be equal to US$ 0 and (13) the Aggregate Catch-Up Payment for the
Plan Year ending December 31, 2015 would be equal to US$ 3,200,000 (i.e., 10% of
the Net Profit achieved for the Plan Year ending December 31, 2015 due to
application of US$ 8,000,000 of the Cumulative Net Profit Surplus as of the end
of the Plan Year ending December 31, 2015 to the Net Profit Deficit for the Plan
Year ending December 31, 2015).

 

(x)                                 If for the Plan Year ending on December 31,
2012 the Company achieves 90% of the Net Profit Target of US$ 10,000,000 (i.e.,
US$ 9,000,000), for the Plan Year ending on December 31, 2013 the Company
achieves 90% of the Net Profit Target of US$ 20,000,000 (i.e., US$ 18,000,000),
for the Plan Year ending on December 31, 2014 the

 

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Company achieves 105% of the Net Profit Target of US$ 30,000,000 (i.e., US$
31,500,000) and for the Plan Year ending on December 31, 2015, the Company
achieves 102% of the Net Profit Target of US$ 40,000,000 (i.e., US$ 40,800,000),
then (1) the Plan Year ending December 31, 2012 would be a Qualified Deficit
Year, (2) the Aggregate Incentive Bonus for the Plan Year ending December 31,
2012 would be equal to US$ 0, (3) the Plan Year ending on December 31, 2013
would be a Qualified Deficit Year, (4) the Aggregate Incentive Bonus for the
year ending December 31, 2013 would be equal to US$ 0, (5) the Aggregate
Catch-Up Payment for the Plan Year ending December 31, 2013 would be equal to
US$ 0, (6) the Plan Year ending on December 31, 2014 would be a Qualified
Surplus Year, (7) the Cumulative Net Profit Surplus as of December 31, 2014
would be equal to US$ 1,500,000, (8) the Aggregate Incentive Bonus for the Plan
Year ending December 31, 2014 would be equal to US$ 3,150,000 (i.e., 10% of the
Net Profit achieved for the Plan Year ending December 31, 2014), (9) the
Aggregate Catch-Up Payment for the Plan Year ending December 31, 2014 would be
equal to US$ 900,000 (i.e., 10% of the Net Profit achieved for the Plan Year
ending December 31, 2012 due to application of US$ 1,000,000 of the Cumulative
Net Profit Surplus as of the end of the Plan Year ending December 31, 2014 to
the Net Profit Deficit for the Plan Year ending December 31, 2012), (10) the
Plan Year ending on December 31, 2015 would be a Qualified Surplus Year, (11)
the Cumulative Net Profit Surplus as of December 31, 2015 would be equal to US$
1,300,000 (i.e., the sum of US$ 500,000 (the unapplied Net Profit Surplus for
the Plan Year ending December 31, 2014) and US$ 800,000 (the Net Profit Surplus
earned during the Plan Year ending December 31, 2015), (12) the Aggregate
Incentive Bonus for the Plan Year ending December 31, 2015 would be equal to US$
4,080,000 (i.e., 10% of the Net Profit achieved for the Plan Year ending
December 31, 2015) and (13) the Aggregate Catch-Up Payment for the Plan Year
ending December 31, 2015 would be equal to US$ 0.  Following the end of the Plan
Year ending December 31, 2015, the Cumulative Net Profit Surplus for all Plan
Years would be reapplied so that Participants receive the largest Aggregate
Catch-Up Payment (i.e., 10% of the Net Profit achieved in the Plan Year ending
December 31, 2013).  The Net Profit Surplus for the Plan Year ending December
31, 2014 (i.e., US$ 1,500,000) and the Net Profit Surplus for the Plan Year
ending December 31, 2015 (i.e., US$ 800,000) would be applied to the Net Profit
Deficit for the Plan Year ending December 31, 2013 (i.e., US$ 2,000,000) so
that, following the end of the Plan Year ending December 31, 2015, Participants
would be entitled to an Aggregate Catch-Up Payment of US$ 900,000 (i.e., the
difference between 10% of the Net Profit achieved for the Plan Year ending
December 31, 2013 (i.e., US$ 1,800,000) and the Aggregate Catch-Up Payment
received by Participants following the end of the Plan Year ending December 31,
2014 (i.e., US$ 900,000)).

 

Section 1.03Except as otherwise set forth in Section 5(d)(i), if (x) each Plan
Year is a Qualified Year, (y) the Company achieves aggregate Net Profit for all
Plan Years equal to or greater than the aggregate Net Profit Targets for such
Plan Years and (z) the aggregate amount of the Aggregate Incentive Bonuses paid
for all Plan Years is less than US$ 50,000,000, then Participants who have been
continuously employed by the Company or a subsidiary or affiliate of the Company
from the Closing Date through

 

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the first business day of 2016 (“Continuous Participants”) shall be entitled to
receive an additional bonus award in the aggregate equal to US$ 50,000,000 less
the aggregate amount of the Aggregate Incentive Bonuses and the Aggregate
Catch-Up Payments paid for all Plan Years (the “Additional Incentive Bonus”). 
The Additional Incentive Bonus shall be allocated to each Continuous Participant
in accordance with the allocation set forth in such Continuous Participant’s
Award Letter; provided that any unallocated or forfeited amount shall be
reallocated to each Continuous Participant pro rata in accordance with the
allocations set forth in the Award Letters for all Continuous Participants,
unless the CEO (or, if applicable, the CEO’s successor) recommends a different
reallocation of such amounts to the Board and the Board approves such
recommendation.  For the avoidance of doubt, the CEO’s recommendation with
respect to the reallocation of such amount may include allocations to any
then-current or former Participants, as well as any new Participants (any such
additional current, former or new Participants, together with the Continuous
Participants, “Final Participants”).  The portion of the Additional Incentive
Bonus to which each individual is entitled shall be payable in a single lump sum
as soon as reasonably practicable following the issuance of the Company’s
audited financial statements for the Plan Year ending December 31, 2015, but in
no event later than May 15, 2016.

 

(a)                                 Plan Year ending on December 31, 2012.  If
(A) the Company does not achieve the Net Profit Target for the Plan Year ending
on December 31, 2012, (B) the Reported Net Profit (as defined below) for such
Plan Year equals at least (US$ 30,000,000) and (C) no member of Senior
Management (as defined on Attachment C) has engaged in any act of fraud,
dishonesty, gross negligence or other misconduct that resulted in a reduction in
Reported Net Profit for the Plan Year ending on December 31, 2012, then the
Board will consider, in the exercise of its reasonable good faith discretion,
whether the Net Profit Target for such Plan Year shall be deemed to have been
achieved at the US$ 10,000,000 target for purposes of determining whether
Continuous Participants are eligible to receive an Additional Incentive Bonus
under Section 5(d) above.

 

(b)                                 Example.  The following example is intended
to demonstrate the principles of this Section 5(d) and is presented for
illustrative purposes only.  If (i) the Company achieves at least 100% of the
Net Profit Target for each Plan Year ending on December 31, 2012, 2013 and 2014,
(ii) the Company achieves 80% of the Net Profit Target for the Plan Year ending
December 31, 2015, (iii) for all Plan Years the Company achieves aggregate Net
Profit equal to the aggregate Net Profit Targets for such Plan Years (which ,for
the avoidance of doubt, includes the Net Profit Deficit in the Plan Year ending
December 31, 2015), and (iv) the aggregate amount of the Aggregate Incentive
Bonuses paid in such Plan Years is equal to US$ 40,000,000, Final Participants
will be entitled to an aggregate Additional Incentive Bonus of US$ 10,000,000. 
However, if the Company achieves the Net Profit Targets for each Plan Year
except the Plan Year ending on December 31, 2013 is not a Qualified Year (i.e.,
the Company fails to achieve at least 80% of the Net Profit Target for the Plan
Year ending on December 31, 2013), no Additional Incentive Bonus will be paid to
Final Participants.  For the avoidance of doubt, if the Company achieves at
least 80% of the Net Profit Target each Plan Year and the aggregate amount of
the Aggregate Incentive Bonuses paid for such Plan Years is equal to US$
60,000,000, Continuous Participants will not be entitled to any Additional
Incentive Bonus.

 

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Section 1.04For purposes of the Plan, “Net Profit” means (w) net earnings or net
loss, calculated under U.S. GAAP, as reported in the Company’s audited financial
statements (the “Reported Net Profit”) increased or decreased as identified and
specified in Attachment B hereto, as applicable, by (x) any Specified
Exclusions, (y) any Transaction Adjustments and (z) any Dividend Alternative.

 

(a)                                 The Net Profit Target for each Plan Year is
set forth on Attachment B hereto.

 

(b)                                 An independent accounting firm, which shall
be a “Big Four” accounting firm appointed by the Board (the “Independent
Accounting Firm”), shall perform agreed upon procedures on the calculation of
Net Profit and shall determine the amount of any Aggregate Incentive Bonus and
any Aggregate Catch-Up Payment for each Plan Year, which shall be the final,
conclusive and binding determination of Net Profit, and the amount of any
Aggregate Incentive Bonus and any Aggregate Catch-Up Payment, on all persons,
including the Company and its affiliates and subsidiaries, Participants and
their beneficiaries, and any other persons claiming rights from or through a
Participant.  For the avoidance of doubt, the Independent Accounting Firm will
determine the amount of any Specified Exclusion, Transaction Adjustment or
Dividend Alternative based on information provided by the Company.

 

Section 6.  Termination of Employment.  In order to be eligible to receive an
Incentive Bonus or a Catch-Up Payment, a Participant must remain employed by the
Company or a subsidiary or affiliate of the Company through the first business
day following the end of the Plan Year to which the Incentive Bonus relates or
through the first business day following the end of the Plan Year in which the
Catch-Up Payment is earned, as applicable.  If a Participant was allocated a
portion of the Aggregate Incentive Bonus or the Aggregate Catch-Up Payment but
subsequently forfeits such allocation due to his or her termination of
employment for any reason, such allocation will be reallocated to the other
Participants pro rata in accordance with the then-current allocation of the
Aggregate Incentive Bonus or Aggregate Catch-Up Payment, as applicable, unless
the CEO recommends to the Board a different allocation of such amount and the
Board approves such alternative allocation.

 

Section 7. Unallocated Amount.  10% of the Aggregate Incentive Bonus and the
Aggregate Catch-Up Payment (each such 10% portion of the Aggregate Incentive
Bonus and the Aggregate Catch-Up Payment, the “Unallocated Amount”) shall remain
unallocated as of the effective date of the Plan.  In the event of any payment
of an Aggregate Incentive Bonus or Aggregate Catch-Up Payment, the Unallocated
Amount shall be allocated and paid to the Participants pro rata in accordance
with the then-current allocation of the Aggregate Incentive Bonus or Aggregate
Catch-Up Payment, as applicable, unless the CEO recommends to the Board a
different allocation of the Unallocated Amount and the Board approves such
alternative allocation.  For the avoidance of doubt, the CEO’s recommendation as
to the Unallocated Amount with respect to any Plan Year may be made at any time
prior to the payment of the Aggregate Incentive Bonus or Aggregate Catch-Up
Payment for such Plan Year.  Any unallocated amount of the Additional Incentive
Bonus shall be allocated in accordance with Section 5(d).

 

Section 8.  Reallocations.  Except as expressly provided for herein, the
allocation set forth in each Award Letter shall not be adjusted.

 

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Section 9. “Clawback”. (a)  From the Closing Date through the third anniversary
of the termination of the Plan, as determined pursuant to Section 3 above, each
Participant shall be subject to mandatory repayment of all or a portion of any
Incentive Bonus, Catch-Up Payment or Additional Incentive Bonus by the
Participant solely to the extent that the payment was based on materially
inaccurate financial statements; provided that financial statements will not be
considered to be materially inaccurate due to changes required as a result of a
change in U.S. GAAP or a change in guidance promulgated by a governing
regulatory body, or retroactive changes in law or regulation.  If the Company
seeks repayment of all or a portion of an Incentive Bonus, Catch-Up Payment or
Additional Incentive Bonus pursuant to this Section 9, the Company shall deliver
to all Participants to which such repayment would be applicable a written notice
(a “Clawback Notice”) that sets forth the amount of the Incentive Bonus,
Catch-Up Payment or Additional Incentive Bonus that the Company seeks repayment
of and, in reasonable detail, the basis for such repayment.  Any repayment
pursuant to this Section 9 shall be due forty-five (45) days following delivery
of the Clawback Notice.

 

Section 1.05Example.  The following example is intended to demonstrate the
principles of this Section 9 and is presented for illustrative purposes only. 
If (i) the Company achieves Net Profit for the Plan Year ending December 31,
2014 equal to US$ 200,000,000, (ii) Participants receive an Aggregate Incentive
Bonus for the Plan Year ending December 31, 2014 equal to US$ 20,000,000 and
(iii) as a result of inaccurate financial statements, Net Profit for the Plan
Year ending December 31, 2014 is restated to US$ 120,000,000, Participants who
received a portion of the Aggregate Incentive Bonus for the Plan Year ending
December 31, 2014 may be required to repay an aggregate amount of such Aggregate
Incentive Bonus equal to US$ 8,000,000.

 

Section 10.  Withholding.  Any amounts payable under this Plan shall be subject
to withholding and to such other deductions as shall at the time of such payment
be required for any Federal, state, local, foreign or other taxes as are
required to be withheld pursuant to any applicable law or regulation.

 

Section 11.  Termination or Amendment.  The Board may amend or terminate the
Plan at any time; provided that, without the prior written consent of an
affected Participant, no amendment or termination of the Plan may (i) materially
adversely affect the rights of such Participant or (ii) adversely affect the
amount of any Incentive Bonus, Catch-Up Payment or portion of the Additional
Incentive Bonus payable to such Participant; provided that, subject to Section
17, the Board may amend the Plan without the prior written consent of
Participants to cause the Plan to comply with applicable law or accounting or
tax rules and regulations.  The failure of a Participant or the Company to
insist upon strict adherence to any term of this Plan on any occasion shall not
be considered a waiver of such Participant’s or the Company’s rights or deprive
such Participant or the Company of the right thereafter to insist upon strict
adherence to such term or any other term of this Plan.  No failure or delay by
any Participant or the Company in exercising any right or power hereunder will
operate as a waiver thereof, nor will any single or partial exercise of any such
right or power, or any abandonment of steps to enforce such right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.

 

Section 12. Confidentiality.  The terms of the Plan (including without
limitation the allocations set forth in any Award Letter) are confidential. 
Participants shall not disclose any terms of the Plan or any Award Letter except
to the extent such information becomes generally available to the public other
than as a result of disclosure by a Participant.

 

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Section 13.  No Right to Continued Employment. Nothing in the Plan constitutes
an express or implied contract or other agreement concerning the duration of any
Participant’s employment with the Company or any of its subsidiaries or
affiliates.  In consideration of being eligible to participate in the Plan,
following the Merger (as defined in the Merger Agreement), each Participant who
is a party to an employment agreement with the Company immediately prior to the
Merger shall continue to be subject to the terms and conditions of such
Participant’s employment agreement following the Merger, unless and until such
Participant enters into a new Board-approved employment agreement with the
Company.

 

Section 14.  Non-Exclusivity of Rights.  Nothing in the Plan shall prevent or
limit any Participant’s continuing or future participation in any plan,
practice, policy or program provided by the Company or any of its affiliates for
which the Participant may qualify, nor shall anything in the Plan limit or
otherwise affect any rights the Participant may have under any contract or
agreement with the Company or any affiliate.  Vested benefits and other amounts
that any Participant is otherwise entitled to receive under any incentive
compensation (including any equity award agreement), deferred compensation,
retirement, pension or other plan, practice, policy or program of, or any
contract or agreement with, the Company or any affiliate shall be payable in
accordance with the terms of each such plan, practice, policy, program, contract
or agreement, as the case may be.

 

Section 15.  Miscellaneous.  This Plan is written in both English and Chinese.
The Company acknowledges that this Plan was negotiated based on the English
version and has been translated into a Chinese version.  Notwithstanding the
foregoing, the Company hereby agrees that, in the event that there is any
discrepancy or inconsistency between the English version and Chinese version,
the English version shall prevail in all cases over the Chinese version.

 

Section 16.  Notices.  All notices or other communications required or permitted
by this Plan will be made in writing and all such notices or communications will
be deemed to have been duly given when delivered or (unless specified) mailed by
United States certified or registered mail, return receipt requested, postage
prepaid, address as follows:

 

(a)  If to the Company:

 

AMC Entertainment Holdings, Inc.

920 Main Street

Kansas City, MO 64105

Facsimile: (816) 480-4700

Attention: General Counsel

 

with a copy to:

 

Dalian Wanda Group Co. Ltd.

21/F Block B, Wanda Plaza

93 Jianguo Road

Chaoyang District, Beijing

China 100022

Facsimile: +86 (10) 8585-3095

Attention: Wu Hua

 

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(b)  If to a Participant, to such Participant’s address as most recently
supplied to the Company and set forth in the Company’s records;

 

or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

 

Section 17.  Section 409A.  (a)  All payments hereunder are intended to comply
with or be exempt from Section 409A of the Internal Revenue Code of 1986, as
amended, the Treasury Regulations promulgated thereunder, and other Treasury
Department guidance and interpretive authority issued with respect thereto
(“Section 409A”). If a payment is deemed subject to Section 409A, the Board may,
in its sole discretion and without a Participant’s prior consent, amend the
Plan, adopt policies and procedures, or take any other necessary or appropriate
actions (including actions with retroactive effect) to (i) preserve the intended
tax treatment of any such payment, or (ii) comply with the requirements of
Section 409A, including without limitation any such regulations guidance,
compliance programs and other interpretative authority issued after the
effective date of the Plan, in a manner determined by the Board in good faith in
its sole discretion to have the least adverse consequences to the Participants. 
Whenever a payment under this Plan specifies a payment period with reference to
a number of days (e.g., “payment shall be made within thirty (30) days following
the date of termination”), the actual date of payment within the specified
period shall be within the sole discretion of the Company.

 

Section 1.06Neither any Participant nor any of such Participant’s creditors or
beneficiaries shall have the right to subject any deferred compensation (within
the meaning of Section 409A) payable under this Plan to any anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment or
garnishment.  Except as permitted under Section 409A, any deferred compensation
(within the meaning of Section 409A) payable to any Participant or for such
Participant’s benefit under this Plan may not be reduced by, or offset against,
any amount owing by the Participant to the Company or any of its affiliates.  It
is intended that each payment provided under this Plan is a separate “payment”
for purposes of Section 409A.

 

If a Participant is deemed on the date of termination of employment to be a
“specified employee” within the meaning of that term under Section 409A, then
with regard to any payment that is considered nonqualified deferred compensation
under Section 409A payable on account of a “separation from service,” such
payment shall be made on the tenth (10th) business day following the date which
is the earlier of (i) the expiration of the six (6)-month period measured from
the date of such “separation from service” of the Participant, and (ii) the date
of Participant’s death (the “Delay Period”).  Upon the expiration of the Delay
Period, all payments delayed pursuant to this section (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid to the Participant in a lump sum on the tenth (10th)
business day following the Delay Period, and any remaining payments due under
this Plan shall be paid in accordance with the normal payment dates specified
for them herein.

 

Section 18.  Governing Law; Clawback; Dispute Resolution.  (a)  The Plan shall
be governed by and construed in accordance with the laws of the State of
Delaware, without giving effect to any choice of law or conflicting provision or
rule (whether of the State of Delaware or any other jurisdiction) that would
cause the law of any jurisdiction other than the State of Delaware to be
applied.

 

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Section 1.07If a Participant in good faith objects to the clawback of all or any
portion of his or her Incentive Bonus, Catch-Up Payment or Additional Incentive
Bonus pursuant to Section 9, within forty-five (45) days following delivery of
the Clawback Notice, such Participant shall deliver to the Clawback
Representative (as defined below) a written notice that sets forth in reasonable
detail the basis for the Participant’s objection to the clawback (the
“Participant Clawback Dispute Notice”).  For purposes of this Section 18(b),
“Clawback Representative” shall mean: (i) the CEO, if the then-current CEO has
an interest in the Aggregate Incentive Bonus at least equal to 6.98% or (ii) if
the then-current CEO has an interest in the Aggregate Incentive Bonus less than
6.98%, (A) the Participant who is also a current employee of the Company with
the largest interest in the Aggregate Incentive Bonus or (B) if multiple
Participants have the largest interest in the Aggregate Incentive Bonus
(determined on an individual basis), the Participant appointed by a majority of
the Interested Participants.  For the avoidance of doubt, (x) only a
then-current employee of the Company is eligible to be the Clawback
Representative and (y) the Clawback Representative shall be permitted to object
to the clawback of all or any portion of his or her Incentive Bonus, Catch-Up
Payment or Additional Incentive Bonus, in which case the Clawback Representative
shall deliver to the Board the Representative Clawback Dispute Notice in his or
her own name as described below.  If the Clawback Representative reviews the
Participant Clawback Dispute Notice and in good faith agrees with the
Participant’s objection to the clawback, within thirty (30) days following
delivery of the Participant Clawback Notice, the Clawback Representative shall
deliver to the Board a written notice that sets forth in reasonable detail the
basis for the dispute (the “Representative Clawback Dispute Notice”).  If the
Clawback Representative delivers the Representative Clawback Dispute Notice,
then the Clawback Representative and the Board shall attempt in good faith to
resolve such dispute.  If no such resolution can be reached during the
forty-five (45) day period following the Board’s receipt of a Representative
Clawback Dispute Notice, then, at the sole discretion of the Clawback
Representative, such dispute may be brought for resolution by a third-party
arbitrator, in accordance with the applicable rules of the London Court of
International Arbitration.  The arbitration proceedings shall be located in New
York, New York.  Each of the parties to the arbitration proceedings shall bear
its own attorneys’ fees, costs and expenses and an equal share of the
arbitrator’s and administrative fees of arbitration.  The determination of such
third-party arbitrator shall be final, conclusive and binding on all persons,
including the Company and its subsidiaries and affiliates, Participants and
their beneficiaries, and any other persons claiming rights from or through a
Participant.

 

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ATTACHMENT B

 

Net Profit Targets

 

Plan Year Ending

 

Net Profit Target

 

December 31, 2012

 

USD $

10,000,000

 

December 31, 2013

 

USD $

50,000,000

 

December 31, 2014

 

USD $

115,000,000

 

December 31, 2015

 

USD $

130,000,000

 

 

“Specified Exclusions”

 

Pursuant to Section 5(e), Net Profit shall be increased or decreased as follows:

 

Net Profit to be decreased by any increase in the Reported Net Profit that
results from any injection of cash by Wanda or any of its affiliates or
subsidiaries, including without limitation cash used (i) to repay or otherwise
reduce indebtedness of the Company or its subsidiaries (calculated based on the
interest rate of the debt retired, or weighted average interest rate if more
than one tranche of debt is retired, after applicable income taxes at the
effective tax rate and prorated over the applicable period after the date of
capital investment) or (ii) to fund any merger, acquisition or other similar
transactions involving the Company or any of its subsidiaries only if such funds
are requested by the Company (calculated based on 10% of the funds drawn by the
Company and prorated over the applicable period after the date of capital
investment). For the avoidance of doubt, if the Company utilizes Wanda cash to
fund an acquisition, the incremental Net Profit generated from the acquisition
in excess of 10% of the Wanda funds used to effect said acquisition would remain
in the calculation of Net Profit for purposes of the Plan. Conversely, if Net
Profits for the related acquisition did not exceed 10% of the Wanda funds used
to effect said acquisition, Net Profit for purposes of this calculation would be
reduced by the full 10% of the Wanda funds used for said acquisition (which
would be partially offset by the actual profits achieved for the related
acquisition);

 

Net Profit to be decreased by 50% of any increase in the Reported Net Profit
arising out of any interest reduction as a result of a corporate guaranty or
other securities provided by Wanda or any of its affiliates to the Company, any
of its subsidiaries or the relevant creditors (calculated based on the
difference in overall cost of debt capital (% interest rate) immediately before
and immediately after the credit enhancement, applied against total debt
capital, net of applicable taxes at the effective tax rate and prorated over the
applicable period after the date of credit enhancement);

 

Net Profit to be decreased by any increase in the Reported Net Profit, and Net
Profit to be increased by any decrease in the Reported Net Profit, in each case
arising out of or resulting from any disposition of the shares of NCM
(calculated based on the gain or loss on disposition on a GAAP basis, net of
applicable income taxes at the effective tax rate and disregarding the use of
proceeds from such disposition); provided that the Board has approved in advance
such disposition;

 

Net Profit to be decreased by any increase in the Reported Net Profit, and Net
Profit to be increased by any decrease in the Reported Net Profit, in each case
due to purchase accounting directly relating to the Merger (net of applicable
income taxes at the effective tax rate); and

 

Net Profit to be increased by any decrease in the Reported Net Profit related to
the Incentive Bonuses accrued for under the Plan (net of applicable income taxes
at the effective tax rate).

 

For the avoidance of doubt, (i) Net Profit shall be decreased by any increase in
the Reported Net Profit that results from a reduction in interest expense due to
the repayment of all or a portion of the Company’s debt obligations with cash
invested by Wanda or any of its affiliates or subsidiaries, and (ii) Net Profit
shall

 

--------------------------------------------------------------------------------

 

be increased by any decrease in the Reported Net Profit that results from
financing charges incurred with respect to a repayment or other reduction of any
indebtedness of the Company or its subsidiaries due to the repayment of all or a
portion of the Company’s debt obligations with cash invested by Wanda or any of
its affiliates or subsidiaries.

 

“Transaction Adjustment”

 

Pursuant to Section 5(e), Net Profit shall be decreased by any increase in the
Reported Net Profit, and Net Profit shall be increased by any decrease in the
Reported Net Profit, in each case relating to any disposition of strategic or
key assets of the Company or any of its subsidiaries that has an aggregate value
of US$ 5,000,000 or more (calculated based on the gain or loss in accordance
with GAAP), net of applicable income taxes at the effective tax rate); provided
that the Board has approved in advance such disposition and an estimated impact
on current and future Reported Net Profit; and provided further that, to the
extent the actual increase or decrease in Reported Net Profit is greater than
the estimate approved by the Board, Board approval will be required to include
any adjustment to Reported Net Profit that exceeds such approved estimate.

 

“Dividend Alternative”

 

Pursuant to Section 5(e), Net Profit shall be increased by the sum of (A) the
product of (i) the amount of each dividend paid by the Company during the
applicable Plan Year, (ii) 20% and (iii) a fraction, the numerator of which
shall be the number of days remaining in such Plan Year following the payment of
such dividend and the denominator of which shall be 365 and (B) 20% of each
dividend paid by the Company following the Closing Date through December 31st of
the year before the applicable Plan Year.

 

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