Exhibit 10.1


 


CONTINUING SERVICE AGREEMENT


 


This
Continuing Service Agreement, dated as of January  26th, 2006
(as amended and otherwise modified, the “Agreement”), between Loews
Cineplex Entertainment Corporation, a Delaware corporation (the “Company”),
and Travis Reid (“Reid”), and, solely for purposes of its repurchase
obligations under Section 7 of this Agreement, Marquee Holdings Inc., a
Delaware corporation (“Marquee”).


 


RECITALS


 


WHEREAS,
Reid is currently employed as the President and Chief Executive Officer of the
Company pursuant to an Employment Agreement dated as of January 1, 2005
(as amended and otherwise modified, the “Employment Agreement”);


 


WHEREAS,
LCE Holdings Inc. (“Holdings”) has entered into an Agreement and Plan of
Merger with Marquee dated as of June 20, 2005 (the “Merger Agreement”)
pursuant to which (i) Holdings will merge with and into Marquee and (ii) the
Company will merge with and into AMC Entertainment Inc., with AMC
Entertainments Inc. as the surviving corporation and “Company” for purposes of
this Agreement from and after the Effective Time under the Merger Agreement;


 


WHEREAS,
it is intended that upon the Closing under the Merger Agreement Reid’s
employment as President and Chief Executive Officer of the Company will
terminate;


 


WHEREAS,
Reid is possessed of certain experience and expertise in the business of the
Company and its affiliates;


 


WHEREAS, subject to the
terms and conditions hereinafter set forth, the Company therefore wishes to
retain Reid’s services following the Closing under the Merger Agreement as
provided below; and


 


WHEREAS,
on or about the Effective Time under the Merger Agreement Reid is expected to
be elected to serve as a director of Marquee.


 


AGREEMENT


 


NOW,
THEREFORE, in consideration of the foregoing premises and the mutual promises,
terms, provisions and conditions set forth in this Agreement, the parties
hereby agree:


 


1.                                       Termination
of Employment.


 


(a)                    Immediately
prior to and subject to the occurrence of the Effective Time under the Merger
Agreement, Reid’s employment as President and Chief Executive Officer of the
Company shall terminate pursuant to Section 5(d) of the Employment
Agreement and, subject to the provisions of this Agreement and the Employment
Agreement, the Company shall have such obligations as are set forth in Section 5(d).  Notwithstanding the foregoing, it is agreed
that (i) the amount payable to Reid (or, in the event of his death, to his
spouse or other designated beneficiary or, otherwise, to his estate) under Section 5(d)(i) and
(ii) of the Employment


 

















 


Agreement is $87,500 per month subject to Reid’s
meeting his obligations under the Employment Agreement and under Section 10(b) of
this Agreement.  Reid shall also be
entitled to receive his “Accrued Rights” as provided in the Employment
Agreement, including payment of his 2005 Annual Bonus pursuant to clause (ii) of
the definition of Accrued Rights to the extent not previously paid, provided
that Reid shall not receive any amount under clause (vi) of the definition
of Accrued Rights relating to pro-rata 2006 Annual Bonus.  The Company shall also continue to provide
Reid with the Indemnification Rights pursuant to Section 4(f) of the
Employment Agreement and clause (iv) of the definition of Accrued Rights.


 


(b)                   In
connection with such termination and in satisfaction of the Company’s
obligation under Section 5(g)(i) of the Employment Agreement, Reid
shall be paid a lump sum payment of $1,575,000 pursuant to Section 5(g)(i)(A) of
the Employment Agreement.  Such payment
shall be made on the Closing Date under the Merger Agreement.


 


2.                                       Consulting
Services.   The Company hereby engages Reid
to provide consulting services to the Company and its affiliates during (a) the
period from the Effective Time through the four-month anniversary of the
Closing Date under the Merger Agreement (the “Initial Consulting Period”),
(b) thereafter through the eight month anniversary of the Closing Date
(the “Interim Consulting Period”) and (c) thereafter until Reid or
the Company delivers a written notice to the other that consulting services
will not longer be provided hereunder (the “Continuing Consulting Period”
and collectively, together with the Initial Consulting Period and the Interim
Consulting Period, the “Consulting Periods”).  Reid will report to the Chief Executive
Officer of the Company while performing services hereunder as a consultant to
the Company.


 


3.                                       Scope
of Consulting Services.


 


(a)                    During
the Initial Consulting Period and the Interim Consulting Period, Reid will
provide such advice and other consulting services as the Company may from time
to time request, upon reasonable notice, orally or in writing.  Reid shall devote such business time as is
necessary or desirable to fully perform hereunder; provided that (i) during
the Initial Consulting Period, Reid will devote his full business time to
providing such services and (ii) during the Interim Consulting Period Reid
will only devote up to two-thirds of his full business time to providing such
services.  Reid may accept other
employment or consulting positions during the Interim Consulting Period,
provided such employment or consulting position is consistent with his
obligations under this Agreement and Reid’s other agreements with the Company
and its affiliates and provided further that during the Interim Consulting
Period Reid give the Company not less than ten calendar days’ notice prior to
commencing such other employment or consulting.


 


(b)                   During
the Continuing Consulting Period, Reid will provide such advice and other
consulting services as he and the Company may from time to time mutually agree,
orally or in writing.  Reid shall devote
such business time as is necessary to perform such services.  Reid may accept other employment or
consulting positions during the Continuing Consulting Period, provided such
employment or consulting position is consistent with his obligations under this
Agreement and Reid’s other agreements with the Company and its affiliates.


 


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4.                                       Relationship
of the Parties.  It is understood and
agreed that in his capacity as a consultant, Reid will be an independent
contractor in the performance of services and that nothing contained in this
Agreement is intended to create an employment relationship between Reid and the
Company.


 


5.                                       Compensation
and Benefits.   During the Consulting
Periods, as full compensation for all services performed for the Company and
its affiliates hereunder and subject to Reid’s meeting his obligations under
this Agreement and under the Employment Agreement, Reid will be provided the
following:


 


(a)                    During
the Initial Consulting Period, the Company shall pay Reid a consulting fee at
the rate of $600,000 per year, payable in accordance with the payroll timing
practices of the Company for its senior executives.


 


(b)                   During
the Interim Consulting Period, the Company shall pay Reid a consulting fee at
the rate of $400,000 per year, payable in accordance with the payroll timing
practices of the Company for its senior executives.


 


(c)                    During
the Continuing Consulting Period, the Company shall pay Reid a consulting fee
at the rate of $200,000 per year, payable in accordance with the payroll timing
practices of the Company for its senior executives.


 


(d)                   The
Company will continue Reid’s benefits under the automobile policy described in
Reid’s Employment Agreement until December 31, 2006.


 


(e)                    In
connection with providing consulting services hereunder as requested by the
Company, the Company shall pay or reimburse Reid for all reasonable, customary
and necessary business expenses incurred or paid by Reid in the performance of
his duties and responsibilities in connection therewith in accordance with the
Company’s expense reimbursement policy.


 


(f)                      The
parties confirm that Reid will remain eligible for indemnification by the
Company, to the extent set forth in Section 4(f) of the Employment
Agreement with respect to claims asserted against Reid for actions or omissions
in the course of his employment by the Company.


 


(g)                   The
parties agree that to the extent acting in his capacity as a consultant
hereunder, Reid will be entitled to indemnification to the same extent as
senior executives of Marquee Holdings Inc. and its subsidiaries.


 


6.                                       Outplacement
Advisor.  The Company will pay an
amount not to exceed $75,000 in the aggregate for outplacement services
provided to Reid (to a provider(s) designated by Reid in accordance with such
provider(s) customary policies) through December 31, 2006.


 


7.                                       Marquee
Stockholders Agreement; Repurchase. 
Reid will become party to the Amended and Restated Management
Stockholders Agreement of Marquee Holdings Inc. (the “Management
Stockholders Agreement”), which shall be in the form provided to Reid on
the date hereof , and all of the shares of Class N common Stock of Marquee
Reid acquires at the Effective Time (the “Purchased Shares”) will be “Restricted
Shares” under the Management


 


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Stockholders Agreement and will be subject to the provisions thereof; provided,
however, that except as expressly set forth in this Section 7, the
provisions of Section 2(b), 2(d) and 2(g) of the Management
Stockholders Agreement shall not apply to the Purchased Shares.  In the event of his death, all rights of Reid
under this Section 7 shall accrue to his spouse or other beneficiary.


 


(a)                    If
Reid terminates the Consulting Periods prior to December 31, 2006, upon
the Date of Termination and for a period of six months thereafter, Marquee
shall have the right to repurchase all but not less than all of the Purchased
Shares in exchange for payment to Reid of $600,000 (the “Repurchase Right”).


 


(b)                   Reid
shall have the right, on or prior to December 31, 2006, to sell to
Marquee, and Marquee shall be required to purchase, on one occasion, all of the
Purchased Shares in exchange for payment to Reid of $600,000 (the “Put Right”).


 


(c)                    If
Marquee or Reid elects to exercise the Repurchase Right or Put Right, as
applicable, the electing party shall send written notice to the other of his or
its intention to exercise the Repurchase Right or Put Right (the “Redemption
Notice”).  The completion of the
purchase shall take place on the tenth day after the actual date of delivery of
the Redemption Notice against delivery of certificates or other instruments
representing the Purchased Shares, appropriately endorsed or executed by Reid.


 


(d)                   Notwithstanding
anything to the contrary herein, if the Board of Directors of Marquee in good
faith determines that the repurchase by Marquee of Purchased Shares pursuant to
a Redemption Notice:


 


(i)                           is
prohibited by applicable law restricting the purchase by a corporation of its
own shares; or


 


(ii)                        prior
to the first to occur of an Initial Public Offering (as defined in the
Management Stockholders Agreement) or a Change of Control, would violate or
cause a default under any of Marquee’s or any of its Subsidiaries’ (as defined
in the Management Stockholders Agreement) material debt agreements, indentures
and other agreements or instruments evidencing material indebtedness of Marquee
or any of its Subsidiaries, as such agreements, indentures and instruments may
be amended or modified from time to time in accordance with their terms
(collectively, “Financing Documents”),


 


(the
events described in (i) and (ii) above each constitute a “Repurchase
Disability”), then Marquee shall notify Reid in writing (a “Disability
Notice”).  The Disability Notice
shall specify the nature of the Repurchase Disability.  Marquee shall thereafter repurchase the
Purchased Shares described in the Redemption Notice as soon as reasonably
practicable after all Repurchase Disabilities cease to exist (or Marquee may
elect, but shall have no obligation, to cause its nominee to repurchase the
Purchased Shares while any Repurchase Disabilities continue to exist).


 


(e)                                  In
the event Marquee or its nominee does not repurchase the Purchased Shares due
to a Repurchase Disability, (i) Marquee shall provide written notice to
Reid as soon as practicable after all Repurchase Disabilities cease to exist
(the “Reinstatement Notice”) and (2) the completion of the
repurchase pursuant to the Redemption Notice shall occur on a date


 


4

















 


specified by Marquee within 10 days following the
actual date of delivery of the Redemption Notice.


 


(f)                                    Notwithstanding
the foregoing, to the extent that Marquee’s repurchase of the Purchased Shares
Stock pursuant to a Redemption Notice may be made in part without creating or
causing a Repurchase Disability, Marquee shall make such repurchase to the
fullest extent without creating or causing a Repurchase Disability.


 


8.                                       Loews
Stock Options.   Immediately prior to the
Effective Time, all options held by Reid to acquire shares of Class A
Common Stock and Class L Common Stock of Holdings and Cumulative Preferred
Shares of LCE Intermediate Holdings Inc. shall terminate.


 


9.                                       Marquee
Stock Options.  Pursuant to a
Non-Qualified Stock Option Agreement to be entered into between Reid and
Marquee, Reid will receive options to purchase 600 shares of Class N
Common Stock of Marquee with an exercise price of $1,000 per share.  Such options (a) will vest in three
equal annual installments on each of December 23, 2006, 2007 and 2008,
subject to acceleration in full upon a Change of Control (as defined under the
Management Stockholders Agreement), (b) together with any shares purchased
upon exercise thereof, will be subject to the Management Stockholder Agreement
and (c) will have an exercise price equal to the exercise price of the
options granted to senior executives of Marquee and its subsidiaries on or
about December, 2004, which price shall not be less than the fair market value
of a share of Class N Common Stock of Marquee as of such date as
determined by the Board of Directors of Marquee.


 


10.                                 Noncompetition
Agreement.


 


(a)                    As
of the Effective Time, Reid will no longer be bound by the restrictions in Section 8(a) of
the Employment Agreement.


 


(b)                   Subject
to such exceptions as may be approved from time to time by the Company in its
sole discretion, Reid hereby agrees that for the eighteen months after the
Closing Date under the Merger Agreement, he shall not become an owner of,
partner in or with, investor in (other than de minimis ownership interests in
public companies or mutual funds), consultant to, or agent, employee or
co-venturer of any of the major theatrical exhibitors of motion pictures to the
public listed on Exhibit A.  Reid
acknowledges that he has carefully read and considered all the terms and
conditions of this Section 10(b) and that the said restraints
contained herein are necessary for the reasonable and proper protection of the
Company and its affiliates and that each and every one of the restraints is
reasonable in respect to subject matter, length of time and geographic
area.  If Reid breaches the covenant
contained in this Section 10(b), (i) the Company shall no longer be
obligated to make payments required under Section 1(a) of this
Agreement or Section 5 of the Employment Agreement (other than with
respect to the Accrued Rights) and (ii) the Consulting Periods will
automatically terminate.  The Company
acknowledges and agrees that it shall have no other remedy in the event of a
breach or threatened breach of any of the covenants contained in this Section 10(b).  The parties further agree that, in the event
that any provision of this Section 10(b) shall be determined by any
court of competent jurisdiction to be unenforceable by reason of its being
extended over too great a time, too large a geographic area


 


5

















 


or too great a range of activities, such provision
shall be deemed to be modified to permit its enforcement to the maximum extent
permitted by law.


 


11.                                 Taxes
and Other Matters.  All payments
under this Agreement will be reduced by all taxes and other amounts which they
required to withhold under applicable law. Reid will not continue to earn
vacation or other paid time off during the Consulting Period or thereafter.


 


12.                                 Termination
of the Consulting Periods.   Reid may elect to terminate the Consulting
Periods in writing with or without cause at any time.  The Company may elect to terminate the
Consulting Periods in writing (a) for Cause (as defined in clauses (iii) and
(iv) of the definition of Cause in the Employment Agreement) at any time
or (b) other than for Cause (as defined in clauses (iii) and (iv) of
the definition of Cause in the Employment Agreement) on or after the earlier of
(i) January 1, 2007 and (ii) the date of purchase by the Company
of the Purchased Shares upon the exercise by Reid of the Put Right under Section 7(b).  In addition, (x) the Consulting Periods will
terminate as provided in Section 10(b) and (y) the Consulting Periods
will be deemed to have been terminated by Reid upon Reid’s death.  The Company and its affiliates shall have no
further obligation to Reid under Section 5 following termination of the
Consulting Periods other than for any consulting fee earned but not paid on the
date of termination and any unreimbursed expenses under Section 5(e) and
the indemnification rights provided under Section 5(f) and 5(g).


 


13.                                 Release
of Claims.  The Company wants to be certain
that this Agreement will resolve any and all concerns that Reid might have and
therefore requests that Reid carefully consider the terms of this Agreement,
including the release of claims set forth here, and, in that connection,
encourages him to seek the advice of an attorney before signing this
Agreement.  In exchange for the
compensation to be provided Reid under this Agreement, certain of which he was
not otherwise entitled to, Reid agrees that upon and subject to the occurrence
of the Effective Time under the Merger Agreement this Agreement (and the
Agreements incorporated herein by reference) shall be in complete and final
settlement of, and releases the Company, its subsidiaries and other affiliates,
and all of the past and present directors, officers, shareholders, general and
limited partners, employees and agents of the foregoing, their successors and
assigns, and all others connected with them, both individually and in their
official capacities, from any and all causes of action, rights or claims that
Reid has had in the past, now has or might now have in any way related to,
connected with or arising out of his employment by the Company and its
termination or pursuant to any law, regulation or other requirement of the U.K.
or of the U.S. (including without limitation Title VII of the federal Civil
Rights Act, the Americans with Disabilities Act, the Age Discrimination in
Employment Act, the fair employment practices statutes of the U.S. state or
states in which Reid provided services to the Company, its subsidiaries or its
affiliates), provided that this release shall not apply to the obligations of
the Company under this Agreement.


 


14.                                 The
Company.  For purposes of this
Agreement, from and after the Effective Time the “Company” shall include
AMC Entertainment Inc. as successor by merger to Loews Cineplex Entertainment
Corporation.


 


15.                                 Severability.  If any portion or provision of this Agreement
shall to any extent be declared illegal or unenforceable by a court of
competent jurisdiction, then the remainder of this


 


6

















 


Agreement, or the application of such portion or provision in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted
by law.


 


16.                                 Governing
Law.  This Agreement and all claims
arising out of or based upon this Agreement or relating to the subject matter
hereof shall be governed by and construed in accordance with the domestic
substantive laws of the State of New York without giving effect to any choice
or conflict of laws provision or rule that would cause the application of
the domestic substantive laws of any other jurisdiction.


 


17.                                 Consent
to Jurisdiction.  Each party to this
Agreement, by its execution hereof, (a) hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the State of
New York, County of New York for the purpose of any action, claim, cause of
action or suit (in contract, tort or otherwise), inquiry, proceeding or
investigation arising out of or based upon this Agreement or relating to the
subject matter hereof, (b) hereby waives to the extent not prohibited by
applicable law, and agrees not to assert, and agrees not to allow any of its
subsidiaries to assert, by way of motion, as a defense or otherwise, in any
such action, any claim that it is not subject personally to the jurisdiction of
the above-named courts, that its property is exempt or immune from attachment
or execution, that any such proceeding brought in one of the above-named courts
is improper, or that this Agreement or the subject matter hereof or thereof may
not be enforced in or by such court and (c) hereby agrees not to commence
or maintain any action, claim, cause of action or suit (in contract, tort or
otherwise), inquiry, proceeding or investigation arising out of or based upon
this Agreement or relating to the subject matter hereof or thereof other than
before one of the above-named courts nor to make any motion or take any other
action seeking or intending to cause the transfer or removal of any such action,
claim, cause of action or suit (in contract, tort or otherwise), inquiry,
proceeding or investigation to any court other than one of the above-named
courts whether on the grounds of inconvenient forum or otherwise.  Notwithstanding the foregoing, to the extent
that any party hereto is or becomes a party in any litigation in connection
with which it may assert indemnification rights set forth in this agreement,
the court in which such litigation is being heard shall be deemed to be
included in clause (a) above. 
Notwithstanding the foregoing, any party to this Agreement may commence
and maintain an action to enforce a judgment of any of the above-named courts
in any court of competent jurisdiction. 
Each party hereto hereby consents to service of process in any such
proceeding in any manner permitted by New York law, and agrees that service of
process by registered or certified mail, return receipt requested, is
reasonably calculated to give actual notice.


 


18.                                 WAIVER
OF JURY TRIAL.  TO THE EXTENT NOT
PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY
WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT
OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE
OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE),
INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON THIS
AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW


 


7

















 


EXISTING OR HEREAFTER ARISING.  EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS
BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 18 CONSTITUTES
A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN ENTERING
INTO THIS AGREEMENT.  ANY PARTY HERETO MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 18 WITH ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS
RIGHT TO TRIAL BY JURY.


 


19.                                 Miscellaneous.
 This Agreement and the agreements
incorporated by reference hereby (and to the extent modified hereby) contain
the entire agreement between Reid and the Company, its subsidiaries, affiliates
and representatives and replaces all prior and contemporaneous communications,
agreements and understandings, written or oral, with respect to the terms and
conditions of Reid’s employment and his retention as a consultant.  In the event of any conflict between the
express terms of this Agreement and the terms of the Management Stockholders
Agreement, the Option Plan, the Non-Qualified Stock Option Agreement by and
between Marquee and Reid dated on or about the Effective Time or any other
agreement with respect to the subject matter hereof between Marquee or the
Company, on one hand, and Reid, on the other, the terms of this Agreement shall
control.  This Agreement may not be
modified or amended, and no breach shall be deemed to be waived, unless agreed
to in writing by Reid and an authorized representative of the Company and of
Marquee.  The heading and captions in
this Agreement are for convenience of reference only and do not define or
describe the scope or content of any provision of this Agreement.  In signing this Agreement, Reid gives the
Company assurance that he has had at least twenty-one days to consider this
Agreement and that such time has provided him a full and reasonable opportunity
to consider its terms; that he has read and understood all of those terms; that
his acceptance of this Agreement is freely and voluntarily given; and that in
signing this Agreement he have not relied on any promises or representations,
express or implied, that are not set forth expressly in this Agreement.  Reid may revoke this Agreement at any time
during the seven calendar day period immediately following the date of his
signing it by notifying the Company in writing of his revocation within that
period.  If Reid does not revoke this
Agreement, then, at the expiration of the seven-day period, this Agreement shall
take effect as a legally binding agreement between Reid and the Company on the
basis set forth above.


 


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IN
WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the
Company, by its duly authorized representative, by Marquee, by its duly
authorized representative, and by Reid, as of the date first above written.


 


 


	
  LOEWS CINEPLEX ENTERTAINMENT CORPORATION

  
	
   

  
	
  By:

  	
  /s/ M. Politi

  	
   

  
	
   

  	
  Name: M. Politi

  
	
   

  	
  Title: SVP

  
	
   

  
	
   

  
	
  MARQUEE HOLDINGS, INC.

  
	
   

  
	
  By:

  	
  /s/ Craig R. Ramsey

  	
   

  
	
   

  	
  Name: Craig R. Ramsey

  
	
   

  	
  Title: Executive
  Vice President and

  Chief Financial Officer

  
	
   

  
	
   

  
	
  REID:

  
	
   

  
	
  /s/ Travis Reid

  	
   

  
	
  Travis Reid

  
					



 

















 


Exhibit A


 


1.                                       Regal
Entertainment Group


2.                                       Cinemark


3.                                       Carmike
Cinemas


4.                                       National
Amusements


5.                                       Century
Theaters


6.                                       Cineplex
Galaxy Cinemas


7.                                       Muvico
Theaters


8.                                       Harkins
Theatres


9.                                       Pacific
Theatres