Exhibit 10.3


 


EMPLOYMENT AGREEMENT


 


This Employment Agreement (the “Agreement”) is entered
into as of December 23, 2004, and is effective immediately following the
Effective Time, by and among MARQUEE HOLDINGS
INC., a Delaware corporation
(“Holdings”), AMC ENTERTAINMENT INC., a Delaware
corporation (“AMCE”), AMERICAN MULTI-CINEMA,
INC., a Missouri corporation and wholly-owned subsidiary of AMCE (“AMC”
and, collectively with Holdings and AMCE, the “Company”), and PHILIP M. SINGLETON (“Employee”).  In consideration of the mutual promises and
covenants contained herein, the parties hereto agree as follows:


 


Capitalized terms not otherwise defined herein shall
have the meanings assigned to such terms in Section 17.


 


1.             Position and Duties. 
During the Term (as defined in Section 2) of his employment by the
Company under this Agreement, Employee shall devote his full time and attention
to the business of the Company as President and Chief Operating Officer of AMC,
as directed by the Chairman of the Board, Chief Executive Officer and President
of AMCE.  Notwithstanding the foregoing,
Employee shall be permitted, to the extent such activities do not substantially
interfere with the performance by Employee of his duties and responsibilities
under this Agreement, (i) to manage Employee’s personal financial and legal
affairs, (ii) to serve on corporate, civic or charitable boards or committees,
and (iii) to serve in executive positions in affiliates or entities in which
the Company has an interest.


 


2.             Term.  The term of
this Agreement shall commence as of the Effective Date and shall terminate on
the third anniversary thereof or sooner as provided in Section 6 below (such
period, as it may be extended, the “Term”). 
On each anniversary of the Effective Date during the Term, one year
shall be added to the Term of Employee’s employment with the Company under this
Agreement, so that as of each such anniversary the Term of Employee’s
employment hereunder shall be three (3) years.


 


3.             Compensation.


 


(a)           Base Salary.  During
the Term of his employment by the Company under this Agreement, Employee shall
receive an annual salary of $468,200.00 (“Base Salary”) (less withholding for
applicable taxes), payable in accordance with the Company’s payroll procedures
for its salaried employees, subject to such increases as may be approved by the
Compensation Committee of Holdings’ Board of Directors (the “Compensation
Committee”).


 


(b)           Bonus.  In addition to
Base Salary, Employee shall be eligible to receive an annual bonus (the “Bonus”)
as determined from time to time by the Compensation Committee based on the
Company’s applicable incentive compensation program, as such may exist from
time to time.


 


(c)           Benefits.  During the
Term of Employee’s employment by the Company under this Agreement, Employee
also shall be eligible for the benefits offered by the Company from time to
time to the Company’s other executive officers (such as group insurance,
pension plans,


 





















 


thrift plans, stock purchase plans and the like).  Following termination of employment, Employee’s
rights to coverage and benefits under such plans and programs shall be governed
by the terms of such plans as in effect from time to time, except to the extent
expressly provided otherwise herein.  Nothing
herein shall be construed so as to prevent the Company from modifying or
terminating any employee benefit plans or programs it may adopt from time to
time.


 


(d)           Automobile.  During
the Term of Employee’s employment by the Company under this Agreement, the
Company shall provide Employee with a Company owned or leased automobile or an
equivalent automobile allowance.


 


4.             Expense Reimbursements.  During the Term of Employee’s employment by
the Company under this Agreement, the Company shall reimburse Employee for
business travel and entertainment expenses reasonably incurred by Employee on
behalf of the Company in accordance with the Company’s procedures, as such may
exist from time to time.


 


5.             Termination.  Employee’s employment by the Company under
this Agreement shall be terminated upon the earliest to occur of the following
events and any termination of Employee’s employment as provided herein shall
constitute a termination of his employment with each of Holdings, AMCE and AMC:


 


(a)           Resignation.  Employee’s
resignation or other voluntary departure.


 


(b)           Death.  The death of
Employee.


 


(c)           Disability.  If, as a
result of Employee’s incapacity due to physical or mental illness, (i) Employee
shall not have been regularly performing his duties and obligations hereunder
for a period of one hundred twenty (120) consecutive days (a “Disability”),
(ii) the Company has given Employee the written Notice of Termination pursuant
to Section 6(a) hereof, and (iii) within thirty (30) days after the Company
gives Employee such written Notice of Termination (which may occur before or
after the end of such 120 day period), Employee shall not have returned to the
performance of his duties and obligations hereunder on a regular basis.


 


(d)           Cause.  Employee is
terminated by Holdings’ Board of Directors for Cause.  For purposes of this Agreement, “Cause” is
defined as (i) the willful and continued failure by Employee to perform
substantially his duties with the Company (other than any such failure
resulting from his incapacity due to physical or mental illness), or (ii) the
willful engaging by Employee in misconduct which is materially and demonstrably
injurious to the Company.  For purposes
of this Agreement, no act, or failure to act, on the part of Employee shall be
considered “willful” unless such act was committed, or such failure to act
occurred, in bad faith and without reasonable belief that Employee’s act or
failure to act was in the best interests of the Company.


 


(e)           Without Cause.  The
employment of Employee by the Company under this Agreement may be terminated
without Cause with severance at any time by Holdings’ Board of Directors in its
sole discretion.


 


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(f)            Good Reason.  Employee
terminates his employment by the Company hereunder for Good Reason.  For purposes of this Agreement, “Good Reason”
shall mean (i) a failure by the Company to comply with any material provisions
of this Agreement which has not been cured within thirty (30) days after
written notice of such noncompliance has been given to Holdings by Employee,
(ii) any purported termination of Employee which is not effected pursuant to a
Notice of Termination, as defined in Sections 6 and 12 below (and for purposes
of this Agreement no such purported termination shall be effective), (iii) actions
by the Company that result in a material diminution of Employee’s position,
authority, duties or responsibilities, other than an action that is not taken
in bad faith and is remedied by the Company promptly after receipt of notice
thereof from Employee or (iv) any material reduction in Employee’s Base Salary
or benefits or eligibility under Bonus or benefit plans which is not agreed to
by Employee; provided, however, that the Merger of Marquee Inc.
with and into AMCE as of the Effective Date shall not constitute or be deemed
to constitute grounds for Employee’s resignation for Good Reason under this
Agreement.  Employee must notify Holdings
in writing within thirty (30) days of becoming aware of the occurrence of any
of (i) through (iv) above in order to receive the payments described in Section
7(c) below.


 


(g)           Change of Control. 
Employee terminates his employment by the Company hereunder in the event
of a Change of Control.  Employee must
not be the person or part of a group (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) which effected the Change of Control, and must
notify the Company in writing of such termination within sixty (60) days after
the occurrence of a Change of Control, in order to receive the payments
described in Section 7(c) below.


 


(h)           Retirement.  The voluntary
retirement by Employee at or after age 65.


 


6.             Termination Procedure.


 


(a)           Notice of Termination. 
Any termination of the Company’s employment of Employee, either by the
Company or by Employee (other than termination pursuant to Section 5(b)
hereof), shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 12. 
For purposes of this Agreement, a “Notice of Termination” shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall, where applicable, set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination
of Employee under the provisions so indicated.


 


(b)           Date of Termination.  “Date
of Termination” shall mean (i) if Employee’s employment by the Company is
terminated pursuant to Section 5(a) or 5(h) hereof, thirty (30) days after
Notice of Termination is given, (ii) if Employee’s employment by the Company is
terminated pursuant to Section 5(b) hereof, the date of death, (iii) if
Employee’s employment by the Company is terminated pursuant to Section 5(c)
hereof, thirty (30) days after Notice of Termination is given (provided that
Employee shall not have again become available for service to the Company on a
regular basis during such thirty (30) day period), (iv) if Employee’s
employment by the Company is terminated pursuant to Section 5(d), the date
specified in the Notice of Termination, and (v) if Employee’s employment by the
Company is terminated for any other reason, the date on which a Notice of
Termination is given.


 


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7.             Compensation During Disability or Upon Termination of Employment.


 


(a)           During Disability.  During
any period that Employee fails to perform his duties under this Agreement as a
result of incapacity due to physical or mental illness (a “disability period”),
Employee shall continue to receive his Base Salary at the rate then in effect
for such period until his employment by the Company is terminated pursuant to
Section 5(c) hereof, provided that payments so made to Employee during the
first 180 days of any such disability period shall be reduced by the sum of the
amounts, if any, paid to Employee at or prior to the time of any such payment
under disability benefit plans of the Company or under the Social Security
disability insurance program, and which amounts were not previously applied to
reduce any such payment.  Employee shall
also receive a pro rata portion of the Bonus described in Section 3(b) pursuant
to the Company’s applicable incentive compensation program (the amount of such
pro rated Bonus to be determined as though the target level for such Bonus was
attained (or if there is no target level, to be determined as though the target
level of 65% of the Base Salary at the rate then in effect was attained),
multiplied by a fraction, the numerator of which is the number of completed
months in the then current Bonus program year and the denominator of which is
12), as such may exist from time to time.


 


(b)           Termination for Employee Resignation, Cause or Retirement.  If Employee’s employment by the Company is
terminated pursuant to Section 5(a) or (d), the Company shall pay Employee his
accrued but unpaid Base Salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given (the “Accrued Payments”), and
the Company shall have no further obligations to Employee under this
Agreement.  If Employee’s employment by the
Company is terminated pursuant to Section 5(h), (i) the Company shall pay
Employee the Accrued Payments, (ii) the Company shall pay Employee a pro rata
portion of the Bonus described in Section 3(b) pursuant to the Company’s
applicable incentive compensation program (the amount of such pro rated Bonus
to be determined as though the target level for such Bonus was attained (or if
there is no target level, to be determined as though the target level of 65% of
the Base Salary at the rate then in effect was attained), multiplied by a
fraction, the numerator of which is the number of completed months in the then
current Bonus program year and the denominator of which is 12), as such may
exist from time to time and (iii) Employee shall have the Put Right described
in Section 7(c)(ii) and Employee’s outstanding Employee Options shall be vested
as if the Date of Termination were the fifth anniversary of such date (i.e.,
Employee will be credited with an additional five years of service for purposes
of vesting in the Employee Options).


 


(c)           Termination for Death, Disability, Without Cause or by Employee for
Good Reason or Change of Control. 
If Employee’s employment by the Company is terminated pursuant to
Section 5(b), (c), (e), (f) or (g), the Company shall pay to Employee or his
personal representative the Accrued Payments and the compensation payments
described in Section 7(c)(i), Employee shall have the Put Right in Section
7(c)(ii) and Employee’s outstanding Employee Options shall be vested as if the
Date of Termination were the fifth anniversary of such date (i.e., Employee
will be credited with an additional five years of service for purposes of
vesting in the Employee Options); provided, however, that
Employee also must have timely notified the Company as provided in Sections
5(f) and (g), as applicable, in order to receive such payments, such Employee
Option vesting and have such Put Right. 
All amounts payable under


 


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this Section 7(c) shall be reduced by withholding for applicable taxes,
if any.


 


(i)            A
lump-sum cash payment equal to the sum of (A) Employee’s Base Salary at the
rate in effect on the Date of Termination for the remainder of the Term, plus
(B) the Bonus described in Section 3(b) pursuant to the Company’s applicable
incentive compensation program (the amount of such Bonus to be determined as if
the target level for such Bonus was attained (or if there is no target level,
to be determined as though the target level of 65% of the Base Salary at the
rate then in effect was attained)), multiplied by the number of years remaining
in the Term (for purpose of (A) and (B) any partial year during the remainder
of the Term shall be treated as an entire year).  All payments pursuant to this Section 7(c)(i)
shall be paid on the Date of Termination by wire transfer of immediately
available funds in the appropriate amount to an account designated by Employee
or his estate, as the case may be.


 


(ii)           Put Right.


 


(A)          Except
as otherwise provided herein, if Employee’s employment by the Company is
terminated pursuant to Section 5(b), (c), (e), (f), (g) or (h), then Employee
or his estate, as the case may be, shall have the right (the “Put Right”), for
six months following the Date of Termination, (A) to sell to Holdings, and
Holdings shall be required to purchase, on one occasion, all or any portion, as
specified by Employee or his estate, of the shares of Common Stock then held by
Employee or his estate, as the case may be, at the Put Price and (B) to require
Holdings to pay to Employee or his estate, as the case may be, an amount equal
to the Employee Option Excess Price with respect to the termination of all or
any portion, as specified by Employee, of the outstanding vested Employee
Options then held by Employee or his estate, as the case may be.


 


(B)           Employee
or his estate, as the case may be, shall send written notice to Holdings of his
or its intention to exercise the Put Right to sell shares of Common Stock
and/or to terminate Employee Options (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
Common Stock so purchased and appropriate documents canceling the Employee
Options so terminated, appropriately endorsed or executed by Employee or his
estate, or his or its duly authorized representative.  Subject to Section 7(c)(ii)(C), payment of
the aggregate Put Price for all Common Stock repurchased pursuant to a
Redemption Notice shall be paid within ten (10) days following the
determination of Fair Market Value by wire transfer of immediately available
funds in the appropriate amount to an account designated by Employee or his
estate, as the case may be.  Payments
with respect to Employee Options as described above shall be paid in
substantially equal installments on the first business day of the month over
the 180 day period following the determination of Fair Market Value by wire
transfer of immediately available funds in the appropriate amount to an account
designated by Employee or his estate, as the case may be.


 


(C)           Notwithstanding
anything to the contrary herein, if the Board of Directors of Holdings in good
faith determines that the repurchase by Holdings of


 


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Common Stock 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 or a Change of Control,
would violate or cause a default under any of Holdings’ or any of Holdings’
Subsidiaries’ material debt agreements, indentures and other agreements or
instruments evidencing material indebtedness of Holdings 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 Holdings shall notify Employee in writing (a “Disability Notice”).  The Disability Notice shall specify the
nature of the Repurchase Disability. 
Holdings shall thereafter repurchase the Common Stock described in the
Redemption Notice as soon as reasonably practicable after all Repurchase
Disabilities cease to exist (or Holdings may elect, but shall have no
obligation, to cause its nominee to repurchase the Common Stock while any
Repurchase Disabilities continue to exist).


 


In the event Holdings or its nominee does not repurchase the Common
Stock due to a Repurchase Disability, (1) Holdings shall provide written
notice to Employee as soon as practicable after all Repurchase Disabilities
cease to exist (the “Reinstatement
Notice”); (2) the Fair Market Value shall be determined as of the
date the Reinstatement Notice is delivered to Employee, which Fair Market Value
shall be used to determine the Put Price and (3) the completion of the
repurchase pursuant to the Redemption Notice shall occur on a date specified by
Holdings within 10 days following the determination of the Fair Market Value of
the Common Stock; provided, however, that the number of shares of
Common Stock subject to repurchase under this Section 7(c)(ii) shall be that
number of shares of Common Stock held by Employee or his estate, as the case
may be, at the effective date of the Redemption Notice in accordance with this
Section 7(c)(ii).


 


(D)          Notwithstanding
the foregoing, to the extent that Holdings’ repurchase of Common Stock pursuant
to a Redemption Notice may be made in part without creating or causing a
Repurchase Disability, Holdings shall make such repurchases to the fullest
extent without creating or causing a Repurchase Disability.


 


(E)           Notwithstanding
anything to the contrary in the Management Stockholders Agreement, if the
Company shall exercise the Call Right pursuant to Section 2(c) of the
Management Stockholders Agreement, Employee shall have the Put Right specified
herein as if he terminated his employment pursuant to Section 5(g) of this
Agreement as of the date of the Change of Control pursuant to which such Call
Right is exercised.


 


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8.             Indemnification.


 


(a)           Holdings
shall indemnify Employee to the fullest extent permitted by Delaware law
against all costs, expenses, liabilities and losses (including, without
limitation, attorneys’ fees, judgments, fines, penalties, ERISA liabilities,
excise taxes and amounts paid in settlement) reasonably incurred by Employee in
connection with a Proceeding.  For the purposes of this Section, a “Proceeding”
shall mean any action, suit or proceeding, whether civil, criminal,
administrative or investigative, in which Employee is made, or is threatened to
be made, a party, or a witness by reason of the fact that he is or was an
officer, director or employee of Holdings or is or was serving as an officer,
director, member, employee, trustee or agent of any other entity at the request
of Holdings.


 


(b)           Holdings
shall advance to Employee all reasonable and necessary costs and expenses
incurred in connection with a Proceeding within 20 days after receipt by
Holdings of a written request for such advance. 
Such request shall include an itemized list of the costs and expenses
and an undertaking by Employee to repay to Holdings the amount of such advance
if ultimately it shall be determined that he is not entitled to be indemnified
against such costs and expenses.


 


(c)           Employee
shall not be entitled to indemnification under this Section unless Employee
meets the standard of conduct specified under Delaware law.  Notwithstanding the foregoing, to the extent
permitted by law, neither Section 145(d) of the General Corporation Law of the
State of Delaware nor any similar provision shall apply to indemnification
under this Section, so that if Employee in fact meets the applicable standard
of conduct (as ultimately determined by a court of competent jurisdiction or as
ultimately determined by the arbitrator in arbitration pursuant to Section 16),
he shall be entitled to indemnification hereunder whether or not Holdings
(whether by the Board of Directors of Holdings, the shareholders, independent
legal counsel or other party) determines that such indemnification is proper or
that he has met such applicable standard of conduct.  Neither the failure
of Holdings to have made such a determination prior to the commencement by
Employee of any suit or arbitration proceeding seeking indemnification, nor a
determination by Holdings that Employee has not met such applicable standard of
conduct, shall create a presumption that Employee has not met the applicable
standard of conduct.


 


(d)           Holdings
shall be permitted to settle any Proceeding or claim in any manner other than
as would impose liability on Employee for which he would not be entitled to
indemnification or insurance coverage hereunder.  Employee shall not settle any proceeding
without Holdings’ prior written consent, which consent will not be unreasonably
withheld.


 


(e)           Holdings
shall maintain an insurance policy or policies providing directors’ and
officers’ liability insurance.  Employee
shall be covered by such policy or policies, in accordance with its or their
terms, to the maximum extent of coverage available for any director or officer
of Holdings.


 


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(f)            Employee
shall give Holdings prompt notice of any proceeding which may give rise to a
claim for indemnification.  Holdings
shall have the right, at its expense, to assume the defense of any such proceeding.


 


9.             Confidentiality.  Employee acknowledges that he knows and in
the future will know information relating to the Company and its affiliated
companies and their respective operations that is confidential or a trade
secret.  Such information includes
information, whether obtained in writing, in conversation or otherwise,
concerning corporate strategy, intent and plans, business operations, pricing,
costs, budgets, equipment, the status, scope and term of pending acquisitions,
negotiations and transactions, the terms of existing or proposed business
arrangements, contracts and obligations, and corporate and financial
reports.  Such confidential or trade
secret information shall not, however, include information in the public domain
unless Employee has, without authority, made it public.


 


Employee shall (a) not disclose such information to
anyone except in confidence and as is necessary to the performance of his
duties for the Company, (b) keep such information confidential, (c) take
appropriate precautions to maintain the confidentiality of such information,
and (d) not use such information for personal benefit or the benefit of any
competitor or any other person.


 


Upon termination of his employment by the Company
under this Agreement, Employee shall return all materials in his possession or
under his control that were prepared by or relate to the Company or its
affiliates, including, but not limited to, materials containing confidential
information, files, memorandums, price lists, reports, budgets and handbooks.


 


Employee’s obligation under this Section 9 shall
survive the termination of Employee’s employment by the Company under this
Agreement.


 


10.          Equitable
Remedies.  The parties acknowledge
that irreparable damage will result to the Company from any violation of
Section 9 above by Employee.  The parties
expressly agree that, in addition to any and all remedies available to the
Company for any such violation, the Company shall have the remedy of
restraining order and injunction and any such equitable relief as may be
declared or issued to enforce the provisions of Section 9 above and Employee
agrees not to claim in any such equitable proceeding that a remedy at law is
available to the Company. 
Notwithstanding anything contained herein to the contrary and if, and
only if, any provision of the type contained in Section 9 above, as the case
may be, is enforceable in the jurisdiction in question, if any one or more of
the provisions contained in such section shall for any reason be held to be
excessively broad as to duration, geographical scope, activity or subject, such
provision shall be construed by limiting and reducing it so as to be
enforceable to the extent compatible with the applicable law in such
jurisdiction as it shall then appear.


 


11.          Successors: Binding Agreement.


 


(a)           Company Successors. 
The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all the
business of the Company, by agreement in form and substance satisfactory to
Employee, to expressly


 


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assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.


 


(b)           Employee’s Successors. 
This Agreement and all rights hereunder shall be binding upon, inure to
the benefit of and be enforceable by Employee’s personal or legal
representatives and heirs.


 


12.          Notices.  All notices,
requests, demand or other communications under this Agreement shall be in
writing addressed as follows:


 


	
  If to
  Holdings:

  	
  Marquee
  Holdings Inc.

  
	
   

  	
  c/o J.P.
  Morgan Partners (BHCA), L.P.

  
	
   

  	
  1221 Avenue
  of the Americas

  
	
   

  	
  39th
  Floor

  
	
   

  	
  New York,
  New York 10020

  
	
   

  	
  Attn:

  	
  Michael R.
  Hannon

  
	
   

  	
   

  	
  Stephen P.
  Murray

  
	
   

  	
   

  
	
  with a copy
  to:

  	
  Latham &
  Watkins LLP

  
	
   

  	
  885 Third
  Avenue

  
	
   

  	
  Suite 1000

  
	
   

  	
  New York, NY
  10022

  
	
   

  	
  Attn:

  	
  Samuel A.
  Fishman

  
	
   

  	
   

  	
  David M.
  Schwartzbaum

  
	
   

  	
   

  
	
  and to:

  	
  Marquee
  Holdings Inc.

  
	
   

  	
  c/o Apollo
  Management V, L.P.

  
	
   

  	
  9 West 57th
  Street

  
	
   

  	
  43rd
  Floor

  
	
   

  	
  New York,
  New York 10019

  
	
   

  	
  Attn:

  	
  Marc Rowan

  
	
   

  	
   

  
	
  with a copy
  to:

  	
  Wachtell,
  Lipton, Rosen & Katz

  
	
   

  	
  51 West 52nd
  Street

  
	
   

  	
  New York,
  New York 10019

  
	
   

  	
  Attn:

  	
  Daniel A.
  Neff

  
	
   

  	
   

  	
  David C.
  Karp

  
	
   

  	
   

  
	
  If to AMCE:

  	
  AMC Entertainment Inc.

  
	
   

  	
  920 Main Street

  
	
   

  	
  Kansas City, MO 64105

  
	
   

  	
  Attn:

  	
  General Counsel

  
	
   

  	
   

  
	
  with copies
  to:

  	
  Holdings,
  Latham & Watkins LLP and Wachtell, Lipton, Rosen & Katz as set forth
  above.

  



 


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  If to AMC:

  	
  to it c/o AMCE at the address set forth above

  
	
   

  	
   

  
	
  with copies to:

  	
  Holdings, Latham & Watkins LLP and Wachtell,
  Lipton, Rosen & Katz as set forth above.

  
	
   

  	
   

  
	
  If to Employee:

  	
  to him at the most recent residence address as
  maintained in the Company’s payroll records.

  



 


Any such notice, request, demand or other
communication shall be effective as of the date of actual delivery
thereof.  Either party may change such
notice address by written notice as provided herein.


 


13.          Total Compensation.  The compensation to be paid to Employee under
this Agreement shall be in full payment for all services rendered by Employee
in any capacity to the Company or any affiliate of the Company.  All compensation and benefits provided
hereunder shall be subject to applicable income tax and other corresponding
withholding requirements.


 


14.          Additional Potential Compensation.  Nothing in this
Agreement shall prohibit the Company from awarding additional compensation to
Employee if it is determined that such compensation is warranted based on
Employee’s performance.


 


15.          Other Provisions. 
This Agreement shall be governed by the laws of the State of
Missouri.  This Agreement represents the
entire agreement of the parties hereto and shall not be amended except by a
written agreement signed by all the parties hereto.  This Agreement supersedes any prior oral or
written agreements or understandings between the Company or any affiliate of
the Company and Employee.  In the event
of any conflict between the terms of this Agreement and the terms of the
Management Stockholders Agreement, the Option Plan, the Incentive Stock Option
Agreement by and between Holdings and Employee dated on or about the Effective
Date, the Non-Qualified Stock Option Agreement by and between Holdings and
Employee dated on or about the Effective Date or any agreement between the
Company and Employee regarding Employee Options, the terms of this Agreement
shall control.  This Agreement shall not
be assignable by one party without the prior written consent of the other party,
except by the Company if it complies with Section 11 above.  In the event one or more of the provisions
contained in this Agreement or any application thereof shall be invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability
of the remaining provisions of this Agreement or any other application thereof
shall not in any way be affected or impaired thereby.  Section headings herein have no legal
significance.


 


16.          Arbitration.  Any
legal dispute related to this Agreement and/or any claim related to this
Agreement, or breach thereof, shall, in lieu of being submitted to a court of
law, be submitted to arbitration, in accordance with the applicable dispute
resolution procedures of the American Arbitration Association.  The award of the arbitrators shall be final
and binding upon the parties.


 


The parties hereto agree that (i) three arbitrators
shall be selected pursuant to the rules and procedures of the American
Arbitration Association, (ii) at least one arbitrator shall be a licensed
attorney, (iii) the arbitrators shall have the power to award injunctive relief
or to direct


 


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specific performance, (iv) each of the parties, unless otherwise
provided by applicable law and procedures, shall bear its own attorneys’ fees,
costs and expenses and an equal share of the arbitrators’ and administrative
fees of arbitration, and (v) the arbitrators shall award to the prevailing
party a sum equal to that party’s share of the arbitrators’ and administrative
fees of arbitration.


 


Nothing in this Section shall be construed as
providing Employee a cause of action, remedy or procedure that Employee would
not otherwise have under this Agreement or the law.  Employee understands that in signing this
Agreement he is waiving any right that he may have to a jury trial or a court
trial of any legal dispute or claim as set forth above.


 


17.          Definitions.  For purposes of this Agreement, the following
definitions are applicable:


 


“Affiliate” shall mean, with respect to any specified
Person:


 


(i)            any
other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person; or


 


(ii)           any
other Person that owns, directly or indirectly, 10% or more of such Person’s
Capital Stock or any officer or director of any such Person or other Person or
with respect to any natural Person, any person having a relationship with such
Person by blood, marriage or adoption not more remote than first cousin.


 


For the purposes
of this definition, “control” when used with respect to any specified Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.


 


“Apollo” means Apollo Management V, L.P., a Delaware
limited partnership.


 


“Apollo Group” means (i) Apollo; (ii) the Apollo
Holders; and (iii) any Affiliate of Apollo (including the Apollo Holders).


 


“Apollo Holders” means Apollo Investment Fund V, L.P.
(“AIF V”), Apollo Overseas Partners V, L.P. (“AOP V”), Apollo Netherlands
Partners V (A), L.P. (“Apollo Netherlands A”), Apollo Netherlands Partners V
(B), L.P. (“Apollo Netherlands B”), and Apollo German Partners V GmbH & Co
KG (“Apollo German Partners”) and any other partnership or entity affiliated
with and managed by Apollo or its Affiliates to which AIF V, AOP V, Apollo
Netherlands A, Apollo Netherlands B, or Apollo German Partners assigns any of
their respective interests in Holdings.


 


“Apollo
Investors” means, collectively, AIF V, AOP V, Apollo Netherlands A, Apollo
Netherlands B and Apollo German Partners.


 


“Capital Stock” of any Person shall mean any and all
shares, interests, participations or other equivalents (however designated) of
such Person’s capital stock, including preferred stock, any rights (other than
debt securities convertible into capital stock), warrants or options to acquire
such capital stock, whether outstanding as of the Effective Time or issued
thereafter.


 


10





















 


“Change of Control” means the occurrence of, after the
Effective Date, any of the following events:


 


(i)            any
“person” or “group” as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act other than one or more Permitted Holders is or becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
such person or group shall be deemed to have “beneficial ownership” of all
shares that any such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), directly
or indirectly, by way of merger, consolidation or other business combination or
purchase of 50% or more of the total voting power of the Voting Stock of
Holdings or of AMCE (for purposes of calculating the total voting power of the
Voting Stock held by a group solely in the context of a merger, consolidation
or other business combination with a Person engaged in a line of business
similar to that of Holdings or of AMCE and its Subsidiaries on August 18, 2004,
the voting power beneficially owned by the Permitted Holders or by Permitted
Co-Investors, to the extent such voting power of the Voting Stock was acquired by
such Permitted Co-Investors on or before January 31, 2005 in transactions that
satisfy the definition of Permitted Co-Investor, shall be excluded in an amount
equal to the lesser of the total voting power of the Voting Stock beneficially
owned by such Permitted Co-Investors on (x) January 31, 2005 or (y) the date of
such merger, consolidation or other business combination);


 


(ii)           the
adoption of a plan relating to the liquidation or dissolution of Holdings or
AMCE;


 


(iii)          the
sale, lease, transfer or other conveyance, in one or a series of related
transactions, of all or substantially all of the assets of Holdings or of AMCE
and its Subsidiaries, taken as a whole, to any Person other than one or more
Permitted Holders; or


 


(iv)          a
change of control under the indentures relating to the 91/2 Senior Subordinated Notes
due 2011 (the “2011 Notes”), the 97/8% Senior Subordinated Notes due 2012 or
the 8% Senior Subordinated Notes due 2014 issued by AMCE (other than a change
of control under the indenture relating to the 2011 Notes resulting from the
Transactions);


 


provided,
however, that for the avoidance of doubt, the parties hereto agree that
the closing of the Merger of Marquee Inc. with and into AMCE as of the
Effective Date shall not constitute and shall not be deemed to cause or result
in a Change of Control hereunder.


 


“Common Stock” means common stock of Holdings, par
value $0.01 per share.


 


“Convertible Securities” means any evidence of
indebtedness, shares of stock or other securities (other than Options or
Warrants) which are directly or indirectly convertible into or exchangeable or
exercisable for shares of Stock.


 


“Effective Date” means the later to occur of (i) the
date of the closing of the merger of


 


11





















 


Marquee Inc. with
and into AMCE pursuant to the Agreement and Plan of Merger by and among
Holdings, Marquee Inc. and AMCE, dated as of July 22, 2004 and (ii) the date on
which occurs the Effective Time.


 


“Effective Time” means the date and time of the filing
(or if another date and time is specified in such filing, such specified date
or time) of a certificate of merger relating to the Merger with the Secretary
of the State of Delaware pursuant to Section 1.2 of the Merger Agreement.


 


“Employee Option” means an option to purchase shares
of Common Stock issued under the Option Plan or other equity award plan of
Holdings.


 


“Employee Option Excess Price” with respect to each
share of Stock that may be acquired by exercise of an Employee Option means the
excess, if any, of (i) the Put Price over (ii) the price that must be paid
under the applicable Employee Option to purchase such share.


 


“Equivalent Shares” means, at any date of
determination, (a) as to any outstanding shares of Stock, such number of shares
of Stock, (b) as to any outstanding Options, Warrants or Convertible
Securities, the maximum number of shares of Stock for which or into which such
Options, Warrants or Convertible Securities may at the time be exercised,
converted or exchanged (or which will become exercisable, convertible or
exchangeable on or prior to, or by reason of, the transaction or circumstances
in connection with which the number of Equivalent Shares is to be determined)
and (c) in respect of any Subsidiary of the Company, (i) as to any outstanding
shares of stock of any Subsidiary of the Company, such number of shares of
stock or (ii) as to any outstanding options, warrants or convertible
securities, the maximum number of shares of stock of any Subsidiary of the
Company for which or into which such options, warrants or convertible
securities may at the time be exercised, converted or exchanged (or which will
become exercisable, convertible or exchangeable on or prior to, or by reason
of, the transaction or circumstances in connection with which the number of
Equivalent Shares is to be determined).


 


“Exchange Act” means the Securities Exchange Act of
1934, as amended.


 


“Fair Market Value” of a share of Common Stock as of a
given date shall be:


 


(i)            the
closing price of a share of Common Stock on the principal exchange on which
such shares are then trading, if any (or as reported on any composite index
which includes such principal exchange), on the most recent trading day prior
to such determination date; or


 


(ii)           if
Common Stock is not traded on an exchange, the mean between the closing
representative bid and asked prices for a share of Common Stock on the most
recent trading day prior to such determination date as reported by Nasdaq or,
if Nasdaq is not then in existence, by its successor quotation system; or


 


(iii) if Common Stock is
not publicly traded on an exchange and not quoted on Nasdaq or a successor
quotation system, the fair market value of a share of Common Stock as
determined in good faith by the Board of Directors of Holdings or the committee
appointed to administer the Option Plan;


 


12





















 


provided,
however, that if Fair Market Value is determined pursuant to subsection
(iii) above and Employee disagrees with such determination, the determination
of the Fair Market Value shall be made by an independent third party valuation
expert selected by Holdings (and reasonably acceptable to Employee).  Such third party valuation expert shall make
a determination of Fair Market Value within 90 days after selection pursuant to
the preceding sentence.  The
determination of Fair Market Value by such third party expert shall take
account of all relevant facts, including, as appropriate, lack of marketability
and minority position.  The reasonable
fees and expenses of such third party expert shall be borne equally by Holdings
and Employee.


 


“Initial Investor Shares” means that number of Shares
held by an Investor immediately following the Effective Time, as the same may
be adjusted for stock splits, stock dividends, recapitalizations or similar
events.


 


“Initial Public Offering” shall mean the first
issuance by Holdings of any class of common equity securities that is required
to be registered (other than on a Form S-8) under Section 12 of the Exchange
Act.


 


“Investor” or “Investors” means each of the JPMP
Investors, the Apollo Investors and the other entities listed on Schedule 1
attached hereto and, upon the unanimous approval of each of the JPMP Investors
and the Apollo Investors, any other subsequent holder of Shares who agrees to
be bound by the terms of the Investor Stockholders Agreement.


 


“Investor Stockholders Agreement” means that certain
Stockholders Agreement by and among Holdings, the JPMP Investors, the Apollo
Investors and certain other stockholder parties thereto dated as of October 29,
2004, as amended.


 


“J.P. Morgan Partners Group” means (i) J.P. Morgan
Partners, LLC and (ii) any Affiliates of J.P. Morgan Partners, LLC.


 


“JPMP
Investors” means, collectively, J.P. Morgan Partners (BHCA), L.P. (“JPMP BHCA”),
J.P. Morgan Global Investors (Cayman), L.P., JP. Morgan Partners Global
Investors (Cayman) II, L.P., and any other affiliated entities designated by
JPMP BHCA to Holdings in writing prior to the Effective Time.


 


“Management
Stockholders Agreement” means that certain Management Stockholders Agreement by
and among Holdings, the Principal Investors and certain management stockholder
parties.


 


“Merger”
means the merger of Marquee Inc. with and into AMCE pursuant to the Merger
Agreement.


 


“Merger
Agreement” means the Agreement and Plan of Merger by and among Holdings,
Marquee Inc. and AMCE, dated as of July 22, 2004.


 


“Option Plan” means the 2004 Stock Option Plan of
Marquee Holdings Inc., as amended.


 


“Options”
means any options to subscribe for, purchase or otherwise directly acquire
Stock, other than any such option held by Holdings or any right to purchase
shares pursuant to the Investor Stockholders Agreement.


 


13





















 


“Permitted Co-Investor” means an Investor (other than
the Principal Investors) as of the Effective Time and any one or more
institutional investors and their respective Affiliates to which any Permitted
Holder transfers in the aggregate up to, but no more than, 35% of (a) its equity
commitments to the Transactions or (b) its equity securities of Holdings or
AMCE, in each case on or before January 31, 2005 (all transfers to any
Affiliates of such institutional investor shall be included in such percentage
calculation).


 


“Permitted Holder” means:


 


(i)            any
member of the Apollo Group;


 


(ii)           any
member of the J.P. Morgan Partners Group; and


 


(iii)          any
Subsidiary, any employee stock purchase plan, stock option plan or other stock
incentive plan or program, retirement plan or automatic reinvestment plan or
any substantially similar plan of AMCE or Holdings or any Subsidiary of
Holdings or any Person holding securities of AMCE or Holdings for or pursuant
to the terms of any such employee benefit plan; provided that if any lender or
other Person shall foreclose on or otherwise realize upon or exercise any
remedy with respect to any security interest in or lien on any securities of
AMCE or Holdings held by any Person listed in this clause (iii), then such
securities shall no longer be deemed to be held by a Permitted Holder.


 


“Permitted
Transfer” means:  (i) a Transfer
approved by each Principal Investor so long as there are any Principal
Investors, (ii) a Transfer to an Affiliate of such Investor; provided
such transferee remains an Affiliate of such transferor following the Transfer;
(iii) following an Initial Public Offering, a Transfer by an Investor made
as part of a distribution by an Investor to its respective general or limited
partners or members in accordance with such Investor’s fund documents, as the
case may be; (iv) a Transfer made by a JPMP Investor pursuant to and in
accordance with the Regulatory Sideletter; or (v) a Transfer made pursuant to
the registration rights as set forth in Section 7 of the Investor
Stockholders Agreement; provided that such transferee, in the case of
clauses (i), (ii), (iii) and (iv) above shall agree in writing with the parties
to the Investor Stockholders Agreement to be bound by, and to comply with, all
applicable provisions of and to be deemed to be an Investor for purposes of the
Investor Stockholders Agreement.


 


“Permitted Transferee” means any Person who acquires
Shares pursuant to clauses (i), (ii) and (iii) of the definition of “Permitted
Transfer”.


 


“Person” means any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, estate, unincorporated organization or government or any agency or
political subdivision thereof.


 


“Principal
Investors” means (i) the JPMP Investors, so long as the JPMP Investors,
together with their Permitted Transferees, collectively own Shares representing
at least 33% of the Initial Investor Shares owned by the JPMP Investors; provided,
that the JPMP Investors shall not be deemed to be a Principal Investor at any
time that they do not, together with their Permitted Transferees, collectively
own Shares representing at least 33% of the Initial Investor Shares owned by
the JPMP Investors, and (ii) the Apollo Investors, so long as the Apollo


 


14





















 


Investors,
together with their Permitted Transferees, collectively own Shares representing
at least 33% of the Initial Investor Shares owned by the Apollo Investors; provided,
that the Apollo Investors shall not be deemed to be a Principal Investor at any
time that they do not, together with their Permitted Transferees, collectively
own Shares representing at least 33% of the Initial Investor Shares owned by
the Apollo Investors (in each case, as may be adjusted for stock splits, stock
dividends, recapitalizations or similar events).  For the avoidance of doubt, so long as there
are two Principal Investors, references in this Agreement to “Principal
Investors” shall mean both Principal Investors, and if at any time there is only
one Principal Investor, references in this Agreement to “the Principal
Investors” or “each Principal Investor” shall mean that sole Principal Investor
then remaining.


 


“Put Price” per share of Stock shall mean the Fair
Market Value as of the later of the date of the Redemption Notice and the date
the Reinstatement Notice is delivered to Employee.


 


“Regulatory Sideletter” means that certain letter
agreement between Holdings and the JPMP Investors, a copy of which is attached
to the Investor Stockholders Agreement as Exhibit B.


 


“Shares”
means (a) all shares of Stock, whenever issued, including all shares of Stock
issued upon the exercise, conversion or exchange of any Options, Warrants or
Convertible Securities and (b) all Options, Warrants and Convertible Securities
(treating such Options, Warrants and Convertible Securities as a number of
Shares equal to the number of Equivalent Shares represented by such Options,
Warrants and Convertible Securities for all purposes of this Agreement except
as otherwise specifically set forth herein).


 


“Stock” means Common Stock, together with any other
classes or series of equity securities of Holdings.


 


“Subsidiary” of a Person means: (i) any corporation of
which more than 50% of the outstanding shares of Capital Stock having ordinary
voting power for the election of directors is owned directly or indirectly by
such Person; and (ii) any partnership, limited liability company, association,
joint venture or other entity in which such Person, directly or indirectly, has
a more than 50% equity interest.


 


“Transactions” means the transactions set forth in the
Agreement and Plan of Merger by and among Holdings, Marquee Inc. and AMCE,
dated as of July 22, 2004 and the transactions related thereto.


 


“Transfer” means a transfer, sale, assignment, pledge,
hypothecation or other disposition or exchange, including any Transfer of a
voting or economic interest in securities or other property; and “Transferring”
or “Transferred” have correlative meanings.


 


“Voting Stock” of a Person means all classes of
Capital Stock or other interests (including partnership interests) of such
Person then outstanding and normally entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
thereof.


 


“Warrants” means any warrants to subscribe for,
purchase or otherwise directly acquire Stock or Convertible Securities.


 


15





















 


THIS AGREEMENT CONTAINS A BINDING
ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.


 


 


IN WITNESS WHEREOF, the parties have executed this
Employment Agreement as of the day and year first above written.


 


	
   

  	
  MARQUEE HOLDINGS INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephan Oppenheimer

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President, Secretary and Assistant

  	
   

  
	
   

  	
   

  	
  Treasurer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Aaron J. Stone

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Vice President, Assistant Secretary and

  	
   

  
	
   

  	
   

  	
  Assistant Treasurer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AMC ENTERTAINMENT INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Kevin M. Connor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President, General

  	
   

  
	
   

  	
   

  	
  Counsel and Secretary

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AMERICAN MULTI-CINEMA, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Kevin M. Connor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President, General

  	
   

  
	
   

  	
   

  	
  Counsel and Secretary

  	
   

  
												



 





















 


	
   

  	
  /s/ Philip M. Singleton

  	
   

  
	
   

  	
  PHILIP M. SINGLETON, EMPLOYEE

  



 


18





















 


SCHEDULE 1




SCHEDULE
OF INVESTORS


 


 


	
  NAME

  
	
  JPMP INVESTORS

  
	
  J.P. MORGAN PARTNERS (BHCA), L.P.

  
	
  J.P. MORGAN PARTNERS GLOBAL INVESTORS, L.P.

  
	
  J.P. MORGAN PARTNERS GLOBAL INVESTORS (CAYMAN), L.P.

  
	
  J.P. MORGAN PARTNERS GLOBAL INVESTORS (CAYMAN) II, L.P.

  
	
  J.P. MORGAN PARTNERS GLOBAL INVESTORS (SELLDOWN), L.P.

  
	
  AMCE (GINGER), L.P.

  
	
  AMCE (LUKE), L.P.

  
	
  AMCE (SCARLETT), L.P.

  
	
   

  
	
  APOLLO INVESTORS

  
	
  APOLLO INVESTMENT FUND V, L.P.

  
	
  APOLLO OVERSEAS PARTNERS V, L.P.

  
	
  APOLLO NETHERLANDS PARTNERS V(A), L.P.

  
	
  APOLLO NETHERLANDS PARTNERS V(B), L.P.

  
	
  APOLLO GERMAN PARTNERS V GMBH & CO KG

  
	
   

  
	
  OTHER INVESTORS

  
	
  WESTON PRESIDIO CAPITAL IV, L.P.

  
	
  WPC
  ENTREPRENEUR FUND II, L.P.

  
	
  SSB CAPITAL PARTNERS (MASTER FUND) I, L.P.

  
	
  CAISSE
  DE DEPOT ET PLACEMENT DU QUEBEC

  
	
  CO-INVESTMENT PARTNERS, L.P.

  
	
  CSFB STRATEGIC PARTNERS HOLDINGS II, L.P.

  
	
  CSFB STRATEGIC PARTNERS PARALLEL HOLDINGS II, L.P.

  
	
  CSFB CREDIT OPPORTUNITIES FUND (EMPLOYEE), L.P.

  
	
  CSFB CREDIT OPPORTUNITIES FUND (HELIOS), L.P.

  
	
  CREDIT SUISSE ANLAGESTIFTUNG

  
	
  PEARL HOLDINGS LIMITED

  
	
  PARTNERS GROUP PRIVATE EQUITY PERFORMANCE HOLDING LIMITED

  
	
  VEGA INVEST (GUERNSEY) LIMITED

  
	
  ALPINVEST PARTNERS CS INVESTMENTS 2003 C.V.

  
	
  ALPINVEST PARTNERS LATER STAGE CO-INVESTMENTS CUSTODIAN II B.V.

  
	
  ALPINVEST PARTNERS LATER STAGE CO-INVESTMENTS CUSTODIAN IIA B.V.

  
	
  SCREEN INVESTORS 2004, LLC