RETAINER AGREEMENT
This Retainer Agreement ("Agreement") is entered into as of October 1,
1999 by and between AMC ENTERTAINMENT INC., its subsidiaries and affiliated
companies (collectively "AMC"), and XXXXXXX X. XXXXXX, XX. ("RFB"). In
consideration of the mutual promises and covenants contained herein, the
parties agree as follows:
1.Engagement. AMC hereby engages RFB to serve as AMC's General
Counsel. AMC agrees that, in addition to this engagement, RFB will continue
in the active practice of law.
2.Term. The term of this Agreement shall commence as of October 1,
1999 and shall terminate on October 1, 2002 or sooner as provided herein. On
each October 1 hereafter, commencing in 2000, one year shall be added to the
Term of this engagement, so that as of each October 1 the Term of this
engagement shall be three (3) years.
3.Retainer Fee. Effective October 1, 1999, AMC agrees to pay RFB
at the annual retainer rate of Three Hundred Sixty Thousand Dollars
($360,000), payable monthly. In addition, the Chairman of the Board may, at
his sole discretion, determine additional payments or bonuses to RFB.
4.Deferred Compensation. Prior to May 19, 1997 AMC agreed to pay as
deferred compensation $12,000 monthly to RFB for a period of years following
his retirement or termination as General Counsel. In consideration of more
than thirty years of legal services which were critical to AMC's growth and
success and in further consideration of continued deferrals of compensation,
AMC, on May 19, 1997 instituted and agreed to maintain a deferred
compensation trust for the purpose of making deferred compensation payments
to RFB, or his estate or other designated beneficiary(ies) on the basis
described herein. The deferred compensation payments shall commence upon the
termination of this Agreement or RFB's position as General Counsel, or RFB's
voluntary termination, death or disability, or a change of control as provided
in paragraph 5(c) below, and shall be paid in substantially equal monthly
installments for a period of twelve (12) years. Based on the trust assets as
of September 30, 1999, and assuming an interest rate of 9.00%, such monthly
payments would have been $28,285 had they commenced as of such date.
Actual payments will be based on the actual amount of the trust at the
commencement of payment, which will increase as follows:
(A)by the amount of any bonus payable as determined by AMC
which shall be deferred and paid hereunder; and
(B)by the accrual of simple annual interest at the prime
rate plus 1%, but averaging such rates for the last day of each
calendar quarter during the fiscal year, credited annually based on
the aggregate unpaid amount of RFB's deferred compensation account,
and as calculated thereafter, whether or not payments to RFB under
the Agreement have commenced. Such interest shall be credited as
of the last day of each fiscal year and any bonus attributable to
the prior fiscal year shall be credited as of the first day of the
following fiscal year. However, if the deferred payments are
commenced during the fiscal year, as provided above, the accrued
interest of the preceding quarter or quarters shall be averaged and
applied as a fraction of the four quarters of the fiscal year and
any bonus that was awarded and not theretofore credited shall be
credited as of the date immediately prior to the date such deferred
payments commence.
Upon commencement of payments over said twelve-year period,
AMC, in consultation with its compensation consultant or pension
plan actuary, shall calculate, based on the accumulated amount of
RFB's deferred compensation and a reasonable projected interest rate
for the payment period, a substantially equal monthly amount, with
any adjustment necessary to be made in the final (144th) payment.
This paragraph 4 will continue in full force and effect until all
payments have been made hereunder, irrespective of the termination of any
other or all provisions of this Agreement.
5.Termination; Severance.
(a)Termination Without Severance. The engagement of RFB as
General Counsel shall terminate without severance upon RFB's
(i) resignation; (ii) death; or (iii) disability which renders
him unable to perform his usual and customary duties for a
period of 180 consecutive days.
(b)Termination With Severance.
(i)RFB may be terminated as General Counsel with severance
at any time by the Chairman of the Board with the approval of the Board of
Directors of AMC Entertainment Inc. ("AMCE").
(ii)In the event of such termination, RFB shall receive a
lump sum cash payment equal to three (3) times the annual retainer, one-
half (50%) to be paid in cash and one-half (50%) to be paid to the Deferred
Compensation Trust described in paragraph 4 above.
(c)Change of Control.
(i)For the purposes of this Agreement, a "Change of Control"
means a merger of AMCE with, or a sale or other transfer of all or
substantially all of AMCE's assets to, any person or entity which is not
controlled by AMCE, provided, that such transaction has been approved by
the holders of a majority of the shares of AMCE's Common Stock then
outstanding.
(ii)In the event of a Change of Control, RFB shall receive
a lump sum cash payment equal to three (3) times the annual retainer, one-
half (50%) to be paid in cash and one-half (50%) to be paid to the Deferred
Compensation Trust described in paragraph 4 above.
6.Notices. All notices, requests, demand or other communications
under this Agreement shall be in writing addressed as follows:
(a)If to RFB:
Xxxxxxx X. Xxxxxx, Xx.
Xxxxxxx & Xxxx X.X.
0000 Xxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
(b)If to AMC:
Xxxxx X. Xxxxx
AMC Entertainment Inc.
000 Xxxx 00xx Xxxxxx
P.O. Box 419615
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
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.
7.Additional Potential Compensation. Nothing in this Agreement
shall prohibit AMC from awarding additional compensation to RFB if it is
determined that such compensation is warranted based on RFB's performance.
8.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 AMC or any affiliate of AMC
and RFB. This Agreement shall not be assignable by one party without the
prior written consent of the other party. 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 provision 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.
9.Arbitration. Any legal dispute, controversy or 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 Commercial
Arbitration Rules 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
specific performance, (iv) the arbitrators will not have the authority to
award punitive damages, (v) each of the parties shall bear its own attorneys'
fees, costs and expenses and an equal share of the arbitrators' and
administrative fees of arbitration, (vi) the arbitrators will not have the
authority to award attorneys' fees other than to direct or confirm in the
award that each party shall pay its own fees, and (vii) 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 RFB a cause of
action, remedy or procedure that RFB would not otherwise have under this
Agreement or the law.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
IN WITNESS WHEREOF, the parties have executed this Retainer Agreement as
of the day and year first above written.
AMC ENTERTAINMENT INC.,
a Delaware corporation
By:/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx, Chairman of the
Board and President
/s/ Xxxxxxx X. Xxxxxx, Xx.
XXXXXXX X. XXXXXX, XX.
