UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(mark one)
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
(Fee Required)
For the fiscal year ended March 28, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
(no fee required) for the transition period from _________________ to
______________________
Commission File Number 01-12429
AMC ENTERTAINMENT INC.
(Exact name of registrant as specified in its charter)
Delaware 43-1304369
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
106 West 14th Street
Kansas City, Missouri 64105-1977
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (816) 221-4000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
Common Stock, 66 2/3 cents par value American Stock Exchange, Inc.
Pacific Stock Exchange, Inc.
$1.75 Cumulative Convertible
Preferred Stock, 66 2/3 cents par value American Stock Exchange, Inc.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months and (2) has been subject
to such filing requirements for the past 90 days.
Yes X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the registrant's voting stock held by
non-affiliates as of May 15, 1996 computed by reference to the closing
price for such stock on the American Stock Exchange on such date, was
$75,246,596.
Number of Shares
Title of Each Class of Common Stock Outstanding as of May 15, 1996
Common Stock, 66 2/3 cents par value 5,529,056
Class B Stock, 66 2/3 cents par value 11,157,000
DOCUMENTS INCORPORATED BY REFERENCEPortions of the Annual Stockholders
Report for the fiscal year ended March 28, 1996 (the
"Report") are incorporated by reference into Parts I and II.
<PAGE>
AMC ENTERTAINMENT INC. AND SUBSIDIARIES
1996 FORM 10-K ANNUAL REPORT
PART I
PAGE NUMBER
Item 1. Business . . . . . . . . . . . . . . . . . 3
Item 2. Properties . . . . . . . . . . . . . . . . 5
Item 3. Legal Proceedings. . . . . . . . . . . . . 6
Item 4. Submission of Matters to a Vote of Security Holders 7
PART II
Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters. . . . . . . 7
Item 6. Selected Financial Data. . . . . . . . . . 7
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . 7
Item 8. Financial Statements and Supplementary Data 8
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure. . . 8
PART III
Item 10. Directors and Executive Officers of the Registrant 8
Item 11. Executive Compensation and Other Information . . . 11
Item 12. Security Ownership of Certain Beneficial Owners
and Management . . . . . . . . . . . . . 21
Item 13. Certain Relationships and Related Transactions 25
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K. . . . . . . . . . . 28
Signatures . . . . . . . . . . . . . . . . 29
<PAGE>
PART I
ITEM 1. BUSINESS
(a) General Development of Business
AMC Entertainment Inc. ("AMCE"), through its direct and indirect
subsidiaries, including American Multi-Cinema, Inc. ("AMC") and its
subsidiaries (collectively with AMCE, unless the context otherwise
requires, the "Company"), is one of the largest motion picture exhibitors
in the United States in terms of the number of theatre screens operated.
AMCE's predecessor was founded in Kansas City, Missouri in 1920 by the
father of Mr. Stanley H. Durwood, the current Chairman of the Board, Chief
Executive Officer and President of AMCE and AMC. AMCE was incorporated
under the laws of the state of Delaware on June 13, 1983 and maintains its
principal executive offices located at 106 West 14th Street, Kansas City,
Missouri 64105-1977. Its telephone number at such address is (816)
221-4000.
(b) Financial Information about Industry Segments
The Registrant operates exclusively in the motion picture exhibition
industry.
(c) Narrative Description of Business
For additional information with respect to the Registrant's business,
reference is made to information contained on page 14, under the heading
"AMC Theatre Locations", page 18 under the headings "Total Revenues", "Net
Earnings (Loss)", "Total Assets" and "EBITDA", Notes 1 and 2 under "Notes
to Consolidated Financial Statements" on pages 34 and 36, respectively,
page 23 under the heading "Liquidity and Capital Resources", page 6 under
the heading "Fiscal 1996 Openings" and page 10 under the heading "Fiscal
1997 Scheduled Openings" of the Report, which information is incorporated
herein by reference.
General
The Company is one of the largest motion picture exhibitors in the
United States based on the number of theatre screens operated. Since 1968,
when the Company operated 12 theatres with 22 screens, the Company has
expanded its operations to include, as of March 28, 1996, 226 theatres with
1,719 screens located in 22 states and the District of Columbia. Nearly
60% of the screens operated by the Company are located in Florida,
California, Texas, Pennsylvania and Missouri and approximately 74% of the
Company's screens are located in areas considered among the 20 largest
Areas of Dominant Influence (television market areas as defined by Arbitron
Company).
Revenues for the Company are generated primarily from box office
admissions and theatre concession sales, which accounted for 66% and 30%,
respectively, of fiscal 1996 revenues. The balance of the Company's
revenues are generated primarily by on-screen advertising programs and
video games located in theatre lobbies.
The Company is an industry leader in the development and operation of
multi-screen theatres, primarily in large metropolitan markets.
Growth Strategy
The Company intends to expand its theatre circuit primarily by
developing new theatres in domestic and international locations. New theatres
will primarily be large "megaplex" theatres with as many as 30 screens.
Opportunities for new theatre openings exist throughout the United States,
both in areas of population growth and in areas of stable population which,
in the Company's judgment, are inadequately served. The Company intends to
develop these state-of-the-art theatres at locations based on retail
concentration, access to surface transportation and specific demographic
statistics and trends. The Company also believes that a significant growth
opportunity exists for the development of multiplex theatres in select
international markets. Many urban areas in Canada, Europe, Asia and South
America are either substantially underscreened or inadequately screened.
The Company intends to utilize its experience in the development of
multiplex theatres, as well as its existing relationships with the domestic
motion picture production industry, to enter certain international markets.
Film Licensing
The Company predominantly licenses "first run" motion pictures from
distributors on a film-by-film and theatre-by-theatre basis. The Company
obtains these licenses either by negotiating directly with, or by
submitting bids to, distributors. Negotiations with distributors are based
on several factors, including theatre location, competition, season and
motion picture content.
The Company's business is dependent upon the availability of
marketable motion pictures. There are several distributors which provide a
substantial portion of quality first-run motion pictures to the exhibition
industry. They include Buena Vista Pictures (Disney), Warner Bros.
Distribution, Columbia Pictures, Tri-Star Pictures, Twentieth Century Fox,
Universal Film Exchanges, Inc. and Paramount Pictures. There are numerous
other distributors and no single distributor dominates the market. Poor
relationships with distributors, poor performance of motion pictures or
disruption in the production of motion pictures by the major studios and/or
independent producers may have an adverse effect upon the business of the
Company. In fiscal 1996, no single distributor accounted for more than 10%
of the motion pictures licensed by the Company or more than 25% of the
Company's box office admissions. From year to year, the Company's revenues
attributable to individual distributors may vary significantly depending
upon the commercial success of such distributor's motion pictures in any
given year.
Competition
The Company's theatres are subject to varying degrees of competition
in the geographic areas in which they operate. Competition is often
intense with respect to licensing motion pictures, attracting patrons and
finding new theatre sites. Theatres operated by national and regional
circuits and by smaller independent exhibitors compete aggressively with
the Company's theatres. The Company believes that the principal
competitive factors with respect to film licensing include licensing terms
seating capacity and location and condition of an exhibitor's theatres. The
Competition for patrons is dependent upon factors such as the availability
of popular motion pictures, the location and number of theatres and screens
in a market, the comfort and quality of the theatres and pricing.
There are over 400 participants in the domestic motion picture
exhibition industry. Industry participants vary substantially in size,
from small independent operators to large international chains. As of May
1, 1995, the ten largest motion picture exhibition companies operated
approximately 51% of the total number of screens, according to the
National Association of Theatre Owners 1995-1996 Encyclopedia of
Exhibition.
The Company's theatres also face competition from other distribution
channels for filmed entertainment, such as pay television, pay per view and
home video systems, as well as other forms of entertainment competing for
the public's leisure time and disposable income.
Seasonality
The motion picture industry is seasonal in nature with the highest
attendance and revenues occurring during the summer months. The Company
generally reports higher revenues and earnings during its second fiscal
quarter.
Employees
As of March 28, 1996, the Company had approximately 1,800 full-time
and 7,700 part-time employees. Approximately 8% of the part-time employees
were minors whose wages do not exceed minimum wage.
Fewer than one percent of the Company's employees, consisting
primarily of motion picture projectionists, are represented by the
International Alliance of Theatrical Stagehand Employees and Motion Picture
Machine Operators.
(d) Financial Information about Foreign and Domestic Operations and Export
Sales
Although the Company's expansion plans include the opening of theatres
outside of the United States, its fiscal 1996 operations were exclusively
domestic and it had no export sales during fiscal 1996.
ITEM 2. PROPERTIES
Of the 226 theatres operated by the Company as of March 28, 1996, 13
theatres with 115 screens were owned, 13 theatres with 111 screens were
leased pursuant to ground leases, 196 theatres with 1,467 screens were
leased pursuant to building leases and 4 theatres with 26 screens were
managed. The Company's leases generally have terms from 15 to 25 years
with options to extend the lease for up to 20 additional years. The leases
typically require escalating minimum annual rentals and additional rentals
based on a percentage of the leased theatre's revenue above a base amount.
The Company generally pays for property taxes, maintenance, insurance and
certain other operating expenses.
The Company leases its corporate headquarters which is located in
Kansas City, Missouri. Regional theatre and film licensing offices are
leased in Los Angeles, California; Clearwater, Florida; and Voorhees, New
Jersey. See Note 9 of the Company's "Notes to Consolidated Financial
Statements" for information on the Company's lease commitments.
ITEM 3. LEGAL PROCEEDINGS
The following paragraphs summarize significant litigation and
proceedings to which the Company is a party.
In Re: AMC Shareholder Derivative Litigation, Chancery Court For New
Castle County, Delaware (Civil Action No. 12855). On February 15, 1995,
the court ordered the consolidation of two derivative actions filed against
four directors of AMCE, Mr. Stanley H. Durwood, Mr. Edward D. Durwood, Mr.
Paul E. Vardeman and Mr. Charles J. Egan, Jr., and one of its former
directors, Mr. Phillip Ean Cohen. The two cases were originally filed on
January 27, 1993, by Mr. Scott C. Wallace and on April 16, 1993, by Mr.
James M. Bird, respectively. On December 8, 1994, the court, pursuant to a
stipulation by the parties, entered an order approving Mr. Wallace's
withdrawal as a derivative plaintiff, granting the motion for intervention
filed by Mr. Philip J. Bogosian, Auginco, Mr. Norman M. Werther and Ms.
Ellen K. Werther, and authorizing the filing of the intervenors' complaint.
The intervenors' complaint includes substantially the same allegations as
the Wallace and Bird complaints. The two actions, as consolidated, are
referred to below as the "Derivative Action."
In the Derivative Action, plaintiffs allege breach of fiduciary duties
of care, loyalty and candor, mismanagement, constructive fraud and waste of
assets in connection with, among other allegations, the provision of film
licensing, accounting and financial services by American Associated
Enterprises, a partnership beneficially owned by Mr. Stanley H. Durwood and
members of his family, to the Company, certain other transactions with
affiliates of the Company, termination payments to a former officer of the
Company, certain transactions between the Company and National Cinema
Supply Corporation, and a fee paid by a subsidiary of the Company to Mr.
Cohen in connection with a transaction between the Company and TPI
Entertainment, Inc. The Derivative Action seeks unspecified money damages
and equitable relief and costs, including reasonable attorneys' fees.
On February 9, 1995, the defendants filed a motion to dismiss the
Derivative Action. The motion has been argued and is awaiting the court's
decision. Discovery has been stayed pending resolution of the motion to
dismiss.
The Company is named as a defendant in a number of other lawsuits
arising in the normal course of its business. Management does not expect
that any actions to which the Company is a party will result in a material
loss to the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There has been no submission of matters to a vote of security holders
during the thirteen weeks ended March 28, 1996.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
With respect to the market for the Company's common stock, market
prices, and stock ownership, reference is made to information contained on
page 52 of the Report, under the headings "Stock Listing/Symbol,"
"Quarterly Common Stock Price Range" and "Stock Ownership," which
information is incorporated herein by reference.
AMCE's Certificate of Incorporation provides that holders of Common
Stock and Class B Stock shall receive, pro rata per share, such cash
dividends as may be declared from time to time by the Board of Directors.
Except for a $1.14 per share dividend declared in connection with a
recapitalization that occurred in August 1992, AMCE has not declared a
dividend on shares of Common Stock since fiscal 1989. Any payment of cash
dividends on the Common Stock in the future will be at the discretion of
the Board of Directors and will depend upon such factors as earnings
levels, capital requirements, the Company's financial condition and other
factors deemed relevant by its Board of Directors. Currently, AMCE does
not contemplate declaring or paying any dividends on the Common Stock.
ITEM 6. SELECTED FINANCIAL DATA
Reference is made to information under the heading "Selected Financial
Data" on page 18 of the Report, which information is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Reference is made to information under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
on pages 19 through 25 of the Report, which information is incorporated
herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated financial statements and notes thereto included on
pages 27 through 49 of the Report and "Statements of Operations by Quarter"
on page 50 of the Report are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Directors and Executive Officers of the Company are as follows:
Years Associated
Name Age(1) Position with Company
Stanley H. Durwood 75 Chairman of the Board, Chief Executive 50(2)
Officer, President and Director (AMCE and AMC)
Philip M. Singleton 49 Executive Vice President, Chief Operating 21
Officer and Director (AMCE and AMC)
Peter C. Brown 37 Executive Vice President, Chief Financial 4
Officer and Director (AMCE and AMC)
Charles J. Egan, Jr. 63 Director (AMCE and AMC) 9
Paul E. Vardeman 66 Director (AMCE and AMC) 13
Frank Stryjewski(3) 39 Senior Vice President (AMC) 17
Richard T. Walsh 42 Senior Vice President (AMC) 20
Richard J. King 47 Senior Vice President (AMC) 24
Rolando B. Rodriquez 36 Senior Vice President (AMC) 21
Richard L. Obert 56 Senior Vice President - Chief Accounting 7
and Information Officer (AMCE and AMC)
Charles P. Stilley 41 President - AMC Realty, Inc. 14
Richard M. Fay 46 President - AMC Film Marketing Less than 1
_______________
(1) As of March 28, 1996.
(2) Includes years with the predecessor of the Company.
(3) Mr. Frank T. Stryjewski resigned effective April 18, 1996.
Mr. Stanley H. Durwood and Mr. Paul E. Vardeman have served as
directors since AMCE's formation in 1983. Mr. Charles J. Egan, Jr. has
served as a director of AMCE since 1986. Mr. Philip M. Singleton and Mr.
Peter C. Brown have served as directors of AMCE since November 1992.
All directors are elected annually, and each holds office until his
successor has been duly elected and qualified or his earlier resignation or
removal. There are no family relationships between any Director and any
Executive Officer of the Company. All directors of AMCE also serve as
directors of AMC.
All current Executive Officers of the Company and its subsidiaries
hold such offices at the pleasure of the Board of Directors, subject, in
the case of (i) Mr. Stanley H. Durwood, Chairman of the Board, Chief
Executive Officer, President and a Director of AMC and AMCE, (ii) Mr.
Philip M. Singleton, Executive Vice President, Chief Operating Officer and
a Director AMC and AMCE and (iii) Mr. Peter C. Brown, Executive Vice
President, Chief Financial Officer and a Director AMC and AMCE, to rights
under their respective employment agreements.
Mr. Stanley H. Durwood has served as a Director of AMCE from its
organization on June 14, 1983 and of AMC since August 2, 1968. Mr. Durwood
has served as Chairman of the Board of AMCE and AMC since February 1986,
and has served as Chief Executive Officer of AMCE since June 1983 and of
AMC since February 20, 1986. Mr. Durwood served as President of AMCE
(i) from June 1983 through February 20, 1986, (ii) from May 1988 through
June 1989 and (iii) was elected President of AMCE on October 6, 1995.
Mr. Durwood served as President of AMC (i) from August 2, 1968 through
February 20, 1986, (ii) from May 13, 1988 through November 8, 1990 and
(iii) was elected President of AMC on October 6, 1995. Mr. Durwood is a
graduate of Harvard University.
Mr. Philip M. Singleton has served as a Director of AMCE and AMC since
November 12, 1992. Mr. Singleton has served as Executive Vice President of
AMCE and AMC since August 3, 1994 and as Chief Operating Officer of AMCE
and AMC since November 14, 1991. Mr. Singleton served as Senior Vice
President of AMCE and AMC from November 14, 1991 until his appointment as
Executive Vice President in August 1994. Prior to November 14, 1991,
Mr. Singleton served as Vice President in charge of operations for the
Southeast Division of AMC from May 10, 1982. Mr. Singleton holds an
undergraduate degree from California State University, Sacramento and an
M.B.A. degree from the University of South Florida.
Mr. Peter C. Brown has served as a Director of AMCE and AMC since
November 12, 1992. Mr. Brown has served as Executive Vice President of AMCE
and AMC since August 3, 1994 and as Chief Financial Officer of AMCE and AMC
since November 14, 1991. Mr. Brown served as Senior Vice President of AMCE
and AMC from November 14, 1991 until his appointment as Executive Vice
President in August 1994. Mr. Brown served as Treasurer of AMCE and AMC
from September 28, 1992 through September 19, 1994. Prior to November 14,
1991, Mr. Brown served as a consultant to AMCE from October 1990 to October
1991. Mr. Brown is a graduate of the University of Kansas.
Mr. Charles J. Egan, Jr. has served as a Director of AMCE and AMC
since October 30, 1986. Mr. Egan is Vice President and General Counsel of
Hallmark Cards, Incorporated, which is primarily engaged in the business of
greeting cards and related social expressions products, Crayola crayons and
the production of movies for television. Mr. Egan holds an A.B. degree from
Harvard University and an LL.B. degree from Columbia University.
Mr. Paul E. Vardeman has served as a Director of AMCE since June 14,
1983 and of AMC since September 28, 1982. Mr. Vardeman has been a partner
in the law firm of Polsinelli, White, Vardeman & Shalton, P.C., Kansas
City, Missouri, since 1982. Prior thereto, Mr. Vardeman served as a Judge
of the Circuit Court of Jackson County, Missouri. Mr. Vardeman holds
undergraduate and J.D. degrees from the University of Missouri-Kansas City.
Mr. Frank T. Stryjewski served as Senior Vice President in charge of
operations for the South Division of AMC from July 1, 1994 until he
resigned from AMC effective April 18, 1996. Previously, Mr. Stryjewski
served as Vice President in charge of operations for the Southeast Division
of AMC from December 9, 1991. Mr. Stryjewski served as Vice
President-Operations Resources of AMC from December 1990 to December 1991,
and as Vice President-Human Resources of AMC from December 1988 to
December 1990. The employment of Mr. Frank Stryjewski ceased effective
April 18, 1996.
Mr. Richard T. Walsh has served as Senior Vice President in charge of
operations for the West Division of AMC since July 1, 1994. Previously,
Mr. Walsh served as Vice President in charge of operations for the Central
Division of AMC from June 10, 1992, and as Vice President in charge of
operations for the Midwest Division of AMC from December 1, 1988.
Mr. Richard J. King has served as Senior Vice President in charge of
operations for the Northeast Division of AMC since January 4, 1995.
Previously, Mr. King served as Vice President in charge of operations for
the Northeast Division of AMC from June 10, 1992, and as Vice President in
charge of operations for the Southwest Division of AMC from October 30,
1986.
Mr. Rolando B. Rodriguez was promoted to Senior Vice President in
charge of operations for the South Division of AMC on April 2, 1996.
Previously, Mr. Rodriguez served as Vice President and South Division
Operations Manager of AMC from July 1, 1994, as Assistant South Division
Operations Manager of AMC from February 12, 1993, as South Division's Senior
Operations Manager from March 29, 1992 and as South Division's Operations
Manager from August 6, 1989.
Mr. Richard L. Obert has served as Senior Vice President - Chief
Accounting and Information Officer, since November 9, 1995, and prior
thereto served as Vice President and Chief Accounting Officer of AMCE and
AMC since January 9, 1989.
Mr. Charles P. Stilley has served as President of AMC Realty, Inc., a
wholly owned subsidiary of AMC, since February 9, 1993, and prior thereto
served as Senior Vice President of AMC Realty, Inc. from March 3, 1986.
Mr. Richard M. Fay has served as President, AMC Film Marketing, a
division of AMC, since September 8, 1995. Previously, Mr. Fay served as
Senior Vice President and Assistant General Sales Manager of Sony Pictures
since 1994. From 1991 to 1994, Mr. Fay served as Vice President and Head
Film Buyer for the eastern division of United Artists Theatre Circuit, Inc.
Prior thereto, Mr. Fay served as Vice President and film buyer for Loew's
Theatres since 1975.
ITEM 11. EXECUTIVE COMPENSATION AND OTHER INFORMATION
Compensation of Directors
Messrs. Charles J. Egan and Paul E. Vardeman receive annual cash compensation
of $20,000 each for their services as members of the Boards of Directors of
AMCE and AMC and $24,000 each for their services as members of the Audit
Committees of AMCE and AMC. The Board has also authorized that Messrs. Egan
and Vardeman be paid reasonable compensation for their services as members of a
special committee ("Special Committee") appointed to consider a proposed merger
of AMCE and Durwood, Inc. and $900 per hour for attending meetings of (i) any
board of directors on which he serves, (ii) the Audit Committee after the
twelfth meeting during the fiscal year and (iii) any other committee on which
he serves.
For fiscal 1996, Messrs. Egan and Vardeman each received $30,000 for their
services on the Special Committee and $115,100 and $106,100, respectively,
for (i) services as members of the Boards of Directors of AMCE and AMC,
(ii) attendance at Board of Directors meetings, and (iii) other committee
meetings of the Board of Directors of AMCE or its subsidiaries.
Executive Compensation and Compensation Plans
The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the
Company's Chief Executive Officer and each of the four other most highly
compensated Executive Officers of the Company (determined as of the end of
the fiscal year and hereafter referred to as the "Named Executive
Officers") for the years ended March 28, 1996, March 30, 1995, and March
31, 1994.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Awards-Securities
ANNUAL COMPENSATION Underlying
Fiscal Other Annual Options/ All Other
Name and Principal Position Year Salary Bonus Compensation(1) SARs(#) Compensation(2)
<S> <C> <C> <C> <C> <C> <C>
Stanley H. Durwood 1996 $492,634 $275,000 N/A - $ -
Chief Executive Officer 1995 452,088 108,949 N/A 22,500 -
1994 436,800 263,400 N/A - -
Philip M. Singleton 1996 285,311 154,000 N/A - 4,686
Chief Operating Officer 1995 273,247 64,149 N/A 4,500 4,663
1994 264,142 153,600 $51,930 150,000 59,564
Peter C. Brown 1996 257,439 137,500 N/A - 4,726
Chief Financial Officer 1995 234,836 55,433 N/A 4,500 4,657
1994 227,016 135,000 N/A 150,000 4,675
Richard T. Walsh 1996 207,204 80,000 N/A 2,250 4,620
Senior Vice President 1995 200,855 35,500 217,112 - 63,464
1994 170,982 66,000 N/A 30,000 3,400
Frank T. Stryjewski (3) 1996 192,209 74,000 N/A 2,250 4,620
Senior Vice President 1995 189,840 43,000 N/A - 4,716
1994 171,098 74,250 N/A 30,000 3,400
</TABLE>
<PAGE>
(1) N/A denotes not applicable. Fiscal 1995 includes a lump sum
payment and gross up of taxes on moving expenses totaling
$209,408 of Mr. Richard T. Walsh. Fiscal 1994 includes gross up
of taxes of $43,285 on moving expenses of Mr. Philip M.
Singleton. For the years presented, excluding Mr. Richard T.
Walsh in 1995 and Mr. Philip M. Singleton in 1994, perquisites
and other personal benefits did not exceed the lesser of $50,000
or 10% of total annual salary and bonus.
(2) For fiscal 1996, All Other Compensation includes the Company's
contributions under the Company's 401(K) Plan and the Executive
Savings Plan, both of which are defined contribution plans,
in the aggregate amount of $4,686 for Mr. Philip M. Singleton, $4,726
for Mr. Peter C. Brown, $4,620 for Mr. Richard T. Walsh and $4,620 for
Mr. Frank J. Stryjewski. For fiscal 1995, All Other
Compensation includes the Company's contributions to two defined
contribution savings plans in the amount of $4,663 for Mr. Philip
M. Singleton, $4,657 for Mr. Peter C. Brown, $4,786 for Mr.
Richard T. Walsh and $4,716 for Mr. Frank T. Stryjewski. In
addition, moving expense for Mr. Richard T. Walsh is included in
the amount of $58,678. For fiscal 1994, the totals include the
Company's contributions to a defined contribution savings plan in
the amount of $4,708 for Mr. Philip M. Singleton, $4,675 for Mr.
Peter C. Brown, $3,400 for Mr. Richard T. Walsh and $3,400 for
Mr. Frank T. Stryjewski. In addition, moving expense for Mr.
Philip M. Singleton is included in the amount of $54,856.
(3) Mr. Frank T. Stryjewski resigned effective April 18, 1996.
(4) As of March 28, 1996, the Named Executive Officers held
performance shares awards under the Company's 1994 Stock Option
and Incentive Plan entitling them to receive shares of the
Company's Common Stock at the end of a three year period from the
date of grant upon satisfaction of performance goals. See "Long
Term Incentive Plan". The number of shares issuable to each such
person (and the value of such shares as of March 28, 1996) under
awards in effect as of March 28, 1996 upon attainment of threshold,
target and maximum performance goals is as follows: Threshold --
Stanley H. Durwood - 30,000 shares ($723,750); Philip M.
Singleton - 6,000 shares ($144,750); Peter C. Brown - 6,000
shares ($144,750); Richard T. Walsh - 3,000 shares ($72,375); and
Frank T. Stryjewski - 3,000 shares ($72,375); Target -- Stanley
H. Durwood - 45,000 shares ($1,085,625); Philip M. Singleton -
9,000 shares ($217,125); Peter C. Brown - 9,000 Shares
($217,125); Richard T. Walsh - 4,500 shares ($108,563) and Frank
T. Stryjewski - 4,500 shares ($108,563); Maximum -- Stanley H.
Durwood - 90,000 shares ($2,171,250); Philip M. Singleton -
18,000 shares ($434,250); Peter C. Brown - 18,000 shares
($434,250); Richard T. Walsh - 9,000 shares ($217,125); and Frank
T. Stryjewski - 9,000 shares ($217,125). Mr. Frank T. Stryjewski
resigned effective April 18, 1996. The performance shares for
Mr. Stryjewski were subsequently canceled.
Option Grants
The following table provides certain information concerning
individual grants of stock options made during the last completed fiscal
year under the AMC Entertainment Inc. 1994 Stock Option and Incentive Plan
to each of the Named Executive Officers.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
Number % of Total Potential Realizable
of Options/ Value at Assumed
Securities SARs Exercise Annual Rates of Stock
Underlying Granted to or Price Appreciation for
Options/ SARs Employees Base Option Term
Granted in Fiscal Price Expiration
Name (#) Year ($sh) Date 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Stanley H. Durwood - - $ - - - $ -
Philip M. Singleton - - - - - -
Peter C. Brown - - - - - -
Richard T. Walsh 2,250 9.70% 14.50 6/27/05 20,520 51,998
Frank T. Stryjewski(1) 2,250 9.70% 14.50 6/27/05 20,520 51,998
</TABLE>
The stock options granted during the fiscal year ended March 28,
1996, are eligible for exercise based upon a vesting schedule. After the
first anniversary of the grant date, 50% of the options will be eligible
for exercise. After the second anniversary of the grant date, all options
are fully vested. Vesting of options will accelerate upon the occurrence
of an optionee's death, disability or retirement, or upon termination of
employment within one year after the occurrence of certain change in
control events. The Compensation Committee of the Board of Directors may
permit accelerated exercise of options if certain extraordinary events
occur, such as a merger or liquidation of the Company, the sale of
substantially all of the assets of the Company, a subsidiary or a division
or the change in control of the Company. With the consent of the Board of
Director's Compensation Committee, optionees may satisfy tax withholding
obligations by electing to have shares otherwise issuable upon exercise of
an option withheld.
(1) Mr. Frank T. Stryjewski resigned effective April 18, 1996. The
options granted to Mr. Stryjewski in fiscal 1996 have expired
unexercised.
Option Exercises and Holdings
The following table provides information with respect to the Named
Executive Officers, concerning the exercise of options during the last
fiscal year and unexercised options held as of March 28, 1996.
<PAGE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<CAPTION>
Number of Value of
Securities Underlying Unexercised
Unexercised Options/ In-The-Money
SARs at FY-End (#) Options/SARs at
Shares Acquired Exercisable/Unexercisable FY-End($)
Name on Exercise Value Realized Shares Price Exercisable/Unexercisable
<S> <C> <C> <C> <C> <C>
Stanley H. Durwood - - 11,250/11,250 $11.75 $139,219/$139,219
Philip M. Singleton - - 75,000/75,000 9.250 1,115,625/1,115,625
2,250/2,250 11.75 27,844/27,844
Peter C. Brown - - 75,000/75,000 9.250 1,115,625/1,115,625
2,250/2,250 11.75 27,844/27,844
Richard T. Walsh - - 15,000/15,000 9.375 221,250/221,250
0/2,250 14.50 0/21,656
Frank T. Stryjewski(1) - - 15,000/15,000 9.375 221,250/221,250
0/2,250 14.50 0/21,656
</TABLE>
(1) Mr. Frank T. Stryjewski resigned effective April 18, 1996. The
unexercisable options outstanding at March 28, 1996 have expired
unexercised.
Long-Term Incentive Plan
The following table provides certain information concerning shares
("Performance Shares") issuable under performance stock awards approved by
the Compensation Committee of the Board of Directors during the last
completed fiscal year for each of the Named Executive Officers.
<PAGE>
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Number of
Shares, Performance or
Units or Other Period Estimated Future Payout under
Other Rights until Maturation Non-stock Price-Based Plans
(#)(1) Or Payout Threshold (#) Target (#) Maximum (#)
<S> <C> <C> <C> <C> <C>
Stanley H. Durwood - - - - -
Philip M. Singleton - - - - -
Peter C. Brown - - - - -
Richard T. Walsh 9,000 3 years 3,000 4,500 9,000
Frank T. Stryjewski (2) 9,000 3 years 3,000 4,500 9,000
</TABLE>
______________________
(1) Maximum
(2) Mr. Frank T. Stryjewski resigned effective April 18, 1996. The
Performance Shares for Mr. Stryjewski were subsequently canceled.
The foregoing table shows the number of Performance Shares issuable
to a participant at the end of a three year performance period ending
April 2, 1998 (the "Performance Period") at Threshold, Target and Maximum
levels of performance.
A participant's eligibility to receive up to one-half of the maximum
number of Performance Shares issuable under an award is based upon changes
in the "private market value per share" of the Company's Common Stock
("PMVPS") over the Performance Period. PMVPS is determined on a fully
diluted basis (assuming full exercise of all outstanding shares of the
Company's Preferred Stock, Class B stock, options and other rights to
acquire shares of Common Stock), based on a multiple of theatre EBITDA
(theatre EBITDA is Consolidated EBITDA less National Cinema Network, Inc.
EBITDA), plus the book value of National Cinema Network, Inc., cash and
equivalents and investments and investments in other long-term assets,
less corporate borrowings, capitalized lease obligations and the carrying
value of minority interests. EBITDA is earnings before interest, taxes,
depreciation and amortization.
A participant's eligibility to receive up to the remaining one-half
of the maximum number of Performance Shares issuable under an award is
based upon changes in "total return to stockholders" ("TRS"), which is
measured by increases in the market value of an investment in shares of
Common Stock of the Company, assuming reinvestment of any dividends
received.
PMVPS and TRS are referred to individually and collectively herein as
"Performance Criterion" and "Performance Criteria," respectively.
Such Performance Criteria will be measured against changes in the
Standard & Poor's 500 Index ("S&P 500") over the Performance Period.
Required achievement levels over the Performance Period for both PMVPS and
TRS are as set forth below:
Maximum - 2,000 basis points higher than the percentage change
in the S&P 500 over the Performance Period;
Target - 750 basis points higher than the percentage change in
the S&P 500 over the Performance Period;
Threshold - No difference between the percentage change in the
S&P 500 and the percentage change in the Performance Criterion over
the Performance Period.
Generally, no shares will be issued with respect to the Company's
performance over the Performance Period as measured by a Performance
Criterion if such performance does not at least meet the Threshold
achievement level over the Performance Period. If the Company's
performance as so measured by a Performance Criterion falls between the
Threshold and Target achievement levels, the number of Performance Shares
issuable under an Award with respect to that Performance Criterion will be
determined to the nearest whole number of shares, so that the actual Award
will be at the same percentage between the Threshold and Target award
levels as the actual achievement level falls between the Threshold and
Target achievement levels. Similarly, if the Company's performance falls
between Target and Maximum achievement levels, the number of Performance
Shares will be determined to the nearest whole number of shares, so that
the actual award will be at the same percentage between the Target and
Maximum award levels as the actual achievement level falls between the
Target and Maximum levels. In no event will the number of Performance
Shares issuable under an Award with respect to a Performance Criterion
exceed the number of Performance Shares issuable upon attaining the
Maximum achievement level over the Performance Period with respect to
such Performance Criterion.
The right to receive Performance Shares will be accelerated and such
Performance Shares issued, based on the achievement levels of the
Performance Criteria measured to the date of termination, in the event of
a participant's death, disability or retirement, or termination of
employment within one year after the occurrence of certain change of
control events. The Compensation Committee of the Board of Directors may
waive performance goals if certain extraordinary events occur, such as a
merger or liquidation of the Company, the sale of substantially all of the
assets of the Company, a subsidiary or a division or the change in control
of the Company.
With the consent of the Compensation Committee, a Grantee may satisfy
his tax withholding obligations by electing to have Performance Shares
otherwise issuable withheld.
Until Performance Shares are issued, participants have no dividend or
voting rights with respect to Performance Shares.
Defined Benefit Retirement and Supplemental Executive Retirement Plans
AMC sponsors a defined benefit retirement plan (the "Retirement
Plan") which provides benefits to certain employees of AMC and its
subsidiaries based upon years of credited service and the highest
consecutive five-year average annual remuneration for each participant.
For purposes of calculating benefits, average annual compensation is
limited by Section 401(a)(17) of the Internal Revenue Code, and is based
upon wages, salaries and other amounts paid to the employee for personal
services, excluding certain special compensation. A participant earns a
vested right to an accrued benefit upon completion of five years of
vesting service.
The Company also sponsors a Supplemental Executive Retirement Plan to
provide the same level of retirement benefits that would have been
provided under the Retirement Plan had the federal tax law not been
changed in the Omnibus Budget Reconciliation Act of 1993, which reduced
the amount of compensation which can be taken into account in a qualified
retirement plan from $235,840 (in 1993), the old limit, to $150,000 (in
1995 and 1996).
The following table shows the total estimated annual pension benefits
(without regard to minimum benefits) payable to a covered participant
under the Company's Retirement Plan and the Supplemental Executive
Retirement Plan, assuming retirement in calendar 1996 at age 65 payable in
the form of a single life annuity. The benefits are not subject to any
deduction for Social Security or other offset amounts. The following
table assumes the old limit would have been increased to $250,000 in 1996.
Highest Consecutive
Five Year Average
Annual Compensation Year of Credited Service
15 20 25 30 35
$125,000 $17,716 $23,621 $29,527 $35,432 $41,337
150,000 21,466 28,621 35,777 42,932 50,087
175,000 25,216 33,621 42,027 50,432 58,837
200,000 28,966 38,621 48,277 57,932 67,587
225,000 32,716 43,621 54,527 65,432 76,337
250,000 36,466 48,621 60,777 72,932 85,087
<PAGE>
As of March 28, 1996, the years of credited service under the
Retirement Plan for each of the Named Executive Officers were: Mr. Philip
M. Singleton, 22 years, Mr. Peter C. Brown, 5 years, Mr. Richard T. Walsh
21 years and Mr. Frank T. Stryjewski (1) 17 years. The final amount
distributed to Mr. Stanley H. Durwood in fiscal 1995 from the Company's
Retirement Plan was $42,067, and was not included in the Summary
Compensation Table. In addition, the benefit Mr. Stanley H. Durwood
accrued under the Supplemental Executive Retirement Plan was $18,724 in
fiscal 1996 and is not included in the Summary Compensation Table.
(1) Mr. Frank T. Stryjewski resigned effective April 18, 1996.
Employment Contracts, Termination of Employment and Change in Control
Arrangements
On February 2, 1977, the Board of Directors of AMC authorized the
continued payment to Mr. Stanley H. Durwood, in the event of his
disability, of 80% of his then current salary and bonuses for a period of
up to two years, such salary payment to be reduced, if necessary, so that
such payments, together with disability compensation under AMC's group
insurance policy, do not exceed 100% of his then current salary and bonus.
Mr. Stanley H. Durwood has an employment agreement with the Company
dated January 26, 1996 retaining him as Chairman and Chief Executive
Officer. It provides for an annual base salary of no less than $500,000
plus payments and awards under the Company's Executive Incentive Program
("EIP"), the Company's 1994 Stock Option and Incentive Plan and other bonus
plans in effect for executive officers at a level reflecting his position,
plus such other amounts as may be paid under any other compensatory arrangement
as determined in the sole discretion of the Compensation Committee. The
Compensation Committee has also agreed to use its best efforts to provide
Mr. Durwood up to $5,000,000 in life insurance and to pay the premiums
thereon and taxes resulting from such payment. Mr. Durwood's employment
agreement has a term of three years and is automatically extended one year
on its anniversary date, January 26, so that as of such date each year the
agreement has a three year term. The employment agreement is terminable
without severance upon Mr. Durwood's death or if he engages in intentional
misconduct or a knowing violation of law or breaches his duty of loyalty
to the Company. The agreement also is terminable (i) by Mr. Durwood, in
the event of the Company's breach, and (ii) by the Company, without cause
or in the event of Mr. Durwood's death or disability, in each case with
severance payments equal to three times the sum of his annual base salary
in effect at the time of termination plus the average of annual incentive
or discretionary cash bonuses paid during the three fiscal years preceding
the year of termination. The Company may elect to pay such severance
payments in monthly installments over a period of three years or in a lump
sum after discounting such amount to its then present value. The
aggregate amount payable under this employment agreement, assuming
termination with severance occurred as of March 28, 1996, was
approximately $1,923,002.
Messrs. Philip M. Singleton and Peter C. Brown each have employment
agreements with AMC dated September 26, 1994, providing for annual base
salaries of no less than $266,000 and $227,000, respectively, and bonuses
resulting from the EIP or other bonus arrangement, if any, as determined
from time to time at the sole discretion of the Compensation Committee
upon the recommendation of the Chairman of the Board. Each employment
agreement has a term of two years. On each September 27, commencing in
1995, one year shall be added to the term of each employment agreement, so
that each employment agreement shall always have a two-year term as of
each anniversary date. Each employment agreement terminates without
severance upon such employee's resignation, death or his disability as
defined in his employment agreement, or upon AMC's good faith
determination that such employee has been dishonest or has committed a
breach of trust respecting AMC. AMC may terminate each employment
agreement at any time, with severance payments in an amount equal to twice
the annual base salary of such employee on the date of termination. Each
employee may terminate his employment agreement upon a change of control
of AMC as defined in the employment agreement and receive severance
payments in an amount equal to twice his annual base salary on the date of
termination. AMC may elect to pay any severance payments in a lump sum
after discounting such amount to its then present value, or over a two-year
period. The aggregate value of all severance benefits to be paid to
such employee shall not exceed 299% of such employee's "base amount" as
defined in the Internal Revenue Code for the five-year period immediately
preceding the date of termination. The aggregate amount payable under
these employment agreements, assuming termination by reason of a change of
control and payment in a lump sum as of March 28, 1996, was approximately
$993,742.
As permitted by the Company's 1994 Stock Option and Incentive Plan, stock
options and Performance Share awards granted to participants thereunder
provide for acceleration upon the termination of employment within one
year after the occurrence of certain changes in control events, whether
such termination is voluntary or involuntary, or with or without cause.
See "Option Grants" and "Long-Term Incentive Plan." In addition, the
Compensation Committee may permit acceleration upon the occurrence of
certain extraordinary transactions which may not constitute a change of
control.
The Company maintains a severance pay plan for full-time salaried
nonbargaining employees with at least 90 days of service. For an eligible
employee who is subject to the Fair Labor Standards Act ("FLSA") overtime
pay requirements (a "nonexempt eligible employee"), the plan provides for
severance pay in the case of involuntary termination of employment due to
layoff of the greater of two week's basic pay or one week's basic pay
multiplied by the employee's full years of service up to no more than
twelve week's basic pay. There is no severance pay for a voluntary
termination, unless up to two week's pay is authorized in lieu of notice.
There is no severance pay for an involuntary termination due to an
employee's misconduct. Only two week's severance is paid for an
involuntary termination due to substandard performance. For an eligible
employee who is exempt from the FLSA overtime pay requirements, severance
pay is discretionary (at the Department Head/Supervisor level), but will
not be less than the amount that would be paid to a nonexempt eligible
employee.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of May 15,
1996, with respect to beneficial owners of five percent or more of any
class of the Company's voting securities:
Name and Address Number of Shares Percent
Title of Class of Beneficial Owner Beneficially Owned of Class
Common Stock Durwood, Inc.(1) 2,641,951(2) 47.8%(2)
106 West 14th Street
Kansas City, MO 64105
Stanley H. Durwood(1) 2,653,351(2)(3) 47.9%(2)
106 West 14th Street
Kansas City, MO 64105
Brian H. Durwood(1) 2,641,951(2) 47.8%(2)
655 N.W. Altishan Place
Beaverton, OR 97006
Edward D. Durwood(1) 2,641,951(2) 47.8%(2)
3001 West 68th Street
Shawnee Mission, KS 66208
Peter J. Durwood(1) 2,641,951(2) 47.8%(2)
666 West End Avenue
New York, NY 10025
Thomas A. Durwood(1) 2,641,951(2) 47.8%(2)
P. O. Box 7208
Rancho Santa Fe, CA 92067
Elissa D. Grodin(1) 2,641,951(2) 47.8%(2)
187 Chestnut Hill Road
Wilton, CT 06897
Carol D. Journagan(1) 2,641,951(2) 47.8%(2)
1323 Granite Creek Drive
Blue Springs, MO 64015
Sandler Capital Mgmt. 285,500(4) 5.2%
767 5th Avenue
New York, NY 10153
The Equitable Com- 615,424(5) 10.0%(5)
panies Incorporated
787 Seventh Avenue
New York, NY 10019
Ryback Management 1,684,865(6) 23.4%(6)
Corporation
7711 Carondelet Ave.
St. Louis, MO 63105
Class B Stock Durwood, Inc.(1) 11,157,000(2) 100.0%
106 West 14th Street
Kansas City, MO 64105
(1) A revocable inter-vivos trust and a revocable voting trust established by
Mr. Stanley H. Durwood for the benefit of Mr. Stanley H. Durwood holds
approximately 75% of the voting power of the outstanding capital stock of
Durwood, Inc. ("DI"). American Associated Enterprises, ("AAE") a Missouri
limited partnership of which Mr. Stanley H. Durwood is the limited partner
and his six children, Edward D. Durwood, Carol D. Journagan, Thomas A.
Durwood, Elissa D. Grodin, Brian H. Durwood and Peter J. Durwood, are the
general partners, holds approximately 25% of the voting power of DI's
outstanding capital stock. Mr. Stanley H. Durwood is the sole director of
DI and is Chairman of the Board, Chief Executive Officer, President and
Director of AMCE and AMC.
Mr. Durwood has sole voting power over the shares of AMCE held by DI
but may be deemed to share investment power with respect to such shares
with his children. As reported in the Schedule 13-D's filed by Mr. Durwood
and DI and by Mr. Durwood's children and AAE, Mr. Durwood and his
children have entered into an agreement expressing their intention to
pursue certain transactions to dissolve AAE and to cause shares of AMCE
held by DI to be distributed to members of the Durwood family through a
merger of DI into AMCE. Thereafter, the family intends to sell
3,000,000 shares of Common Stock in a public offering, which will be
made only by means of a prospectus. If the proposed transactions are
consummated, Mr. Durwood will retain approximately 4.5 million shares
(or 100%) of AMCE's Class B Stock and each of his children will retain
approximately 1 million shares (aggregating approximately 52%) of
AMCE's Common Stock. Based on voting shares outstanding as of May 15,
1996, the shares to be retained by Mr. Durwood will represent
approximately 79% of the combined voting power of AMCE's voting stock.
However, provisions of the family agreement could result in an adjustment
pursuant to which Mr. Durwood would deliver additional shares to his
children. The proposed transactions are subject to negotiation of a
definitive merger agreement with AMCE and approval of such agreement by
the holders of a majority of the shares of Common Stock voting thereon,
other than members of the Durwood family. Reference is made to AMCE's
report on Form 8-K dated May 6, 1996, for additional information
respecting the Durwood family agreement.
(2) The shares of Class B Stock owned of record by DI and beneficially
owned by members of the Durwood family as indicated in footnote (1)
above are convertible into Common Stock on a share for share basis.
The number and percentage of shares of Common Stock shown as
beneficially owned do not give effect to the conversion option.
Were all the shares of Class B Stock converted, there would be
16,686,056 shares of Common Stock outstanding, of which DI would
own of record 13,798,951, or 83% of the outstanding shares of
Common Stock.
(3) The shares of Common Stock shown as beneficially owned by Mr.
Stanley H. Durwood also include 150 shares owned by him directly
and 11,250 shares subject to presently exercisable stock options.
(4) As reported by Sandler Capital Management on Schedule
March 7, 1996.
(5) This is the number of shares of Common Stock that would be obtained
upon conversion of AMCE's $1.75 Cumulative Convertible Preferred
Stock reported as owned by The Equitable Companies Incorporated in
Amendment No. 1 to Schedule 13G dated February 9, 1996.
(6) This is the number of shares of Common Stock that would be obtained
upon conversion of AMCE's $1.75 Cumulative Convertible Preferred
Stock reported as owned by Ryback Management Corporation in
Amendment No. 1 to Schedule 13G dated January 25, 1996.
Beneficial Ownership By Directors and Officers
The following table sets forth certain information as of May 15, 1996,
with respect to beneficial ownership by Directors and Executive Officers
of the Company's Common Stock and Class B Common Stock. The amounts set
forth below include the vested portion of 429,000 shares of Common Stock
subject to options under the Company's 1984 and 1994 Stock Option Plans
held by Executive Officers. Unless otherwise indicated, the persons named
are believed to have sole voting and investment power over the shares
shown as beneficially owned by them.
Name and Address Number of Shares Percent
Title of Class of Beneficial Owner Beneficially Owned of Class
Common Stock Stanley H. Durwood 2,653,351(1)(2) 47.9%
Philip M. Singleton 132,750(2) 2.4%
Peter C. Brown 114,750(2) 2.0%
Richard T. Walsh 23,675(2) *
Frank T. Stryjewski(3) 15,150(2) *
Paul E. Vardeman 300 *
All Directors and Executive
Officers as a group (12 persons,
including the individuals named
above) 2,978,269(2) 50.7%
Class B Stock Stanley H. Durwood 11,157,000(1) 100.0%
*Less than one percent.
(1) See Notes 1 and 2 under "Security Ownership of Certain Beneficial
Owners and Management." Mr. Stanley H. Durwood has sole voting power
over the shares held by DI but may be deemed to share investment power
with respect to such shares with his children. The shares of Common
Stock shown as beneficially owned by Mr. Stanley H. Durwood also include
150 shares owned by him directly and 11,250 shares subject to presently
exercisable stock options.
(2) Includes shares subject to presently exercisable options to purchase
Common Stock under the Company's 1984 and 1994 Stock Option Plans, as
follows: Mr. Stanley H. Durwood - 11,250 shares; Mr. Philip M.
Singleton - 114,750 shares; Mr. Peter C. Brown - 114,750 shares; Mr.
Richard T. Walsh - 23,625 shares; Mr. Frank T. Stryjewski - 15,000
shares; and all executive officers as a group - 315,750 shares.
(3) Mr. Frank T. Stryjewski resigned from the Company effective April
18, 1996.
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Executive Officers and Directors, and persons who own more than
10% of the Company's Common Stock and $1.75 Cumulative Convertible
Preferred Stock, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission ("SEC") and the American and
Pacific Stock Exchanges. Executive Officers, Directors and
greater-than-10% beneficial owners are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company, or written representations that no Forms 5 were required, the
Company believes that during fiscal 1996 its Executive Officers, Directors
and greater-than-10% beneficial owners complied with all Section 16(a)
filing requirements applicable to them.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain Transactions
Since its formation, AMCE and AMC have been members of an affiliated
group of companies (the "DI affiliated group") beneficially owned by Mr.
Stanley H. Durwood and members of his family. Mr. Stanley H. Durwood is
President, Treasurer and the sole Director of DI and Chairman of the
Board, Chief Executive Officer, President and a Director of AMCE and AMC.
There have been transactions involving AMCE or AMC and the DI affiliated
group in prior years. The Company intends to ensure that all transactions
with DI or other related parties are fair, reasonable and in the best
interests of the Company. In that regard, the Audit Committees of the
Boards of Directors of AMCE and AMC review all material proposed
transactions between the Company and DI or other related parties to
determine that, in their best business judgment, such transactions meet
that standard. The Audit Committees consist of Messrs. Vardeman and Egan,
neither of whom are officers or employees of AMCE or AMC nor stockholders,
directors, officers or employees of DI. Set forth below is a description
of significant transactions which have occurred since March 31, 1995 or
involve receivables that remain outstanding as of March 28, 1996.
Certain corporate departments of AMC perform general and
administrative services for DI and its subsidiaries. AMC charged DI and
its subsidiaries $116,000 for such services for fiscal 1996.
Periodically, AMC and DI reconcile any accounts owed by one company
to the other. Charges to the intercompany account have included the
allocation of AMC's general and administrative expenses and payments made
by AMC on behalf of DI. As of March 28, 1996, DI and its subsidiaries
owed AMC $795,000 which was also the largest balance owned by DI and its
subsidiaries to AMC during fiscal 1996. The balance was repaid in its
entirety shortly after the fiscal year end.
Ms. Marjorie D. Grant, a Vice President of AMC and the sister of Mr.
Stanley H. Durwood, has an employment agreement with AMCE providing for a
base annual salary of no less than $100,000, an automobile and, at the
sole discretion of the Chief Executive Officer of the Company, a year-end
bonus. Ms. Grant's employment agreement, executed July 1, 1991,
terminates on June 30, 1996, or upon her death or disability. The
agreement provides that in the event Mr. Stanley H. Durwood fails to
control the management of AMCE by reason of its sale, merger, or
consolidation, or because of his death or disability, or for any other
reason, then AMCE and Ms. Grant would each have the option to terminate
the agreement. In such event, AMCE would pay to Ms. Grant in cash a sum
equal to the aggregate cash compensation, exclusive of bonus, to the end
of the term of her employment under the agreement, after discounting such
amount to its then present value using a discount rate equal to the lesser
of one-half of the current prime rate of interest or 10% per annum. In
November 1991, this agreement was assumed by Durwood, Inc. and was
reassumed by AMCE in January 1995.
In July 1992, Mr. Jeffery W. Journagan, a son-in-law of Mr. Stanley
H. Durwood, was employed by a subsidiary of the Company. Mr. Journagan's
current compensation is approximately $80,000.
AMC loaned $200,000 in January 1987 to Mr. Donald P. Harris, one of
the named Executive Officers in fiscal 1995, in connection with the
purchase of his principal residence. The employment of Mr. Harris by the
Company or its afiliates ceased effective as of October 1, 1995. Mr.
Harris paid AMC $110,249, the remaining amount of the principal and
accrued interest on the loan, on October 1, 1995. The largest principal
amount outstanding on the note during fiscal 1996 was $200,000.
AMC has proposed an employment agreement with Mr. Richard M. Fay
which provides for an annual base salary of $275,000 and a $50,000
relocation allowance. Mr. Fay is eligible to participate in the EIP or
other bonus arrangement, if any, as determined from time to time in the
sole discretion of the Compensation Committee of the Board of Directors of
the Company upon the recommendation of the Chief Executive Officer of the
Company. The proposed employment agreement has a term of three years, from
September 8, 1995 through September 7, 1998. As proposed, the employment
agreement will terminate without severance upon Mr. Fay's resignation,
death or disability as defined in his proposed employment agreement, or
upon AMC's good faith determination that Mr. Fay has been dishonest or has
committed a breach of trust respecting AMC. As proposed, AMC may terminate
the employment agreement at any time, with severance payments in an amount
equal to, at AMC's option, either (i) Mr. Fay's base salary per month in
effect at the time of termination, payable over the remaining term of his
employment, or (ii) the net present value of the monthly payments
described in (i) above, payable within 30 days of the date of termination.
As proposed, any severance payable to Mr. Fay shall be reduced by any
wages, compensation or income, cash or otherwise, received by Mr. Fay from
sources other than AMC during the remaining term of his employment
agreement following the date of termination.
The Company and Mr. Edward D. Durwood entered into an Agreement and
General Release effective October 5, 1995, pursuant to which Mr. Durwood
was terminated as President, Vice Chairman of the Board and Director of
AMCE and AMC upon the recommendation of the Compensation Committee without
cause with the consent of the Company's Board of Directors. The Company
paid Mr. Durwood $498,398 in severance. The Agreement and General Release
also provides for mutual releases between the Company and Mr. Durwood.
AMC and Mr. Donald P. Harris entered into an Agreement and Release
effective October 1, 1995, pursuant to which Mr. Harris resigned as
President AMC Film Marketing, Inc. AMC paid Mr. Harris $467,850 in
severance. Mr. Harris paid AMC $110,249, the remaining amount of the
principal and accrued interest on a loan he had previously received from
AMC. The Agreement and Release also provides for mutual releases between
AMC and Mr. Harris.
In November of 1995, AMC purchased the principal residence of Mr.
Richard M. Fay, one of the Executive Officers in 1996, for $500,000. The
Company is currently marketing the residence and intends to sell it.
During fiscal 1996, the Company retained Polsinelli, White, Vardeman
& Shalton, P.C., of which Mr. Vardeman, a director of AMCE and AMC, is a
partner, as special legal counsel.
For a description of certain employment agreements between the
Company and Messrs. Stanley H. Durwood, Philip M. Singleton and Peter C.
Brown, see "Employment Contracts, Termination of Employment and Change in
Control Arrangements."
Federal Income Taxes
DI and the Company entered into an agreement dated July 1, 1983,
pursuant to which, so long as DI and the Company filed a consolidated
federal income tax return, the Company paid to DI the amount of tax that
would be payable calculated as if the Company filed a separate
consolidated federal income tax return for such period and all prior
taxable periods, provided, however, that if such return reflected a refund
due to the Company, DI was obligated to pay the Company an amount equal to
such refund when and if the consolidated group is able to realize the
Company's tax benefit in the future. Due to the Company's issuance of the
$1.75 Cumulative Convertible Preferred Stock on March 3, 1994, the Company
is no longer eligible to file a consolidated federal income tax return
with DI. The agreement still applies to all tax years for which DI and
the Company previously filed a consolidated federal income tax return.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) Financial Statements
The following consolidated financial statements of the Registrant and
its consolidated subsidiaries included in the Report are incorporated
herein by reference in Item 8:
Consolidated Balance Sheets - March 28, 1996 and March 30, 1995
Consolidated Statements of Operations-Fiscal years (52 weeks) ended
March 28, 1996, March 30, 1995 and March 31, 1994
Consolidated Statements of Cash Flows - Fiscal years (52 weeks) ended
March 28, 1996, March 30, 1995 and March 31, 1994
Consolidated Statements of Stockholders' Equity - Fiscal years (52
weeks) ended March 28, 1996, March 30, 1995 and March 31, 1994
Notes to Consolidated Financial Statements - Fiscal years (52 weeks)
ended March 28, 1996, March 30, 1995 and March 31, 1994
(a)(2) Financial Statement Schedules
The following consolidated financial statement schedule of the
Registrant and its consolidated subsidiaries is filed pursuant to Item
14(d) (this schedule appears immediately following the signature page):
Schedule II - Valuation and Qualifying Accounts and Reserves
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore
have been omitted.
(b) Reports on Form 8-K
No reports on Form 8-K were filed or required to be filed for the
thirteen weeks ended March 28, 1996.
(c) Exhibits
A list of exhibits required to be filed as part of this report on Form
10-K is set forth in the Exhibit Index, which immediately precedes such
exhibits, and is incorporated herein by reference.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
AMC ENTERTAINMENT INC.
By: /s/ Stanley H. Durwood
Stanley H. Durwood,
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Stanley H. Durwood Chairman of the Board, Chief June 3, 1996
Stanley H. Durwood Executive Officer, President
and Director
/s/ Paul E. Vardeman Director June 3, 1996
Paul E. Vardeman
/s/ Charles J. Egan, Jr. Director June 3, 1996
Charles J. Egan, Jr.
/s/ Philip M. Singleton Executive Vice President, Chief June 3, 1996
Philip M. Singleton Operating Officer and Director
/s/ Peter C. Brown Executive Vice President, Chief June 3, 1996
Peter C. Brown Financial Officer and Director
/s/ Richard L. Obert Senior Vice President - Chief June 3, 1996
Richard L. Obert Accounting and Information Officer
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
of AMC Entertainment Inc.
Kansas City, Missouri
Our report on the consolidated financial statements of AMC Entertainment
Inc. and subsidiaries has been incorporated by reference in this Form 10-K
from page 27 of the 1996 Annual Report to Shareholders of AMC Entertainment
Inc. and subsidiaries. In connection with our audits of such financial
statements, we have also audited the related financial statement schedule
listed in Item 14(a)(2) of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
/s/ Coopers & Lybrand
Kansas City, Missouri
May 17, 1996
<PAGE>
<TABLE>
AMC ENTERTAINMENT INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(in thousands)
<CAPTION>
Additions
Balance at Charged to Charged to Balance at
Beginning Costs and Other End of
Description of Period Expenses Accounts Deductions Period
<S> <C> <C> <C> <C> <C>
Year ended (52 Weeks)
March 28, 1996
Allowance for
doubtful accounts $ 1,529 $ 526 $ - $ 1,254 $ 801
Self insurance
reserves 12,029 10,458 - 9,852 12,635
Reserve for future
dispositions 2,827 - - 720 2,107
Year ended (52 Weeks)
March 30, 1995
Allowance for doubtful
accounts $ 1,270 $ 744 $ - $ 485 $ 1,529
Self insurance reserves 11,005 11,263 - 10,239 12,029
Reserve for future
dispositions 4,711 500 - 2,384 2,827
Valuation allowance
for deferred tax assets 19,792 (19,792) - - -
Year ended (52 Weeks)
March 31, 1994
Allowance for doubtful
accounts $ 611 $ 633 $ 492(1) $ 466 $ 1,270
Self insurance reserves 8,163 11,760 - 8,918 11,005
Reserve for future
dispositions 3,653 - 2,055(2) 997 4,711
Valuation allowance for
deferred tax assets 17,541 2,251 - - 19,792
</TABLE>
(1) Represents a reclassification from accrued expenses and other liabilities.
(2) Represents the amounts resulting from capital lease adjustments and a charge
from an expected loss relating to a corporate joint venture.
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
2.1. Articles of Merger dated March 31, 1994, between American
Multi-Cinema, Inc. and its wholly-owned subsidiaries Cinema
Enterprises, Inc. and Cinema Enterprises II, Inc. and
related Plan and Agreement of Liquidation and Merger (1)
*2.2. Articles of Merger dated March 28, 1996, between AMC
Philadelphia, Inc. and its wholly owned subsidiary Concord
Cinema, Inc.
*2.3. Articles of Merger dated March 28, 1996, between
American Multi-Cinema,
Inc. and its wholly owned subsidiary Conservco, Inc.
*2.4. Articles of Merger dated April 3, 1996, between American
Multi-Cinema,
Inc. and its wholly owned subsidiary AMC Film Marketing,Inc.
3.1. Certificate of Incorporation of AMC Entertainment Inc.(2)
3.2. Certificate of Designations relating to $1.75 Cumulative
Convertible Preferred Stock (3)
3.3. Bylaws of AMC Entertainment Inc. (2)
3.4. Articles of Incorporation, as amended, of American
Multi-Cinema, Inc. (4)
3.5. Bylaws of American Multi-Cinema, Inc. (4)
3.6. Certificate of Incorporation, as amended, of AMC
Philadelphia, Inc. (4)
3.7. Bylaws of AMC Philadelphia, Inc. (4)
3.8. Certificate of Incorporation, as amended, of AMC Realty,
Inc. (4)
3.9. Bylaws of AMC Realty, Inc. (4)
3.10. Certificate of Incorporation, as amended, of AMC Canton Realty,
Inc. (4)
3.11. Bylaws of AMC Canton Realty, Inc. (4)
3.12. Certificate of Incorporation, as amended, of Budco
Theatres, Inc. (4)
3.13. Bylaws of Budco Theatres, Inc. (4)
4.1.(a) Indenture among AMC Entertainment Inc., as issuer, American
Multi-Cinema, Inc., AMC Realty,Inc., Conservco, Inc., AMC
Canton Realty, Inc., AMC Philadelphia, Inc., Budco
Theatres, Inc. and Concord Cinema, Inc. (collectively "Guarantors")
and United States Trust Company of New York, as Trustee, respecting
AMC Entertainment Inc.'s 11 7/8% Senior Notes due 2000 (6)
4.1.(b) First Supplemental Indenture dated as of March 31, 1993, pursuant to
which AMC Film Marketing, Inc. became a Guarantor (5)
4.1.(c) Fourth Supplemental Indenture dated as of March 31, 1994,
pursuant to which American Multi-Cinema, Inc. assumed the
obligations of Cinema Enterprises, Inc., Cinema Enterprises II,
Inc. and Exhibition Enterprises Partnership under the Senior Note
Indenture and related guarantees of such entities (1)
4.1.(d) Fifth Supplemental Indenture dated December 28, 1995, respecting
AMC Entertainment Inc.'s 11 7/8% Senior Notes due 2000 (17)
4.1.(e) Fifth Supplemental Indenture dated December 28, 1995, respecting
AMC Entertainment Inc.'s 12 5/8% Senior Subordinated Notes due
2002 (17)
4.2.(a) Indenture among AMC Entertainment
Inc., as issuer, American Multi-Cinema, Inc., AMC Realty,
Inc., Conservco, Inc., AMC Canton Realty, Inc., AMC Philadelphia,
Inc., Budco Theatres, Inc. and Concord Cinema, Inc. (collectively
"Guarantors") and The Bank of New York, as Trustee, respecting AMC
Entertainment Inc.'s 12 5/8% Senior Subordinated Notes due 2002 (6)
4.2.(b) First Supplemental Indenture dated as of March 31, 1993, pursuant to
which AMC Film Marketing, Inc. became a Guarantor (5)
4.2.(c) Fourth Supplemental Indenture dated as of March 31, 1994,
pursuant to which American Multi-Cinema, Inc. assumed the
obligations of Cinema Enterprises, Inc., Cinema Enterprises II, Inc.
and Exhibition Enterprises Partnership under the Senior Subordinated
Note Indenture and related guarantees of such entities (1)
*4.2.(d) Sixth Supplemental Indenture dated March 28, 1996, respecting AMC
Entertainment Inc.'s 11 7/8% Senior Notes due 2000
*4.2.(e) Sixth Supplemental Indenture dated March 28, 1996, respecting AMC
Entertainment Inc.'s 12 5/8% Senior Subordinated Notes due 2002
4.3. Credit Agreement Dated as of December 27, 1995 Among AMC
Entertainment Inc., as the Borrower, The Bank of Nova Scotia, as
Administrative Agent, Chemical Bank, as Syndication Agent, and
Bank of America National Trust and Savings Association, as
Documentation Agent and Various Financial Institutions, as
Lenders together with the following exhibits thereto, form of
significant subsidiaries guarantee, form of notes, form of pledge
agreement and form of subsidiary pledge agreement. (17)
4.4. Significant Subsidiary Guaranty from American Multi-Cinema,
Inc., Budco Theatres, Inc., Concord Cinema, Inc., AMC Realty, Inc.,
Conservco, Inc, AMC Canton Realty, Inc., AMC Philadelphia, Inc., and
AMC Film Marketing, Inc to The Bank of Nova Scotia, as Administrative
Agent (17)
4.5. In accordance with Item 601(b)(4)(iii)(A) of Regulation S-K,
certain instruments respecting long term debt of the Registrant
have been omitted but will be furnished to the Commission upon
request
10.1. AMC Entertainment Inc. 1983 Stock Option Plan (7)
10.2. Federal Income Tax Allocation Agreement dated as of July 1, 1983,
between Durwood, Inc. and AMC Entertainment Inc. (7)
10.3. AMC Entertainment Inc. 1984 Employee Stock Purchase Plan (8)
10.4. AMC Entertainment Inc. 1984 Employee Stock Option Plan (9)
*10.5.(a) AMC Entertainment Inc. 1994 Stock Option and Incentive Plan
as amended
10.5.(b) Performance Stock Award Agreement (14)
10.5.(c) Non-Qualified (NON-ISO) Stock Option Agreement (14)
10.6. American Multi-Cinema, Inc. Savings Plan, a defined contribution
401(k) plan, restated January 1, 1989, as amended (4)
10.7.(a) Defined Benefit Retirement Income Plan for Certain Employees of
American Multi-Cinema, Inc. dated January 1, 1989, as amended (4)
10.7.(b) AMC Supplemental Executive Retirement Plan dated January
1, 1994 (14)
10.8. Employment Agreement between American Multi-Cinema, Inc.
and Philip M. Singleton (16)
10.9. Employment Agreement between American Multi-Cinema, Inc. and
Peter C. Brown (16)
10.10. Disability Compensation Provisions respecting Stanley H.
Durood, Executive Medical Expense Reimbursement and Supplemental
Accidental Death or Dismemberment Insurance Plan, as restated
effective as of February 1, 1991 (4)
10.12. Division Operations Incentive Program (4)
10.13. Management Agreement dated December 30, 1986, between AMC
Philadelphia, Inc. and H. Donald Busch ("Busch") (10)
10.14. Stockholders' Agreement dated December 30, 1986, between AMC
Philadelphia, Inc. and Busch (10)
10.15. Letter of Agreement dated November 25, 1986, between American
Multi-Cinema, Inc. and Busch (10)
10.16. Letter of Agreement dated December 30, 1986, between American
Multi-Cinema, Inc. and Busch (10)
10.17. Standstill Agreement entered into as of March 4, 1991, by and
among TPI Enterprises, Inc., AMC Entertainment Inc., American
Multi-Cinema, Inc., Durwood, Inc., Stanley H. Durwood and
Edward D. Durwood (11)
10.18. Stock Sale Agreement dated March 4, 1991, by and between
American Multi-Cinema, Inc. and C&C Investment Holdings, L.P.
(12)
10.19.(a)Option Agreement dated March 4, 1991, by and between American
Multi-Cinema, Inc. and C&C Investment Holdings, L.P. (the
"Option Agreement") (12)
10.19.(b)Amendment dated April 25, 1991, to Option Agreement (4)
10.20. Real Estate Contract dated March 30, 1992, among Philip M.
Singleton, C. Suzanne Singleton and American Multi-Cinema, Inc. (4)
10.21. Agreement and General Release between Edward D. Durwood and
American Multi-Cinema, Inc. (15)
10.22. Agreement and General Release between Donald P. Harris and
American Multi-Cinema, Inc. (15)
10.23. Partnership Interest Purchase Agreement dated May 28, 1993,
among Exhibition Enterprises Partnership, Cinema Enterprises,
Inc., Cinema Enterprises II, Inc., American Multi-Cinema, Inc.,
TPI Entertainment, Inc. and TPI Enterprises, Inc. (5)
10.24. Mutual Release and Indemnification Agreement dated May 28,
1993, among Exhibition Enterprises Partnership, Cinema
Enterprises, Inc., American Multi-Cinema, Inc., TPI
Entertainment, Inc. and TPI Enterprises, Inc. (5)
10.25. Assignment and Assumption Agreement between Cinema Enterprises
II, Inc. and TPI Entertainment, Inc. (5)
10.26. Confidentiality Agreement dated May 28, 1993, among TPI
Entertainment, Inc., TPI Enterprises, Inc., Exhibition
Enterprises Partnership, Cinema Enterprises, Inc., Cinema
Enterprises II, Inc. and American Multi-Cinema, Inc. (5)
10.27. Termination Agreement dated May 28, 1993, among TPI
Entertainment, Inc., TPI Enterprises, Inc. Exhibition Enterprises
Partnership, American Multi-Cinema, Inc., Cinema Enterprises,
Inc., AMC Entertainment Inc., Durwood, Inc., Stanley H. Durwood
and Edward D. Durwood (5)
10.28. Promissory Note dated June 16, 1993, made by Thomas L. Velde and
Katherine G. Terwilliger, husband and wife, payable to American
Multi-Cinema, Inc. (5)
10.29. Second Mortgage dated June 16, 1993, among Thomas L. Velde,
Katherine G. Terwilliger and American Multi-Cinema, Inc. (5)
10.30. Summary of American Multi-Cinema, Inc. Executive Incentive
Program (13)
10.31. AMC Non-Qualified Deferred Compensation Plans (2)
*10.32. Employment agreement between American Multi-Cinema, Inc.
and Stanley H. Durwood
*10.33. Real Estate Contract dated November 1, 1995 among Richard M. Fay,
Mary B. Fay and American Multi-Cinema, Inc.
*11. Computation of Per Share Earnings
*13. Incorporated portions of the Annual Stockholders Report for the
fiscal year ended March 28, 1996.
16. Letter regarding change in certifying accountant (6)
*21. Subsidiaries of AMC Entertainment Inc.
*23. Consent of Coopers & Lybrand, L.L.P. to the use of their
report of independent accountants incorporated in Part 8 of this
annual report
____________________
(1) Incorporated by reference from AMCE's Form 10-K report for fiscal
year ended March 31, 1994 (File No. 0-12429)
(2) Incorporated by reference from Amendment No. 2 to AMCE's
Registration Statement on Form S-2 (File No. 33-51693) filed
February 18, 1994
(3) Incorporated by reference from AMCE's Form 8-K (File No.01-12429)
dated April 7, 1994
(4) Incorporated by reference from AMCE's Form S-1 (File No.
33-48586) filed June 12, 1992, as amended
(5) Incorporated by reference from AMCE's Form 10-K report for fiscal
year ended April 1, 1993 (File No. 01-12429)
(6) Incorporated by reference from AMCE's Form 10-Q (File No.
01-12429) dated July 2, 1992
(7) Incorporated by reference from AMCE's Form S-1 (File No. 2-84675)
filed June 22, 1983
(8) Incorporated by reference from AMCE's Form S-8 (File No.
2-97523) filed July 3, 1984
(9) Incorporated by reference from AMCE's S-8 and S-3 (File No.
2-97522) filed July 3, 1984
(10) Incorporated by reference from AMCE's From 8-K File (No. 0-12429)
dated December 30, 1986
(11) Incorporated by reference from AMCE's Form S-8 (File No. 2-92048)
filed July 3, 1985
(12) Incorporated by reference from AMCE's Form 8-K (File No. 0-12429)
dated March 4, 1991
(13) Incorporated by reference from AMCE's Registration Statement on
Form S-2 (File No. 33-51693) filed December 23, 1993
(14) Incorporated by reference from AMCE's Form 10-K
(File No. 1-12429) report for fiscal year ended March 30, 1995
(15) Incorporated by reference from AMCE's Form 10-Q
(File No. 0-12429) dated October 27, 1995
(16) Incorporated by reference from AMCE's Form 10-Q
(File No. 1-08747) dated November 1, 1994
(17) Incorporated by reference from AMCE's Form 10-Q
(File No. 0-12429) dated February 2, 1996
* - Filed herewith
EXHIBIT 11.
AMC ENTERTAINMENT INC. AND SUBSIDIARIES
STATEMENTS REGARDING COMPUTATION OF PER SHARE EARNINGS
Years (52) weeks Ended March 28, 1996, March 30, 1995 and March 31, 1994
(in thousands, except per share amounts)
1996 1995 1994
PRIMARY EARNINGS PER SHARE:
Net earnings before extraordinary item $ 27,371 $ 33,978 $ 15,312
Extraordinary item (19,350) - -
Net earnings 8,021 33,978 15,312
Preferred dividends (7,000) (7,000) (538)
Net earnings for common shares $1,021 $ 26,978 $ 14,774
Average shares for primary earnings per share:
Weighted average number of
shares outstanding 16,513 16,456 16,365
Stock options and other dilutive items 282 137 156
Total shares outstanding 16,795 16,593 16,521
Primary earnings per share
before extraordinary item $ 1.21 $ 1.63 $ 0.89
Primary earnings per share $ .06 $ 1.63 $ 0.89
FULLY DILUTED EARNINGS PER SHARE:
Net earnings before extraordinary item $ 27,371 $ 33,978 $ 15,312
Extraordinary item (19,350) - -
Net earnings 8,021 33,978 15,312
Preferred dividends (7,000) n/a (538)
Net earnings for common shares $1,021 $ 33,978 $ 14,774
Weighted average number of
shares outstanding 16,513 16,456 16,365
Stock options and other dilutive items 518 157 185
Shares issuable upon conversion
of preferred stock n/a 6,896 n/a
Total shares outstanding 17,031 23,509 16,550
Fully diluted earnings per share
before extraordinary item $1.20(1) $1.45(2) $0.89(1)
Fully diluted earnings per share $0.06(1) $1.45(2) $0.89(1)
(1) Fully diluted earnings per share for 1996 and 1994 excludes conversion
of preferred stock.
(2) Fully diluted earnings per share for 1995 includes conversion of
preferred stock.
<PAGE>
EXHIBIT 21.
AMC ENTERTAINMENT INC. AND ITS SUBSIDIARIES
AMC ENTERTAINMENT INC.
American Multi-Cinema, Inc.
AMC Philadelphia, Inc. (1)
Budco Theatres, Inc.
AMC Realty, Inc.
AMC Canton Realty, Inc.
Centertainment, Inc.
AMC Entertainment International, Inc.
AMC Entertainment International Limited
AMC Entertainment EspaNa S.A.
Actividades Multi-Cinemas E Espectaculos, LDA
AMC De Mexico, S.A., De C.V.
AMC Europe S.A.
National Cinema Network, Inc.
Unless otherwise noted all subsidiaries are wholly-owned.
(1)80% owned by American Multi-Cinema, Inc. <PAGE>
<PAGE>
EXHIBIT 23.
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
of AMC Entertainment Inc.
Kansas City, Missouri
We consent to the incorporation by reference in the registration
statement of AMC Entertainment Inc. on Form S-8 (File Nos. 33-58129,
2-92048, 2-97522 and 2-97523) of our report dated May 17, 1996, on our
audits of the consolidated financial statements and financial
statement schedule of AMC Entertainment Inc. as of March 28, 1996, and
March 30, 1995, and for each of the three years (52 weeks) ended March
28, 1996, which report is incorporated by reference in this Annual Report
on Form 10-K.
/s/ Coopers & Lybrand
Kansas City, Missouri
June 3, 1996
EXHIBIT 2.2
CERTIFICATE OF OWNERSHIP AND MERGER
Pursuant to the provisions of the General Corporation Law of the
State of Delaware, the undersigned, AMC Philadelphia, Inc., a Delaware
corporation ("AMCP"), and Concord Cinema, Inc., a Delaware corporation,
("Concord"), each certifies as follows:
1. AMCP, pursuant to Section 253 of the General Corporation Law of
the State of Delaware, has adopted a Plan and Agreement of Liquidation and
Merger (the "Plan"), a copy of which is attached hereto and incorporated
herein by this reference, pursuant to which Concord shall be merged into
and with AMCP.
2. On March 25, 1996, the Board of Directors of AMCP, by statement
of unanimous consent to action, adopted the following resolutions approving
the Plan and Agreement of Liquidation and Merger:
WHEREAS, it is in the best interests of this
corporation to enter into a Plan and Agreement of
Liquidation and Merger with Concord Cinema, Inc.
("Concord"), a Delaware corporation, pursuant to which
Concord will be merged into and with this corporation;
NOW, THEREFORE, BE IT RESOLVED, that the Plan and
Agreement of Liquidation and Merger (the "Plan") dated
this date between this corporation and Concord, a copy
of which is attached hereto and incorporated herein by
this reference, be, and it hereby is, adopted and
approved in all respects as and for a binding
obligation of this corporation; and
FURTHER RESOLVED, that the Chairman, or any
Executive Vice President of this corporation be, and
each of such officers hereby is, authorized and
directed in the name of and on behalf of this
corporation, and under its corporate seal attested by
its Secretary or any Assistant Secretary, to execute,
seal, verify, acknowledge and deliver the Plan
substantially in the form attached hereto, with such
changes therefrom, if any, as the officer executing the
same may approve, such approval to be conclusively
evidenced by the signature of such officer; and
FURTHER RESOLVED, that the Chairman, or any
Executive Vice President of this corporation be, and
each of such officers hereby is, authorized and
directed in the name of and on behalf of this
corporation to cause a document entitled "Certificate
of Ownership and Merger" to be prepared, executed,
acknowledged and filed with the Delaware Secretary of
State in accordance with the provisions of the General
Corporation Law of the State of Delaware and to take
such other action, including the making of one or more
filings with the appropriate government agencies or
offices of other states in which this corporation or
Concord is qualified to transact business, as may be
necessary or appropriate to cause the merger to be
effective in Delaware and such other states; and
FURTHER RESOLVED, that the officers of this
corporation be, and they hereby are, authorized and
directed, in the name of and on behalf of this
corporation and under its corporate seal, to execute
and deliver all such further agreements, certificates
and other instruments and to take all such further
actions as any such officer may consider necessary or
appropriate in order to effect the merger of Concord
into this corporation in accordance with the terms,
conditions and provisions of the Plan and to carry out
the purpose and intent of these resolutions.
3. AMCP owns all of the outstanding shares of the sole
class of stock of Concord. AMCP shall maintain its ownership of
at least 90% of the outstanding shares of each class of stock of
Concord until the issuance of a Certificate of Merger by the
Delaware Secretary of State.
IN WITNESS WHEREOF, this Certificate of Ownership and Merger
has been executed on behalf of AMC Philadelphia, Inc. by Peter C.
Brown, Executive Vice President of the corporation, and on behalf
of Concord Cinema, Inc. by Peter C. Brown, Executive Vice
President of the corporation, and the corporate seal of each such
corporation has been affixed hereto and attested to by the
Secretary of the respective corporation on March 26, 1996.
AMC PHILADELPHIA, INC.
By: /s/ Peter C. Brown
Peter C. Brown,
Executive Vice President
(SEAL)
ATTEST:
/s/ Nancy L. Gallagher
Nancy L. Gallagher, Secretary
<PAGE>
STATE OF MISSOURI )
) ss.
COUNTY OF JACKSON )
I, the undersigned, a notary public, do hereby certify that
on the 26th day of March, 1996, personally appeared before me
Peter C. Brown, who, being by me first duly sworn, declared that
he is the Executive Vice President of AMC Philadelphia, Inc., a
Delaware corporation, that he signed the foregoing document as
Executive Vice President of said corporation, and that the
statements contained therein are true.
In witness whereof, I have hereunto set my hand and affixed
my official seal the day and year last above written.
/s/ Susan Diane Slusher
Notary Public in and for
said County and State
My Commission expires:
May 10, 1996
<PAGE>
CONCORD CINEMA, INC.
By: /s/ Peter C. Brown
Peter C. Brown,
Executive Vice President
(SEAL)
ATTEST:
/s/ Nancy L. Gallagher
Nancy L. Gallagher, Secretary
STATE OF MISSOURI )
) ss.
COUNTY OF JACKSON )
I, the undersigned, a notary public, do hereby certify that
on the 26th day of March, 1996, personally appeared before me
Peter C. Brown, who, being by me first duly sworn, declared that
he is the Executive Vice President of Concord Cinema, Inc., a
Delaware corporation, that he signed the foregoing document as
Executive Vice President of said corporation, and that the
statements contained therein are true.
In witness whereof, I have hereunto set my hand and affixed
my official seal the day and year last above written.
/s/ SUSAN DIANE SLUSHER
Notary Public in
and for said
County and State
My Commission expires:
/s/ May 10, 1996
<PAGE>
PLAN AND AGREEMENT OF LIQUIDATION AND MERGER
This Plan and Agreement of Liquidation and Merger (the "Plan") is made
on March 26, 1996, by AMC Philadelphia, Inc., a Delaware corporation
("AMCP"), and Concord Cinema, Inc., a Delaware corporation ("Concord"). On
the Effective Date (as defined in paragraph 4 below), AMCP shall own all of
the shares of the sole class of stock of Concord. It is intended that the
merger contemplated by the Plan shall constitute a liquidation of Concord
in which no taxable gain or loss is recognized pursuant to Section 332 of
the Internal Revenue Code of 1986, as amended. The terms and conditions of
the Plan are as follows:
1. Names of Corporations. The names of the corporations proposing
to merge are:
AMC Philadelphia, Inc.
and
Concord Cinema, Inc.
2. Merger. On the Effective Date AMCP and Concord shall merge into
a single corporation by Concord merging into AMCP.
3. Name of Surviving Corporation. The name of AMC Philadelphia,
Inc., which is to be the surviving corporation, shall not be changed as a
result of the merger.
4. Effective Date. The merger shall be effected at the close of
business on March 28, 1996 (the "Effective Date").
5. Effect of Merger. (a) On the Effective Date, the separate
existence of Concord shall cease, except to the extent that its separate
existence may be continued by law. The existence of AMCP shall continue
unaffected and unimpaired by the merger, and AMCP shall after the Effective
Date have all of the rights, privileges, immunities and powers, and shall
be subject to all of the duties and liabilities, of a corporation organized
under the General Corporation Law of the State of Delaware.
(b) On the Effective Date, AMCP shall have and thereafter
possess all the rights, privileges, immunities, powers and franchises, of a
public as well as of private nature, of Concord, and all property, real,
personal and mixed, and all debts due on whatever account and all other
choses in action, and every other interest of or belonging to or due to
Concord shall be taken and deemed to be transferred to and vested or remain
in AMCP without further act or deed (and the title to any real estate, or
any interest therein, vested in the merging corporations shall not revert
or be in any way impaired by reason of the merger).
(c) Upon the Effective Date and thereafter, AMCP shall be
responsible and liable for all the liabilities and obligations of Concord,
and any claim existing or action or proceeding pending by or against any of
such entities may be prosecuted to judgment as if such merger had not taken
place or, in the case of Concord, AMCP may be substituted in its place.
Neither the rights of creditors nor any liens upon the property of the
merging corporations shall be impaired by the merger.
(d) The respective officers of Concord are hereby authorized to
execute all deeds, assignments and other documents which may be necessary
to effect the full and complete transfer of the properties of such
corporations to AMCP. The officers of AMCP are hereby authorized to
execute and deliver any and all documents which may be required of it in
order for it to assume or otherwise comply with any liability or obligation
of Concord. If at any time AMCP shall determine that any further documents
are necessary or desirable to vest in it, according to the terms hereof,
the title to any property, rights, privileges, immunities, powers or
franchises of Concord, then the officers of such entities shall execute and
deliver all such documents and do all things necessary to vest in and
confirm to AMCP title and possession to all such property, rights,
privileges, immunities, powers and franchises, and to otherwise carry out
the purposes of this Plan.
6. Cancellation of Shares. (a) The manner and basis of cancelling
the shares of stock of the merging corporations shall be as follows:
(i) On the Effective Date, each share of the authorized $1.00
par value common stock of AMCP, whether or not issued and outstanding,
shall continue to be one share of the $1.00 par value common stock of AMCP.
(ii) On the Effective Date, each of the ten (10) shares of the
$100.00 par value common stock of Concord which are issued and outstanding
(whether or not such shares are in all respects validly issued) and owned
of record by AMCP shall be cancelled.
7. Articles of Incorporation; Bylaws; Directors; Officers. The
Articles of Incorporation and Bylaws of AMCP shall not be changed by or as
a result of the merger. The directors and officers of AMCP prior to the
merger shall continue in such offices after the merger.
8. Further Action. Each of the merging corporations shall take all
actions and do all things necessary, proper, or advisable under the laws of
the State of Delaware to consummate and make effective the merger
contemplated herein.
IN WITNESS WHEREOF, this Plan and Agreement of Liquidation and Merger
has been signed on behalf of AMC Philadelphia, Inc. by Peter C. Brown, its
Executive Vice President and on behalf of Concord Cinema, Inc. by Peter C.
Brown, its Executive Vice President, and the corporate seal of each
corporation has been affixed hereto and attested to by the Secretary of
each corporation, respectively, on the date first above written.
AMC PHILADELPHIA, INC.
By: /s/ Peter C. Brown
Peter C. Brown, Executive Vice
President
(SEAL)
ATTEST:
/s/ Nancy L. Gallagher
Nancy L. Gallagher, Secretary
CONCORD CINEMA, INC.
By: /s/ Peter C. Brown
Peter C. Brown,
Executive Vice President
(SEAL)
ATTEST:
/s/ Nancy L. Gallagher
Nancy L. Gallagher, Secretary
<PAGE>
EXHIBIT 2.3
ARTICLES OF MERGER
Pursuant to the provisions of The General and Business Corporation Law
of Missouri, the undersigned, American Multi-Cinema, Inc., a Missouri
corporation ("AMC"), and Conservco, Inc., a Missouri corporation,
("Conservco"), each certifies as follows:
1. AMC, pursuant to Section 351.447 of The General and Business
Corporation Law of Missouri, has adopted a Plan and Agreement of
Liquidation and Merger (the "Plan"), a copy of which is attached hereto and
incorporated herein by this reference, pursuant to which Conservco shall be
merged into and with AMC.
2. On March 25, 1996, the Board of Directors of AMC, by statement of
unanimous consent to action, adopted the following resolutions approving
the Plan and Agreement of Liquidation and Merger:
WHEREAS, it is in the best interests of this
corporation to enter into a Plan and Agreement of
Liquidation and Merger with Conservco, Inc.
("Conservco"), a Missouri corporation, pursuant to
which Conservco will be merged into and with this
corporation;
NOW, THEREFORE, BE IT RESOLVED, that the Plan and
Agreement of Liquidation and Merger (the "Plan") dated
this date between this corporation and Conservco, a
copy of which is attached hereto and incorporated
herein by this reference, be, and it hereby is, adopted
and approved in all respects as and for a binding
obligation of this corporation; and
FURTHER RESOLVED, that the Chairman and President,
or any Executive Vice President of this corporation be,
and each of such officers hereby is, authorized and
directed in the name of and on behalf of this
corporation, and under its corporate seal attested by
its Secretary or any Assistant Secretary, to execute,
seal, verify, acknowledge and deliver the Plan
substantially in the form attached hereto, with such
changes therefrom, if any, as the officer executing the
same may approve, such approval to be conclusively
evidenced by the signature of such officer; and
FURTHER RESOLVED, that the Chairman and President,
or any Executive
Vice President of this corporation be, and each of such
officers hereby is, authorized and directed in the name
of and on behalf of this corporation to cause a
document entitled "Articles of Merger" to be prepared,
executed, acknowledged and filed with the Missouri
Secretary of State in accordance with the provisions of
The General and Business Corporation Law of Missouri
and to take such other action, including the making of
one or more filings with the appropriate government
agencies or offices of other states in which this
corporation or Conservco is qualified to transact
business, as may be necessary or appropriate to cause
the merger to be effective in Missouri and such other
states; and
FURTHER RESOLVED, that the officers of this
corporation be, and they hereby are, authorized and
directed, in the name of and on behalf of this
corporation and under its corporate seal, to execute
and deliver all such further agreements, certificates
and other instruments and to take all such further
actions as any such officer may consider necessary or
appropriate in order to effect the merger of Conservco
into this corporation in accordance with the terms,
conditions and provisions of the Plan and to carry out
the purpose and intent of these resolutions.
3. AMC owns all of the outstanding shares of the sole
class of stock of Conservco. AMC shall maintain its ownership of
at least 90% of the outstanding shares of each class of stock of
Conservco until the issuance of a Certificate of Merger by the
Missouri Secretary of State.
IN WITNESS WHEREOF, these Articles of Merger have been
executed on behalf of American Multi-Cinema, Inc. by Peter C.
Brown, Executive Vice President of the corporation, and on behalf
of Conservco, Inc. by Peter C. Brown, Executive Vice President of
the corporation, and the corporate seal of each such corporation
has been affixed hereto and attested to by the Secretary of the
respective corporation on March 26, 1996.
AMERICAN MULTI-CINEMA, INC.
By: /s/ Peter C. Brown
Peter C. Brown,
Executive Vice President
(SEAL)
ATTEST:
/s/ Nancy L. Gallagher
Nancy L. Gallagher, Secretary
<PAGE>
STATE OF MISSOURI )
) ss.
COUNTY OF JACKSON )
I, the undersigned, a notary public, do hereby certify that
on the 26th day of March, 1996, personally appeared before me
Peter C. Brown, who, being by me first duly sworn, declared that
he is the Executive Vice President of American Multi-Cinema,
Inc., a Missouri corporation, that he signed the foregoing
document as Executive Vice President of said corporation, and
that the statements contained therein are true.
In witness whereof, I have hereunto set my hand and affixed
my official seal the day and year last above written.
/s/ Susan Diane Slusher
Notary Public in and for said
County and State
My Commission expires:
May 10, 1996
<PAGE>
CONSERVCO, INC.
By: /s/ PETER C. BROWN
Peter C. Brown,
Executive Vice President
(SEAL)
ATTEST:
/s/ Nancy L. Gallagher
Nancy L. Gallagher, Secretary
STATE OF MISSOURI )
) ss.
COUNTY OF JACKSON )
I, the undersigned, a notary public, do hereby certify that
on the 26 day of March, 1996, personally appeared before
me Peter C. Brown, who, being by me first duly sworn, declared
that he is the Executive Vice President of Conservco, Inc., a
Missouri corporation, that he signed the foregoing document as
Executive Vice President of said corporation, and that the
statements contained therein are true.
In witness whereof, I have hereunto set my hand and affixed
my official seal the day and year last above written.
/s/ SUSAN DIANE SLUSHER
Notary Public in and for said
County and State
My Commission expires:
MAY 10, 1996
<PAGE>
PLAN AND AGREEMENT OF LIQUIDATION AND MERGER
This Plan and Agreement of Liquidation and Merger (the "Plan") is made
on March 25, 1996, by American Multi-Cinema, Inc., a Missouri corporation
("AMC"), and Conservco, Inc., a Missouri corporation ("Conservco"). On the
Effective Date (as defined in paragraph 4 below), AMC shall own all of the
shares of the sole class of stock of Conservco. It is intended that the
merger contemplated by the Plan shall constitute a liquidation of Conservco
in which no taxable gain or loss is recognized pursuant to Section 332 of
the Internal Revenue Code of 1986, as amended. The terms and conditions of
the Plan are as follows:
1. Names of Corporations. The names of the corporations proposing
to merge are:
American Multi-Cinema, Inc.
and
Conservco, Inc.
2. Merger. On the Effective Date AMC and Conservco shall merge into
a single corporation by Conservco merging into AMC.
3. Name of Surviving Corporation. The name of American Multi-Cinema,
Inc., which is to be the surviving corporation, shall not be
changed as a result of the merger.
4. Effective Date. The merger shall be effected at the close of
business on March 28, 1996 (the "Effective Date").
5. Effect of Merger. (a) On the Effective Date, the separate
existence of Conservco shall cease, except to the extent that its separate
existence may be continued by law. The existence of AMC shall continue
unaffected and unimpaired by the merger, and AMC shall after the Effective
Date have all of the rights, privileges, immunities and powers, and shall
be subject to all of the duties and liabilities, of a corporation organized
under The General and Business Corporation Law of Missouri.
(b) On the Effective Date, AMC shall have and thereafter possess
all the rights, privileges, immunities, powers and franchises, of a public
as well as of private nature, of Conservco, and all property, real,
personal and mixed, and all debts due on whatever account and all other
choses in action, and every other interest of or belonging to or due to
Conservco shall be taken and deemed to be transferred to and vested or
remain in AMC without further act or deed (and the title to any real
estate, or any interest therein, vested in the merging corporations shall
not revert or be in any way impaired by reason of the merger).
(c) Upon the Effective Date and thereafter, AMC shall be
responsible and liable for all the liabilities and obligations of
Conservco, and any claim existing or action or proceeding pending by or
against any of such entities may be prosecuted to judgment as if such
merger had not taken place or, in the case of Conservco, AMC may be
substituted in its place. Neither the rights of creditors nor any liens
upon the property of the merging corporations shall be impaired by the
merger.
(d) The respective officers of Conservco are hereby authorized
to execute all deeds, assignments and other documents which may be
necessary to effect the full and complete transfer of the properties of
such corporations to AMC. The officers of AMC are hereby authorized to
execute and deliver any and all documents which may be required of it in
order for it to assume or otherwise comply with any liability or obligation
of Conservco. If at any time AMC shall determine that any further
documents are necessary or desirable to vest in it, according to the terms
hereof, the title to any property, rights, privileges, immunities, powers
or franchises of Conservco, then the officers of such entities shall
execute and deliver all such documents and do all things necessary to vest
in and confirm to AMC title and possession to all such property, rights,
privileges, immunities, powers and franchises, and to otherwise carry out
the purposes of this Plan.
6. Cancellation of Shares. (a) The manner and basis of cancelling
the shares of stock of the merging corporations shall be as follows:
(i) On the Effective Date, each share of the authorized $.0625
par value common stock of AMC, whether or not issued and outstanding, shall
continue to be one share of the $.0625 par value common stock of AMC.
(ii) On the Effective Date, each of the 1,000 shares of the $1.00
par value common stock of Conservco which are issued and outstanding
(whether or not such shares are in all respects validly issued) and owned
of record by AMC shall be cancelled.
7. Articles of Incorporation; Bylaws; Directors; Officers. The
Articles of Incorporation and Bylaws of AMC shall not be changed by or as a
result of the merger. The directors and officers of AMC prior to the
merger shall continue in such offices after the merger.
8. Further Action. Each of the merging corporations shall take all
actions and do all things necessary, proper, or advisable under the laws of
the State of Missouri to consummate and make effective the merger
contemplated herein.
IN WITNESS WHEREOF, this Plan and Agreement of Liquidation and Merger
has been signed on behalf of American Multi-Cinema, Inc. by Peter C. Brown,
its Executive Vice President and on behalf of Conservco, Inc. by Peter C.
Brown, its Executive Vice President, and the corporate seal of each
corporation has been affixed hereto and attested to by the Secretary of
each corporation, respectively, on the date first above written.
AMERICAN MULTI-CINEMA, INC.
By: /s/ Perter C. Brown
Peter C. Brown,
Executive Vice President
(SEAL)
ATTEST:
/s/ Nancy L. Gallagher
Nancy L. Gallagher, Secretary
CONSERVCO, INC.
By:/s/ Perter C. Brown
Peter C. Brown,
Executive Vice President
(SEAL)
<PAGE>
EXHIBIT 2.4
ARTICLES OF MERGER
Pursuant to the provisions of The General and Business Corporation Law
of Missouri, the undersigned, American Multi-Cinema, Inc., a Missouri
corporation ("AMC"), and AMC Film Marketing, Inc., a Missouri corporation,
("AMCFM"), each certifies as follows:
1. AMC, pursuant to Section 351.447 of The General and Business
Corporation Law of Missouri, has adopted a Plan and Agreement of
Liquidation and Merger (the "Plan"), a copy of which is attached hereto and
incorporated herein by this reference, pursuant to which AMCFM shall be
merged into and with AMC.
2. On November 30, 1995 and reconfirmed on March 28, 1996, the Board
of Directors of AMC, by statement of unanimous consent to action, adopted
the following resolutions approving the Plan and Agreement of Liquidation
and Merger:
WHEREAS, it is in the best interests of this
corporation to enter into a Plan and Agreement of
Liquidation and Merger with AMC Film Marketing, Inc.
("AMCFM"), a Missouri corporation, pursuant to which
AMCFM will be merged into and with this corporation;
NOW, THEREFORE, BE IT RESOLVED, that the Plan and
Agreement of Liquidation and Merger (the "Plan") dated
this date between this corporation and AMCFM, a copy of
which is attached hereto and incorporated herein by
this reference, be, and it hereby is, adopted and
approved in all respects as and for a binding
obligation of this corporation; and
FURTHER RESOLVED, that the Chairman and President,
or any Executive Vice President of this corporation be,
and each of such officers hereby is, authorized and
directed in the name of and on behalf of this
corporation, and under its corporate seal attested by
its Secretary or any Assistant Secretary, to execute,
seal, verify, acknowledge and deliver the Plan
substantially in the form attached hereto, with such
changes therefrom, if any, as the officer executing the
same may approve, such approval to be conclusively
evidenced by the signature of such officer; and
FURTHER RESOLVED, that the Chairman and President,
or any Executive
Vice President of this corporation be, and each of such
officers hereby is, authorized and directed in the name
of and on behalf of this corporation to cause a
document entitled "Articles of Merger" to be prepared,
executed, acknowledged and filed with the Missouri
Secretary of State in accordance with the provisions of
The General and Business Corporation Law of Missouri
and to take such other action, including the making of
one or more filings with the appropriate government
agencies or offices of other states in which this
corporation or AMCFM is qualified to transact business,
as may be necessary or appropriate to cause the merger
to be effective in Missouri and such other states; and
FURTHER RESOLVED, that the officers of this
corporation be, and they hereby are, authorized and
directed, in the name of and on behalf of this
corporation and under its corporate seal, to execute
and deliver all such further agreements, certificates
and other instruments and to take all such further
actions as any such officer may consider necessary or
appropriate in order to effect the merger of AMCFM into
this corporation in accordance with the terms,
conditions and provisions of the Plan and to carry out
the purpose and intent of these resolutions.
3. AMC owns all of the outstanding shares of the sole
class of stock of AMCFM. AMC shall maintain its ownership of at
least 90% of the outstanding shares of each class of stock of
AMCFM until the issuance of a Certificate of Merger by the
Missouri Secretary of State.
<PAGE>
IN WITNESS WHEREOF, these Articles of Merger have been
executed on behalf of American Multi-Cinema, Inc. by Peter C.
Brown, Executive Vice President of the corporation, and on behalf
of AMC Film Marketing, Inc. by Peter C. Brown, Executive Vice
President of the corporation, and the corporate seal of each such
corporation has been affixed hereto and attested to by the
Secretary of the respective corporation on April 2, 1996.
AMERICAN MULTI-CINEMA, INC.
By: /s/ Peter C. Brown
Peter C. Brown,
Executive Vice President
(SEAL)
ATTEST:
/s/ Nancy L. Gallagher
Nancy L. Gallagher, Secretary
STATE OF MISSOURI )
) ss.
COUNTY OF JACKSON )
I, the undersigned, a notary public, do hereby certify that
on the 2nd day of April, 1996, personally appeared before me
Peter C. Brown, who, being by me first duly sworn, declared that
he is the Executive Vice President of American Multi-Cinema,
Inc., a Missouri corporation, that he signed the foregoing
document as Executive Vice President of said corporation, and
that the statements contained therein are true.
In witness whereof, I have hereunto set my hand and affixed
my official seal the day and year last above written.
/s/ Susan Diane Slusher
Notary Public in and for
said
County and State
My Commission expires:
May 10, 1996
<PAGE>
AMC FILM MARKETING, INC.
By: /s/ Peter C. Brown
Peter C. Brown,
Executive Vice President
(SEAL)
ATTEST:
/s/ Nancy L. Gallagher
Nancy L. Gallagher, Secretary
STATE OF MISSOURI )
) ss.
COUNTY OF JACKSON )
I, the undersigned, a notary public, do hereby certify that
on the 2nd day of April, 1996, personally appeared before me
Peter C. Brown, who, being by me first duly sworn, declared that
he is the Executive Vice President of AMC Film Marketing, Inc., a
Missouri corporation, that he signed the foregoing document as
Executive Vice President of said corporation, and that the
statements contained therein are true.
In witness whereof, I have hereunto set my hand and affixed
my official seal the day and year last above written.
/s/ Susan Diane Slusher
Notary Public in and for said
County and State
My Commission expires:
May 10, 1996
<PAGE>
PLAN AND AGREEMENT OF LIQUIDATION AND MERGER
This Plan and Agreement of Liquidation and Merger (the "Plan") is made
on April 2, 1996, by American Multi-Cinema, Inc., a Missouri corporation
("AMC"), and AMC Film Marketing, Inc., a Missouri corporation ("AMCFM").
On the Effective Date (as defined in paragraph 4 below), AMC shall own all
of the shares of the sole class of stock of AMCFM. It is intended that the
merger contemplated by the Plan shall constitute a liquidation of AMCFM in
which no taxable gain or loss is recognized pursuant to Section 332 of the
Internal Revenue Code of 1986, as amended. The terms and conditions of the
Plan are as follows:
1. Names of Corporations. The names of the corporations proposing
to merge are:
American Multi-Cinema, Inc.
and
AMC Film Marketing, Inc.
2. Merger. On the Effective Date AMC and AMCFM shall merge into a
single corporation by AMCFM merging into AMC.
3. Name of Surviving Corporation. The name of American Multi-Cinema,
Inc., which is to be the surviving corporation, shall not be
changed as a result of the merger.
4. Effective Date. The merger shall be effected at the close of
business on April 3, 1996 (the "Effective Date").
5. Effect of Merger. (a) On the Effective Date, the separate
existence of AMCFM shall cease, except to the extent that its separate
existence may be continued by law. The existence of AMC shall continue
unaffected and unimpaired by the merger, and AMC shall after the Effective
Date have all of the rights, privileges, immunities and powers, and shall
be subject to all of the duties and liabilities, of a corporation organized
under The General and Business Corporation Law of Missouri.
(b) On the Effective Date, AMC shall have and thereafter possess
all the rights, privileges, immunities, powers and franchises, of a public
as well as of private nature, of AMCFM, and all property, real, personal
and mixed, and all debts due on whatever account and all other choses in
action, and every other interest of or belonging to or due to AMCFM shall
be taken and deemed to be transferred to and vested or remain in AMC
without further act or deed (and the title to any real estate, or any
interest therein, vested in the merging corporations shall not revert or be
in any way impaired by reason of the merger).
(c) Upon the Effective Date and thereafter, AMC shall be
responsible and liable for all the liabilities and obligations of AMCFM,
and any claim existing or action or proceeding pending by or against any of
such entities may be prosecuted to judgment as if such merger had not taken
place or, in the case of AMCFM, AMC may be substituted in its place.
Neither the rights of creditors nor any liens upon the property of the
merging corporations shall be impaired by the merger.
(d) The respective officers of AMCFM are hereby authorized to
execute all deeds, assignments and other documents which may be necessary
to effect the full and complete transfer of the properties of such
corporations to AMC. The officers of AMC are hereby authorized to execute
and deliver any and all documents which may be required of it in order for
it to assume or otherwise comply with any liability or obligation of AMCFM.
If at any time AMC shall determine that any further documents are necessary
or desirable to vest in it, according to the terms hereof, the title to any
property, rights, privileges, immunities, powers or franchises of AMCFM,
then the officers of such entities shall execute and deliver all such
documents and do all things necessary to vest in and confirm to AMC title
and possession to all such property, rights, privileges, immunities, powers
and franchises, and to otherwise carry out the purposes of this Plan.
6. Cancellation of Shares. (a) The manner and basis of cancelling
the shares of stock of the merging corporations shall be as follows:
(i) On the Effective Date, each share of the authorized $.0625
par value common stock of AMC, whether or not issued and outstanding, shall
continue to be one share of the $.0625 par value common stock of AMC.
(ii) On the Effective Date, each of the 3,000 shares of the
$10.00 par value common stock of AMCFM which are issued and outstanding
(whether or not such shares are in all respects validly issued) and owned
of record by AMC shall be cancelled.
7. Articles of Incorporation; Bylaws; Directors; Officers. The
Articles of Incorporation and Bylaws of AMC shall not be changed by or as a
result of the merger. The directors and officers of AMC prior to the
merger shall continue in such offices after the merger.
8. Further Action. Each of the merging corporations shall take all
actions and do all things necessary, proper, or advisable under the laws of
the State of Missouri to consummate and make effective the merger
contemplated herein.
IN WITNESS WHEREOF, this Plan and Agreement of Liquidation and Merger
has been signed on behalf of American Multi-Cinema, Inc. by Peter C. Brown,
its Executive Vice President and on behalf of AMC Film Marketing, Inc. by
Peter C. Brown, its Executive Vice President, and the corporate seal of
each corporation has been affixed hereto and attested to by the Secretary
of each corporation, respectively, on the date first above written.
AMERICAN MULTI-CINEMA, INC.
By: /s/ Peter C. Brown
Peter C. Brown,
Executive Vice President
(SEAL)
ATTEST:
/s/ Nancy L. Gallagher
Nancy L. Gallagher, Secretary
AMC FILM MARKETING, INC.
By: /s/ Peter C. Brown
Peter C. Brown,
Executive Vice President
(SEAL)
ATTEST:
/s/ Nancy L. Gallagher
Nancy L. Gallagher, Secretary
EXHIBIT 4.2(d)
AMC ENTERTAINMENT INC.
and
the Existing Guarantors Named Herein
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
SIXTH SUPPLEMENTAL INDENTURE
Dated as of March 28, 1996
to
INDENTURE
Dated as of August 1, 1992,
As Supplemented by
THE FIRST SUPPLEMENTAL INDENTURE
Dated as of March 31, 1993, and by
THE SECOND SUPPLEMENTAL INDENTURE,
Dated as of May 28, 1993 and by
THE THIRD SUPPLEMENTAL INDENTURE
Dated as of May 28, 1993, and by
THE FOURTH SUPPLEMENTAL INDENTURE
Dated as of March 31, 1994, and by
THE FIFTH SUPPLEMENTAL INDENTURE
Dated as of December 28, 1995
___________________________
$100,000,000
11 7/8% Senior Notes Due 2000
<PAGE>
SIXTH SUPPLEMENTAL INDENTURE, dated as of March 28, 1996 (the "Sixth
Supplemental Indenture"), among AMC ENTERTAINMENT INC., a Delaware
corporation (the"Company") , AMERICAN MULTI-CINEMA, INC., a Missouri
corporation ("AMC"), AMC
REALTY, INC., a Delaware corporation ("Realty"), AMC CANTON REALTY, INC., a
Delaware corporation ("Canton Realty"), AMC PHILADELPHIA, INC., a Delaware
corporation ("AMCP"), and BUDCO THEATRES, INC., a Pennsylvania corporation
("Budco") (AMC, Realty, Canton Realty, AMCP and Budco being collectively
referred to herein as the "Existing Guarantors" and each as an "Existing
Guarantor"), and United States Trust Company of New York, a New York banking
corporation, as Trustee (the "Trustee"), to the Indenture, dated as of
August 1, 1992, as supplemented by the First Supplemental Indenture, dated
as of March 31, 1993, the Second Supplemental Indenture dated May 28, 1993,
the Third Supplemental Indenture dated May 28, 1993, the Fourth Supplemental
Indenture dated March 31, 1994, and the Fifth
Supplemental Indenture dated December 28, 1995 (collectively, the
"Indenture").
WHEREAS, AMC and the Existing Guarantors have each heretofore
guaranteed (the "Guarantee") the $100,000,000 aggregate principal amount of
11 7/8% Senior Notes due 2000 (the "Securities") of the Company issued
pursuant to the Indenture; and
WHEREAS, there have been issued and are now outstanding Securities in
the aggregate principal amount of $617,000; and
WHEREAS, each of AMC Film Marketing, Inc. ("AMCFM") and Conservco, Inc.
("Conservco"), both of which are wholly-owned subsidiaries of AMC, desires
to merge into and with AMC, with AMC being the surviving corporation, which
mergers will result in the termination by operation of law of the existence
of each of AMCFM and Conservco; and
WHEREAS, Concord Cinema, Inc. ("Concord"), a wholly-owned subsidiary of
AMCP, desires to merge into and with AMCP, with AMCP being the surviving
corporation, which merger will result in the termination by operation of law
of the existence of Concord; and
WHEREAS, pursuant to Section 5.1(b)(ii), such mergers are not permitted
unless each of the respective surviving entities assumes the respective
non-surviving entity's obligations under the Indenture and the Guarantee of
such non-surviving entity; and
WHEREAS, AMC desires by this Sixth Supplemental Indenture, pursuant to
and as contemplated by Sections 5.1 and 9.1 of the Indenture, to expressly
assume the obligations of AMCFM and Conservco; and
WHEREAS, AMCP desires by this Sixth Supplemental Indenture, pursuant to
and as contemplated by Sections 5.1 and 9.1 of the Indenture, to expressly
assume the obligations of Concord; and
WHEREAS, pursuant to Section 5.1(b)(iv), such mergers are not permitted
unless each Existing Guarantor reaffirms its obligations under the
Indenture; and
WHEREAS, each of the Existing Guarantors desires by this Sixth
Supplemental Indenture, pursuant to and as contemplated by Sections 5.1 and
9.1 of the Indenture, to expressly reaffirm its obligations as a Guarantor
under the Indenture and all of the covenants, agreements and undertakings of
a Guarantor thereunder, including Article XI thereof; and
WHEREAS, the execution and delivery of this Sixth Supplemental
Indenture has been authorized by a resolution of the Board of Directors of
each of the Company and the Existing Guarantors; and
WHEREAS, upon the execution and delivery hereof, all conditions and
requirements necessary to make this Sixth Supplemental Indenture a valid,
binding and legal instrument in accordance with its terms shall have been
performed and fulfilled;
NOW, THEREFORE, in consideration of the above premises, each party
agrees, for the benefit of the other and for the equal and ratable benefit
of the Holders of the Securities, as follows:
ARTICLE I
ASSUMPTION AND REAFFIRMATION OF OBLIGATIONS
Section 1.1. Assumption of Obligations of AMCFM and Conservco. AMC
hereby assumes all of the obligations of AMCFM and Conservco under the
Indenture and under the Guarantee of
such entity.
Section 1.2. Assumption of Obligations of Concord. AMCP hereby
assumes all of the obligations of Concord under the Indenture and under the
Guarantee of such entity.
Section 1.3. Reaffirmation of Existing Guarantors' Obligations. The
Existing Guarantors each hereby confirms the due and punctual performance of
its Guarantee and every covenant in the Indenture on the part of each
Existing Guarantor to be performed or observed.
ARTICLE II
MISCELLANEOUS PROVISIONS
Section 2.1. Terms Defined. For all purposes of this Sixth
Supplemental Indenture, except as otherwise defined or unless the context
otherwise requires, terms used in capitalized form in this Sixth
Supplemental Indenture and defined in the Indenture have the meanings
specified in the Indenture.
Section 2.2. Indenture. Except as supplemented hereby, the Indenture
and the Securities (including the Guarantees thereof) are in all respects
ratified and confirmed and all the terms shall remain in full force and
effect.
SECTION 2.3. GOVERNING LAW. THIS SIXTH SUPPLEMENTAL INDENTURE SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND
FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID
STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE
PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS SIXTH SUPPLEMENTAL INDENTURE.
Section 2.4. Successors. All agreements of each of the Existing
Guarantors in this Sixth Supplemental Indenture shall bind the successors of
each such corporation.
Section 2.5. Multiple Counterparts. The parties hereto may sign
multiple counterparts of this Sixth Supplemental Indenture. Each signed
counterpart shall be deemed an original, but all of them together represent
the same agreement.
Section 2.6. Effectiveness. The provisions of this Sixth Supplemental
Indenture will take effect immediately upon its execution and delivery by
the Trustee in accordance with the provisions of Section 9.6 of the
Indenture.
Section 2.7. Trustee Disclaimer. The Trustee accepts the supplement to
the Indenture effected by this Sixth Supplemental Indenture and agrees to
execute the trust created by the Indenture as hereby supplemented, but only
upon the terms and conditions set forth in the Indenture, including the
terms and provisions defining and limiting the liabilities and
responsibilities of the Trustee, which terms and provisions shall in like
manner define and limit its liabilities and responsibilities in the
performance of the trust created by the Indenture hereby supplemented.
Without limiting the generality of the foregoing, the Trustee shall not be
responsible in any manner whatsoever for or with respect to any of the
recitals or statements contained herein, all of which recitals or statements
are made solely by the Existing Guarantors. Except to the extent that they
relate to action taken by the Trustee, the Trustee shall not be responsible
in any manner whatsoever for or with respect to (i) the validity, efficacy
or sufficiency of this Sixth Supplemental Indenture or any of the terms or
provisions hereof, (ii) the proper authorization hereof by the Company and
the Existing Guarantors by corporate action or otherwise, (iii) the due
execution hereof by the Company and the Existing Guarantors, or (iv) the
consequences (direct or indirect and whether deliberate or inadvertent) of
any supplement herein provided for, and the Trustee makes no representation
with respect to any such matters.
ATTEST: AMC ENTERTAINMENT INC.
/s/ NANCY L. GALLAGHER BY: /s/ PETER C. BROWN
Peter C. Brown
Executive Vice President
and Chief Financial Officer
ATTEST: UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
____________________________ By: /s/ CYNTHIA CHANEY
Name:________________
Title: ASSISTANT VICE PRESIDENT
ATTEST:
AMERICAN MULTI-CINEMA, INC.
/s/ NANCY L. GALLAGHER BY: /s/ PETER C. BROWN
Peter C. Brown
Executive Vice President and
Chief Financial
Officer
ATTEST: AMC REALTY, INC.
/s/ NANCY L. GALLAGHER BY: /s/ PETER C. BROWN
Peter C. Brown
Executive Vice President and Chief Financial
Officer
ATTEST: AMC PHILADELPHIA, INC.
/s/ NANCY L. GALLAGHER BY: /s/ PETER C. BROWN
Peter C. Brown
Executive Vice President
and Chief Financial
Officer
ATTEST: BUDCO THEATRES, INC.
/s/ NANCY L. GALLAGHER BY: /s/ PETER C. BROWN
Peter C. Brown
Executive Vice President and
Chief Financial Officer
ATTEST: AMC CANTON REALTY, INC.
/s/ NANCY L. GALLAGHER BY: /s/ PETER C. BROWN
Peter C. Brown
Executive Vice President and
Chief Financial Officer
EXHIBIT 4.2(e)
AMC ENTERTAINMENT INC.
and
the Existing Guarantors Named Herein
and
THE BANK OF NEW YORK,
as Trustee
SIXTH SUPPLEMENTAL INDENTURE
Dated as of March 28, 1996
to
INDENTURE
Dated as of August 1, 1992,
As Supplemented by
THE FIRST SUPPLEMENTAL INDENTURE
Dated as of March 31, 1993, and by
THE SECOND SUPPLEMENTAL INDENTURE
Dated as of May 28, 1993, and by
THE THIRD SUPPLEMENTAL INDENTURE
Dated as of May 28, 1993, and by
THE FOURTH SUPPLEMENTAL INDENTURE
Dated as of March 31, 1994, and by
THE FIFTH SUPPLEMENTAL INDENTURE
Dated as of December 28, 1995
____________________________
$100,000,000
12 5/8% Senior Subordinated Notes Due 2002
<PAGE>
SIXTH SUPPLEMENTAL INDENTURE, dated as of March 28, 1996 (the "Sixth
Supplemental Indenture"), among AMC ENTERTAINMENT INC., a Delaware corporation
(the "Company") , AMERICAN MULTI-CINEMA, INC., a Missouri corporation ("AMC"),
AMC REALTY, INC., a Delaware corporation ("Realty"), AMC CANTON REALTY, INC.,
a Delaware corporation ("Canton Realty"), AMC PHILADELPHIA, INC., a Delaware
corporation ("AMCP"), and BUDCO THEATRES, INC., a Pennsylvania corporation
("Budco") (AMC, Realty, Canton Realty, AMCP and Budco being collectively
referred to herein as the "Existing Guarantors" and each as an "Existing
Guarantor"), and The Bank of New York, a New York banking corporation, as
Trustee (the "Trustee"), to the Indenture, dated as of August 1, 1992, as
supplemented by the First Supplemental Indenture, dated as of March 31, 1993,
the Second Supplemental Indenture dated May 28, 1993, the Third Supplemental
Indenture dated May 28, 1993, the Fourth Supplemental Indenture dated March
31, 1994, and the Fifth Supplemental Indenture dated December 28, 1995
(collectively, the "Indenture").
WHEREAS, AMC and the Existing Guarantors have each heretofore guaranteed
(the "Guarantee") the $100,000,000 aggregate principal amount of 12 5/8%
Senior Subordinated Notes due 2002 (the "Securities") of the Company issued
pursuant to the Indenture; and
WHEREAS, there have been issued and are now outstanding Securities in the
aggregate principal amount of $4,904,000; and
WHEREAS, each of AMC Film Marketing, Inc. ("AMCFM") and Conservco, Inc.
("Conservco"), both of which are wholly-owned subsidiaries of AMC, desires to
merge into and with AMC, with AMC being the surviving corporation, which
mergers will result in the termination by operation of law of the existence of
each of AMCFM and Conservco; and
WHEREAS, Concord Cinema, Inc. ("Concord"), a wholly-owned subsidiary of
AMCP, desires to merge into and with AMCP, with AMCP being the surviving
corporation, which merger will result in the termination by operation of law
of the existence of Concord; and
WHEREAS, pursuant to Section 5.1(b)(ii), such mergers are not
permitted unless each of the respective surviving entities assumes the
non-surviving entity's obligations under the Indenture and the Guarantee of
such non-surviving entity; and
WHEREAS, AMC desires by this Sixth Supplemental Indenture, pursuant to
and as contemplated by Sections 5.1 and 9.1 of the Indenture, to expressly
assume the obligations of each of AMCFM and Conservco; and
WHEREAS, AMCP desires by this Sixth Supplemental Indenture, pursuant to
and as contemplated by Sections 5.1 and 9.1 of the Indenture, to expressly
assume the obligations of Concord; and
WHEREAS, pursuant to Section 5.1(b)(iv), such mergers are not permitted
unless each Existing Guarantor reaffirms its obligations under the Indenture;
and
WHEREAS, each of the Existing Guarantors desires by this Sixth
Supplemental Indenture, pursuant to and as contemplated by Sections 5.1 and
9.1 of the Indenture, to expressly reaffirm its obligations as a Guarantor
under the Indenture and all of the covenants, agreements and undertakings of
a Guarantor thereunder, including Article XI thereof; and
WHEREAS, the execution and delivery of this Sixth Supplemental Indenture
has been authorized by a resolution of the Board of Directors of each of the
Company and the Existing Guarantors; and
WHEREAS, upon the execution and delivery hereof, all conditions and
requirements necessary to make this Sixth Supplemental Indenture a valid,
binding and legal instrument in accordance with its terms shall have been
performed and fulfilled;
NOW, THEREFORE, in consideration of the above premises, each party
agrees, for the benefit of the other and for the equal and ratable benefit of
the Holders of the Securities, as follows:
ARTICLE I
ASSUMPTION AND REAFFIRMATION OF OBLIGATIONS
Section 1.1. Assumption of Obligations of AMCFM and Conservco. AMC
hereby assumes all of the obligations of AMCFM and Conservco under the
Indenture and under the Guarantee of such entity.
Section 1.2. Assumption of Obligations of Concord. AMCP hereby assumes
all of the obligations of Concord under the Indenture and under the Guarantee
of such entity.
Section 1.3. Reaffirmation of Existing Guarantors' Obligations. The
Existing Guarantors each hereby confirms the due and punctual performance of
its Guarantee and every covenant in the Indenture on the part of each Existing
Guarantor to be performed or observed.
ARTICLE II
MISCELLANEOUS PROVISIONS
Section 2.1. Terms Defined. For all purposes of this Sixth Supplemental
Indenture, except as otherwise defined or unless the context otherwise
requires, terms used in capitalized form in this Sixth Supplemental Indenture
and defined in the Indenture have the meanings specified in the Indenture.
Section 2.2. Indenture. Except as supplemented hereby, the Indenture
and the Securities (including the Guarantees thereof) are in all respects
ratified and confirmed and all the terms shall remain in full force and
effect.
SECTION 2.3. GOVERNING LAW. THIS SIXTH SUPPLEMENTAL INDENTURE SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR
ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO
AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SIXTH SUPPLEMENTAL
INDENTURE.
Section 2.4. Successors. All agreements of each of the Existing
Guarantors in this Sixth Supplemental Indenture shall bind the successors of
each such corporation.
Section 2.5. Multiple Counterparts. The parties hereto may sign
multiple counterparts of this Sixth Supplemental Indenture. Each signed
counterpart shall be deemed an original, but all of them together represent
the same agreement.
Section 2.6. Effectiveness. The provisions of this Sixth Supplemental
Indenture will take effect immediately upon its execution and delivery by the
Trustee in accordance with the provisions of Section 9.6 of the Indenture.
Section 2.7. Trustee Disclaimer. The Trustee accepts the supplement to
the Indenture effected by this Sixth Supplemental Indenture and agrees to
execute the trust created by the Indenture as hereby supplemented, but only
upon the terms and conditions set forth in the Indenture, including the terms
and provisions defining and limiting the liabilities and responsibilities of
the Trustee, which terms and provisions shall in like manner define and limit
its liabilities and responsibilities in the performance of the trust created
by the Indenture hereby supplemented. Without limiting the generality of the
foregoing, the Trustee shall not be responsible in any manner whatsoever for
or with respect to any of the recitals or statements contained herein, all of
which recitals or statements are made solely by the Existing Guarantors.
Except to the extent that they relate to action taken by the Trustee, the
Trustee shall not be responsible in any manner whatsoever for or with respect
to (i) the validity, efficacy or sufficiency of this Sixth Supplemental
Indenture or any of the terms or provisions hereof, (ii) the proper
authorization hereof by the Company and the Existing Guarantors by corporate
action or otherwise, (iii) the due execution hereof by the Company and the
Existing Guarantors, or (iv) the consequences (direct or indirect and whether
deliberate or inadvertent) of any supplement herein provided for, and the
Trustee makes no representation with respect to any such matters.
ATTEST: AMC ENTERTAINMENT INC.
/s/ NANCY L. GALLAGHER_ By: /s/ PETER C. BROWN
Peter C. Brown
Executive Vice President
and Chief Financial Officer
ATTEST: THE BANK OF NEW YORK,
as Trustee
____________________________ By: /s/ MARY JANE MORRISSEY
Name:____________________
Title:____________________
ATTEST: AMERICAN MULTI-CINEMA, INC.
/s/ NANCY L. GALLAGHER BY: /s/ PETER C BROWN
Peter C. Brown
Executive Vice President and
Chief Financial Officer
ATTEST: AMC REALTY, INC.
/s/ NANCY L. GALLAGHER BY: /s/ PETER C BROWN _
Peter C. Brown
Executive Vice President
and Chief Financial Officer
ATTEST: AMC PHILADELPHIA, INC.
/s/ NANCY L. GALLAGHER BY: /s/ PETER C BROWN
Peter C. Brown
Executive Vice President
and Chief Financial Officer
ATTEST: BUDCO THEATRES, INC.
/s/ NANCY L. GALLAGHER BY: /s/ PETER C BROWN
Peter C. Brown
Executive Vice President
and Chief Financial Officer
ATTEST: AMC CANTON REALTY, INC.
/s/ NANCY L. GALLAGHER BY: /s/ PETER C BROWN
Peter C. Brown
Executive Vice President
and Chief Financial Officer
EXHIBIT 10.5.(a)
Exhibit A
to Proxy Statement
Set forth below is the AMC Entertainment Inc. 1994 Stock Option and
Incentive Plan, as proposed to be amended. Proposed deletions from the Plan as
originally adopted are marked through, and proposed additions are underlined.
AMC ENTERTAINMENT INC.
1994 STOCK OPTION AND INCENTIVE PLAN
1. PURPOSE
The AMC Entertainment Inc. 1994 Stock Option and Incentive Plan is
intended to incorporate stock-based and results-oriented awards into the
ongoing compensation packages of executives and managers and to thereby
increase the alignment of the interests of such persons and stockholders. The
Plan is intended to foster in participants a strong incentive to exert maximum
effort for the continued success and growth of the Company and its
Subsidiaries and the enhancement of stockholders' interests, to aid in
retaining individuals who exert such efforts and to assist in attracting the
best available individuals in the future.
2. DEFINITIONS
When used herein, the following terms shall have the meaning set forth
below:
2.1 "AMC" means American Multi-Cinema, Inc., a wholly-owned subsidiary of
the Company.
2.2 "Award" means an Option, a Stock Award or a Performance Unit.
2.3 "Board" means the Board of Directors of the Company.
2.4 A "Change of Control Event" shall be deemed to have occurred at the
first time that (a) a majority of the Board of Directors of the Company, over
a two-year period, is replaced from the directors who constituted the Board of
Directors of the Company at the beginning of such period, which replacement
shall not have been approved by the Board of Directors of the Company (or
replacement directors approved by the Board of Directors of the Company), as
constituted at the beginning of such period, or (b) a person or entity or
group of persons or entities acting in concert as a partnership or other group
(other than the DI affiliates, 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 the
Company or any Subsidiary or any person holding securities of the Company for
or pursuant to the terms of any such employee benefit plan) shall, as a result
of a tender or exchange offer, open market purchases, privately negotiated
purchases or otherwise, have become the beneficial owner (within the meaning
of Rule 13d-3 under the Exchange Act) of securities of the Company
representing 50% or more of the combined voting power of the then outstanding
securities of the Company ordinarily (and apart from rights accruing under
special circumstances) having the right to vote in the election of Directors.
2.5 "Code" means the Internal Revenue Code of 1986 as amended from time to
time.
2.6 "Committee" means the Board's Compensation Committee, or such other
committee of Directors as may be designated by the Board, authorized to
administer this Plan. The Committee shall consist of not fewer than two
(2) Directors and shall be constituted so as to permit the Plan to comply with
Rule 16b-3 or any successor provision of similar import.
2.7 "Common Stock" means the Company's Common Stock, par value 66 2/3 cents
per share.
2.8 "Company" means AMC Entertainment Inc., a corporation organized and
existing under the laws of the State of Delaware, or such Company by whatever
name it may at the time have.
2.9 "DI Affiliates" means (a) Mr. Stanley H. Durwood, his spouse and any of
his lineal descendants and their respective spouses (collectively the Durwood
Family ), (b) any controlled affiliate of any member of the Durwood Family and
(c) any trust for the benefit of one or more members of the Durwood Family
(whether or not any member of the Durwood Family is a trustee of such trust)
or one or more charitable organizations.
2.10 "Director" means a member of the Board.
2.11 "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
2.12 "Fair Market Value" means with respect to the Company's Shares the
closing sales price of the Shares, as reported on the American Stock Exchange,
or, if not so reported, on the NASDAQ/National Market System, or, if not so
reported, the closing sales price as reported by any other appropriate
reporting system of general circulation, on the date for which the value is to
be determined, or if there is no closing sales price on such date, then on the
last day for which transactions in Shares were so reported prior to the date
on which the value is to be determined.
2.13 "Grantee" means a person to whom an Award is made.
2.14 "Incentive Stock Option" or "ISO" means an Option awarded under the
Plan which meets the terms and conditions established by Code Section 422 and
applicable regulations thereunder for such an Option.
2.15 "Non-Qualified Stock Option" or "NQSO" means an Option awarded under
the Plan which by its terms and conditions is not an ISO.
2.16 "Option" means the right to purchase, at a price, for a term, under
conditions, and for cash or other considerations (which may include a note
from the Grantee) fixed by the Committee in accordance with such restrictions
as the Plan and the Committee impose, a number of Shares specified by the
Committee (subject to limitations imposed by this Plan). An Option can be
either an ISO or NQSO or a combination thereof.
2.17 "Plan" means the Company's 1994 Stock Option and Incentive Plan.
2.18 "Performance Unit" means an Award payable only in cash and valued by
reference to designated criteria (other than Shares) established by the
Committee.
2.19 "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act.
2.20 "Securities Act" means the Securities Act of 1933, as amended from time
to time.
2.21 "Shares" means shares of the Company's Common Stock or if by reason of
the adjustment provisions hereof any rights under an Award under the Plan
pertain to any other security, such other security.
2.22 "Stock Award" means the grant of a right to receive, at a time or times
fixed by the Committee in accordance with the Plan and subject to such other
limitations and restrictions as the Plan and the Committee impose, the number
of Shares specified by the Committee. A Stock Award may be either a
"Performance Stock Award", under which the receipt of Shares, subject to
provisions of the Plan permitting acceleration, will be conditioned on the
attainment by the Company or a Subsidiary or a division during a performance
period of performance goals established by the Committee, or a "Restricted
Stock Award", under which the receipt of Shares, subject to provisions of the
Plan permitting acceleration, is conditioned on the continued employment of
the Grantee or such other conditions as the Committee may impose, or both.
2.23 "Subsidiary" means any business, including AMC, whether or not
incorporated, in which the Company, at the time an Award is granted or in
other cases at the time of reference, owns directly or indirectly not less
than 50% of the equity interest.
2.24 "Successor" means the legal representative of the estate of a deceased
Grantee or the person or persons who shall acquire the right to exercise an
Option, to receive Shares issuable in satisfaction of a Stock Award or to
receive other amounts payable under an Award, by bequest or inheritance or by
reason of the death of the Grantee or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employment Retirement
Income Security Act, or the rules thereunder.
2.25 "Tax Date" means the date on which the amount of tax to be withheld
with respect to an Option or Stock Award is determined.
2.26 "Term" means the period during which a particular Option may be
exercised or the period during which the conditions and/or restrictions placed
on an Award are in effect.
2.27 "Window Period" means a period beginning on the third business day
following the date of release of a quarterly or annual summary statement of
sales and earnings of the Company and ending on the twelfth business day
following such date.
3. ADMINISTRATION OF THE PLAN
3.1 The Plan shall be administered by the Committee.
3.2 The Committee shall have plenary authority, subject to provisions of the
Plan, to: (a) determine when and to whom Awards shall be granted;
(b) determine the form of each Award, its Term, the number of Shares covered
by it, if any, the participation by a Grantee in other plans, and any other
terms or conditions of each such Award, including the time and conditions of
exercise or vesting; (c) determine whether Awards will be granted singly or in
combination or tandem; (d) determine the performance goals, if any, that will
be applicable to the Award and eliminate or reduce an Award otherwise payable
that is based on performance goals; (e) accelerate the vesting, exercise, or
payment of an Award when such action(s) would be in the best interests of the
Company; and (f) take any and all other action it deems necessary or advisable
for the proper operation or administration of the Plan. The Committee also
shall have the authority to grant Awards in replacement of Awards previously
granted under the Plan or any other plan of the Company or a Subsidiary. The
Committee's actions in making Awards and fixing their size, Term, and other
terms and conditions shall be final and conclusive on all persons.
3.3 The Committee shall have the sole responsibility for construing and
interpreting the Plan, for establishing (and amending) such rules and
regulations as it deems necessary or desirable for the proper administration
of the Plan, and for resolving all questions arising under the Plan. Any
decision or action taken by the Committee arising out of or in connection with
the construction, administration, interpretation and effect of the Plan and of
its rules and regulations shall, to the extent permitted by law, be within its
absolute discretion, except as otherwise specifically provided herein, and
shall be conclusive and binding upon all Grantees, all Successors, and any
other person, whether that person is claiming under or through any Grantee or
otherwise.
3.4 The Committee may designate one of its members as Chairman. It shall
hold its meetings at such times and places as it may determine. All
determinations of the Committee shall be made by a majority of its members.
Any determination reduced to writing and signed by all members shall be fully
as effective as if it had been made by a majority vote at a meeting duly
called and held. The Committee may make such rules and regulations for the
conduct of its business as it shall deem advisable.
3.5 The Committee, in its discretion, may delegate its authority and duties
under the Plan to the Chief Executive Officer and/or to other senior officers
of the Company under such conditions and/or limitations as the Committee may
establish; provided, however, that only the Committee may establish
performance goals and select and grant Awards to Grantees who are subject to
Section 16 of the Exchange Act.
3.6 Service on the Committee shall constitute service as a Director, so that
the members of the Committee shall be entitled to indemnification and
reimbursement as Directors pursuant to its Bylaws and to any agreements
between the Company and its Directors providing for indemnification.
3.7 The Committee shall regularly inform the Board as to its actions with
respect to all Awards under the Plan and the terms and conditions of such
Awards in a manner, at such times, and in such form as the Board may
reasonably request.
4. ELIGIBILITY
Awards may be made under the Plan to employees who are corporate or field
executives or senior managers, including executive officers of the Company and
its Subsidiaries, and other managers, including field and theatre managers.
Officers shall be employees for this purpose, whether or not they also are
Directors. A Director who is not an employee shall not be eligible to receive
an Award. Awards may be made to eligible employees whether or not they have
received prior Awards under the Plan or under any previously adopted plan, and
whether or not they are participants in other benefit plans of the Company,
AMC or any other Subsidiary.
5. SHARES SUBJECT TO PLAN; LIMITATIONS
5.1 The Company hereby reserves 1,000,000 Shares, for issuance in connection
with Awards under the Plan, subject to adjustment under Section 20. During the
Plan no Grantee may receive Options to acquire more than 325,000 Shares, Stock
Awards entitling the Grantee to receive more than 150,000 Shares or cash
awards aggregating more than $2 million under Performance Units. During any
12 month period no Grantee may receive Options to acquire more than 65,000
Shares or cash awards aggregating more than $400,000 under Performance Units.
No Grantee may receive a Stock Award or Awards entitling the Grantee to
receive free of conditions more than 30,000 Shares with respect to any
12 month period, but determined on an annualized basis so that more than
30,000 Shares may be received at one time free of conditions with respect to
a performance period exceeding 12 months in duration.
5.2 Any Shares related to Awards which (a) terminate by expiration,
forfeiture, cancellation or otherwise without the issuance of such Shares, or
(b) are settled in cash in lieu of Shares, shall be available again for grant
under the Plan, provided the Participant received no other benefits of
ownership of such Award other than voting rights, if any. Notwithstanding the
foregoing, no Shares which are used by a Participant for the full or partial
payment to the Company of the purchase price of Shares upon exercise of an
Option, or for any withholding taxes due as a result of such exercise, may
become available for Awards under the Plan. The Shares available for issuance
under the Plan may be authorized and unissued shares or treasury shares.
6. GRANTING OF OPTIONS
6.1 Subject to the terms of the Plan, the Committee may from time to time
grant Options to persons eligible under Section 4 above and shall designate
such Options as ISOs or NQSOs.
6.2 Pursuant to Code Section 422 and applicable regulations, an Option shall
not be deemed to be an ISO to the extent that the aggregate Fair Market Value,
as determined on the date or dates of grant, of Shares with respect to which
such ISO is exercisable for the first time by any individual during any
calendar year (under all stock option incentive plans of the Company or a
Subsidiary) exceeds $100,000. ISOs which first become exercisable during a
calendar year shall be taken into account in the order granted. Options that
exceed the $100,000 limit shall be treated as NQSOs.
6.3 The purchase price of each Share subject to Option shall be fixed by the
Committee, provided the purchase price for Shares subject to an Option shall
not be less than 100% of the Fair Market Value of the Shares on the date the
Option is granted.
6.4 Notwithstanding Section 6.3 above, pursuant to Code Section 422 and
applicable regulations, the minimum purchase price of an ISO shall be 110% of
the Fair Market Value of the Shares on the date the ISO is granted with
respect to Grantees who at the time of Award are deemed to own 10% or more of
the voting power of the Company's outstanding Shares.
6.5 Each Option shall expire and all rights to purchase Shares thereunder
shall cease on the date fixed by the Committee.
6.6 Notwithstanding Section 6.5 above, pursuant to Code Section 422 and
applicable regulations, an ISO shall expire and all rights to purchase Shares
thereunder shall cease no later than the fifth anniversary of the date on
which the ISO was granted with respect to Grantees who at the time of Award
are deemed to own 10% or more of the voting power of the Company, and no later
than the tenth anniversary of the date on which the ISO was granted with
respect to other Grantees.
6.7 No Option shall become exercisable prior to the expiration of six months
after the date of its grant, unless otherwise determined by the Committee or
permitted by the Plan, and, subject to the limitations in the Plan, each
Option shall be exercisable for the number of Shares fixed by the Committee.
7. STOCK AWARDS
7.1 The Committee may grant eligible employees Stock Awards which shall
entitle Grantees to receive Shares in the future for no cash consideration and
which may be subject to such terms, conditions and restrictions, if any, as
the Committee may deem appropriate, including, without limitation,
satisfaction of performance goals, restrictions on transferability and
continued employment.
7.2 Subject to provisions of the Plan permitting acceleration, the receipt
of Shares under Stock Awards granted to persons subject to Section 16 of the
Exchange Act will be conditioned on the attainment by the Company or a
Subsidiary or a division during a performance period of performance goals
established by the Committee based on criterion described in Section 9.
7.3 At the time of grant of a Stock Award, the Grantee shall receive written
evidence of the Award in such form as may be approved by the Committee but
shall not be entitled to issuance or delivery of a stock certificate
evidencing the Shares covered by the Award until the Committee certifies that
performance goals have been met and the lapse of any restrictions that may
have been imposed pursuant to the Award. Upon the attainment of such goals and
the lapse of any restrictions, a certificate or certificates representing the
number of Shares covered by the Award, free and clear of all restrictions,
shall be issued and registered in the name of, and delivered to, the Grantee.
7.4 Unless otherwise determined by the Committee or provided in the Plan, no
Shares may be issued under Restricted Stock Awards unless the Grantee remains
employed by the Company or a Subsidiary for one year after the date of the
Award.
8. PERFORMANCE UNITS
8.1 The Committee may grant Awards in the form of Performance Units.
8.2 Amounts payable under a Performance Unit may be payable at a specified
date or dates or upon attaining performance conditions. Subject to provisions
of the Plan permitting acceleration, a Performance Unit granted to persons
subject to Section 16 of the Exchange Act will be conditioned on the
attainment by the Company or a Subsidiary or a division during a performance
period of performance goals established by the Committee based on criteria
described in Section 9.
9. PERFORMANCE GOALS
Performance Stock and Performance Unit Awards made to persons subject to
Section 16 of the Exchange Act shall be based on performance goals established
by the Committee prior to not later than 90 days after the start of a
performance period of 12 months duration or longer with respect to which such
an Award is made. After the start of a performance period The Committee may
not increase the compensation payable under an Award that is otherwise due
upon attainment of a performance goal. The Committee shall certify that the
performance goals have been achieved before payment of any such Award.
Performance goals established by the Committee shall be based upon, as the
Committee deems appropriate, one or more of the following business criteria:
(i) Company or Subsidiary EBITDA (earnings before interest, taxes,
depreciation and amortization); (ii) Company or Subsidiary earnings or
earnings per Share; (iii) public market prices of Shares; (iv) division
operating income, or "DOI" (operating income less general and administrative
expenses and extraordinary expenses); (v) division level EBITDA (DOI less
national film, home office and international general and administrative
expenses plus capitalized lease adjustments; (vi) private market value of
Shares on a fully-diluted basis (assuming full exercise of all outstanding
shares of preferred stock, Class B stock, options and other rights to acquire
Shares), based on a constant multiple of theatre level EBITDA (Company EBITDA
less National Cinema Network, Inc. EBITDA), plus the book value of National
Cinema Network, Inc., cash, cash equivalents and investments and investments
in other long-term assets, less corporate borrowings, capitalized lease
obligations and the carrying value of minority interests in other long-term
liabilities; (vii) return to stockholders, measured by increases in the market
value of an investment in Shares, assuming reinvestment of dividends received;
and (viii) return on assets within a participant's span of responsibility; and
the Committee may, in its discretion, determine whether an Award will be paid
under any one or more of such business criteria. In setting performance goals,
such criteria may be measured against one or more of the following: (i) the
prior year or years' performance of the Company, a Subsidiary, or a division
or other operations-based unit or span of a participant's responsibility;
(ii) the performance of a broad-based group of stock such as, but not limited
to, the Standard and Poor's 500 Index with risk profiles similar to the
Company's and; (iii) the performance of a peer group of two or more companies.
Such performance goals may be (but need not be) different for each performance
period. The Committee may set different (or the same) goals for different
Grantees and for different Awards, and performance goals may include standards
for minimum attainment, target attainment, and maximum attainment. In all
cases, however, performance goals shall include a minimum performance standard
below which no part of the relevant Award will be earned.
10. NON-TRANSFERABILITY OF RIGHTS
No Award, no rights under any Award, and no payment under the Plan shall
be assignable or transferable otherwise than by will or the laws of descent
and distribution or pursuant to a qualified domestic relations order as
defined by the Code or Title I of the Employment Retirement Income Security
Act, or the rules thereunder, and the rights and the benefits of any such
Award may be exercised during the lifetime of the Grantee only by his or her
guardian or legal representative or Successor.
11. DEATH, DISABILITY, RETIREMENT AND OTHER TERMINATION
OF EMPLOYMENT
11.1 Subject to the terms of the Plan, the Committee may make such
provisions concerning exercise or lapse of Awards upon the Grantee's death,
disability, retirement, or other termination of employment as it shall in its
discretion determine, provided that:
(a) except as provided in paragraph (b) below, no provision shall permit
an ISO to be exercised after the date three months following the Grantee's
termination of employment,
(b) no provision shall permit an Option to be exercised after the date
which is twelve months following a Grantee's death or disability,
(c) no provision shall permit a NQSO to be exercised after the date
which is three years following the Grantee's retirement from the Company or a
Subsidiary,
(d) except as provided in paragraphs (b) and (c) above, no provision
shall permit a NQSO to be exercised after the date which is six months
following a Grantee's termination of employment,
(e) except as provided in paragraph (f) below or as permitted by
Sections 12 or 20, all Stock Awards and Performance Units shall be canceled
and forfeited if a Grantee's employment is terminated, and
(f) in the event of Grantee's death, disability or retirement, the
Grantee (or his Successor) shall be entitled immediately to be issued a
certificate or certificates for all of the Shares represented by his Stock
Award(s) and to be paid amounts due under Performance Unit awards, free and
clear of all performance goal requirements and restrictions, based in each
case on the extent to which performance goals have been achieved, measured
through the date of termination.
For purposes of this Section 11, the term "disability" shall mean "long
term disability", as defined in the AMC Long Term Disability Plan, or any
comparable plan of the Company or AMC, or, if there is no such plan, the
inability of the Grantee to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can
be expected to result in death or to last for a continuous period of not less
than twelve months as determined by the Committee based on the opinion of a
qualified physician (or other medical certificate) and other evidence
acceptable to the Committee, and the term "retirement" shall mean "normal
retirement" or, with the approval of the Committee, "early retirement"
pursuant to the applicable terms of the AMC Defined Benefit Retirement Plan or
any comparable plan of the Company or a Subsidiary covering a Grantee.
11.2 Unless the Committee determines otherwise, Options which pursuant to
their terms are exercisable following termination of a Grantee's employment:
(a) may be exercised only to the extent exercisable upon the date such
employment terminates, if such termination is other than by reason of the
Grantee's death, disability or retirement, and
(b) shall be accelerated if not yet vested and shall be exercisable in
full, free and clear of all restrictions, if such termination is by reason of
the Grantee's death, disability or retirement.
11.3 Transfers of employment between the Company and a Subsidiary, or
between Subsidiaries, shall not constitute termination of employment for
purposes of any Award. The Committee may specify in the terms and conditions
of an Award whether any authorized leave of absence or absence for military or
governmental service or for any other reason shall constitute a termination of
employment for purposes of the Award and the Plan.
12. PROVISIONS RELATING TO CHANGE IN CONTROL
The Committee may provide, at the time of an Award or thereafter, that if
a Change of Control Event occurs or if termination results from such Change of
Control Event, (a) any restrictions on Stock Awards shall lapse immediately
and (b) outstanding Options shall become exercisable immediately. The
Committee may also waive, at the time of an Award or thereafter, the
satisfaction of performance goals with respect to Performance Stock Awards and
Performance Units upon the occurrence of a Change in Control Event or upon
termination resulting from a Change in Control Event, and authorize the
issuance of Shares represented by Stock Awards or the payment of amounts under
Performance Unit Awards, based in each case on the extent to which performance
goals have been achieved, measured through the date a Change in Control Event
or termination resulting therefrom occurs.
13. WRITING EVIDENCING AWARDS
Each Award granted under the Plan shall be evidenced by a writing which
may, but need not, be in the form of an agreement to be signed by the Grantee.
The writing shall set forth the nature and size of the Award, its Term, the
other terms and conditions thereof, other than those set forth in the Plan,
and such other information as the Committee directs. Acceptance of, or receipt
of the benefits of, an Award by the Grantee shall be conclusively presumed to
be assent to the terms and conditions set forth therein, whether or not the
writing is in the form of an agreement to be signed by the Grantee.
14. EXERCISE OF RIGHTS UNDER AWARDS
14.1 A person entitled to exercise an Option may do so by delivery of a
written notice to that effect specifying the number of Shares with respect to
which the Option is being exercised and any other information the Committee
may prescribe.
14.2 The notice of exercise shall be accompanied by payment in full of the
purchase price for any Shares to be purchased, with such payment being made in
cash, certified or bank cashier's check or money order or in Shares having a
Fair Market Value equivalent to the purchase price of such Shares to be
purchased, or a combination thereof. If approved by the Committee, payment of
the purchase price of an Option may also be made by Note, provided that unless
the Shares issued are treasury shares at least the par value of the Shares
issued shall be paid in cash or equivalent or Shares as provided above. The
Committee shall establish appropriate methods for accepting Shares and may
impose such conditions as it deems appropriate on the use of such Shares to
exercise an Option.
14.3 Upon exercise of an Option, or after grant of a Stock Award but before
a distribution of Shares in satisfaction thereof, the Grantee may request in
writing that the Shares to be issued in satisfaction of the Award be issued in
the name of the Grantee and another person as joint tenants with right of
survivorship or as tenants in common.
14.4 All notices or requests to the Company provided for herein shall be
delivered to the Secretary of the Company.
15. EFFECTIVE DATE AND DURATION OF THE PLAN AND DATE OF AWARD
15.1 The Plan shall become effective on November 10, 1994, provided any
Awards granted hereunder shall be subject to approval of any governmental body
having jurisdiction over the Company with respect to this Plan within the time
limits applicable to any such governmental approvals.
15.2 The Plan shall remain in effect until all Awards have been exercised or
satisfied in accordance herewith, but no Awards may be granted under the Plan
after the date of the first stockholders' meeting held in 1999 or December 31,
1999, whichever first occurs. The terms of any Award may be amended at any
time prior to the end of its Term in accordance with and subject to the
limitations of the Plan.
15.3 The date of an Award shall be the date on which the Committee's
determination to grant the same is final, or such later date as shall be
specified by the Committee in connection with its determination.
16. AMENDMENTS TO AWARDS
The Committee may at any time unilaterally amend or terminate and cash out
any unexercised or unpaid Award, whether earned or unearned, including, but
not by way of limitation, Awards earned but not yet paid, and/or substitute
another Award of the same or different type, to the extent it deems
appropriate; provided, however, that any amendment to (but not termination of)
an outstanding Award which, in the opinion of the Committee, is materially
adverse to the Grantee, or any amendment or termination which, in the opinion
of the Committee, may subject the Grantee to liability under Section 16 of the
Exchange Act, shall require the Grantee's consent. It shall be conclusively
presumed that any adjustment for changes in capitalization as provided for
herein are not adverse to a Grantee.
17. STOCKHOLDER STATUS
No person shall have any rights as a stockholder by virtue of the grant of
an Award under the Plan, except with respect to Shares actually issued to that
person.
18. POSTPONEMENT OR NON-EXERCISE
The Company shall not be required to issue any certificate or certificates
for Shares upon the exercise of an Option or upon the vesting of a Stock Award
granted under the Plan prior to (a) the obtaining of any approval from any
governmental agency which the Company shall, in its sole discretion, determine
to be necessary or advisable, (b) the taking of any action in order to comply
with restrictions or regulations incident to the maintenance of a public
market for its Shares, and (c) the completion of any registration or other
qualification of such Shares under any state or Federal law or rulings or
regulations of any governmental body which the Company shall, in its sole
discretion, determine to be necessary or advisable. The Company shall not be
obligated by virtue of any terms and conditions of any Award or any provisions
of the Plan to recognize the exercise of an Option or to sell or issue shares
in violation of the Securities Act or the law of any government having
jurisdiction thereof. Any postponement or delay by the Company in recognizing
the exercise of any Option or in issuing any Shares under a Stock Award or
otherwise hereunder shall not extend the Term of an Option nor shorten the
Term of any restriction attached to any Stock Award and neither the Company
nor its directors or officers shall have any obligation or liability to the
Grantee of an Award, to a Successor or to any other person with respect to any
Shares as to which the Option shall lapse because of such postponement or as
to which issuance under a Stock Award was delayed.
19. TERMINATION, SUSPENSION OR MODIFICATION OF PLAN
The Board may terminate, suspend or modify the Plan at any time and in any
manner, provided, however, that without stockholder approval the Board will
not adopt an amendment that requires stockholder approval under Rule 16b-3.
No termination or suspension of the Plan shall adversely affect any right
acquired by any Grantee or any Successor under an Award granted before the
date of such termination or suspension except to the extent permitted in
Section 16.
20. ADJUSTMENTS FOR CORPORATE CHANGES
20.1 In the event of a recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation, rights offering,
reorganization or liquidation, or any other change in the corporate structure
or shares of the Company, the Committee may (a) make such equitable
adjustments, designed to protect against dilution or enlargement, as it may
deem appropriate in the number and kind of Shares authorized by the Plan and,
with respect to outstanding Awards, in the number and kind of Shares covered
thereby and in the Option price, and (b) make such arrangements, which shall
be binding upon the holders of unexpired Options and outstanding Stock Awards,
for the substitution of new Options or Stock Awards for any unexpired Options
or Stock Awards then outstanding under the Plan or for the assumption of any
such unexpired Options and outstanding Stock Awards.
20.2 In the event that the Company agrees (a) to sell or otherwise dispose
of all or substantially all of the Company's assets, or (b) to be wholly or
partially liquidated, or (c) to participate in a merger, consolidation or
reorganization, or (d) to sell or otherwise dispose of substantially all the
assets of, or a majority interest in, a Subsidiary or division, then the
Committee may determine that any and all Options granted under the Plan, in
situations involving an event described in clauses (a) through (c), and any
and all Options granted to employees of the affected Subsidiary or division,
in situations described in clause (d), shall be immediately exercisable in
full, and any and all Shares issuable pursuant to Stock Awards or cash payable
under Performance Units made under the Plan, in situations involving an event
described in clauses (a) through (c), and any and all Shares issuable pursuant
to Stock Awards or cash payable under Performance Units granted to employees
of the affected Subsidiary or division, in situations described in clause (d),
shall be immediately issuable or paid in full, as the case may be, based in
each case on the extent to which performance goals have been achieved to the
date of the event described in clause (a), (b), (c) or (d) above. The
Committee may also determine that any Options not exercised, and any Stock
Awards or Performance Units with respect to which any restrictions shall not
have lapsed or conditions shall not have been satisfied, prior to any such
event, or within such period of time thereafter (not to exceed 120 days) as
the Committee shall determine, shall terminate.
20.3 The grant of any Award pursuant to the Plan shall not affect in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part
of its business or assets or the business, assets or stock of a Subsidiary.
21. NON-UNIFORM DETERMINATION
The Committee's determination under the Plan including, without
limitation, determination of the persons to receive Awards, the form, amount
and type of Awards, the terms and provisions of Awards and the written
material evidencing such Awards, any amendments to the terms and provisions of
any Awards, and the granting or rejecting of applications for delivery of
Shares need not be uniform and may be made selectively among otherwise
eligible employees whether or not such employees are similarly situated.
22. TAXES
22.1 The Company may pay, withhold or require a Grantee to remit to it
amounts sufficient to satisfy the Company's federal, state, local or other tax
withholding obligations attributable to any Awards after giving notice to the
person entitled to receive such amount, and the Company may defer making
payment of any Award if any such tax, charge or assessment may be pending
until indemnified to its satisfaction.
22.2 Subject to the consent of the Committee, in connection with (a) the
exercise of a Non-Qualified Stock Option or (b) satisfaction of conditions
and/or lapse of restrictions on a Stock Award, a Grantee may make an
irrevocable election to tender back to the Company Shares received pursuant to
(a) or (b), having a Fair Market Value sufficient to satisfy all or part of
the Company's total federal, state, local and other tax withholding
obligations associated with the transaction. Any such election shall be
irrevocable and, except with respect to elections incident to death,
retirement, disability or termination of employment, must be made by a Grantee
prior to the Tax Date, by delivering written notice to the Secretary of the
Company together with such information and documents as the Committee may
prescribe. The Committee may disapprove of any election, may suspend or
terminate the right to make elections, or may provide with respect to any
Award under this Plan that the right to make elections shall not apply to such
Award.
22.3 If a Grantee is an officer of the Company and is subject to the
provisions of Section 16 of the Exchange Act, then an election to have Shares
withheld and any exercise of such right are subject to the following
additional restrictions:
(a) no exercise shall be made within six months of the grant of the
Award, unless made incident to death, retirement, disability or termination of
employment; and
(b) both the election and exercise must be made during a Window Period,
unless made incident to death, retirement, disability or termination of
employment, or the election must be made six months prior to the Tax Date.
22.4 If, pursuant to the provisions of the Code, the Tax Date of an Award is
deferred and a Grantee elects to have Shares withheld, the full number of
Option Shares or Stock Award Shares may be issued but the Grantee shall enter
into an agreement unconditionally obligating him or her to tender back to the
Company the proper number of Shares on the Tax Date.
23. NONCOMPETITION AND FORFEITURE PROVISION
If the Committee so determines, an Award may specify that a Grantee shall
forfeit all unexercised, unearned, and/or unpaid Awards, including, but not
limited to, Awards earned but not yet paid if, in the opinion of the
Committee, the Grantee, at any time during the period of Grantee's employment
and for one (1) year thereafter, without the written consent of the Committee,
engages directly or indirectly in any manner or capacity as principal, agent,
partner, officer, director, employee, or otherwise, in any business or
activity competitive with the business conducted by the Company, in the
geographic area in which the Company does business, or in any manner which is
inimical to the best interests of the Company.
24. TENURE
Nothing in the Plan or in any agreement entered into pursuant to the Plan
shall confer upon any participant the right to continue in the employment of
the Company or any Subsidiary or affect any right which the Company or
Subsidiary has to terminate the employment of such participant. An employee
terminated for cause, as determined by the Company, shall forfeit all of his
rights under the Plan, except as to Options already exercised and Stock Awards
on which restrictions have already lapsed.
25. APPLICATION OF PROCEEDS
The proceeds received by the Company from the sale of its Shares under the
Plan shall be used for general corporate purposes of the Company and its
Subsidiaries.
26. OTHER ACTIONS
Nothing in the Plan shall be construed to limit the authority of the
Company to exercise its corporate rights and powers, including, by way of
illustration and not by way of limitation, the right to grant options or pay
bonuses for proper corporate purposes otherwise than under the Plan to any
employee or any other person, firm, corporation, association or other entity,
or to grant options to, or assume options of, any person in connection with
the acquisition by purchase, lease, merger, consolidation or otherwise, of all
or any part of the business and assets of any person, firm, corporation,
association or other entity.
27. GENDER AND NUMBER
Except when otherwise indicated by the context, words in the masculine
gender when used in the Plan shall include the feminine gender, the singular
shall include the plural, and the plural shall include the singular.
28. REQUIREMENTS OF LAW, GOVERNING LAW
The granting of Awards and the issuance of Shares shall be subject to all
applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required. The
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of Missouri.
29. EFFECT ON OTHER PLANS
Participation in this Plan shall not affect an employee's eligibility to
participate in any other benefit or incentive plan of the Company or a
Subsidiary. Any Awards made pursuant hereto shall not be used in determining
the benefits provided under any other plan of the Company or a Subsidiary
unless specifically provided therein.
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of January 26, 1996
by and between AMC ENTERTAINMENT INC., a Delaware corporation, and its
wholly owned subsidiary, AMERICAN MULTI-CINEMA, INC., a Missouri
corporation (collectively, the "Company"), and STANLEY H. DURWOOD (the
"Employee").
WHEREAS, Employee has demonstrated continued vision, innovation,
knowledge and experience in the development of the motion picture
exhibition industry, which has contributed to the growth and financial
stability of the Company and has caused the Company to become a leader
in the motion picture exhibition industry; and
WHEREAS, the Company desires to provide certain assurances to
Employee in consideration of his willingness to continue to exercise
those capabilities, and the Company does not intend to employ any
employee in a position superior to Employee's current title, status,
duties, functions, power or otherwise without Employee's written
consent, or to effectuate a change in the nature of Employee's duties,
services, terms or conditions of employment without Employee's written
consent; and
WHEREAS, the Company desires to enter into an Employment
Agreement with Employee wherein he will continue to be employed as
Chief Executive Officer of the Company and serve as President and
Chairman of the Board.
In consideration of the mutual promises and covenants contained
herein, the parties hereto agree as follows:
1. Duties of Employee: Certain Covenants of the Company.
(a) Employee shall be employed as Chief Executive Officer of
the Company and, subject to the exercise by the Board of Directors of
its fiduciary duties and powers under the Company's bylaws, will
serve as its President and Chairman of the Board. Employee shall
devote his full time and attention to the business of the Company and
its affiliates, as reasonably directed from time to time by the Board
of Directors of the Company.
(b) Company shall not, without Employee's written consent,
(i) require Employee to perform duties or services other than those
comparable in scope, span, term and dignity to those he is presently
performing; (ii) diminish or reduce the scope or span of Employee's
authority or responsibilities heretofore exercised as Chief Executive
Officer of the Company; (iii) change the location of Employee's office
or of the Company's principal executive offices to a place which is
more than 50 miles from the location of such office at the date of
execution of this Agreement, or change the location of Employee's
office from the location of the Company's principal executive offices;
or (iv) reduce the base salary paid to Employee by Company in any
fiscal year below the highest amount determined by the Compensation
Committee in accordance with Section 3 hereof, or reduce any Employee
Benefits (as defined below) provided to Employee below amounts
generally provided to all other executives of the Company.
2. Term. The term of Employee's employment with the Company
pursuant to this Agreement shall be from January 26, 1996 through
January 26, 1999, subject, however, to termination of Employee's
employment pursuant to Section 4 hereafter. On each January 26
hereafter, commencing in 1997, one year shall be added to the term of
Employee's employment with the Company under this Agreement, so that
as of each January 26 the term of Employer's employment hereunder
shall be three years.
3. Compensation.
(a) Employee shall receive (i) an annual base salary as
determined from time to time by the Compensation Committee of the
Board of Directors pursuant to paragraph 3(b) below, but not less
than Five Hundred Thousand Dollars ($500,000) per annum, payable
bi-weekly during the term of this Agreement, plus (ii) payments and
awards under the Company's Executive Incentive Program, 1994 Stock
Option and Incentive Plan and any other bonus or incentive plan in
effect for executive officers from time to time, at a level reflecting
his position as Chief Executive Officer, as provided in paragraph 3(b)
below, plus (iii) such other awards or amounts as may be made or
paid under any other compensatory arrangement, stock option plan or
employee benefit plan of the Company (other than those provided for in
the last sentence of this paragraph 3(a)), if any, as determined from
time to time in the sole discretion of the Compensation Committee of
the Board of Directors of the Company. All or a portion of any
earned bonus may be deferred for a reasonable period of time
determined by the Compensation Committee of the Board of Directors of
the Company. Employee shall also receive his appropriate share of all
benefits ("Employee Benefits") existing from time to time that inure
to the benefit of all other executives of the Company, as determined
in the sole discretion of the Board of Directors of the Company, such
as group insurance, pension plans, thrift plans, stock purchase plans
and the like.
(b) Not less frequently than annually, and no later than April
30 of each year commencing in 1997, the Compensation Committee of the
Board of Directors will review Employee's compensation package
referred to in clauses 3(a)(i) and (ii) above and make such increase
in Employee's annual base salary, annual incentive cash bonus, stock
incentives and other incentives, if any, as may be required to provide
Employee with compensation that is comparable to that afforded chief
executive officers of comparable companies (which may include
companies in different industries) and not below a level which is
consistent with the Company's compensation policy for the Chief
Executive Officer as it exists on the date of this agreement. Each
such increase shall be effective as of the first day of the fiscal
year in which such April 30 occurs.
(c) The Company shall use its best efforts to provide Employee
at the Company's expense with a life insurance policy on his life in
an amount up to $5,000,000 and pay the premiums thereon, and shall pay
Employee annually, in addition to the other compensation provided for
in this Section 3, an amount equal to the incremental income tax
incurred by Employee as a result of the payment of such premiums,
inclusive of the additional income taxes owed by Employee upon the
Company's payment of such obligation.
4. Termination; Severance.
(a) Termination Without Severance. The employment of Employee
with the Company may be terminated without severance (i) upon
Employee's resignation or voluntary departure from the Company (except
under the circumstances described in paragraph 4(b) below); or (ii)
if, during the term of this Agreement, Employee engages in intentional
misconduct or a knowing violation of law or breaches his duty of
loyalty to the Company.
(b) Termination With Severance.
(i) The employment of Employee with the Company may be
terminated with severance (A) upon the Employee's death, in which
event the severance compensation payment shall be paid to
Employee's estate; (B) upon the Employee's disability which
renders him unable to perform his usual and customary duties for
a period of 180 consecutive days; (C) without cause, by the
Board of Directors of the Company; or (D) by the Employee if the
Company violates any of its covenants herein, including those in
Section 1.
(ii) Upon any termination of Employee's employment
pursuant to this paragraph 4(b), the Company shall elect and pay
to Employee one of the two alternative severance compensation
payments described in clause (A) or (B) below.:
(A) Installment Payments. An amount equal to
three times the sum of annual base salary of Employee in
effect at the time of termination plus the average of all
annual incentive or discretionary cash bonuses paid to
Employee with respect to the three fiscal years preceding
the year in which such termination occurred, payable in
advance at the beginning of each month in equal monthly
installments over the three years immediately following
the date of termination;
OR
(B) Lump-sum Payment. Within 30 days of the
date of termination, Employee shall receive an amount
equal to the net present value of the payments described
in paragraph 4(b)(ii)(A) above.
The discount of such payments to their net present value shall
utilize a discount rate equal to the prime rate of interest published
in The Wall Street Journal on the date of termination (such prime rate
currently defined in The Wall Street Journal as the base rate on
corporate loans posted by at least 75% of the nation's 30 largest
banks) or if such rate is not available, then the prime rate of
interest of Boatmen's Bank of Kansas City in effect on the date of
termination (hereinafter the "Prime Rate").
The Company shall have the right to elect either the severance
compensation described in clause (A) or (B) above, at its sole
discretion.
5. 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 confiden-
tial or a trade secret. Such information includes information,
whether obtained in writing, in conversation or otherwise, concerning
corporate strategy, intent and plans, business operations, financing,
pricing, costs, budgets, equipment, potential locations of new
screens, the status, scope and terms of pending negotiations and
transactions, the terms of existing or proposed leases, contracts and
obligations, and corporate and financial reports. Such confidential
or trade secret information does not, however, include information in
the public domain unless Employee has, without authority, made it
public.
Employee agrees: (i) not to disclose such information to anyone
except in confidence and as is necessary to the performance of duties
for the Company; (ii) to keep such information confidential; (iii) to
take appropriate precautions to maintain the confidentiality of such
information; and (iv) not to use such information for personal benefit
or the benefit of any competitor of the Company or any other person.
Upon termination of his employment with the Company, Employee
shall return all materials in his possession or under his control
which were prepared by or relate to the Company or its affiliates.
6. Survival. Upon termination of Employee's employment
with the Company, the respective rights and obligations of the Company
and Employee under Sections 1, 2 and 3 hereof shall cease. However,
the Company's and Employee's obligations under Sections 4 and 5 hereof
shall survive the termination of Employee's employment with the
Company.
7. Assumption. The Company shall obtain the express
written assumption of this Agreement by any successor of the Company
or any assignee of all or substantially all of the Company's assets at
or prior to such succession or assignment. Such assumption shall not
relieve the Company of any liability under this Agreement.
8. Miscellaneous Provisions. This Agreement shall be
binding upon, inure to the benefit of and be enforceable by the
parties hereto and their respective heirs, personal representatives,
successors and permitted assigns. This Agreement shall be governed by
the laws of the State of Missouri. This Agreement represents the
entire agreement of the parties hereto with respect to the subject
matter hereof 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 concerning Employee's
relationship and employment with the Company or any affiliate of the
Company. This Agreement shall not be assignable by the Company
without prior written consent of the Employee.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the day and year first above written.
"COMPANY"
AMC ENTERTAINMENT INC.
By:/s/ Peter C. Brown By: /s/ Philip M. Singleton
Peter C. Brown, Philip M. Singleton,
Executive Vice President Executive Vice President
and Chief Financial Officer and Chief Operating
Officer
AMERICAN MULTI-CINEMA, INC.
By:/s/ Peter C. Brown By: /s/ Philip M. Singleton
Peter C. Brown, Philip M. Singleton,
Executive Vice President Executive Vice President
and Chief Financial Officer and Chief Operating
Officer
"EMPLOYEE"
/s/ Stanley H. Durwood
Stanley H. Durwood
EXHIBIT 10.33
REAL ESTATE CONTRACT
THIS REAL ESTATE CONTRACT (the "Contract") is made and entered into
this 1st day of November, 1995, by and among RICHARD FAY and MARY FAY,
husband and wife (the "Sellers"), and AMERICAN MULTI-CINEMA INC., a
Missouri corporation (the "Buyer").
WITNESSETH:
Sellers hereby sell and agree to convey to Buyer and Buyer hereby
purchases the real estate legally described in Exhibit A attached hereto
and incorporated herein by this reference, together with all improvements
thereon, including, if any, central air conditioning, gas heater, attic
fan, lighting, heating and plumbing equipment and fixtures, linoleum,
venetian blinds, storm windows and doors, screens, curtains, curtain and
drapery rods, keys, all wall-to-wall carpeting, garbage disposal,
dishwasher, dehumidifier, and electric garage door opener in Westchester
County, State of New York, commonly referred to as 44 Dusk Drive, New
Rochelle, New York (the "Premises").
Subject, however, to the conditions stated herein and subject to any
recorded restrictions, easements, reservations, party wall agreements,
community contracts and existing zoning laws such as are permitted under
the terms hereof.
1. Purchase Price. The purchase price is $500,000 which Buyer
agrees to pay as follows:
1.1 On the Closing Date (as hereinafter defined), Buyer shall
deliver by wire transfer to Merrill Lynch Credit Corporation ("Merrill
Lynch") a portion of the purchase price in the amount of $176,813.50,
in full and complete satisfaction and payment of the existing mortgage
encumbering the Premises. The wire transfer instructions for Merrill
Lynch are as follows:
1.2 Customer Wire Account
Account #: 2181409385
Barnette Bank of Jacksonville
100 Laura St.
Jacksonville, FL
ABA#: 063000047
Client Name: Richard & Mary Fay
Account #: 5003610
1.3 On the Closing Date Buyer shall deliver by wire transfer to,
or for the account of, Sellers the remainder of the purchase price,
as adjusted by any prorations required hereby. The wire transfer
instructions for Sellers are as follows:
1.4
Routing # 021000089
Account # 25092087
Richard M. Fay
Mary B. Fay
Citibank
1010 Morris Park Avenue
Bronx, New York 10462
2. Taxes. Sellers shall pay all installments of taxes and special
assessments on the Premises for the calendar years prior to 1995. All
taxes and assessments on the Premises for 1995 shall be prorated between
Buyer and Sellers as of the date of closing. If the amount of such taxes
cannot be ascertained, proration shall be computed on the amount of the
annual installment of assessments and taxes for 1994.
3. Title Insurance. Buyer, at its sole expense, shall obtain an
ALTA Owner's Residential Title Insurance Policy, issued by a title
insurance company authorized to insure titles in the state of New York (the
"Title Company") in the amount of the purchase price, insuring a mer-
chantable fee simple title vested in Buyer as of the date of recording the
deed as provided herein, subject only to those conditions and exceptions
permitted hereunder.
4. Title Insurance Commitment. Buyer shall obtain a commitment (the
"Commitment") issued by the Title Company showing the status of the title
to the Premises and the Title Company's commitment to insure Buyer's title
as herein required. Buyer shall prior to the Closing Date, advise Sellers
of any objections to the state of title as shown in the Commitment which
result in title being unmarketable. Sellers shall have until closing to
make such corrections in the title required by Buyer in such manner as
shall be required by the Title Company to delete the particular
exception(s) in the final policy. In the event such defects in title are
not corrected prior to closing, this Contract shall be null and void at
Buyer's option unless Buyer shall advise Seller of Buyer's election to
accept title subject to such defects.
5. Closing. The closing of this transaction shall take place at the
offices of the Title Company on November 3, 1995 the ("Closing Date"), or
at such other date and place as may be agreed upon by Seller and Buyer.
On the Closing Date, Sellers shall deliver to Buyer a general warranty
deed, properly executed, conveying the Premises free and clear of all liens
and encumbrances except as herein permitted. On the Closing Date Buyer
shall deliver an amount equal to the purchase price in accordance with the
instructions set forth in Section 1 above. At closing, the general
warranty deed, and all other closing documents shall be placed in escrow
with the Title Company, and the Title Company as escrow agent shall then
inspect the public records in Westchester County, New York, to ascertain
if: (a) title to the Premises remains unchanged since the date of the
Commitment; and (b) any required corrections of title have been made. If
the inspection shows that title is satisfactory according to the terms
hereof, the Title Company shall record the documents. The policy of title
insurance shall be delivered to Buyer as soon as issued in the usual course
of business. All prorations required hereunder shall be computed as of the
Closing Date. Buyer shall pay the premium for the title policy and for
recording the general warranty deed. All other recording costs and escrow
fees shall be paid by Buyer.
6. Possession. Sellers shall deliver possession of the Premises to
Buyer upon closing.
7. Condition of Premises. Except as provided herein, Buyer agrees
that it has inspected the Premises and are thoroughly familiar and satis-
fied with its present condition. Sellers have not made and do not now make
any warranties or representations about the past, present or future
condition of the Premises or any other matter affecting or relating to the
Premises.
8. Insurance. Sellers hereby agree to maintain fire and other
casualty insurance on the Premises until the Closing Date. If, before the
Closing Date, any of the improvements on the Premises are destroyed or
substantially damaged by casualty Buyer shall have the option of enforcing
this Contract and receiving the proceeds or an assignment of the proceeds
of such insurance or canceling this Contract by written notice to Sellers.
If this Contract is cancelled, all deposits and payments made hereunder
shall immediately be returned to the Buyer.
9. Utilities. The parties agree that all utilities to the Premises
shall be read on the Closing Date and transferred to Buyer's name. Sellers
shall be responsible for all utilities which accrue prior to Buyer taking
possession of the Premises.
10. Real Estate Broker's Commissions. Sellers hereby represent that
there are no real estate broker's commissions due on this sale.
11. Entire Agreement. This Contract contains the entire agreement
between Sellers and Buyer and supersedes all prior oral or written
agreements between the parties respecting the Premises. The parties agree
that there are no terms, conditions, promises, understandings, statements
or representations, express or implied, concerning the sale contemplated
hereby, except as stated herein.
12. Contract Binding Upon Heirs, Etc. The provisions of this
Contract shall be binding upon and inure to the benefit of the parties
hereto, their heirs, executors, administrators, legal representatives,
successors and assigns. The terms of this Contract shall survive the
closing of this transaction.
13. Captions. The paragraph captions in this Contract have been
inserted for convenience of reference only and shall in no way modify or
restrict any provision hereof, or be used to construe any of such
provisions.
14. Notices. All written notices required or permitted hereunder
shall be effective upon receipt and shall be hand delivered or mailed by
Certified Mail-Return Receipt Requested to the parties at the following
addresses, provided that either party may change the designated address by
written notice to the other party:
Sellers:
Richard Fay
Mary Fay
44 Dusk Drive
New Rochelle, New York 10804
Buyer:
American Multi-Cinema Inc.
106 West 14th Street
P. O. Box 419615
Kansas City, Missouri 64141-6615
Attn: Jeff Schnabel
With a copy to:
Larry B. Huebner
Gage & Tucker L.C.
P. O. Box 418200
Kansas City, Missouri 64141
15. Counterparts. This Contract may be executed in one or more
counterparts, all of which shall constitute one and the same instrument.
Delivery of a facsimile copy of this Contract executed by a party
hereto shall have the same force and effect as delivery of an original
counterpart hereof executed by such party.
IN WITNESS WHEREOF, the parties have executed this Real Estate Contract the
day and year first above written.
BUYER
AMERICAN MULTI-CINEMA INC., a Missouri
corporation
By: /s/ Stanley H. Durwood
ATTEST: Name:
Title:
__________________________
Name:_____________________
Title:______________________
SELLERS
/s/ Richard Fay
Richard Fay
/s/ Mary Fay
Mary Fay
(Inside Front Cover)
AMC Entertainment, Inc.
Corporate Profile
AMC Entertainment Inc., through its wholly owned subsidiary American
Multi-Cinema Inc. (AMC), is one of the largest motion picture exhibition
circuits in the world. Over 110 million people watched a movie in an
AMC-operated theatre during fiscal 1996.
Following are some of the characteristics that distinguish AMC from its
competitors.
Nearly 75% of AMC screens are located in the top 20 U.S. markets.
AMC's average screen count per theatre at 7.6 is higher than the
industry average of 4.9.
Almost 39% of AMC's screens are in theatres with 10 or more screens and
90% of its screens are in theatres with six or more screens.
AMC's innovative theatre technology ranges from computerized box
offices to High Impact Theatre Systems with brighter pictures and
clearer sound.
AMC is the industry leader in value-added services such as
MovieWatcher , the first nationwide frequent movie-goer program.
As of March 28, 1996, the company owned or operated 226 theatres with
1,719 screens in 22 states and the District of Columbia.
AMC common stock trades on the American and Pacific Stock Exchanges under
the symbol AEN. The preferred stock is traded on the American Stock Exchange
under the symbol AEN Pr. The company is headquartered in Kansas City,
Missouri.
Cover Photo
AMC Entertainment Inc. is changing the way the world sees movies.
Table of Contents
Financial and Operating Highlights 1
Report to Shareholders 2
Operating Report 4
Financial Report 5
The Era of the AMC Megaplex 6
AMC Theatre Locations 14
Selected Financial Data 18
Management's Discussion and Analysis of
Financial Condition and Results of Operations 19
Responsibility for Preparation of
Financial Statements 26
Report of Independent Accountants 27
Consolidated Financial Statements 28
Notes to Consolidated Financial Statements 34
tatements of Operations by Quarter 50
Investor Information 52
Executive Officers and Directors 53
(Page 1)
Financial and Operating Highlights
(In thousands, except number of theatres and screens)
March 28 March 30, March 31, April 1, April 2,
1996 (1) 1995 (1) 1994 (1) 1993 (1) 1992 (1)
Domestic operated theatres:
Total revenues $657,872 $564,664 $ 587,453 $404,465 $406,964
EBITDA (2) $112,555 $88,942 $ 98,784 $ 57,345 $ 43,178
Number of patrons 114,506 103,148 107,710 99,957 98,417
Number of theatres 226 232 236 243 253
Number of screens 1,719 1,630 1,603 1,617 1,617
Screens per theatre 7.6 7.0 6.8 6.7 6.4
(1) Fiscal year April 2, 1992 consists of 53 weeks. All other fiscal years
have 52 weeks.
(2) Represents operating income plus depreciation and amortization plus
estimated loss on future disposition of assets.
GRAPH
Report to Shareholders
(Callout): In fiscal 1996 AMC achieved the highest revenues and cash flows
in its history.
I am pleased to report excellent results for fiscal 1996. The company
achieved the highest revenues and cash flows in its history. Our new
generation of theatres or "megaplexes" opened to rave reviews and
extraordinary operating results, totally redefining the moviegoing
experience. The company also completed a major debt refinancing, positioning
AMC as one of the most financially sound companies in the industry.
Additionally, we made a significant stride on the international front with
the completion of construction of our first theatre in Asia.
Financial Results
Total revenues increased 16.5% to a record $657.9 million from $564.7
million last year. Earnings before interest, taxes, depreciation and
amortization (EBITDA) increased 26.5% to $112.6 million compared to $88.9
million for last year. EBITDA was also 13.9% higher than fiscal 1994's
record $98.8 million. Earnings before income taxes and extraordinary item
increased 86.8% to $46.7 million from $25.0 million in fiscal 1995.
Earnings before extra-ordinary item declined 19.4% to $27.4
million from $34.0 million last year due primarily to a $19.8 million tax
benefit recorded last year. After deducting for an extraordinary loss of
$19.4 million related to a debt refinancing, net earnings were $8.0 million
in fiscal 1996 com-pared to net earnings of $34.0 million last year.
On a per share basis, earn-ings before extraordinary item, after
deducting preferred dividends, were $1.21 in fiscal 1996 compared to $1.63
per share in fiscal 1995. After extraordinary item and preferred dividends,
net earnings per share were $.06 compared to net earnings of $1.63 per share
last year.
Debt Refinancing
During the third quarter we com-pleted a major debt refinancing transaction
which involved retiring substantially all of our outstanding public debt
securities as well as arranging a new $425 million revolving credit
facility.
Completion of the refinancing transaction represents another
significant financial milestone for the company. It lowered our interest
costs and increased our available credit which we will use to continue the
implementation of our highly successful megaplex strategy.
Strategic Growth Initiative
AMC once again changed the way people see movies when it opened the first
and largest megaplex in the United States, the AMC Grand 24 in Dallas,
Texas. During fiscal 1996 we opened four additional mega-plexes and expanded
two other theatres to megaplex status. All have achieved excellent operating
results and continue to rank among the most successful theatres in the
industry.
The outstanding results of the megaplex concept in the United
States have reinforced our com-mitment to building large theatres in
strategic U.S. and select inter-national markets. The under-screened
worldwide market as well as the growing global interest in filmed
entertainment present a tremendous international growth opportunity for AMC.
Our international expansion plans also progressed significantly
in fiscal 1996. The AMC Canal City 13 in Fukuoka, Japan opened early in
fiscal 1997. With more screens than any other theatre in Japan, the Canal
City 13 represents AMC's first theatre in Asia. Construction also began this
year on the com-pany's next international theatre, the AMC Arrabida 20 in
Porto, Portugal, which is scheduled to open in the fall of 1996. Plans to
build our second Pacific Rim theatre, the AMC Festival Walk 11 in Hong Kong,
were announced this year as well.
In total AMC added 150 new and expansion screens in over a dozen
locations throughout the United States in fiscal 1996 and began
con-struction on over 200 additional domestic and inter-national screens.
This year's report updates our growth strategy and includes a
detailed discussion of our expansion schedule. It also highlights our
continuing efforts to increase atten-dance and revenues through exclusive
AMC innovative marketing and customer service programs.
We look forward to continued success in fiscal 1997 and beyond as
we move closer to our ultimate goal of becoming the world's premier motion
picture exhibition company.
AMC is literally changing the way the world sees movies.
/s/ Stanley H. Durwood
Chairman of the Board, Chief Executive Officer and President
May 20, 1996
(Callout): In total AMC added 150 new and expansion screens in over a dozen
locations throughout the United States in fiscal 1996 and began construction
on over 200 additional domestic and international screens.
Operating Report
In fiscal 1996 we continued to increase attendance and control expenses
which is our simple but effective operating strategy. Our operating plan not
only focuses on improving efficiencies but also emphasizes key personnel
develop-ment that will enhance our ability to expand the company worldwide.
Since the successful implemen-tation of a cost-containment plan
four years ago, operating expenses have decreased 14% from $1.71 per patron
in fiscal 1992 to $1.47 per patron at the close of the current year. We
achieved this performance while continuing to deliver the finest moviegoing
experience in the industry.
The new generation of AMC megaplexes opened this year is forming
the foundation of our future in the era of the AMC megaplex. This year's
success validates our commitment to growth and strengthens AMC's leadership
position in the motion picture exhibition industry.
/s/ Philip M. Singleton
Executive Vice President and
Chief Operating Officer
May 20, 1996
(Callout): The new generation of AMC megaplexes opened this year is forming
the foundation of our future in the era of the AMC megaplex.
Financial Report
With the completion of a major refinancing transaction in fiscal 1996, AMC's
financial picture continued to develop positively. The refinanc-ing, which
was completed in the third quarter, involved retiring substantially all of
our high coupon public debt as well as arranging the largest bank facility
in the history of our industry. This $425 million facility, along with the
tremendous cash flow that the we generate, gives us the financial capacity
to execute our successful megaplex or "big store" expansion strategy.
The refinancing represents the third major step in a financial
evolu-tion that started in fiscal 1993 with a $200 million recapitalization
that solidified AMC's balance sheet. The evolution continued in fiscal 1994
with the issuance of $100 million of convertible preferred stock which
created a solid cushion of equity capital for our growth plans.
AMC now stands as perhaps the best capitalized company in the
motion picture exhibition industry. This position should allow us to execute
our strategic plan, and in so doing, continue to increase the value of the
company.
/s/Peter C. Brown
Executive Vice President and
Chief Financial Officer
May 20, 1996
(Callout): AMC now stands as perhaps the best capitalized company in the
motion picture exhibition industry.
(Callout): AMC continues to execute its strategy of building megaplex
theatres in strategic U.S. and select international markets. These new
generation theatres offer patrons a new and invigorating moviegoing
experience while generating superior operating results.
Future AMC megaplexes may have as many as 30 screens, occupy as
much as 100,000 square feet and contain up to 6,000 seats. An AMC megaplex
theatre provides patrons with a broader range of films and a superior
viewing environment by incorporating AMC's industry-leading innovations.
These innovations include computerized ticketing, stadium-style seating with
extra-wide row spacing, plush high back seats with cupholder armrests, Sony
Dynamic Digital Sound (SDDS ) and AMC's exclusive High Impact Theatre
System (HITS ) which includes Torus compound-curved screens for maximum
picture clarity and brilliance.
The Era of the AMC Megaplex
The introduction of the AMC megaplex theatre is redefining moviegoing and
setting new industry standards. The success seen from the megaplexes opened
to date confirms that our customers desire a quality, out-of-home
enter-tainment experience. AMC's new and innovative entertainment experience
will appeal to moviegoers around the world.
Fiscal 1996 Openings
From the record-breaking premiere of the AMC Grand 24 in Dallas on May
25,1995 to the opening of the AMC Promenade 16 in Los Angeles on March 28,
1996, virtually every new theatre opened has dramatically exceeded
expectations.
In fiscal 1996 AMC added 150 screens, 114 of which were at new
locations and 36 of which were expansions of existing theatres. Consistent
with our megaplex strategy, three of the new locations and two of the
expanded theatres offer 20 or more screens.
The Success of the AMC Megaplex
AMC's new megaplex theatres have quickly became the dominant force within
their markets. Since opening, the AMC Grand 24 in Dallas has become one of
the highest grossing theatre complexes in North America. Also, the AMC
Mission Valley 20 in San Diego is consistently among the industry's top five
grossing theatre complexes and is often the highest grossing theatre in the
United States for individual films. For example, the theatre achieved the
highest opening week gross in the U.S. for the film "Jumanji."
The AMC Promenade 16 in Los Angeles is another success story.
During its first week of operation, the Promenade's admission revenues for
each new film ranked among the top five in the country. Finally, the AMC
Independence 20 is one of the top two performing theatres in the Kansas City
market sharing top billing with AMC's well-established Ward Parkway 22
theatre.
New AMC megaplexes should fuel enhanced, company-wide financial
performance by generating much higher operating income levels. In fiscal
1996 operating income per patron in AMC theatres with 18 or more screens was
48% higher than those with fewer than 18 screens.
Maximizing Attendance
and Revenue
In addition to our megaplex strategy we remain committed to increasing
attendance and revenue at existing theatres. Year after year AMC theatres
generate some of the industry's highest attendance and revenues per screen.
We believe these results are achieved by our unyielding insistence on
providing patrons with the finest and most enjoyable moviegoing experience
possible.
Recognized industry-wide as the leader in both customer service
and marketing, individual AMC theatre managers routinely earn coveted
industry awards in both categories. At the recent National Association of
Theatre Owners (NATO) ShoWest convention in Las Vegas, AMC theatre managers
earned first place awards in customer service. AMC theatre managers also
swept the prestigious Hollywood Reporter Theatre Excellence and Marketing
(TEAM) honors at the same convention.
AMC develops national marketing programs in cooperation with major
partners such as the Coca-Cola Company, the Walt Disney Company and major
league sports franchises and sporting events including the NFL Super Bowl
to drive incremental attendance. National promotions are augmented by local
programs such as special early morning shows, midnight shows and children's
matinees, which also generate additional attendance.
The AMC MovieWatcher is our premier marketing program and the
only one of its kind in the industry. This frequent moviegoer club with
almost one million of our best customers enrolled as members rewards
frequent AMC moviegoing. The AMC MovieWatcher program has strengthened AMC
brand loyalty and provides an invaluable database of avid AMC moviegoers-a
powerful tool used for research, analysis and direct marketing programs.
In addition to revenue from the sale of tickets, concession sales
are an important source of revenue at an AMC theatre. We continually review
our concession operations to ensure customers a broad selection of the
highest quality products as well as quick, courteous service. New methods
designed to cut average transaction time in half without eroding service
quality are currently in development and are being tested at many of our new
megaplexes. The AMC concession menu is constantly evolving to meet the
tastes of our ever-changing customer. New items such as frozen carbonated
beverages, bulk candy, bottled water and fruit drinks complement AMC's
traditional concession menu.
Fiscal 1997 Scheduled Openings
At the close of this year 200 screens were under construction. The pace of
new theatre activity will increase dramatically in fiscal 1997 as new screen
growth is expected to more than double fiscal 1996 performance.
Fiscal 1997 will also mark the debut of the first AMC 30-screen
megaplex located in Ontario, California. The AMC Ontario Mills 30 will be
the largest theatre in the United States when it opens in the third quarter.
This new 30-plex and other new AMC megaplexes will continue to revolutionize
the industry and change the way people see movies. By fiscal year-end, over
300 screens will be open or under construction.
International Expansion
As international box-office revenues continue to grow at a rapid rate, the
international market is becoming a larger component of a film's
profit-ability. This fact coupled with a short-age of quality theatres in
many coun-tries outside the United States has created a tremendous
international growth opportunity.
AMC's first location in Asia, the AMC Canal City 13, opened on
April 20, 1996 in Fukuoka, Japan. The AMC Canal City 13, part of the 2.5
million square-foot Canal City Hakata Project, is the largest in Japan in
terms of number of screens. The theatre complex offers Japanese moviegoers
their first opportunity to enjoy the new AMC megaplex entertainment
experience.
International screens presently under construction include the AMC
Arrabida 20 in Porto, in northern Portugal, which is scheduled to open in
the fall of 1996. The AMC Arrabida 20 is located in a major entertainment
and retail center and is expected to change moviegoing in Portugal's second
largest city.
We also announced plans to build AMC's second Pacific Rim theatre,
the AMC Festival Walk 11 in Hong Kong. The AMC Festival Walk 11 will be Hong
Kong's largest theatre in terms of screen count and will be located in an
innovative, entertain-ment--oriented center which is expected to draw
customers from as far away as southern China.
AMC has long been recognized as a leader in the exhibition
industry. The company is considered the forerunner of nearly every major
innovation in the industry. This leadership and vision continues as we move
toward the millennium-changing the way people see movies-and toward our
objective of becoming the world's premier motion picture exhibition company.
<PAGE>
AMC theatre locations
(* Openings expected in fiscal 1997)
(** Expanding to 12 screens)
Arizona
Phoenix
Bell Plaza 8
Fiesta Village 6
Gateway Village 10
Laguna Village 10
Lakes 6
Metro Village 6
Sunvalley Plaza 10
Three Fountains 4
Town & Country 6
* Arrowhead 14
* Ahwatukee 24
Tucson
El Con 6
Valencia 4
California
Bakersfield
Stockdale 6
Los Angeles
Alondra 6
Burbank 14
Century City 14
Chino Town Square 10
Commercenter 6
Fine Arts 1
Fullerton 10
Hermosa Beach 6
Main Place 6
Marina Pacifica 6 **
Media Center 8
Media Center 6
Montebello 10
Old Pasadena 8
Orange Mall 6
Pine Square 16
Promenade 16
Puente East 4
Puente Plaza 10
Puente West 6
Rolling Hills 6
Santa Monica 7
Victor Valley 10
* Norwalk 20
* Ontario Mills 30
San Diego
La Jolla 12
Santee Village 8
Wiegand Plaza 8
Mission Valley 20
San Francisco
Kabuki 8
Serramonte 6
Vallejo Plaza 6
San Jose
Milpitas 10
Oakridge 6
Saratoga 6
Sunnyvale 6
Town & Country 1
* Mission College 20
Colorado
Colorado Springs
Tiffany Square 6
Denver
Buckingham 4
Buckingham 6
Colorado Plaza 6
Seven Hills 10
Southbridge Plaza 8
Tiffany Plaza 6
Tivoli 12
Westminster 5
Westminster 6
Delaware
Philadelphia
Cinema Center 3
Concord 2
District of
Columbia
Washington, D.C.
Union Station 9
Florida
Gainesville
Oaks 6
Oaks West 4
Jacksonville
Orange Park 5
Regency 6
Regency Mall 8
Miami
Cocowalk 16
Coral Ridge 10
Fashion Island 16
Kendall Town & Country 10
Mall of the Americas 14
Ocean Walk 10
Omni 4
Omni 6
Ridge Plaza 8
Sheridan 12
South Dade 8
Orlando/Daytona
Daytona 6
Fashion Village 8
Interstate 6
Lake Square 12
Merritt 6
Merritt Square 7/12
Pleasure Island 10
Volusia Square 8
Ft. Myers
* Merchant Crossing 16
Tallahassee
* Tallahassee 20
Tampa/ St. Petersburg
Clearwater 5
Countryside 6
Crossroads Center 8
Horizon Park 4
Merchants Walk 10
Old Hyde Park 7
Regency 20
Sarasota 6
Sarasota Exp 7/12
Seminole 8
Tri-City Plaza 8
Twin Bays 4
Tyrone Square 6
Varsity 6
West Palm Beach
Cross County 8
Mizner Park 8
Georgia
Atlanta
Cobb Place 8
Colonial 18
Galleria 8
Mansell 14
Northlake Festival 8
Phipps Plaza 14
* Market Square 16
Illinois
Carbondale
University Place 8
Chicago
Barrington Square 6
Ogden 6
Kansas
Kansas City
Indian Springs 6
Oak Park 6
Oak Park 7/12
Louisiana
New Orleans
Galleria 8
Shreveport
Bossier 6
St. Vincents 6
Maryland
Washington, D.C.
Academy 6
Academy 8
Carrollton 6
City Place 10
Country Club Mall 6
Rivertowne 12
Massachusetts
Springfield
Hampshire 6
Mountain Farms 4
Michigan
Detroit
Abbey 8
Americana West 6
Bel-Air Centre 10
Eastland 2
Eastland Mall 5
Hampton 4
Laurel Park 10
Maple 3
Old Orchard 3
Southfield City 12
Southland 4
Sterling Center 10
Towne 4
Wonderland 6
Woods Complex 6
Lansing
Elmwood Plaza 8
Meridian 1/4
Meridian 5/8
Meridian Mall 6
Missouri
Kansas City
Bannister Square 6
Crown Center 6
Independence 20
Metro North 6
Metro North Plaza 7/12
Summit 4
Ward Parkway 22
St. Louis
Crestwood Plaza 10
Esquire 7
Galleria 6
Northwest Square 10
Regency 8
Village 6
Nebraska
Omaha
Westroads 2
Westroads 3/8
New Jersey
Metro New York
Headquarters Plaza 10
Rockaway 6
Rockaway 7/12
Philadelphia
Deptford 8
Marlton 8
Millside 4
Quakerbridge 4
Vineland 4
New York
Buffalo
Como 8
Maple Ridge 8
North Carolina
Charlotte
* Carolina Pavilion 22
Ohio
Columbus
Dublin Village 18
Eastland Centre 8
Eastland Plaza 6
Westerville 6
* Lennox 24
Oklahoma
Oklahoma City
Memorial Square 8
Northwest 8
Robinson Crossing 6
Pennsylvania
Harrisburg
Colonial Commons 9
Eden 2
Hampden Center 8
Wonderland 4
York 4
Philadelphia
Andorra 8
Anthony Wayne 2
Barn 5
Granite Run Mall 8
Marple 10
Olde City 2
Orleans 8
Painters Crossing 9
Plaza 2
Quakertown 6
309 Cinema 9
Tilghman Square 8
25th Street 4
Woodhaven 10
Texas
Dallas/Fort Worth
Central Park 7
Forum 6
Glen Lakes 8
Grand 24
Green Oaks 8
Highland Park 4
Hulen 10
Irving 8
Prestonwood 5
Sundance 11
Towne Crossing 8
* Palace 9
Houston
Almeda Square 5
Commerce Park 8
Deerbrook 8
Festival 6
Greens Crossing 6
Meyer Park 16
Northoaks 6
Town & Country 10
Westchase 5
Willowbrook 10
* Deerbrook 24
* Majestic 30
San Antonio
Rivercenter 9
Virginia
Norfolk/Portsmouth/Newport News
Circle 4
Coliseum 4
Lynnhaven 8
Newmarket 4
Patrick Henry 7
Washington, D.C.
Courthouse Plaza 8
Potomac Mills 15
Skyline Center 12
Washington
Seattle/Tacoma
Center Plaza 6
Narrows Plaza 8
Seatac 6
Japan
Fukuoka
Canal City Hakata 13
(opened April 20, 1996)
Portugal
Porto
Arrabida 20*
(opening Fall 1996)
<PAGE>
Table of Contents
Selected Financial Data 18
Management's Discussion and Analysis
of Financial Condition and
Results of Operations 19
Responsibility for Preparation of
Financial Statements 26
Report of Independent Accountants 27
Consolidated Financial Statements 28
Notes to Consolidated Financial Statements 34
Statements of Operations by Quarter 50
Investor Information 52
Executive Officers and Directors 53
<PAGE>
<TABLE>
Selected Financial Data
(Dollars in thousands, except per share data)
<CAPTION>
March 28, March 30, March 31, April 1, April 2,
1996(1) 1995(1) 1994(1) 1993 1992(3)
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Total revenues $657,872 $564,664 $587,453 $404,465 $406,964
Total cost of operations 496,567 435,915 449,177 310,835 325,901
Depreciation and amortization 43,886 37,913 38,048 28,175 31,385
General and administrative expenses 48,750 39,807 39,492 36,285 37,885
Estimated loss on future disposition
of assets - - - 2,500 3,000
Operating income 68,669 51,029 60,736 26,670 8,793
Interest expense 28,828 35,908 36,375 31,401 30,035
Investment income 7,052 10,013 1,156 8,239 8,502
Minority interest - - 1,599 - -
Gain (loss) on disposition of assets (222) (156) 296 9,638 8,721
Earnings (loss) before income taxes
and extraordinary item 46,671 24,978 27,412 13,146 (4,019)
Income tax provision 19,300 (9,000) 12,100 5,400 1,500
Earnings (loss) before
extraordinary item 27,371 33,978 15,312 7,746 (5,519)
Extraordinary item (19,350) - - (6,483) -
Net earnings (loss) $8,021 $33,978 $15,312 $1,263 $(5,519)
Preferred dividends 7,000 7,000 538 256 700
Net earnings (loss)
for common shares $1,021 $26,978 $14,774 $1,007 $(6,219)
Earnings (loss) per share $.06(4) $1.63 $.89 $.06(2) $(.39)
Common dividends per share $- $- $- $1.14 $-
Weighted average number of
shares outstanding 16,795 16,593 16,521 16,217 16,088
Balance Sheet Data:
Cash, equivalents and investments $10,795 $140,377 $151,469 $50,106 $36,823
Total debt (including capitalized
lease obligations) 188,172 267,504 268,188 255,302 240,231
Stockholders' equity 158,918 157,388 130,404 18,171 39,869
Total assets 483,458 522,154 501,276 374,102 377,699
Other Financial Data:
EBITDA(5) $112,555 $88,942 $98,784 $57,345 $43,178
Capital expenditures 120,796 56,403 10,651 8,786 21,045
</TABLE>
(1) Fiscal 1996, 1995 and 1994 include the effects from the acquisition of
Exhibition Enterprises Partnership on May 28, 1993.
(2) Fiscal 1993 includes a $6,483 extraordinary loss equal to $.40 per common
share.
(3) Fiscal 1992 includes 53 weeks. All other years have 52 weeks.
(4) Fiscal 1996 includes a $19,350 extraordinary loss equal to $1.15 per common
share.
(5) Represents operating income plus depreciation and amortization plus
estimated loss on future disposition of assets. EBITDA is a financial measure
commonly used in the Company's industry and should not be construed as an
alternative to operating income (as determined in accordance with GAAP), an
indicator of operating performance, an alternative to cash flows from
operating activities (as determined in accordance with GAAP) or a measure of
liquidity.
Management's Discussion And Analysis of Financial Condition and Results of
Operations
General
The Company's revenues are derived principally from box office admissions and
concession sales. Additional revenues are derived from other sources such as
on-screen advertising and license fees from video games in theatre lobbies. The
Company's principal costs of operations are film rentals, con-cession
merchandise and other expenses such as advertising, payroll, occupancy costs and
insurance. Set forth below is a summary of operating revenues and expenses for
the last three fiscal years.
<TABLE>
<CAPTION>
52 Weeks Ended 52 Weeks Ended 52 Weeks Ended
March 28,% of Total March 30, % of Total March 31,% of Total
<S> <C> <C> <C> <C> <C> <C>
(Dollars in
thousands) 1996 Revenues 1995 Revenues 1994 Revenues
Revenues
Admissions $431,361 66% $371,145 66% $389,454 66%
Concessions 196,645 30 169,120 30 176,274 30
Other 29,866 4 24,399 4 21,725 4
Total $657,872 100% $564,664 100% $587,453 100%
Cost of Operations
Film rentals $215,099 33% $182,669 32% $197,461 34%
Concession
merchandise 32,641 5 26,453 5 26,349 4
Other 248,827 38 226,793 40 225,367 38
Total $496,567 76% $435,915 77% $449,177 76%
</TABLE>
Operating Results
Years (52 weeks) Ended March 28, 1996, and March 30, 1995
Total revenues for the year (52 weeks) ended March 28, 1996, increased 16.5%, or
$93,208,000, to $657,872,000 compared to $564,664,000 for the year (52 weeks)
ended March 30, 1995. Admissions revenues increased by 16.2% due to a 11.1%
increase in attendance and a 4.4% increase in average ticket prices. The
increase in attendance resulted from the popularity of films released during the
period and the net addition of 89 screens since fiscal 1995 at new and higher
performing locations. Attendance during the prior year was impacted by a dispute
with a major distributor over film terms, which resulted in the Company
licensing a smaller number of runs per film from that distributor. During the
current year, the Company licensed what it considers to be a more acceptable
number of runs per film from that distributor. Concessions revenues and average
concessions per patron increased by 16.3% and 4.2%, respectively, during the
current year. The increase in concession revenue was primarily attributable to
the attendance increase.
Total cost of operations increased 13.9%, or $60,652,000, during 1996 to
$496,567,000 from $435,915,000 for 1995. As a percentage of total revenues, cost
of operations was 76% and 77% in fiscal year 1996 and 1995, respectively. Film
rentals expense increased 17.8% in the current period due to higher attendance
levels and a .7% increase in the percentage of admissions paid to film
distributors. Concession and other costs of operations increased 11.1% from the
prior year due to increases in payroll, concession merchandise and other theatre
operating expenses associated with the increase in admissions and concessions
revenues and from the higher number of screens in operation.
Depreciation and amortization increased 15.8% from $37,913,000 to $43,886,000
for 1996. This increase resulted primarily from the reduction, effective
December 30, 1994, in the estimated lives of lease rights and location premiums
on certain smaller theatres to correspond to the base terms of the theatre
leases, an increase in employed theatre assets and the recognition of an
impairment loss of $1,799,000 in connection with the adoption of Statement of
Financial Accounting Standards No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of (See Note 1 of the
Company's "Notes to Consolidated Financial Statements.")
General and administrative expenses increased 22.5%, or $8,943,000, from
$39,807,000 for 1995 to $48,750,000 for the current year. The increase in
general and administrative expenses is primarily attributable to payroll and
other costs associated with the Company's development of theatres in the United
States and certain international markets, additional bonus expenses related to
improved profitability of the Company and severance payments for two former
executive officers. As a percentage of total revenues, general and
administrative expenses increased from 7.0% to 7.4%.
Interest expense decreased 19.7%, or $7,080,000, to $28,828,000 for 1996 from
$35,908,000 in the prior year. The decrease in interest expense resulted from
higher amounts of capitalized interest from increased construction activities
and lower interest rates under the Company's New Credit Facility. (See Note 6 of
the Company's "Notes to Consolidated Financial Statements.")
Investment income decreased 29.6%, or $2,961,000, during 1996 due primarily to a
net gain of $1,407,000 recorded in the prior year from the sales of stock of TPI
Enterprises, Inc. and AmeriHealth, Inc. and a decrease of $1,513,000 in interest
income during the current year.
Earnings before income taxes and extraordinary item increased 86.8%, or
$21,693,000, from $24,978,000 for 1995 to $46,671,000 for the current year. The
Company recorded a $19,350,000 extraordinary loss, net of income tax benefit of
$13,400,000, related to extinguishment of debt during the current year. (See
Note 6 of the Company's "Notes to Consolidated Financial Statements.")
For the year (52 weeks) ended March 28, 1996, the Company recorded net earnings
of $8,021,000, a $25,957,000 decrease from net earnings of $33,978,000 for the
year (52 weeks) ended March 30, 1995. Net earnings per common share, after
deducting $7,000,000 of preferred dividends, was $.06 compared to $1.63 for the
same period in the prior year. The decrease in net earnings was impacted by an
extraordinary loss of $19,350,000 incurred as a result of the Company's
repurchase of Senior and Senior Subordinated Notes during 1996. Also, in 1995
the Company had a tax benefit of $9,000,000, as opposed to a tax expense of
$19,300,000 in 1996. The 1995 tax benefit resulted from a $19,792,000 reduction
in the deferred tax valuation allowance established under Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes. Earnings per share
before extraordinary item, after deduction of preferred dividends, was $1.21
compared to $1.63 for the previous year.
Years (52 weeks) Ended March 30, 1995, and March 31, 1994 Total revenues for
the year (52 weeks) ended March 30, 1995, decreased 3.9%, or $22,789,000, to
$564,664,000 compared to $587,453,000 for the year (52 weeks) ended March 31,
1994. Admissions revenues decreased by 4.7% due to a 4.4% decrease in attendance
and a .3% decrease in average ticket prices. Attendance during the year was
impacted by a dispute with a major distributor over film terms, which resulted
in the Company licensing a smaller number of runs per film from that
distributor. Concessions revenues decreased by 4.1% during the current year. The
decrease in concession revenue was primarily attributable to the attendance
decrease.
Total cost of operations decreased 3.0%, or $13,262,000, during 1995 to
$435,915,000 from $449,177,000 for 1994. As a percentage of total revenues, cost
of operations was 77% and 76% in fiscal year 1995 and 1994, respectively. Film
rentals expense decreased 7.5% in the current year due to lower attendance
levels and a 1.5% decrease in the percentage of admissions paid to film
distributors. Concession and other costs of operations increased .6% from the
prior year.
Depreciation and amortization decreased .4% from $38,048,000 to $37,913,000 for
1995. Effective December 30, 1994, the Company reduced the estimated lives of
lease rights and location premiums on certain smaller theatres to correspond to
the base terms of the theatre leases. The effect of this change in accounting
estimate was to increase amortization expense in 1995 by $1,542,000.
General and administrative expenses increased .8%, or $315,000, from $39,492,000
for 1994 to $39,807,000 for the current year. The increase was primarily the
result of the additional professional and consulting and travel and
entertainment expenses and the costs related to the restructuring of division
offices, offset by decreases in legal fees and bonuses under incentive programs.
As a percentage of total revenues, general and administrative expenses increased
from 6.7% to 7.0%.
Interest expense decreased $467,000, or 1.3%, to $35,908,000 for 1995 from
$36,375,000 in the prior year. The decrease in interest expense resulted
primarily from borrowings on the $40 million Credit Facility during the first
half of fiscal 1994. The Credit Facility was not utilized in 1995.
Investment income increased $8,857,000 during 1995. This increase was the result
of additional interest income of $5,835,000 and an increase in other investment
income of $3,022,000. The increase in interest income was due to additional cash
and investments as a result of the March 3, 1994, sale of preferred stock. The
increase in other investment income was primarily due to the gains on sales of
stock of TPI Enterprises, Inc. and AmeriHealth, Inc.
Income from minority interest in the amount of $1,599,000 was recorded in the
first quarter of fiscal 1994 relating to TPI Entertainment, Inc.'s ("TPIE")
share of the Exhibition Enterprises Partnership ("EEP") operating loss from
April 2, 1993, through May 27, 1993, prior to the Company's acquisition of
TPIE's partnership interest in EEP.
In 1995, the Company reported earnings prior to taxes of $24,978,000, a decrease
of $2,434,000 compared to $27,412,000 in 1994.
The provision for income taxes in 1995 reflects a benefit of $9,000,000 which is
a decrease of $21,100,000 from the tax expense of $12,100,000 in 1994. This
decrease in the income tax provision resulted primarily from a $19,792,000
reduction in the deferred tax asset valuation allowance established under
Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes. Based on the Company's positive earnings in recent years and the
expectation of continued earnings, management believes that the uncertainties
that led to the establishment of the valuation allowance have been removed with
respect to the realization of deferred tax assets. Accordingly, the valuation
allowance was eliminated.
For the year (52 weeks) ended March 30, 1995, the Company recorded net earnings
of $33,978,000, a $18,666,000 increase from net earnings of $15,312,000 for the
year (52 weeks) ended March 31, 1994. Net earnings for common shares in 1995,
after deducting $7,000,000 for preferred dividends, were $26,978,000, or $1.63
per share, compared to net earnings for common shares of $14,774,000, or $.89
per share, in 1994 after deducting $538,000 for preferred dividends.
Liquidity and Capital Resources
The Company's revenues are principally collected in cash through box office
admissions and theatre concession sales. Cash flow from operating activities, as
reflected in the Consolidated Statements of Cash Flows, was $86,453,000,
$44,184,000 and $63,680,000 in fiscal 1996, 1995 and 1994, respectively. The
Company has an operating "float" which finances its operations and which permits
the Company to maintain a small amount of working capital capacity. This "float"
exists because admissions revenues are received in cash, while exhibition costs
(primarily film rentals) are ordinarily paid to distributors from 30 to 45 days
following receipt of box office admission revenues. The Company is only
occasionally required to make advance payments or non-refundable guarantees of
film rentals.
On December 28, 1995, the Company completed the redemption of substantially all
of its Senior and Senior Subordinated Notes and entered into a new loan
agreement (the "Refinancing Plan"). The Company redeemed $99,383,000 of its
117_8% Senior Notes Due 2000 at a price of $1,117.90 per $1,000 principal amount
and $95,096,000 of its outstanding 125_8% Senior Subordinated Notes Due 2002 at
a price of $1,144.95 per $1,000 principal amount. The Company utilized cash and
investments along with borrowings of $130,000,000 under a new loan agreement to
redeem the Senior and Senior Subordinated Notes. The Refinancing Plan was
intended to improve the Company's financial and operating flexibility, reduce
its net interest expense, extend the average life of its indebtedness and
increase its available credit.
As a part of the Refinancing Plan, the Company entered into a new loan agreement
with several banks to provide a revolving credit facility of up to $425,000,000
(the "Credit Facility"). The Credit Facility matures in 2002, permits borrowings
at interest rates based on either the bank's base rate or LIBOR and requires an
annual commitment fee based on margin ratios, as defined in the loan agreement,
that could result in a rate of .25% or .375% on the unused portion of the
commitment. As of March 28, 1996, the Company had outstanding borrowings of
$120,000,000 under the Credit Facility at an average rate of 5.8%.
The Credit Facility contains covenants that generally limit the Company's
capital expenditures, as defined in the loan agreement, to $150,000,000 per year
plus amounts for unused capital expenditures from the prior year of
approximately $34,000,000 and amounts received for assets placed in sale and
leaseback and other comparable funding arrangements. The Company is pursuing
various financing arrangements to allow it to continue with its increased rate
of capital expenditures and comply with the terms of the loan agreement. The
Company anticipates that its capital expenditures in 1997 will comply with the
limits in the loan agreement.
Additionally, other covenants impose limitations on the incurrence of additional
indebtedness, creation of liens, a change of control, transactions with
affiliates, mergers, investments, guaranties and asset sales. The Company is
required to maintain a maximum net indebtedness to consolidated earnings before
interest, taxes, depreciation and amortization ("EBITDA") ratio, as defined in
the loan agreement, of 4.50 to 1 during the first four years of the Credit
Facility and a ratio of 4.0 to 1 thereafter, and a minimum cash flow coverage
ratio, as defined in the loan agreement, of 1.40 to 1. The Company does not
anticipate that any such covenants will materially impede its operations. As of
March 28, 1996, the Company was in compliance with all financial covenants
relating to the Credit Facility. The terms of the Indentures governing the
remaining Senior and Senior Subordinated Notes were amended to eliminate certain
restrictive covenants.
In 1996, the Company had capital expenditures of $120,796,000, primarily for the
development of new theatres and the addition of screens at existing locations.
The Company anticipates that total capital expenditures in 1997 will be
approximately $240,000,000. The Company believes that cash generated from
operations, existing cash and cash equivalents and the unused commitment amount
under its Credit Facility will be sufficient to fund operating results and
planned capital expenditures for the next twelve months.
During the current fiscal year, the Company opened two owned theatres with 40
screens, opened one ground lease theatre with 20 screens, opened four leased
theatres with 54 screens and added 36 screens at existing leased theatres. In
addition, the Company closed one owned theatre with two screens and closed 12
leased theatres with 59 screens resulting in a circuit total of 1,719 screens in
226 theatres as of March 28, 1996.
Impact of Inflation
Historically, the principal impact of inflation and changing prices upon the
Company has been with respect to the construction of new theatres, the purchase
of theatre equipment and the utility and labor costs incurred in connection with
continuing theatre operations. Film rental fees, which are the largest operating
expense incurred by the Company, are customarily paid as a percentage of box
office admission revenues and hence, while the film rental fees may increase on
an absolute basis, the percentages are not directly affected by inflation.
Except as set forth above, for the three years ended March 28, 1996, inflation
and changing prices have not had a significant impact on the Company's total
revenues and results of operations.
Recently Issued Financial Accounting Pronouncements
During 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of, which was adopted
early by the Company during the fourth quarter of 1996. As a result, the Company
recognized an impairment loss of $1,799,000. (See Note 1 of the Company's "Notes
to Consolidated Financial Statements.")
During 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation.
The Statement allows companies to measure compensation cost in connection with
employee stock compensation plans using a fair value based method or to continue
to use an intrinsic value based method to account for stock options and awards.
The Company currently plans to continue using the intrinsic value based method.
Responsibility for Preparation of Financial Statements
To the Stockholders of AMC Entertainment Inc.
The accompanying consolidated financial statements and related notes of AMC
Entertainment Inc. and subsidiaries were prepared by management in conformity
with generally accepted accounting principles appropriate in the circumstances.
In preparing the financial statements, management has made judgments and
estimates based on currently available information. Management is responsible
for the information; representations contained elsewhere in this Annual Report
are consistent with the financial statements.
The Company has a formalized system of internal accounting controls designed to
provide reasonable assurance that assets are safeguarded and that its financial
records are reliable. Management monitors the system for compliance to measure
its effectiveness and recommends possible improvements. In addition, as part of
their audit of the consolidated financial statements, the Company's independent
accountants review and test the internal accounting controls on a selected basis
to establish a basis of reliance in determining the nature, extent and timing of
audit tests to be applied.
The Board of Directors oversees financial reporting and internal accounting
control through its Audit Committee. This committee meets (jointly and
separately) with the independent accountants, management and internal auditor to
monitor the proper discharge of responsibilities relative to internal accounting
controls and consolidated financial statements.
/s/ Peter C. Brown
Peter C. Brown
Executive Vice President and Chief Financial Officer
Report of Independent Accountants
To the Board of Directors and Stockholders of AMC Entertainment Inc.
Kansas City, Missouri
We have audited the accompanying consolidated balance sheets of AMC
Entertainment Inc. and subsidiaries as of March 28, 1996, and March 30, 1995,
and the related consolidated statements of operations, stockholders' equity and
cash flows for each of the three years (52 weeks) in the period ended March 28,
1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of AMC Entertainment
Inc. and subsidiaries as of March 28, 1996, and March 30, 1995, and the
consolidated results of their operations and their cash flows for each of the
three years (52 weeks) in the period ended March 28, 1996, in conformity with
generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
Kansas City, Missouri
May 17, 1996
<PAGE>
Consolidated Statements of Operations
(In thousands, except per share amounts)
52 Weeks 52 Weeks 52 Weeks
Ended Ended Ended
March 28, March 30, March 31,
1996 1995 1994
Revenues
Admissions $431,361 $371,145 $389,454
Concessions 196,645 169,120 176,274
Other 29,866 24,399 21,725
Total revenues 657,872 564,664 587,453
Expenses
Film rentals 215,099 182,669 197,461
Concession merchandise 32,641 26,453 26,349
Other 248,827 226,793 225,367
Total cost of operations 496,567 435,915 449,177
Depreciation and amortization 43,886 37,913 38,048
General and administrative
expenses 48,750 39,807 39,492
Total expenses 589,203 513,635 526,717
Operating income 68,669 51,029 60,736
Other expense (income)
Interest expense
Corporate borrowings 18,099 24,502 25,699
Capitalized lease 10,729 11,406 10,676
Investment income (7,052) (10,013) (1,156)
Minority interest - - (1,599)
(Gain) loss on disposition
of assets 222 156 (296)
Earnings before income taxes
and extraordinary item 46,671 24,978 27,412
Income tax provision 19,300 (9,000) 12,100
Earnings before extraordinary item 27,371 33,978 15,312
Extraordinary item -
Loss on extinguishment of debt
(net of income tax benefit
of $13,400) (19,350) - -
Net earnings $8,021 $33,978 $15,312
Preferred dividends 7,000 7,000 538
Net earnings for common shares $1,021 $26,978 $14,774
Earnings per share before
extraordinary item:
Primary $1.21 $1.63 $.89
Fully diluted $1.20 $1.45 $.89
Earnings per share:
Primary $0.06 $1.63 $.89
Fully diluted $0.06 $1.45 $.89
See Notes to Consolidated Financial Statements.
<PAGE>
Consolidated Balance Sheets
(In thousands, except share amounts)
March 28, March 30,
1996 1995
Assets
Current assets:
Cash and equivalents $10,795 $71,233
Investments - 69,144
Receivables, net of allowance for
doubtful accounts of $801
as of March 28, 1996, and $1,529
as of March 30, 1995 20,503 8,572
Other current assets 15,179 12,069
Total current assets 46,477 161,018
Property, net 355,485 279,904
Intangible assets, net 36,483 42,926
Other long-term assets 45,013 38,306
Total assets $483,458 $522,154
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $64,353 $29,047
Accrued expenses and other liabilities 38,319 33,794
Current maturities of corporate borrowings
and capital lease obligations 2,904 2,516
Total current liabilities 105,576 65,357
Corporate borrowings 126,127 200,183
Capital lease obligations 59,141 64,805
Other long-term liabilities 33,696 34,421
Total liabilities 324,540 364,766
Commitments and contingencies
Stockholders' equity
Cumulative Convertible Preferred Stock;
4,000,000 shares issued
and outstanding (aggregate liquidation
preference of $100,000) 2,667 2,667
Common Stock; 5,388,880 and 5,306,380
shares issued
as of March 28, 1996, and March 30, 1995,
respectively 3,593 3,538
Convertible Class B Stock; 11,157,000 shares
issued and outstanding 7,438 7,438
Additional paid-in capital 107,986 107,163
Retained earnings 37,603 36,582
159,287 157,388
Less - Common Stock in treasury, at cost,
20,500 shares as of March 28, 1996 369 -
Total stockholders' equity 158,918 157,388
Total liabilities and stockholders' equity $483,458 $522,154
See Notes to Consolidated Financial Statements.
<PAGE>
Consolidated Statements of Cash Flows
(In thousands)
52 Weeks 52 Weeks 52 Weeks
Ended Ended Ended
March 28, March 30, March 31,
1996 1995 1994
Increase (Decrease) in Cash and Equivalents
Cash flows from operating activities:
Net earnings $8,021 $33,978 $15,312
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
- property 34,508 29,647 29,074
- other long-term assets 9,378 8,266 7,075
Deferred income taxes (1,328) (21,285) (4,023)
Gain on sale of available
for sale investments - (1,407) -
Extraordinary item 19,350 - -
Minority interest - - 1,599
Gain (loss) on sale of long-term assets 222 156 (296)
Change in assets and liabilities, net of
effects from acquisition:
Receivables (11,931) 625 (2,843)
Other current assets 10,167 (578) 412
Accounts payable 7,458 341 5,187
Accrued expenses and other liabilities 7,640 (5,763) 11,892
Other, net 2,968 204 291
Total adjustments 78,432 10,206 48,368
Net cash provided by operating activities 86,453 44,184 63,680
Cash flows from investing activities:
Capital expenditures (120,796) (56,403) (10,651)
Purchases of available for
sale investments (424,134) (314,368) -
Proceeds from maturities of available
for sale investments 493,278 364,374 -
Proceeds from sales of available
for sale investments - 11,689 -
Net purchase of short-term investments - - (93,041)
Purchase of partnership interest,
net of cash acquired - - (8,486)
Proceeds from disposition of long-term assets 2,243 70 1,270
Other, net (7,045) (1,516) (597)
Net cash provided by (used in)
investing activities (56,454) 3,846 (111,505)
Cash flows from financing activities:
Net borrowings under revolving
credit facility 120,000 - -
Principal payments under capital
lease obligations (2,455) (2,088) (1,700)
Repayment of acquired subsidiary
indebtedness - - (37,000)
Repurchase of Senior and
Senior Subordinated Notes (220,734) - -
Cash overdrafts 22,848 - -
Other repayments (404) (34) (1,720)
Proceeds from exercise of stock options 878 239 1,321
Proceeds from issuance of preferred stock - - 95,600
Dividends paid on preferred stock (7,000) (7,233) -
Deferred financing costs and other (3,570) - (354)
Net cash provided by (used in)
financing activities (90,437) (9,116) 56,147
Net increase (decrease) in
cash and equivalents (60,438) 38,914 8,322
Cash and equivalents at beginning of year 71,233 32,319 23,997
Cash and equivalents at end of year $10,795 $71,233 $32,319
<PAGE>
52 Weeks 52 Weeks52 Weeks
Ended Ended Ended
March 28,March 30,March 31,
1996 1995 1994
Supplemental Schedule of Noncash Investing
and Financing Activities:
During 1995 and 1994, capital lease obligations of $1,363 and $5,219,
respectively were incurred in connection with property acquired.
On May 28, 1993, a subsidiary of American Multi-Cinema, Inc. ("AMC"), acquired a
fifty percent partnership interest in Exhibition Enterprises Partnership ("EEP")
from TPI Entertainment, Inc. Together with the fifty percent partnership
interest already owned by AMC, EEP became a wholly-owned subsidiary. Cash and
equivalents held by EEP as of May 28, 1993, totaled $9,014. Liabilities assumed
from the May 28, 1993, transaction follow:
Fair value of assets acquired
(including cash and equivalents) $70,170
Cash paid (17,500)
Liabilities assumed $52,670
Supplemental Disclosures of Cash Flow Information:
52 Weeks 52 Weeks 52 Weeks
Ended Ended Ended
March 28, March 30, March 31,
1996 1995 1994
Cash paid during the period for:
Interest (net of amounts capitalized
of $3,003, $870 and $49) $34,775 $35,878 $35,742
Income taxes, net 9,787 14,822 13,659
See Notes to Consolidated Financial Statements.
<PAGE>
Consolidated Statements of Stockholders' Equity
(In thousands, except share amounts)
<TABLE>
<CAPTION> Additional Retained Common Stock Total
Preferred Stock Common Stock Class B Stock Paid-in Earnings in Treasury Stockhold
Shares Amount Shares Amount Shares Amount Capital(Deficit)Shares Amount Equity
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, April 2, 1993 - - 4,539,380 $3,026 11,730,000 $7,820 $12,800 $(5,475) - $- $18,171
Net earnings - - - - - - - 15,312 - - 15,312
Exercise of options on
Common Stock - - 154,450 103 - - 1,218 - - - 1,321
Net proceeds from sale of
Preferred Stock 4,000,000 2,667 - - - - 92,933 - - - 95,600
Conversion of Class B
Stock - - 573,000 382 (573,000) (382) - - - - -
Balance, March 31, 1994 4,000,000 2,667 5,266,830 3,511 11,157,000 7,438 106,951 9,837 - - 130,404
Net earnings - - - - - - - 33,978 - - 33,978
Exercise of options on
Common Stock - - 39,550 27 - - 212 - - - 239
Dividends declared:
$1.75 Preferred Stock - - - - - - - (7,233) - - (7,233)
Balance, March 30, 1995 4,000,000 2,667 5,306,380 3,538 11,157,000 7,438 107,163 36,582 - - 157,388
Net earnings - - - - - - - 8,021 - - 8,021
Exercise of options on
Common Stock - - 82,500 55 - - 823 - - - 878
Dividends declared:
$1.75 Preferred Stock - - - - - - - (7,000) - - (7,000)
Acquisition of Common
Stock in Treasury - - - - - - - - (20,500) (369) (369)
Balance, March 28, 1996 4,000,000 $2,667 5,388,880 $3,593 11,157,000 $7,438 $107,986 $37,603 (20,500) $(369) $158,918
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
Notes to Consolidated Financial Statements
Years (52 Weeks) Ended March 28, 1996, March 30, 1995, and March 31, 1994
Note 1 - The Company and Significant Accounting Policies
AMC Entertainment Inc. ("AMCE"), through American Multi-Cinema, Inc. ("AMC")
and its subsidiaries (collectively with AMCE, unless the context otherwise
requires, the "Company") is principally involved in the operation of motion
picture theatres throughout the United States.
Approximately 84% of AMCE's outstanding voting securities are owned by
Durwood, Inc. ("DI"). See Note 13 for further description of AMCE's related
party transactions.
Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Although these estimates are based on
management's knowledge of current events and actions it may undertake in the
future, they may ultimately differ from actual results.
Principles of Consolidation: The consolidated financial statements include
the accounts of AMCE and all subsidiaries. Minority interest in AMC
Philadelphia, Inc., an 80% owned subsidiary, with a book value of $5,000,000
and $3,583,000, as of March 28, 1996, and March 30, 1995, respectively, is
recorded as a liability. All significant intercompany balances and
transactions have been eliminated.
Fiscal Year: The Company has a 52/53 week fiscal year ending on the Thursday
closest to the last day of March. The 1996, 1995 and 1994 fiscal years each
reflect a 52 week period. Fiscal year 1997 will reflect a 53 week period.
Revenues and Film Rental Costs: Revenues are recognized when admissions and
concessions sales are received at the theatres. Film rental costs are
recognized based on the applicable box office receipts and the terms of the
film licenses.
Cash and Equivalents: Cash and equivalents consists of cash on hand and
temporary cash investments with original maturities of less than thirty
days. The Company invests excess cash in deposits with major banks and in
temporary cash investments. Such investments are made only in instruments
issued or enhanced by high quality financial institutions (investment grade
or better). Amounts invested in a single institution are limited to minimize
risk. Under the Company's cash management system, checks issued but not
presented to banks frequently result in overdraft balances for accounting
purposes and are classified within accounts payable in the balance sheet.
The amount of these checks included in accounts payable as of March 28, 1996
was $22,848,000.
Investments: Effective April 1, 1994, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 115 ("SFAS 115"), Accounting
for Certain Investments in Debt and Equity Securities. Upon adoption, the
Company classified its debt and equity securities as available for sale
which did not have a material impact to the consolidated financial
statements. In accordance with SFAS 115, prior years financial statements
have not been restated to reflect the change in accounting method.
As of March 30, 1995, investments in available for sale debt securities are
carried at amortized cost which approximates market value due to the
short-term nature of the securities.
For purposes of determining gross realized gains and losses, the cost of
securities sold is determined upon specific identification.
Refundable Construction Advances: Included in receivables as of March 28,
1996, and March 30, 1995, is $12,117,000 and $1,723,000, respectively,
advanced to developers to fund a portion of the construction costs of new
theatres that are to be operated by AMC pursuant to lease agreements. These
advances are refunded by the developers either during construction or
shortly after completion.
Property: Property is recorded at cost. The Company uses the straight-line
method in computing depreciation and amortization for financial reporting
purposes and accelerated methods, with respect to certain assets, for income
tax purposes. The estimated useful lives are generally as follows:
Buildings and improvements 20 to 40 years
Leasehold improvements 5 to 25 years
Furniture, fixtures and equipment 3 to 10 years
Expenditures for additions (including interest during construction), major
renewals and betterments are capitalized, and expenditures for maintenance
and repairs are charged to expense as incurred. The cost of assets retired
or otherwise disposed of and the related accumulated depreciation are
eliminated from the accounts in the year of disposal. Gains or losses
resulting from property disposals are credited or charged to operations
currently.
Intangible Assets: Intangible assets are recorded at cost and are comprised
of lease rights, which are amounts assigned to theatre leases assumed under
favorable terms, and location premiums on acquired theatres which are being
amortized on a straight-line basis over the estimated remaining useful life
of the theatre.
Effective December 30, 1994, the Company reduced the estimated lives of
lease rights and location premiums on certain smaller theatres to correspond
to the base terms of the theatre leases. This change in accounting estimate
was made to better match the estimated life of the intangible assets with
the life of the theatre due to the Company's strategic plans to primarily
own and operate larger theatres. The effect of this change in estimate was
to increase amortization expense in 1995 by $1,542,000 and decrease net
earnings by $876,000, or $.05 per share. Accumulated amortization on
intangible assets as of March 28, 1996, and March 30, 1995, was $36,035,000
and $29,960,000, respectively.
Other Long-Term Assets: Other long-term assets are comprised principally of
costs incurred in connection with the issuance of debt securities which are
being amortized over the respective life of the issue; investments in real
estate; investments in partnerships and corporate joint ventures accounted
for under the equity method; and long-term deferred income taxes.
Income Taxes: Income taxes are calculated in accordance with Statement of
Financial Accounting Standards No. 109 ("SFAS 109"), Accounting for Income
Taxes. The statement requires that deferred income taxes reflect the impact
of temporary differences between the amount of assets and liabilities for
financial reporting purposes and such amounts as measured by tax laws and
regulations.
The Company, pursuant to a tax sharing agreement, joined with DI in filing a
consolidated federal income tax return through March 3, 1994. Upon issuance
of the Cumulative Convertible Preferred Stock, DI no longer owns the
requisite 80% of the Company. The Company has filed a separate consolidated
federal income tax return after that date. The provisions of the tax sharing
agreement will remain effective for any changes to taxable income for years
covered under such agreement. Prior to March 3, 1994, the Company's
provision for income tax expense was computed as if it filed a separate
consolidated return.
Earnings per Share: Primary earnings per share is computed by dividing net
earnings for common shares by the sum of the weighted average number of
common shares outstanding and outstanding stock options, when their effect
is dilutive. The average shares used in the computations were 16,795,000 in
1996, 16,593,000 in 1995 and 16,521,000 in 1994. On a fully diluted basis,
both net earnings and shares outstanding are adjusted to assume the
conversion of Cumulative Convertible Preferred Stock, if dilutive. The
average shares used in the computations were 17,031,000 in 1996, 23,509,000
in 1995 and 16,550,000 in 1994.
Changes in Accounting Principles: During the fourth quarter of 1996, the
Company adopted Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of. This Statement establishes accounting standards for the
impairment of long-lived assets, certain identifiable intangibles and
goodwill related to those assets to be held and used. In connection with the
adoption of this Statement, the Company reviewed the assets and related
intangibles of its motion picture theatres for impairment on a disaggregated
basis. The expected future cash flows of certain theatres, undiscounted and
without interest charges, were less than the carrying value of the assets.
As a result, the Company recognized an impairment loss of $1,799,000. The
impairment loss represents the amount by which the carrying value of the
theatre assets, including intangibles, exceeded the estimated fair value of
those assets. The estimated fair value of assets was determined as the
present value of estimated expected future cash flows. The loss is included
in depreciation and amortization in the Consolidated Statements of
Operations.
Presentation: Certain amounts have been reclassified from prior period
consolidated financial statements to conform with the current year
presentation.
Note 2 - Acquisition
- -Prior to May 28, 1993, Exhibition Enterprises Partnership ("EEP" or the
"Partnership") was a partnership jointly owned by a subsidiary of AMC and
TPI Entertainment, Inc. ("TPIE"), a wholly-owned subsidiary of TPI
Enterprises, Inc. ("TPI"). On April 19, 1991, the Partnership acquired the
ownership interest in 57 movie theatres (56 theatres previously purchased by
TPIE from AMC in 1989 and 1990 and 1 theatre constructed by TPIE), subject
to obligations under notes, loans and capital leases. From inception through
April 1, 1993, the Company accounted for its 50% ownership of EEP on the
equity method.
On May 28, 1993, a subsidiary of AMC acquired a fifty percent partnership
interest in EEP from TPI for $17,500,000 in cash. The acquisition also
required the repayment of $37,000,000 in EEP bank indebtedness. The
acquisition was accounted for under the purchase method of accounting and
EEP was consolidated, for financial reporting purposes, as a wholly-owned
subsidiary. Pro forma financial information of the Company for 1994 has been
omitted as the effect is immaterial.
Note 3 - Investments
Investments as of March 30, 1995 consist of U.S. Treasury obligations with
contractual maturities within one year. The carrying value of these
investments approximates fair value, and therefore, there are no unrealized
gains or losses.
Proceeds and gross realized gains from the sales in 1995 of equity
securities classified as other long-term assets as of March 30, 1995, were
$11,689,000 and $1,407,000, respectively.
Note 4 - Property
A summary of property is as follows (in thousands):
1996 1995
Property owned:
Land $ 35,610 $ 30,112
Buildings and improvements 146,061 105,370
Furniture, fixtures and equipment 205,761 173,328
Leasehold improvements 146,152 122,276
533,584 431,086
Less-accumulated depreciation and amortization 213,654 192,204
319,930 238,882
Property leased under capitalized leases:
Buildings 67,274 69,723
Less-accumulated amortization 31,719 28,701
35,555 41,022
Net Property $ 355,485 $ 279,904
Included in property is $35,289,000 and $26,104,000 of construction in
progress as of March 28, 1996, and March 30, 1995, respectively.
Note 5 - Other Assets and Liabilities
Other assets and liabilities consist of the following (in thousands):
1996 1995
Other current assets:
Prepaid rent $ 6,412 $ 5,974
Prepaid income taxes 3,074 515
Deferred income taxes 3,207 3,330
Other 2,486 2,250
$ 15,179 $ 12,069
Other long-term assets:
Investments in real estate $ 6,922 $ 4,277
Investments in partnerships and
corporate joint ventures 1,121 1,327
Deferred charges, net 6,203 6,991
Deferred income taxes 24,506 23,055
Other 6,261 2,656
$ 45,013 $ 38,306
Accrued expenses and other liabilities:
Taxes other than income $ 7,110 $ 5,860
Interest 841 3,893
Payroll and vacation 6,149 5,794
Casualty claims and premiums 2,034 2,268
Deferred income 11,634 10,070
Accrued bonus 7,634 3,293
Other 2,917 2,616
$ 38,319 $ 33,794
Note 6 - Borrowings and Capital Lease Obligations
Debt Securities: On December 28, 1995, the Company completed the redemption
of $99,383,000 of its outstanding 117/8% Senior Notes Due 2000 at a price of
$1,117.90 per $1,000 principal amount and $95,096,000 of its outstanding
125/8% Senior Subordinated Notes Due 2002 at a price of $1,144.95 per $1,000
principal amount. In addition, the terms of the Indentures governing the
remaining Senior and Senior Subordinated Notes were amended to eliminate
certain restrictive covenants. Sources of funds for the redemption were cash
and investments on hand and borrowings on the Company's new revolving credit
facility. Premiums paid to redeem the Senior and Senior Subordinated Notes,
together with the write-off of unamortized debt issue costs and other costs
directly related to the debt redemptions, resulted in an extraordinary loss
of $19,350,000, net of income tax benefit of $13,400,000. The extraordinary
loss reduced earnings per share by $1.15 for the year (52 weeks) ended March
28, 1996.
The discounts on the remaining Senior and Senior Subordinated Notes are
being amortized to interest expense following the interest method of
amortization. Costs related to the issuance of the debt securities were
capitalized and are charged to expense, following the interest method, over
the lives of the respective securities. Unamortized issuance costs of
$175,000 and $6,201,000 as of March 28, 1996, and March 30, 1995,
respectively, are included in other long-term assets.
Line of Credit: In connection with the redemption of Senior Notes and Senior
Subordinated Notes, the Company entered into a new loan agreement to provide
a revolving credit facility of up to $425 million (the "Credit Facility").
The Credit Facility will mature on December 26, 2002. The commitment
thereunder will reduce by $25 million on each of September 30, 2001,
December 31, 2001, March 31, 2002 and June 30, 2002, and by $50 million on
September 30, 2002. Under the Credit Facility, the Company has the option to
borrow at rates based on either the bank's base rate or LIBOR and is
required to pay an annual commitment fee based on margin ratios, as defined
in the loan agreement, that could result in a rate of .25% or .375% on the
unused amount of the commitment.
The Credit Facility includes several financial covenants. The Company is
required to maintain a maximum net indebtedness to consolidated earnings
before interest, taxes, depreciation and amortization ("EBITDA") ratio, as
defined in the loan agreement, of 4.50 to 1 during the first four years of
the Credit Facility and a ratio, as defined in the loan agreement, of 4.0 to
1 thereafter, and a minimum cash flow coverage ratio of 1.40 to 1. In
addition, the Credit Facility i) generally limits the Company's capital
expenditures and investments to $150 million, subject to certain
adjustments, per year, ii) generally limits investments in entities which
are unrestricted subsidiaries, are not guarantors of the Credit Facility, or
are not wholly-owned subsidiaries of the Company, to $100 million in the
aggregate, plus the greater of 25% of free cash flow or 50% of consolidated
net income (minus 100% of consolidated net income if negative), as defined
in the Credit Facility, and iii) imposes limitations on the incurrence of
additional indebtedness, creation of liens, a change of control,
transactions with affiliates, mergers, investments, guaranties and asset
sales. As of March 28, 1996, the Company was in compliance with all
financial covenants relating to the Credit Facility.
Costs related to the establishment of the Credit Facility were capitalized
and are charged to interest expense over the life of the Credit Facility.
Unamortized issuance costs of $3,208,000 as of March 28, 1996 are included
in other long-term assets.
<PAGE>
Summary of Borrowings: The Company is obligated under notes, capital
leases and other indebtedness as follows (in thousands):
<TABLE>
<CAPTION>
Rates of Maturity Due in Totals
Interest Dates Fiscal 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Senior Debt
Credit Facility 5.8% December, 2002 $- $120,000 $-
Senior notes 11.875% August, 2000 - 614 99,510
Capital lease
obligations 7.25% to 20% Serially to 2025 2,881 62,022 67,282
Other indebtedness Various Various 23 658 1,306
Total senior debt 2,904 183,294 168,098
Subordinated Debt
Senior subordinated
notes 12.625% August, 2002 - 4,878 99,406
Total borrowings $2,904 $188,172 $267,504
</TABLE>
Minimum annual payments required under existing capital lease
obligations, net present value thereof, and maturities of total
indebtedness as of March 28, 1996, are as follows (in thousands):
<TABLE>
<CAPTION>
Capital Lease Obligations
Minimum Net
Lease Less Present Other
Payments Interest Value Indebtedness Total
<S> <C> <C> <C> <C> <C>
1997 $ 12,910 $ 10,029 $ 2,881 $ 23 $ 2,904
1998 13,022 9,461 3,561 26 3,587
1999 13,027 8,766 4,261 30 4,291
2000 12,392 8,040 4,352 34 4,386
2001 11,939 7,293 4,646 655 5,301
Thereafter 81,271 38,950 42,321 125,382 167,703
Total $ 144,561 $ 82,539 $ 62,022 $ 126,150 $ 188,172
</TABLE>
Letter of Credit: The Company maintains a letter of credit in the normal
course of its business. The unused portion of the letter of credit was
$2,000,000 as of March 28, 1996.
Note 7 - Stockholders' Equity
Common Stock: The authorized Common Stock of AMCE consists of two classes
of stock. Each holder of Common Stock (66 2/3 cents par value; 45,000,000
shares authorized) is entitled to one vote per share, and each holder of
Class B Stock (66 2/3 cents par value; 30,000,000 shares authorized) is
entitled to 10 votes per share. Common stockholders voting as a class are
presently entitled to elect two of the five members of AMCE's Board of
Directors with Class B stockholders electing the remainder.
Holders of the Company's stock have no pre-emptive or subscription rights
and there are no restrictions with respect to transferability. Holders of
the Common Stock have no conversion rights, but holders of Class B Stock
may elect to convert at any time on a share-for-share basis into Common
Stock.
Cumulative Convertible Preferred Stock: The Company has authorized
10,000,000 shares of Cumulative Convertible Preferred Stock (66 2/3 cents par
value) (the "Convertible Preferred"). Dividends are payable quarterly at
an annual rate of $1.75 per share. The Convertible Preferred has
preference in liquidation in the amount of $25 per share plus accrued and
unpaid dividends. The Convertible Preferred is convertible at the option
of the holder into shares of Common Stock at a conversion price of $14.50
per share of Common Stock, subject to change in certain events. In lieu
of conversion the Company may, at its option, pay to the holder cash
equal to the then market value of the Common Stock. After March 15, 1997,
the Company may redeem in whole or in part the Convertible Preferred at a
redemption price beginning at $26.00 per share, declining ratably to
$25.00 per share after March 15, 2001.
Stock Option and Incentive Plans
1983 Plan: In June 1983, AMCE adopted a stock option plan (the "1983 Plan")
for selected employees. This plan provided for the grant of rights to
purchase shares of Common Stock under both incentive and non-incentive
stock option agreements. The number of shares which could be sold under
the plan could not exceed 750,000 shares. The 1983 Plan provided that the
exercise price could not be less than the fair market value of the stock
at the date of grant and unexercised options expired no later than ten
years after date of grant. Pursuant to the terms of the 1983 Plan, no
further options may be granted under this plan.
1984 Plan: In September 1984, AMCE adopted a non-qualified stock option
plan (the "1984 Plan"). This plan provided for the grant of rights to
purchase shares of Common stock under non-qualified stock option
agreements. The number of shares which could be sold under the plan could
not exceed 750,000 shares. The 1984 Plan provided that the exercise price
would be determined by the Company's Stock Option Committee and that the
options expired no later than ten years after date of grant. Pursuant to
the terms of the 1984 Plan, no further options may be granted under this
plan.
1994 Plan: In November 1994, AMCE adopted a stock option and incentive
plan (the "1994 Plan"). This plan provides for three basic types of
awards: (i) grants of stock options which are either incentive or
non-qualified stock options, (ii) grants of stock awards, which are
either performance or restricted stock awards, and (iii) performance unit
awards. The number of shares of Common Stock which may be sold or granted
under the plan may not exceed 1,000,000 shares. The 1994 Plan provides
that the exercise price for stock options may not be less than the fair
market value of the stock at the date of grant and unexercised options
expire no later than ten years after date of grant.
<PAGE>
Pertinent information relating to stock options is as follows:
<TABLE>
<CAPTION>
1996 1995 1994
Number Option Price Number Option Price Number Option Price
of Shares Per Share of Shares Per Share of Shares Per Share
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
beginning of year 776,500 $9.25-$11.75 813,300 $4.67-$11.13 242,750 $4.67-$11.13
Granted 23,250 $14.50 36,500 $11.75 725,000 $9.25-$9.375
Cancelled (229,750) $9.375-$14.50 (33,750) $9.375 -
Exercised (82,500) $9.375-$11.13 (39,550) $4.67-$9.375 (154,450) $4.67-$9.00
Outstanding at
end of year 487,500 $9.25-$14.50 776,500 $9.25-$11.75 813,300 $4.67-$11.13
Exercisable at
end of year 233,250 $9.25-$11.75 230,000 $9.25-$11.75 88,300 $4.67-$11.13
Available for grant at
end of year 746,500 817,500 252,529
</TABLE>
Expiration dates for outstanding stock options as of March 28, 1996,
are as follows:
Number Option Price
Fiscal year of Shares Per Share
2004 435,000 $9.25-$9.375
2005 31,500 11.75
2006 21,000 14.50
Total options outstanding 487,500
Note 8 - Income Taxes
Income taxes reflected in the Consolidated Statements of Operations for the
three years ended March 28, 1996, are as follows (in thousands):
1996 1995 1994
Current:
Federal $5,134 $7,738 $13,977
State 2,094 4,547 2,146
Total current 7,228 12,285 16,123
Deferred:
Federal (1,121) (1,238) (5,203)
State (207) (255) (1,071)
Change in valuation allowance - (19,792) 2,251
Total deferred (1,328) (21,285) (4,023)
Total provision 5,900 (9,000) 12,100
Tax benefit of extraordinary item
- extinguishment of debt 13,400 - -
Total provision before
extraordinary item $19,300 $(9,000) $12,100
The effective tax rate on income before extraordinary items was 41.4%,
(36.0%) and 44.1% in 1996, 1995 and 1994, respectively. The difference
between the effective rate and the U.S. federal income tax statutory rate
of 35% in 1996 and 1995 and 34% in 1994 is accounted for as follows (in
thousands):
1996 1995 1994
Tax on earnings before provision for income tax
and extraordinary items at statutory rates $16,335 $ 8,742 $9,594
Add (subtract) tax effect of:
State income taxes, net of federal tax benefit 3,163 2,973 699
Change in valuation allowance - (19,792) 2,251
Other, net (198) (923) (444)
Income tax provision before extraordinary item $19,300 $(9,000) $12,100
The significant components of deferred income tax assets and liabilities
as of March 28, 1996, and March 30, 1995, are as follows (in thousands):
1996 1995
Deferred Income TaxDeferred Income Tax
Assets Liabilities Assets Liabilities
Accrued reserves and liabilities $5,323 $343 $5,775 $297
Investments in partnerships - 419 - 456
Capital leases 10,852 - 10,767 -
Depreciation 7,842 - 6,797 -
Deferred rents 5,266 - 4,287 -
Other 683 1,491 240 728
Total 29,966 2,253 27,866 1,481
Less: Current deferred income taxes 3,702 495 3,952 622
Total noncurrent deferred income
taxes $26,264 $1,758 $23,914 $859
Net noncurrent deferred income taxes $24,506 $23,055
SFAS 109 requires that a valuation allowance be provided against deferred
tax assets if, based on the weight of available evidence, it is more
likely than not that some or all of the deferred tax assets will not be
realized. Based upon positive earnings in recent years and the expectation
that taxable income will continue for the foreseeable future, management
believes it is more likely than not that the Company will realize its
deferred tax assets and, accordingly, no valuation allowance has been
provided as of March 28, 1996 and March 30, 1995.
Note 9 - Leases
The majority of the Company's operations are conducted in premises
occupied under lease agreements with base terms ranging generally from 15
to 25 years, with certain leases containing options to extend the leases
for up to an additional 20 years. The leases provide for fixed rentals
and/or rentals based on revenues with a guaranteed minimum. The Company
also leases certain equipment under leases expiring at various dates. The
majority of the leases provide that the Company will pay all, or
substantially all, taxes, maintenance, insurance and certain other
operating expenses. Assets held under capital leases are included in
property. Performance under some leases has been guaranteed by DI.
The Company has entered into agreements to lease space for the operation
of theatres not yet fully constructed. Of the total number of anticipated
openings, leases for 12 new theatres with 200 screens have been finalized.
The scheduled completion of construction and theatre openings are at
various dates during fiscal 1997. The estimated minimum rental payments
that may be required under the terms of these leases total approximately
$294 million.
Following is a schedule, by year, of future minimum rental payments
required under these leases and existing operating leases that have
initial or remaining non-cancellable terms in excess of one year as of
March 28, 1996 (in thousands):
Fiscal year:
1997 $ 62,497
1998 73,549
1999 81,973
2000 81,755
2001 80,143
Thereafter 1,052,254
Total minimum payments required $ 1,432,171
The Company records rent expense on a straight-line basis over the term of
the lease. Included in long-term liabilities as of March 28, 1996, and
March 30, 1995, is $12,858,000 and $10,537,000, respectively, of deferred
rent representing pro rata future minimum rental payments for leases with
scheduled rent increases.
Rent expense is summarized as follows (in thousands):
1996 1995 1994
Minimum rentals $63,099 $58,374 56,813
Percentage rentals based on revenues 2,354 1,970 1,968
Equipment rentals 876 647 692
$66,329 $60,991 $59,473
Note 10 - Employee Benefit Plans
Defined Benefit Plans: The Company sponsors a non-contributory defined
benefit pension plan covering, after a minimum of one year of employment,
all employees age 21 or older, who have completed 1,000 hours of service
in their first twelve months of employment or in a calendar year and who
are not covered by a collective bargaining agreement.
The plan calls for benefits to be paid to eligible employees at retirement
based primarily upon years of credited service with the Company (not
exceeding thirty-five) and the employee's highest five year average
compensation. Contributions to the plan reflect benefits attributed to
employees' services to date, as well as services expected to be earned in
the future. Plan assets are invested in a group annuity contract with an
insurance company pursuant to which the plan's benefits are paid to
retired and terminated employees and the beneficiaries of deceased
employees.
The following table sets forth the plan's funded status as of December 31,
1995 and 1994 (plan valuation dates) and the amounts included in the
Consolidated Balance Sheets as of March 28, 1996, and March 30, 1995 (in
thousands):
1996 1995
Actuarial present value of accumulated benefit
obligation,
including vested benefits of $10,041 and $7,699 $10,205 $7,856
Projected benefit obligation for service
rendered to date $17,051 $12,512
Plan assets at fair value (9,580) (8,291)
Projected benefit obligation in excess
of plan assets 7,471 4,221
Unrecognized net gain (loss) from past
experience different from that assumed
and effects of changes in assumptions (1,509) 1,117
Unrecognized net obligation upon adoption
being recognized over 15 years (1,588) (1,764)
Pension liability included in Consolidated
Balance Sheets $4,374 $3,574
Net pension expense includes the following components (in thousands):
1996 1995 1994
Service cost $855 $1,261 $1,157
Interest cost 966 971 852
Actual return on plan assets (1,630) 55 (864)
Net amortization and deferral 1,096 (190) 698
Net pension expense $1,287 $2,097 $1,843
The Company also sponsors a non-contributory Supplemental Executive
Retirement Plan (the "SERP") which provides certain employees additional
pension benefits. The actuarial present value of accumulated plan benefits
related to the SERP was $379,000 and $224,000 as of March 28, 1996 and
March 30, 1995, respectively, which is reflected in the Consolidated
Balance Sheet.
The weighted average discount rate used to measure the plans' projected
benefit obligations was 7.00%, 7.75% and 5.75% for 1996, 1995 and 1994,
respectively. The rate of increase in future compensation levels was 6.0%
for 1996 and 1995 and 6.5% for 1994 and the expected long-term rate of
return on assets was 8.5% for 1996, 1995 and 1994.
A limited number of employees are covered by collective bargaining
agreements under which payments are made to a union-administered fund.
401(k) Plan: The Company sponsors a voluntary thrift savings plan covering
the same employees eligible for the pension plan. Since inception of the
savings plan, the Company has matched 50% of each eligible employee's
elective contributions, limited to 3% of the employee's salary.
The Company's expense under the thrift savings plan was $1,032,000,
$1,015,000 and $907,000 for 1996, 1995, and 1994, respectively.
Other Retirement Benefits: The Company currently offers eligible retirees
the opportunity to participate in a health plan (medical and dental) and a
life insurance plan. Substantially all employees may become eligible for
these benefits provided that the employee must be at least 55 years of age
and have 15 years of credited service at retirement. The health plan is
contributory, with retiree contributions adjusted annually; the life
insurance plan is noncontributory. The accounting for the health plan
anticipates future modifications to the cost-sharing provisions to provide
for retiree premium contributions of approximately 20% of total premiums,
increases in deductibles and co-insurance at the medical inflation rate
and coordination with Medicare.
Retiree health and life insurance plans are not funded. The Company is
amortizing the transition obligation on the straight-line method over a
period of 20 years.
The following table sets forth the plans' accumulated postretirement
benefit obligation reconciled with the amounts included in the
Consolidated Balance Sheets as of March 28, 1996, and March 30, 1995 (in
thousands):
1996 1995
Accumulated postretirement benefit obligation:
Retirees $ 557 $ 791
Fully eligible active plan participants 438 332
Other active plan participants 1,292 1,397
Accumulated postretirement benefit obligation 2,287 2,520
Unrecognized net obligation upon
adoption being recognized over 20 years (747) (797)
Unrecognized loss 105 (521)
Postretirement benefit liability included in
the Consolidated Balance Sheets $ 1,645 $ 1,202
Postretirement expense includes the following components (in thousands):
1996 1995 1994
Service cost $192 $188 $175
Interest cost 208 202 169
Net amortization and deferral 66 66 94
Postretirement expense $466 $456 $438
For measurement purposes, the annual rate of increase in the per capita
cost of covered health care benefits assumed for 1996 was 8.5% for medical
and 6.0% for dental. The rates were assumed to decrease gradually to 5.0%
for medical and 3.0% for dental at 2020 and remain at that level
thereafter. The health care cost trend rate assumption has a significant
effect on the amounts reported. Increasing the assumed health care cost
trend rates by one percentage point in each year would increase the
accumulated postretirement benefit obligation as of March 28, 1996, by
$456,000 and the aggregate of the service and interest cost components of
postretirement expense for 1996 by $144,000. The weighted-average discount
rate used in determining the accumulated postretirement benefit obligation
was 7.00%, 7.75% and 7.25% for 1996, 1995 and 1994, respectively.
Note 11 - Contingencies
The Company, in the normal course of business, is party to various legal
actions. Management believes that the potential exposure, if any, from
such matters would not have a material adverse effect on the financial
condition or results of operations of the Company.
Note 12 - Future Disposition of Assets
The Company has provided reserves for estimated losses from discontinuing
the operation of fast food restaurants, for theatres which have been or
are expected to be closed and for other future dispositions of assets.
In conjunction with the opening of certain new theatres in fiscal 1986
through 1988, the Company expanded its food services by leasing additional
space adjacent to those theatres to operate specialty fast food
restaurants. The Company discontinued operating the restaurants due to
unprofitability. The Company continues to sub-lease or to convert to other
uses the space leased for these restaurants. The Company is obligated
under long-term lease commitments with remaining terms of up to twelve
years. As of March 28, 1996, the base rents aggregate approximately
$884,000 annually, and $8,314,000 over the remaining term of the leases.
As of March 28, 1996, the Company has subleased approximately 77% of the
space with remaining terms ranging from five months to 144 months.
Non-cancellable subleases currently aggregate approximately $650,000
annually, and $2,730,000 over the remaining term of the subleases.
As of March 28, 1996, the Company remains obligated under lease
commitments for two closed theatres and for a closed office with remaining
terms of up to five years. The current leasing costs of these closed
locations approximates $354,000 annually, and $951,000 over the remaining
term of the leases. Non-cancellable subleases currently aggregate
approximately $58,000 annually, and $92,000 over the remaining term of the
subleases.
Note 13 - Transactions with Related Parties
The Company and DI maintain intercompany accounts. Charges to the
intercompany accounts include the allocation of AMC general and
administrative expense and payments made by AMC on behalf of DI. As of
March 28, 1996, DI and non-AMCE subsidiaries owed the Company $795,000. As
of March 30, 1995, the Company owed DI and Non-AMCE subsidiaries $37,000.
Note 14 - Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it was practicable to
estimate that value.
The carrying value of cash and equivalents and investments in debt
securities approximates fair value because of the short duration of those
instruments. The fair value of publicly held corporate borrowings was
based upon quoted market prices. For other corporate borrowings, the fair
value was based upon rates available to the Company from bank loan
agreements or rates based upon the estimated premium over U.S. treasury
notes with similar average maturities.
The estimated fair values of the Company's financial instruments are as
follows (in thousands):
1996 1995
Carrying Fair Carrying Fair
Amount Value Amount Value
Financial assets:
Cash and equivalents $ 10,795 $ 10,795 $71,233 $71,233
Investments - - 69,144 69,144
Financial liabilities:
Cash overdrafts $ 22,848 $22,848 $- $ -
Corporate borrowings 126,150 126,992 200,222 215,952
<PAGE>
<TABLE>
Statements of Operations by Quarter
(In thousands, except per share amounts) (Unaudited)
<CAPTION>
June 29, June 30, Sept. 28, Sept. 29, Dec. 28, Dec. 29, March 28, March 30, Fiscal Year
1995 1994 1995 1994 1995 1994 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total revenues $153,810 $128,481 $185,066 $164,591 $155,426 $142,625 $163,570 $128,967 $657,872 $564,664
Total cost of
operations 120,001 101,435 136,883 125,839 119,508 108,001 120,175 100,640 496,567 435,915
Depreciation and
amortization 9,972 8,360 10,471 9,801 10,399 8,977 13,044(3) 10,775(1) 43,886 37,913
General and
administrative expenses 10,223 9,620 13,695 9,983 10,637 9,777 14,195 10,427 48,750 39,807
Operating income 13,614 9,066 24,017 18,968 14,882 15,870 16,156 7,125 68,669 51,029
Interest expense 8,309 8,960 8,318 9,321 7,883 8,931 4,318 8,696 28,828 35,908
Investment income 2,226 2,563 2,440 2,954 1,958 2,064 428 2,432 7,052 10,013
Gain (loss) on
disposition of assets (15) 2 (123) (77) 159 (4) (243) (77) (222) (156)
Earnings before income taxes
and extraordinary item 7,516 2,671 18,016 12,524 9,116 8,999 12,023 784 46,671 24,978
Income tax provision 3,100 1,100 7,400 5,100 3,800 3,600 5,000 (18,800)(2) 19,300 (9,000)
Earnings before
extraordinary item 4,416 1,571 10,616 7,424 5,316 5,399 7,023 19,584 27,371 33,978
Extraordinary item
- Loss on extinguishment
of debt (net of
income tax benefit
of $13,400) - - - - (19,350) - - - (19,350) -
Net earnings (loss) $4,416 $1,571 $10,616 $7,424 $(14,034) $5,399 $7,023 $19,584 $8,021 $33,978
Preferred dividends 1,750 1,750 1,750 1,750 1,750 1,750 1,750 1,750 7,000 7,000
Net earnings (loss)
for common shares $2,666 $(179) $8,866 $5,674 $(15,784) $3,649 $5,273 $17,834 $1,021 $26,978
Earnings (loss) per
share before
extraordinary item:
Primary $.16 $(.01) $.53 $.34 $.21 $.22 $.31 $1.07 $1.21 $1.63
Fully diluted $.16 $(.01) $.45 $.32 $.21 $.22 $.29 $.83 $1.20 $1.45
Earnings (loss) per share:
Primary $.16 $(.01) $.53 $.34 $(.93) $.22 $.31 $1.07 $.06 $1.63
Fully diluted $.16 $(.01) $.45 $.32 $(.93) $.22 $.29 $.83 $.06 $1.45
</TABLE>
(1)During the fourth quarter of 1995, the Company reduced the estimated lives of
lease rights and location premiums on certain smaller theatres to correspond to
the base term of the theatre lease. This change in accounting estimate resulted
in an increase in amortization expense of $1,542.
(2)During the fourth quarter of 1995, the Company reduced the deferred tax asset
valuation allowance established under Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. Based on the Company's positive
earnings in recent years and the expectation of continued earnings, management
believes uncertainty was removed with respect to the realization of deferred
tax assets. Accordingly, the valuation allowance was reduced.
(3)During fourth quarter of 1996, the Company adopted Statement of Financial
Accounting Standards No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of. As a result, the Company
recognized an impairment loss of $1,799.
Investor Information
Stock Listing/Symbol
amc Entertainment Inc. Common Stock is traded on the American and Pacific Stock
Exchanges under the symbol aen. The Preferred Stock is traded on the American
Stock Exchange under the symbol aen Pr.
Quarterly Common Stock Price Range
Fiscal 1996 Fiscal 1995
High Low High Low
First Quarter $ 14.50 $ 11.00 $ 12.75 $ 9.75
Second Quarter 18.12 13.50 13.25 11.12
Third Quarter 23.50 17.62 12.37 10.37
Fourth Quarter 24.12 19.25 12.62 9.87
Year $ 24.12 $ 11.00 $ 13.25 $ 9.75
(As reported on the American Stock Exchange)
Stock Ownership
At the end of fiscal 1996, the Company had 5,368,380 common shares outstanding,
50.7% of which were beneficially owned by company man-agement. There were 458
shareholders of record on May 15, 1996.
SEC Form 1O-K
A copy of the report to the Securities and Exchange Commission on Form 10-K,
may be obtained without charge upon written request to the
Finance Department at amc headquarters.
Annual Meeting
The annual meeting of stockholders will be held on Thursday, November 14, 1996,
at 11:00 a.m. cst at
the Ward Parkway 22 Theatres, 8600 Ward Parkway,
Kansas City, Missouri.
Quarterly Calendar
The company has a 52/53 week fiscal year ending on the Thursday closest to the
last day of March. Fiscal 1997
quarter-end dates will be June 27, September 26,
December 27, and April 3. Fiscal 1997 will be a 53 week
year. Quarterly results usually are announced approximately four weeks after
the close of the quarter.
Registrar and Transfer Agent
UMB Bank, n.a., Securities Transfer Division,
928 Grand Avenue, 13th Floor, P.O. Box 410064,
Kansas City, Missouri 64141-6226
Corporate Offices
amc Entertainment Inc., 106 West 14th Street,
P.O. Box 419615, Kansas City, Missouri 64141-6615,
(816) 221-4000
Independent Public Accountants
Coopers & Lybrand L.L.P., Kansas City, Missouri
Additional Information
For additional information on amc Entertainment Inc., please contact:
Peter C. Brown, amc Entertainment Inc., P.O. Box 419615, Kansas City, Missouri
64141-6615
(816) 221-4000
Executive Officers and Directors
Executive Officers
Stanley H. Durwood
Chairman of the Board, Chief Executive Officer
and President
Philip M. Singleton
Executive Vice President and Chief Operating Officer
Peter C. Brown
Executive Vice President and Chief Financial Officer
Richard J. King
Senior Vice President (AMC)
Rolando B. Rodriquez
Senior Vice President (AMC)
Richard T. Walsh
Senior Vice President (AMC)
Richard M. Fay
President, amc Film Marketing
Charles P. Stilley
President, amc Realty, Inc.
Richard L. Obert
Senior Vice President and Chief Accounting
and Information Officer
Board of Directors
Stanley H. Durwood
Chairman of the Board, Chief Executive Officer
and President
Philip M. Singleton
Executive Vice President and Chief Operating Officer
Peter C. Brown
Executive Vice President and Chief Financial Officer
Charles J. Egan, Jr.
Vice President General Counsel
Hallmark Cards, Incorporated
Paul E. Vardeman
Partner, Polsinelli, White, Vardeman and Shalton
Design and production: Annual Reports, Inc., Franklin, Indiana. Photography:
Len Allington
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
Consolidated Financial Statements of AMC Entertainment Inc. as of and for the
fifty-two weeks ended March 28, 1996, submitted in response to the requirements
to Form 10-K and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-28-1996
<PERIOD-END> MAR-28-1996
<CASH> 10,795
<SECURITIES> 0
<RECEIVABLES> 21,304
<ALLOWANCES> 801
<INVENTORY> 0
<CURRENT-ASSETS> 46,477
<PP&E> 600,858
<DEPRECIATION> 245,373
<TOTAL-ASSETS> 483,458
<CURRENT-LIABILITIES> 105,576
<BONDS> 185,268
0
2,667
<COMMON> 11,031
<OTHER-SE> 145,220
<TOTAL-LIABILITY-AND-EQUITY> 483,458
<SALES> 196,645
<TOTAL-REVENUES> 657,872
<CGS> 32,641
<TOTAL-COSTS> 496,567
<OTHER-EXPENSES> 43,886
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,828
<INCOME-PRETAX> 46,671
<INCOME-TAX> 19,300
<INCOME-CONTINUING> 27,371
<DISCONTINUED> 0
<EXTRAORDINARY> (19,350)
<CHANGES> 0
<NET-INCOME> 8,021
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
