<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
</TABLE>
AMC ENTERTAINMENT INC.
-------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which
transaction applies:
-----------------------------------------------------
2) Aggregate number of securities to which transaction
applies:
-----------------------------------------------------
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
-----------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------
5) Total fee paid:
-----------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-----------------------------------------------------
2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------
3) Filing Party:
-----------------------------------------------------
4) Date Filed:
-----------------------------------------------------
</TABLE>
<PAGE>
[LOGO]
AMC ENTERTAINMENT INC.
106 West 14th Street
Kansas City, Missouri 64105
November 9, 2000
TO THE STOCKHOLDERS OF
AMC ENTERTAINMENT INC.:
The Annual Meeting of Stockholders of AMC Entertainment Inc. will be held at
the Town Center 20 Theatres, 11701 Nall, Leawood, Kansas. The meeting will be
held on November 30, 2000 at 11:00 a.m. local time and will be followed by an
informal lunch and a movie. The Board of Directors cordially invites you to
attend.
I hope you will attend the meeting in person, but whether or not you expect
to attend, please sign, date and return the enclosed proxy card now, so that
your shares will be represented at the meeting. You may also vote via the
Internet as indicated on the proxy card instructions. If you do attend the
meeting, you will be entitled to vote in person.
Very truly yours,
[SIGNATURE]
Peter C. Brown
Chairman of the Board
<PAGE>
[LOGO]
AMC ENTERTAINMENT INC.
106 West 14th Street
Kansas City, Missouri 64105
------------------------
Notice of Annual Meeting of Stockholders
To Be Held November 30, 2000
------------------------
TO THE STOCKHOLDERS OF AMC ENTERTAINMENT INC.:
The Annual Meeting of Stockholders of AMC Entertainment Inc. (the "Company")
will be held at the Town Center 20 Theatres, 11701 Nall, Leawood, Kansas. The
meeting will be held on Thursday, November 30, 2000 at 11:00 a.m. local time for
the following purposes:
1. To elect a Board of Directors for the upcoming year;
2. To consider and vote upon a proposal to ratify the appointment of
PricewaterhouseCoopers LLP as independent accountants for the Company
for the fiscal year ending March 29, 2001; and
3. To transact such other business as may properly come before the meeting.
The close of business on November 3, 2000 has been designated as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting of Stockholders and any adjournments thereof. A list of such
stockholders will be available for review in the office of the Company's
Secretary on the 21st Floor of the Power and Light Building, located at 106 West
14th Street, Kansas City, Missouri, after November 15, 2000.
By order of the Board of Directors
[SIGNATURE]
Nancy L. Gallagher
Vice President and Secretary
Kansas City, Missouri
November 9, 2000
YOUR VOTE IS IMPORTANT
If you do not expect to attend the meeting in person, it is important that
your shares be represented. Please use the enclosed proxy card to vote on the
matters to be considered at the meeting, sign and date the proxy card and mail
it promptly in the enclosed envelope, which requires no postage if mailed in the
United States. You may also vote via the Internet as indicated on the proxy card
instructions. Any stockholder may revoke his proxy at any time before the
meeting by written notice to such effect, by submitting a subsequently dated
proxy or by attending the meeting and voting in person.
1
<PAGE>
[LOGO]
AMC ENTERTAINMENT INC.
106 West 14th Street
Kansas City, Missouri 64105
PROXY STATEMENT
PROXIES, SOLICITATION AND VOTING:
This Proxy Statement is furnished in connection with the solicitation of the
enclosed proxy by the Board of Directors of AMC Entertainment Inc. (the
"Company") for use at the Annual Meeting of Stockholders to be held at
11:00 a.m. local time on Thursday, November 30, 2000 at the Town Center 20
Theatres, 11701 Nall, Leawood, Kansas. This Proxy Statement and the accompanying
proxy are being mailed to stockholders on or about November 9, 2000.
The Board of Directors of the Company has established November 3, 2000 as
the record date for the meeting. Only stockholders of record at the close of
business on the record date are entitled to notice of and to vote at the Annual
Meeting of Stockholders and any adjournments thereof. At the close of business
on the record date, the Company had outstanding 19,427,098 shares of Common
Stock and 4,041,993 shares of Class B Stock. On all matters other than the
election of Directors, the shares of Common Stock and Class B Stock vote
together as if a single class, with each outstanding share of Common Stock
having one vote per share and each outstanding share of Class B Stock having ten
votes per share.
Properly executed and dated proxies which are received by the Company prior
to the Annual Meeting of Stockholders will be voted in accordance with the
instructions thereon. If a proxy is received with no instructions given with
respect to the matters to be acted upon, the shares represented by the proxy
will be voted (i) for the election of the nominees to the Company's Board of
Directors designated below and (ii) for the ratification of the appointment of
PricewaterhouseCoopers LLP as independent accountants of the Company for the
fiscal year ending March 29, 2001. A proxy may be revoked at any time by written
notice to such effect received by the Secretary of the Company before the proxy
is voted at the Annual Meeting of Stockholders, by delivery to the Company of a
subsequently dated proxy or by a vote cast in person at the Annual Meeting of
Stockholders by written ballot.
The election of directors is determined by a plurality of the votes cast.
Votes that are withheld will be excluded entirely from the vote and will have no
effect. A favorable vote of a majority (based on voting power) of the shares of
Common Stock and Class B Stock voted in person or by proxy at the Annual Meeting
of Stockholders is required for the proposal to ratify the appointment of
PricewaterhouseCoopers LLP as independent accountants for the Company for the
fiscal year ending March 29, 2001. Under Delaware law and the Company's bylaws,
abstentions and broker non-votes are not counted in the calculation of the vote.
A proxy confers discretionary authority with respect to the voting of the
shares represented thereby on any other business that may properly come before
the meeting (and any adjournments thereof) as to which the Company did not have
notice prior to September 24, 2000. The Board of
2
<PAGE>
Directors is not aware that any such other business is to be presented for
action at the meeting and does not itself intend to present any such other
business. However, if any such other business does come before the meeting,
shares represented by proxies given pursuant to this solicitation will be voted
by the persons named in the proxy in accordance with their best judgment. A
proxy also confers discretionary authority on the persons named therein to
approve minutes of last year's Annual Meeting of Stockholders, to vote on
matters incident to the conduct of the meeting and to vote on the election of
any person as a director if a nominee herein named should decline or become
unable to serve as a director for any reason. The cost of the solicitation of
proxies will be paid by the Company.
1. ELECTION OF DIRECTORS
Directors are elected annually, and each holds office until such director's
successor is duly elected and qualified or until such director's earlier
resignation or removal. The by-laws of the Company provide that the full Board
of Directors consists of five (5) members. It is anticipated that five
(5) directors will be elected at the meeting. Three (3) of those directors are
to be elected by the holders of Class B Stock, voting as a class, with each
outstanding share having one vote per share, and two (2) of those directors are
to be elected by the holders of Common Stock, voting as a class, with each
outstanding share having one vote per share.
It is intended that shares represented by the proxies will be voted in favor
of the election of the nominees named below who are to be elected by the holders
of Common Stock, unless otherwise directed by stockholders. Each nominee has
consented to being named as a nominee and to serve if elected. In the event any
nominee for director to be elected by the holders of Common Stock should decline
or shall become unable to serve as a director for any reason, it is intended
that the persons named in the proxy will vote for a substitute who will be
designated by the Board of Directors.
NOMINEES FOR DIRECTORS
The Company's nominees for Directors are as follows:
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED OR
NAME AGE(1) POSITIONS APPOINTED
---- ------ --------- ---------
<S> <C> <C> <C>
Peter C. Brown 42 Chairman of the Board, Chief Executive 1992
Officer, President and Director
Charles J. Egan, Jr. 68 Director 1986
Paul E. Vardeman 70 Director 1983
W. Thomas Grant, II 50 Director 1996
Charles S. Paul 51 Director 1999
</TABLE>
-------------------
(1)As of October 20, 2000.
American Multi-Cinema, Inc. ("AMC") is a wholly owned subsidiary of the
Company. The primary business of AMC is the operation of megaplex and multiplex
theatres, primarily in large metropolitan markets. There are no family
relationships among Directors or between any Director
3
<PAGE>
or any Executive Officer of the Company. At each Annual Meeting of Stockholders,
the Company intends to nominate as directors to be elected by the holders of
Common Stock individuals who are not officers or employees of the Company or its
subsidiaries but who may be incumbent directors.
TO BE ELECTED BY HOLDERS OF CLASS B STOCK
Mr. Peter C. Brown has served as a Director of the Company and AMC since
November 12, 1992. Mr. Brown was elected Chairman of the Board and Chief
Executive Officer of the Company on July 15, 1999 and Chairman of the Board and
Chief Executive Officer of AMC on September 29, 1999. Mr. Brown served as
Co-Chairman of the Board of the Company from May 15, 1998 through July 14, 1999.
Mr. Brown was elected President of the Company on January 10, 1997. Mr. Brown
served as Executive Vice President of the Company from August 3, 1994 to
January 10, 1997 and as Executive Vice President of AMC from August 3, 1994 to
September 28, 1999. Mr. Brown also serves as Chairman of the Board of Trustees
of Entertainment Properties Trust, a real estate investment trust, and serves on
the Board of Directors of LabONE, Inc. Mr. Brown also serves as a member of the
Board of Trustees of Rockhurst High School and is a member of the Board of
Advisors for the University of Kansas School of Business. Mr. Brown is a
graduate of the University of Kansas.
Mr. Charles J. Egan, Jr., has served as a Director of the Company since
October 30, 1986. Mr. Egan is Vice President of Hallmark Cards, Incorporated,
and was General Counsel of such company until December 31, 1996. Hallmark Cards,
Incorporated 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 is a Trustee of the Durwood Voting Trust established under
that certain 1992 Durwood, Inc. Voting Trust Agreement dated December 12, 1992,
as amended and restated as of August 12, 1997 (the "Voting Trust"). Mr. Egan
also serves as a member of the Board of Trustees, Treasurer and Chairman of the
Finance Committee of the Kansas City Art Institute and is Co-Chair of the
Harvard College Fund. 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 the Company since June 14,
1983. Mr. Vardeman was a director, officer and shareholder of the law firm of
Polsinelli, White, Vardeman & Shalton, P.C. (now Polsinelli, Shalton and Welte,
P.C.), Kansas City, Missouri from 1982 until his retirement from such firm in
November 1997. 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.
TO BE ELECTED BY HOLDERS OF COMMON STOCK
Mr. W. Thomas Grant, II has served as a Director of the Company since
November 14, 1996. Mr. Grant is Chairman of the Board, Chief Executive Officer,
President and a Director of LabONE, Inc. LabONE, Inc. provides risk appraisal
laboratory services for the insurance industry, clinical testing services for
the healthcare industry and substance abuse testing services for employers.
Mr. Grant also serves on the Boards of Directors of Commerce Bancshares, Inc.,
Kansas City Power & Light Company, Business Men's Assurance Company of America
and Response Oncology, Inc. Mr. Grant holds a B.A. degree from the University of
Kansas and an M.B.A. degree from the Wharton School of Finance at the University
of Pennsylvania.
Mr. Charles S. Paul has served as a Director of the Company since
December 2, 1999. Mr. Paul is Chairman of the Board of IFILM Corp., an online
global film destination for film fans, filmmakers and industry professionals.
Prior thereto, Mr. Paul was Chairman and Co-Founder of Sega GameWorks L.L.C.
Mr. Paul was an Executive Vice President and director of MCA, Inc. from 1989
4
<PAGE>
through March 1996 and served as President of MCA Enterprises, a division of the
company, from 1986 through March 1996. Mr. Paul also serves on the Board of
Directors of National Golf Properties, Inc. Mr. Paul holds an undergraduate
degree from Stanford University and is a graduate of the University of Santa
Clara School of Law.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR W. THOMAS GRANT, II AND
CHARLES S. PAUL AS DIRECTORS OF THE COMPANY.
DIRECTORS' MEETINGS AND COMMITTEES
The Company has a 52/53 week fiscal year ending on the Thursday closest to
the last day of March. The Company's last full fiscal year began on April 2,
1999, and ended on March 30, 2000 ("fiscal 2000").
The Board of Directors of the Company held four meetings and acted by
unanimous written consent to action eight times in fiscal 2000. All directors
attended at least 75% of the aggregate number of meetings of the Board of
Directors and of board committees on which they served.
On December 2, 1999, the Board of Directors appointed an Audit Committee,
composed of Messrs. Charles J. Egan, Jr., W. Thomas Grant, II and Charles S.
Paul, and a Compensation Committee, composed of Messrs. Charles J. Egan, Jr., W.
Thomas Grant, II and Paul E. Vardeman. Mr. Grant resigned from the Compensation
Committee effective May 22, 2000. The Company does not have a nominating
committee.
The principal purpose of the Audit Committee is to review the process
involved in the preparation of the Company's annual audited financial
statements. In this regard, the Audit Committee (i) recommends to the Board of
Directors the firm of independent accountants to serve as Independent Auditor;
(ii) meets with the Independent Auditor and management to review matters
relating to financial reporting and accounting procedures and policies, the
adequacy of internal controls and the scope of the audit performed by the
Independent Auditor; (iii) reviews the results of the audit; and (iv) submits
any recommendations it may have from time to time to the Board of Directors with
respect to financial reporting and accounting procedures and policies, internal
controls and other matters that may come to its attention. The Audit Committee
is also charged with the responsibility of reviewing material transactions with
related parties and with certain responsibilities under the Company's Compliance
Plan. The Audit Committee held two meetings during fiscal 2000.
The principal responsibilities of the Compensation Committee are to
(i) review and recommend periodically the compensation to be paid to the
Executive Officers of the Company and its subsidiaries, including the amount and
timing of bonus payments and other incentive compensation awards, and
(ii) oversee the preparation of the reports and other information required to be
disclosed in connection with any filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934 with respect to the compensation of Executive
Officers. In addition, the Compensation Committee oversees the Company's 1983
and 1984 Stock Option Plans, which have expired except with respect to rights
under outstanding awards. The Compensation Committee also (i) administers
existing employee benefit plans and programs, (ii) periodically reviews, and if
needed, recommends amendments to such plans and programs and (iii) oversees the
development of new plans and programs. The Compensation Committee held nine
meetings during fiscal 2000.
5
<PAGE>
COMPENSATION OF DIRECTORS
Prior to December 2, 1999, each of the Company's non-employee directors
received an annual fee of $32,000 for service on the Board of Directors and, in
addition, $1,500 for each Board meeting and $1,000 for each Board committee
meeting which they attended. Effective December 2, 1999, each non-employee
director receives $65,000 for service on the Board of Directors and, in
addition, $1,500 for each Board meeting and $1,000 for each Board committee
meeting which they attend.
Pursuant to the Company's 1999 Stock Option Plan for Outside Directors (the
"1999 Directors Option Plan"), the non-employee directors are permitted to elect
to receive up to all of their annual $65,000 fee in the form of stock options.
The number of options which may be received is determined by dividing the amount
of the fee taken in the form of options by 30% of the fair market value of the
Company's Common Stock on the effective date of the grant, which is the first
business day after the Annual Meeting of Stockholders. Under the 1999 Directors
Option Plan, each non-employee director also received a one time grant of
options whose value (estimated under the 1999 Directors Option Plan for this
purpose at 30% of the fair market value of the Company's Common Stock) was
$14,000. Options generally become exercisable one year after grant and terminate
ten years after grant. However, exercisability is accelerated upon the
occurrence of a change in control, as defined in the 1999 Directors Option Plan,
death, disability or retirement from service as a director upon or after
reaching age 70, and options will terminate prior to the tenth anniversary of
the date of grant within specified periods following termination of service as a
director. Directors may elect to pay any required withholding taxes in
connection with the exercise of an option by having the Company withhold shares
otherwise issuable upon exercise. The maximum number of shares issuable under
the 1999 Directors Option Plan is 200,000 and no director may receive more than
50,000 shares under the 1999 Directors Option Plan.
6
<PAGE>
EXECUTIVE OFFICERS
The Company's and its subsidiaries' Executive Officers are as follows:
<TABLE>
<CAPTION>
NAME AGE(1) POSITIONS
---- ------ ---------
<S> <C> <C>
Peter C. Brown(2) 42 Chairman of the Board, Chief Executive Officer and
Director (the Company and AMC); President (the Company)
Philip M. Singleton 54 Executive Vice President (the Company);
President, Chief Operating Officer and Director (AMC)
John D. McDonald 43 Executive Vice President, North American Operations
(AMC)
Mark A. McDonald 42 Executive Vice President, International Operations (AMC
Entertainment International, Inc.)
Richard M. Fay 51 President (AMC Film Marketing, a division of AMC)
Richard T. Walsh 47 Executive Vice President, Film Operations (AMC Film
Marketing)
Craig R. Ramsey 49 Senior Vice President, Finance, Chief Financial Officer
and Chief Accounting Officer (the Company and AMC);
Director (AMC)
James V. Beynon 52 Senior Vice President and Treasurer (the Company and
AMC)
</TABLE>
-------------------
(1)As of October 20, 2000.
(2)For biographical information on this Executive Officer, see "Directors
and Nominees for Directors."
All current Executive Officers of the Company and its subsidiaries hold such
offices at the pleasure of the Company's Board of Directors, subject, in the
case of Messrs. Brown, Singleton, John D. McDonald, Mark A. McDonald, Fay, Walsh
and Ramsey, to rights under their respective employment agreements. There are no
family relationships between any Executive Officers except that Messrs. John D.
McDonald and Mark A. McDonald are brothers.
Mr. Philip M. Singleton was elected President of AMC on January 10, 1997 and
has served as Chief Operating Officer of AMC since November 14, 1991.
Mr. Singleton has served as Executive Vice President of the Company since
August 3, 1994. Mr. Singleton has served as a Director of AMC since
November 12, 1992.
Mr. John D. McDonald has served as Executive Vice President, North American
Operations of AMC since October 1, 1998. Prior thereto, Mr. McDonald served as
Senior Vice President, corporate operations from November 9, 1995 until his
promotion to Executive Vice President on October 1, 1998. Mr. McDonald served as
Vice President, corporate operations from September 22, 1992 through
November 9, 1995.
Mr. Mark A. McDonald has served as Executive Vice President, International
Operations of AMC Entertainment International, Inc., a subsidiary of the
Company, since December 7, 1998. Prior thereto, Mr. McDonald served as Senior
Vice President, Asia Operations from November 9, 1995 until his appointment as
Executive Vice President in December 1998. Mr. McDonald previously served as
Vice President, Finance of AMC from October 1, 1992 to November 9, 1995.
7
<PAGE>
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 from 1994 until
joining AMC.
Mr. Richard T. Walsh has served as Executive Vice President, Film
Operations, AMC Film Marketing, a division of AMC, since September 29, 1999.
Prior thereto, Mr. Walsh served as Senior Vice President in charge of operations
for the West Division of AMC from July 1, 1994.
Mr. Craig R. Ramsey has served as Chief Financial Officer of the Company and
AMC since January 24, 2000 and as Senior Vice President, Finance of the Company
and AMC since August 20, 1998. Mr. Ramsey was elected Chief Accounting Officer
of the Company and AMC effective October 15, 1999. Prior thereto, Mr. Ramsey
served as Vice President, Finance from January 17, 1997 and as Director of
Information Systems and Director of Financial Reporting since joining AMC on
February 1, 1995.
Mr. James V. Beynon has served as Senior Vice President of the Company and
AMC since September 29, 1999. Prior thereto, Mr. Beynon served as Vice President
of the Company and AMC from September 19, 1994. Mr. Beynon has served as
Treasurer of the Company and AMC since September 19, 1994.
8
<PAGE>
COMPENSATION OF MANAGEMENT
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 last fiscal
year and hereafter referred to as the "Named Executive Officers") for the last
three fiscal years ended March 30, 2000, April 1, 1999 and April 2, 1998,
respectively.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- AWARDS-
OTHER(1) SECURITIES ALL(2)
FISCAL ANNUAL UNDERLYING OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS/SARS COMPENSATION
--------------------------- -------- -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Peter C. Brown 2000 $471,244 $112,455 N/A -- $9,462
Chief Executive Officer 1999 409,241 -- N/A 125,000 5,334
and President 1998 296,444 -- N/A -- 4,960
Stanley H. Durwood(3) 2000 152,656 -- N/A -- --
Chief Executive Officer 1999 567,008 -- N/A 150,000 --
1998 536,558 -- N/A -- --
Philip M. Singleton 2000 375,145 66,300 N/A -- 7,789
Chief Operating Officer 1999 383,702 -- N/A 100,000 5,317
1998 316,679 -- N/A -- 4,896
Richard M. Fay 2000 285,473 31,875 N/A 42,750 8,550
President - AMC Film 1999 298,075 -- N/A -- 4,503
Marketing 1998 286,982 45,000 N/A -- 4,676
Richard T. Walsh 2000 270,089 31,875 N/A 15,500 8,058
Executive Vice President, 1999 238,666 -- N/A -- 4,639
Film Operations, AMC Film 1998 226,441 60,000 N/A -- 4,805
Marketing
John D. McDonald 2000 256,308 42,075 N/A 50,500 7,685
Executive Vice President, 1999 217,695 -- N/A -- 8,308
North American Operations 1998 199,442 60,000 N/A -- 6,883
</TABLE>
-------------------
(1)For the years presented, perquisites and other personal benefits did not
exceed the lesser of $50,000 or 10% of total annual salary and bonus.
(2)For fiscal 2000, 1999 and 1998, All Other Compensation is comprised of
AMC's contributions under AMC's 401(k) Savings Plan and Non-Qualified Deferred
Compensation Plan, both of which are defined contribution plans.
(3)Mr. Stanley H. Durwood died on July 14, 1999.
9
<PAGE>
OPTION GRANTS
The following table provides certain information concerning individual
grants of stock options made during the last completed fiscal year under the AMC
Entertainment Inc. 1994 Stock Option and Incentive Plan (the "1994 Option Plan")
to each of the Named Executive Officers. There were no grants of stock options
made during the last fiscal year under the AMC Entertainment Inc. 1999 Stock
Option and Incentive Plan (the "1999 Option Plan").
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS/SARS EXERCISE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM(2)
OPTIONS/ EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME SARS GRANTED(1) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
---- --------------- ------------ --------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Peter C. Brown -- -- $ -- -- $ -- $ --
Stanley H. Durwood(3) -- -- -- -- -- --
Philip M. Singleton -- -- -- -- -- --
Richard M. Fay 42,750 9.10% 17.69 06/18/09 475,546 1,205,127
Richard T. Walsh 15,500 3.30% 17.69 06/18/09 172,420 436,947
John D. McDonald 50,500 10.80% 17.69 06/18/09 561,756 1,423,601
</TABLE>
-------------------
(1)The stock options granted from the 1994 Option Plan during the fiscal
year ended March 30, 2000 vested one half at date of grant and one half one year
from the date of grant. They became fully vested in June 2000.
(2)These columns show the hypothetical gains of "option spreads" of the
outstanding options granted based on assumed annual compound stock appreciation
rates of 5% and 10% over the options' terms. The 5% and 10% assumed rates of
appreciation are mandated by the rules of the Securities and Exchange Commission
(the "SEC") and do not represent the Company's estimate or projections of the
future prices of the Company's Common Stock.
(3)Mr. Stanley H. Durwood died on July 14, 1999.
10
<PAGE>
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 30, 2000.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS IN-THE-MONEY OPTIONS/
SHARES AT FY-END SARS AT FY-END(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Peter C. Brown........... -- $ -- 284,000 -- $ -- $--
Stanley H. Durwood(2).... -- -- 237,500 -- -- --
Philip M. Singleton...... -- -- 233,600 -- -- --
Richard M. Fay........... -- -- 23,625 21,375 -- --
Richard T. Walsh......... -- -- 37,250 7,750 -- --
John D. McDonald......... -- -- 29,750 25,250 -- --
</TABLE>
-------------------
(1)Values for "in-the-money" outstanding options represent the positive
spread between the respective exercise prices of the outstanding options and the
value of the Company's Common Stock as of March 30, 2000. There were no
"in-the-money" options outstanding as of March 30, 2000.
(2)Mr. Stanley H. Durwood died on July 14, 1999.
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 (the "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.
AMC 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 $170,000 (in 2000).
The following table shows the total estimated annual pension benefits
(without regard to minimum benefits) payable to a covered participant under
AMC's Retirement Plan and the Supplemental Executive Retirement Plan, assuming
retirement in calendar 2000 at age 65,
11
<PAGE>
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 $275,000 in 2000.
<TABLE>
<CAPTION>
HIGHEST CONSECUTIVE YEARS OF CREDITED SERVICE
FIVE YEAR AVERAGE ----------------------------------------------------
ANNUAL COMPENSATION 15 20 25 30 35
------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000................................ $17,510 $23,347 $29,184 $35,021 $41,857
150,000................................ 21,260 28,347 35,434 42,521 50,607
175,000................................ 25,010 33,347 42,684 50,021 58,357
200,000................................ 28,760 38,347 48,934 57,521 67,107
225,000................................ 32,510 43,347 54,184 65,021 76,857
250,000................................ 36,260 48,347 60,434 72,521 85,607
275,000................................ 40,010 53,347 66,684 80,021 93,357
</TABLE>
As of March 30, 2000, the years of credited service under the Retirement
Plan for each of the Named Executive Officers were: Mr. Peter C. Brown, nine
years; Mr. Philip M. Singleton, 26 years; Mr. Richard M. Fay, four years;
Mr. Richard T. Walsh, 25 years; and Mr. John D. McDonald, 25 years.
AMC has established a Retirement Enhancement Plan (the "REP") for the
benefit of officers who from time to time may be designated as eligible
participants therein by the Board of Directors. The REP is a non-qualified
deferred compensation plan designed to provide an unfunded retirement benefit to
an eligible participant in an amount equal to (i) sixty percent (60%) of his or
her average compensation (including paid and deferred incentive compensation)
during the last three full years of employment, less (ii) the sum of (A) such
participant's benefits under the Retirement Plan and Social Security, and
(B) the amount of a straight life annuity commencing at the participant's normal
retirement date attributable to AMC's contributions under the Supplemental
Executive Retirement Plan, the 401(k) Savings Plan, the Non-Qualified Deferred
Compensation Plan and the Executive Savings Plan. The base amount in clause (i)
will be reduced on a pro rata basis if the participant completes fewer than
twenty-five (25) years of service. The REP benefit vests upon the participant's
attainment of age 55 or completion of fifteen (15) years of service, whichever
is later, and may commence to a vested participant retiring on or after age 55
(who has participated in the plan for at least 5 years) on an actuarially
reduced basis (6 2/3% for each of the first five years by which commencement
precedes age 65 and an additional 3 1/3% for each year by which commencement
precedes age 60). Benefits commence at a participant's normal retirement date
(i.e., the later of age 65 or the participant's completion of five years of
service with AMC) whether or not the participant continues to be employed by
AMC. The accrued benefit payable upon total and permanent disability is not
reduced by reason of early commencement. Participants become fully vested in
their rights under the REP if their employment is terminated without cause or as
a result of a change in control, as defined in the REP. No death, disability or
retirement benefit is payable prior to a participant's early retirement date or
prior to the date any severance payments to which the participant is entitled
cease.
Mr. Peter C. Brown, Mr. Stanley H. Durwood and Mr. Philip M. Singleton have
been designated as eligible to participate in the REP. The amount paid to
Mr. Durwood with respect to fiscal 2000 under the REP was $345,000 and is not
included in the Summary Compensation Table. The estimated monthly amounts that
Mr. Brown and Mr. Singleton will be eligible to receive under the
12
<PAGE>
REP at age 65 are $41,000 and $15,000, respectively; such amounts are based on
certain assumptions respecting their future compensation amounts and the amounts
of AMC contributions under other plans. Actual amounts received by such
individuals under the REP may be different than those estimated.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
Messrs. Peter C. Brown, Philip M. Singleton, Richard M. Fay, Richard T.
Walsh and John D. McDonald have entered into employment agreements with the
Company providing for annual base salaries of no less than the following
amounts: Mr. Brown - $400,000; Mr. Singleton - $375,000; Mr. Fay - $285,000;
Mr. Walsh - $285,000 and Mr. McDonald - $210,000. The agreements also provide
for discretionary bonuses, an automobile allowance, reimbursement of reasonable
travel and entertainment expenses and other benefits offered from time to time
to other Executive Officers. The employment agreements of Mr. Brown and
Mr. Singleton have terms of three years and those of Mr. Fay, Mr. Walsh and
Mr. McDonald have terms of two years. On the anniversary date of each agreement,
one year shall be added to its term, so that each employment agreement shall
always have a three year or two year term, as the case may be, as of each
anniversary date. Each employment agreement terminates generally without
severance if such employee is terminated for cause, as defined in the employment
agreement, or upon such employee's resignation, death or disability, as defined
in his employment agreement. Pro rata bonus payments will be made upon
termination by reason of disability or death. If either Mr. Brown or
Mr. Singleton is terminated without cause or terminates his agreement following
a material breach by the Company or a change in control, as defined in the
agreement, he will be entitled to receive (i) a lump sum cash payment equal to
the lesser of 150% of current annual base salary multiplied by three or 2.99
times average annual W-2 earnings for the prior five years and (ii) the value of
all outstanding employee stock options held by such employee. If any of
Mr. Fay, Mr. Walsh or Mr. McDonald is terminated without cause or terminates his
agreement subsequent to specified changes in his responsibilities, annual base
salary or benefits following a change in control, as defined in the agreement,
he will be entitled to receive a lump sum cash payment equal to two years annual
base salary. In addition, if either Mr. Brown or Mr. Singleton dies, is
terminated without cause or terminates his agreement following a material breach
by the Company or a change in control, the Company will redeem shares of the
Company's Common Stock previously purchased by him with the proceeds of a loan
from the Company. (Mr. Brown financed the purchase of 375,000 shares of the
Company's Common Stock with such a loan and Mr. Singleton financed the purchase
of 250,000 shares of the Company's Common Stock with such a loan). In such
event, if the employee's obligations under the note to the Company exceed the
value of the stock which he acquired with the note proceeds, the Company will
forgive a portion of such excess in an amount based on a formula set forth in
the agreement. The amounts payable to the Named Executive Officers under these
employment agreements, assuming termination by reason of a change in control as
of October 20, 2000 were as follows: Mr. Brown - $1,094,000; Mr. Singleton -
$1,375,000; Mr. Fay - $570,000; Mr. Walsh - $570,000 and Mr. McDonald -
$480,000. The value of outstanding employee stock options payable to the Named
Executive Officers under these employment agreements, assuming termination by
reason of a change of control as of October 20, 2000 were as follows: Mr. Brown
-$0 and Mr. Singleton - $0. The amount of note proceeds and interest that would
be forgiven by the Company assuming termination by reason of a change in control
as of October 20, 2000 were as follows: Mr. Brown - $5,821,000 and
Mr. Singleton - $2,967,000.
Mr. Stanley H. Durwood had an employment agreement with the Company and AMC
dated January 26, 1996 retaining him as Chairman and Chief Executive Officer and
President. It
13
<PAGE>
provided for an annual base salary of no less than $500,000, plus payments and
awards under AMC's Executive Incentive Program (the "EIP"), the 1994 Option 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.
Mr. Durwood's annual base salary at the date of his death (July 14, 1999) was
$567,000. The Company had 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 had a
term of three years and was automatically extended one year on its anniversary
date, January 26, so that as of such date each year the agreement had a
three-year term. The employment agreement was terminable without severance if he
engaged in intentional misconduct or a knowing violation of law or breached his
duty of loyalty to the Company. The agreement provided for severance payments in
the event of Mr. Durwood's death 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 could 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. On July 26, 1999, the Company
paid $1,509,000 in settlement of Mr. Durwood's employment agreement.
As permitted by the 1994 Option Plan, stock options granted to participants
thereunder provide for acceleration upon the termination of employment within
one year after the occurrence of certain change in control events, whether such
termination is voluntary or involuntary, or with or without cause. In addition,
the Compensation Committee may permit acceleration upon the occurrence of
certain extraordinary transactions which may not constitute a change in control.
AMC 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
weeks' basic pay or one weeks' basic pay multiplied by the employee's full years
of service up to no more than twelve weeks' basic pay. There is no severance pay
for a voluntary termination, unless up to two weeks' pay is authorized in lieu
of notice. There is no severance pay for an involuntary termination due to an
employee's misconduct. Only two weeks' severance pay 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.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
THE REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS SHALL NOT
BE DEEMED INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY
REFERENCE THIS PROXY STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933
OR UNDER THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT THE
COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT
OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
The Compensation Committee of the Board of Directors of the Company (the
"Committee") is composed of independent non-employee directors. The Committee is
responsible for developing the executive compensation strategy of the Company
and its subsidiaries. In carrying out its responsibilities, the Committee, among
other things, reviews the policies of comparable companies and consults with an
independent compensation consulting firm.
14
<PAGE>
The Committee utilized the compensation programs described below for the
fiscal year ended March 30, 2000. The annual base salaries discussed below are
those established at the beginning of fiscal 2000, i.e., in the spring of 1999.
The annual incentive cash bonus pertains to performance for fiscal 2000 and
payments, if any, are paid early in the next fiscal year, in this case, in the
spring of 2000. The long term incentives pertain to grants made under the AMC
Entertainment Inc. 1994 Stock Option and Incentive Plan (the "1994 Option Plan")
for fiscal 2000.
COMPENSATION POLICY. The Company's executive compensation policy has four
overall objectives:
- To align the interests of Executive Officers with those of the Company and
its stockholders.
- To link compensation to the performance of the Company as well as to the
individual contribution of each Executive Officer.
- To maintain total direct compensation (salary plus annual incentive plus
equity based compensation), when performance is at target levels, at rates
that are at the third quartile of the total direct compensation market for
comparable companies. Because of the relatively small number of comparable
motion picture exhibition companies, this comparison has included companies
engaged in other businesses.
- To compensate executives at a level which is competitive in the
marketplace so that the Company can continue to attract, motivate and retain
executives with outstanding abilities.
In fiscal 1999, the Company began restructuring senior executive positions
and their responsibilities to ensure a smooth transition in leadership. This
leadership transition process continued in fiscal 2000 due to (i) the death on
July 14, 1999 of Mr. Stanley H. Durwood and the appointment of Mr. Peter C.
Brown to succeed Mr. Durwood as Chairman of the Board and Chief Executive
Officer of the Company and (ii) the September 1999 restructuring of the Company
related to the consolidation of its three U.S. divisional operations offices
into its corporate headquarters.
ANNUAL BASE SALARY. Annual base salaries for the Company's Executive
Officers are determined with reference to a "position rate" for each of the
Executive Officers. The position rate is determined by evaluating the
responsibilities of the position and comparing it with that of similar positions
in comparable companies as well as companies generally.
The fiscal 2000 annual base salaries for the Company's Executive Officers
were reviewed and approved by the Committee. For fiscal 2000, the Committee
approved no initial increases in annual base salary for Messrs. Durwood, Brown
and Singleton during the annual review process for salary increases. The
aggregate percentage increase in annual base salary for the remaining Executive
Officers was 5.75%. In addition, the Committee granted one time payments in
June 1999 to three Executive Officers (Messrs. John D. McDonald, Mark A.
McDonald and Richard T. Walsh of $21,922, $13,224 and $7,308, respectively) for
retention purposes. Also, Mr. Brown received an increase in annual base salary
of 25% approved by the Committee in July 1999 when Mr. Brown was elevated to the
position of Chairman of the Board and Chief Executive Officer following the
death of Mr. Stanley H. Durwood. Messrs. Walsh, Ramsey and Beynon also received
increases in annual base salary later in fiscal 2000 due to promotions in titles
and increases in responsibilities following the Company's September 1999
restructuring.
ANNUAL INCENTIVE CASH BONUS. The Committee approved an Executive Incentive
Program (the "EIP") in fiscal 1994 as an incentive for executives to improve the
financial success of the Company. Eligible employees, including Executive
Officers, are rewarded with annual incentive
15
<PAGE>
cash bonuses if certain performance criteria are met and/or exceeded. For fiscal
2000, the Committee determined that the performance criteria for the annual
incentive cash bonus would be based upon company, division and personal
components. For fiscal 2000, the company component was based upon achievement of
an Adjusted EBITDA (earnings before interest, taxes, depreciation and
amortization) target. The Company exceeded its threshold level of its
established Adjusted EBITDA target in fiscal 2000 and paid annual incentive cash
bonuses based on a formula to Executive Officers early in fiscal 2001. The
Committee had originally approved a division component of performance criteria
for fiscal 2000. However, because the divisions were consolidated into the
corporate headquarters in September 1999, no annual incentive cash bonuses were
paid with regard to such division component. Although the Committee had the
discretion to approve a personal component of the annual incentive cash bonus
for Executive Officers, the Committee determined not to make any such award for
fiscal 2000. The annual incentive cash bonuses paid to the Named Executive
Officers for fiscal 2000 were as follows: Mr. Brown, $112,455; Mr. Singleton,
$66,300; Mr. Fay, $31,875; Mr. Walsh, $31,875; and Mr. John D. McDonald,
$42,075.
LONG TERM INCENTIVES. Consistent with the Committee's policy of aligning
the interests of its executives with those of the stockholders, the Committee
continued to incorporate equity based awards into the ongoing compensation
package for executives. In fiscal 2000, the Committee approved discretionary
grants of options to certain Executive Officers as part of the retention plan
during the leadership transition process. These options vested one half at date
of grant and one half one year following the date of grant.
CEO COMPENSATION. Mr. Peter C. Brown's fiscal 2000 annual base salary was
reviewed and approved by the Committee. See "Annual Base Salary." Mr. Brown did
not receive an increase in annual base salary at the beginning of fiscal 2000.
Mr. Brown did, however, receive a 25% increase in annual base salary in
July 1999 after his elevation to Chairman of the Board and Chief Executive
Officer following the death of Mr. Stanley H. Durwood. Mr. Brown received an
annual incentive cash bonus of $112,455 early in fiscal 2001 based on fiscal
2000's performance criteria. The Company achieved the threshold level of its
performance target and the annual incentive cash bonus was paid to Mr. Brown
based on a formula of Company performance. Mr. Brown is a participant in the
Company's Retirement Enhancement Plan (the "REP") but receives no current cash
compensation from this program. See "Defined Benefit Retirement and Supplemental
Executive Retirement Plans." Mr. Brown received no option grants in fiscal 2000.
Mr. Stanley H. Durwood was the Company's Co-Chairman of the Board and Chief
Executive Officer prior to his death on July 14, 1999. Mr. Durwood received
neither an increase in annual base salary nor an annual incentive cash bonus for
fiscal 2000. Mr. Durwood was a participant in the Company's REP. Because Mr.
Durwood's participation requirements had been met, Mr. Durwood was paid $345,000
in fiscal 2000 (April 1999) with the Committee's approval. See "Defined Benefit
Retirement and Supplemental Executive Retirement Plans."
IMPACT OF INTERNAL REVENUE CODE SECTION 162(M). During 1993, Section 162 of
the Internal Revenue Code of 1986, as amended (the "Code"), was amended with
respect to the tax deductibility of executive compensation. Under the Code,
publicly held companies such as the Company may not deduct compensation paid to
certain Executive Officers to the extent that an executive's compensation
exceeds $1,000,000 in any one year, unless such compensation is "performance
based." Although the Committee has attempted to design the Company's executive
compensation programs so that compensation received pursuant to the compensation
programs will be deductible under Section 162(m) of the Code, in certain
circumstances it may not be possible or practicable or in the Company's best
interests to so qualify compensation programs. In any event, the
16
<PAGE>
Committee anticipates that, in most instances, treatment under Section 162(m) of
the Code will not be an issue because generally no Executive Officer's
non-performance based compensation will exceed $1,000,000 in any one year.
COMPENSATION COMMITTEE
Charles J. Egan, Jr.
Paul E. Vardeman
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Executive Committee (which was disbanded on October 7, 1999) recommended
to the Compensation Committee for its review and approval the annual base
salaries of Executive Officers other than the Named Executive Officers. The
members of the Executive Committee were Messrs. Stanley H. Durwood, Peter C.
Brown and Philip M. Singleton.
Mr. Charles J. Egan, Jr. is a member of the Compensation Committee.
Mr. Egan is a Trustee of the Voting Trust, which has the power to vote all
shares of the Company's Class B Stock. Mr. Egan also is a Trustee of the
Revocable Trust established under that certain Revocable Trust Agreement of
Mr. Stanley H. Durwood dated August 14, 1989, as amended and restated as of
May 12, 1999 (the "Revocable Trust"), and is the Trustee of the Pamela Yax
Durwood Marital Trust created pursuant to the above Revocable Trust Agreement
(the "Marital Trust"). The Revocable Trust and the Marital Trust are the
beneficial owners of all shares of the Company's Class B Stock.
Mr. Peter C. Brown, Chairman of the Board, Chief Executive Officer,
President and a Director of the Company, serves as a director of LabONE, Inc.
Mr. W. Thomas Grant, II, an Executive Officer of LabONE, Inc., served on the
Compensation Committee of the Company until May 22, 2000.
STOCK PERFORMANCE GRAPH
THE STOCK PERFORMANCE GRAPH SHALL NOT BE DEEMED INCORPORATED BY REFERENCE BY
ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY
FILING UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES EXCHANGE ACT OF
1934, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS
INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH
ACTS.
The following line graph compares the yearly percentage change in the
cumulative total stockholder return on the Company's Common Stock with (i) the
cumulative total return on the Standard and Poor's Corporation Composite 500
Index and (ii) a peer group of companies primarily engaged in the motion picture
exhibition industry, for the period of five fiscal years commencing March 30,
1995 and ending March 30, 2000. The comparison assumes $100 was invested on
March 30, 1995 in the Company's Common Stock and in each of the foregoing
indices, and further assumes the reinvestment of dividends. The peer group
companies include Carmike Cinemas, Inc., Cineplex Odeon Corporation, Loews
Cineplex Entertainment Corporation, GC Companies, Inc. and Regal Cinemas, Inc.
17
<PAGE>
Set forth below are three lines as follows: (i) the Company's Common Stock
performance for the past five fiscal years; (ii) the Standard and Poor's
Corporation Composite 500 Index performance for the past five fiscal years; and
(iii) the "peer group" performance for the past five fiscal years. The peer
group includes Carmike Cinemas, Inc. and GC Companies, Inc.'s performance for
five years. The peer group also includes the performance of Cineplex Odeon
Corporation for the period March 30, 1995 until May 14, 1998, at which time it
combined with LTM Holdings, Inc. On the date of the combination, outstanding
shares of Cineplex Odeon Corporation were exchanged for shares of Loews Cineplex
Entertainment Corporation. Loews Cineplex Entertainment Corporation began
trading publicly on May 15, 1998 and is included in the peer group performance
for the period May 15, 1998 through March 30, 2000. Also, Regal Cinemas, Inc.'s
performance is included in the peer group for the period March 30, 1995 through
May 27, 1998. Regal Cinemas, Inc. completed a merger on May 27, 1998 with an
affiliate of Kohlberg Kravis Roberts & Co. L.P. and an affiliate of Hicks, Muse,
Tate & Furst Incorporated, with Regal Cinemas, Inc. as the surviving
corporation. This merger resulted in a recapitalization in which existing
shareholders of Regal Cinemas, Inc. received cash for their shares of common
stock. Thus, Regal Cinemas, Inc.'s common stock was not publicly traded after
May 27, 1998.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
95 96 97 98 99 00
<S> <C> <C> <C> <C> <C> <C>
AMC 100 203 167 199 125 42
S&P 100 133 157 238 280 326
PEER 100 143 159 184 118 57
</TABLE>
18
<PAGE>
SECURITY OWNERSHIP OF BENEFICIAL OWNERS
The following table sets forth certain information as of October 20, 2000
with respect to principal owners of each class of the Company's voting
securities:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
TITLE OF CLASS BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
-------------- ---------------- ------------------ ----------
<S> <C> <C> <C>
Common Stock Syufy Century 1,407,000(1) 7.2%(1)
Corporation(1)
150 Pelican Way
San Rafael, CA 94901
Peter J. Durwood(2) 1,123,480(2) 5.8%(2)
c/o Kopple & Klinger
2029 Century Park East,
Suite 3290
Los Angeles, CA 90067
Elissa D. Grodin(2) 1,123,480(2) 5.8%(2)
c/o Kopple & Klinger
2029 Century Park East,
Suite 3290
Los Angeles, CA 90067
EnTrust Capital Inc.(3) 1,035,729(3) 5.3%(3)
650 Madison Ave.
New York, NY 10022
Wellington Management 1,022,300(4) 5.3%(4)
Company, LLP(4)
75 State Street
Boston, MA 02109
Class B Stock Raymond F. Beagle, Jr.(2) 4,041,993(2) 100%(2)
2345 Grand Blvd.
Kansas City, MO 64108
Charles J. Egan, Jr.(2) 4,041,993(2) 100%(2)
106 West 14th Street
Kansas City, MO 64105
</TABLE>
-------------------
(1)As reported in its Schedule 13D dated January 11, 2000. Syufy Century
Corporation reports that it has sole voting power and sole dispositive power
with respect to 1,407,000 shares.
(2)Mrs. Carol D. Journagan, Mr. Edward D. Durwood, Mr. Thomas A. Durwood,
Mrs. Elissa D. Grodin, Mr. Brian H. Durwood and Mr. Peter J. Durwood are the
children (the "Durwood Children") of Mr. Stanley H. Durwood, the Company's
founder who died on July 14, 1999. Mr. Stanley H. Durwood and the Durwood
Children (collectively, the "Durwood Family Stockholders") formerly held their
stock in the Company through a holding company, Durwood, Inc. ("DI"), and
acquired their shares on August 15, 1997 pursuant to the Merger of the Company
and DI.
The Company's Class B Stock formerly beneficially owned by Mr. Stanley H.
Durwood is now held under the Revocable Trust, the Marital Trust (for the
benefit of Mr. Durwood's widow, Pamela
19
<PAGE>
Yax Durwood) and the Voting Trust. The Voting Trust is the record owner of the
shares reported as beneficially owned above. The Revocable Trust and the Marital
Trust are the holders of certificates of beneficial interest respecting
3,541,993 and 500,000 shares, respectively, reported as beneficially owned
above. The Trustees of the Voting Trust and of the Revocable Trust are
Mr. Raymond F. Beagle, Jr., the Company's general counsel, and Mr. Charles J.
Egan, Jr., a Director of the Company. Mr. Egan is also the Trustee of the
Marital Trust. The Voting Trust, the Revocable Trust, the Marital Trust and
Messrs. Beagle and Egan, as Trustees, may be deemed to beneficially own all of
the outstanding shares of the Company's Class B Stock. Messrs. Beagle and Egan
each disclaim such beneficial ownership of any of such shares attributable to
him solely by reason of his position as Trustee. Under the terms of the Voting
Trust, the Trustees (or their successors and any additional trustees whom they
might appoint) have all voting powers with respect to shares held therein, and
exercise such rights by majority vote. Unless otherwise terminated or extended
in accordance with its terms, the Voting Trust will terminate in 2030.
The 4,041,993 shares of the Company's Class B Stock constitute 100% of the
outstanding shares of such class. Messrs. Beagle and Egan, as Trustees of the
Revocable Trust, the Marital Trust and the Voting Trust share voting power and
investment power over all of these shares. The Company's Class B Stock and
Common Stock held by the Revocable Trust, the Marital Trust and the Voting Trust
represent 67.5% of the voting power of the Company's stock other than in the
election of directors. Were all the shares of the Company's Class B Stock
converted into Common Stock, there would be approximately 23,469,091 shares of
Common Stock outstanding, of which the Revocable Trust, the Marital Trust and
the Voting Trust would hold 4,042,143 shares (assuming such conversion and
disregarding the exercise of outstanding options) or 17.2% of the outstanding
number of shares of Common Stock. This voting control may be diluted if the
Revocable Trust, the Marital Trust and the Voting Trust are obligated to dispose
of shares to honor tax and other indemnity obligations made by Mr. Stanley H.
Durwood and the Company in connection with the Merger and other related
transactions, or if additional shares of Common Stock are issued under the
Company's employee benefit plans.
For a period ended on August 15, 2000, the Durwood Children agreed to give
an irrevocable proxy to the Secretary and each Assistant Secretary of the
Company to vote their shares of Common Stock in the election of directors for
each candidate in the same proportionate manner as the aggregate votes cast in
such elections by other holders of Common Stock not affiliated with the Company.
This agreement expired on August 15, 2000.
(3)As reported in its Schedule 13G dated February 11, 2000. Of these shares,
EnTrust Capital, Inc. reports that it has sole voting power with respect to
107,300 shares, shares voting power with respect to 683,309 shares and shares
dispositive power with respect to 928,429 shares.
(4)As reported in its Schedule 13G dated February 9, 2000. Of these shares,
Wellington Management Company, LLP reports that it shares voting power with
respect to 239,300 shares and shares dispositive power with respect to 1,022,300
shares.
BENEFICIAL OWNERSHIP BY DIRECTORS AND OFFICERS
The following table sets forth certain information as of October 20, 2000
with respect to beneficial ownership by Directors and Executive Officers of the
Company's Common Stock and Class B Stock. The amounts set forth below include
the vested portion of 782,600 shares of Common Stock subject to options under
the Company's 1983 and 1984 Stock Option Plans and the 1994 Option Plan held by
Executive Officers and the vested portion of 68,690 shares of Common
20
<PAGE>
Stock subject to options under the Company's 1999 Stock Option Plan for Outside
Directors. Unless otherwise indicated, the persons named are believed to have
sole voting and investment power over the shares shown as beneficially owned by
them.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
TITLE OF CLASS NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
-------------- ------------------------ -------------------- ----------
<S> <C> <C> <C>
Common Stock Peter C. Brown 659,000(1) 3.3%
Philip M. Singleton 498,600(1) 2.5%
Richard T. Walsh 45,050(1) *
Richard M. Fay 47,683(1) *
John D. McDonald 55,100(1) *
W. Thomas Grant, II 28,078(2) *
Paul E. Vardeman 11,640(2) *
Charles J. Egan, Jr. 4,670(2) *
Charles S. Paul 46,340(2) *
All Directors and
Executive Officers as a
group (12 persons,
including the
individuals named above) 1,516,161(1) 7.5%
Class B Stock Charles J. Egan, Jr.(3) 4,041,993(3) 100%
</TABLE>
-------------------
*Less than one percent.
(1)Includes shares subject to presently exercisable options to purchase
Common Stock under the Company's 1983 and 1984 Stock Option Plans and the 1994
Option Plan, as follows: Mr. Peter C. Brown - 284,000 shares; Mr. Philip M.
Singleton - 233,600 shares; Mr. Richard M. Fay - 45,000 shares; Mr. Richard T.
Walsh - 45,000 shares; Mr. John D. McDonald - 55,000 shares and all Executive
Officers as a group - 782,600 shares.
(2)Includes shares subject to presently exercisable options to purchase
Common Stock under the Company's 1999 Stock Option Plan for Outside Directors,
as follows: Mr. Grant - 26,340 shares; Mr. Vardeman 11,340 shares; Mr. Egan -
4,670 shares; Mr. Paul - 26,340 shares; and all Outside Directors as a group
68,690 shares.
(3)See Note (1) under "Security Ownership of Certain Beneficial Owners."
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, to file reports of ownership and changes in ownership
with the SEC and the American Stock Exchange. 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 2000 its Executive Officers, Directors and greater-than-10% beneficial
owners complied with all Section 16(a) filing
21
<PAGE>
requirements except that Mr. Grant (a member of the Company's Board of
Directors) failed to timely report on Form 4 two transactions attributable to
him. Mr. Grant's spouse purchased 233 shares of the Company's Common Stock in
fiscal 2000 and also purchased 5 shares of the Company's Common Stock as
custodian for their minor son. These transactions were reported on a Form 5,
which was timely filed.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Audit Committee of the Board of Directors of the Company reviews all
material proposed transactions between the Company and related parties to
determine that, in their best business judgment, such transactions are fair,
reasonable and in the best interests of the Company. The Company believes that
all transactions described below with related parties were on terms at least as
favorable to the Company as could have been obtained from an unaffiliated third
party. None of the members of the Audit Committee are or were officers or
employees of the Company nor stockholders, directors, officers or employees of
any related party referred to below. Set forth below is a description of
significant transactions which have occurred since April 2, 1999 or involve
receivables that remain outstanding as of October 20, 2000.
THE MERGER
Effective August 15, 1997, the Company completed the Merger with its
majority stockholder, Durwood, Inc. ("DI"). In connection with the Merger, the
Durwood Family Stockholders and Delta Properties, Inc. ("Delta") entered into an
agreement pursuant to which the Company agreed to pay Mr. Stanley H. Durwood as
promptly as practicable after March 31, 2000 an amount equal to certain credit
amounts resulting from net tax benefits realized by the Company from the
utilization by the Company of DI's alternative minimum tax credit carryforwards
and Missouri operating loss carryforwards. The Company also agreed to pay any
credit amount that arises after March 31, 2000. The maximum amount of credit
amounts that could be paid to Mr. Durwood is approximately $1,100,000. At this
time, the Company has not realized any of DI's net tax benefits on the tax
returns it has filed for fiscal years 1999 and 1998.
As a condition to the Merger, the Company and the Durwood Family
Stockholders entered into a registration agreement pursuant to which the Durwood
Family Stockholders sold 3,300,000 shares on August 11, 1998. The Company's
expenses in the offering were approximately $698,000, which expenses were
reimbursed to the Company by Delta, a former subsidiary of DI.
OTHER MATTERS
As a Successor Trustee of the Voting Trust, Mr. Raymond F. Beagle, Jr.
shares voting powers over shares held in the Voting Trust and may be deemed to
beneficially own in excess of 5% of the Company's voting securities. Mr. Beagle
serves as general counsel to the Company under a retainer agreement which
provides for annual payments of $360,000. The agreement provides for severance
payments equal to three times the annual retainer upon termination of the
agreement by the Company or a change in control approved by Common Stockholders.
The agreement also provides for deferred payments from a previously established
rabbi trust in a formula amount of $30,800 monthly as of April 1, 2000 for a
period of twelve years after termination of services or a change in control.
During fiscal 2000 and the current fiscal year, the Company approved
discretionary deferred bonuses of $250,000 and $75,000, respectively, which have
been paid to the rabbi trust.
22
<PAGE>
Pursuant to a program recommended by the Compensation Committee and approved
by the Company's Board of Directors, the Company loaned Mr. Peter C. Brown
$5,625,000 to purchase 375,000 shares of the Company's Common Stock. Mr. Brown
purchased such shares on August 11, 1998. Under such program the Company also
loaned Mr. Philip M. Singleton $3,765,000 to purchase 250,000 shares of the
Company's Common Stock. Mr. Singleton purchased such shares from September 11 to
September 15, 1998 and unused proceeds of $811,000 were repaid to the Company,
leaving a remaining unpaid principal balance of $2,954,000. Such loans are
unsecured and bear interest at a rate at least equal to the applicable federal
rate prescribed by Section 1274(d) of the Internal Revenue Code in effect on the
date of such loan (6% per annum for the loans to Messrs. Brown and Singleton).
Interest on these loans accrues and is added to principal annually on the
anniversary date of such loan, and the full principal amount and all accrued
interest is due and payable on the fifth anniversary of such loan. On
October 20, 2000, the principal amount of the loan to Mr. Brown was $6,269,000
and the principal amount of the loan to Mr. Singleton was $3,292,000. Accrued
interest on the loans as of October 20, 2000 was $67,000 for Mr. Brown and
$18,000 for Mr. Singleton, respectively.
Periodically, the Company and DI or Delta reconciled any amounts owed by one
company to the other. Charges to the intercompany account have included payments
made by the Company on behalf of DI or Delta. The largest balance owed by DI or
Delta to the Company during fiscal 2000 was $11,322 owed by Delta. This balance
was reimbursed by Delta on June 7, 2000.
Ms. Marjorie D. Grant, sister of Mr. Stanley H. Durwood, is employed as a
Vice President of AMC. Ms. Grant's current annual base salary is $110,000.
During fiscal 1998, the Company sold the real estate assets associated with
13 megaplexes to Entertainment Properties Trust ("EPT"), a real estate
investment trust, for an aggregate purchase price of $283,800,000. The Company
leased the real estate assets associated with the theatres from EPT pursuant to
non-cancelable operating leases with terms ranging from 13 to 15 years at an
initial lease rate of 10.5% with options to extend for up to an additional
20 years. The Company leases four additional theatres from EPT under the same
terms as those included in the Sale and Lease Back Transaction. Annual rentals
for these four theatres are based on an estimated fair value of $95,100,000 for
the theatres. The Company has granted an option to EPT to acquire the land at a
theatre for the cost to the Company. In addition, for a period of five years
subsequent to November 1997, EPT will have a right of first refusal and first
offer to purchase and lease back to the Company the real estate assets
associated with any theatre and related entertainment property owned or
ground-leased by the Company, exercisable upon the Company's intended
disposition of such property. Mr. Peter C. Brown, Chairman of the Board, Chief
Executive Officer, President and a Director of the Company is also the Chairman
of the Board of Trustees of EPT.
For a description of certain employment agreements between the Company and
Messrs. Peter C. Brown, Philip M. Singleton, Richard M. Fay, Richard T. Walsh,
John McDonald and Stanley H. Durwood, see "Employment Contracts, Termination of
Employment and Change in Control Arrangements."
Lathrop & Gage L.C., a law firm of which Mr. Raymond F. Beagle, Jr. is a
member, renders legal services to the Company and its subsidiaries. During
fiscal 2000, the Company paid Lathrop & Gage L.C. $2,617,000 for such services.
23
<PAGE>
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors recommends that the stockholders ratify the
appointment of PricewaterhouseCoopers LLP as independent accountants to audit
the financial statements of the Company for the fiscal year ending March 29,
2001. Representatives of PricewaterhouseCoopers LLP are expected to be present
at the Annual Meeting of Stockholders, and if present, will have the opportunity
to make a statement if they wish, and are expected to be available to respond to
appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS TO AUDIT THE FINANCIAL
STATEMENTS OF THE COMPANY FOR THE FISCAL YEAR ENDING MARCH 29, 2001.
3. OTHER MATTERS TO COME BEFORE THE MEETING
No other matters are intended to be brought before the meeting by the
Company nor does the Company know of any matters to be brought before the
meeting by others. If, however, any other matters properly come before the
meeting, the persons named in the proxy will vote the shares represented thereby
in accordance with the judgment of management on any such matters.
Stockholders who wish to present proposals for action at the Annual Meeting
of Stockholders to be held in 2001 should submit their proposals to the Company
at the address of the Company set forth on the first page of this Proxy
Statement. Proposals must be received by the Company no later than July 12, 2001
for consideration for inclusion in the next year's Proxy Statement and proxy. In
addition, proxies solicited by management may confer discretionary authority to
vote on matters which are not included in the proxy statement but which are
raised at the Annual Meeting by stockholders, unless the Company receives
written notice at such address of such matters on or before September 25, 2001.
By order of the Board of Directors
[SIGNATURE]
Nancy L. Gallagher
Vice President and Secretary
REQUESTS FOR ANNUAL REPORT
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR FISCAL 2000 WILL BE SENT TO STOCKHOLDERS
UPON REQUEST WITHOUT CHARGE. REQUESTS SHOULD BE MADE TO THE DIRECTOR OF INVESTOR
RELATIONS, AMC ENTERTAINMENT INC., P.O. BOX 219615, KANSAS CITY, MISSOURI
64121-9615.
24
<PAGE>
AMC ENTERTAINMENT INC.
ANNUAL MEETING OF STOCKHOLDERS
AMC Town Center 20 Theatres
11701 Nall
Leawood, Kansas
Thursday, November 30, 2000
11:00 a.m. local time
VOTE BY INTERNET
YOUR INTERNET VOTE IS QUICK, CONVENIENT AND YOUR VOTE IS IMMEDIATELY
SUBMITTED. JUST FOLLOW THESE EASY STEPS:
<TABLE>
<S> <C>
1. Read the accompanying Proxy Statement.
2. Visit our Internet Voting site at http://www.umb.com/proxy
and follow the instructions on the screen.
</TABLE>
Your Internet vote authorizes the named proxies to vote your shares to the
same extent as if you marked, signed, dated and returned the proxy card.
Please note that all votes cast by Internet must be submitted prior to
5:00 p.m. Central Time, November 29, 2000.
IF YOU VOTE BY INTERNET, PLEASE DO NOT RETURN YOUR PROXY BY MAIL.
THANK YOU FOR YOUR VOTE.
Cut or tear along perforated edge.
--------------------------------------------------------------------------------
AMC ENTERTAINMENT INC.
106 WEST 14TH STREET KANSAS CITY, MISSOURI 64105
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Messrs. Peter C. Brown and Paul E. Vardeman,
jointly and severally, as Proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and vote, as designated
below, all of the Common Stock of AMC Entertainment Inc. which the undersigned
is entitled to vote at the Annual Meeting of Stockholders to be held on
November 30, 2000 and at any adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING PROPOSALS:
<TABLE>
<S> <C> <C>
1. Election of Directors: FOR all nominees listed. WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY) TO VOTE FOR ALL NOMINEES LISTED. / /
/ /
NOMINEES. Messrs. W. Thomas Grant, II and Charles S. Paul
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME ON THE SPACE
PROVIDED BELOW.
----------------------------------------------------------------------------------------------------------------
2. PROPOSAL TO ratify the appointment of PricewaterhouseCoopers LLP as independent accountants of the Company
for the fiscal year ending March 29, 2001.
FOR / / AGAINST / / ABSTAIN / /
3. In their discretion, the Proxies are authorized to vote on such other business as may properly come before
the meeting.
</TABLE>
(Continued and to be signed on the reverse side)
<PAGE>
AMC ENTERTAINMENT INC.
ANNUAL MEETING OF STOCKHOLDERS
AMC Town Center 20 Theatres
11701 Nall
Leawood, Kansas
Thursday, November 30, 2000
11:00 a.m. local time
VOTE BY INTERNET
YOUR INTERNET VOTE IS QUICK, CONVENIENT AND YOUR VOTE IS IMMEDIATELY
SUBMITTED. JUST FOLLOW THESE EASY STEPS:
<TABLE>
<S> <C>
1. Read the accompanying Proxy Statement.
2. Visit our Internet Voting site at http://www.umb.com/proxy
and follow the instructions on the screen.
</TABLE>
Your Internet vote authorizes the named proxies to vote your shares to the
same extent as if you marked, signed, dated and returned the proxy card.
Please note that all votes cast by Internet must be submitted prior to
5:00 p.m. Central Time, November 29, 2000.
IF YOU VOTE BY INTERNET, PLEASE DO NOT RETURN YOUR PROXY BY MAIL.
THANK YOU FOR YOUR VOTE.
Cut or tear along perforated edge.
--------------------------------------------------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" THE ELECTION OF THE NOMINEES NAMED AND "FOR" PROPOSAL 2.
<TABLE>
<S> <C>
Please date and sign exactly as name appears. When
shares are held by joint tenants, both must sign. When
signing as an attorney, executor, administrator, trustee
or guardian, please give full title as such. If a
corporation, please sign in full corporate name by
President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
Date --------------------------------------------
, 2000
Signature
----------------------------------------
Signature (if held jointly)
----------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
</TABLE>
