-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pnte9J/Tdd+06xXJx4KU+3yVRJIWqgaiQyKRlAWd8kOJ3ukK1PtHk4zg6OfkG9in MwE/uwcnEj8Jhxl9K7nI4Q== 0000916002-97-000052.txt : 19971001 0000916002-97-000052.hdr.sgml : 19971001 ACCESSION NUMBER: 0000916002-97-000052 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19970930 SROS: AMEX SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AMC ENTERTAINMENT INC CENTRAL INDEX KEY: 0000722077 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE THEATERS [7830] IRS NUMBER: 431304369 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-34911 FILM NUMBER: 97688413 BUSINESS ADDRESS: STREET 1: 106 W 14TH ST STREET 2: P O BOX 419615 CITY: KANSAS CITY STATE: MO ZIP: 64141-6615 BUSINESS PHONE: 8162214000 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DURWOOD STANLEY H CENTRAL INDEX KEY: 0001008117 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O AMC ENTERTAINMENT INC STREET 2: 106 WEST 14TH STREET SUITE 1700 CITY: KANSAS CITY STATE: MO ZIP: 64015 BUSINESS PHONE: 8162214000 SC 13D/A 1 SCHEDULE 13D, AMENDMENT NO. 2 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 2)* AMC ENTERTAINMENT INC. (name of issuer) COMMON STOCK, 66 2/3 cents PAR VALUE 001669 10 0 (CUSIP number) Raymond F. Beagle, Jr. LATHROP & GAGE L.C. 2345 Grand Avenue Kansas City, Missouri 64108-2684 (816) 292-2129 (name, address and telephone number) of person authorized to receive notices and communications) August 15, 1997 (date of event which requires filing of this statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1 (a) for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 of 11 pages) - -------------------- *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 1 CUSIP No. 001669 10 0 (1) Names of reporting Persons; S.S. or I.R.S. Identification Nos. of Above Persons. Stanley H. Durwood; ###-##-#### (2) Check the appropriate box if a member of a Group (See Instructions) (a) [ ] (b) [x] (3) SEC Use Only ----------------------------------------------------------------------- ----------------------------------------------------------------------- ----------------------------------------------------------------------- (4) Source of Funds (See Instructions) 00 (5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [_] (6) Citizenship or Place of Organization U.S.A. Number of Shares (7) Sole Voting Power 5,070,807 Beneficially ---------------------------------------------------- Owned by Each (8) Shared Voting Power 0 Reporting ---------------------------------------------------- Person (9) Sole Dispositive Power 5,070,807 With ---------------------------------------------------- (10) Shared Dispositive Power 5,070,807 (11) Aggregate Amount Beneficially Owned by Each Reporting Person 5,070,807 2 (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ x ] (13) Percent of Class Represented by Amount in Row (11) 27.5 % (14) Type of Reporting Person (See Instructions) IN 3 INTRODUCTORY STATEMENT This schedule is filed by Mr. Stanley H. Durwood. By this filing, Mr. Durwood amends Items 2 through 7 of the Schedule 13D filed by Mr. Durwood and Durwood, Inc., a Missouri corporation ("DI"), dated January 24, 1994, as amended May 3, 1996, to read as set forth herein. ITEM 1. SECURITY AND ISSUER. This statement relates to the Common Stock, par value 66 2/3 cents per share ("Common Stock") , of AMC Entertainment Inc., a Delaware corporation ("AMCE"). AMCE's principal executive offices are located at 106 West 14th Street, Kansas City, Missouri 64105. ITEM 2. IDENTITY AND BACKGROUND. This statement is filed by Stanley H. Durwood. Stanley H. Durwood is a United States Citizen whose business address is 106 West 14th Street, Kansas City, Missouri, 64105. As his principal occupation he serves as Chairman of the Board and Chief Executive Officer of AMCE. AMCE is a theatrical exhibition company. During the last five years, Stanley H. Durwood has not been convicted in any criminal proceeding nor been a party to any civil proceeding of a judicial or administrative body of competent jurisdiction which resulted in him being subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activity subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Not applicable. ITEM 4. PURPOSE OF TRANSACTION. On May 3, 1996, Stanley H. Durwood entered into a Durwood Family Settlement Agreement (as amended on March 25, 1997 and August 15, 1997, the " Family Agreement") with his six children, Edward D. Durwood, Carol D. Journagan, Thomas A Durwood, Elissa B. Grodin, Brian H. Durwood and Peter J. Durwood (collectively, the "Durwood Children") and The Thomas A. and Barbara F. Durwood Family Investment Partnership (the "TBD Partnership" and together with the Durwood Children and Stanley H. Durwood, the "Durwood Family Members") setting forth the Durwood Family Members' intention to pursue certain transactions to dissolve American Associated Enterprises, Inc., a Missouri limited partnership ("AAE"), and to cause the shares of AMCE held by Durwood, Inc., a Missouri corporation ("DI"), to be distributed to Durwood Family Members through a merger of DI with and into AMCE. The Durwood Family Members sought such transactions to eliminate DI and AAE, thereby enabling the Durwood Family Members to hold their interests in AMCE directly in the form of a marketable security instead of indirectly through DI or AAE, and to resolve a dispute among the Durwood Family Members concerning the value of their interests in AAE and DI. 4 On August 15, 1997, 6,141,343 shares of Class B Stock held of record by DI were converted into shares of Common Stock and AAE was liquidated. In addition, on August 15, 1997, the stockholders of AMCE approved and adopted an Agreement and Plan of Merger and Reorganization dated as of March 31, 1997 (the "Merger Agreement") by and between AMCE and DI, and DI was merged with and into AMCE (the "Merger"). Pursuant to the Merger, 5,015,657 shares of AMCE Class B Stock were distributed to Stanley H. Durwood in exchange for his shares of DI and 8,767,218 shares of AMCE Common Stock were distributed to the Durwood Children and the TBD Partnership in exchange for their shares of DI. Each of the Durwood Children other than Thomas Durwood received 1,461,203 shares, Thomas Durwood received 1,315,083 shares and the TBD Partnership received 146,120 shares. In connection with the Merger, AMCE and the Durwood Family Members entered into a Registration Agreement dated August 15, 1997 (the "Registration Agreement") pursuant to which the Durwood Family Members have agreed that they or their charitable donees will sell at least 3,000,000 shares of AMCE Common Stock in a registered secondary offering (the "Secondary Offering") that will be made only by means of a prospectus, and AMCE has agreed to file a registration statement with respect to such shares so that the registration statement becomes effective not more than twelve months and not less than six months after the Merger. Consummation of the Secondary Offering is subject to certain conditions and other rights of the parties. Subject to certain conditions, the expenses of the Secondary Offering will be borne by Stanley H. Durwood and Delta Properties, Inc., a Missouri corporation, whose shares were distributed by DI to the Durwood Family Members and DI's other stockholder prior to the Merger ("Delta"). Of the 3,000,000 shares to be sold in the Secondary Offering, 500,000 will be sold by Stanley H. Durwood or his charitable donees who may agree to participate in the Secondary Offering. Prior to and for purposes of such offering, Stanley H. Durwood intends to convert 500,000 shares of Class B stock into shares of Common Stock. Each of the Durwood Children will sell approximately 416,667 shares of Common Stock in the Secondary Offering, unless they agree to a different allocation of the 2,500,000 shares to be sold by them. The Family Agreement also generally provides that if the price per share to the public of the 2.5 million shares of AMCE Common Stock proposed to be sold by the Durwood Children in the Secondary Offering is less than $18, Stanley H. Durwood will pay the Durwood Children the difference between such sale price and $18 (net of applicable underwriting commissions), up to $20 million in aggregate amount, in shares of AMCE Common Stock, as an adjustment to the original allocation of shares received by the Durwood Children in the Merger (the "Share Adjustment"). The Family Agreement provides that AMCE (which is not a party to the Family Agreement) and the individual Durwood Family Members are to participate equally in determining all material terms of the Secondary Offering. Matters to be determined by individual Durwood Family Members are to be determined by majority vote, with each family member having one vote. Also in connection with the Merger, the Durwood Family Members have entered into a Stock Agreement dated August 15, 1997 (the "Stock Agreement") which, for three years, limits the ability of the Durwood Children and TBD Partnership to deposit shares in a voting trust, solicit proxies, participate in election contests or make a proposal concerning an extraordinary transaction involving AMCE. Under the Stock Agreement, the Durwood Children and TBD Partnership have agreed, among other matters, for a period of three years, (i) to grant an irrevocable proxy to the Secretary and each Assistant Secretary of AMCE to vote their shares of AMCE Common Stock for each candidate to the AMCE Board in the same proportion as the aggregate votes cast by all other stockholders not affiliated with AMCE, its directors or officers and (ii) that AMCE will have a right of first refusal with respect to any such shares the Durwood Children or TBD Partnership wish to sell in a transaction exempt from registration, except for such shares sold in brokers' transactions. 5 Pursuant to the terms of an Escrow Agreement dated August 15, 1997, by and among Stanley H. Durwood, the Durwood Children and Mercantile Bank of Kansas City (the "Escrow Agreement"), Stanley H. Durwood and the Durwood Children have agreed to deposit in escrow the 3,000,000 shares that will be offered by them in the Secondary Offering. A majority of the individual parties may cause the shares held in escrow to be delivered to the managing underwriters in connection with the Secondary Offering. The dissolution of AAE, the Merger and the sale of at least 3,000,000 shares of AMCE Common Stock by the Durwood Family Members are provided for in the settlement of a derivative action (the "Derivative Suit") that was filed by certain shareholders in 1993 in the Chancery Court for New Castle County, Delaware against Messrs. Stanley H. Durwood, Edward D. Durwood, Charles J. Egan, Paul E. Vardeman and a former AMCE director. On October 10, 1996, the parties to this litigation entered into a Stipulation and Agreement of Compromise and Settlement (the "Derivative Action Settlement Agreement") providing for the release of all claims against the defendants, the Durwood Family Members and the Company, conditioned upon the dissolution of AAE, the consummation of the Merger and the sale of shares by the Durwood shareholders in a secondary offering and certain other transactions, including, among other matters, (i) the payment following the Secondary Offering of an aggregate of approximately $1.3 million to persons who were holders of AMCE Common Stock on January 2, 1996 (other than the defendants, DI or the Durwood Family Members), (iii) the nomination, for three annual meetings, of two additional outside directors (initially, Messrs. William T. Grant, II and John P. Mascotte (collectively, with their replacements, if any, the "New Independent Directors")) to serve on the AMCE Board whose biographical information has been furnished to plaintiffs' counsel and which persons, to be nominated, must be serving on the board of another public company or be a member of senior management of a publicly held company or a privately held company with $50 million in annual revenues, (iv) that Stanley H. Durwood and Edward D. Durwood will cause the other Durwood Family Members to vote their shares with respect to the election and reelection of the New Independent Directors in the same proportion as votes cast by all stockholders not affiliated with AMCE, its directors and officers, (v) that the New Independent Directors are to have the ability to approve or disapprove (a) any proposed transaction between AMCE and any of the Durwood Family Members, except with respect to compensation issues relating to Stanley H. Durwood or any other Durwood Family Stockholder who is an officer of AMCE, which are to be governed by existing AMCE Board procedures, and (b) the hiring and compensation of any person related to Stanley H. Durwood who is not an officer of AMCE, and (vi) that the New Independent Directors, together with either Charles J. Egan, Jr. or Paul E. Vardeman, are to have the ability to approve or disapprove all other related-party transactions with all officers, directors and ten percent stockholders of AMCE. The Derivative Action Settlement Agreement requires court approval. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a)-(b) Under AMCE's charter, holders of the AMCE Class B stock generally are entitled to elect as a class 75% of the Board of Directors and to vote as a class with holders of the Common Stock on other matters, with each share of Class B Stock being entitled to ten (10) votes per share and each share of Common Stock being entitled to one (1) vote per share. Holders of AMCE Common Stock generally are entitled to elect 25% of AMCE's Board of Directors. Should the outstanding shares of Class B Stock be less than 12 1/2% of the total number of outstanding shares of Class B and Common Stock, the holders of Common Stock would be entitled to vote with the holders of Class B Stock in the election of the remaining 75% of the Board; for these purposes, the Class B Stock would have ten votes per share and the Common Stock would have one vote per share. Each share of AMCE Class B Stock is convertible into one share of AMCE Common Stock. 6 Stanley H. Durwood now beneficially owns 150 shares of AMCE Common Stock and options that are presently exercisable to acquire 55,000 shares of AMCE Common Stock, over which he has sole voting and investment power, which constitute less than 1% of the outstanding shares of such class. Stanley H. Durwood also beneficially owns 5,015,657 shares of Class B Stock, which constitute 100% of the outstanding shares of that class. Mr. Durwood has sole voting power over all of these share and sole investment power over 4,515,657 of these shares. As noted below, he may be deemed to share investment power over 500,000 of these shares with the Durwood Children. The Class B and Common shares presently beneficially owned by Stanley H. Durwood represent approximately 78.9% of the voting power of AMCE stock, other than in the election of directors. Were all the shares of AMCE Class B Stock converted, there would be approximately 18,387,119 shares of AMCE Common Stock outstanding, of which shares Stanley H. Durwood would beneficially own 5,070,657 shares ( assuming such conversion and exercise of outstanding options), or approximately 27.5 % of the outstanding number of shares of Common Stock. . The Class B shares beneficially owned by Stanley H. Durwood are held under his Revocable Trust Agreement dated April 14, 1989, as amended, and the 1992 Durwood, Inc. Voting Trust dated December 12, 1992. The 1992 Trust is the record owner of the shares reported as beneficially owned, and Stanley H. Durwood is the settler and sole acting trustee of both trusts. The name successor trustees are Charles J. Egan, Jr. , a director of AMCE, and Raymond F. Beagle, Jr. AMCE's general counsel. Because of the Escrow Agreement, Stanley H. Durwood may be deemed to share investment power over the 2,500,000 shares held under the Escrow Agreement that are owned by the Durwood Children, and each of the Durwood Children may be deemed to share investment power over the 500,000 shares held under the Escrow Agreement that are owned of record by Stanley H. Durwood as well as the shares held thereunder that are owned of record by the other Durwood Children.. However, Stanley H. Durwood disclaims any beneficial ownership of any shares of AMCE Common Stock owned of record by the Durwood Children. After giving effect to the Secondary Offering (and disregarding shares which may be acquired by Stanley H. Durwood upon the exercise of employee stock options, shares which the Durwood Children might acquire under the Share Adjustment referred to in Item 4 herein and shares of Common Stock which might be issued upon conversion of shares of the Company's outstanding $1.75 Cumulative Convertible Preferred Stock) (i) Stanley H. Durwood will beneficially own approximately 4.5 million shares of Class B Stock, and the Durwood Children and TBD Partnership will own an aggregate of approximately 6.3 million shares of AMCE Common Stock, (ii) such shares of Class B Stock to be owned by Stanley H. Durwood will entitle him to elect a majority of the Board of Directors and will have approximately 76.5% of the voting power of all outstanding shares of AMCE capital stock to be then outstanding generally having the right to vote on matters submitted to stockholders, other than the election of directors, and (iii) the Common Stock to be owned by the Durwood Children and TBD Partnership will represent approximately 45.2% of the shares of Common Stock expected to be then outstanding. Stanley H. Durwood's holdings will diminish and the other Durwood Family Member's holdings will increase if the other Durwood Family Members acquire additional shares under the Share Adjustment. However, based on the number of Common and Class B shares presently outstanding, the Share Adjustment should not result in Stanley H. Durwood owning shares with less than 50% of the combined voting power of the outstanding Common and Class B Stock unless AMCE and the Durwood Family Members determine to proceed with the Secondary Offering of the family's shares at a time during which the market value of AMCE's stock is less than approximately $7.03 per share ($8.38 assuming full conversion of AMCE's outstanding $1.75 Cumulative Convertible Preferred Stock). 7 Set forth below is information known to the undersigned concerning the business or residence address and primary employment of each of the Durwood Children. Name and Address Principal Employment Edward D. Durwood Self Employed 3001 West 68th Street Shawnee Mission, Ks. 66208 Carol D. Journagan Homemaker 1323 Granite Creek Drive Blue Springs, Mo. 64015 Thomas A. Durwood Self Employed P.O.Box 7208 Rancho Santa Fe, Ca. 92067 Elissa D. Grodin Homemaker 187 Chestnut Hill Road Wilton, Ct. 06897 Brian H. Durwood Markets computer software 655 N.W. Altishim Place Beaverton, Or. 97006 Peter J. Durwood The Children's Television Workshop 666 West End Avenue New York, New York New York, N.Y. 10025 Each of the Durwood Children is a United States Citizen. To Stanley H. Durwood's knowledge, during the last five years none of the Durwood Children has been convicted in any criminal proceeding nor been a party to any civil proceeding of a judicial or administrative body of competent jurisdiction which resulted in any of them being subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activity subject to, federal or state securities laws or finding any violation with respect to such laws. The TBD Partnership is a California limited partnership. Its general partner is the Thomas A. and Barbara F. Durwood Family Trust, of which Thomas A. Durwood and his spouse, Barbara F. Durwood, are trustees. 8 (c) Except as described above, during the past 60 days, Mr. Stanley H. Durwood has not effected a transaction in AMCE Common Stock or Class B Stock. (d) No other person is known to Stanley H. Durwood to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities described in paragraphs 5(a)-(b) above. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS, WITH RESPECT TO SECURITIES OF THE ISSUER. In addition to the agreements described in Item 4, Stanley H. Durwood is a party to an Indemnification Agreement, dated as of March 31, 1997, as amended August 15, 1997, with AMCE, Delta Properties, Inc., the Durwood Children and TBD Partnership, and an Escrow Agreement, dated as of August 15, 1997, with the Durwood Children and Mercantile Bank of Kansas City, as escrow agent. Pursuant to the Stock Agreement and the Indemnification Agreement, Stanley H. Durwood and the Durwood Children have agreed for two years not to sell, exchange or otherwise dispose of a number of shares: (i) in the case of each of the Durwood Children, which would reduce his or her ownership to less than 730,602 shares and (ii) in the case of Stanley H. Durwood, which would reduce his ownership to less than 2,590,017 shares. To this end, each of the Durwood Children has deposited 730,602 shares of Common Stock and Stanley H. Durwood has deposited 2,590,017 shares of Class B Stock in escrow under the Escrow Agreement, to be held for a period of two years after the Merger. Pursuant to the Indemnification Agreement, Stanley H. Durwood also has agreed not to transfer shares (other than in the Secondary Offering or to certain charitable assignees) unless the assignee agrees to be bound by the Indemnification Agreement and the indemnification provisions of the Stock Agreement and the Registration Agreement. 9 ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. EX-99.1 Agreement and Plan of Merger and Reorganization dated as of March 31, 1997, between AMCE and DI ( Filed as Exhibit 2.1 to AMCE's registration Statement on Form S-4 (File No. 333- 25755 ) EX-99.2 Registration Agreement, dated as of August 15, 1997, among AMCE, Stanley H. Durwood, the Durwood Children and Delta Properties, Inc. EX-99.3 Stock Agreement, dated as of August 15, 1997, among AMCE, Stanley H. Durwood, the Durwood Children, TBD Partnership and Delta Properties, Inc. EX-99.4 Escrow Agreement, dated as of August 15, 1997, among Stanley H. Durwood, the Durwood Children and Mercantile Bank of Kansas City, as escrow agent. EX-99.5 Durwood Family Settlement Agreement dated as of January 22, 1996 among Stanley H. Durwood and the Durwood Children (Filed as Exhibit 99.1 to Schedule 13D of Mr. Durwood filed May 7, 1996 ) EX-99.6 First Amendment to Durwood Family Settlement Agreement, dated as of March 18, 1997, among Stanley H. Durwood and the Durwood Children (Filed as Exhibit 2.4(c) to AMCE's Registration Statement on Form S-4 (File No. 333-25755) EX-99.7 Second Amendment to Durwood Family Settlement Agreement, dated as of August 15, 1997, among Stanley H. Durwood, the Durwood Children and the TBD Partnership. EX-99.8 Indemnification Agreement, dated as of March 31, 1997, among AMCE, Stanley H. Durwood and the Durwood Children (Filed as Exhibit 2.4(a) to AMCE's Registration Statement on Form S-4 (File No. 333-25755) EX-99.9 First Amendment to Indemnification Agreement, dated as of August 15, 1997, among AMC Entertainment, Inc., Stanley H. Durwood, the Durwood Children, TBD Partnership and Delta Properties, Inc. EX-99.10 Escrow Agreement, dated as of August 15, 1997, among AMCE, Stanley H. Durwood, the Durwood Children and Mercantile Bank of Kansas City, as escrow agent. 10 After reasonable inquiry and to the best of the undersigned's knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and accurate. September 30, 1997 /s/Stanley H. Durwood --------------------- Stanley H. Durwood 11 EX-99 2 Exhibit 99.2 V32 REGISTRATION AGREEMENT THIS REGISTRATION AGREEMENT (the "Agreement") is made and entered into this 15th day of August, 1997, between (i) AMCE Entertainment Inc., a Delaware corporation (the "Company"), (ii) Stanley H. Durwood, individually and as trustee of the 1992 Durwood, Inc. Voting Trust dated December 12, 1992 (the "1992 Trust"), and the Trust created pursuant to the Stanley H. Durwood Trust Agreement dated August 14, 1989 (the "1989 Trust"), Carol D. Journagan, Edward D. Durwood, Thomas A. Durwood, Elissa D. Grodin, Brian H. Durwood, Peter J. Durwood, The Thomas A. and Barbara F. Durwood Family Investment Partnership, a California limited partnership (the "TBD Partnership") (the "Family Stockholders") and each Permitted Assignee (as herein defined) of such Family Stockholder listed on Exhibit A to this Agreement from time to time (each such Family Stockholder and Permitted Assignee a "Stockholder" and collectively "Stockholders") and (iii) solely for purposes of Section 4 hereof, Delta Properties, Inc., a Missouri corporation. The Company has agreed to provide to the Stockholders the registration rights ("Registration Rights") set forth in this Agreement. In consideration of the foregoing, the parties hereto agree as follows: Section 1. Certain Definitions. For purposes of this Agreement, the following terms shall have the following respective meanings: "Adjusted Basis" shall mean, as of a specified date with respect to a specified number of shares of Common Stock or Class B Stock, the number of shares of Common Stock and Class B Stock that a record holder of such specified number of shares on March 1 31, 1997 would hold on such specified date, after giving effect to all stock dividends and splits and all subdivisions, combinations or reclassifications of such class of securities the record date of which occurs between March 31, 1997 and such specified date. "Charitable Assignee" of a Stockholder shall mean any charitable organization, including charitable remainder and charitable lead trusts, a transfer of property to which by such Stockholder would qualify, at least in part, for an income, gift or estate tax charitable deduction under the Internal Revenue Code of 1986, as amended. "Class B Stock" shall mean the Class B Stock, par value 66 2/3(cent) per share, of the Company. "Commission" shall mean the Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose. "Common Stock" shall mean the Common Stock, par value 66 2/3(cent) per share, of the Company. "DI" shall mean Durwood, Inc., a Missouri corporation, which is to be merged into the Company in the Merger. "Effectiveness Period" shall have the meaning set forth in Section 2(a). "Effective Date" shall mean the date on which the Commission declares a Registration effective or on which a Registration otherwise becomes effective. "Exchange Act" shall mean the Securities Exchange Act of 1934, or any successor thereto, as the same shall be amended from time to time. 2 The term "holder" shall mean a Stockholder and such of its respective Permitted Assignees who acquire Registrable Securities, directly or indirectly, from such Stockholder or from any Permitted Assignee of such Stockholder. "Merger" shall mean the merger of DI with and into the Company pursuant to the Agreement and Plan of Merger and Reorganization dated as of March 31, 1997 between the Company and DI (the "Merger Agreement"). "Permitted Assignees" of a Stockholder shall mean any of the following persons and entities to which Registrable Securities are transferred by such Stockholder by gift prior to the date the Registration Statement is first filed with the Commission that at the time of such transfer agree by instrument in form and substance reasonably satisfactory to the Company to be bound by the provisions of (x) this Agreement and (y) the Stock Agreement, in each case as a "Stockholder": (i) another Stockholder, (ii) the spouse of a Stockholder, (iii) a lineal descendant of a Stockholder, including an adopted child, and any spouse of a lineal descendant (each, a "Family Member"), (iv) a trust established by one or more Stockholders or Family Members of one or more Stockholders principally for the benefit of one or more Stockholders or Family Members of Stockholders and/or one or more Charitable Assignees, (v) the estate of such Stockholder and (vi) any Charitable Assignee. Upon the transfer of shares of Registrable Securities by a Stockholder to a Permitted Assignee of such Stockholder as provided herein prior to the date the Registration Statement is first filed with the Commission, Exhibit A hereto will be deemed to be amended without further action of the parties hereto (x) to reduce the number of shares of Registrable Securities set forth next to such Stockholder's name on Exhibit A by the number of shares so transferred that will be subject to this Agreement, (y) if such Permitted Assignee's name is not listed on Exhibit A, to add the name of such Permitted Assignee to Exhibit A as a Stockholder, and (z) to set forth the number of shares of Registrable Securities so transferred that will be subject to this Agreement (or to increase the number of shares so listed by the number of shares so transferred that will be subject to this Agreement) next to such Permitted Assignee's name on Exhibit A. Notwithstanding any provision of this Agreement to the contrary, a Family Stockholder may transfer to or for the benefit of one or more Charitable Assignees in the aggregate up to five percent (5%) of the number of shares of Common Stock or Class B Stock received by such Family Stockholder in the Merger (or shares of Common Stock issued upon conversion of such Class B Stock), free and clear of all the provisions of this Agreement, and such Charitable Assignees may elect after the date of 3 transfer (but otherwise at a time consistent with the provisions of this Agreement) to participate in the Registration (in which case such Charitable Assignee shall be deemed to be a Permitted Assignee (except that such Charitable Assignee need not agree to be bound by the provisions of the Stock Agreement)); provided that if any such Charitable Assignee elects to participate in the Registration, (i) such Charitable Assignee must then agree by instrument in form and substance satisfactory to the Company to be bound by this Agreement and (ii) the provisions of the preceding sentence shall apply. The term "person" shall mean a corporation, association, partnership (general, limited or limited liability), organization, business, limited liability company, individual, government or political subdivision thereof or governmental agency. "Prospectus" shall mean the prospectus included in a Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement, and all other amendments and supplements to the prospectus, including post-effective amendments, and all documents and materials incorporated by reference in such prospectus. "Registrable Securities" shall mean the shares of Common Stock (on an Adjusted Basis), listed on Exhibit A hereto and acquired by Stockholders pursuant to the Merger or upon conversion of shares of the Class B Stock acquired by Stockholders pursuant to the Merger. "Registration" shall have the meaning set forth in Section 2(a). "Registration Expenses" shall have the meaning set forth in Section 4 hereof. "Registration Statement" shall mean a registration statement of the Company that covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, 4 including post-effective amendments, all exhibits, and all material incorporated by reference in such registration statement. "Securities Act" shall mean the Securities Act of 1933, or any successor thereto, as the same shall be amended from time to time. "Stock Agreement" shall have the meaning set forth in the Merger Agreement. The term "underwritten offering" shall mean a distribution of securities subject to registration under the Securities Act in which securities are sold to an underwriter for reoffering to the public. Section 2. Registration. (a) Registration. Subject to the consummation of the Merger and the effectiveness of the Registration, each Stockholder agrees to participate in a registered underwritten secondary offering of at least 3,000,000 shares (on an Adjusted Basis) in the aggregate of Registrable Securities on the terms and conditions set forth in this Agreement and to sell such number of shares of Common Stock in such underwritten offering as is set forth next to each Stockholder's name on Exhibit A, subject to increase or reduction as set forth below. The Stockholders agree that the underwriters for the Registration will use their reasonable efforts in light of market conditions to sell at least 70% of the shares sold in such secondary offering to institutional (as opposed to retail) investors. The Company agrees (subject to the performance by the Stockholders of their obligations hereunder) to use its reasonable efforts to file a Registration Statement on a form selected by the Company to register under the Securities Act for sale to the public in an underwritten offering the number of shares of Registrable Securities owned by each Stockholder set forth next to such Stockholder's name on Exhibit A hereto (on an Adjusted Basis) from time to time (the "Registration") or such smaller or greater number of shares of Registrable Securities as shall be agreed by the Company and such Stockholder in writing, provided that (x) the number of shares of Registrable Securities of a Stockholder set forth on Exhibit A may be decreased without the consent of the Company by written notice to the Company reasonably 5 satisfactory to the Company from such Stockholder if (1) the number of shares of Registrable Securities of another Stockholder set forth on Exhibit A is at the same time increased by a like number of shares or (2) such shares are transferred to a Permitted Assignee of such Stockholder and such Permitted Assignee becomes a party hereto as a Stockholder and such shares so transferred are set forth next to such Permitted Assignee's name on Exhibit A hereto, (y) the number of shares of Registrable Securities of a Stockholder set forth on Exhibit A may be decreased without the consent of the Company by written notice to the Company reasonably satisfactory to the Company from such Stockholder so long as after giving effect thereto the Registration covers at least 3,000,000 shares of Common Stock (on an Adjusted Basis) and (z) the number of shares of Registrable Securities of a Family Stockholder set forth in Exhibit A may be increased without the consent of the Company by written notice to the Company from such Family Stockholder so long as after giving effect thereto the Registration covers no more than 5,000,000 shares of Common Stock (on an Adjusted Basis). Should more than one Family Stockholder seek to increase the number of Registrable Securities as permitted above and as a result the number of shares sought to be included in the Registration exceeds 5,000,000 shares (on an Adjusted Basis), the number of shares, if any, that Stanley H. Durwood, the 1992 Trust and the 1989 Trust have sought to include in the Registration above the number listed on Exhibit A (on an Adjusted Basis) shall be reduced to the extent necessary to reduce the aggregate number of shares sought to be included in the Registration to 5,000,000 shares (on an Adjusted Basis), and if such number of shares still exceeds 5,000,000, the Company shall allocate the increased number of shares to be included in the Registration among such Family Stockholders (other than Stanley H. Durwood, the 1992 Trust and the 1989 Trust) seeking an increase on a pro rata basis or in such other manner as such Family Stockholders may agree. In the event of any increase or decrease in the number of Registrable Securities of a Stockholder as set forth above, Exhibit A hereto shall be deemed amended to increase or decrease, accordingly, the number of shares of Registrable Securities set forth next to such Stockholder's name. The Company shall (subject to the performance by the Stockholders of their obligations hereunder) use its reasonable efforts to cause the Registration to be declared effective under the Securities Act as promptly as practicable on or after the date that is six months and one day from the date of the Merger and to keep the Registration effective under the Securities Act for a period ending on the date that is six months from such date (provided that such six month period shall be extended by the length of any Postponement Period (as defined below)) or such shorter period ending when all Registrable Securities covered by the Registration have been sold (the "Effectiveness Period"). 6 (b) Supplements and Amendments. The Company shall supplement and amend the Registration Statement, prior to the Effective Date and during the Effectiveness Period, if (i) required by the rules, regulations or instructions applicable to the registration form used for such Registration, (ii) otherwise required by the Securities Act or (iii) reasonably requested by the holders of a majority in aggregate principal amount of the Registrable Securities covered by such Registration Statement or by any underwriter of such Registrable Securities. (c) Selection of Underwriters. The managing underwriters for the Registration shall be selected jointly by the Company and the Family Stockholders (other than the 1992 Trust and the 1989 Trust) acting by majority vote (for which purpose each such Family Stockholder shall have one vote). (d) Conditions to the Obligations of Company. The Company shall be entitled to postpone (or if already filed may withdraw such Registration Statement), for an aggregate of up to 180 days (together with any period described in the last sentence of Section 3(b) hereof, a "Postponement Period"), the filing of the Registration Statement otherwise required to be prepared and filed by it pursuant hereto if, as a result of the Registration the Company would be required to prepare any financial statements other than those it customarily prepares or the Company determines in its reasonable business judgment that such registration and offering would interfere with any material financing, acquisition, corporate reorganization or other material corporate transaction or development involving the Company and gives the Stockholders written notice of such determination. Section 3. Registration Procedures. (a) In connection with the Company's obligations with respect to the Registration, the Company shall (subject to the performance by the Stockholders of their obligations hereunder): (i) prepare and file with the Commission a Registration Statement which shall permit the disposition of the Registrable Securities, in an underwritten offering, and use 7 its reasonable efforts to cause such Registration Statement to become effective as provided in this Agreement; provided, however, before filing the Registration Statement or Prospectus or any amendments or supplements thereto (including documents that would be incorporated therein by reference after the initial filing of the Registration Statement), the Company shall afford the Counsel (as defined below) and the managing underwriters, an opportunity to review copies of all such documents proposed to be filed; provided, further, that the Company shall not file any Registration Statement or related Prospectus or any amendments or supplements thereto (including such documents incorporated by reference) if such counsel for all such holders, or the managing underwriters shall reasonably object, in writing, on a timely basis (provided that any such objecting party and the Company use their best efforts promptly to resolve such party's objections on a basis reasonably satisfactory to such party and the Company which will permit such filing); (ii) prepare and file with the Commission such amendments, post-effective amendments and supplements to such Registration Statement and the Prospectus included therein as may be necessary to effect and maintain the effectiveness of such Registration Statement for the applicable period specified herein and furnish to the Stockholders copies of any such supplement or amendment prior to its being used or filed with the Commission; (iii)for a reasonable period prior to the filing of such Registration Statement, and throughout the Effectiveness Period, make available for inspection by the Counsel and the counsel for the managing underwriters such financial and other information and books and records of the Company, and cause the officers, employees, counsel and independent certified public accountants of the Company to respond to such inquiries, as shall be reasonably necessary, in the judgment of the respective counsel referred to in such Section, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that each such party shall be required to maintain in confidence and not to disclose to any other person any information or records reasonably designated by the Company in writing as being confidential, until such time as (A) such information becomes a matter of public record (whether by virtue of its inclusion in such Registration Statement or otherwise), or (B) such person shall be required so to disclose such information pursuant to a subpoena or order of any court or other governmental agency or body having jurisdiction over the matter (subject to the requirements of such order, and only after such person shall have given the Company prompt written notice of such requirement), or (C) such information is required to be set forth in such Registration Statement or the 8 Prospectus included therein or in an amendment to such Registration Statement or an amendment or supplement to such Prospectus in order that such Registration Statement, Prospectus, amendment or supplement, as the case may be, does not contain an untrue statement of a material fact or omit to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (iv) notify the Stockholders and the managing underwriters thereof and, if requested by any such person, confirm such advice in writing, (A) when such Registration Statement or the Prospectus included therein or any Prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such Registration Statement or any post-effective amendment, when the same has become effective, (B) of any comments by the Commission and by the blue sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such Registration Statement or Prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceedings for that purpose, (D) if at any time the representations and warranties of the Company contemplated by Section 3(a)(xi) hereof cease to be true and correct in all material respects, (E) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, or (F) at any time when a Prospectus is required to be delivered under the Securities Act, that such Registration Statement, Prospectus, Prospectus amendment or supplement or post-effective amendment, or any document incorporated by reference in any of the foregoing, contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (v) use its reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of such Registration Statement or any post-effective amendment thereto at the earliest practicable date; (vi) if requested by the managing underwriters or the holders of a majority of the Registrable Securities covered by the Registration, incorporate in a Prospectus supplement or post-effective amendment such information as is required by the applicable 9 rules and regulations of the Commission and as such managing underwriters or such holders specify should be included therein relating to the terms of the sale of such Registrable Securities, including, without limitation, information with respect to the principal amount of Registrable Securities being sold by such holders or to any underwriters, the name and description of such holders or underwriter, the offering price of such Registrable Securities and any discount, commission or other compensation payable in respect thereof, the purchase price being paid therefor by such underwriters and with respect to any other terms of the offering of the Registrable Securities to be sold by such holders or to such underwriters; and make all required filings of such Prospectus supplement or post- effective amendment after notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment; (vii) furnish to each Stockholder, each underwriter of holders of Registrable Securities participating in the Registration thereof and the Counsel an executed copy of such Registration Statement, each such amendment or supplement thereto (in each case, upon request, including all exhibits thereto and documents incorporated by reference therein) and furnish each such holder and underwriter such number of copies of the Prospectus included in such Registration Statement (including each preliminary Prospectus and any summary Prospectus) as such holder or underwriter may reasonably request; the Company hereby consents to the use of such Prospectus (including such preliminary and summary Prospectus) and any amendment or supplement thereto by each such holder and underwriter, in each case in the form most recently provided to such party by the Company, in connection with the offering and sale of the Registrable Securities covered by the Prospectus (including such preliminary and summary Prospectus) or any supplement or amendment thereto; (viii) use its reasonable efforts to (A) register or qualify the Registrable Securities to be included in such Registration Statement under such state securities laws or blue sky laws of such jurisdictions as any holder of such Registrable Securities and underwriter thereof shall reasonably request, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions during the period such Registration Statement is required to be kept effective and for so long as may be necessary to enable any such holder or underwriter to complete its distribution of Securities pursuant to such Registration Statement as contemplated hereby and (C) take any and all other actions as may be reasonably necessary or advisable to enable each such holder and underwriter to consummate the disposition in such jurisdictions of such Registrable Securities; provided, however, that the Company shall 10 not be required for any such purpose to (I) qualify as a foreign corporation in any jurisdiction where it would not otherwise be required to qualify but for the requirements of this Section 3(a)(viii), (II) consent to general service of process in any such jurisdiction, (III) subject itself to taxation in any such jurisdiction or (IV) make any changes to the Company's Certificate of Incorporation or By-laws or any agreement between the Company and its stockholders; (ix) cooperate with the holders of the Registrable Securities and the managing underwriters to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, which Registrable Securities shall not bear any restrictive legends; and enable such Registrable Securities to be registered in such names as the managing underwriters may request at least two business days prior to any sale of the Registrable Securities to the underwriters; (x) enter into one or more underwriting agreements, or similar agreements, as appropriate, with customary provisions applicable to such agreements, provided that any such underwriting agreements shall contain an agreement of the underwriters to indemnify and hold harmless the Company against any and all losses, claims, damages, and liabilities caused by any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus relating to the Registrable Securities if a copy of the current Prospectus, as amended or supplemented, was furnished to the underwriters and/or the holders of such Registrable Securities by the Company but was not provided to a purchaser and such current Prospectus would have cured the defect giving rise to such loss, claim, damage or liability, or shall contain a substantially similar agreement acceptable to the Company; and (xi) (A) make such representations and warranties to the holders of such Registrable Securities and the underwriters thereof in form, substance and scope as are customarily made in connection with an offering of equity securities pursuant to a Registration Statement filed on the form applicable to the Registration; (B) obtain an opinion of counsel to the Company in customary form and covering such matters, of the type customarily covered by such an opinion, as the managing underwriters, and as the holders of at least a majority in aggregate principal amount of the Registrable Securities covered by the Registration, may reasonably request, addressed to such holder or holders and the underwriters thereof; (C) obtain "comfort" letters and updates thereof from the independent 11 certified public accountants of the Company addressed to the selling holders of Registrable Securities and the underwriters thereof, such letters to be in customary form and covering matters of the type ustomarily covered in "comfort" letters to underwriters in connection with underwritten offerings; (D) deliver such documents and certificates, including officer's certificates, as may be reasonably requested by the holders of at least a majority in aggregate principal amount of the Registrable Securities being sold and the managing underwriters thereof to evidence the accuracy of the representations and warranties made pursuant to clause (A) above and the compliance with or satisfaction of any agreements or conditions contained in the underwriting agreement or other agreement entered into by the Company; and (E) undertake such obligations relating to expense reimbursement, indemnification and contribution as are provided in Sections 4 and 5 hereof. (b) In the event that the Company would be required, pursuant to Section 3(a)(iv)(F) above, to notify the selling holders of Registrable Securities, and the managing underwriters thereof, the Company shall prepare and furnish to each such holder and to each underwriter a reasonable number of copies of a Prospectus supplemented or amended so that, as thereafter delivered to purchasers of Registrable Securities, such Prospectus shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Each holder of Registrable Securities agrees that upon receipt of any notice from the Company pursuant to Section 3(a)(iv)(F) hereof, such holder shall forthwith discontinue the disposition of Registrable Securities pursuant to the Registration Statement applicable to such Registrable Securities until such holder shall have received copies of such amended or supplemented Prospectus, and if so directed by the Company, such holder shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such holder's possession of the Prospectus covering such Registrable Securities at the time of receipt of such notice. In the event the Company shall give such notice, the Company shall extend the period during which such Registration Statement shall be maintained effective as provided in Section 2(a) hereof by the number of days during the period from and including the date of the giving of such notice to the date when the Company shall make available to each holder of Registrable Securities covered by the Registration Statement such amended or supplemented Prospectus. (c) The Company may require each holder of Registrable Securities as to which any registration is being effected to furnish to the Company such information regarding such holder (and, in the case of Stanley H. Durwood, regarding DI, its subsidiaries 12 (other than the Company), American Associated Enterprises, a Missouri limited partnership ("AAE"), the 1989 Trust and the 1992 Trust) and the method of distribution of such Registrable Securities as the Company may from time to time reasonably request in writing. Each such holder agrees to notify the Company as promptly as practicable of any inaccuracy or change in information previously furnished by such holder to the Company or of the occurrence of any event in either case as a result of which any Prospectus relating to such registration contains or would contain an untrue statement of a material fact regarding such holder or the method of distribution of such Registrable Securities or omits to state any material fact regarding such holder or the intended method of distribution of such Registrable Securities required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly to furnish to the Company any additional information required to correct and update any previously furnished information or required so that such Prospectus shall not contain, with respect to such holder or the method of distribution of such Registrable Securities, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. (d) In connection with the Registration, the Family Stockholders (other than the 1992 Trust and the 1989 Trust) acting by majority vote (for which purpose each such Family Stockholder shall have one vote) thereby shall designate a single counsel (the "Counsel"), which shall be reasonably satisfactory to the Company, to represent the collective interests of all of the holders of the Registrable Securities covered by the Registration Statement in the Registration and in their dealings with the Company. (e) The Company may require each holder of Registrable Securities covered by a Registration Statement promptly to furnish in writing to the Company such information regarding such holder (and, in the case of Stanley H. Durwood, regarding DI, its subsidiaries (other than the Company), AAE, the 1989 Trust and the 1992 Trust), the plan of distribution of the Registrable Securities and other information as the Company may from time to time reasonably request or as may be legally required in connection with such Registration. 13 Section 4. Registration Expenses. Stanley H. Durwood, the 1989 Trust, the 1992 Trust and Delta shall bear and pay (jointly and severally), promptly upon request being made therefor, all expenses incident to the Company's performance of or compliance with this Agreement whether or not the public offering contemplated by the Registration is consummated, including, without limitation, (a) all Commission and any NASD registration and filing fees and expenses, (b) all fees and expenses in connection with the qualification of the Registrable Securities for offering and sale under the state securities and blue sky laws referred to in Section 3(a)(viii) hereof, including reasonable fees and disbursements of counsel for the underwriters in connection with such qualifications (in the event that such counsel performs such functions), (c) all expenses relating to the preparation, printing, distribution and reproduction of the Registration Statement required to be filed hereunder, each Prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, the certificates representing the Registrable Securities and all other documents relating hereto, (d) messenger and delivery expenses, (e) fees and expenses of any escrow agent or custodian, (f) fees, disbursements and expenses of counsel and independent certified public accountants of the Company (including the expenses of any opinions or "comfort" letters required by or incident to such performance and compliance), and fees, expenses and disbursements of any other persons, including special experts, retained by the Company in connection with such registration (collectively, the "Registration Expenses"). Each holder of the Registrable Securities being registered severally shall also pay (i) its respective pro rata portion of all underwriting discounts and commissions attributable to the sale of such Registrable Securities and the reasonable fees and disbursements of the Counsel and (ii) the entire amount of the fees and expenses of any counsel or other advisors or experts retained by such holder. The Company shall pay all of its internal expenses (including, without limitation, all salaries and expenses of the Company's officers and employees performing legal or accounting duties). Section 5. Indemnification. (a) Indemnification by the Company. The Company shall, and it hereby agrees to, indemnify and hold harmless each holder of Registrable Securities to be included in the Registration (other than Stanley H. Durwood, the 1992 Trust and the 1989 Trust) from and against any and all losses, claims, damages and liabilities to which such holder may 14 become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages and liabilities (or actions in respect thereof) and related expenses (including without limitation reasonable attorneys' fees and expenses) ("Losses") arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in a Registration Statement under which such Registrable Securities were registered under the Securities Act, or any preliminary, final or summary Prospectus contained therein or furnished by the Company to any such holder, or any amendment or supplement thereto, or arise out of or are based upon any omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading; provided, however, that (A) the Company shall not be obligated to indemnify any such person in any such case to the extent that any such Losses are caused by an untrue statement or alleged untrue statement or omission or alleged omission made in such Registration Statement, or preliminary, final or summary Prospectus, or amendment or supplement based upon written information furnished to the Company by any holder of Registrable Securities expressly for use therein, (B) the Company shall not be liable to any such holder under the indemnity agreement in this subsection (a) with respect to any preliminary Prospectus to the extent that any such Loss of such holder results from the fact that such person sold Registrable Securities to a person as to whom it shall be established that there was not sent or given at or prior to the written confirmation of such sale, a copy of the Prospectus or of the Prospectus as then amended or supplemented if the Company has previously furnished copies thereof in sufficient quantity to such holder or underwriter and the loss, claim, damage or liability of such holder or underwriter results from an untrue statement or omission of a material fact contained in the preliminary Prospectus which was corrected in the Prospectus or in the Prospectus as amended or supplemented and (C) the Company shall not be obligated to indemnify any such holder with respect to any sales occurring after the Company has given notice under Section 3(a)(iv)(F) to such holder and the managing underwriters and prior to the delivery by the Company of any amended or supplemented Prospectus. (b) Indemnification by the Holders. Each Stockholder shall, and hereby agrees to, severally and not jointly, indemnify and hold harmless the Company, and all other holders of Registrable Securities, against any Losses to which the Company or such other holders of Registrable Securities may become subject, under the Securities Act or otherwise, to the same extent as the foregoing indemnity by the Company contained in (a), but only with reference to information relating to such Stockholder furnished to the Company by such Stockholder expressly for use in such Registration Statement, or any preliminary, final or summary Prospectus and, where such Stockholder is Stanley H. Durwood, the 1989 Trust or the 1992 Trust, with reference to information relating to DI, its subsidiaries (other than 15 the Company), AAE, the 1989 Trust, the 1992 Trust and Stanley H. Durwood; provided, however, that no such holder shall be required to indemnify under this Section 5(b) for any amounts in excess of the dollar amount of the proceeds to be received by such holder from the sale of such holder's Registrable Securities pursuant to such Registration. Such information shall be deemed to have been so furnished for use therein by a Stockholder if it relates to such Stockholder (or, in the case of Stanley H. Durwood, the 1989 Trust or the 1992 Trust, where it relates to Stanley H. Durwood, the 1989 Trust, the 1992 Trust, DI, its subsidiaries (other than the Company) or AAE) and if such Registration Statement was available for review by such Stockholder (or the legal counsel for such Stockholder) a reasonable time before being filed and not objected to in writing by such Stockholder prior to the filing thereof. (c) Notices of Claims, Etc. Promptly after receipt by an indemnified party under subsection (a) or (b) above of written notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party pursuant to the indemnification provisions of or contemplated by this Section 5, notify such indemnifying party in writing of the commencement of such action; but the omission so to notify the indemnifying party shall relieve it from liability which it may have to any indemnified party only to the extent the indemnifying party is prejudiced thereby. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, such indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, including the employment of counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party shall pay the fees and disbursements of such counsel and shall not be liable to such indemnified party for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties. Such firm shall be designated in writing by the managing underwriter if the named parties to such proceeding include the managing underwriter and by the Family 16 Stockholders (other than the 1992 Trust and the 1989 Trust) acting by majority vote (in which each such Family Stockholder shall have one vote) in the case of parties indemnified pursuant to paragraph (a) above and by the Company in the case of parties indemnified pursuant to paragraph (b) above. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent not to be unreasonably withheld, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party not to be unreasonably withheld, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) Contribution. Each party hereto agrees that, if for any reason the indemnification provisions contemplated by Section 5(a) or Section 5(b) are unavailable to or insufficient to hold harmless an indemnified party in respect of any Losses referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such Losses in such proportion as is appropriate to reflect not only the relative benefits received by the indemnifying party and the indemnified party, but also the relative fault of the indemnifying party and the indemnified party in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. Notwithstanding the provisions of this Section 5(d), no holder shall be required to contribute any amount in excess of the amount by which the dollar amount of the proceeds received by such holder from the sale of any Registrable Securities (after deducting any fees, discounts and commissions applicable thereto) exceeds the amount of any damages which such holder has otherwise been required to pay by reason of such untrue or alleged 17 untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The holders' obligations in this Section 5(d) to contribute shall be several in proportion to the principal amount of Registrable Securities registered or underwritten, as the case may be, by them and not joint. (e) The obligations of the Company under this Section 5 shall extend, upon the same terms and conditions, to each officer, director and partner of each holder and each person, if any, who controls any holder within the meaning of either Section 20 of the Exchange Act or Section 15 of the Securities Act; and the obligations of the Stockholders contemplated by this Section 5 shall be in addition to any liability which the Stockholders may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company (including any person who, with his consent, is named in any Registration Statement as about to become a director of the Company) and to each person, if any, who controls the Company within the meaning of the Securities Act. (f) The obligations of the Company and each Stockholder under this Section 5 shall terminate on the Termination Date (as defined below), except that such obligations shall survive in respect to any claim for indemnification made under this Section 5 prior to the Termination Date until such claim for indemnification is finally resolved. As used herein "Termination Date" means the March 31 that is two years after the March 31 occurring immediately after the date on which the Effective Time (defined in the Merger Agreement) occurs. Section 6. Underwriting Requirements. Each holder of Registrable Securities hereby agrees (i) to sell such holder's Registrable Securities on a basis consistent with this Agreement and as provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) to complete and execute all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 18 Section 7. Miscellaneous. (a) Specific Performance. The parties hereto acknowledge that there may be no adequate remedy at law if any party fails to perform any of its obligations hereunder and that each party may be irreparably harmed by any such failure, and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of any other party under this Agreement in accordance with the terms and conditions of this Agreement, in any court of the United States or any State thereof having jurisdiction. (b) Notices. All notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, if delivered personally or by courier, or three days after being deposited in the mail (registered or certified mail, postage prepaid, return receipt requested) as follows: if to the Company, to it at 106 West 14th Street, Kansas City, Missouri 64101, Attention: Corporate Secretary, if to Delta, to it at 106 West 14th Street, Kansas City, Missouri 64101, and if to a Stockholder, to such Stockholder at the address set forth on the signature page hereof next to such Stockholder's signature, provided that such addresses may be changed by written notice as provided in this paragraph. Information copies of all notices given to a Stockholder (other than Stanley H. Durwood, the 1992 Trust or the 1989 Trust) or to Delta shall be given to: Robert C. Kopple, Esq. Kopple & Klinger 2029 Century Park East Suite 1040 Los Angeles, CA 90067 Glenn Kurlander, Esq. Schiff Hardin & Waite 150 East 52nd Street Suite 2900 New York, New York 10022 19 Information copies of all notices given to Stanley H. Durwood, the 1992 Trust, the 1989 Trust, or Delta should be given to: Raymond F. Beagle, Jr., Esq. Lathrop & Gage L.C. 2345 Grand Boulevard, 24th Floor Kansas City, Missouri 64108-2684 Information copies of all notices given to the Company should be given to: Charles J. Egan, Jr., Esq. Hallmark Cards, Incorporated 2501 McGee Trafficway Kansas City, MO 64141-6126 The Honorable Paul E. Vardeman Polsinelli, White, Vardeman & Shalton Suite 1000, Plaza Steppes 700 West 47th Street Kansas City, MO 64112-1802 (c) Third Party Beneficiaries: Holders Entitled and Bound. This agreement shall be binding upon and inure to the benefit of the parties, their successors, heirs, legatees, devisees and personal and legal representatives, and any transferee that is a Permitted Assignee. No party may assign its rights under this Agreement (except to a Permitted Assignee as provided herein) without the consent of the other parties hereto. (d) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (e) Survival. The respective indemnities, agreements, representations and warranties and each other provision set forth in this Agreement or made pursuant hereto shall remain in full force and effect regardless of any investigation (or statement as to the results thereof) made by or on behalf of any holder of Registrable Securities, any director, officer 20 or partner of such holder, any agent or underwriter or any director, officer or partner thereof, or any controlling person of any of the foregoing, and shall survive the transfer of Registrable Securities by such holder. (f) Law Governing; Consent to Jurisdiction. (I) This Agreement shall be governed by and construed in accordance with the laws of the State of Missouri without giving effect to the conflicts of laws principles thereof. (II) Each party hereto hereby consents to, and confers exclusive jurisdiction upon, the courts of the State of Missouri and the Federal courts of the United States of America located in the City of Kansas City, Missouri, and appropriate appellate courts therefrom, over any action, suit or proceeding arising out of or relating to this Agreement. Each party covenants that it will not commence any action, suit or proceeding arising out of or relating to this Agreement in any other jurisdiction. Nothing in this paragraph shall affect the rights of a party to enforce a judgment rendered by the courts referred to in the first sentence of this paragraph in any other jurisdiction. Each party hereto hereby waives, and agrees not to assert, as a defense in any such action, suit or proceeding that it is not subject to such jurisdiction or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that this Agreement may not be enforced in or by said courts or that its property is exempt or immune from execution, that the suit, action or proceeding is brought in an inconvenient forum, or that the venue of the suit, action or proceeding is improper. Service of process in any such action, suit or proceeding may be served on any party anywhere in the world, whether within or without the State of Missouri by mailing a copy thereof by registered or certified mail, postage prepaid, to such party at its address provided in Section 7(b) of this Agreement, provided that service of process may be accomplished in any other manner permitted by applicable law. (g) Headings. The descriptive headings of the several Sections and paragraphs of this Agreement are inserted for convenience only, do not constitute a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. 21 (h) Entire Agreement; Amendments. This Agreement, the Stock Agreement, the Indemnification Agreement and the Merger Agreement and, with respect to the Family Stockholders, that certain Durwood Family Settlement Agreement dated as of January 22, 1996 contain the entire understanding of the parties with respect to the transactions contemplated hereby. This Agreement supersedes all prior agreements and understandings between the parties with respect to its subject matter, except that the Durwood Family Settlement Agreement shall not be deemed to be amended by this Agreement and shall remain in full force and effect. This Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument duly executed by the Company and the Family Stockholders acting by majority vote (for which purpose each Family Stockholder (other than the 1992 Trust and the 1989 Trust) shall have one vote). Each holder of any Registrable Securities at the time or thereafter outstanding shall be bound by any amendment or waiver effected pursuant to this Section 7(h), whether or not any notice, writing or marking indicating such amendment or waiver appears on such Registrable Securities or is delivered to such holder. (i) Inspection. For so long as this Agreement shall be in effect, this Agreement and a complete list of the names and addresses of all the holders of Registrable Securities shall be made available for inspection and copying on any business day by any holder of Registrable Securities at the offices of the Company at the address thereof set forth in Section 7(b) above. (j) Severability. In the event that any one or more of the provisions contained in this Agreement, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (k) Certain Provisions Regarding the TBD Partnership. The TBD partnership will not participate in any vote or determination to be made by the Stockholders hereunder. All agreements and obligations of Thomas A. Durwood and the TBD Partnership made herein or arising hereunder shall be deemed to be joint and several agreements and obligations of each of Thomas A. Durwood and the TBD Partnership, except that the number of Registrable Securities to be sold by Thomas A. Durwood and the TBD Partnership in the 22 secondary offering provided for herein shall in the aggregrate equal the number of shares of Registrable Securities set forth next to Thomas A. Durwood's name on Exhibit A hereto (the allocation of such Registrable Securities between Thomas A. Durwood and the TBD Partnership to be determined by Thomas A. Durwood). IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. AMC ENTERTAINMENT INC. By: /s/Peter C. Brown ----------------- Peter C. Brown President DELTA PROPERTIES, INC. By:/s/Stanley H. Durwood --------------------- Address: Suite 1700 Power & Light Building 106 West 14th Street P.O. Box 419615 Kansas City, Missouri 64141-6615 /s/Stanley H. Durwood - --------------------- 1323 Granite Creek Drive /s/Carol D. Journagan Blue Springs, Missouri 64015 - --------------------- 3001 West 68th Street /s/Edward D. Durwood Shawnee Mission, KS 66208 - -------------------- P.O. Box 7208 /s/Thomas A. Durwood Rancho Santa Fe, CA 92067 - -------------------- 23 187 Chestnut Hill Road /s/Elissa D. Grodin Wilton, CT 06897 - ------------------- 655 N.W. Altishan Place /s/Brian H. Durwood Beaverton, OR 97006 - ------------------- 666 West End Avenue /s/Peter J. Durwood New York, NY 10025 - ------------------- Suite 1700 Power & Light Building 106 West 14th Street P.O. Box 419615 /s/Stanley H. Durwood, Kansas City, Missouri 64141-6615 - ---------------------- as trustee of the 1992 Trust Suite 1700 Power & Light Building 106 West 14th Street P.O. Box 419615 /s/Stanley H. Durwood, Kansas City, Missouri 64141-6615 - ---------------------- as trustee of the 1989 Trust THE THOMAS A. AND BARBARA F. P.O. Box 7208 DURWOOD FAMILY INVESTMENT Rancho Santa Fe, California 92067 PARTNERSHIP By:/s/ Thomas A. Durwood - ------------------------ Thomas A. Durwood, as Trustee of the Thomas A. and Barbara F. Durwood Family Trust, as General Partner By: /s/Barbara F. Durwood - -------------------------- Barbara F. Durwood, as Trustee of the Thomas A. and Barbara F. Durwood Family Trust, as General Partner 24 Exhibit A Stanley H. Durwood * 1989 Trust * 1992 Trust * ___________ *500,000 shares, collectively Carol D. Journagan 416,666.67 shares Edward D. Durwood 416,666.67 shares Thomas A. Durwood 416,666.67 shares Elissa D. Grodin 416,666.67 shares Brian H. Durwood 416,666.67 shares Peter J. Durwood 416,666.67 shares 25 EX-99 3 Exhibit 99.3 V55 STOCK AGREEMENT THIS AGREEMENT, dated as of August 15, 1997, is between (i) AMC Entertainment Inc., a Delaware corporation ("AMCE"), (ii) Stanley H. Durwood, individually, and as trustee of the 1992 Durwood, Inc. Voting Trust dated December 12, 1992 (the "1992 Trust"), and as trustee of the Trust created pursuant to the Stanley H. Durwood Trust Agreement dated August 14, 1989 (the "1989 Trust"), Carol D. Journagan, Edward D. Durwood, Thomas A. Durwood, Elissa D. Grodin, Brian H. Durwood, Peter J. Durwood, The Thomas A. and Barbara F. Durwood Family Investment Partnership, a California limited partnership (the "TBD Partnership") (all persons and entities referred to in this clause (ii) are referred to herein collectively as the "Family Stockholders") and each Authorized Assignee (as defined below) of such Family Stockholder (each such Family Stockholder and Authorized Assignee a "Stockholder" and collectively "Stockholders") and (iii) solely for purposes of Section 5.3 hereof, Delta Properties, Inc., a Missouri corporation. WITNESSETH: WHEREAS, Family Stockholders own (directly or indirectly) stock of Durwood, Inc., a Missouri corporation ("DI"), which is party to an Agreement and Plan of Merger and Reorganization among DI and AMCE (the "Merger Agreement"), providing for the merger ("Merger") of DI into AMCE; and WHEREAS, pursuant to the Merger, Family Stockholders will acquire shares of AMCE's common stock, par value 66 2/3(cent) per share (the "Common Stock") and shares of AMCE's Class B Stock, par value 66 2/3(cent) per share (the "Class B Stock"); and WHEREAS, the parties anticipate that a portion of the shares of Common Stock received in the Merger (or the shares of Common Stock received upon the conversion of shares of Class B Stock received in the Merger) will be offered in a secondary offering registered under the Securities Act of 1933, as amended (the "1933 Act") pursuant to and as contemplated by the Registration Agreement (the "Secondary Offering"); and 1 WHEREAS, AMCE requires that this Agreement be made as a condition precedent to the Merger and its agreement to file a registration statement in connection with the Secondary Offering. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements set forth herein and for other good and valuable consideration the receipt of which is hereby acknowledged, the parties, intending to be legally bound hereby, agree as follows: ARTICLE I Definitions As used in this Agreement, the following terms, not otherwise defined herein, have the meanings set forth below. "Adjusted Basis" shall have the meaning specified in the Registration Agreement. "Affiliate" of a specified person means a person (other than AMCE or a majority-owned subsidiary of AMCE) that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified. For purposes of this definition, control of a person means the power, direct or indirect, to direct or cause the direction of the management and policies of such person whether by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Associate" of any person means (i) a corporation or organization (other than AMCE or a majority-owned subsidiary of AMCE) of which such person is an officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities; (ii) any trust or other estate in which such person has a substantial beneficial ownership interest or as to which such person serves as trustee or in a similar fiduciary capacity; or (iii) any relative or spouse of such person, or any relative of such 2 spouse, who has the same home as such person or who is a director or officer of AMCE or any of its parents or subsidiaries. "Authorized Assignee" of a Stockholder means (i) any person or entity (other than a Charitable Assignee, except as provided in clause (ii) below) to which Voting Securities are transferred by gift or otherwise without fair consideration or (ii) if such Stockholder is a Family Stockholder, to the extent such Stockholder (and its Authorized Assignees) transfers more than 5% in the aggregate of the shares of Class B Stock or Common Stock received by such Family Stockholder in the Merger (or Common Stock received upon the conversion of such Class B Stock) ("Merger Shares") to Charitable Assignees, those Charitable Assignees receiving shares in excess of such threshold. "Charitable Assignee" of a Stockholder shall mean any charitable organization, including charitable remainder and charitable lead trusts, a transfer of property to which by such Stockholder would qualify, at least in part, for an income, gift or estate tax charitable deduction under the Internal Revenue Code of 1986, as amended. "Durwood Children" means Family Stockholders (other than Stanley H. Durwood, the 1992 Trust and the 1989 Trust), and any Authorized Assignee of a Family Stockholder (other than Authorized Assignees of Stanley H. Durwood, the 1992 Trust and the 1989 Trust that are not Family Stockholders). "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Effective Date" shall mean the date on which the Effective Time (as defined in the Merger Agreement) occurs. "Group" means two or more persons acting as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, or disposing of securities of AMCE. 3 "Indemnification Agreement" has the meaning specified in the Merger Agreement. "Merger Expenses" shall mean those Expenses (as defined in the Merger Agreement) not paid by Stanley H. Durwood, the 1989 Trust and the 1992 Trust pursuant to Section 2(c) of the Indemnification Agreement. "Permitted Assignee" shall have the meaning specified in the Registration Agreement. "Registration Agreement" means the Registration Agreement dated the date hereof among AMCE and the Family Stockholders. "Restricted Period" shall mean a period commencing the date hereof and ending three years after the Effective Date. "Voting Securities" means Common Stock, Class B Stock and any other securities of AMCE that may be issued from time to time having general voting power under ordinary circumstances in the election of directors and any other security of AMCE convertible into, or exercisable for, any such security. ARTICLE II Representations and Warranties Section 2.1 Representations and Warranties of Stockholders: Each Stockholder, severally, as to himself, herself or itself, and not jointly, hereby represents and warrants to AMCE as follows: (a) Such Stockholder has full legal right, power and authority to enter into and perform this Agreement and the Registration Agreement. This Agreement and the Registration Agreement are valid and binding obligations of such Stockholder enforceable against such Stockholder in accordance with their terms, except that such enforcement may 4 be subject to (i) bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law). (b) Neither the execution and delivery of this Agreement or the Registration Agreement by such Stockholder nor the consummation by such Stockholder of the transactions contemplated hereby or thereby conflicts with or constitutes a violation of or default under any statute, law, regulation, order or decree applicable to such Stockholder, or any material contract, commitment, agreement, arrangement or restriction of any kind to which such Stockholder is a party or by which such Stockholder is bound. Section 2.2 Representations and Warranties of AMCE. AMCE hereby represents and warrants to Stockholders as follows: (a) AMCE has full legal right, power and authority to enter into and perform this Agreement and the Registration Agreement. The execution and delivery of this Agreement and the Registration Agreement by AMCE and the consummation by AMCE of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on behalf of AMCE. This Agreement and the Registration Agreement are valid and binding obligations of AMCE enforceable against AMCE in accordance with their terms, except that such enforcement may be subject to (i) bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law). (b) Neither the execution and delivery of this Agreement or the Registration Agreement by AMCE nor the consummation by AMCE of the transactions contemplated hereby or thereby conflicts with or constitutes a violation of or default under the charter or bylaws of AMCE, any statute, law, regulation, order or decree applicable to AMCE, or any material contract, commitment, agreement, arrangement or restriction of any kind to which AMCE is a party or by which AMCE is bound. 5 ARTICLE III Limitations and Restrictions Section 3.1 Restrictions on Certain Actions by Stockholders. Each of the Durwood Children severally agrees that during the Restricted Period, such Stockholder will not, nor will it permit any of its Affiliates or Associates (other than Stanley H. Durwood, the 1992 Trust and the 1989 Trust) from and after the date that such person becomes an Affiliate or Associate to, unless in any such case specifically invited to do so by the Board of Directors of AMCE, directly or indirectly, alone or in concert with others: (a) become a member of a Group (other than a Group composed solely of Stockholders) or make any public or private proposal with respect to an extraordinary transaction involving AMCE or any of its subsidiaries; (b) solicit, or participate in any "solicitation" of, "proxies" or become a "participant" in any "election contest" (as such terms are defined or used in Regulation 14A under the Exchange Act) with respect to AMCE; or (c) deposit any shares of Common Stock in a voting trust (where the trustees thereof are not such Stockholder or Permitted Assignees of such Stockholder) or, except as specifically contemplated by this Agreement, subject them to a voting agreement or other agreement or arrangement with respect to the voting of such shares of Common Stock. The foregoing limitations shall not restrict directors of AMCE who are also Stockholders from taking such action as directors as they deem necessary, advisable or proper to fulfill their fiduciary duties to AMCE and its stockholders. Section 3.2 Voting. (a) During the Restricted Period, each of the Durwood children, severally, shall grant the proxy set forth in paragraph (b) below, and shall take no action to revoke or interfere with the exercise of such proxy or to vote shares subject to the proxy in a manner inconsistent with the proxy. 6 (b) Each of the Durwood Children hereby appoints the Secretary and each Assistant Secretary of AMCE, and each of them, as such Durwood Child's proxy and attorney, with full power of substitution, to vote all shares of Common Stock owned by such Durwood Child from time to time for each candidate for the Board of Directors of AMCE in the same proportion as the aggregate votes cast in such elections by all other holders of Common Stock not affiliated with AMCE, its directors and officers. This proxy will remain in effect during the Restricted Period and is coupled with an interest and irrevocable during the Restricted Period. This proxy will automatically terminate upon the conclusion of the Restricted Period. Section 3.3 Restrictions on Transfer. Each Stockholder severally agrees not to sell, assign, pledge, hypothecate, transfer, grant an option with respect to or otherwise dispose of any interest in Voting Securities, or enter into an agreement, arrangement or understanding with respect to the foregoing (individually and collectively, "Transfer"), except in compliance with the 1933 Act. Each Stockholder severally acknowledges that shares of Common Stock and Class B Stock received in the Merger will be subject to limitations on Transfer imposed by Rule 145 under the 1933 Act and may not be sold except in a registered offering, pursuant to Rule 145 under the 1933 Act or in a transaction otherwise exempt from registration under the 1933 Act and that certificates evidencing Voting Securities of AMCE which it will receive as a result of the Merger (and any shares subsequently acquired by such Stockholder) may bear an appropriate legend to such effect (and to the effect that Authorized Assignees are required to become parties to this Agreement and to the effect that the Company has a right of first refusal in connection with certain sales thereof) and that AMCE will give stop transfer instructions to its transfer agent regarding Voting Securities held by such Stockholder. Section 3.4 Transfers by Gift. Subject to the next sentence, each Stockholder severally agrees that during the Restricted Period such Stockholder will not transfer Voting Securities to any Authorized Assignee unless such person or entity agrees by instrument in form and substance reasonably satisfactory to AMCE to be bound by the provisions of this Agreement as a "Stockholder". It is understood and agreed that (subject to the requirements set forth in the definition of Permitted Assignees in the Registration Agreement) other transferees of Voting Securities shall not be required to agree to be bound by the provisions of this Agreement and that each Family Stockholder may transfer up to 5% 7 in the aggregate of its Merger Shares to Charitable Assignees free and clear of the provisions of this Agreement. ARTICLE IV Right of First Refusal Section 4.1 Right of First Refusal. (a) In the event that during the Restricted Period one of the Durwood Children desires to sell all or part of its holding of Voting Securities (the "Shares") in a transaction that is exempt from the registration requirements of the 1933 Act other than in brokers' transactions within the meaning of Section 4(4) thereof, AMCE shall first be given the opportunity, in the following manner, to purchase (or cause a corporation, entity, person or group designated by AMCE to purchase) all, but not less than all, of such Shares sought to be sold. (b) Such Durwood Child shall deliver a written notice (the "Notice") to AMCE of such intention, describing the proposed terms for sale of the Shares, identifying the offeror, identifying the proposed price of the Shares, and setting forth the other terms and conditions of such offer or proposed sale. (c) AMCE shall have the right for 5 business days (which period shall be extended by the amount of time taken to determine the value of non-cash consideration pursuant to the next sentence) from the receipt of the Notice (the "Decision Period"), exercisable by written notice in accordance with Section 7.8 hereof, to elect to purchase (or to designate a corporation, entity, person or group to purchase) all, but not less than all, of the Shares specified in the Notice for cash at the price set forth therein and upon the terms and conditions in the Notice. If the purchase price specified in the Notice includes any property other than cash, the purchase price shall be deemed to be the amount of any cash included in the purchase price plus the value (as may be mutually agreed by the Durwood Child and AMCE, or, if they are unable to agree, as determined by an independent, nationally recognized investment banking firm mutually selected by the Durwood Child and AMCE and the fees and expenses of such firm shall be borne equally by the Durwood Child and AMCE) of the 8 other property included in the price; and in such event AMCE's notice of exercise of the right to elect to purchase provided for herein shall set forth the purchase price so determined. (d) If AMCE does not exercise its right to elect to purchase by the end of the Decision Period, the Durwood Child shall be free to sell or agree to sell the Shares specified in the Notice to the third party making the offer described in the Notice, at the price specified therein or at any price in excess thereof and on the other terms and conditions specified in the Notice. If the Durwood Child shall not so sell all of the Shares within 90 days after the expiration of the Decision Period, the provisions of this Agreement including, without limitation, this Article IV, shall thereafter apply to the Shares not so sold. (e) If AMCE exercises its right to purchase specified in paragraph (c) of this Article IV, the closing of the purchase of the Shares shall take place within 30 days after receipt by the Durwood Child of the notice of exercise at a place, time, and date specified by AMCE. At the closing, AMCE shall deliver to the Durwood Child cash or immediately available funds in an amount equal to the purchase price set forth in the Notice, and the Durwood Child shall deliver to AMCE certificates representing the Shares, which Shares shall be free and clear of all liens, security interests and other encumbrances, duly endorsed in blank or accompanied by stock powers duly executed and otherwise in form acceptable for transfer of the Shares on the books of AMCE, together with all necessary stock transfer stamps. ARTICLE V Secondary Offering Section 5.1 Consummation of Secondary Offering. The Stockholders agree to use their best efforts to cause the Secondary Offering to be consummated during the period beginning the date that is six months and one day from the Effective Date and ending the date (the "Deadline Date") that is six months from such date (provided that such six-month period ending on the Deadline Date shall be extended by the length of any Postponement Period (as defined in the Registration Agreement)). Section 5.2 Number of Shares. Subject to the terms and conditions of the Registration Agreement, each Stockholder severally agrees that it will sell a number of 9 shares of Common Stock in the Secondary Offering equal to the number of shares of Common Stock set forth next to such Stockholder's name in Exhibit A to the Registration Agreement, subject to reduction or increase pursuant to the Registration Agreement, provided that Thomas A. Durwood and the TBD Partnership need only in the aggregate sell the number of shares of Common Stock set forth next to Thomas A. Durwood's name on such Exhibit A. Section 5.3 Failure to Consummate. In the event that the Merger is consummated and the Secondary Offering is not consummated pursuant to the Registration Agreement on or prior to the Deadline Date, other than as a result of the breach by AMCE of the Registration Agreement, Stanley H. Durwood, the 1992 Trust, the 1989 Trust and Delta shall jointly and severally (i) pay to AMCE a fee equal to an aggregate of $2,000,000 to compensate AMCE for the diversion of its officers and other employees in connection with the Secondary Offering and (ii) reimburse AMCE for all of its Merger Expenses. ARTICLE VI Tax Matters Section 6.1 Representations. Each Stockholder (other than the TBD Partnership) hereby severally represents and warrants to AMCE that such Stockholder has no plan or intention, and as of the Effective Date will have no plan or intention to sell, exchange, or otherwise dispose of a number of shares of Common Stock or Class B Stock received in the Merger that would reduce (i) the ownership by such Stockholder of Common Stock received in the Merger to a number of shares equal to less than 50% of the number of shares of Common Stock received by such Stockholder (plus, in the case of Thomas A. Durwood, the TBD Partnership) in the Merger or (ii) the ownership by such Stockholder of Class B Stock received by such Stockholder in the Merger to a number of shares equal to less than 50% of the number of shares of Class B Stock received by such Stockholder in the Merger (plus, in the case of Stanley H. Durwood, the 1989 Trust and the 1992 Trust, collectively, a number of shares of Class B Stock equal to the sum of (x) 65% of the number of shares of Common Stock received by Harvard College in the Merger, plus (y) a number of shares of Class B Stock equal to the Specified Percentage of the total number of shares of Class B Stock and Common Stock issued in the Merger). Section 6.2 Covenants. Each Stockholder (other than the TBD Partnership) hereby severally covenants that for a period of two years from the Effective Date, he, she or 10 it will not sell, exchange, or otherwise dispose of a number of shares of Common Stock or Class B Stock received by such Stockholder in the Merger that would reduce (i) the ownership by such Stockholder of Common Stock received in the Merger to a number of shares equal to less than 50% of the number of shares of Common Stock received by such Stockholder (plus, in the case of Thomas A. Durwood, the TBD Partnership) in the Merger (provided that such Stockholder may sell, exchange or otherwise dispose of a number of shares of Common Stock in excess of the number otherwise permitted by this clause (i) if another Stockholder agrees by written instrument reasonably satisfactory to AMCE to reduce the number of shares of Common Stock such other Stockholder is permitted to sell pursuant to this clause (i) by a like number of shares and all other Stockholders consent in writing thereto) or (ii) the ownership by such Stockholder of Class B Stock received by such Stockholder in the Merger to a number of shares equal to less than 50% of the number of shares of Class B Stock received by such Stockholder in the Merger (plus, in the case of Stanley H. Durwood, the 1989 Trust and the 1992 Trust, collectively, a number of shares of Class B Stock equal to the sum of (x) 65% of the number of shares of Common Stock received by Harvard College in the Merger, plus (y) a number of shares of Class B Stock equal to the Specified Percentage of the total number of shares of Class B Stock and Common Stock issued in the Merger). Section 6.3 Definitions. As used herein, a "Specified Percentage" of a number of shares of Common Stock and Class B Stock shall mean a percentage of such shares equal to the product (expressed as a percentage) of (A) a fraction having a numerator of $1,125,000 and a denominator equal to the sum of the value of all shares of Common Stock and Class B Stock issued in the Merger (as determined by AMCE in good faith, such determination to be conclusive and binding on the parties in the absence of manifest error), plus $1,125,000, multiplied by (B) 1.25. Immediately prior to the execution and delivery of this Agreement, AMCE shall have delivered to the 1989 Trust, the 1992 Trust and Stanley H. Durwood written notice of its determination of the Specified Percentage. ARTICLE VII Miscellaneous Section 7.1 Holdback Agreement. The Stockholders agree in connection with any registration of an underwritten offering of securities of AMCE during the Restricted Period, including the Secondary Offering, upon the request of AMCE or the underwriters 11 managing such offering, not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Voting Securities without the prior written consent of AMCE or such underwriters, as the case may be, for such period of time as AMCE or the underwriters may specify (a "Holdback Period"), provided that the aggregate of Holdback Periods for any 365-day period shall not exceed 180 days. Section 7.2 Interpretation. For all purposes of this Agreement, the terms AMCE "Common Stock" and "Class B Stock" shall include any securities of any issuer entitled to vote generally for the election of directors of such issuer which securities the holders of AMCE Common Stock or Class B Stock shall have received or as a matter of right are entitled to receive as a result of (i) any capital reorganization or reclassification of the capital stock of AMCE, (ii) any consolidation, merger or share exchange of AMCE with or into another corporation, or (iii) any sale of all or substantially all the assets of AMCE. Section 7.3 Enforcement. (a) Stockholders, on the one hand, and AMCE, on the other, acknowledge and agree that irreparable damage would occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the parties will be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically its provisions in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they may be entitled at law or in equity. (b) No failure or delay on the part of either party in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. Section 7.4 Entire Agreement. This Agreement, the Merger Agreement, the Registration Agreement and the Indemnification Agreement (as defined in the Merger Agreement) and, with respect to the Family Stockholders only, that certain Durwood Family Settlement Agreement dated as of January 22, 1996, constitute the entire understanding of the parties with respect to the transactions contemplated herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to the transactions contemplated hereby except that the Durwood Family Settlement Agreement shall not be deemed to be amended by this Agreement and shall remain in full force and effect. This Agreement may be amended only by an agreement in writing executed by all the parties. 12 Section 7.5 Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable, the remaining provisions shall remain in full force and effect. It is declared to be the intention of the parties that they would have executed the remaining provisions without including any that may be declared unenforceable. Section 7.6 Heading. Descriptive headings are for convenience only and will not control or affect the meaning or construction of any provision of this Agreement. Section 7.7 Counterparts. This Agreement may be executed in two or more counterparts, and each such executed counterpart will be an original instrument. Section 7.8 Notices. All notices, consents, requests, instructions, approvals and other communications provided for in this Agreement and all legal process in regard to this Agreement will be validly given, made or served, if in writing and delivered personally, by telecopy (except for legal process) or sent by registered mail postage paid: If to AMCE: AMC Entertainment Inc. 106 W. 14th Street Kansas City, Missouri 64101 Attention: Corporate Secretary Fax: with copies to: Charles J. Egan, Jr., Esq. Hallmark Cards, Incorporated 2501 McGee Trafficway Kansas City, MO 64141-6126 The Honorable Paul E. Vardeman Polsinelli, White, Vardeman & Shalton 13 Suite 1000, Plaza Steppes 700 West 47th Street Kansas City, MO 64112-1802 If a Stockholder or Delta: to the address set forth next to such Stockholder's or Delta's name on the signature pages hereto With information copies of notices to a Stockholder (other than Stanley H. Durwood, the 1992 Trust or the 1989 Trust) or Delta to: Robert C. Kopple, Esq. Kopple & Klinger 2029 Century Park East Suite 1040 Los Angles, CA 90067 Glenn Kurlander, Esq. Schiff Hardin & Waite 150 East 52nd Street Suite 2900 New York, New York 10022 With information copies of notices to Stanley H. Durwood, the 1992 Trust, the 1989 Trust or Delta to: Raymond F. Beagle, Jr., Esq. Lathrop & Gage L.C. 2345 Grand Boulevard, 24th Floor Kansas City, Missouri 64108-2684 or to such other address or telecopy number as any party may, from time to time, designate in a written notice given in a like manner. Notice shall be deemed given upon receipt thereof. Section 7.9 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors, heirs, legatees, devisees and personal and legal representatives of the parties and Authorized Assignees of Stockholders; provided, however, that no party may assign this Agreement (other than an assignment by a Stockholder to an Authorized Assignee as provided herein) without the prior written consent of all other parties. 14 Section 7.10 Governing Law. (a) This Agreement will be governed by and construed and enforced in accordance with the internal laws of the State of Missouri without giving effect to the conflict of laws principles thereof. (b) Each party hereto hereby consents to, and confers exclusive jurisdiction upon, the courts of the State of Missouri and the Federal courts of the United States of America located in the City of Kansas City, Missouri, and appropriate appellate courts therefrom, over any action, suit or proceeding arising out of or relating to this Agreement. Each party covenants that it will not commence any action, suit or proceeding arising out of or relating to this Agreement in any other jurisdiction. Nothing in this paragraph shall affect the rights of a party to enforce a judgment rendered by the courts referred to in the first sentence of this paragraph in any other jurisdiction. Each party hereto hereby waives, and agrees not to assert, as a defense in any such action, suit or proceeding that it is not subject to such jurisdiction or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that this Agreement may not be enforced in or by said courts or that its property is exempt or immune from execution, that the suit, action or proceeding is brought in an inconvenient forum, or that the venue of the suit, action or proceeding is improper. Service of process in any such action, suit or proceeding may be served on any party anywhere in the world, whether within or without the State of Missouri by mailing a copy thereof by registered or certified mail, postage prepaid, to such party at its address provided in Section 7.8 of this Agreement, provided that service of process may be accomplished in any other manner permitted by applicable law. Section 7.11 Certain Provisions Regarding the TBD Partnership. The TBD Partnership will not participate in any vote or determination to be made by the Stockholders hereunder. All agreements and obligations of Thomas A. Durwood and the TBD Partnership made herein or arising hereunder (other than in or under Article VI hereof) shall be deemed to be joint and several agreements and obligations of each of Thomas A. Durwood and the TBD Partnership. 15 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first referred to above. AMC ENTERTAINMENT INC. By /s/Peter C. Brown -------------------- Peter C. Brown President Address: STOCKHOLDERS Suite 1700 Power & Light Building 106 West 14th Street P.O. Box 419615 /s/Stanley H. Durwood Kansas City, Missouri 64141-6615 --------------------- Stanley H. Durwood 1323 Granite Creek Drive /s/Carol D. Journagan --------------------- Blue Springs, MO 64015 Carol D. Journagan 3001 West 68th Street /s/Edward D. Durwood -------------------- Shawnee Mission, KS 66208 Edward D. Durwood P.O. Box 7208 /s/Thomas A. Durwood -------------------- Rancho Santa Fe, CA 92067 Thomas A. Durwood 187 Chestnut Hill Road /s/Elissa D. Grodin ------------------- Wilton, CT 06897 Elissa D. Grodin 655 N.W. Altishan Place /s/Brian H. Durwood ------------------- Beaverton, OR 97006 Brian H. Durwood 666 West End Avenue /s/Peter J. Durwood ------------------- New York, NY 10025 Peter J. Durwood 16 Suite 1700 Power & Light Building 106 West 14th Street P.O. Box 419615 /s/Stanley H. Durwood ---------------------- Kansas City, Missouri 64141-6615 Stanley H. Durwood, as trustee of the 1992 Trust 1700 Power & Light Building 106 West 14th Street P.O. Box 419615 /s/ Stanley H. Durwood ---------------------- Kansas City, Missouri 64141-6615 Stanley H. Durwood, as trustee of the 1989 Trust Suite 1700 DELTA PROPERTIES, INC. Power & Light Building 106 West 14th Street P.O. Box 419615 /s/Stanley H. Durwood, ---------------------- Kansas City, Missouri 64141-6615 President P.O. Box 7208 THE THOMAS A. AND BARBARA F. Rancho Santa Fe, California 92067 DURWOOD FAMILY INVESTMENT PARTNERSHIP By:/s/Thomas A. Durwood --------------------- Thomas A. Durwood, as Trustee of the Thomas A. and Barbara F. Durwood Family Trust, as General Partner By: /s/Barbara F. Durwood --------------------- Barbara F. Durwood, as Trustee of the Thomas A. and Barbara F. Durwood Family Trust, as General Partnership 17 EX-99 4 Exhibit 99.4 Family Settlement Agreement Escrow ESCROW AGREEMENT This Escrow Agreement is entered into on August 15, 1997, by and among (i) Stanley H. Durwood, individually, and as trustee of the 1992 Durwood, Inc. Voting Trust dated December 12, 1992 (the "1992 Trust") and as trustee of the Trust created pursuant to the Stanley H. Durwood Trust Agreement dated August 14, 1989 (the "1989 Trust"), Carol D. Journagan, Edward D. Durwood, Thomas A. Durwood, Elissa D. Grodin, Brian H. Durwood and Peter J. Durwood (all persons and entities listed in this clause (ii) are referred to herein as the "Durwood Parties") and (ii) Mercantile Bank of Kansas City, a state banking corporation chartered in Missouri (the "Escrow Agent"). WHEREAS, the Durwood Parties are parties to a Durwood Family Settlement Agreement dated as of January 22, 1996 as amended (the "Settlement Agreement") and, together with AMC Entertainment Inc. ("AMCE"), are parties to a Registration Agreement dated as of August 15, 1995 (the "Registration Agreement"); and WHEREAS, pursuant to the Registration Agreement the Durwood Parties have agreed to sell at least 3,000,000 shares of Registerable Securities (as therein defined) in a registered secondary offering to occur after six months from the date hereof but prior to the expiration of twelve months after the date hereof, and pursuant to Section 7(a) of the Settlement Agreement, the Durwood Parties have agreed to deposit in escrow the shares to be offered by them in a secondary offering; and WHEREAS, the Escrow Agent is willing to establish an escrow account on the terms and subject to the conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows: 1. The Escrow Agent hereby acknowledges receipt of one or more certificates representing the shares of AMCE Common Stock and Class B Stock listed on Exhibit A hereto (the "Shares") and one or more related stock powers executed in blank with signatures guaranteed ("Stock Power") from the Durwood Party whose name is set forth next to such Shares on Exhibit A, in escrow, pursuant to this Escrow Agreement. The Durwood Party placing Shares and Stock Powers in escrow is referred to herein as the "Owner" of such Shares and of all Additional Shares (as defined below) issued or paid as dividends or other distributions thereon or with respect thereto. The Escrow Agent agrees to hold and dispose of the Shares and Stock Powers and any Additional Shares and Stock Powers in accordance with the terms and conditions of this Escrow Agreement. 1 2. The Escrow Agent shall hold the Shares and all shares of capital stock of AMCE or other securities issued or paid as dividends or other distributions on the Shares, any shares issued upon conversion of the Shares ("Additional Shares") and all Stock Powers delivered hereunder and release them only as set forth in Section 3 below. All dividends and other distributions (other than Additional Shares) on Shares received by the Escrow Agent will be immediately distributed to the Owner of such Shares by mailing the same to his or her respective address specified in or in the manner provided in Section 9. Each Durwood Party severally agrees to immediately forward to the Escrow Agent for deposit in escrow all Additional Shares received by such Durwood Party and related Stock Powers with respect to Shares remaining in escrow hereunder. The Escrow Agent shall maintain a ledger setting forth the number of Shares placed in escrow by each Durwood Party and all Additional Shares issued in respect of such Shares and deposited in escrow. 3. The Escrow Agent shall distribute the Shares, Additional Shares and related Stock Powers as follows: (a) Shares of Class B Stock and the related Stock Powers may be surrendered to AMCE in exchange for shares of Common Stock issued to the Owner thereof upon conversion of the Class B Stock by such Owner and a related Stock Power. (b) Subject to paragraphs (c) and (d) below, all Shares, Additional Shares and related Stock Powers shall be released from escrow and distributed to the Durwood Party that is the Owner thereof by mailing the same to his or her respective address specified in or in the manner provided in Section 9 promptly following the first anniversary of the date hereof. (c) Shares, Additional Shares and related Stock Powers shall be released from escrow, in whole or in part, (i) to the managing underwriters selected under the Registration Agreement upon the Escrow Agent's receipt of a joint written notice from a majority of the Durwood Parties, in accordance with such notice, and (ii) from time to time upon the Escrow Agent's receipt of a joint written notice from all the Durwood Parties, in accordance with such notice. For purpose of clause (i), each Durwood Party shall have one vote, Stanley H. Durwood, the 1992 Trust and the 1989 Trust shall be considered a single Durwood Party, Thomas A. Durwood and the Investment Partnership, as defined in Section 3(d), if it becomes subject to this Agreement as provided in Section 3(d), together with any and all of their Permitted Assignees who become subject to this Agreement as provided in Section 3(d), shall be considered a single Durwood Party, and each other Durwood Party and any and all of its Permitted Assignees who become subject to this Agreement as provided in Section 3 (d) shall be considered a single Durwood Party. 2 (d) Shares, Additional Shares and related Stock Powers may be released to one or more Durwood Parties if a like number of Shares and related Stock Powers are deposited by one or more other Durwood Parties or by a Permitted Assignee, as defined in the Registration Agreement, or, in the case of Thomas A. Durwood, by The Thomas A. and Barbara F. Durwood Family Investment Partnership, a California Limited Partnership (the "Investment Partnership") and such Durwood Party, Permitted Assignee or Investment Partnership executes an addendum in the form set forth as Exhibit B hereto acknowledging that they and such Shares are subject to this Agreement. Upon the execution of such addendum and the deposit of Shares and related Stock Powers by a Permitted Assignee or the Investment Partnership, the Permitted Assignee or the Investment Partnership, as the case may be, will be deemed a Durwood Party for purposes of this Agreement, subject to Section 3 (c). The Escrow Agent may rely on a joint letter from Lathrop & Gage L.C. and either of Schiff, Hardin & Waite, of Chicago, Illinois, or New York, New York, or Kopple & Klinger, LLP, of Los Angeles, California, as to the status of a person as a Permitted Assignee. (e) If the Escrow Agent is notified of a claim against or in respect of Shares, Additional Shares or Stock Powers or if a claim is made against the Escrow Agent in respect of Shares, Additional Shares, or Stock Powers, such Shares, Additional Shares and Stock Powers shall continue to be held, and not released from escrow, except pursuant to the final unappealable order (or an order for which the time to appeal has expired without an appeal having been made) of a court of competent jurisdiction. 4. It is understood and agreed that the duties of the Escrow Agent are purely ministerial in nature. It is further agreed that: (a) the Escrow Agent may conclusively rely and shall be protected in acting or refraining from acting upon any document, instrument, certificate, instruction or signature believed by it to be genuine and may assume and shall be protected in assuming that any person purporting to give any notice or instructions in accordance with this Escrow Agreement or in connection with any transaction to which this Escrow Agreement relates has been duly authorized to do so. The Escrow Agent shall not be obligated to make any inquiry as to the authority, capacity, existence or identity of any person purporting to have executed any such document or instrument or have made any such signature or purporting to give any such notice or instructions; (b) in the event that the Escrow Agent shall be uncertain as to its duties or rights hereunder or shall receive instructions with respect to the Shares, Additional Shares or Stock Powers which, in its sole opinion, are in conflict with either other instructions received by it or any provision of the Escrow Agreement, it shall, without liability of any kind, be entitled to hold the Shares, Additional Shares and Stock Powers pending the resolution of such uncertainty to the Escrow Agent's sole satisfaction, by final judgment 3 of a court or courts of competent jurisdiction or otherwise, or the Escrow Agent, at its option, may, in final satisfaction of its duties hereunder, deposit the relevant Shares, Additional Shares and Stock Powers with the clerk of any other court of competent jurisdiction; (c) the Escrow Agent undertakes to perform only such duties as are expressly set forth herein and shall not be bound in any way by any agreement among the Durwood Parties (whether or not the Escrow Agent has knowledge thereof); (d) the Escrow Agent shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the rights or powers conferred upon it by this Escrow Agreement (provided that the Escrow Agent shall be liable for its gross negligence and willful misconduct), and may consult with counsel of its own choice and shall have full and complete authorization and protection for any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel; and (e) the Escrow Agent shall not assume any responsibility or liability for any transactions among the Durwood Parties. 5. The Durwood Parties, jointly and severally, agree to indemnify the Escrow Agent, its directors, officers, agents and employees and any person who "controls" the Escrow Agent within the meaning of Section 15 of the Securities Act of 1933, as amended (collectively the "Indemnified Parties") against, and hold them harmless from, any and all loss, liability, cost, damage and expense, including, without limitation, costs of investigation and reasonable counsel fees and expenses, which any of the Indemnified Parties may suffer or incur by reason of any action, claim or proceeding brought against any of the Indemnified Parties, arising out of or relating in any way to this Escrow Agreement or any transaction to which this Escrow Agreement relates, other than any action, claim or proceeding to the extent resulting from the gross negligence or willful misconduct of such Indemnified Party. The provisions of this paragraph shall survive the termination of this Escrow Agreement. 6. This Escrow Agreement may be altered, amended or terminated only with the written consent of the Durwood Parties and the Escrow Agent. Should the Durwood Parties attempt to change this Escrow Agreement in a manner which, in the Escrow Agent's sole opinion, is undesirable, the Escrow Agent may resign as Escrow Agent upon two weeks' written notice to the Durwood Parties; otherwise, notwithstanding any provision hereof to the contrary, it may resign as Escrow Agent at any time upon 60 days' written notice to the Durwood Parties. In the case of the Escrow Agent's resignation, its only duty shall be to hold and dispose of the Shares, Additional Shares and Stock Powers in accordance with the original provisions of this Escrow Agreement until a successor escrow agent shall be appointed by the Durwood Parties acting by majority vote determined as set forth in Section 3(c) and a written notice of the name and address of 4 such successor escrow agent shall be given to the Escrow Agent by the Durwood Parties, whereupon the Escrow Agent's only duty shall be to turn over, in accordance with the written instructions of the Durwood Parties, to the successor escrow agent the Shares, Additional Shares and Stock Powers and any documentation related thereto. In the event that a successor escrow agent shall not have been appointed and the Escrow Agent shall not have turned over to the successor escrow agent the Shares, Additional Shares and Stock Powers within the time periods specified above, or the Escrow Agent's written notice of resignation, as the case may be, the Escrow Agent may deposit the Shares, Additional Shares and Stock Powers with the clerk of any other court of competent jurisdiction, at which time the Escrow Agent's duties hereunder shall terminate. 7. The Escrow Agent shall be entitled to a $125 initiation fee and a $750 annual escrow fee. The fees will be payable ratably by the Durwood Parties. 8. THIS ESCROW AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF MISSOURI WITHOUT APPLICATION TO THE PRINCIPLES OF CONFLICTS OF LAWS. This Escrow Agreement shall be binding upon the parties hereto and their respective successors and assigns; provided, however, that any assignment or transfer by any party of its rights under this Escrow Agreement shall be void (as against the Escrow Agent or otherwise) unless: (a) written notice thereof shall be given to the Escrow Agent and the Durwood Parties; and (b) the Escrow Agent and the Durwood Parties shall have consented, in writing, to such assignment or transfer. 9. All notices, requests, demands and other communications to be given in connection with this Escrow Agreement shall be in writing, shall be delivered by hand, overnight delivery service or by facsimile transmission, shall be deemed given when received and shall be addressed to the Escrow Agent at the address listed below or to the Durwood Parties at the respective addresses listed on the signature pages or to such other addresses as they shall designate from time to time in writing, forwarded in like manner; provided, however, that if any notice given by telecopy is received other than during the regular business hours of the recipient, it shall be deemed to have been given on the opening of business on the next business day of the recipient: If to the Escrow Agent: Mercantile Bank of Kansas City 1101 Walnut, 2nd Floor Kansas City, Missouri 64106 5 Attention: Carolyn Hargis Telecopier No.: 816-871-2279 Information copies of all notices given a Durwood Party (other than Stanley H. Durwood, the 1992 Trust or the 1989 Trust) shall be given to: Robert C. Kopple, Esq. Kopple & Klinger 2029 Century Park East Suite 1040 Los Angeles, A 90067 Glenn Kurlander, Esq. Schiff Hardin & Waite 150 East 52nd Street Suite 2900 New York, New York 10022 Information copies of all notices given to Stanley H. Durwood, the 1992 Trust or the 1989 Trust should be given to: Raymond F. Beagle, Jr., Esq. Lathrop & Gage L.C. 2345 Grand Boulevard, 24th Floor Kansas City, Missouri 64108-2684 10. If any provision of this Escrow Agreement or the application thereof to any person or circumstance shall be determined to be invalid or unenforceable, the remaining provisions of this Escrow Agreement or the application of such provision to persons or circumstances other than those to which it is held invalid or unenforceable shard not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law. 11. This Escrow Agreement may be executed in several counterparts or by separate instruments, and all of such counterparts or instruments shall constitute one agreement, binding on all the parties hereto. 12. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the context may require. IN WITNESS WHEREOF, the undersigned have executed this Escrow Agreement as of the day and year first above written. 6 Mercantile Bank of Kansas City By: /s/Ted L. Randall ------------------- Name: Ted L. Randall Title: Vice President Suite 1700 Power & Light Building 106 West 14th Street P.O. Box 419615 /s/Stanley H. Durwood --------------------- Kansas City, Missouri 64141-6615 Stanley H. Durwood 1323 Granite Creek Drive /s/Carol D. Journagan ------------------- Blue Springs, MO 64015 Carol D. Journagan 3001 West 68th Street /s/Edward D. Durwood ---------------------- Shawnee Mission, KS 66208 Edward D. Durwood P.O. Box 7208 /s/Thomas A. Durwood -------------------- Rancho Santa Fe. CA 92067 Thomas A. Durwood 187 Chestnut Hill Road /s/Elissa D. Grodin ------------------- Wilton, CT 06897 Elissa D.Grodin 655 N.W. Altishan Place /s/Brian H. Durwood ------------------ Beaverton, OR 97006 Brian H. Durwood 666 West End Avenue /s/Peter J. Durwood ------------------ New York, NY 10025 Peter J. Durwood Suite 1700 Power & Light Building 106 West 14th Street /s/ Stanley H. Durwood ---------------------- P.O. Box 419615 Stanley H. Durwood, as trustee of Kansas City, Missouri 64141-6615 the 1992 Trust 7 Suite 1700 Power & Light Building 106 West 14th Street /s/Stanley H. Durwood --------------------- P.O. Box 419615 Stanley H. Durwood, as trustee of Kansas City, Missouri 64141-6615 the 1989 Trust 8 Exhibit A Family Settlement Agreement Escrow 1992 Durwood, Inc. Voting Trust 500,000 Shares of AMCE Class B Stock Carol D. Journagan 416,667 Shares of AMCE Common Stock Edward D. Durwood 416,667 Shares of AMCE Common Stock Thomas A. Durwood 416,667 Shares of AMCE Common Stock Elissa D. Grodin 416,667 Shares of AMCE Common Stock Brian H. Durwood 416,667 Shares of AMCE Common Stock Peter J. Durwood 416,667 Shares of AMCE Common Stock 9 Exhibit B ADDENDUM TO ESCROW AGREEMENT The undersigned hereby deposits ________ shares of Common Stock of AMC Entertainment Inc. and related stock powers executed in blank with Mercantile Bank of Kansas City, as Escrow Agent, to be held in escrow by Escrow Agent in accordance with that certain Escrow Agreement dated as of August 15, 1997, by and among Escrow Agent, Stanley H. Durwood, individually, and as trustee of the 1992 Durwood, Inc. Voting Trust dated December 12, 1992 and as trustee of the Trust created pursuant to the Stanley H. Durwood Trust Agreement dated August 14, 1989, Carol D. Journagan, Edward D. Durwood, Thomas A. Durwood, Elissa D. Grodin, Brian H. Durwood and Peter J. Durwood. If the undersigned is not one of the above named original parties to the Escrow Agreement, the undersigned agrees that it shall be bound by said Escrow Agreement as though it were an original party thereto and that such shares and stock powers shall be disposed of in accordance with such Escrow Agreement. For purposes of Section 9 of the Escrow Agreement, the undersigned's notice address is - ------------------------------------------------------------------------. ------------------------------- Date:_________________________ Accepted Mercantile Bank of Kansas City By_____________________________ Date:______________________ 10 EX-99 5 Exhibit 99.7 SECOND AMENDMENT TO DURWOOD FAMILY SETTLEMENT AGREEMENT THIS AMENDMENT is made as of August 15, 1997 by and among (i) STANLEY H. DURWOOD, individually, as Trustee of the 1992 Durwood, Inc. Voting Trust dated December 12, 1992, as amended, and as Trustee of the Stanley H. Durwood Trust Agreement dated August 14, 1989, as amended, and (ii) CAROL D. JOURNAGAN, EDWARD D. DURWOOD, ELISSA D. GRODIN, BRIAN H. DURWOOD, PETER J. DURWOOD, THOMAS A. DURWOOD, ("TAD"), and THE THOMAS A. AND BARBARA F. DURWOOD FAMILY INVESTMENT PARTNERSHIP, a California limited partnership ("TBD Partnership") (all persons and entities listed in this clause (ii) are referred to herein as the "Durwood Children"). WHEREAS, the parties hereto (other than TBD Partnership) heretofore entered into a certain agreement entitled the "Durwood Family Settlement Agreement" dated as of January 22, 1996, as amended by first amendment thereto dated as of March 18, 1997 ("Settlement Agreement"), regarding, among other things, the liquidation of American Associated Enterprises, a Missouri limited partnership ("AAE"), and the merger of Durwood, Inc., a Missouri corporation ("DI), with and into AMC Entertainment, Inc., a Delaware corporation ("AMCE"); WHEREAS, the parties hereto and others heretofore entered into a certain Partnership Interest Assignment and Assumption Agreement dated as of August ___, 1997 (the "Assignment and Assumption"), pursuant to which TAD assigned to TBD Partnership, inter alia, an undivided portion of TAD's rights, title and interests in, to and under the Settlement Agreement, and TBD Partnership assumed and agreed perform and observe, to the extent applicable to the interests transferred, all of the terms, covenants and conditions on the part of TAD to be performed or observed under the Settlement Agreement, upon the terms and conditions contained therein; and WHEREAS, the parties desire to amend the Settlement Agreement in the manner hereinafter provided in order to implement the terms of the Assignment and Assumption; NOW, THEREFORE, in consideration of the foregoing, and of the mutual agreements, promises, covenants and representations hereinafter set forth, the parties, intending to be bound legally, hereby agree as follows: 1. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Settlement Agreement. 2. The parties hereto agree that TBD Partnership shall be, and hereby is, added as a party to the Settlement Agreement as one of the Partners and as one of the Durwood Children, respectively. - 1 - 3. TBD Partnership shall, and hereby does, assume and agree to be bound by and perform and observe, to the extent applicable directly or indirectly to the interest transferred pursuant to the Assignment and Assumption, all of the terms, covenants, conditions and obligations on the part of TAD to be performed or observed under the Settlement Agreement. 4. Notwithstanding anything contained or implied herein or in the Assignment and Assumption to the contrary, TBD Partnership will not participate in any vote or determination to be made by the parties under the Settlement Agreement. All agreements and obligations of TAD and TBD Partnership made or arising under the Settlement Agreement shall be deemed to be joint and several agreements and obligations of each of TAD and TBD Partnership. 5. Except as expressly modified by this Amendment, each party hereby expressly reserves all of its rights, remedies and defenses under, arising out of or related to the Settlement Agreement, the transactions contemplated thereby and all applicable laws, whether at law or in equity. 6. Except as expressly modified by this Amendment, the Settlement Agreement shall remain in full force and effect in accordance with its terms and is hereby ratified and confirmed in all respects by the parties hereto. IN WITNESS WHEREOF, the parties have caused this Amendment to be executed as of the date first above written. - 2 - /s/Stanley H. Durwood /s/Thomas A. Durwood - --------------------- -------------------- STANLEY H. DURWOOD, individually and THOMAS A. DURWOOD as trustee of the aforesaid trusts /s/Carol D. Journagan THE THOMAS A. AND BARBARA F. - --------------------- CAROL D. JOURNAGAN DURWOOD FAMILY INVESTMENT PARTNERSHIP /s/Edward D. Durwood By: /s/Thomas A, Durwood - -------------------- ---------------------- EDWARD D. DURWOOD Thomas A. Durwood, as Trustee of the Thomas A. and Barbara F. Durwood Family Trust, as General Partner /s/Elissa D. Grodin - ------------------- ELISSA D. GRODIN By: /s/Barbara F. Durwood ---------------------- Barbara F. Durwood, as Trustee of the Thomas A. and Barbara F. Durwood Family Trust. as General Partner /s/Brian D. Durwood - ------------------- BRIAN H. DURWOOD /s/Peter J. Durwood - ------------------- PETER J. DURWOOD - 3 - THE UNDERSIGNED, AMC ENTERTAINMENT INC., hereby consents to the provisions of the foregoing Second Amendment to Durwood Family Settlement Agreement among Stanley H. Durwood, individually, as Trustee of the 1992 Durwood, Inc. Voting Trust dated December 12, 1992, as amended, and as Trustee of the Stanley H. Durwood Trust Agreement dated August 14, 1989, Carol D. Journagan, Edward D. Durwood, Elissa D. Grodin, Brian H. Durwood, Peter J. Durwood, Thomas A. Durwood and The Thomas A. and Barbara F. Durwood Family Investment Partnership, pursuant to the provisions of Section 4(a) of the Indemnification Agreement dated as of March 31, 1997 among the undersigned, Stanley H. Durwood, individually, as Trustee of the 1992 Durwood, Inc. Voting Trust dated December 12, 1992, as amended, and as Trustee of the Stanley H. Durwood Trust Agreement dated August 14, 1989, Carol D. Journagan, Edward D. Durwood, Thomas A. Durwood, Elissa D. Grodin, Brian H. Durwood and Peter J. Durwood, as amended. Date: August 15, 1997 AMC ENTERTAINMENT INC. By:/s/ Stanley H. Durwood ---------------------- Title: Chairman and CEO - 4 - EX-99 6 Exhibit 99.9 FIRST AMENDMENT TO INDEMNIFICATION AGREEMENT THIS AMENDMENT is made as of August 15, 1997 by and among (i) AMC ENTERTAINMENT, INC., a Delaware corporation ("AMCE"), (ii) STANLEY H. DURWOOD, individually ("SHD"), as Trustee of the 1992 Durwood, Inc. Voting Trust dated December 12, 1992, as amended (the "1992 Trust"), and as Trustee of the trust created pursuant to the Stanley H. Durwood Trust Agreement dated August 14, 1989, as amended (the "1989 Trust"), CAROL D. JOURNAGAN, EDWARD D. DURWOOD, ELISSA D. GRODIN, BRIAN H. DURWOOD, PETER J. DURWOOD, THOMAS A. DURWOOD, ("TAD"), and THE THOMAS A. AND BARBARA F. DURWOOD FAMILY INVESTMENT PARTNERSHIP, a California limited partnership ("TBD Partnership") (all persons and entities listed in this clause (ii) are referred to herein as the "Durwood Parties"), and (iii) DELTA PROPERTIES, INC., a Missouri corporation ("Delta"). WHEREAS, the parties hereto (other than TBD Partnership) heretofore entered into a certain Indemnification Agreement dated as of March 31, 1997 ("Indemnification Agreement"), in connection with a certain Agreement and Plan of Merger and Reorganization dated as of March 31, 1997 (the "Merger Agreement") between AMCE and Durwood Inc., a Missouri corporation ("DI"), pursuant to which DI will be mergered with and into AMCE; WHEREAS, the parties hereto and DI heretofore entered into a certain Partnership Interest Assignment and Assumption Agreement dated as of August 14, 1997 (the "Assignment and Assumption"), pursuant to which TAD assigned to TBD Partnership, inter alia, an undivided portion of TAD's rights, title and interests in, to and under the Indemnification Agreement, and TBD Partnership assumed and agreed perform and observe, to the extent applicable to the interests transferred, all of the terms, covenants and conditions on the part of TAD to be performed or observed under the Indemnification Agreement (other than the provisions of Section 4(c) thereof), upon the terms and conditions contained therein; WHEREAS, the parties desire to amend the Indemnification Agreement in the manner hereinafter provided in order to implement the terms of the Assignment and Assumption; NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth herein, the parties hereto do hereby agree and covenant as follows: 1 1. Capitalized terms not defined herein shall have the meanings assigned to such terms in the Indemnification Agreement. 2. The parties hereto agree that TBD Partnership shall be, and hereby is, added as a party to the Indemnification Agreement as one of the Durwood Parties. 3. TBD Partnership shall, and hereby does, assume and agree to be bound by and perform and observe, to the extent applicable directly or indirectly to the interest transferred pursuant to the Assignment and Assumption, all of the terms, covenants, conditions and obligations on the part of TAD to be performed or observed under the Indemnification Agreement (other than Section 4(c) thereof). 4. Notwithstanding anything contained or implied herein or in the Assignment and Assumption to the contrary, TBD Partnership will not participate in any vote or determination to be made by the Durwood Parties under the Indemnification Agreement. All agreements and obligations of TAD and TBD Partnership made or arising under the Indemnification Agreement (other than Section 4(c) thereof) shall be deemed to be joint and several agreements and obligations of each TAD and TBD Partnership. 5. Except as expressly modified by this Amendment, the Indemnification Agreement shall remain in full force and effect in accordance with its terms and is hereby ratified and confirmed in all respects by the parties hereto. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first above written. 2 AMC ENTERTAINMENT, INC. By /s/Peter C. Brown ------------------- Peter C. Brown President /s/Stanley H. Durwood ---------------------- Stanley H. Durwood /s/Carol D. Journagan ------------------------- Carol D. Journagan /s/Edward D. Durwood ------------------------- Edward D. Durwood /s/Thomas A. Durwood ------------------------ Thomas A. Durwood /s/Elissa D. Grodin ------------------------ Elissa D. Grodin /s/Brian H. Durwood ------------------------ Brian H. Durwood /s/Peter J. Durwood ----------------------- Peter J. Durwood 3 EX-99 7 Exhibit 99.10 Stock Agreement Escrow ESCROW AGREEMENT This Escrow Agreement is entered into on August 15, 1997, by and among (i) AMC Entertainment Inc., a Delaware corporation ("AMCE"), (ii) Stanley H. Durwood, individually, and as trustee of the 1992 Durwood, Inc. Voting Trust dated December 12, 1992 (the "1992 Trust") and as trustee of the Trust created pursuant to the Stanley H. Durwood Trust Agreement dated August 14, 1989 (the"1989 Trust"), Carol D. Journagan, Edward D. Durwood, Thomas A. Durwood, Elissa D. Grodin, Brian H. Durwood and Peter J. Durwood (all persons and entities listed in this clause (ii) are referred to herein as the "Durwood Parties") and (iii) Mercantile Bank of Kansas City, a state banking corporation chartered in Missouri (the "Escrow Agent"). WHEREAS, AMCE, the Durwood Parties and Delta Properties, Inc., a Missouri corporation, are parties to an Indemnification Agreement dated as of March 31, 1997 (the "Indemnification Agreement"); and WHEREAS, Section 4(c) of the Indemnification Agreement provides that certain shares of AMCE Common Stock and AMCE Class B Stock be deposited in escrow for two years; and WHEREAS, the Escrow Agent is willing to establish an escrow account on the terms and subject to the conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows: 1. The Escrow Agent hereby acknowledges receipt of certificates representing the shares of AMCE Common Stock and Class B Stock listed on Exhibit A hereto (the "Shares") from the Durwood Party whose name is set forth next to such Shares on Exhibit A, in escrow, pursuant to this Escrow Agreement. The Durwood Party placing Shares in escrow is referred to herein as the "Owner" of such Shares and of all Additional Shares (as defined below) issued or paid as dividends or other distributions thereon. The Escrow Agent agrees to hold and dispose of the Shares and any Additional Shares in accordance with the terms and conditions of this Escrow Agreement. 2. The Escrow Agent shall hold the Shares and all shares of capital stock of AMCE or other securities issued or paid as dividends or other distributions on the Shares ("Additional Shares") and release them only as set forth in Section 3 below. 1 All dividends and other distributions (other than Additional Shares) on Shares received by the Escrow Agent will be immediately distributed to the Owner of such Shares by mailing the same to his or her respective address specified in or in the manner provided in Section 9. Each Durwood Party severally agrees to immediately forward to the Escrow Agent for deposit in escrow all Additional Shares received by such Durwood Party while the relevant Shares remain in escrow hereunder. The Escrow Agent shall maintain a ledger setting forth the number of Shares placed in escrow by each Durwood Party and all Additional Shares issued in respect of such Shares and deposited in escrow. 3. The Escrow Agent shall distribute the Shares and Additional Shares as follows: (a) Subject to paragraphs (b) and (c) below, all Shares and Additional Shares shall be released from escrow and distributed to the Durwood Party that is the Owner thereof by mailing the same to his or her respective address specified in or in the manner provided in Section 9 promptly following the second anniversary of the date hereof. (b) Shares and Additional Shares shall be released from escrow, in whole or in part, from time to time upon the Escrow Agent's receipt of a joint written notice of AMCE and the Durwood Party that is the Owner of such Shares and Additional Shares in accordance with such notice. (c) If the Escrow Agent is notified of a claim against or in respect of Shares or Additional Shares or if a claim is made against the Escrow Agent in respect of Shares or Additional Shares, such Shares and Additional Shares shall continue to be held, and not released from escrow, except pursuant to the final unappealable order (or an order for which the time to appeal has expired without an appeal having been made) of a court of competent jurisdiction. 4. It is understood and agreed that the duties of the Escrow Agent are purely ministerial in nature. It is further agreed that: (a) the Escrow Agent may conclusively rely and shall be protected in acting or refraining from acting upon any document, instrument, certificate, instruction or signature believed by it to be genuine and may assume and shall be protected in assuming that any person purporting to give any notice or instructions in accordance with this Escrow Agreement or in connection with any transaction to which this Escrow Agreement relates has been duly authorized to do so. The Escrow Agent shall not be obligated to make any inquiry as to the authority, capacity, existence or identity of any person purporting to have executed any such document or instrument or have made any such signature or purporting to give any such notice or instructions; 2 (b) in the event that the Escrow Agent shall be uncertain as to its duties or rights hereunder or shall receive instructions with respect to the Shares and Additional Shares which, in its sole opinion, are in conflict with either other instructions received by it or any provision of the Escrow Agreement, it shall, without liability of any kind, be entitled to hold the Shares and Additional Shares pending the resolution of such uncertainty to the Escrow Agent's sole satisfaction, by final judgment of a court or courts of competent jurisdiction or otherwise, or the Escrow Agent, at its option, may, in final satisfaction of its duties hereunder, deposit the relevant Shares and Additional Shares with the clerk of any other court of competent jurisdiction; (c) the Escrow Agent undertakes to perform only such duties as are expressly set forth herein and shall not be bound in any way by any agreement between AMCE and the Durwood Parties (whether or not the Escrow Agent has knowledge thereof); (d) the Escrow Agent shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the rights or powers conferred upon it by this Escrow Agreement (provided that the Escrow Agent shall be liable for its gross negligence and willful misconduct), and may consult with counsel of its own choice and shall have full and complete authorization and protection for any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel; and (e) the Escrow Agent shall not assume any responsibility or liability for any transactions between AMCE and the Durwood Parties. 5. AMCE agrees to indemnify the Escrow Agent, its directors, officers, agents and employees and any person who "controls" the Escrow Agent within the meaning of Section 15 of the Securities Act of 1933, as amended (collectively the "Indemnified Parties") against, and hold them harmless from, any and all loss, liability, cost, damage and expense, including, without limitation, costs of investigation and reasonable counsel fees and expenses, which any of the Indemnified Parties may suffer or incur by reason of any action, claim or proceeding brought against any of the Indemnified Parties, arising out of or relating in any way to this Escrow Agreement or any transaction to which this Escrow Agreement relates, other than any action, claim or proceeding to the extent resulting from the gross negligence or willful misconduct of such Indemnified Party. The provisions of this paragraph shall survive the termination of this Escrow Agreement. 6. This Escrow Agreement may be altered, amended or terminated only with the written consent of AMCE, the Durwood Parties and the Escrow Agent. Should AMCE and the Durwood Parties attempt to change this Escrow Agreement in a manner which, in the Escrow Agent's sole opinion, is undesirable, the Escrow Agent may resign as Escrow Agent upon two weeks' written notice to AMCE and the Durwood Parties; otherwise, notwithstanding any provision hereof to the contrary, it may resign as Escrow 3 Agent at any time upon 60 days' written notice to AMCE and the Durwood Parties. In the case of the Escrow Agent's resignation, its only duty shall be to hold and dispose of the Shares and Additional Shares in accordance with the original provisions of this Escrow Agreement until a successor escrow agent shall be appointed by AMCE and the Durwood Parties acting by majority vote (in which each such party shall have one vote, with Stanley H. Durwood, the 1989 Trust and the 1992 Trust being deemed a single party) and a written notice of the name and address of such successor escrow agent shall be given to the Escrow Agent by AMCE and the Durwood Parties, whereupon the Escrow Agent's only duty shall be to turn over, in accordance with the written instructions of AMCE and the Durwood Parties, to the successor escrow agent the Shares and Additional Shares and any documentation related thereto. In the event that a successor escrow agent shall not have been appointed and the Escrow Agent shall not have turned over to the successor escrow agent the Shares and Additional Shares within the time periods specified above, or the Escrow Agent's written notice of resignation, as the case may be, the Escrow Agent may deposit the Shares and Additional Shares with the clerk of any other court of competent jurisdiction, at which time the Escrow Agent's duties hereunder shall terminate. 7. The Escrow Agent shall be entitled to a $125 initiation fee and a $750 annual escrow fee. The fees will be payable by AMCE. 8. THIS ESCROW AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF MISSOURI WITHOUT APPLICATION TO THE PRINCIPLES OF CONFLICTS OF LAWS. This Escrow Agreement shall be binding upon the parties hereto and their respective successors and assigns; provided, however, that any assignment or transfer by any party of its rights under this Escrow Agreement shall be void (as against the Escrow Agent or otherwise) unless: (a) written notice thereof shall be given to the Escrow Agent, AMCE and the Durwood Parties; and (b) the Escrow Agent, AMCE and the Durwood Parties shall have consented, in writing, to such assignment or transfer. 9. All notices, requests, demands and other communications to be given in connection with this Escrow Agreement shall be in writing, shall be delivered by hand, overnight delivery service or by facsimile transmission, shall be deemed given when received and shall be addressed to the Escrow Agent at the address listed below or to AMCE and the Durwood Parties at the respective addresses listed on the signature pages or to such other addresses as they shall designate from time to time in writing, forwarded in like manner; provided, however, that if any notice given by telecopy is received other than during the regular business hours of the recipient, it shall be deemed to have been given on the opening of business on the next business day of the recipient: 4 If to the Escrow Agent: Mercantile Bank of Kansas City 1101 Walnut, 2nd Floor Kansas City, Missouri 64106 Attention: Carolyn Hargis Telecopier No.: 816-871-2279 Information copies of all notices given a Durwood Party (other than Stanley H. Durwood, the 1992 Trust or the 1989 Trust) shall be given to: Robert C. Kopple, Esq. Kopple & Klinger 2029 Century Park East Suite 1040 Los Angeles, A 90067 Glenn Kurlander, Esq. Schiff Hardin & Waite 150 East 52nd Street Suite 2900 New York, New York 10022 Information copies of all notices given to Stanley H. Durwood, the 1992 Trust or the 1989 Trust should be given to: Raymond F. Beagle, Jr., Esq. Lathrop & Gage L.C. 2345 Grand Boulevard, 24th Floor Kansas City, Missouri 64108-2684 Information copies of all notices given to AMCE shall be given to: Charles J. Egan, Jr., Esq. Hallmark Cards, Incorporated 2501 McGee Trafficway Kansas City, MO 64141-6126 The Honorable Paul E. Vardeman Polsinelli, White, Vardeman & Shalton Suite 1000, Plaza Steppes 700 West 47th Street 5 Kansas City, MO 64112-1802 10. If any provision of this Escrow Agreement or the application thereof to any person or circumstance shall be determined to be invalid or unenforceable, the remaining provisions of this Escrow Agreement or the application of such provision to persons or circumstances other than those to which it is held invalid or unenforceable shard not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law. 11. This Escrow Agreement may be executed in several counterparts or by separate instruments, and all of such counterparts or instruments shall constitute one agreement, binding on all the parties hereto. 12. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the context may require. IN WITNESS WHEREOF, the undersigned have executed this Escrow Agreement as of the day and year first above written. MERCANTILE BANK OF KANSAS CITY By:/s/Ted L. Randall ---------------------- Name: Ted L. Randall Title: Vice President Suite 1700 Power & Light Building AMC ENTERTAINMENT INC. 106 West 14th Street P.O. Box 419615 By:/s/Stanley H. Durwood ----------------------- Kansas City, Missouri 64141-6615 Chairman and CEO Suite 1700 Power & Light Building 106 West 14th Street P.O. Box 419615 /s/Stanley H. Durwood -------------------------- Kansas City, Missouri 64141-6615 Stanley H. Durwood 1323 Granite Creek Drive /s/Carol D. Journagan -------------------------- Blue Springs, MO 64015 Carol D. Journagan 3001 West 68th Street /s/Edward D. Durwood -------------------------- Shawnee Mission, KS 66208 Edward D. Durwood 6 P.O. Box 7208 /s/Thomas A. Durwood -------------------------- Rancho Santa Fe. CA 92067 Thomas A. Durwood 187 Chestnut Hill Road /s/Elissa D. Grodin ------------------------- Wilton, CT 06897 Elissa D. Grodin 655 N.W. Altishan Place /s/Brian H. Durwood ------------------------- Beaverton, OR 97006 Brian H. Durwood 666 West End Avenue /s/Peter J. Durwood ------------------------- New York, NY 10025 Peter J. Durwood Suite 1700 Power & Light Building 106 West 14th Street /s/Stanley H. Durwood --------------------- P.O. Box 419615 Stanley H. Durwood, as trustee of Kansas City, Missouri 64141-6615 the 1992 Trust Suite 1700 Power & Light Building 106 West 14th Street /s/Stanley H. Durwood --------------------------- P.O. Box 419615 Stanley H. Durwood, as trustee of Kansas City, Missouri 64141-6615 the 1989 Trust 7 EXHIBIT A TO STOCK AGREEMENT ESCROW 1992 Durwood, Inc. Voting Trust 2,590,017 shares of AMCE Class B Stock Carol D. Journagan 730,602 shares of AMCE Common Edward D. Durwood Stock each Thomas A. Durwood Elissa D. Grodin Brian H. Durwood Peter J. Durwood 8 -----END PRIVACY-ENHANCED MESSAGE-----