SCHEDULE 14A INFORMATION

                  Proxy Statement Pursuant to Section 14(a) of
            the Securities Exchange Act of 1934 (Amendment No.    )


              
      Filed by the Registrant /X/

      Filed by a Party other than the Registrant / /

      Check the appropriate box:
      /X/        Preliminary Proxy Statement
      / /        CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED
                 BY RULE 14a-6(e)(2))
      / /        Definitive Proxy Statement
      / /        Definitive Additional Materials
      / /        Soliciting Material Pursuant to Section240.14a-12

                                      AMC ENTERTAINMENT INC.
      -----------------------------------------------------------------------
                 (Name of Registrant as Specified In Its Charter)

      -----------------------------------------------------------------------
           (Name of Person(s) Filing Proxy Statement, if other than the
                                    Registrant)


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                                   [AMC LOGO]

                             AMC ENTERTAINMENT INC.
                              106 West 14th Street
                          Kansas City, Missouri 64105

                                 August 8, 2001

TO THE STOCKHOLDERS OF
AMC ENTERTAINMENT INC.:

    The Annual Meeting of Stockholders of AMC Entertainment Inc. will be held at
the Town Center 20 Theatres, 11701 Nall Avenue, Leawood, Kansas 66211. The
meeting will be held on September 13, 2001 at 11:00 a.m. local time and will be
followed by an informal lunch and a movie. The Board of Directors cordially
invites you to attend.

    I hope you will attend the meeting in person, but whether or not you expect
to attend, please sign, date and return the enclosed proxy card now, so that
your shares will be represented at the meeting. If you do attend the meeting,
you will be entitled to vote in person.

                                             Very truly yours,

                                             /s/ Peter C. Brown

                                             Peter C. Brown
                                             Chairman of the Board

                                   [AMC LOGO]
                             AMC ENTERTAINMENT INC.
                              106 West 14th Street
                          Kansas City, Missouri 64105
                            ------------------------
                    Notice of Annual Meeting of Stockholders
                         To Be Held September 13, 2001
                            ------------------------

TO THE STOCKHOLDERS OF AMC ENTERTAINMENT INC.:

    The Annual Meeting of Stockholders of AMC Entertainment Inc. (the "Company")
will be held at the Town Center 20 Theatres, 11701 Nall Avenue, Leawood, Kansas
66211. The meeting will be held on Thursday, September 13, 2001 at 11:00 a.m.
local time for the following purposes:

    1.  To elect a Board of Directors for the upcoming year;

    2.  To consider and vote upon a proposal to amend Article FOURTH of the
        Company's Restated and Amended Certificate of Incorporation to increase
        the number of authorized shares of Common Stock from 45,000,000 to
        200,000,000;

    3.  To consider and vote upon a proposal to ratify the appointment of
        PricewaterhouseCoopers LLP as independent accountants for the Company
        for the fiscal year ending March 28, 2002; and

    4.  To transact such other business as may properly come before the meeting.

    The close of business on August 3, 2001 has been designated as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting of Stockholders and any adjournments thereof. A list of such
stockholders will be available for review in the office of the Company's
Secretary on the 21st Floor of the Power and Light Building, located at 106 West
14th Street, Kansas City, Missouri, after August 31, 2001.

                                          By order of the Board of Directors

                                                /s/ Nancy L. Gallagher

                                                  Nancy L. Gallagher
                                             Vice President and Secretary
Kansas City, Missouri
August 8, 2001

                             YOUR VOTE IS IMPORTANT

    If you do not expect to attend the meeting in person, it is important that
your shares be represented. Please use the enclosed proxy card to vote on the
matters to be considered at the meeting, sign and date the proxy card and mail
it promptly in the enclosed envelope, which requires no postage if mailed in the
United States. You may revoke your proxy at any time before the meeting by
written notice to such effect, by submitting a subsequently dated proxy or by
attending the meeting and voting in person.

                                       1

                                   [AMC LOGO]

                             AMC ENTERTAINMENT INC.
                              106 West 14th Street
                          Kansas City, Missouri 64105

                                PROXY STATEMENT

MEETING INFORMATION, PROXIES, SOLICITATION AND VOTING:

    DATE AND PLACE OF MEETING.  This Proxy Statement is furnished in connection
with the solicitation of the enclosed proxy by the Board of Directors of AMC
Entertainment Inc. (the "Company") for use at the Annual Meeting of Stockholders
to be held at 11:00 a.m. local time on Thursday, September 13, 2001 at the Town
Center 20 Theatres, 11701 Nall Avenue, Leawood, Kansas 66211. This Proxy
Statement and the accompanying proxy are being mailed to stockholders on or
about August 8, 2001.

    RECORD DATE; OUTSTANDING SHARES.  The Board of Directors of the Company has
established August 3, 2001 as the record date for the meeting. Only stockholders
of record at the close of business on the record date are entitled to notice of
and to vote at the Annual Meeting of Stockholders and any adjournments thereof.
At the close of business on the record date, the Company had outstanding
19,427,098 shares of Common Stock, 4,041,993 shares of Class B Stock, 93,242
shares of Series A Convertible Preferred Stock ("Series A Preferred Stock") and
161,792 shares of Series B Exchangeable Preferred Stock ("Series B Preferred
Stock").

    VOTES REQUIRED ON MATTERS TO BE CONSIDERED.  The election of directors is
determined by a plurality of the votes cast. Votes that are withheld will be
excluded entirely from the vote and will have no effect.

    The favorable vote of a majority (based on voting power) of the shares of
outstanding Common Stock, Class B Stock and Series A Preferred Stock (on an as
converted basis) entitled to notice of and to vote at the Annual Meeting, voting
in person or by proxy as a single class, and, in addition, the favorable vote of
a majority of outstanding shares of Common Stock, voting in person or by proxy
as a separate class, are required to approve the proposal to amend Article
FOURTH of the Company's Restated and Amended Certificate of Incorporation. A
favorable vote of a majority (based on voting power) of the shares of Common
Stock, Class B Stock and Series A Preferred Stock (on an as converted basis)
entitled to notice of and to vote at the Annual Meeting, voting in person or by
proxy as a single class, is required for the proposal to ratify the appointment
of PricewaterhouseCoopers LLP as independent accountants for the Company for the
fiscal year ending March 28, 2002.

    Under Delaware law and the Company's bylaws, abstentions and broker
non-votes are not counted in the calculation of the vote except that abstentions
and broker non-votes will be counted and have the same effect as votes against
the proposal to amend Article FOURTH of the Company's Restated and Amended
Certificate of Incorporation. The Trustees of the 1992 Durwood, Inc. Voting
Trust (the "Durwood Voting Trust"), the sole stockholder of the outstanding

                                       2

Class B Stock, have advised the Company of their intention to vote in favor of
the proposals to amend Article FOURTH of the Company's Restated and Amended
Certificate of Incorporation and to ratify the appointment of
PricewaterhouseCoopers LLP as independent accountants.

    PERSONS ENTITLED TO VOTE.  Holders of Common Stock are entitled to vote as a
class on the proposal to amend Article FOURTH of the Restated and Amended
Certificate of Incorporation. Holders of Common Stock, holders of Class B Stock
and certain investment entities (the "Sandler Funds") affiliated with Sandler
Capital Management, which hold an aggregate of 5,520 shares of Series A
Preferred Stock (representing 772,027 shares of Common Stock on an as converted
basis) are also entitled to vote as a single class on the proposal to amend
Article FOURTH and on the proposal to ratify the appointment of
PricewaterhouseCoopers LLP as independent public accountants for the Company for
the fiscal year ending March 28, 2002. On such matters, each outstanding share
of Common Stock and "as converted" share of Series A Preferred Stock has one
vote per share and each outstanding share of Class B Stock has ten votes per
share. With respect to the election of directors, holders of Common Stock are
entitled to elect two directors, voting as a class, holders of Class B Stock are
entitled to elect three directors, voting as a class, and the Apollo Purchasers,
as herein defined, that hold Series A Preferred Stock and Series B Preferred
Stock, voting as a single class, are entitled to elect three directors, and in
such election shares of Series A Preferred Stock and Series B Preferred Stock
are each entitled to one vote.

    HOW PROXIES WILL BE VOTED.  Properly executed and dated proxies which are
received by the Company prior to the Annual Meeting of Stockholders will be
voted in accordance with the instructions thereon. If a proxy is received with
no instructions given with respect to the matters to be acted upon, the shares
represented by the proxy will be voted (i) for the election of the nominees to
the Company's Board of Directors designated below, (ii) for the proposal to
amend Article FOURTH of the Company's Restated and Amended Certificate of
Incorporation to increase the number of authorized shares of Common Stock, and
(iii) for the ratification of the appointment of PricewaterhouseCoopers LLP as
independent accountants for the Company for the fiscal year ending March 28,
2002. A proxy may be revoked at any time by written notice to such effect
received by the Secretary of the Company before the proxy is voted at the Annual
Meeting of Stockholders, by delivery to the Company of a subsequently dated
proxy or by a vote cast in person at the Annual Meeting of Stockholders by
written ballot.

    OTHER BUSINESS; COSTS OF SOLICITATION.  A proxy confers discretionary
authority with respect to the voting of the shares represented thereby on any
other business that may properly come before the meeting (and any adjournments
thereof) as to which the Company did not have notice prior to July 6, 2001. The
Board of Directors is not aware that any such other business is to be presented
for action at the meeting and does not itself intend to present any such other
business. However, if any such other business does come before the meeting,
shares represented by proxies given pursuant to this solicitation will be voted
by the persons named in the proxy in accordance with their best judgment. A
proxy also confers discretionary authority on the persons named therein to
approve minutes of last year's Annual Meeting of Stockholders, to vote on
matters incident to the conduct of the meeting and to vote on the election of
any person as a director if a nominee herein named should decline or become
unable to serve as a director for any reason. The cost of the solicitation of
proxies will be paid by the Company.

    The Company has retained MacKenzie Partners, Inc. to provide proxy
solicitation services in connection with the Annual Meeting. The Company will
pay MacKenzie Partners, Inc. a base fee of $7,500 and reimburse its
out-of-pocket expenses. Proxies also may be solicited by directors, executive
officers or employees of the Company in person, by letter or by telephone or
telegram. No additional compensation will be paid to those persons for such
service.

                                       3

                            1. ELECTION OF DIRECTORS

    Directors are elected annually, and each holds office until such director's
successor is duly elected and qualified or until such director's earlier
resignation or removal. The by-laws of the Company provide that the full Board
of Directors consists of eight (8) members. It is anticipated that eight
(8) directors will be elected at the meeting. Three (3) of those directors are
to be elected by the holders of Class B Stock, voting as a class, with each
outstanding share having one vote per share, two (2) of those directors are to
be elected by the holders of Common Stock, voting as a class, with each
outstanding share having one vote per share, and three (3) of those directors
are to be elected by the Apollo Purchasers holding shares of Series A Preferred
Stock and Series B Preferred Stock, voting as a class, with each outstanding
share having one vote per share.

    It is intended that shares represented by the proxies will be voted in favor
of the election of the nominees named below who are to be elected by the holders
of Common Stock, unless otherwise directed by stockholders. Each nominee has
consented to being named as a nominee and to serve if elected. In the event any
nominee for director to be elected by the holders of Common Stock should decline
or shall become unable to serve as a director for any reason, it is intended
that the persons named in the proxy will vote for a substitute who will be
designated by the Board of Directors.

NOMINEES FOR DIRECTORS

TO BE ELECTED BY HOLDERS OF CLASS B STOCK

    Mr. Peter C. Brown, 42, has served as a Director of the Company and AMC
since November 12, 1992. Mr. Brown has served as Chairman of the Board and Chief
Executive Officer of the Company since July 1999 and as President of the Company
since January 1997. Mr. Brown served as Co-Chairman of the Board of the Company
from May 1998 through July 1999. Mr. Brown served as Executive Vice President of
the Company from August 1994 to January 1997. Mr. Brown also is Chairman of the
Board, Chief Executive Officer and a Director of American Multi-Cinema, Inc.
("AMC"). In addition, Mr. Brown serves as Chairman of the Board of Trustees of
Entertainment Properties Trust, a real estate investment trust, and serves on
the Board of Directors of LabONE, Inc. Mr. Brown is also a member of the Board
of Advisors for the University of Kansas School of Business. Mr. Brown is a
graduate of the University of Kansas.

    Mr. Charles J. Egan, Jr., 68, has served as a Director of the Company since
October 30, 1986. Mr. Egan is Vice President of Hallmark Cards, Incorporated,
and was General Counsel of such company until December 31, 1996. Hallmark Cards,
Incorporated is primarily engaged in the business of greeting cards and related
social expressions products, Crayola crayons and the production of movies for
television. Mr. Egan is a Trustee of the Durwood Voting Trust established under
that certain 1992 Durwood, Inc. Voting Trust Agreement dated December 12, 1992,
as amended and restated as of August 12, 1997 (the "Durwood Voting Trust").
Mr. Egan also serves as a member of the Board of Trustees, Treasurer and
Chairman of the Finance Committee of the Kansas City Art Institute and is
Co-Chair of the Harvard College Fund. Mr. Egan holds an A.B. degree from Harvard
University and an LL.B. degree from Columbia University.

    Mr. Charles S. Paul, 52, has served as a Director of the Company since
December 2, 1999. Mr. Paul is Chairman of the Board of IFILM Corp., an online
global film destination for film fans, filmmakers and industry professionals.
Prior thereto, Mr. Paul was Chairman and Co-Founder of Sega GameWorks L.L.C.
Mr. Paul was an Executive Vice President and director of MCA, Inc. from 1989
through March 1996 and served as President of MCA Enterprises, a division of the
company,

                                       4

from 1986 through March 1996. Mr. Paul also serves on the Board of Directors of
National Golf Properties, Inc. Mr. Paul holds an undergraduate degree from
Stanford University and is a graduate of the University of Santa Clara School of
Law.

TO BE ELECTED BY HOLDERS OF COMMON STOCK

    Mr. Paul E. Vardeman, 71, has served as a Director of the Company since
June 14, 1983. Mr. Vardeman was a director, officer and shareholder of the law
firm of Polsinelli, White, Vardeman & Shalton, P.C. (now Polsinelli, Shalton and
Welte, P.C.), Kansas City, Missouri from 1982 until his retirement from such
firm in November 1997. Prior thereto, Mr. Vardeman served as a Judge of the
Circuit Court of Jackson County, Missouri. Mr. Vardeman holds undergraduate and
J.D. degrees from the University of Missouri-Kansas City.

    Mr. W. Thomas Grant, II, 51, has served as a Director of the Company since
November 14, 1996. Mr. Grant is Chairman of the Board, Chief Executive Officer,
President and a Director of LabONE, Inc. LabONE, Inc. provides risk appraisal
laboratory services for the insurance industry, clinical testing services for
the healthcare industry and substance abuse testing services for employers.
Mr. Grant also serves on the Boards of Directors of Commerce Bancshares, Inc.,
Kansas City Power & Light Company, Business Men's Assurance Company of America
and Response Oncology, Inc. Mr. Grant holds a B.A. degree from the University of
Kansas and an M.B.A. degree from the Wharton School of Finance at the University
of Pennsylvania.

TO BE ELECTED BY ELIGIBLE HOLDERS OF SERIES A AND SERIES B PREFERRED STOCK

    Mr. Leon D. Black, 49, has served as a Director of the Company since
April 19, 2001. Mr. Black is one of the founding principals of Apollo Advisors,
L.P. which, together with its affiliates, acts as the managing general partner
of the Apollo Investment Funds, private securities investment funds; Apollo Real
Estate Advisors, L.P. which, together with its affiliates, acts as the managing
general partner of the Apollo Real Estate Investment Funds, private real estate
investment funds; and Lion Advisors, L.P., a financial advisor to, and
representative of, institutional investors with respect to securities
investments. Mr. Black also serves on the Boards of Directors of Wyndham
International, Inc., Allied Waste Industries, Inc., Samsonite Corporation, Sequa
Corporation, United Rentals, Inc. and Vail Resorts, Inc. Mr. Black also serves
as a Trustee of The Museum of Modern Art, Mount Sinai-NYU Medical Center,
Lincoln Center for the Performing Arts, the Metropolitan Museum of Art, Prep for
Prep, The Asia Society and Vail Valley Foundation. Mr. Black holds a B.A. degree
from Dartmouth College and an M.B.A. degree from Harvard University.

    Mr. Marc J. Rowan, 38, has served as a Director of the Company since
April 19, 2001. Mr. Rowan is one of the founding principals of Apollo Advisors,
L.P. which, together with its affiliates, acts as the managing general partner
of the Apollo Investment Funds, private securities investment funds; and Lion
Advisors, L.P., a financial advisor to, and representative of, institutional
investors with respect to securities investments. Mr. Rowan also serves on the
Boards of Directors of Wyndham International, Inc., Samsonite Corporation, Vail
Resorts, Inc., National Financial Partners, Inc., NRT Incorporated, Quality
Distribution, Inc. and Rare Medium Group, Inc. Mr. Rowan also serves on the
executive committee of the Youth Renewal Fund and is a member of the Board of
Directors of National Jewish Outreach Program and the Undergraduate Executive
Board of The Wharton School of Business. Mr. Rowan holds a B.S. degree and an
M.B.A. degree from The Wharton School of Business at the University of
Pennsylvania.

    Mr. Laurence M. Berg, 35, has served as a Director of the Company since
April 19, 2001. Mr. Berg is a partner with Apollo Advisors, L.P. which, together
with its affiliates, serves as

                                       5

managing general partner of the Apollo Investment Funds. Mr. Berg also serves on
the Boards of Directors of Sylvan Learning Systems, Inc., Berlitz
International, Inc., Resolution Performance Products and Rent-A-Center, Inc.
Mr. Berg also serves on the Development Committee of the Fulfillment Fund.
Mr. Berg holds a B.S. degree from The Wharton School of Business at the
University of Pennsylvania and an M.B.A. degree from Harvard University.

    THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR PAUL E. VARDEMAN AND
W. THOMAS GRANT, II AS DIRECTORS OF THE COMPANY.

DIRECTORS' MEETINGS AND COMMITTEES

    The Company has a 52/53 week fiscal year ending on the Thursday closest to
the last day of March. The Company's last full fiscal year began on March 31,
2000 and ended on March 29, 2001 ("fiscal 2001").

    The Board of Directors of the Company held five meetings and acted by
unanimous written consent to action two times in fiscal 2001. All directors
attended at least 75% of the aggregate number of meetings of the Board of
Directors and of board committees on which they served.

    The Board of Directors has established an Audit Committee, a Compensation
Committee and a Nominating Committee.

    AUDIT COMMITTEE.  The principal purpose of the Audit Committee is to review
the process involved in the preparation of the Company's annual audited
financial statements. The Audit Committee (i) recommends to the Board of
Directors the firm of independent public accountants to serve as Independent
Auditor; (ii) meets with the Independent Auditor and management to review
matters relating to financial reporting and accounting procedures and policies,
the adequacy of internal controls and the scope of the audit performed by the
Independent Auditor; (iii) reviews the results of the audit; and (iv) submits
any recommendations it may have from time to time to the Board of Directors with
respect to financial reporting and accounting procedures and policies, internal
controls and other matters that may come to its attention. The Audit Committee
is also charged with the responsibility of reviewing material transactions with
related parties and with certain responsibilities under the Company's Compliance
Plan. The Audit Committee consists of Messrs. Charles J. Egan, Jr. (Chairman of
the Audit Committee), W. Thomas Grant, II, Charles S. Paul and Marc J. Rowan
(appointed to the Audit Committee on April 19, 2001). The Audit Committee held
three meetings during fiscal 2001.

    COMPENSATION COMMITTEE.  The principal responsibilities of the Compensation
Committee are to (i) review and recommend periodically the compensation to be
paid to the Executive Officers of the Company and its subsidiaries, including
the amount and timing of bonus payments and other incentive compensation awards,
and (ii) oversee the preparation of the reports and other information required
to be disclosed in connection with any filing under the Securities Act of 1933
or the Securities Exchange Act of 1934 with respect to the compensation of
Executive Officers. In addition, the Compensation Committee oversees the
Company's 1983 and 1984 Stock Option Plans, which have expired except with
respect to rights under outstanding awards. The Compensation Committee also
(i) administers existing employee benefit plans and programs, (ii) periodically
reviews, and if needed, recommends amendments to such plans and programs and
(iii) oversees the development of new plans and programs. The Compensation
Committee consists of Messrs. Charles J. Egan, Jr. (Chairman of the Compensation
Committee), Paul E. Vardeman and Marc J. Rowan (appointed to the Audit Committee
on April 19, 2001). Mr. W. Thomas Grant, II resigned from the Compensation
Committee effective May 22, 2000. The Compensation Committee held two meetings
during fiscal 2001.

                                       6

    NOMINATING COMMITTEE.  The principal responsibility of the Nominating
Committee is to nominate candidates and incumbents for election by the holders
of the Company's Common Stock voting separately as a class. The Nominating
Committee was formed by the Board of Directors with the intention that the
selection of nominees for election by the holders of the Company's Common Stock
would be made with input from the other directors of the Company, including
(i) those directors elected by controlled affiliates of Apollo, as herein
defined (See "Election of Directors--Security Ownership of Beneficial Owners")
(the "Apollo Directors"), and (ii) those directors elected by the holders of the
Company's Class B Stock ("Class B Directors"). Under the Nominating Committee
charter, which may be amended with the approval of 75% of the directors
constituting the full Board of Directors, (i) at least one member of the
Nominating Committee must be an Apollo Director and at least one member must be
a Class B Director, (ii) all candidates recommended must be approved unanimously
by the Nominating Committee, and (iii) if members of the Nominating Committee
are unable to agree on the candidates, one nominee is to be recommended to the
Board of Directors for nomination by the Apollo Director on the Nominating
Committee and one is to be recommended to the Board of Directors for nomination
by the Class B Director on the Nominating Committee.

    The Nominating Committee will consider the nomination by any holder of
Common Stock of a candidate for election as a director of the Company. Nominees
must satisfy the requirements of an "Independent Director" as defined in
Regulation 14A of the Securities Exchange Act of 1934, as amended, and may not
be or have been an officer or employee of any of the Company, Apollo, the Apollo
Purchasers or any of their affiliates or any entity which derived substantial
revenues from any such person. Further, nominees may have no relationship or
affiliation or compensation, consulting or contracting arrangement with the
Company, Apollo, the Apollo Purchasers, the Trustees of the Durwood Voting
Trust, the Stanley H. Durwood Foundation or any other entity that a reasonable
person could regard as likely to be unduly influenced by any such persons.
Recommendations for nominees to be considered at the Annual Meeting of
Stockholders to be held in 2002 should be submitted to the Nominating Committee,
in care of the Secretary of the Company, by no later than June 8, 2002.
Recommendations must include a resume of the person recommended and his or her
consent to serve as a director if nominated and elected.

    The Nominating Committee was established on April 19, 2001 (thus, the
Nominating Committee did not meet in fiscal 2001) and consists of Messrs. Peter
C. Brown and Marc J. Rowan.

COMPENSATION OF DIRECTORS

    Effective December 2, 1999, each non-employee director receives $65,000
annually for service on the Board of Directors and, in addition, $1,500 for each
Board meeting and $1,000 for each Board committee meeting which they attend.

    Pursuant to the Company's 1999 Stock Option Plan for Outside Directors (the
"1999 Directors Option Plan"), the non-employee directors are permitted to elect
to receive up to all of their $65,000 annual fee in the form of stock options.
The number of options which may be received is determined by dividing the amount
of the fee taken in the form of options by 30% of the fair market value of the
Company's Common Stock on the effective date of the grant, which is the first
business day after the Annual Meeting of Stockholders. Under the 1999 Directors
Option Plan, each non-employee director also receives a one time grant of
options whose value (estimated under the 1999 Directors Option Plan for this
purpose at 30% of the fair market value of the Company's Common Stock) is
$14,000. Options generally become exercisable one year after grant and terminate
ten years after grant. However, exercisability is accelerated upon the
occurrence of a change of control of the Company, as defined in the 1999
Directors Option Plan, or such director's

                                       7

death, disability or retirement from service as a director upon or after
reaching age 70, and options will terminate prior to the tenth anniversary of
the date of grant within specified periods following termination of service as a
director. Directors may elect to pay any required withholding taxes in
connection with the exercise of an option by having the Company withhold shares
otherwise issuable upon exercise. The maximum number of shares issuable under
the 1999 Directors Option Plan is 200,000 and no director may receive more than
50,000 shares under the 1999 Directors Option Plan.

    For the fiscal year ended March 29, 2001, the non-employee directors
received the following for their service as directors under the Company's
compensation arrangements for non-employee directors: Mr. Charles J. Egan, Jr.,
$78,500; 0 options; Mr. W. Thomas Grant, II, $60,607; 23,660 options; Mr. Paul
E. Vardeman, $64,000; 14,010 options; and Charles S. Paul, $58,607; 23,660
options.

EXECUTIVE OFFICERS

    The Company's and its subsidiaries' Executive Officers are as follows:



NAME                    AGE(1)  POSITIONS
- ----                    ------  ---------
                          
Peter C. Brown(2)         42    Chairman of the Board, Chief Executive Officer and
                                Director (the Company and AMC*); President (the
                                Company)
Philip M. Singleton       54    Executive Vice President (the Company); President,
                                Chief Operating Officer and Director (AMC)
Craig R. Ramsey           49    Senior Vice President, Finance, Chief Financial
                                Officer and Chief Accounting Officer (the Company and
                                AMC); Director (AMC)
John D. McDonald          44    Executive Vice President, North American Operations
                                (AMC)
Richard M. Fay            51    President (AMC Film Marketing, a division of AMC)
Richard T. Walsh          47    Executive Vice President, Film Operations (AMC Film
                                Marketing)
James V. Beynon           53    Senior Vice President and Treasurer (the Company and
                                AMC)
Mark A. McDonald          42    Executive Vice President, International Operations
                                (AMC Entertainment International, Inc.)


- -------------------

    *American Multi-Cinema, Inc. ("AMC") is a wholly owned subsidiary of the
Company whose primary business is theatrical exhibition.

    (1)As of July 16, 2001.

    (2)For biographical information on this Executive Officer, see "Directors
and Nominees for Directors."

                                       8

    All current Executive Officers of the Company and its subsidiaries hold such
offices at the pleasure of the Company's Board of Directors, subject to rights
under their respective employment agreements. There are no family relationships
between any Executive Officers except that Messrs. John D. McDonald and Mark A.
McDonald are brothers.

    Mr. Philip M. Singleton was elected President of AMC on January 10, 1997 and
has served as Chief Operating Officer of AMC since November 14, 1991.
Mr. Singleton has served as Executive Vice President of the Company since
August 3, 1994. Mr. Singleton has served as a Director of AMC since
November 12, 1992.

    Mr. Craig R. Ramsey has served as Chief Financial Officer of the Company and
AMC since January 24, 2000 and as Senior Vice President, Finance of the Company
and AMC since August 20, 1998. Mr. Ramsey was elected Chief Accounting Officer
of the Company and AMC effective October 15, 1999. Prior thereto, Mr. Ramsey
served as Vice President, Finance from January 17, 1997 and as Director of
Information Systems and Director of Financial Reporting since joining AMC on
February 1, 1995.

    Mr. John D. McDonald has served as Executive Vice President, North American
Operations of AMC since October 1, 1998. Prior thereto, Mr. McDonald served as
Senior Vice President, corporate operations from November 9, 1995 until his
promotion to Executive Vice President on October 1, 1998.

    Mr. Richard M. Fay has served as President, AMC Film Marketing, a division
of AMC, since September 8, 1995.

    Mr. Richard T. Walsh has served as Executive Vice President, Film
Operations, AMC Film Marketing, a division of AMC, since September 29, 1999.
Prior thereto, Mr. Walsh served as Senior Vice President in charge of operations
for the West Division of AMC from July 1, 1994.

    Mr. James V. Beynon has served as Senior Vice President of the Company and
AMC since September 29, 1999. Prior thereto, Mr. Beynon served as Vice President
of the Company and AMC from September 19, 1994. Mr. Beynon has served as
Treasurer of the Company and AMC since September 19, 1994.

    Mr. Mark A. McDonald has served as Executive Vice President, International
Operations of AMC Entertainment International, Inc., a subsidiary of the
Company, since December 7, 1998. Prior thereto, Mr. McDonald served as Senior
Vice President, Asia Operations from November 9, 1995 until his appointment as
Executive Vice President in December 1998.

                                       9

COMPENSATION OF MANAGEMENT

    The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and each of the four other most highly compensated
Executive Officers of the Company (determined as of the end of the last fiscal
year and hereafter referred to collectively as the "Named Executive Officers")
for the last three fiscal years ended March 29, 2001, March 30, 2000 and
April 1, 1999, respectively.

                           SUMMARY COMPENSATION TABLE



                                                                                                LONG-TERM(2)
                                                               ANNUAL COMPENSATION           COMPENSATION AWARDS
                                                         -------------------------------   -----------------------
                                                                                 OTHER                  SECURITIES      ALL
                                                                                ANNUAL     RESTRICTED   UNDERLYING     OTHER
NAME AND                                       FISCAL                           COMPEN-      STOCK       OPTIONS/     COMPEN-
PRINCIPAL POSITION                              YEAR      SALARY     BONUS     SATION(1)     AWARDS        SARS      SATION(3)
- ------------------                            --------   --------   --------   ---------   ----------   ----------   ---------
                                                                                                
Peter C. Brown                                  2001     $507,937   $454,230      N/A         --           --         $7,875
Chairman of the Board,                          2000      471,244    112,455      N/A         --           --          9,462
Chief Executive Officer                         1999      409,241      --         N/A         --         125,000       5,334
and President

Philip M. Singleton                             2001      375,186    267,800      N/A         --           --          7,875
Chief Operating Officer                         2000      375,145     66,300      N/A         --           --          7,789
                                                1999      383,702      --         N/A         --         100,000       5,317

Richard M. Fay                                  2001      289,285    132,750      N/A         --           --          7,875
President - AMC Film                            2000      285,473     31,875      N/A         --          42,750       8,550
Marketing                                       1999      298,075      --         N/A         --           --          4,503

Richard T. Walsh                                2001      289,756    132,750      N/A         --           --          8,204
Executive Vice President,                       2000      270,089     31,875      N/A         --          15,500       8,058
Film Operations, AMC                            1999      238,666      --         N/A         --           --          4,639
Film Marketing

John D. McDonald                                2001      240,426    169,950      N/A         --           --          7,200
Executive Vice President,                       2000      256,308     42,075      N/A         --          50,500       7,685
North American Operations                       1999      217,695      --         N/A         --           --          8,308


- -------------------

    (1)For the years presented, perquisites and other personal benefits did not
exceed the lesser of $50,000 or 10% of total annual salary and bonus.

    (2)On April 17, 2001, the Company made restricted stock awards under the
1999 Stock Option and Incentive Plan to the Named Executive Officers with
respect to that number of shares and having a value (based on the market value
of the shares of stock covered by the awards on the date of grant) as of the
award date, as follows: Mr. Peter C. Brown - 30,000 shares ($209,400);
Mr. Philip M. Singleton - 15,760 shares ($110,005); Mr. Richard M. Fay - 3,580
shares ($24,988); Mr. Richard T. Walsh - 3,580 shares ($24,988); and Mr. John D.
McDonald - 6,450 shares ($45,021). Additionally, on April 17, 2001, the Company
granted options under the 1999 Stock Option and Incentive Plan as follows:
Mr. Peter C. Brown - 106,990 shares; Mr. Philip M. Singleton - 42,980 shares;
Mr. Richard M. Fay - 7,160 shares; Mr. Richard T. Walsh - 7,160 shares; and
Mr. John D. McDonald - 14,330 shares. One half of these restricted stock awards
and non-qualified stock options vest one year from date of grant with the
balance vesting two years from date of grant, subject to, with certain
exceptions such as death or disability, continued employment with the Company.
Pursuant to their employment agreements with the Company, under certain
circumstances Messrs. Brown and Singleton will receive cash payments equal to
the value of their

                                       10

respective vested and unvested stock options. See "Employment Contracts,
Termination of Employment and Change of Control Arrangements." The exercise
price of the options is $6.98 per share.

    (3)For fiscal 2001, 2000 and 1999, All Other Compensation is comprised of
AMC's contributions under AMC's 401(k) Savings Plan and Non-Qualified Deferred
Compensation Plan, both of which are defined contribution plans.

    OPTION GRANTS

    There were no grants of stock options made during the last fiscal year to
the Named Executive Officers.

    OPTION EXERCISES AND HOLDINGS

    The following table provides information with respect to the Named Executive
Officers concerning the exercise of options during the last fiscal year and
unexercised options held as of March 29, 2001. (No options were exercised by any
Named Executive Officer during the last fiscal year.)

              AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                     AND FISCAL YEAR END OPTION/SAR VALUES



                                                       NUMBER OF SECURITIES
                                                      UNDERLYING UNEXERCISED         VALUE OF UNEXERCISED
                                                           OPTIONS/SARS              IN-THE-MONEY OPTIONS/
                             SHARES                          AT FY-END                 SARS AT FY-END(1)
                            ACQUIRED      VALUE     ---------------------------   ---------------------------
NAME                       ON EXERCISE   REALIZED   EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
- ----                       -----------   --------   -----------   -------------   -----------   -------------
                                                                              
Peter C. Brown...........     --         $  --         284,000        --            $ --           $--
Philip M. Singleton......     --            --         233,600        --              --            --
Richard M. Fay...........     --            --          45,000        --              --            --
Richard T. Walsh.........     --            --          45,000        --              --            --
John D. McDonald.........     --            --          55,000        --              --            --


- -------------------

    (1)Values for "in-the-money" outstanding options represent the positive
spread between the respective exercise prices of the outstanding options and the
value of the Company's Common Stock as of March 29, 2001. There were no
"in-the-money" options outstanding as of March 29, 2001.

    DEFINED BENEFIT RETIREMENT AND SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS

    AMC sponsors a defined benefit retirement plan (the "Retirement Plan") which
provides benefits to certain employees of AMC and its subsidiaries based upon
years of credited service and the highest consecutive five-year average annual
remuneration for each participant. For purposes of calculating benefits, average
annual compensation is limited by Section 401(a)(17) of the Internal Revenue
Code (the "Code"), and is based upon wages, salaries and other amounts paid to
the employee for personal services, excluding certain special compensation. A
participant earns a vested right to an accrued benefit upon completion of five
years of vesting service.

                                       11

    AMC also sponsors a Supplemental Executive Retirement Plan to provide the
same level of retirement benefits that would have been provided under the
Retirement Plan had the federal tax law not been changed in the Omnibus Budget
Reconciliation Act of 1993, which reduced the amount of compensation which can
be taken into account in a qualified retirement plan from $235,840 (in 1993),
the old limit, to $170,000 (in 2001).

    The following table shows the total estimated annual pension benefits
(without regard to minimum benefits) payable to a covered participant under
AMC's Retirement Plan and the Supplemental Executive Retirement Plan, assuming
retirement in calendar 2001 at age 65, payable in the form of a single life
annuity. The benefits are not subject to any deduction for Social Security or
other offset amounts. The following table assumes the old limit would have been
increased to $285,000 in 2001.



          HIGHEST CONSECUTIVE                          YEARS OF CREDITED SERVICE
           FIVE YEAR AVERAGE              ----------------------------------------------------
          ANNUAL COMPENSATION                15         20         25         30         35
          -------------------             --------   --------   --------   --------   --------
                                                                       
$125,000................................  $17,434    $23,245    $29,056    $34,868    $40,679
 150,000................................   21,184     28,245     35,306     42,368     49,429
 175,000................................   24,834     33,245     41,556     49,868     58,179
 200,000................................   28,684     38,245     47,806     57,368     66,929
 225,000................................   32,434     43,245     54,056     64,868     76,679
 250,000................................   36,184     48,245     60,306     72,368     84,429
 270,000................................   39,184     52,245     65,306     78,388     91,429
 275,000................................   39,934     53,245     66,556     79,868     93,179
 285,000................................   41,434     55,245     69,056     82,868     96,679


    As of March 29, 2001, the years of credited service under the Retirement
Plan for each of the Named Executive Officers were: Mr. Peter C. Brown, ten
years; Mr. Philip M. Singleton, 27 years; Mr. Richard M. Fay, five years;
Mr. Richard T. Walsh, 26 years; and Mr. John D. McDonald, 26 years.

    AMC has established a Retirement Enhancement Plan (the "REP") for the
benefit of officers who from time to time may be designated as eligible
participants therein by the Board of Directors. The REP is a non-qualified
deferred compensation plan designed to provide an unfunded retirement benefit to
an eligible participant in an amount equal to (i) sixty percent (60%) of his or
her average compensation (including paid and deferred incentive compensation)
during the last three full years of employment, less (ii) the sum of (A) such
participant's benefits under the Retirement Plan and Social Security, and
(B) the amount of a straight life annuity commencing at the participant's normal
retirement date attributable to AMC's contributions under the Supplemental
Executive Retirement Plan, the 401(k) Savings Plan, the Non-Qualified Deferred
Compensation Plan and the Executive Savings Plan. The base amount in clause (i)
will be reduced on a pro rata basis if the participant completes fewer than
twenty-five (25) years of service. The REP benefit vests upon the participant's
attainment of age 55 or completion of fifteen (15) years of service, whichever
is later, and may commence to a vested participant retiring on or after age 55
(who has participated in the plan for at least 5 years) on an actuarially
reduced basis (6 2/3% for each of the first five years by which commencement
precedes age 65 and an additional 3 1/3% for each year by which commencement
precedes age 60). Benefits commence at a participant's normal retirement date
(i.e., the later of age 65 or the participant's completion of five years of
service with AMC) whether or not the participant continues to be employed by
AMC. The accrued benefit payable upon total and permanent disability is not
reduced by reason of early commencement. Participants become fully vested in
their rights under the REP if their employment is terminated

                                       12

without cause or as a result of a change of control, as defined in the REP. No
death, disability or retirement benefit is payable prior to a participant's
early retirement date or prior to the date any severance payments to which the
participant is entitled cease.

    Mr. Peter C. Brown and Mr. Philip M. Singleton have been designated as
eligible to participate in the REP. The estimated monthly amounts that
Mr. Brown and Mr. Singleton will be eligible to receive under the REP at age 65
are $64,000 and $19,000, respectively; such amounts are based on certain
assumptions respecting their future compensation amounts and the amounts of AMC
contributions under other plans. Actual amounts received by such individuals
under the REP may be different than those estimated.

    EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS

    Messrs. Peter C. Brown, Philip M. Singleton, Richard M. Fay, Richard T.
Walsh and John D. McDonald have entered into employment agreements with the
Company, each with a term commencing as of July 1, 2001. The employment
agreements provide for annual base salaries of no less than the following
amounts: Mr. Brown - $625,000; Mr. Singleton - $425,000; Mr. Fay - $300,000;
Mr. Walsh - $300,000; and Mr. McDonald - $275,000. The employment agreements
also provide for discretionary bonuses, an automobile allowance, reimbursement
of reasonable travel and entertainment expenses and other benefits offered from
time to time to other Executive Officers. The employment agreement of Mr. Brown
has a term of five years, that of Mr. Singleton has a term of three years and
those of Mr. Fay, Mr. Walsh and Mr. McDonald have terms of two years. On the
anniversary date of each employment agreement, one year shall be added to its
term, so that each employment agreement shall always have a five year, three
year or two year term, as the case may be, as of each anniversary date. Each
employment agreement terminates generally without severance if such employee is
terminated for cause or upon such employee's resignation, each as defined in his
employment agreement. The Company will pay the employee a pro rata portion of
the bonus he would otherwise be eligible to receive upon termination by reason
of employee's retirement. If any of Messrs. Fay, Walsh or McDonald dies or is
terminated without cause or following his disability or terminates his agreement
subsequent to specified changes in his responsibilities, annual base salary or
benefits following a change of control, each as defined in the agreement, he
will be entitled to receive a lump sum cash payment equal to two years annual
base salary. If either Mr. Brown or Mr. Singleton dies or is terminated without
cause or following his disability or terminates his agreement for good reason or
following a change of control, each as defined in the agreement, he will be
entitled to receive (i) a lump sum cash payment equal to such employee's then
annual base salary for the remainder of the term of the agreement plus the bonus
such employee would be entitled to receive as if the target level had been
obtained multiplied by the number of years remaining in the term of the
employment agreement and (ii) a cash payment equal to the difference between (a)
the value of all vested and unvested stock options granted by the Company to
employee which have an exercise price per share less than the closing price per
share of the Company's Common Stock on the date of termination and (b) the
exercise price of such options. In addition, the Company will redeem shares of
the Company's Common Stock previously purchased by Mr. Brown or Mr. Singleton
with the proceeds of a loan from the Company. (Mr. Brown financed a purchase of
375,000 shares of the Company's Common Stock with such a loan and Mr. Singleton
financed the purchase of 250,000 shares of the Company's Common Stock with such
a loan.) In such event, if the employee's obligations under the note to the
Company exceed the value of the stock which he acquired with the note proceeds,
the Company will forgive a portion of such excess in an amount based upon a
formula set forth in the employment agreement and also pay employee an amount
equal to all taxes imposed on employee as a result of the note

                                       13

forgiveness. Furthermore, the Compensation Committee has the discretion to
permit the employee or his estate to retain all shares of the Company's Common
Stock purchased with the proceeds of the note. The amounts payable to the Named
Executive Officers under these employment agreements, assuming termination by
reason of a change of control as July 16, 2001 were as follows: Mr. Brown -
$5,330,000; Mr. Singleton - $2,055,000, Mr. Fay - $600,000, Mr. Walsh - $600,000
and Mr. McDonald - $550,000. The values of outstanding employee stock options
that would be payable to the Named Executive Officers under these employment
agreements, assuming termination by reason of a change of control as of
July 16, 2001, were as follows: Mr. Brown - $1,303,726 and Mr. Singleton -
$791,843. The amount of note proceeds and interest that would be forgiven by the
Company assuming termination by reason of a change of control as of July 16,
2001, together with payments by the Company equal to the estimated amount of
taxes which would have been incurred by the employee as a result of the
forgiveness, were as follows: Mr. Brown - $2,308,104 and Mr. Singleton -
$156,426.

    As permitted by the 1994 and 1999 Stock Option and Incentive Plans, stock
options granted to participants thereunder provide for acceleration upon the
termination of employment within one year after the occurrence of certain change
of control events, whether such termination is voluntary or involuntary, or with
or without cause. In addition, the Compensation Committee may permit
acceleration upon the occurrence of certain extraordinary transactions which may
not constitute a change of control.

    AMC maintains a severance pay plan for full-time salaried nonbargaining
employees with at least 90 days of service. For an eligible employee who is
subject to the Fair Labor Standards Act ("FLSA") overtime pay requirements (a
"nonexempt eligible employee"), the plan provides for severance pay in the case
of involuntary termination of employment due to layoff of the greater of two
weeks' basic pay or one weeks' basic pay multiplied by the employee's full years
of service up to no more than twelve weeks' basic pay. There is no severance pay
for a voluntary termination, unless up to two weeks' pay is authorized in lieu
of notice. There is no severance pay for an involuntary termination due to an
employee's misconduct. Only two weeks' severance pay is paid for an involuntary
termination due to substandard performance. For an eligible employee who is
exempt from the FLSA overtime pay requirements, severance pay is discretionary
(at the Department Head/Supervisor level), but will not be less than the amount
that would be paid to a nonexempt eligible employee.

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

    THE REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS SHALL NOT
BE DEEMED INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY
REFERENCE THIS PROXY STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933
OR UNDER THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT THE
COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT
OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.

    The Compensation Committee of the Board of Directors of the Company (the
"Committee") is composed of independent non-employee directors. The Committee is
responsible for developing the executive compensation strategy of the Company
and its subsidiaries. In carrying out its responsibilities, the Committee, among
other things, reviews the policies of comparable companies and consults with an
independent compensation consulting firm.

    The Committee utilized the compensation programs described below for the
fiscal year ended March 29, 2001. The annual base salaries discussed below are
those established at the beginning of fiscal 2001, i.e., in the spring of 2000.
The annual incentive cash bonus pertains to performance for fiscal 2001;
payments, if any, are paid early in the next fiscal year, in this case, in

                                       14

the spring of 2001. The long term incentives pertain to grants and awards made
under the AMC Entertainment Inc. 1999 Stock Option and Incentive Plan (the "1999
Incentive Plan") for fiscal 2001.

    COMPENSATION POLICY.  The Company's executive compensation policy has four
overall objectives:

    - to align the interests of Executive Officers with those of the Company and
    its stockholders;

    - to link compensation to the performance of the Company as well as to the
    individual contribution of each Executive Officer;

    - to maintain total direct compensation (salary plus annual incentive plus
    equity based compensation), when performance is at target levels, at rates
     that are at the third quartile of the total direct compensation market for
     comparable companies. Because of the relatively small number of comparable
     motion picture exhibition companies, this comparison has included companies
     engaged in other businesses; and

    - to compensate executives at a level which is competitive in the
    marketplace so that the Company can continue to attract, motivate and retain
     executives with outstanding abilities.

    ANNUAL BASE SALARY.  Annual base salaries for the Company's Executive
Officers are determined with reference to a "position rate" for each of the
Executive Officers. The position rate is determined by evaluating the
responsibilities of the position and comparing it with that of similar positions
in comparable companies as well as companies generally.

    The fiscal 2001 annual base salaries for the Company's Executive Officers
were reviewed and approved by the Committee. For fiscal 2001, the Committee
approved no increases in annual base salary for the Company's Executive
Officers.

    ANNUAL INCENTIVE CASH BONUS.  Under the Executive Incentive Program (the
"EIP"), eligible employees, including Executive Officers, are rewarded with
annual incentive cash bonuses if certain performance criteria are met and/or
exceeded. For fiscal 2001, the Committee determined that the performance
criteria for the annual incentive cash bonus for Executive Officers would be
based upon achievement of an Adjusted EBITDA (earnings before interest, taxes,
depreciation and amortization) target. The Company exceeded its Adjusted EBITDA
target in fiscal 2001 and paid annual incentive cash bonuses based on a formula
to Executive Officers early in fiscal 2002. The annual incentive cash bonuses
paid to the Named Executive Officers for fiscal 2001 are detailed in the Summary
Compensation Table.

    LONG TERM INCENTIVES.  The AMC Entertainment Inc. 1999 Stock Option and
Incentive Plan (the "1999 Incentive Plan") was approved by the Company's
stockholders on December 2, 1999. The Committee determined in May 2000 that if
the Company's Adjusted EBITDA target was met, long term incentives would be
awarded to senior members of theatre management and above in the organization.
The Company exceeded its target for fiscal 2001 and thus, granted to its
Executive Officers and certain other associates long term incentives in the form
of (i) non-qualified stock options and (ii) restricted stock awards. One half of
these non-qualified stock options vest one year from date of grant with the
balance vesting two years from date of grant, subject (with certain exceptions
such as death or disability) to continued employment with the Company. One half
of these restricted stock awards are paid to the recipient one year from the
date of the grant with the balance paid two years from the date of the grant,
also subject to

                                       15

continued employment with the Company. The option grants and restricted stock
awards for the Named Executive Officers for fiscal 2001 performance are detailed
in footnote (2) to the Summary Compensation Table.

    CEO COMPENSATION.  Mr. Peter C. Brown's fiscal 2001 annual base salary was
reviewed by the Committee and, as discussed above, the Committee did not grant
increases in annual base salary at the beginning of fiscal 2001. Mr. Brown
received an annual incentive cash bonus of $454,230 early in fiscal 2002 based
on the Company exceeding the established target of Adjusted EBITDA for fiscal
2001. Mr. Brown is a participant in the Company's Retirement Enhancement Program
(the "REP") but receives no current cash compensation from this program. See
"Defined Benefit Retirement and Supplemental Executive Retirement Plans."
Mr. Brown received options to purchase 106,990 shares of the Company's Common
Stock and restricted stock awards covering 30,000 shares of the Company's Common
Stock, also based on the Company exceeding the performance criteria for fiscal
2001 established by the Committee.

    IMPACT OF INTERNAL REVENUE CODE SECTION 162(M).  Under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), publicly held companies
such as the Company may not deduct compensation paid to certain Executive
Officers to the extent that an executive's compensation exceeds $1,000,000 in
any one year, unless such compensation is "performance based." Although the
Committee has attempted to design the Company's executive compensation programs
so that compensation received pursuant to the compensation programs will be
deductible under Section 162(m) of the Code, in certain circumstances it may not
be possible or practicable or in the Company's best interests to so qualify
compensation programs. In any event, the Committee anticipates that, in most
instances, treatment under Section 162(m) of the Code will not be an issue
because generally no Executive Officer's non-performance based compensation will
exceed $1,000,000 in any one year.

                                          COMPENSATION COMMITTEE
                                          Charles J. Egan, Jr.
                                          Paul E. Vardeman
                                          Marc J. Rowan

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

    Mr. Charles J. Egan, Jr. is a member of the Compensation Committee.
Mr. Egan is a Trustee of the Durwood Voting Trust, which has the power to vote
all shares of the Company's Class B Stock. Mr. Egan also is a Trustee of the
Revocable Trust established under that certain Revocable Trust Agreement of
Mr. Stanley H. Durwood dated August 14, 1989, as amended and restated as of
May 12, 1999 (the "Revocable Trust"), and is the Trustee of the Pamela Yax
Durwood Marital Trust created pursuant to the above Revocable Trust Agreement
(the "Marital Trust"). The Revocable Trust and the Marital Trust are the
beneficial owners of all shares of the Company's Class B Stock.

    Mr. Peter C. Brown, Chairman of the Board, Chief Executive Officer,
President and a Director of the Company, serves as a director of LabONE, Inc.
Mr. W. Thomas Grant, II, an Executive Officer of LabONE, Inc., served on the
Compensation Committee of the Company until May 22, 2000.

                                       16

STOCK PERFORMANCE GRAPH

    THE STOCK PERFORMANCE GRAPH SHALL NOT BE DEEMED INCORPORATED BY REFERENCE BY
ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY
FILING UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES EXCHANGE ACT OF
1934, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS
INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH
ACTS.

    The following line graph compares the yearly percentage change in the
cumulative total stockholder return on the Company's Common Stock with (i) the
cumulative total return on the Standard and Poor's Corporation Composite 500
Index and (ii) a peer group of companies primarily engaged in the motion picture
exhibition industry, for the period of five fiscal years commencing March 28,
1996 and ending March 29, 2001. The comparison assumes $100 was invested on
March 28, 1996 in the Company's Common Stock and in each of the foregoing
indices, and further assumes the reinvestment of dividends. The peer group
companies include Carmike Cinemas, Inc., Cineplex Odeon Corporation, Loews
Cineplex Entertainment Corporation, GC Companies, Inc., and Regal Cinemas, Inc.

    Set forth below are three lines as follows: (i) the Company's Common Stock
performance for the past five fiscal years; (ii) the Standard and Poor's
Corporation Composite 500 Index performance for the past five fiscal years; and
(iii) the "peer group" performance for the past five fiscal years.

    The peer group is further described as follows:

    a.  Carmike Cinemas, Inc. from March 28, 1996 through March 29, 2001.
        Carmike Cinemas, Inc. filed for Chapter 11 bankruptcy protection on
        August 8, 2000. Its common stock continued to trade on the New York
        Stock Exchange ("NYSE") until January 12, 2001 (NYSE suspended trading
        prior to the opening on January 12, 2001). Carmike Cinemas, Inc. common
        stock began trading on the NASD's over-the-counter Bulletin Board
        ("OTCBB") on January 18, 2001 under the symbol "ckecq.ob".

    b.  GC Companies, Inc. from March 28, 1996 through March 29, 2001. GC
        Companies, Inc. filed for Chapter 11 bankruptcy protection on
        October 11, 2000. Its common stock continued to trade on the NYSE until
        June 12, 2001.

    c.  Cineplex Odeon Corporation from March 28, 1996 through May 14, 1998, at
        which time it combined with LTM Holdings, Inc. On the date of the
        combination, outstanding shares of Cineplex Odeon Corporation were
        exchanged for shares of Loews Cineplex Entertainment Corporation. Loews
        Cineplex Entertainment Corporation began trading publicly on May 15,
        1998 and is included in the peer group performance from May 15, 1998
        through March 29, 2001. Loews Cineplex Entertainment Corporation filed
        for Chapter 11 bankruptcy protection on February 15, 2001 and its common
        stock was delisted from the NYSE subsequent to the Chapter 11 filing.
        After such date, its stock has continued to trade on the Toronto Stock
        Exchange and on the OTCBB under the symbol "lcpfq.ob".

    d.  Regal Cinemas, Inc.'s performance is included in the peer group from
        March 28, 1996 through May 27, 1998. Regal Cinemas, Inc. completed a
        merger on May 27, 1998 with an affiliate of Kohlberg Kravis Roberts &
        Co. L.P. and an affiliate of Hicks, Muse, Tate & Furst Incorporated,
        with Regal Cinemas, Inc. as the surviving corporation. This merger
        resulted in a recapitalization in which existing shareholders of Regal
        Cinemas, Inc. received cash for their shares of common stock. Thus,
        Regal Cinemas, Inc.'s common stock was not publicly traded after
        May 27, 1998.

                                       17

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC



      1996  1997  1998  1999  2000  2001
                  
AMC    100    82    98    62    21    26
S&P    100   118   180   211   246   192
PEER   100   111   128    82    40     2


                                       18

AUDIT COMMITTEE CHARTER

    During 2000, the Board of Directors of the Company adopted a new, written
Audit Committee Charter, a copy of which Charter is attached hereto as
Appendix A to the Proxy Statement. The Board of Directors has determined that
each Audit Committee member is "independent" as that term is defined in
Section 121(A) of the American Stock Exchange's Listing Standards.

    THE INFORMATION IN OR REFERRED TO IN THE FOREGOING PARAGRAPH SHALL NOT BE
DEEMED INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY
REFERENCE THIS PROXY STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933
OR UNDER THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT THE
COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT
OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.

AUDIT COMMITTEE REPORT

    The Audit Committee has reviewed and discussed with management the audited
financial statements for the fiscal year ended March 29, 2001; has discussed
with the independent auditors the matters required to be discussed by SAS 61
(Codification of Statements on Auditing Standards, AU ss. 380), as modified or
supplemented; has received the written disclosures and letter from the
independent auditors required by Independence Standards Board Standard No. 1, as
may be modified or supplemented; and has discussed with the independent auditors
the auditors' independence. Based on such review and discussions, the Audit
Committee recommended to the Board of Directors that the audited financial
statements for the fiscal year ended March 29, 2001 be included in the Company's
Annual Report on Form 10-K for filing with the Securities and Exchange
Commission.

                                          AUDIT COMMITTEE
                                          Charles J. Egan, Jr.
                                          W. Thomas Grant, II
                                          Charles S. Paul
                                          Marc J. Rowan

    THE INFORMATION IN THE FOREGOING PARAGRAPH SHALL NOT BE DEEMED INCORPORATED
BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933 OR UNDER THE
SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT THE COMPANY
SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE
BE DEEMED FILED UNDER SUCH ACTS.

                                       19

AUDIT AND CERTAIN OTHER FEES PAID TO ACCOUNTANTS

    The aggregate fees billed the Company by its principal accountant,
PricewaterhouseCoopers LLP, for the fiscal year ended March 29, 2001 for
(i) professional services rendered for the audit of the Company's annual
financial statements and the reviews of the financial statements included in the
Company's reports on Form 10-Q during such fiscal year, (ii) financial
information systems design and implementation as described in
paragraph (c)(4)(ii)of Rule 2-01 of Regulation S-X during such year, and
(iii) for all other services were as set forth in the following table. The Audit
Committee has considered whether the provision of such services is compatible
with maintaining the independence of PricewaterhouseCoopers LLP.



TYPE OF FEE                                                 AMOUNT
- -----------                                               -----------
                                                       
Audit Fees                                                $   201,521
Financial Information Systems Design and
 Implementation Fees                                                0
All Other Fees                                              1,167,180
                                                          -----------
      Total                                               $ 1,368,701
                                                          ===========


                                       20

SECURITY OWNERSHIP OF BENEFICIAL OWNERS

    The following table sets forth certain information as of July 16, 2001
(except as noted) with respect to principal owners of each class of the
Company's voting securities:



                                                                NUMBER OF SHARES    PERCENT OF
TITLE OF CLASS           BENEFICIAL OWNER                      BENEFICIALLY OWNED     CLASS
- --------------           ----------------                      ------------------   ----------
                                                                           
Class B Stock            Raymond F. Beagle, Jr.                     4,041,993(1)         100%
                         2345 Grand Blvd.
                         Kansas City, MO 64108
                         Charles J. Egan, Jr.                       4,041,993(1)         100%
                         106 West 14th Street
                         Kansas City, MO 64105
Series A Preferred       "Apollo Group"                                87,722(2)        94.1%
 Stock                   Apollo Investment Fund IV, L.P.
                         Apollo Overseas Partners IV, L.P.
                         Apollo Advisors IV, L.P.
                         Apollo Management IV, L.P.
                         c/o Apollo Advisors IV, L.P.
                         Two Manhattanville Road
                         Purchase, NY 10577;

                           Apollo Investment Fund V, L.P.
                           Apollo Overseas Partners V, L.P.
                           Apollo Advisors V, L.P.
                           Apollo Management V, L.P.
                           c/o Apollo Advisors V, L.P
                           Two Manhattanville Road
                           Purchase, NY 10577;
                           and
                           AP Entertainment LLC
                           c/o Apollo Management V, L.P.
                           Two Manhattanville Road
                           Purchase, N. Y. 10577

                         Sandler Capital Management                     5,520(3)         5.9%
                         767 Fifth Avenue
                         New York, New York 10153


                                       21




                                                                NUMBER OF SHARES    PERCENT OF
TITLE OF CLASS           BENEFICIAL OWNER                      BENEFICIALLY OWNED     CLASS
- --------------           ----------------                      ------------------   ----------
                                                                           
Series B                 "Apollo Group"                               152,312(2)        94.1%
 Preferred Stock         (see above)

                         Sandler Capital Management                     9,480(3)         5.9%
                         (see above)
Common Stock             Ronald B. Ferrin                           1,822,600(4)         9.4%
                         and Group
                         2215 York Road, Suite 209
                         Oak Brook, IL 60523

                         Sandler Capital Management                 2,596,464(5)        12.9%
                         (see above)

                         Harvey Sandler                             1,604,437(6)         8.3%
                         Sandler Enterprises
                         1555 North Park Drive, Suite 101
                         Weston, Florida 33326

                         Michael J. Marocco                         1,489,437(7)         7.7%
                         767 Fifth Avenue
                         New York, New York 10153

                         John Kornreich                             1,474,437(8)         7.6%
                         767 Fifth Avenue
                         New York, New York 10153

                         Syufy Century Corporation                  1,407,000(9)         7.2%
                         150 Pelican Way
                         San Rafael, CA 94901

                         Raymond F. Beagle, Jr.                     4,042,143(10)       17.2%(10)
                         (see above)

                         Charles J. Egan, Jr.                       4,042,143(10)       17.2%(10)
                         (see above)

                         Apollo Group                              12,268,811(11)       38.7%(11)
                         (see above)


- -------------------

    (1)The Company's Class B Stock is held of record by the Durwood Voting Trust
established under that certain 1992 Durwood, Inc. Voting Trust Agreement dated
December 12, 1992, as amended and restated as of August 12, 1997. Beneficial
interests in the Durwood Voting Trust are held by a revocable trust established
under a Revocable Trust Agreement of Mr. Stanley H. Durwood dated August 14,
1989, as amended and restated as of May 12, 1999 (the "Revocable Trust") and by
the Pamela Yax Durwood Marital Trust created pursuant to the above described
Revocable Trust Agreement (the "Marital Trust"). The Trustees of the Durwood
Voting Trust and of the Revocable Trust are Mr. Raymond F. Beagle, Jr., the
Company's general counsel, and Mr. Charles J. Egan, Jr., a Director of the
Company. The Trustee of the Marital Trust is Mr. Charles

                                       22

J. Egan, Jr. As Trustees, Messrs. Beagle and Egan share voting and investment
power over all outstanding shares of Class B Stock and may be deemed to
beneficially own all of such shares. (Although Mr. Egan is the sole trustee of
the Marital Trust, Mr. Beagle shares the power to dispose of the shares in which
the Marital Trust has a beneficial interest because under the terms of the
Voting Trust, the Voting Trust trustees must approve any transfer of shares held
in the Voting Trust). Each of Messrs. Beagle and Egan disclaims beneficial
ownership of any of such shares attributable to him solely by reason of his
position as Trustee. Under the terms of the Durwood Voting Trust, the Trustees
(or their successors and any additional trustees whom they might appoint) have
all voting powers with respect to shares held therein, and exercise such rights
by majority vote. Unless otherwise terminated or extended in accordance with its
terms, the Durwood Voting Trust will terminate in 2030.

    The 4,041,993 shares of the Company's Class B Stock constitute 100% of the
outstanding shares of such class. Pursuant to the Company's Restated and Amended
Certificate of Incorporation, the holders of the Company's Class B Stock are
entitled to ten votes per share on all matters that are voted upon as a class by
the holders of the Company's Common Stock, Class B Stock and, if applicable,
Series A Preferred Stock entitled to be voted on an as converted basis. Shares
of Class B Stock are convertible into Common Stock on a share-for-share basis at
any time at the option of the holder. As of July 16, 2001, the shares of the
Company's Class B Stock and Common Stock held by the Durwood Voting Trust
represent 66.7% of the voting power of the Company's outstanding stock, other
than in the election of directors or in matters reserved for a class vote by the
holders of the Company's Common Stock or Class B Stock. This percentage includes
approximately 772,027 votes attributable to the shares of Series A Preferred
Stock held by the Sandler Funds (see Note (3)), which are entitled to vote on an
"as converted" basis with the Common Stock and Class B Stock on certain matters.
See "Proposal No. 2 -- Terms of the Apollo Transaction -- Terms of the Preferred
Stock under the Certificate of Designations -- Voting Rights".

    The voting control of the Trustees may be diluted if the Trustees are
required to dispose of shares to honor provisions of the Revocable Trust or the
Marital Trust or otherwise. Other factors which may substantially dilute the
voting control of the Trustees include, but are not limited to, the following:
(1) the issuance of additional shares of Common Stock by the Company, including
under the Company's employee benefit plans; (2) the transfer by the Apollo
Purchasers of shares of Series A Preferred Stock to persons who may be entitled
to vote such shares on an "as-converted" basis; (3) the conversion of shares of
Series A Preferred Stock into Common Stock; and (4) the exchange of Series B
Preferred Stock for Series A Preferred Stock. If the proposed Amendment
described in Proposal 2 herein is approved and all Series B Preferred Stock is
exchanged for Series A Preferred Stock, the Class B Stock would represent 42.4%
of the total voting power (other than in the election of directors) of all
outstanding stock of the Company, assuming all of the Series A Preferred Stock
is either converted to Common Stock or held by persons entitled to vote such
stock on an as converted basis. See Note (2) for information regarding
limitations on the conversion rights of certain holders of Series A Preferred
Stock.

    (2)Beneficial ownership is as reported in Amendment No. 1 to Schedule 13D
dated as of July 3, 2001.

    As used herein, "Initial Apollo Purchasers" means Apollo Investment Fund IV,
L.P. and Apollo Overseas Partners IV, L.P. (collectively, the "Apollo IV
Purchasers"), Apollo Investment Fund V, L.P. and Apollo Overseas Partners V,
L.P. (collectively, the "Apollo V Purchasers"). "Apollo" means Apollo Management
IV, L.P., in its capacity as investment manager of the Apollo IV Purchasers
("Apollo IV Management"), and Apollo Management V, L.P., in its capacity as
investment manager to the Apollo V Purchasers ("Apollo V Management"), together
with their affiliates. According to

                                       23

their Schedule 13D filed on April 20, 2001, Apollo Advisors IV, L.P. is the
general partner of Apollo Investment Fund IV, L.P. and the managing general
partner of Apollo Overseas Partners IV, L.P., and Apollo Advisors V, L.P. is the
general partner of Apollo Investment Fund V, L.P. and the managing general
partner of Apollo Overseas Partners V, L.P. The foregoing parties identified in
this paragraph, together with AP Entertainment LLC, are referred to collectively
as the "Apollo Group."

    Pursuant to an Investment Agreement dated April 19, 2001, the Initial Apollo
Purchasers acquired 92,000 shares of Series A Preferred Stock and 158,000 share
of Series B Preferred Stock from the Company. According to Amendment No. 1 to
Schedule 13D of the Initial Apollo Purchasers filed on July 3, 2001, on
June 29, 2001 the Initial Apollo Purchasers sold 3,680 shares of Series A
Preferred Stock and 6,320 shares of Series B Preferred Stock to AP Entertainment
LLC, a vehicle formed for the purpose of holding the Company's securities that
is managed by Apollo V Management. On July 3, 2001, the Initial Apollo
Purchasers sold 5,520 shares of Series A Preferred Stock and 9,480 shares of
Series B Preferred Stock to the Sandler Funds.

    After giving effect to these transactions, the Apollo Group owns 87,722
shares of Series A Preferred Stock and 152,312 shares of Series B Preferred
Stock. The terms of the Series A Preferred Stock provide that each share is
convertible into 139.86 shares of Common Stock, subject to adjustment.
Presently, these shares of Series A Preferred Stock are convertible into an
aggregate of 12,268,811 shares of Common Stock, or 38.7% of the shares of such
class giving effect only to such conversion. If the Amendment is approved, to
the extent such an exchange will not result in a change in control under the
Indentures, the 152,312 shares of Series B Preferred Stock will be automatically
exchanged for 152,312 shares of Series A Preferred Stock. These shares would be
convertible into an additional 21,302,377 shares of Common Stock, which,
together with the 12,268,811 shares referred to above, would represent 63.3% of
the shares of such class, giving effect only to such conversion. However,
pursuant to an agreement between the Company and certain members of the Apollo
Group, members of the Apollo Group may not convert their shares of Series A
Preferred Stock into Common Stock, except in connection with a disposition of
such shares, before April 20, 2006.

    Regular dividends on the Series A Preferred Stock are payable at the annual
rate of 6.75% per annum and must be paid with additional shares of Series A
Preferred Stock through April 19, 2004 (the "PIK Period"). Thereafter, dividends
on shares of the Series A Preferred Stock may be paid in cash or shares of
Series A Preferred Stock, at the Company's option, through April 19, 2008.
Assuming that the Amendment to the Restated and Amended Certificate of
Incorporation referred to above is approved by stockholders at the Annual
Meeting of Stockholders, by the end of the PIK Period the Apollo Purchasers
might hold an aggregate of 289,506 shares of Series A Preferred Stock. Based on
the current conversion price of $7.15 per share of Common Stock, assuming full
conversion of the Series A Preferred Stock for Common Stock at the end of the
PIK Period, the Apollo Purchasers would hold an aggregate of 40,490,349 shares
of Common Stock at the end of such period. However, pursuant to an agreement
between the Company and certain members of the Apollo Group, members of the
Apollo Group may not convert their shares of Series A Preferred Stock into
Common Stock, except in connection with a disposition of such shares, before
April 20, 2006.

    Apollo and the Apollo Purchasers are bound by a Standstill Agreement with
the Company which, for a period of five years ending April 19, 2006 (the
"Standstill Period"), among other matters, restricts their ability to
(i) acquire additional voting securities of the Company, (ii) propose certain
extraordinary corporate transactions, (iii) seek to elect or remove members of

                                       24

the Board of Directors or (iv) engage in election contests. Further, if during
the Standstill Period an Apollo Purchaser wishes to convert Series A Preferred
Stock to Common Stock it may do so only in connection with a permitted
disposition under the Standstill Agreement.

    Until such time as the Apollo Purchasers no longer beneficially own 50% of
the aggregate number of shares of Preferred Stock issued pursuant to the
Investment Agreement (reduced by the shares sold on July 3, 2001 to the Sandler
Funds) or either Apollo is terminated as investment manager of the Apollo
Purchasers or an Apollo affiliate is removed as the general partner of the
Apollo Purchasers and, in either case, is not replaced by another Apollo
affiliate, (i) Apollo's approval is required with respect to certain corporate
actions, including, generally, amending the Company's Restated and Amended
Certificate of Incorporation or bylaws, creating, issuing or purchasing capital
stock, paying cash dividends, prepaying indebtedness, incurring indebtedness,
engaging in mergers with other companies, engaging in certain affiliate
transactions, changing the size of the Board of Directors or acquiring
significant assets and (ii) Apollo Purchasers that are holders of Series A
Preferred Stock and Series B Preferred Stock, acting as a single class, are
entitled to elect three members of the Company's Board of Directors. Pursuant to
an Investment Agreement between the Company, Apollo and the Initial Apollo
Purchasers, the Apollo Purchasers have agreed that so long as they hold shares
of Preferred Stock and the Apollo Purchasers have Preferred Stock Approval
Rights, Apollo Investment Fund IV and Apollo Investment Fund V shall be entitled
to elect two of the three directors, with each being entitled to elect one of
the two so long as it holds Preferred Shares. The third director is to be
elected collectively by all Apollo Purchasers.

    In their Schedule 13D filed on April 20, 2001, as amended on July 3, 2001,
each member of the Apollo Group reported that it shared the power to dispose of
the shares reported therein as beneficially owned but stated that, in light of
its agreement in the Investment Agreement not to convert shares of Series A
Preferred Stock into Common Stock from April 20, 2001 until April 20, 2006
except in connection with the disposition of such Common Stock to an
unaffiliated third party, notwithstanding the right to elect directors, such
person has no ability to exercise voting power with respect to the Common Stock
following conversion during such time period.

    (3)These shares were acquired by Sandler Capital Partners V, L.P., Sandler
Capital Partners V FTE, L.P., and Sandler Capital Partners V Germany, L.P. on
July 3, 2001 from the Initial Apollo Purchasers. Sandler Capital Management,
Sandler Investment Partners, L.P and MJDM Corp. are general partners of each of
the purchasers, which purchasers are referred to collectively as the Sandler
Funds in Note (2).

    (4)As reported in his Amendment No. 1 to Schedule 13D dated January 16,
2001. Mr. Ferrin reports that he has sole voting and dispositive power with
respect to 355,700 shares, Mrs. Janet Madori-Ferrin has sole voting and
dispositive power with respect to 522,000 shares, Mr. John E. Gorman has sole
voting and dispositive power with respect to 239,400 shares and Fairmac Realty
Corporation has sole voting and dispositive power with respect to 705,500
shares. The Amendment No. 1 to Schedule 13D also reports that Mr. Ferrin and
Mr. Gorman have shared voting and dispositive power over 705,500 shares as
reported in its Schedule 13D dated February 1, 2001.

    (5)Includes 1,824,437 shares, or 9.4% of the outstanding shares of Common
Stock as of July 16, 2001, reported in a Schedule 13G filed on February 14,
2001, and 772,027 shares issuable upon conversion of the Series A Preferred
Stock referred to in Note (3). Sandler Capital Management is one of a number of
parties named in the Schedule 13G, which states that it was filed on behalf of
Sandler Capital Management. Of the 1,824,437 shares of Common Stock reported in
the Schedule, Sandler Capital Management reported shared voting and dispositive
power as to

                                       25

335,700 shares and sole voting and dispositive power over no other shares. The
only persons named in the Schedule 13G reporting beneficial ownership of more
than 5% of the Company's Common Stock were Harvey Sandler, Michael J. Marocco
and John Kornreich, each of whom stated that he was a general partner of Sandler
Capital Management and affiliated with certain other entities named in the
Schedule 13G.

    (6)As reported in the Schedule 13G filed on February 14, 2001 referred to in
Note (5), Harvey Sandler has sole voting and dispositive power over 115,000
shares and shared voting and dispositive power over 1,489,437 shares. According
to the Schedule 13G, Mr. Sandler shares voting and dispositive power with
Mr. Marocco and Mr. Kornreich with respect to 1,469,437 of these shares.

    (7)As reported in the Schedule 13G filed on February 14, 2001 referred to in
Note (5), Michael J. Marocco has sole voting and dispositive power over 0 shares
and shared voting and dispositive power over 1,489,437 shares. According to the
Schedule 13G, Mr. Marocco shares voting and dispositive power with Mr. Sandler
and Mr. Kornreich with respect to 1,469,437 of these shares.

    (8)As reported in the Schedule 13G filed on February 14, 2001 referred to in
Note (5), John Kornreich has sole voting and dispositive power over 5,000 shares
and shared voting and dispositive power over 1,469,437 shares. According to the
Schedule 13G, Mr. Kornreich shares voting and dispositive power with
Mr. Marocco and Mr. Sandler with respect to these 1,469,437 shares.

    (9)As reported in its Schedule 13D dated January 11, 2000. Syufy Century
Corporation reports that it has sole voting power and sole dispositive power
with respect to 1,407,000 shares.

    (10)Assumes the conversion of outstanding Class B Stock for Common Stock.
Percentage ownership does not reflect any conversion of Series A Preferred Stock
for Common Stock.

    (11)Assumes the conversion of outstanding Series A Preferred Stock for
Common Stock. Percentage ownership does not reflect any conversion of Class B
Stock for Common Stock. The number of shares shown as beneficially owned does
not give effect to the exchange of outstanding Series B Preferred Stock for
Series A Preferred Stock that will occur if the Amendment is approved.

BENEFICIAL OWNERSHIP BY DIRECTORS AND OFFICERS

    The following table sets forth certain information as of July 16, 2001, with
respect to beneficial ownership by Directors and Executive Officers of the
Company's Common Stock, Class B Stock and Series A and Series B Preferred Stock.
The amounts set forth below include the vested portion of 782,600 shares of
Common Stock subject to options under the Company's 1983 and 1984 Stock Option
Plans and the 1994 Stock Option and Incentive Plan held by Executive Officers
and the vested portion of 68,690 shares of Common Stock subject to options under
the

                                       26

Company's 1999 Stock Option Plan for Outside Directors. Unless otherwise
indicated, the persons named are believed to have sole voting and investment
power over the shares shown as beneficially owned by them.



                                                   AMOUNT AND NATURE OF   PERCENT OF
TITLE OF CLASS          NAME OF BENEFICIAL OWNER   BENEFICIAL OWNERSHIP     CLASS
- --------------          ------------------------   --------------------   ----------
                                                                 
Series A Preferred      Leon D. Black                       87,722(1)         94.1%
  Stock                 Marc J. Rowan                       87,722(1)         94.1%
                        Laurence M. Berg                    87,722(1)         94.1%
Series B Preferred      Leon D. Black                      152,312(1)         94.1%
  Stock                 Marc J. Rowan                      152,312(1)         94.1%
                        Laurence M. Berg                   152,312(1)         94.1%
Class B Stock           Charles J. Egan, Jr.             4,041,993(2)        100.0%
Common                  Leon D. Black                   12,268,811(3)         38.7%(3)
  Stock                 Marc J. Rowan                   12,268,811(3)         38.7%(3)
                        Laurence M. Berg                12,268,811(3)         38.7%(3)
                        Peter C. Brown                     659,000(6)          3.4%
                        Philip M. Singleton                498,600(6)          2.6%
                        Richard T. Walsh                    45,050(6)            *
                        Richard M. Fay                      50,933(6)            *
                        John D. McDonald                    55,100(6)            *
                        W. Thomas Grant, II                 28,078(4)            *
                        Charles S. Paul                     46,340(4)            *
                        Paul E. Vardeman                    11,640(4)            *
                        Charles J. Egan, Jr.             4,046,813(4)(5)      17.2%
                        All Directors and
                        Executive Officers
                        as a group (15 persons,
                        including the
                        individuals named above)        17,830,365(3)(4)(5)(6)     48.7%


- -------------------

    *Less than one percent.

    (1)See Note (2) under "Security Ownership of Certain Beneficial Owners."
Messrs. Black, Rowan and Berg are affiliates of Apollo. Messrs. Black, Rowan and
Berg have each disclaimed beneficial ownership of these shares.

    (2)See Note (1) under "Security Ownership of Certain Beneficial Owners."

    (3)Assumes conversion of Series A Preferred Stock. See Note (11) under
"Security Ownership of Certain Beneficial Owners." Messrs. Black, Rowan and Berg
have each disclaimed beneficial ownership of the Series A Preferred Stock (see
Note (1) above) and the shares of Common Stock issuable upon its conversion.

    (4)Includes shares subject to presently exercisable options to purchase
Common Stock under the Company's 1999 Stock Option Plan for Outside Directors,
as follows: Mr. Grant - 26,340 shares; Mr. Vardeman - 11,340 shares; Mr. Egan -
4,670 shares; Mr. Paul - 26,340 shares; and all Outside Directors as a group -
68,690 shares.

                                       27

    (5)Assumes conversion of Class B Stock. See Note (10) under "Security
Ownership of Certain Beneficial Owners."

    (6)Includes shares subject to presently exercisable options to purchase
Common Stock under the Company's 1983 and 1984 Stock Option Plans and the 1994
Stock Option and Incentive Plan, as follows: Mr. Peter C. Brown - 284,000
shares; Mr. Philip M. Singleton - 233,600 shares; Mr. Richard M. Fay - 45,000
shares; Mr. Richard T. Walsh - 45,000 shares; Mr. John D. McDonald - 55,000
shares; and all Executive Officers as a group - 782,600 shares.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

    Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Executive Officers and Directors, and persons who own more than 10% of the
Company's Common Stock, to file reports of ownership and changes in ownership
with the SEC and the American Stock Exchange. Executive Officers, Directors and
greater-than-10% beneficial owners are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file. Based solely on a
review of the copies of such forms furnished to the Company, or written
representations that no Forms 5 were required, the Company believes that during
fiscal 2001 its Executive Officers, Directors and greater-than-10% beneficial
owners complied with all Section 16(a) filing requirements.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    The Company seeks to ensure that all transactions with related parties are
fair, reasonable and in the best interest of the Company. In this regard, the
Audit Committee of the Board of Directors of the Company reviews all material
proposed transactions between the Company and related parties to determine that,
in their best business judgment, such transactions meet that standard. The
Company believes that each of these transactions was on terms at least as
favorable to the Company as could have been obtained from an unaffiliated third
party. Set forth below is a description of significant transactions which have
occurred since March 31, 2000 or which involve obligations that remain
outstanding as of July 16, 2001.

    In connection with the 1997 merger of the Company and Durwood, Inc. ("DI"),
the Company agreed to pay Mr. Stanley H. Durwood's estate any credit amounts
arising after March 31, 2000 that result from net tax benefits realized by the
Company from the utilization by the Company of alternative minimum tax credit
carryforwards and Missouri operating loss carryforwards of DI. The maximum
amount of credit amounts that could be paid to Mr. Durwood's estate is
approximately $1,100,000. At this time, the Company has not realized any of DI's
net tax benefits on the tax returns it has filed since 1998.

    As a Successor Trustee of the Voting Trust with shared voting powers over
shares held in the Durwood Voting Trust, Mr. Raymond F. Beagle, Jr. may be
deemed to beneficially own in excess of 5% of the Company's voting securities.
Mr. Beagle serves as general counsel to the Company under a three year retainer
agreement which provides for annual payments of $400,000. On each anniversary
date of the retainer agreement, one year will be added to the term so that as of
each anniversary date the retainer agreement will have a three year term. The
agreement provides for severance payments upon a change of control or
termination (other than upon resignation or retirement or for cause) equal to
the annual payments for the remaining term, which will be up to three years. The
agreement also provides for deferred payments from a previously established

                                       28

rabbi trust in a formula amount ($35,623 monthly as of July 16, 2001, which
amount reflects a $150,000 discretionary deferred bonus which has been paid to
the rabbi trust during fiscal 2002), for a period of twelve years after
termination of services or a change of control.

    Pursuant to a program recommended by the Compensation Committee and approved
by the Company's Board of Directors, the Company loaned Mr. Peter C. Brown
$5,625,000 to purchase 375,000 shares of the Company's Common Stock. Mr. Brown
purchased such shares on August 11, 1998. Under such program the Company also
loaned Mr. Philip M. Singleton $3,765,000 to purchase 250,000 shares of the
Company's Common Stock. Mr. Singleton purchased such shares from September 11 to
September 15, 1998 and unused proceeds of $811,000 were repaid to the Company,
leaving a remaining unpaid principal balance of $2,954,000. Such loans are
unsecured and bear interest at a rate at least equal to the applicable federal
rate prescribed by Section 1274(d) of the Internal Revenue Code in effect on the
date of such loan (6% per annum for the loans to Messrs. Brown and Singleton).
Interest on these loans accrues and is added to principal annually on the
anniversary date of such loan, and the full principal amount and all accrued
interest is due and payable on the fifth anniversary of such loan. On July 16,
2001, the principal amount of the loan to Mr. Brown was $6,270,000 and the
principal amount of the loan to Mr. Singleton was $3,292,000. Accrued interest
on the loans as of July 16, 2001 was $477,600.

    Periodically, the Company and DI or Delta Properties, Inc. ("Delta"), a
former subsidiary of DI, reconciled any amounts owed by one company to the
other. Charges to the intercompany account have included payments made by the
Company on behalf of DI or Delta. The largest balance owed by DI or Delta to the
Company during fiscal 2001 was $11,322. This balance was reimbursed by Delta on
June 7, 2000.

    During fiscal 1998, the Company sold the real estate assets associated with
13 theatres to Entertainment Properties Trust ("EPT"), a real estate investment
trust, for an aggregate purchase price of $283,800,000. The Company leased the
real estate assets associated with the theatres from EPT pursuant to
non-cancelable operating leases with terms ranging from 13 to 15 years at an
initial lease rate of 10.5% with options to extend for up to an additional
20 years. (Such sales and leases being referred to herein collectively as the
"Sale and Lease Back Transaction"). The Company leases four additional theatres
from EPT under the same terms as those included in the Sale and Lease Back
Transaction. Annual rentals for these four theatres are based on an estimated
fair value of $102,600,000 for the theatres. In addition, for a period of five
years subsequent to November 1997, EPT has a right of first refusal and first
offer to purchase and lease back to the Company the real estate assets
associated with any theatre and related entertainment property owned or
ground-leased by the Company, exercisable upon the Company's intended
disposition of such property. Mr. Peter C. Brown, Chairman of the Board, Chief
Executive Officer, President and a Director of the Company, is also the Chairman
of the Board of Trustees of EPT.

    Lathrop & Gage L.C., a law firm of which Mr. Raymond F. Beagle, Jr. is a
member, renders legal services to the Company and its subsidiaries. During
fiscal 2001, the Company paid Lathrop & Gage L.C. $3,252,000 for such services.

    On April 19, 2001, the Initial Apollo Purchasers purchased 92,000 shares of
Series A Preferred Stock and 158,000 shares of Series B Preferred Stock for an
aggregate purchase price of $250 million. In accordance with the Investment
Agreement pursuant to which the shares were purchased, the Company paid Apollo a
fee of $8.75 million and paid Apollo's transaction expenses of $3.75 million.
The Company has entered into a Registration Rights Agreement with the Initial
Apollo Purchasers in which it has given the Apollo Purchasers and their
permitted transferees demand and piggyback registration rights with respect to
shares of Preferred Stock and Common Stock held by them.

                                       29

    For a description of certain employment agreements between the Company and
Messrs. Peter C. Brown, Philip M. Singleton, Richard M. Fay, Richard T. Walsh
and John D. McDonald, see "Employment Contracts, Termination of Employment and
Change of Control Arrangements."

2. PROPOSAL TO AMEND ARTICLE FOURTH OF THE COMPANY'S RESTATED AND AMENDED
CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK FROM 45,000,000 TO 200,000,000.
PROPOSED AMENDMENT

    The Company's Amended and Restated Certificate of Incorporation authorizes
the issuance of a total of 85,000,000 shares of capital stock, consisting of
45,000,000 shares of common stock, par value 66 2/3 CENTS per share ("Common
Stock"), 30,000,000 shares of Class B Stock, par value 66 2/3 CENTS per share
("Class B Stock"), and 10,000,000 shares of preferred stock, par value
66 2/3 CENTS per share ("Preferred Stock"). The Company's Board of Directors has
unanimously declared the advisability of and approved an amendment (the
"Amendment") to the Company's Amended and Restated Certificate of Incorporation
to increase the total number of shares that the Company is authorized to issue
from 85,000,000 to 240,000,000 by increasing the number of authorized shares of
Common Stock that the Company is authorized to issue from 45,000,000 to
200,000,000, and has resolved to submit the proposed Amendment to the Company's
stockholders. To effect the Amendment, the Company proposes that paragraph (a)
of Article FOURTH of the Company's Restated and Amended Certificate of
Incorporation be amended to provide as follows:

        "The aggregate number of shares of capital stock that the corporation
shall have authority to issue is 240,000,000 shares, consisting of 200,000,000
    shares of Common Stock, par value 66 2/3 CENTS per share (the "Common
    Stock"), 30,000,000 shares of Class B Stock, par value 66 2/3 CENTS per
    share (the "Class B Stock"), and 10,000,000 shares of Preferred Stock, par
    value 66 2/3 CENTS per share (the Preferred Stock")."

PURPOSE OF PROPOSED AMENDMENT

    The Amendment will increase the number of authorized shares of Common Stock
by 155,000,000, from 45,000,000 to 200,000,000 shares. This increase will allow
the Company to reserve shares of Common Stock for issuance upon conversion of
additional shares of the Company's Series A Preferred Stock that would be issued
(1) upon exchange of shares of the Company's outstanding Series B Preferred
Stock if the Amendment is approved and (2) as payment-in-kind dividends ("PIK
dividends") on such shares of Series A Preferred Stock in the future. The
proposed Amendment also would create a sufficient reserve of shares of Common
Stock for the Company's future needs. Approval of the proposed Amendment at the
Annual Meeting will satisfy the Shareholder Approval requirement described below
under "Terms of the Apollo Transaction - Terms of Preferred Stock - Dividends -
Series B Preferred Stock" and will reduce retroactively the dividend rate
currently payable by the Company on the Series B Preferred Stock.

    Of the additional shares of Common Stock that will be authorized if the
Amendment is approved, the Company believes that 24,555,009 shares is the
minimum amount required to satisfy the Shareholder Approval requirement
described herein if stockholders approve the proposed Amendment at the Annual
Meeting. Additional shares will be required if the Company elects to pay PIK
dividends after the PIK Period or if the Amendment is approved at a subsequent

                                       30

annual or special meeting. The balance of the increase in authorized shares of
Common Stock will provide the Company with financial and strategic flexibility
and will better enable the Company to take advantage of opportunities that may
present themselves, such as future acquisitions of other companies or assets,
and will also provide a potential source of financial liquidity to the Company
through sales of Common Stock or securities convertible into Common Stock. The
additional authorized shares also could be used to increase the number of shares
available for issuance to Company employees under employee benefit plans. At
present, the Company has no definitive plans for the use of the additional
shares of Common Stock proposed to be authorized except to permit the conversion
of the additional shares of Series A Preferred Stock that would be issuable
(1) upon exchange of Series B Preferred Stock or (2) as PIK dividends on such
shares of Series A Preferred Stock in the future. If the Board of Directors
deems it to be in the best interest of the Company and its stockholders to issue
additional shares of Common Stock in the future, the Board generally will not
seek further authorization from the stockholders, unless such authorization is
otherwise required by applicable law or regulations.

    Holders of Common Stock have no preemptive rights.

APOLLO TRANSACTION

    On April 19, 2001, the Company entered into an Investment Agreement (the
"Investment Agreement") with the Initial Apollo Purchasers and Apollo. Apollo is
a private investment firm that specializes in equity investments in companies
that focus on growth, recapitalizations and other principal investing
activities. Since its inception in 1990, Apollo has overseen the investment of
more than $8 billion in its corporate investment activities. Apollo's four
corporate private equity funds and other managed accounts have, to date, held
interests in more than 150 companies.

    Pursuant to the Investment Agreement, the Company sold shares of preferred
stock for an aggregate purchase price of $250 million to the Initial Apollo
Purchasers. The sale was comprised of 92,000 shares of Series A Preferred Stock
and 158,000 shares of Series B Preferred Stock, each at a price of $1,000 per
share. The Company used net proceeds from the sale of approximately
$225 million to reduce indebtedness under its credit facility. The terms and
relative rights and preferences of the Series A Preferred Stock and the
Series B Preferred Stock are set forth in the Certificate of Designations and
are described below under the heading "Terms of the Apollo Transaction - Terms
of the Preferred Stock under the Certificate of Designations".

    THE SALE OF THE SERIES A PREFERRED STOCK AND SERIES B PREFERRED STOCK
(COLLECTIVELY, THE "PREFERRED STOCK") TO THE INITIAL APOLLO PURCHASERS PURSUANT
TO THE INVESTMENT AGREEMENT AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE
INVESTMENT AGREEMENT WERE APPROVED BY THE COMPANY'S BOARD OF DIRECTORS PRIOR TO
THE CONSUMMATION OF THE TRANSACTION. NO STOCKHOLDER APPROVAL WAS REQUIRED FOR
THE TRANSACTION UNDER THE DELAWARE GENERAL CORPORATION LAW OR THE COMPANY'S
ORGANIZATIONAL DOCUMENTS. REGARDLESS OF WHETHER THE STOCKHOLDERS APPROVE THE
AMENDMENT, THE TRANSACTION HAS BEEN CONSUMMATED AND THE PREFERRED STOCK HAS BEEN
ISSUED TO THE INITIAL APOLLO PURCHASERS. THE COMPANY IS SEEKING STOCKHOLDER
APPROVAL FOR A NUMBER OF OTHER REASONS DESCRIBED IN THIS PROXY STATEMENT,
INCLUDING IN ORDER TO SATISFY THE SHAREHOLDER APPROVAL REQUIREMENT DESCRIBED
BELOW UNDER "TERMS OF THE APOLLO TRANSACTION - TERMS OF PREFERRED STOCK -
DIVIDENDS - SERIES B PREFERRED STOCK".

    The Series A Preferred Stock is convertible at the option of the holders
into shares of Common Stock at a conversion price of $7.15 per share, subject to
antidilution adjustments. Therefore, on the date of issuance each share of
Series A Preferred Stock was convertible into

                                       31

139.86 shares of Common Stock. In addition, holders of the Series A Preferred
Stock are entitled to receive as dividends additional shares of Series A
Preferred Stock from April 19, 2001 until April 19, 2004 (the "PIK Period").
From April 20, 2004 until April 19, 2008, the Company may elect to pay dividends
on the Series A Preferred Stock in cash or in additional shares of Series A
Preferred Stock. Thereafter, the Company is obligated to pay dividends in cash,
subject to limitations that may be imposed under the Company's Indentures as
defined below. Dividends are payable at a rate of 6.75% per annum, compounded
quarterly. The number of shares of Common Stock that would be issuable upon
conversion of the Series A Preferred Stock that has been issued to date, as well
as the shares of Series A Preferred Stock that will be payable on those shares
as dividends through the PIK Period, is 15,728,531.

    At the time of the sale of the Preferred Stock to the Initial Apollo
Purchasers, the Company did not have sufficient authorized and unissued shares
of Common Stock available to permit it to issue only shares of Series A
Preferred Stock to the Initial Apollo Purchasers. Accordingly, the Company
issued shares of Series B Preferred Stock - which is not convertible into Common
Stock - to the Initial Purchasers. The Series B Preferred Stock will be
exchanged for Series A Preferred Stock if the Company's stockholders approve the
proposed Amendment. (See "Terms of the Apollo Transaction - Terms of Preferred
Stock - Exchange of Series B Preferred Stock for Series A Preferred Stock.")
Assuming the exchange of all presently outstanding shares of Series B Preferred
Stock for shares of Series A Preferred Stock immediately after the Annual
Meeting, the Company will require up to an additional approximately 24,555,009
authorized shares of Common Stock beyond those currently available under its
Restated and Amended Certificate of Incorporation and not otherwise reserved to
provide for the conversion of such shares of Series A Preferred Stock to Common
Stock and to pay PIK dividends with respect to those shares during the PIK
Period. Additional shares of Common Stock will be required if the Company
decides to pay PIK dividends on the Series A Preferred Stock after the PIK
Period or if the Amendment is approved at a subsequent annual or special
meeting. Accordingly, a portion of the increased authorization sought by the
Company and its Board of Directors provides for the conversion of shares of
Series A Preferred Stock issued upon the exchange of Series B Preferred Stock
and the payment of PIK dividends on such shares.

    As provided in the Certificate of Designations, not all outstanding shares
of Series B Preferred Stock will be exchanged automatically for Series A
Preferred Stock if the exchange would result in a change of control under the
indentures for the Company's 9 1/2% Subordinated Notes due 2009 and 9 1/2%
Subordinated Notes due 2011 (collectively, the "Indentures"). However, if the
amendment is approved, the only circumstances of which the Company is aware that
might result in less than all outstanding shares of Series B Preferred Stock
being exchanged for Series A Preferred Stock are the conversion prior to the
date of the Annual Meeting of more than approximately 3.1 million shares of
Class B Stock (which has ten votes per share) into Common Stock or the
conversion and the sale to the Apollo Purchasers of more than 2.6 million shares
of Class B Stock. The Trustees of the Durwood Voting Trust, who have investment
authority over all of the outstanding shares of Class B Stock, have advised the
Company that they do not anticipate such a conversion will occur prior to the
date of the Annual Meeting. The Company, however, can give no assurances that
the holders of the Class B Shares will not convert and/or dispose of such
shares.

                                       32

EFFECT OF FAILURE TO APPROVE

    If the Company's stockholders fail to approve the Amendment, the Series B
Preferred Stock will not be exchanged for Series A Preferred Stock but will
remain outstanding. This could result in certain negative consequences to the
Company and the holders of its Common Stock and Class B Stock, including the
following:

    - HIGHER DIVIDEND RATE. The annual rate at which dividends are payable on
    the Series A Preferred Stock is 6.75% of the Series A Liquidation
     Preference. The annual rate at which dividends are payable on the Series B
     Preferred Stock is 12.0% of the Series B Liquidation Preference. See "Terms
     of the Apollo Transaction - Terms of Preferred Stock - Dividends -
     Series A Preferred Stock", "Dividends - Series B Preferred Stock", and
     "Liquidation Preference". Under the terms of the Series B Preferred Stock,
     if the Amendment is approved at the Annual Meeting and all the shares of
     Series B Preferred Stock are exchanged, the dividend rate of the Series B
     Preferred Stock will be reduced to 6.75%, retroactive to April 19, 2001. If
     the Amendment is not approved at the Annual Meeting, the Company will
     continue to pay a higher dividend rate on the Series B Preferred Stock and
     the rate will not be adjusted retroactively if the Amendment is approved at
     a subsequent annual or special meeting. This could have a negative impact
     on earnings to common stockholders and, after the PIK Period, cash flow,
     and could dilute the ownership interests of the Company's other
     stockholders. See "Terms of the Apollo Transaction -- Terms of Preferred
     Stock - Dividends -- Series A Preferred Stock", "Dividends -- Series B
     Preferred Stock", and "Liquidation Preference".

    - HIGHER COST OF REDEMPTION: Under certain circumstances described in this
    Proxy Statement, the Company may choose or be forced to redeem the
     outstanding shares of Preferred Stock. In addition, upon a liquidation of
     the Company, the holders of Preferred Stock will be entitled to receive the
     Liquidation Preference for each share before the holders of the Company's
     Common Stock and Class B Stock receive any distribution in respect of their
     shares. If the proposed Amendment is not approved or is approved at a
     subsequent annual or special meeting, the Series B Preferred Stock will
     continue to accrue PIK dividends at a higher rate than would accrue had it
     been exchanged for Series A Preferred Stock, resulting in a greater number
     of shares of Preferred Stock outstanding. Upon a redemption of the stock or
     upon liquidation of the Company, a greater amount will therefore be payable
     in the aggregate to holders of Preferred Stock than will be payable if the
     Amendment is approved at the Annual Meeting. For example if, PIK dividends
     are paid only through the PIK Period, the aggregate redemption price for
     the Preferred Stock will be approximately $305.6 million if the Amendment
     is approved at the Annual Meeting and all Series B Preferred Stock is
     exchanged; if PIK dividends are paid through April 19, 2006, the aggregate
     redemption price for the Preferred Stock will be approximately
     $349.4 million if the Amendment is approved at the Annual Meeting and all
     Series B Preferred Stock is exchanged. On the other hand, if the Amendment
     is never approved and the Series B Preferred Stock is not exchanged for
     Series A Preferred Stock, the aggregate redemption price for the Preferred
     Stock will be approximately $337.8 million if PIK dividends are paid only
     during the PIK period and will be approximately $414.0 million if they are
     paid through April 19, 2006. Thus, it may be considerably more costly for
     the Company to redeem the outstanding shares of Preferred Stock if the
     Amendment is not approved at the Annual Meeting. The redemption prices for
     Series B Preferred Stock reflect only regular PIK dividends and do not
     reflect amounts that might be paid as special dividends. (See "Terms of the
     Apollo Transaction--Terms of Preferred Stock - Dividends - Series B
     Preferred Stock".)

                                       33

    - SPECIAL DIVIDENDS PAYABLE IN CERTAIN EVENTS. Upon the occurrence of (a) a
    redemption of the Preferred Stock at the Company's option, (b) certain
     change of control events, or (c) April 19, 2011, all outstanding shares of
     Series B Preferred Stock must be paid a one-time PIK dividend designed to
     capture appreciation in the Company's Common Stock from April 19, 2001.
     These special dividends will be reduced in certain circumstances by special
     dividends that may have already been paid. (See "Terms of the Apollo
     Transaction - Terms of Preferred Stock - Dividends - Series B Preferred
     Stock"). These special dividends are not payable on Series A Preferred
     Stock. The issuance of these special dividends may further dilute the
     ownership interests of the other holders of the Company's stock.

    - SPECIAL DIVIDENDS PAYABLE ON RESALE. If Shareholder Approval is not
    obtained by October 19, 2002, holders of Series B Preferred Stock also will
     be entitled, in certain circumstances, to receive a special PIK dividend
     upon the initial sale of Series A Preferred Stock or the Common Stock into
     which Series A Preferred Stock is converted. See "Terms of the Apollo
     Transaction - Terms of Preferred Stock - Dividends - Series B Preferred
     Stock".

    - CASH DIVIDEND PAYMENTS. After April 19, 2006, the Company must pay
    dividends on the Series B Preferred Stock in cash, unless prohibited from
     doing so by the Indentures governing the Company's Notes. The Company's
     obligation to pay dividends on the Series A Preferred Stock in cash does
     not commence until April 19, 2008. The Company may not have the available
     funds to make cash dividend payments at the earlier date.

    - NO SHARES FOR OTHER PURPOSES. The Company might be unable to pursue
    expansion opportunities or obtain new financing through equity issuances.

OTHER FACTORS TO CONSIDER

    SERIES A PREFERRED STOCK IS MANDATORILY REDEEMABLE.  The Series A Preferred
Stock is redeemable at the option of holders at any time after April 19, 2011.
The Company may pay the redemption price in cash or shares of Common Stock, at
the Company's option. If Shareholder Approval is not obtained, the maximum
redemption price of the Series A Preferred Stock will be $130,035,684.35 and the
value attributed to Common Stock used to pay the redemption price of Series A
Common Stock may not be less than $7.15 per share. See "Terms of Preferred Stock
under the Certificate of Designations - Holder's Optional Redemption".

    TRANSFEREES OF THE SERIES A PREFERRED STOCK MAY HAVE VOTING RIGHTS. Except
for the right of the Apollo Purchasers to elect three directors and the right to
elect additional directors upon certain events of default, the Apollo Purchasers
have no voting rights with respect to the Preferred Stock. However, transferees
who are not affiliates of the Apollo Purchasers to whom Series A Preferred Stock
is transferred in accordance with the Standstill Agreement are entitled to vote
such shares on an as converted basis on all matters to be voted on by
stockholders, voting together with holders of Common Stock and Class B Stock as
a single class (other than in the election of directors and on matters reserved
by law exclusively to holders of Common Stock or Class B Stock). Therefore, the
exchange of the Series B Preferred Stock for Series A Preferred Stock upon
approval of the Amendment could substantially dilute the voting power of the
holders of Common Stock and Class B Stock on certain matters, if such stock is
transferred. See "Terms of the Apollo Transaction - Terms of Preferred Stock -
Voting Rights". Further, the Series A Preferred Stock is convertible into Common
Stock at any time (although any conversion by the Apollo Purchasers prior to
April 19, 2006 must be in connection with a disposition of such shares in
accordance with the Standstill Agreement). Such a conversion may also have a
dilutive effect on the voting power of the holders of Common Stock on certain
matters.

                                       34

    If the proposed Amendment is approved and all of the outstanding Series B
Preferred Stock is exchanged for Series A Preferred Stock, holders of all then
outstanding shares of Series A Preferred Stock will be entitled to receive upon
full conversion of such shares and giving effect to accumulated dividends since
July 2, 2001, an aggregate of 35,669,090 shares of Common Stock, based on the
number of shares of Series A Preferred Stock and Series B Preferred Stock
outstanding as of July 2, 2001. Based on the number of shares of Common Stock
and Class B Stock outstanding on July 16, 2001, this number of shares of Common
Stock would represent 64.7% of the outstanding shares of Common Stock and would
have 37.3% of the total voting power of the Company's outstanding stock, other
than in the election of directors. Additional shares of Common Stock will be
issuable upon conversion of shares of Series A Preferred Stock that may be
issued as PIK dividends thereafter. For example, at the end of the PIK Period,
the shares of Series A Preferred Stock that would then be outstanding (assuming
no prior conversions) would be convertible into 42,741,818 shares of Common
Stock, which, based on the number of shares of Common Stock and Class B Stock
outstanding on July 16, 2001, would equal 68.7% of the outstanding shares of
Common Stock and would have 41.7% of the total voting power of the Company's
outstanding stock, other than in the election of directors. If PIK dividends are
paid through the Standstill Period (April 19, 2006), the shares of Series A
Preferred Stock that would then be outstanding (assuming no prior conversions)
would be convertible into 48,864,055 shares of Common Stock, which, based on the
number of shares of Common Stock and Class B Stock outstanding on July 16, 2001,
would equal 71.6% of the outstanding shares of Common Stock and would have 44.9%
of the total voting power of the Company's outstanding stock, other than in the
election of directors.

    SERIES B PREFERRED STOCK MAY BE ISSUED IN CERTAIN CIRCUMSTANCES EVEN IF THE
AMENDMENT IS APPROVED. If at any time the Company is unable to pay cash
dividends on the Series A Preferred Stock and a payment of a PIK dividend in
Series A Preferred Stock would result in a "change of control" under the
Indentures, the Company will pay the PIK dividend with Series B Preferred Stock.
The Company does not intend to pay PIK dividends with Series A Preferred if, as
a result, shares of Series A Preferred Stock held by the Apollo Purchasers or
any other person would be convertible into Common Stock representing more than
50% of the combined voting power of all outstanding shares generally entitled to
vote in the election of directors.

    FUTURE ISSUANCES MAY FURTHER DILUTE YOUR OWNERSHIP OR VOTING INTEREST IN THE
COMPANY. In addition to providing availability for the issuance of shares in
connection with the sale of Preferred Stock to Apollo, the proposed Amendment
will provide the Company with availability for future issuances of Common Stock
or securities convertible into Common Stock. The Company may choose to issue
additional securities in the future for a variety of reasons, including to
provide the Company with a source of financial liquidity or to acquire other
companies or assets. If the Board of Directors deems it to be in the best
interest of the Company and its stockholders to issue additional shares of
Common Stock in the future, it will not seek authorization from stockholders,
unless such authorization is required by applicable law or regulations. Any
future issuances of Common Stock or securities convertible into Common Stock
could further dilute your ownership or voting interest in the Company.

BACKGROUND OF THE APOLLO TRANSACTION

    In recent years there has been a proliferation of screens in the theatre
exhibition industry; between 1995 and 1999, the number of screens increased 30%.
Notwithstanding the increase in screens, industry revenues and attendance have
remained relatively flat. Many theatrical exhibition companies were unable to
offset the cost of operating additional theatres or to rationalize excess screen
capacity; as a result, at least eleven theatrical exhibition companies recently
have

                                       35

filed for bankruptcy protection. Further, in the spring of 2001, there was
increasing concern over potential Writer's Guild and Actor's Guild strikes,
which, had they occurred, could have hurt both earnings and market perceptions
of the industry.

    Although the Company is one of only a few of the major theatrical exhibition
companies that did not file for bankruptcy protection during this period, its
prospects were not unaffected by the financial condition of other companies.
Although management expects that industry economics will gradually improve with
rationalized development of theatres, it also anticipated that the companies
emerging from bankruptcy would be at a competitive advantage as a result of
reduced debt loads, cancellation of unprofitable leases and renegotiation of
other obligations. As a result, management believed that the Company needed to
strengthen its balance sheet in order to compete effectively. The Company
retained Salomon Smith Barney Inc. to act as its financial advisor with respect
to possible financings or strategic transactions for the Company.

    The Company evaluated a number of alternatives with respect to possible
investments in the Company and other strategic transactions. Raising capital in
the public markets or through a sale to a strategic buyer did not appear to be a
viable alternative in light of the state of the industry generally. The
Company's Board of Directors and management eventually determined that the
Apollo transaction was a transaction that was in the best interests of the
Company and its stockholders. In approving the Apollo transaction on April 19,
2001, the Company's Board of Directors considered, among other things, the
following factors (none of which were assigned relative weight as compared to
any other factor):

    - the additional capital from the Apollo transaction would strengthen the
    Company's balance sheet and create availability under the Company's credit
     facility, thereby giving the Company greater flexibility to pursue
     opportunities in a restructuring and consolidating industry environment;

    - the continuing uncertainty of the theatrical exhibition industry operating
    environment;

    - the efforts that the Company, its Board of Directors and advisors had made
    to pursue alternative transactions or obtain alternative sources of
     financing, and the Board of Directors' belief that the Apollo transaction
     was superior to all available alternatives;

    - Apollo's stated unwillingness to commit funds to a transaction that would
    require shareholder approval before consummation;

    - the unfavorable position in which the Company would find itself in
    relation to its competitors who may emerge from bankruptcy with improved
     capital structures;

    - the additional capital from the Apollo transaction reduces the possibility
    of bankruptcy; and

    - the terms of the transaction.

    In addition, the Apollo transaction has given the Company access to the
strategic relationships of Apollo. Due to the substantial investment of the
Apollo Purchasers in the Company, Apollo has a strong incentive to help the
Company build stockholder value through introductions to companies and
individuals who are potential business partners for the Company.

    On April 19, 2001, Salomon Smith Barney Inc. delivered a written opinion to
the Company's Board of Directors stating that the consideration to be received
by the Company in connection with the issuance of the Preferred Stock was fair,
from a financial point of view, to the Company. Salomon Smith Barney Inc.'s
opinion did not address whether the issuance of Preferred Stock was fair to the
stockholders of the Company or whether the exchange of the Series B Preferred
Stock

                                       36

for Series A Preferred Stock following receipt of Shareholder Approval was fair
to or in the best interests of the stockholders of the Company. Salomon Smith
Barney's opinion was not conditioned upon obtaining Shareholder Approval.

    In rendering its opinion, Salomon Smith Barney Inc. expressed no opinion as
to what the value of the Common Stock would be either before or after
consummation of the Apollo transaction and did not make and was not provided
with an independent evaluation or appraisal of the assets or liabilities of the
Company.

    Salomon Smith Barney Inc.'s opinion was addressed to the Board of Directors
of the Company and was provided solely for the use of the Board of Directors of
the Company in its evaluation of the Apollo transaction. Its opinion was not
intended to be and does not constitute a recommendation to any stockholder as to
how such stockholder should vote with respect to the proposed Amendment to
Article FOURTH or any other matter relating to the Apollo transaction. Salomon
Smith Barney Inc.'s opinion was not intended to confer rights upon any
stockholder of the Company or any person other than the Board of Directors of
the Company.

    The full text of the opinion is set forth in Appendix B attached to this
proxy statement. You are urged to read this opinion in its entirety for a
description of the matters considered by Salomon Smith Barney Inc. in arriving
at its opinion.

    Salomon Smith Barney Inc. received a financial advisory fee of $8.5 million
in connection with the transaction. Salomon Smith Barney Inc. and its affiliates
have previously rendered certain investment banking and financial advisory
services to the Company and its affiliates and to the Initial Apollo Purchasers
and their affiliates, for which it has received customary compensation.

DISSENTERS' RIGHTS

    Under the Delaware General Corporation Law, stockholders have no rights of
appraisal or dissenters' rights in connection with the approval of the
Amendment.

SALE TO SANDLER FUNDS

    On July 3, 2001, the Initial Apollo Purchasers sold $15,000,000 of Preferred
Stock, consisting of 5,520 shares of Series A Preferred Stock and 9,480 shares
of Series B Preferred Stock, to the Sandler Funds. The Initial Apollo Purchasers
assigned their rights under the Registration Rights Agreement referred to below
with respect to such shares that were sold to the Sandler Funds. The Sandler
Funds are subject to certain restrictions on the sale of conversion shares
during the period commencing June 29, 2001 and ending on June 29, 2004. The
Sandler Funds are subject to the same restrictions on conversions of Series A
Preferred Stock and the restrictions on transfers of Series B Preferred Stock
applicable to the Apollo Purchasers. See "Terms of the Apollo Transaction -
Investment Agreement - Limitation on Right to Convert Series A Preferred Stock
or Transfer Series B Preferred Stock."

TERMS OF THE APOLLO TRANSACTION

    In connection with the Apollo transaction, the Company, Apollo and the
Initial Apollo Purchasers entered into an Investment Agreement, a Registration
Rights Agreement and a Standstill Agreement, and the Board of Directors approved
a Certificate of Designations which sets forth the designations, powers and
preferences, and the relative participating, optional and other special rights,
and the qualifications, limitations and restrictions of the Preferred Stock. The

                                       37

Certificate of Designations designates 2,000,000 shares each of the Series A
Preferred Stock and Series B Preferred Stock. The following is a summary of the
material terms of the Preferred Stock and other rights of the Apollo Purchasers.

  TERMS OF PREFERRED STOCK UNDER THE CERTIFICATE OF DESIGNATIONS

    RANKING.  The Preferred Stock is senior to the Common Stock and Class B
Stock with respect to dividend rights and rights upon the liquidation, winding
up or dissolution of the Company. In this regard, unless and until full
cumulative dividends on the Preferred Stock in respect of all past quarterly
dividends have been paid, and the full amount of dividends on shares of
Preferred Stock in respect of the current quarterly dividend have been paid or
are contemporaneously declared and set aside, no cash dividends may be paid or
declared on shares of Common Stock or Class B Stock and no shares of Common
Stock or Class B Stock may be purchased by the Company.

    DIVIDENDS - SERIES A PREFERRED STOCK.  Dividends on the Series A Preferred
Stock accumulate at an annual rate of 6.75% of the Series A Liquidation
Preference, as described below under "Liquidation Preference", and are payable
when, as and if declared by the Company's Board of Directors on the last day of
each June, September, December and March, commencing June 30, 2001. Dividends
are cumulative whether or not earned or declared. During the PIK Period, the
Company must pay dividends on the Series A Preferred Stock with additional
shares of Series A Preferred Stock. Between April 20, 2004 and April 19, 2008,
the Company may pay dividends in either additional shares of Series A Preferred
Stock or cash, at the Company's option. After April 19, 2008, the Company must
pay dividends in cash, unless prohibited by the Indentures, in which case the
Company may pay such dividends in additional shares of Series A Preferred Stock.

    If at any time the Company is unable to pay dividends on the Series A
Preferred Stock in cash and the accrual, declaration or payment of additional
Series A Preferred Stock dividends would either result in a "change of control"
under the Indentures or require the Company to reserve for issuance underlying
shares of Common Stock in excess of the number of shares of Common Stock
available for issuance under the Company's Restated and Amended Certificate of
Incorporation, then the Company will pay dividends on the Series A Preferred
Stock in shares of Series B Preferred Stock. Any such shares of Series B
Preferred Stock automatically will be exchanged for an equal number of shares of
Series A Preferred Stock to the extent such limitations subsequently no longer
exist.

    If a Change of Control (as defined below) of the Company occurs prior to
April 19, 2006, the holders of Series A Preferred Stock are also entitled to a
special dividend of shares of Series A Preferred Stock equal to the dividends
that they would have received from April 19, 2001 through April 19, 2006
(assuming compounding) less regular dividends received through such date (the
"Series A No-Call Period Dividend"). To the extent shares of Series A Preferred
Stock remain outstanding after a Change of Control, no regular dividends will be
paid on such shares for the period commencing on the closing date of the
transaction resulting in a Change of Control and extending through April 19,
2006. For purposes of the Certificate of Designations, a "Change of Control"
means (i) a merger, consolidation or similar Company transaction after which
holders of the Company's stock before such transaction do not own at least 50%
of the combined voting power of all shares generally entitled to vote in the
election of directors of the surviving entity, (ii) the acquisition by any
person or group (other than Apollo and its affiliates or the holders of the
Company's Class B Stock on April 19, 2001, so long as neither Apollo and its
affiliates nor such holders of Class B Stock is part of the group) of beneficial
ownership of at least 50% of the combined voting power of shares generally
entitled to vote in the election of the Company's Board of Directors, or
(iii) the sale of all or substantially all of the Company's assets or a similar

                                       38

transaction. In the determination of combined voting power in the election of
directors, the calculation shall take into account that the Class B Stock has
ten votes per share and the Common Stock has one vote per share.

    If dividends in cash (or notes of the Company) are paid on the Common Stock
in any fiscal period, the holders of Series A Preferred Stock are entitled to
receive dividends in cash (or notes of the Company) on an "as converted" basis
to the extent such dividends are greater than the Series A Preferred Stock
dividends otherwise payable in such fiscal period.

    DIVIDENDS - SERIES B PREFERRED STOCK.  Dividends on the Series B Preferred
Stock accumulate at an annual rate of 12.00% of the Series B Liquidation
Preference, as described below under "Liquidation Preference", and are payable
when, as and if declared by the Company's Board of Directors on the last day of
each June, September, December and March, commencing June 30, 2001. If the
Company obtains Shareholder Approval (as defined below) at the Company's Annual
Meeting and all the then outstanding shares of Series B Preferred Stock are
exchanged for shares of Series A Preferred Stock (See "Exchange of Series B
Preferred Stock" below), the Series B Preferred Stock dividend rate, as to the
then outstanding shares of Series B Preferred Stock only, will be reduced
retroactively to April 19, 2001 from 12.00% to 6.75%. For purposes of the
Certificate of Designations, "Shareholder Approval" means approval by the
holders of a majority of the Common Stock, voting as a class, and a majority of
the votes cast by the Company's stockholders entitled to vote on the matter
voting together, of an amendment to the Company's Certificate of Incorporation
increasing the authorized shares of Common Stock so as to permit reservation of
a sufficient number of shares of Common Stock to permit the issuance of
additional shares of Series A Preferred Stock and underlying Common Stock and
the conversion into Common Stock of all shares of Series A Preferred Stock and
to permit the exchange of shares of Series B Preferred Stock for Series A
Preferred Stock as contemplated by the Certificate of Designations. APPROVAL OF
THE AMENDMENT WILL CONSTITUTE "SHAREHOLDER APPROVAL" FOR PURPOSES OF THE
CERTIFICATE OF DESIGNATIONS AND THE INVESTMENT AGREEMENT AND WILL RESULT IN THE
REDUCTION OF THE DIVIDEND RATE ON THE SERIES B PREFERRED STOCK AS DESCRIBED
BELOW.

    During the PIK Period, the Company must pay dividends on the Series B
Preferred Stock with additional shares of Series B Preferred Stock. Between
April 20, 2004 and April 19, 2006, the Company may pay dividends on Series B
Preferred Stock in either additional shares of Series B Preferred Stock or cash,
at the Company's option. After April 19, 2006, dividends on the Series B
Preferred Stock shall be paid in cash unless prohibited by the Indentures, in
which case the Company may pay such dividends in additional shares of Series B
Preferred Stock.

    If a Change of Control of the Company occurs prior to April 19, 2006, the
holders of Series B Preferred Stock are entitled to a special dividend of
additional shares of Series B Preferred Stock equal to the dividends that they
would have received through April 19, 2006 assuming compounding, less regular
dividends received through such date (the "Series B No-Call Period Dividend").
To the extent shares of Series B Preferred Stock remain outstanding after the
Change in Control, no regular dividends will be paid in such shares for the
period commencing on the closing date of the transaction resulting in a Change
of Control and extending through April 19, 2006.

    If the Company gives notice that it is redeeming the Preferred Stock, it
must pay the holders of Series B Preferred Stock a special dividend of
additional shares of Series B Preferred Stock in an amount equal to (i) the
quotient of (x) the difference (if positive) between the average closing price
of the Common Stock for the 20 trading days preceding determination and the
Conversion Price (as defined below), divided by (y) the Conversion Price, less
(ii) the amount of any dividends paid upon a Change of Control described below
in this paragraph or those payable pursuant to the

                                       39

provisions described in the next paragraph. Additionally, the Company must pay
the holders of Series B Preferred Stock a special dividend of additional
Series B Preferred Stock upon the occurrence of a Change of Control in a number
of shares equal to (i) the quotient of (x) the difference (if positive) between
the value per share of the consideration received by the holders of Common Stock
as a result of the Change of Control and the Conversion Price, divided by
(y) the Conversion Price, less (ii) the amount of any dividends paid through the
date of such event pursuant to the provisions described in the next paragraph.

    If the circumstances described in the next sentence exist, the holders of
Series B Preferred Stock are also entitled to a special dividend of additional
Series B Preferred Stock at any time after October 19, 2002, upon a sale of
Series A Preferred Stock or the Common Stock into which Series A Preferred Stock
were converted, equal to the product of (i) the percentage of such shares sold
in such transaction, multiplied by (ii) the quotient of (x) the difference (if
positive) between the sales price of the Series A Preferred Stock or Common
Stock on an "as converted" basis and the Conversion Price, divided by (y) the
Conversion Price. In order for a holder of Series B Preferred Stock to qualify
for this special dividend, the following criteria must be met: (1) the sale must
be the initial sale of the Series A Preferred Stock to a purchaser that is not
an Apollo affiliate, (2) the seller must be a holder of both Series A Preferred
Stock and Series B Preferred Stock at the time of the sale, and (3) the holder
of the Series B Preferred Stock must also own shares of Series A Preferred
Stock.

    The Company also must pay the holders of Series B Preferred Stock a special
dividend of additional shares of Series B Preferred Stock on April 19, 2011, in
an amount equal to the quotient of (i) the difference (if positive) between the
average closing price of the Common Stock for the 20 trading days preceding
determination and the Conversion Price, divided by (ii) the Conversion Price.

    If dividends in cash (or notes of the Company) are paid on the Common Stock
in any fiscal period, the holders of Series B Preferred Stock are entitled to
receive dividends in cash (or notes of the Company) on an "as converted" basis
to the extent such dividends are greater than the Series B Preferred Stock
dividends otherwise payable in such fiscal period.

    CONVERSION OF SERIES A PREFERRED STOCK INTO COMMON STOCK.  Each share of
Series A Preferred Stock is convertible at any time into shares of the Company's
Common Stock at a conversion price of $7.15 per Common Stock share, subject to
antidilution adjustment (as adjusted, the "Conversion Price"), with each share
of Series A Preferred Stock having a value equal to the Series A Liquidation
Preference. The Conversion Price and conversion rate are adjustable in
connection with any reclassifications, reorganizations, consolidations, mergers,
stock dividends, stock splits, combinations or similar transactions.

    Holders of Series A Preferred Stock may convert their shares into Common
Stock at any time. However, a Standstill Agreement dated April 19, 2001 (the
"Standstill Agreement") between the Company and the Initial Apollo Purchasers
restricts the ability of the Apollo Purchasers to exercise Series A Preferred
Stock conversion rights until April 19, 2006. See "Standstill Agreement" below.

    EXCHANGE OF SERIES B PREFERRED STOCK FOR SERIES A PREFERRED STOCK.  If
Shareholder Approval is received, each share of Series B Preferred Stock will
automatically be exchanged for a share of Series A Preferred Stock so long as
each exchange will not result in a "change in control" under the Indentures.
Immediately before each exchange, the Company will pay holders of Series B
Preferred Stock all accrued and unpaid dividends. If the exchange of all
outstanding shares of Series B Preferred Stock would result in a "change in
control" under the Indentures, only such

                                       40

number of shares as would not result in a "change of control" will be exchanged
and the remaining shares will be exchanged as soon as and to the extent that
such exchange would not result in a "change of control."

    HOLDER'S OPTIONAL REDEMPTION.  The Company must redeem Series A Preferred
Stock at the option of a holder at any time after April 19, 2011 for cash or
Common Stock, at the Company's option, at a price equal to the Series A
Liquidation Preference (see "Liquidation Preference" below), subject to a
maximum redemption price of $130,035,684.35, or 18,186,809 shares of Common
Stock, in the event that Shareholder Approval is not obtained. If the Company
elects to use shares of Common Stock in such redemption, the Common Stock will
be valued based upon the average closing price for the 20 trading days prior to
determination, or if not traded, by a nationally recognized investment bank, but
in any event the Common Stock may not be valued at less than the Conversion
Price then in effect and, if Shareholder Approval is not obtained, may not be
less than $7.15 per share.

    COMPANY'S OPTIONAL REDEMPTION.  The Company may redeem the Preferred Stock
in whole and not in part at any time after April 19, 2006 for cash equal to the
Liquidation Preference (see "Liquidation Preference" below), provided that the
average Common Stock closing price for the 20 trading days preceding the
delivery by the Company of the notice of redemption exceeds 150% of the
Conversion Price. The Preferred Stock may also be redeemed in whole and not in
part by the Company at the Company's option upon a Change of Control for cash
equal to the Liquidation Preference; provided, that if the Change of Control
occurs prior to April 19, 2006, the Company must first pay the Series A No-Call
Period Dividend and Series B No-Call Period Dividend. In any event, the
Preferred Stock remains convertible and exchangeable until the redemption price
is paid by the Company. There is no sinking fund for the Preferred Stock.

    MERGERS; REORGANIZATIONS.  If a merger, reorganization or other event occurs
that results in Common Stock being changed into securities of another entity or
exchanged for assets from another entity (a "Reorganization Event"), such
Reorganization Event must be structured so that holders of Series B Preferred
Stock may elect to receive the same consideration as such holders would have
been entitled to receive had such Series B Preferred Stock been exchanged for
Series A Preferred Stock and such Series A Preferred Stock had in turn been
converted into Common Stock. Provision must be made so that the terms of the
Certificate of Designations shall be applicable, as nearly as may be, in
relation to any securities or other assets thereafter deliverable upon exchange
of the Series B Preferred Stock. The successor of such Reorganization Event (if
other than the Company) must assume all liabilities of the Company under the
Certificate of Designations with respect to Series B Preferred Stock and no
Reorganization Event may occur in which the Company (as opposed to another
party) must pay cash to holders of Series B Preferred Stock.

    VOTING RIGHTS.  Upon transfer of Series A Preferred Stock shares to a
transferee that is not an affiliate of an Apollo Purchaser, consistent with the
Standstill Agreement, the transferee holder of Series A Preferred Stock is
entitled to vote on an as-converted basis with the holders of Common Stock and
Class B Stock on all matters except the election of directors and any matter
reserved by law or the Company's Certificate of Incorporation for consideration
exclusively by the holders of Common Stock or Class B Stock. Holders of the
Series A Preferred Stock also have the right to vote as a class on the creation,
authorization or issuance of any class, series or shares of senior stock, parity
stock or junior stock (if the junior stock may be redeemed at the option of the
holders thereof prior to April 19, 2011) and on any adverse change to the
preferences, rights and powers of the Preferred Stock. The Apollo Purchasers
also have certain Preferred Stock Approval Rights which are set forth in the
Investment Agreement (see "Investment Agreement - Apollo Approval Rights"
below).

                                       41

    So long as the Apollo Purchasers continue to hold Preferred Stock Approval
Rights (see "Apollo Approval Rights" below), the Apollo Purchasers will have the
right to elect three directors to the Company's Board of Directors. In the
Investment Agreement, the Apollo Purchasers have agreed that so long as they
hold shares of Preferred Stock and the Apollo Purchasers have Preferred Stock
Approval Rights, Apollo Investment Fund IV, L.P. and Apollo Investment Fund V,
L.P. shall be entitled to elect two of the three directors, with each being
entitled to elect one of the two so long as it holds Preferred Shares. The third
director is to be elected collectively by all Apollo Purchasers.

    If an Event of Default (as defined below) occurs and is not cured or waived
within 45 days, then the holders of the Preferred Stock have the right to elect
that number of directors of the Company that, when added to those directors
already elected by the holders of Preferred Stock, constitute a majority of the
Board of Directors. An "Event of Default" is defined as (i) an event of default
under the Company's senior credit facility, the Indentures or any other Company
indebtedness in excess of $10 million, (ii) the Company's failure to pay cash
dividends on the Preferred Stock when required under the terms thereof, or
(iii) the Company's violation of the provisions of the Investment Agreement
prohibiting certain actions without Apollo's approval (see "Apollo Approval
Rights" below).

    LIQUIDATION PREFERENCE.  Upon liquidation, the Series A Preferred Stock is
entitled to receive an amount (the "Series A Liquidation Payment") equal to the
greater of (i) $1,000 per share plus all accrued and unpaid dividends as of the
date of payment (the "Series A Liquidation Preference") and (ii) such amount per
share of Series A Preferred Stock as would have been payable had each share been
converted into Common Stock immediately prior to the event requiring the payment
of such liquidation preference. Upon liquidation, the Series B Preferred Stock
is entitled to receive an amount (the "Series B Liquidation Payment, and
together with the Series A Liquidation Payment, the "Liquidation Payment") equal
to the greater of (i) $1,000 plus all accrued and unpaid dividends as of the
date of payment (the "Series B Liquidation Preference, and together with the
Series A Liquidation Preference, the "Liquidation Preference") and (ii) such
amount per share of Series B Preferred Stock as would have been payable had each
share first been exchanged for Series A Preferred Stock (assuming that all
conditions to conversion had occurred) and then such shares of Series A
Preferred Stock were in turn converted into Common Stock immediately prior to
the event requiring the payment of such liquidation preference. The Liquidation
Preference shall be adjusted for any stock split, reverse stock split, stock
combination, reclassification or pursuant to any other adjustment with respect
to the Series A Preferred Stock or Series B Preferred Stock, as the case may be.
In the event of a liquidation, the Liquidation Payment must be made to holders
of Preferred Stock before any payment or distribution may be made to holders of
Common Stock or Class B Stock. A liquidation means any liquidation, winding up
or dissolution of the Company.

    PREEMPTIVE RIGHTS.  Holders of Preferred Stock have no preemptive rights.
However, under the Investment Agreement, as long as the Apollo Purchasers
beneficially own shares of Preferred Stock representing more than 50% of the
Preferred Stock issued pursuant to the Investment Agreement (less shares sold on
July 3, 2001 to the Sandler Funds), the Company generally may not issue
additional stock of any class without the approval of Apollo.

  INVESTMENT AGREEMENT

    The sale of the Preferred Stock occurred pursuant to the Investment
Agreement. The Investment Agreement grants certain rights and imposes certain
obligations on the Apollo Purchasers. The material rights and obligations are
summarized below.

                                       42

    APOLLO APPROVAL RIGHTS. The Investment Agreement contains provisions which
prohibit the Company from taking certain corporate actions without the prior
approval of the Apollo Purchasers. We refer to these rights as "Preferred Stock
Approval Rights". Under the Investment Agreement, the Preferred Stock Approval
Rights are effective until the Apollo Purchasers and their affiliates cease to
own at least 50% of the total number of shares of Preferred Stock issued in the
transaction (less shares re-sold on July 3, 2001 to the Sandler Funds), or until
Apollo is terminated as the investment manager or removed as the general partner
of the Apollo Purchasers and not replaced by another Apollo affiliate. The
Preferred Stock Approval Rights are not transferable by Apollo.

    Subject to certain exceptions, the Preferred Stock Approval Rights require
the Apollo Purchasers' consent for the Company and its subsidiaries to take any
of the following actions:

    - amend its Restated and Amended Certificate of Incorporation or Bylaws;

    - create, authorize or issue any class, series or shares of capital stock;

    - purchase, redeem, or repurchase any shares of the Company's capital stock
    or any options, warrants or other rights to acquire the Company's capital
     stock;

    - pay any dividend or declare any distribution on any shares of stock;

    - redeem, prepay, defease or repurchase any indebtedness of the Company,
    other than scheduled or ordinary course repayments of indebtedness;

    - merge, consolidate or consummate a similar transaction involving the
    Company;

    - incur debt or amend or alter the material terms of any existing or future
    material senior debt;

    - voluntarily initiate any liquidation or dissolution or winding up of the
    Company, file for bankruptcy or take any similar action;

    - enter into certain affiliate transactions;

    - increase or decrease the size of the Board of Directors of the Company; or

    - acquire or dispose of any material business or assets.

    BOARD COMMITTEES. The Investment Agreement also provides that, so long as
the Apollo Purchasers possess the Preferred Stock Approval Rights described
above, and subject to the provisions of applicable law and fiduciary duties of
members of the Board of Directors, one of the directors elected to the Company's
Board of Directors by the Apollo Purchasers will be a member of each of the
committees of the Board of Directors, including the Nominating Committee. See
"ELECTION OF DIRECTORS - Directors' Meetings and Committees" for a description
of each of the committees that have been established by the Board of Directors.

    LIMITATION ON RIGHT TO CONVERT SERIES A PREFERRED STOCK OR TRANSFER
SERIES B PREFERRED STOCK. Pursuant to the Investment Agreement, the Apollo
Purchasers have agreed not to convert any shares of Series A Preferred Stock
into Common Stock prior to April 19, 2006, except in connection with a
disposition of such shares to a purchaser that is not a member of the Apollo
Group or an affiliate thereof. Further, the Apollo Purchasers have agreed that,
without the consent of the Company, they will not transfer any shares of
Series B Preferred Stock to any non-affiliate until after October 19, 2002.

    OTHER AGREEMENTS. The Investment Agreement also contains a number of other
agreements between the Company and Apollo. The Company and the Board have
agreed, among other things,

                                       43

to seek Shareholder Approval of the proposed Amendment at the Annual Meeting,
and to continue to seek Shareholder Approval at every annual and special
stockholder meeting until Shareholder Approval is obtained. The Company has also
agreed that a supermajority vote of the Board of Directors shall be required to
approve amendments to the Company's credit facility, capital expenditures or
employment arrangements with executive officers. The Company has also agreed to
customary indemnification provisions for Apollo with respect to the Investment
Agreement.

  STANDSTILL AGREEMENT

    As a condition to selling the Preferred Stock to the Initial Apollo
Purchasers, the Company required that the Initial Apollo Purchasers and Apollo
enter into a standstill agreement (the "Standstill Agreement"), which imposes
additional restrictions on the ability of Apollo and certain related parties to
acquire or dispose of the Company's securities.

    Between April 19, 2001 and April 19, 2006 (the "Standstill Period"), the
Standstill Agreement restricts the ability of Apollo, the Apollo Purchasers and
certain related parties from taking certain actions unless requested by a
majority of the members of the Board of Directors elected by the holders of the
Company's Common Stock. During that period, and with certain exceptions, the
restricted parties may not, among other things:

    - acquire any of the Company's securities (other than debt securities,
    shares acquired from the Durwood Voting Trust (not to exceed 500,000, unless
     the Standstill Agreement would otherwise be terminated and the Independent
     Directors have approved the sale), and shares acquired in accordance with
     the Standstill Agreement after an acquisition by a third person giving such
     person beneficial ownership of shares having more than 15% of the combined
     voting power of the Common Stock, Class B Stock and any other securities
     entitled to vote generally in the election of directors);

    - propose or take substantial steps to effect a merger or similar
    transaction involving the Company;

    - seek election to, or removal of, the Company's Board of Directors;

    - solicit proxies or otherwise become a participant in any election contest
    or solicit shareholders for approval of a Company shareholder proposal;

    - participate in a "group" with respect to any voting securities, deposit
    voting securities in a voting trust, or agree to limit Apollo's discretion
     with respect to Preferred Stock Approval Rights; or

    - otherwise act to circumvent any of the restrictions described above.

    After the Standstill Period (or earlier, if a third party acquires
beneficial ownership of shares representing more than 15% of the voting power of
the Company's outstanding Common Stock and Class B Shares), Apollo and its
restricted affiliates may acquire the Company's voting securities only in a
tender offer made to all holders of Common Stock that is accepted by holders of
a majority of the Common Stock not owned by Apollo or its affiliates. In
addition, Apollo may propose a merger or similar transaction involving the
Company only if such transaction is contingent upon approval by the holders of a
majority of the Common Stock not owned by Apollo or its affiliates. "Voting
power" means the aggregate votes represented by Common Stock, Class B Stock and
other securities then entitled to vote generally in the election of directors.

    The Standstill Agreement also restricts the ability of Apollo and the Apollo
Purchasers to transfer voting securities of the Company to third parties. Among
other things, Apollo and the

                                       44

Apollo Purchasers have agreed not to transfer voting securities to any third
party if, after giving effect to the transfer, the party would own securities
representing more than 15% of the total voting power of the Company's voting
stock, unless the Board of Directors first approves the transaction and such
third party agrees to be bound by a similar standstill agreement. For this
purpose "total voting power" means the aggregate votes represented by all
outstanding securities of the Company including, with respect to Preferred
Stock, the number of votes accorded to underlying Common Stock into which such
Preferred Stock would be convertible (including Common Stock which would be
issuable upon conversion of Series A Preferred Stock issued upon exchange of
Series B Preferred Stock).

    In addition, pursuant to the Standstill Agreement, the Apollo Purchasers
have also agreed not to convert any Series A Preferred Stock shares into Common
Stock except in connection with a disposition to a third party made in
compliance with the restrictions described above. In addition, if Apollo, the
Apollo Purchasers or certain related parties acquire any shares of Class B
Stock, such persons may not sell those shares to an unaffiliated third party
unless those shares are first converted into shares of Common Stock.

    The Standstill Agreement will terminate upon the earliest to occur of
(1) April 19, 2011, (2) the date any person (other than Apollo, certain Apollo
affiliates or a person approved by the Company's Board of Directors) acquires or
enters into an agreement to acquire shares of Class B Stock or Common Stock if,
after giving effect to such acquisition, such person owns beneficially Common
Stock, Class B Stock and Preferred Stock having more than 20% of the voting
power of the Company, unless such person has become bound by the terms of the
Standstill Agreement, or (3) the Company's termination of the Standstill
Agreement with the approval of a majority of the independent directors elected
by the holders of the Company's Common Stock.

  REGISTRATION RIGHTS AGREEMENT

    The Company entered into a Registration Rights Agreement dated April 19,
2001 with the Initial Apollo Purchasers in connection with the Investment
Agreement. Under the Registration Rights Agreement, the Company granted certain
demand and piggyback registration rights with respect to the Preferred Stock and
any shares of Common Stock held by the Apollo Purchasers or any transferee at
any time.

STOCKHOLDER VOTE REQUIRED

    Section 242(b) of the Delaware General Corporation Law, as well as the
Certificate of Designations and the Investment Agreement, requires that the
Amendment be approved by (i) the holders of a majority of the Common Stock,
voting separately as a class, and (ii) a majority of the votes cast by holders
of the Company's Common Stock, Class B Stock and Series A Preferred Stock (who
are not affiliated with the Apollo Purchasers and who may vote their Series A
Preferred Stock on an "as converted" to Common Stock basis under the Certificate
of Designations), voting together as a single class.

    THE SALE OF THE SERIES A PREFERRED STOCK AND SERIES B PREFERRED STOCK TO THE
INITIAL APOLLO PURCHASERS PURSUANT TO THE INVESTMENT AGREEMENT AND THE OTHER
TRANSACTIONS CONTEMPLATED BY THE INVESTMENT AGREEMENT WERE APPROVED BY THE
COMPANY'S BOARD OF DIRECTORS PRIOR TO THE CONSUMMATION OF THE TRANSACTION. NO
STOCKHOLDER APPROVAL WAS REQUIRED FOR THE TRANSACTION UNDER THE DELAWARE GENERAL
CORPORATION LAW OR THE COMPANY'S ORGANIZATIONAL DOCUMENTS. REGARDLESS OF WHETHER
THE STOCKHOLDERS APPROVE THE AMENDMENT, THE TRANSACTION HAS BEEN CONSUMMATED AND
THE PREFERRED STOCK HAS BEEN

                                       45

ISSUED TO THE INITIAL APOLLO PURCHASERS. THE COMPANY IS SEEKING STOCKHOLDER
APPROVAL FOR A NUMBER OF OTHER REASONS DESCRIBED IN THIS PROXY STATEMENT,
INCLUDING IN ORDER TO SATISFY THE SHAREHOLDER APPROVAL REQUIREMENT DESCRIBED
BELOW UNDER "TERMS OF THE APOLLO TRANSACTION - TERMS OF PREFERRED
STOCK - DIVIDENDS - SERIES B PREFERRED STOCK."

    THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO AMEND
ARTICLE FOURTH OF THE COMPANY'S RESTATED AND AMENDED CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM
45,000,000 TO 200,000,000.

3.  RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS

    The Board of Directors recommends that the stockholders ratify the
appointment of PricewaterhouseCoopers LLP as independent accountants to audit
the financial statements of the Company for the fiscal year ending March 28,
2002. Representatives of PricewaterhouseCoopers LLP are expected to be present
at the Annual Meeting of Stockholders, and if present, will have the opportunity
to make a statement if they wish, and are expected to be available to respond to
appropriate questions from stockholders.

    THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS TO AUDIT THE FINANCIAL
STATEMENTS OF THE COMPANY FOR THE FISCAL YEAR ENDING MARCH 28, 2002.

4.  OTHER MATTERS TO COME BEFORE THE MEETING

    No other matters are intended to be brought before the meeting by the
Company nor does the Company know of any matters to be brought before the
meeting by others. If, however, any other matters properly come before the
meeting, the persons named in the proxy will vote the shares represented thereby
in accordance with the judgment of management on any such matters.

    Stockholders who wish to present proposals for action at the Annual Meeting
of Stockholders to be held in 2002 should submit their proposals to the Company
at the address of the Company set forth on the first page of this Proxy
Statement. Proposals must be received by the Company no later than April 10,
2002 for consideration for inclusion in the next year's Proxy Statement and
proxy. In addition, proxies solicited by management may confer discretionary
authority to vote on matters which are not included in the proxy statement but
which are raised at the Annual Meeting by stockholders, unless the Company
receives written notice at such address of such matters on or before June 25,
2002.

HOUSEHOLDING

    Only one copy of the Company's Annual Report and Proxy Statement has been
sent to multiple stockholders of the Company who share the same address and last
name, unless the Company has received contrary instructions from one or more of
those stockholders. This procedure is referred to as "householding." In
addition, the Company has been notified that certain intermediaries, i.e.
brokers or banks, will household proxy materials. The Company will deliver
promptly, upon oral or written request, a separate copy of the Annual Report and
Proxy Statement to any stockholder at the same address. If you wish to receive a
separate copy of the Annual Report and Proxy Statement, you may write to the
Director of Investor Relations, AMC Entertainment Inc. P.O. Box 219615, Kansas
City, Missouri 64121-9615 or call (816-221-4060 ext. 260). You can contact your
broker or bank to make a similar request. Stockholders sharing an address who
now receive multiple copies of the Company's Annual Report and Proxy Statement
may request delivery of a single copy by writing or calling the Company at the
above address or by contacting their broker or bank, provided they have
determined to household proxy materials.

                                       46

DOCUMENTS INCORPORATED BY REFERENCE

    The following information is incorporated by reference to the Company's
Annual Report on Form 10-K for the fiscal year ended March 31, 2001: Item 8
("Financial Statements and Supplementary Data"); Item 7 ("Management's
Discussion and Analysis of Financial Condition and Results of Operations"); Item
9 ("Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure"); and Item 7A ("Quantitative and Qualitative Disclosures about
Market Risk").

    All information updating the foregoing information included in any document
filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, subsequent to the date of this
Proxy Statement and prior to the Annual Meeting shall be deemed to be
incorporated by reference into this Proxy Statement and to be a part hereof from
the date of filing of such document.

    Any statement contained in a document incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Proxy Statement to
the extent that a statement contained in this Proxy Statement, or in any other
subsequently filed document which is also incorporated herein by reference,
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part of this Proxy Statement
except as so modified or superseded.

                                          By order of the Board of Directors

                                                /s/ Nancy L. Gallagher

                                                  Nancy L. Gallagher
                                             Vice President and Secretary

REQUESTS FOR ANNUAL REPORT

    A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS) AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR FISCAL 2001 WILL BE SENT
TO STOCKHOLDERS WITHIN ONE BUSINESS DAY OF RECEIPT OF WRITTEN OR ORAL REQUEST
WITHOUT CHARGE. REQUESTS SHOULD BE MADE TO THE DIRECTOR OF INVESTOR RELATIONS,
AMC ENTERTAINMENT INC., P.O. BOX 219615, KANSAS CITY, MISSOURI 64121-9615
(TELEPHONE 816-221-4060 EXT. 260).

                                       47

                                                                      APPENDIX A

                                   CHARTER OF
                             AMC ENTERTAINMENT INC.
                                (THE "COMPANY")
                                AUDIT COMMITTEE

               Adopted by the Board of Directors on May 25, 2000
                            and made effective as of
                                  May 25, 2000

    The Board of Directors of the Company has established an Audit Committee
(the "Committee"). The following charter shall govern the purpose, organization,
membership, authority and duties of the Committee.

1.  PURPOSE.

    The principal purpose of the Committee is to review the process involved in
the preparation of the Company's annual audited financial statements.(1) In this
regard and as more fully set forth herein, the Committee

    * recommends to the Board of Directors the firm of independent public
accountants to serve as Independent Auditor;

    * meets with the Independent Auditor and management to review matters
relating to financial reporting and accounting procedures and policies, the
adequacy of internal controls and the scope of the audit performed by the
Independent Auditor;

    * reviews the results of the audit;

    * submits any recommendations it may have from time to time to the Board of
Directors with respect to financial reporting and accounting procedures and
policies, internal controls and other matters that may come to its attention.

    The Committee is also charged with the responsibility of reviewing material
transactions with related parties and with certain responsibilities under the
Company's Compliance Plan.

- -------------------
(1) It is not the purpose or the responsibility of the Committee to audit those
financials or to review them to determine whether they are accurate or complete
or whether they have been prepared in accordance with generally accepted
accounting principles. Although it is expected that members of the Committee
will read the annual audited financial statements in order to form a basis for
its recommendation as to whether they should be included in the Company's Annual
Report on Form 10-K, it is understood that the recommendation of the Committee
essentially will reflect the Committee's confidence in their assessment of the
process involved in the preparation and audit of those statements. Although
Committee members will also be familiar with interim quarterly financial
statements after they have been published, it is not contemplated that the
Committee has any responsibility for any regular review of those statements
prior to their publication other than its responsibilities relating to the
selection of the auditor that will conduct the quarterly review of those
statements.

                                       49

2.  ORGANIZATION OF COMMITTEE.

    a.  NUMBER AND QUALIFICATIONS. The Committee shall be comprised of not less
        than three directors, each of whom shall (i) have no relationship to the
        Company, which, in the opinion of the Board, would interfere with the
        exercise of his or her independent judgment and who shall also satisfy
        the independence requirements of Section 121 of the AMEX Company Guide
        ("Independent Directors and Audit Committee") and (ii) be able to read
        and understand fundamental financial statements, including the Company's
        balance sheet, income statement, and cash flow statement, or will become
        able to do so within a reasonable period of time after appointment to
        the Committee. At least one member of the Committee must have past
        employment experience in finance or accounting, requisite professional
        certification in accounting, or any other comparable experience or
        background which results in the individual's financial sophistication,
        including being or having been a chief executive officer, chief
        financial officer or other senior officer with financial oversight
        responsibilities.

    b.  COMMITTEE CHAIRMAN. One of the members of the Committee shall be
        appointed Committee chairperson by the Board of Directors for such term
        as the Board may specify at the time of the appointment. The Committee
        Chairman shall have the responsibility of moderating and presiding over
        meetings of the Committee and shall have such other responsibilities as
        may be assigned by resolution of the Board or the Committee. If the
        Committee Chairman is not present, the members of the Committee may
        designate a chairman by majority vote of the Committee membership.

    c.  RULES OF PROCEDURE. The Committee shall operate in accordance with such
        rules of procedure as it may from time to time establish.

3.  AUTHORITY. The Committee shall have the authority necessary to enable it to
    carry out its responsibilities as set forth in this charter. All employees
    are directed to cooperate as requested by members of the Committee. The
    Committee is empowered to retain persons having special competence as
    necessary to assist the Committee in fulfilling its responsibility.

4.  RESPONSIBILITIES. Subject to the provisions of Section 1, to assist the
    Board with respect to the process involved in the Company's preparation of
    annual audited financial statements, the Committee shall have the following
    duties, together with such other duties and responsibilities as the Board
    may delegate by resolution to the Committee from time to time:

    a.  MEETINGS. Hold meetings necessary to effectively carry out the
        responsibilities of the Committee.

    b.  ANNUAL REVIEW OF AUDIT COMMITTEE CHARTER. The Committee shall annually
        review and assess the adequacy of this Charter and make recommendations
        to the Board necessary to provide for the continued adequacy of the
        Charter to achieve its stated purpose.

    c.  PUBLICATION OF AUDIT COMMITTEE CHARTER. The Committee shall see that the
        Audit Committee Charter is included as an appendix to the Company's
        proxy statement for its annual meeting of stockholders, unless a copy
        has been included as an appendix to the Company's proxy statement within
        the past three fiscal years.

    d.  ANNUAL REVIEW OF INDEPENDENCE AND LITERACY OF AUDIT COMMITTEE
        MEMBERS. The Committee shall annually review and assess the independence
        and financial literacy of each Committee member and report its findings
        to the Board regarding such matters.

                                       50

    e.  SELECTION, EVALUATION AND REPLACEMENT OF INDEPENDENT AUDITOR. The
        Committee shall recommend to the Board, annually, for its approval or
        recommendation to stockholders for their approval, the appointment of a
        firm of independent public accountants as the Company's Independent
        Auditor to audit and report on the Company's annual financial statements
        that are required to be filed with the Securities and Exchange
        Commission on Form 10-K and to review the Company's quarterly financial
        statements that are required to be filed with the Securities and
        Exchange Commission on Form 10-Q. The Committee shall also be
        responsible for annually evaluating the performance of the Independent
        Auditor and, if deemed appropriate, to recommend a replacement of the
        Independent Auditor.

    f.   REVIEW OF CERTAIN ITEMS WITH REPRESENTATIVES OF THE INDEPENDENT
         AUDITOR. The Committee shall review and discuss, annually and at such
         other times as may be appropriate(2), with the Independent Auditor the
         following matters and shall take such actions with respect to the
         results of such reviews and discussions, including the making of
         recommendations to the Board, as may be appropriate and consistent with
         the duties of the Committee:

         (1) The plan for and scope of the annual audit of the Company's
             financial statements.

         (2) The fees proposed by the Company's Independent Auditor for its
             services.

         (3) The written disclosures and the letter from the Independent Auditor
             required by Independence Standards Board Standard No. 1
             (Independence Standards Board Standard No. 1, INDEPENDENCE
             DISCUSSIONS WITH AUDIT COMMITTEES), as may be modified or
             supplemented. The review shall include an active dialogue with the
             Independent Auditor with respect to any disclosed relationships or
             services that may impact the objectivity and independence of the
             Independent Auditor. The Committee shall also be responsible for
             taking or recommending that the Board of Directors take appropriate
             action in response to the Independent Auditor's report to satisfy
             itself of the Independent Auditor's independence.

         (4) The matters required to be discussed with the Independent Auditor
             by SAS 61 (Codification of Statements on Auditing Standards, AU
             380), as may be modified or supplemented, including the Independent
             Auditor's judgments about the quality, not just the acceptability,
             of the Company's accounting principles as applied in its financial
             reporting.(3)

         (5) The results of the annual audit.

         (6) Any management letter provided by the Independent Auditor and the
             Company's response to the letter; any recommendations of the
             Independent Auditor with respect to internal controls and other
             financial matters, including any perceived weaknesses in the
             Company's internal controls, policies, and procedures.

- -------------------
(2) The Committee Chairman may represent the Committee for purposes of any
matter required to be discussed with the Independent Auditor in connection with
quarterly financial results.
(3) Other matters include, if applicable, selection of new or changes in
significant accounting polices or their application, methods used to account for
significant unusual transactions, management judgments and accounting estimates,
disagreements with management and difficulties encountered in the course of the
work of the Independent Auditor, including any restrictions on the scope of
activities or access to information.

                                       51

         (7) Assurances provided by the Independent Auditor with respect to the
             compliance of the audit with the requirements of Section 15 U.S.C.
             Section 78j-1(a) of the Securities Exchange Act of 1934 relating to
             the detection of certain illegal acts, the identification of
             certain related party transactions and an evaluation of the
             Company's ability to continue as a going concern.

         (8) The manner in which the persons performing the Company's internal
             audit function work in connection with the Independent Auditor,
             including management's responses to recommendations made and plans
             for future audit coverage.

    g.  REVIEW AND DISCUSSIONS WITH MANAGEMENT.

         (1) Review and discuss the audited financial statements with management
             and with persons performing the Company's internal audit function
             prior to filing or distribution.

         (2) Also, when necessary or appropriate, discuss with management the
             items reviewed with the Independent Auditor under paragraph (f) of
             this Section 4.

    h.  RECOMMENDATION REGARDING INCLUSION OF AUDITED FINANCIAL STATEMENTS IN
        ANNUAL REPORT. Based on the review and discussions referred to in
        paragraphs (f) and (g)(1) of this Section 4, provide a recommendation to
        the Board of Directors as to whether the audited financial statements
        should be included in the Company's Annual Report on Form 10-K for the
        fiscal year in question.

    i.   INTERNAL AUDIT AND LEGAL MATTERS.

         (1) Review the appointment, performance, plan and replacement of
             persons performing the internal auditor function.

         (2) Review significant reports prepared by internal auditors together
             with management's responses and follow up to these reports.

         (3) At least annually, review with legal counsel legal matters that
             could significantly impact the Company's financial statements.

    j.   OTHER RECOMMENDATIONS DEEMED APPROPRIATE. Submit to the Board of
         Directors any recommendation the Audit Committee may have from time to
         time relating to financial reporting and accounting practices and other
         matters that come to its attention.

    k.  ANNUAL AUDIT COMMITTEE REPORT. Publish a report in the annual proxy
        statement of the Company over the printed signatures of each member of
        the Audit Committee which shall state whether it has performed the
        duties set forth in Sections 4.f.(3), 4.f.(4), 4.f.(5), 4.g(1) and 4.h
        above.

    l.   REPORTS TO THE AMEX. The Committee will confirm that approximately once
         each year the Company has provided to the AMEX written confirmation
         required by AMEX Rule 121.B.(a) and (b) relating to the composition of
         the Audit Committee and review of the Audit Committee Charter.

    m. RELATED PARTY TRANSACTIONS. Review and approve any material transaction
       between the Company and any of its subsidiaries and related parties to
       such companies.

    n.  COMPLIANCE PLAN. Review reports of the compliance director under and
        monitor performance of personnel assigned to the Company's Compliance
        Plan, impose appropriate

                                       52

        discipline on directors and executive officers for violations of the
        Company's Compliance Plan and direct the compliance director to make
        referrals to appropriate law enforcement officials of violations of law.

5.  COMPENSATION OF COMMITTEE. The Committee shall be compensated in accordance
    with the compensation policy that has been established for other committees
    of the Board.

                                       53

                                                                      APPENDIX B

April 19, 2001
The Board of Directors
AMC Entertainment Inc.
106 West 14th Street
P.O. Box 419615
Kansas City, MO 64105

Members of the Board:

    You have requested our opinion as to the fairness, from a financial point of
view, to AMC Entertainment Inc. (the "Company") of the consideration to be
received by the Company in connection with the proposed issuance of 92,000
shares of the Company's Series A convertible preferred stock, liquidation
preference $1,000 per share (the "Series A Preferred"), and 158,000 shares of
the Company's Series B exchangeable preferred stock, liquidation preference
$1,000 per share (the "Series B Preferred and, together with the Series A
Preferred, the "Preferred Stock"), for an aggregate purchase price of
$250,000,000 (less a fee of $8,750,000) to Apollo Investment Fund IV, L.P.,
Apollo Overseas Partners IV, L.P., Apollo Investment Fund V, L.P. and Apollo
Overseas Partners V, L.P. (collectively, the "Purchasers") pursuant to the
Investment Agreement (the "Investment Agreement") among the Company, the
Purchasers, Apollo Management IV, L.P. and Apollo Management V, L.P. dated
April 19, 2001 (the "Transaction").

    The Series A Preferred shall (i) be convertible at the option of the holder
into shares of common stock, par value 66 2/3 cents per share, of the Company
(the "Company Common Stock") at a price of $7.15 per share of Company Common
Stock, subject to adjustments (as adjusted from time to time, the "Conversion
Price"), (ii) be redeemable five years and six months following the date of
closing of the Transaction (the "Closing Date") at the option of the Company if
the Company Common Stock is trading at or above 150% of the then Conversion
Price or upon a Change of Control (as such term is defined in the certificate of
designations of the Series A Preferred and the Series B Preferred (the
"Certificate of Designations")), (iii) be redeemable after the tenth anniversary
of the Closing Date at the option of the holder for cash or shares of Company
Common Stock, at the Company's option, and (iv) entitle the holder to a
quarterly dividend of 6.75% per annum paid (A) in kind for the period from the
Closing Date to the third anniversary thereof, (B) either in kind or in cash, at
the option of the Company, for the period commencing on the third anniversary
and ending on the seventh anniversary of the Closing Date and (C) in cash after
the seventh anniversary of the Closing Date. The dividends on the Series A
Preferred will be subject to the following special adjustment: if a Change of
Control occurs prior to the fifth anniversary of the Closing Date, each share of
Series A Preferred will receive a special dividend, paid in kind, with a
liquidation preference equal in amount to the additional dividends that would
have been received in respect of such share (assuming full compounding of
dividends) had such share been outstanding from the date of such Change of
Control through the fifth anniversary of the Closing Date. Under certain
circumstances, "paid in kind" dividend on the Series A Preferred may be paid in
the form of Series B Preferred.

    The Series B Preferred shall (i) automatically be exchanged for Series A
Preferred upon the receipt by the Company of stockholder approval to allow for
the issuance of additional shares of Company Common Stock (the "Shareholder
Approval") unless such exchange would result in a

                                       54

"change of control" under the Company's outstanding senior subordinated notes,
(ii) be redeemable after the five years and six months following the Closing
Date at the option of the Company if the Company Common Stock is trading at or
above 150% of the then Conversion Price and (iii) entitle the holder to a
quarterly dividend of 12% per annum paid (A) in kind for the period from the
Closing Date to the third anniversary thereof, (B) either in kind or in cash, at
the option of the Company, for the period commencing on the third anniversary
and ending on the fifth anniversary of the Closing Date and (C) in cash at any
time after the fifth anniversary of the Closing Date. The dividends on the
Series B Preferred will be subject to the following special adjustments: (i) if
Shareholder Approval is obtained and all the shares of Series B Preferred are
exchanged for Series A Preferred within 270 days of the Closing Date, the
dividend rate on the Series B Preferred shall be reduced, retroactively to the
Closing Date, from 12% to 6.75%; (ii) if a Change of Control occurs prior to the
fifth anniversary of the Closing Date, each share of Series B Preferred will
receive a special dividend, paid in kind, with a liquidation preference equal in
amount to the additional dividends that would have been received in respect of
such share (assuming full compounding of dividends) had such share been
outstanding from the date of such Change of Control through the fifth
anniversary of the Closing Date; (iii) upon the redemption of the Series B
Preferred, each Share of Series B Preferred will receive a special dividend,
paid in kind, in shares in an amount equal to (A) the quotient of (x) the
difference (if positive) between the then market price per share of Company
Common Stock and the Conversion Price then in effect divided by (y) the
Conversion Price then in effect (the amount calculated in this clause (A) being
the "Conversion Adjustment Amount") minus (B) any dividend previously paid with
respect to such share of Series B Preferred under clause (vi) below (the
Conversion Adjustment Amount minus the amount calculated in accordance with this
clause (B) being the "Reduced Conversion Adjustment Amount") minus (C) any
dividend previously paid with respect to such share of Series B Preferred
pursuant to clause (v) below; (iv) on the tenth anniversary of the Closing Date,
each share of Series B Preferred will receive a special dividend, paid in kind,
in shares in an amount equal to the Conversion Adjustment Amount; (v) upon a
Change of Control, each share of Series B Preferred will receive a special
dividend, paid in kind, in shares in an amount equal to the Reduced Conversion
Adjustment Amount; and (vi) if at any time after 18 months following the Closing
Date any Series A Preferred or Company Common Stock issued upon conversion of
Series A Preferred (the "Conversion Stock") is sold by the holder thereof, each
share of Series B Preferred will, subject to certain restrictions, receive a
special dividend, paid in kind, in shares in an amount equal to the product of
(A) the percentage of Series A Preferred and/or Conversion Stock sold in such
transaction (calculated in accordance with the Certificate of Designations)
multiplied by (B) the quotient of (x) the difference, if positive, between the
Effective Sale Price (as defined in the Certificate of Designations), in the
case of a sale of shares of Series A Preferred, or the sale price per share, in
the case of a sale of shares of Conversion Stock, and the Conversion Price then
in effect divided by (y) the Conversion Price then in effect. No special
dividend will be payable in respect of shares of Series B Preferred under
clause (vi) of the immediately preceding sentence with respect to any sale of
Series A Preferred Stock or Conversion Stock unless (i) such sale is the initial
sale of the shares of Series A Preferred Stock or Conversion Stock to a party
that is not a Purchaser or an affiliate of a Purchaser, (ii) the seller also
owns Series B Preferred at the time of such sale and (iii) the holder of such
shares of Series B Preferred also owned Series A Preferred at the time of such
sale.

    If the Company pays dividends on the shares of Company Common Stock, holders
of Series A Preferred and Series B Preferred will be entitled to participate in
such dividends on an "as converted" or "as exchanged" basis, less any amounts
otherwise payable as dividends on the Series A Preferred and Series B Preferred.

                                       55

    In arriving at our opinion, we held discussions with certain senior
officers, directors and other representatives and advisors of the Company
concerning the businesses, operations and prospects of the Company. We have
reviewed the Investment Agreement and drafts of the Bylaw Amendments, the
Registration Rights Agreement and the Standstill Agreement (each as defined in
the Investment Agreement) and the Certificate of Designations (collectively, the
"Ancillary Documents").We have examined certain publicly available business and
financial information relating to the Company as well as certain financial
forecasts and other information and data for the Company which were provided or
otherwise discussed with us by the management of the Company. We were advised by
representatives of the Purchasers that they were unwilling to have their funds
committed to the Transaction, if the transaction were subject to Shareholder
Approval, for the time it would take to obtain Shareholder Approval. We were
also advised by representatives of the 1992 Durwood, Inc. Voting Trust, the
Stanley H. Durwood Foundation and the 1989 Stanley H. Durwood Trust
(collectively, the "Durwood Trusts") that the Durwood Trusts would vote in favor
of the Shareholder Approval and were not interested in selling a substantial
portion of their shares of the Company's Class B Stock at or around prevailing
market prices. In addition to the foregoing, we conducted such other analyses
and examinations and considered such other financial, economic and market
criteria as we deemed appropriate in arriving at our opinion.

    In rendering our opinion, we have assumed and relied, without any
responsibility for independent verification, upon the accuracy and completeness
of all financial and other information and data publicly available or furnished
to or otherwise reviewed by or discussed with us. With respect to financial
forecasts provided to or otherwise reviewed by or discussed with us, we have
been advised by the management of the Company that such forecasts were
reasonably prepared on bases reflecting the best currently available estimates
and judgments of the management of the Company as to the future financial
performance of the Company. We have assumed that the definitive Ancillary
Documents will not vary from the drafts attached to the Investment Agreement in
any manner materially adverse to the Company.

    We are not expressing any opinion as to what the value of the Company Common
Stock will be either before or after the consummation of the Transaction. We
have not made or been provided with an independent evaluation or appraisal of
the assets or liabilities (contingent or otherwise) of the Company nor have we
made any physical inspection of the properties or assets of the Company. Our
opinion does not address the Company's underlying business decision to effect
the Transaction. Our opinion is necessarily based upon information available to
us, and financial, stock market and other conditions and circumstances existing
and disclosed to us, as of the date hereof.

    We have acted as financial advisor to the Board of Directors of the Company
in connection with the Transaction and will receive a fee for our services,
which is payable upon consummation of the Transaction. In the ordinary course of
business, we and our affiliates may hold or actively trade the securities of the
Company for our own account and for the accounts of customers and, accordingly,
may at any time hold a long or short position in such securities. In addition,
we and our affiliates have previously rendered certain investment banking and
financial advisory services to the Company and affiliates of the Purchasers for
which we have received customary compensation. We and our affiliates (including
Citigroup Inc.) may have other business relationships with the Company and
affiliates of the Purchasers in the ordinary course of their businesses.

    Our advisory services and the opinion expressed herein are provided solely
for the use of the Board of Directors of the Company in its evaluation of the
proposed Transaction, and our opinion is not intended to be and does not
constitute a recommendation to any stockholder as to how such stockholder should
vote on the Shareholder Approval or any other matter relating to the
Transaction. Our advisory services and the opinion expressed herein are not on
behalf of, and are not

                                       56

intended to confer rights upon, any stockholder of the Company or any person
other than the Board of Directors. Our opinion may not be published or otherwise
used or referred to, nor shall any public reference to Salomon Smith
Barney Inc. be made, without our prior written consent.

    Based upon and subject to the foregoing, our experience as investment
bankers, our work as described above and other factors we deemed relevant, we
are of the opinion that, as of the date hereof, the consideration to be received
by the Company in connection with the proposed issuance of the Preferred Stock
is fair, from a financial point of view, to the Company.

                                          Very truly yours,
                                          /s/ Salomon Smith Barney Inc.
                                          Salomon Smith Barney Inc.

                                       57

                                                                    COMMON STOCK

                               AMC ENTERTAINMENT INC.
               106 WEST 14TH STREET   KANSAS CITY, MISSOURI 64105
          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

    The undersigned hereby appoints Messrs. Peter C. Brown and Paul E. Vardeman,
jointly and severally, as Proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and vote, as designated
below, all of the Common Stock of AMC Entertainment Inc. which the undersigned
is entitled to vote at the Annual Meeting of Stockholders to be held on
September 13, 2001 and at any adjournments thereof.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING PROPOSALS:


                                                                    
    1. Election of Directors:          FOR all nominees listed.           WITHHOLD AUTHORITY
                                       (EXCEPT AS MARKED TO THE           TO VOTE FOR ALL NOMINEES LISTED.
                                       CONTRARY) / /                      / /
    NOMINEES. Messrs. Paul E. Vardeman and W. Thomas Grant, II
    (INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME ON
    THE SPACE PROVIDED BELOW.)

    -------------------------------------------------------------------------------------------------------
    2. PROPOSAL TO amend Article FOURTH of the Company's Restated and Amended Certificate of Incorporation
    to increase the number of authorized shares of Common Stock from 45,000,000 to 200,000,000.
                 FOR / /                          AGAINST / /                        ABSTAIN / /
    3. PROPOSAL TO ratify the appointment of PricewaterhouseCoopers LLP as independent accountants of the
    Company for the fiscal year ending March 28, 2002.
                 FOR / /                          AGAINST / /                        ABSTAIN / /
    4. In their discretion, the Proxies are authorized to vote on such other business as may properly come
    before the meeting.


                (Continued and to be signed on the reverse side)

    THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" THE ELECTION OF THE NOMINEES NAMED AND "FOR" PROPOSALS 2 AND 3.


                                                                                                    
                                                              Please date and sign exactly as name appears.
                                                              When shares are held by joint tenants, both
                                                              must sign. When signing as an attorney,
                                                              executor, administrator, trustee or guardian,
                                                              please give full title as such. If a
                                                              corporation, please sign in full corporate name
                                                              by President or other authorized officer. If a
                                                              partnership, please sign in partnership name by
                                                              authorized person.

                                                              Date ----------------------------------
                                                                                                       , 2001

                                                              Signature
                                                              -------------------------------

                                                              Signature (if held jointly)
                                                              -------------------

                                                              PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
                                                              CARD PROMPTLY USING THE ENCLOSED ENVELOPE.


                                                        SERIES A PREFERRED STOCK

                               AMC ENTERTAINMENT INC.
               106 WEST 14TH STREET   KANSAS CITY, MISSOURI 64105
          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

    The undersigned hereby appoints Messrs. Peter C. Brown and Paul E. Vardeman,
jointly and severally, as Proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and vote, as designated
below, all of the Series A Preferred Stock of AMC Entertainment Inc. which the
undersigned is entitled to vote on an as converted basis at the Annual Meeting
of Stockholders to be held on September 13, 2001 and at any adjournments
thereof.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING PROPOSALS:


                                                                    
    1. PROPOSAL TO amend Article FOURTH of the Company's Restated and Amended Certificate of Incorporation
    to increase the number of authorized shares of Common Stock from 45,000,000 to 200,000,000.
                 FOR / /                          AGAINST / /                        ABSTAIN / /
    2. PROPOSAL TO ratify the appointment of PricewaterhouseCoopers LLP as independent accountants of the
    Company for the fiscal year ending March 28, 2002.
                 FOR / /                          AGAINST / /                        ABSTAIN / /
    3. In their discretion, the Proxies are authorized to vote on such other business as may properly come
    before the meeting.


                (Continued and to be signed on the reverse side)

    THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" THE PROPOSALS TO AMEND ARTICLE FOURTH AND TO RATIFY THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP.


                                                                                                    
                                                              Please date and sign exactly as name appears.
                                                              When shares are held by joint tenants, both
                                                              must sign. When signing as an attorney,
                                                              executor, administrator, trustee or guardian,
                                                              please give full title as such. If a
                                                              corporation, please sign in full corporate name
                                                              by President or other authorized officer. If a
                                                              partnership, please sign in partnership name by
                                                              authorized person.

                                                              Date ----------------------------------
                                                                                                       , 2001

                                                              Signature
                                                              -------------------------------

                                                              Signature (if held jointly)
                                                              -------------------

                                                              PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
                                                              CARD PROMPTLY USING THE ENCLOSED ENVELOPE.