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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
THE MARCUS CORPORATION
(Name of Registrant as Specified in its Charter)
----------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
THE MARCUS CORPORATION
[LOGO]
250 East Wisconsin Avenue, Suite 1700
Milwaukee, Wisconsin 53202-4220
--------------------------------------
NOTICE OF 2002 ANNUAL MEETING OF SHAREHOLDERS
To Be Held Thursday, October 10, 2002
-------------------------------------
To the Shareholders of
THE MARCUS CORPORATION
NOTICE IS HEREBY GIVEN THAT the 2002 Annual Meeting of Shareholders of THE
MARCUS CORPORATION will be held on Thursday, October 10, 2002, at 10:00 A.M.,
local time, at the Pfister Hotel, 424 East Wisconsin Avenue, Milwaukee,
Wisconsin, for the following purposes:
1. to elect nine directors for the ensuing year and
2. to consider and act upon any other business which may be properly
brought before the meeting or any adjournment thereof.
Only holders of record of our Common Stock and Class B Common Stock as of
the close of business on August 9, 2002, will be entitled to notice of, and to
vote at, the meeting and any adjournment thereof. Shareholders may vote in
person or by proxy. The holders of our Common Stock will be entitled to one vote
per share and the holders of Class B Common Stock will be entitled to ten votes
per share on each matter submitted for shareholder consideration.
Shareholders are cordially invited to attend the meeting in person. A map
is provided on the following page to assist you in locating the Pfister Hotel.
Even if you expect to attend the meeting in person, to help ensure your vote is
represented at the meeting, please complete, sign, date and return in the
enclosed postage paid envelope the accompanying proxy, which is being solicited
by our board of directors. You may revoke your proxy at any time before it is
actually voted by giving notice thereof in writing to the undersigned or by
voting in person at the meeting.
Accompanying this Notice of 2002 Annual Meeting of Shareholders is a form
of proxy and proxy statement.
On Behalf of the Board of Directors
/s/ Thomas F. Kissinger
Thomas F. Kissinger
General Counsel and Secretary
Milwaukee, Wisconsin
September 5, 2002
The Marcus Corporation 2002 Annual Meeting
10:00 a.m.
Thursday, October 10, 2002
Pfister Hotel
424 East Wisconsin Avenue
Milwaukee, Wisconsin
[MAP OMITTED]
Directions:
From the south and west From the north
o Take I-94 Milwaukee to I-794 (stay o Take I-43 Milwaukee south to I-794
in the far right lane from exit (far left lane) and take
Chicago), take I-794 to the Van I-794 to the Van Buren exit (far
Buren exit (far left lane). Take left lane). Take Van Buren to
Van Buren to Mason Street Mason Street (approximately 3
(approximately 3 blocks north), blocks north), make a left turn
make a left turn on Mason, go to on Mason, go to Jefferson Street
Jefferson Street (2 blocks). (2 blocks).
o If you wish to use valet parking, o If you wish to use valet parking,
make a left turn onto Jefferson make a left turn onto Jefferson
Street and pull up to the side of Street and pull up to the side of
the building. the building.
o To park in the Pfister Hotel o To park in the Pfister Hotel
parking ramp, continue west on parking ramp, continue west on
Mason Street for a short distance Mason Street for a short distance
to the parking ramp entrance on to the parking ramp entrance on
the left. the left.
o Parking in the Pfister Hotel o Parking in the Pfister Hotel
parking ramp is on a space parking ramp is on a space
available basis. available basis.
THE MARCUS CORPORATION
[LOGO]
--------------------------------------
PROXY STATEMENT
--------------------------------------
For
2002 Annual Meeting of Shareholders
To Be Held Thursday, October 10, 2002
This proxy statement and accompanying form of proxy are being furnished to
our shareholders beginning on or about September 5, 2002, in connection with the
solicitation of proxies by our board of directors for use at our 2002 Annual
Meeting of Shareholders to be held on Thursday, October 10, 2002, at 10:00 A.M.,
local time, at the Pfister Hotel, 424 East Wisconsin Avenue, Milwaukee,
Wisconsin and at any adjournment thereof (collectively, the "Meeting"), for the
purposes set forth in the attached Notice of 2002 Annual Meeting of Shareholders
and as described herein.
Execution of a proxy will not affect your right to attend the Meeting and
to vote in person, nor will your presence revoke a previously submitted proxy.
You may revoke a previously submitted proxy at any time before it is exercised
by giving written notice of your intention to revoke the proxy to our Secretary,
by notifying the appropriate personnel at the Meeting in writing or by voting in
person at the Meeting. Unless revoked, the shares represented by proxies
received by our board of directors will be voted at the Meeting in accordance
with the instructions thereon. If no instructions are specified on a proxy, the
votes represented thereby will be voted (i) for the board's nine director
nominees set forth below and (ii) on such other matters that may properly come
before the Meeting in accordance with the best judgment of the persons named as
proxies.
Only holders of record of shares of our Common Stock (the "Common Shares")
and our Class B Common Stock (the "Class B Shares") as of the close of business
on August 9, 2002 (the "Record Date") are entitled to vote at the Meeting. As of
the Record Date, we had 19,741,998 Common Shares and 9,595,879 Class B Shares
outstanding and entitled to vote. The record holder of each outstanding Common
Share on the Record Date is entitled to one vote per share and the record holder
of each outstanding Class B Share on the Record Date is entitled to ten votes
per share on each matter submitted for shareholder consideration at the Meeting.
The holders of our Common Shares and the holders of our Class B Shares will vote
together as a single class on all matters subject to shareholder consideration
at the Meeting. The total number of votes represented by outstanding Common
Shares and Class B Shares as of the Record Date was 115,700,788, consisting of
19,741,998 votes represented by outstanding Common Shares and 95,958,790 votes
represented by outstanding Class B Shares.
ELECTION OF DIRECTORS
At the Meeting, our shareholders will elect all nine members of our board
of directors. The directors elected at the Meeting will hold office until our
2003 Annual Meeting of Shareholders and until their successors are duly
qualified and elected. If, prior to the Meeting, one or more of the board's
nominees become unable to serve as a director for any reason, the votes
represented by proxies granting authority to vote for all of the board's
nominees, or containing no voting instructions, will be voted for a replacement
nominee selected by the board. Under Wisconsin law, if a quorum of shareholders
is present, directors are elected by a plurality of the votes cast by the
shareholders entitled to vote in the election. This means that the individuals
receiving the largest number of votes will be elected as directors, up to the
maximum number of directors to be chosen at the election. Therefore, any shares
that are not voted on this matter at the Meeting, whether by abstention, broker
nonvote or otherwise, will have no effect on the election of directors at the
Meeting.
All of our director nominees have been elected by our shareholders and have
served continuously as directors since the date indicated below. The names of
the nominees, together with certain information about each of them as of the
Record Date, are set forth below.
Director
Name Current Principal Occupation Age Since
---- ---------------------------- --- --------
[Photo] Stephen H. Marcus Our Chairman of the Board, President and Chief 67 1969
Executive Officer(1)(2)(3)
[Photo] Diane Marcus Gershowitz Real estate management and investments(1)(3) 63 1985
[Photo] Daniel F. McKeithan, Jr. President of Tamarack Petroleum Company, Inc. 66 1985
(operator of oil and gas wells) and President of
Active Investor Management, Inc. (manager of oil
and gas wells)(4)
2
[Photo] Allan H. Selig Commissioner of Major League Baseball and 67 1995
President and Chief Executive Officer of Selig
Executive Leasing Co., Inc. (automobile leasing
agency)(5)
[Photo] Timothy E. Hoeksema Chairman of the Board, President and Chief 55 1995
Executive Officer of Midwest Express Holdings,
Inc. (commercial airline carrier)
[Photo] Bruce J. Olson Our Group Vice President(2)(6) 52 1996
[Photo] Philip L. Milstein President of Emigrant Savings Bank (savings bank) 53 1996
[Photo] Bronson J. Haase Former President and Chief Executive Officer of 58 1998
Wisconsin Gas Company (gas utility) and Vice
President of WICOR, Inc. (utility holding
company) and former President and Chief Executive
Officer of Ameritech Wisconsin
[Photo] James D. Ericson Retired President, Chief Executive Officer and 66 2001
Chairman of the Board of Trustees of Northwestern
Mutual Life Insurance Company (life insurance
company)(7)
3
(1) Stephen H. Marcus and Diane Marcus Gershowitz are brother and sister.
(2) Stephen H. Marcus and Bruce J. Olson are also officers of certain of our
subsidiaries.
(3) As a result of their beneficial ownership of Common Shares and Class B
Shares, Stephen H. Marcus and/or Diane Marcus Gershowitz may be deemed to
control, or share in the control of, the company. See "Stock Ownership of
Management and Others."
(4) Daniel F. McKeithan, Jr. is a director of U.S. Bancorp and a trustee of
Northwestern Mutual Life Insurance Company ("NML"). U.S. Bancorp and NML
are two of our principal lenders.
(5) Allan H. Selig is a director of Oil-Dri Corporation of America.
(6) Bruce J. Olson is a director of Fresh Brands, Inc.
(7) James D. Ericson is a director of Kohl's Corporation, Green Bay Packaging,
Inc. and a trustee of NML.
Our board of directors has an Audit Committee whose principal functions are
to: (i) recommend annually a firm of independent certified public accountants to
serve as our auditor; (ii) meet with and review reports of our auditor; and
(iii) recommend to our board such actions within the scope of its authority as
it deems appropriate. During our fiscal 2002, the Audit Committee consisted of
Daniel F. McKeithan, Jr. (Chairman), James D. Ericson, Philip L. Milstein and
Allan H. Selig. The Audit Committee met two times in our fiscal 2002. See "Audit
Committee Report."
Our board of directors also has a Compensation and Nominating Committee
whose principal functions are to: (i) recommend for approval to the board the
compensation, bonuses and benefits of officers and other key employees of the
company and its subsidiaries; (ii) administer our 1995 Equity Incentive Plan;
and (iii) recommend individuals to be elected to our board of directors. See
"Executive Compensation." The Compensation and Nominating Committee will
consider director nominees recommended by our shareholders, but has no
established procedures that shareholders must follow to make such a
recommendation. Our By-laws require that shareholders give advance notice and
furnish certain information to us in order to nominate a person as a director.
The Compensation and Nominating Committee consists of entirely independent,
nonemployee directors. During our fiscal 2002, the Compensation and Nominating
Committee consisted of Timothy E. Hoeksema (Chairman), Bronson J. Haase, Daniel
F. McKeithan, Jr. and Philip L. Milstein. The Compensation and Nominating
Committee met two times in our fiscal 2002. See "Executive Compensation."
Our board met four times in our fiscal 2002. No director attended fewer
than 75% of the fiscal 2002 meetings of our board or board committees on which
he or she served.
4
STOCK OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth information as of the Record Date as to our
Common Shares and Class B Shares beneficially owned by: (i) each of our
directors; (ii) each of our executive officers named in the Summary Compensation
Table set forth below under "Executive Compensation -- Summary Compensation;"
(iii) all such directors and executive officers as a group; and (iv) all other
persons or entities known by us to be the beneficial owner of more than 5% of
either class of our outstanding capital stock. A row for Class B Share ownership
is not included for individuals or entities who do not beneficially own any
Class B Shares.
Total Share Percentage of
Sole Voting Shared Voting Ownership and Aggregate
Name of Individual or and Investment and Investment Percentage of Voting
Group/Class of Stock Power(1) Power(1) Class(1) Power(1)
--------------------- -------------- -------------- ------------- -------------
Directors and Named Executive Officers
Stephen H. Marcus(2)
Common Shares 25,672(3) 47,003 72,675(3)
* 58.1%
Class B Shares 2,604,458 4,111,809 6,716,267
(70.0%)
Diane Marcus Gershowitz(2)
Common Shares 83,456(4) 41,000 124,456(4)
* 48.2%
Class B Shares 1,736,334 3,829,807 5,566,141
(58.0%)
Daniel F. McKeithan, Jr.
Common Shares 10,801(4) 0 10,801(4)
* *
Allan H. Selig
Common Shares 8,776(4) 0 8,776(4)
* *
Timothy E. Hoeksema
Common Shares 8,551(4) 0 8,551(4)
* *
Philip L. Milstein
Common Shares 57,691(4)(5) 0 57,691(4)(5)
* *
Class B Shares 39,601 62,055(5) 101,656(5)
*
Bronson J. Haase
Common Shares 4,176(4) 0 4,176(4)
* *
James D. Ericson
Common Shares 2,392(4) 0 2,392(4) *
Bruce J. Olson
Common Shares 147,472(3)(6) 30,856 178,328(3)(6)
* *
H. Fred Delmenhorst
Common Shares 54,113(3)(6) 2,469 56,582(3)(6)
* *
Thomas F. Kissinger
Common Shares 40,663(3)(6) 0 40,663(3)(6)
* *
5
Total Share Percentage of
Sole Voting Shared Voting Ownership and Aggregate
Name of Individual or and Investment and Investment Percentage of Voting
Group/Class of Stock Power(1) Power(1) Class(1) Power(1)
--------------------- -------------- -------------- ------------- -------------
Directors and Named Executive Officers
Douglas A. Neis
Common Shares 46,212(3)(6) 6,417 52,629(3)(6)
* *
All directors and executive
officers as a group (12
persons)(7)
Common Shares(8) 489,975(3) 86,745 576,720(3)
(2.9%) 77.0%
Class B Shares 4,380,393 4,495,436 8,875,829
(92.5%)
Other Five Percent Shareholders
Private Capital Management,
Inc.(9)
Common Shares(10) 0 6,976,920 6,976,920
(35.3%) 6.0%
Lord Abbett & Co.(11)
Common Shares(12) 1,803,231 0 1,803,231
(9.1%) 1.6%
Dimensional Fund Advisors(13)
Common Shares(14) 1,202,183 0 1,202,183
(6.1%) 1.0%
-----------------
* Less than 1%.
(1) Includes, in some cases, shares over which a person has or shares voting
power and/or investment power, as to which beneficial ownership may be
disclaimed. 3,508,235 shares of Class B Shares and 41,000 Common Shares
held in certain trusts are included in the beneficial ownership figures for
both Stephen H. Marcus and Diane Marcus Gershowitz because both of them are
trustees of these trusts. The outstanding Class B Shares are convertible on
a share-for-share basis into Common Shares at any time at the discretion of
each holder. As a result, a holder of Class B Shares is deemed to
beneficially own an equal number of Common Shares. However, to avoid
overstatement of the aggregate beneficial ownership of both classes of our
outstanding capital stock, the Common Shares listed in the table do not
include Common Shares that may be acquired upon the conversion of
outstanding Class B Shares. Similarly, the percentage of outstanding Common
Shares beneficially owned is determined with respect to the total number of
outstanding Common Shares, excluding Common Shares that may be issued upon
conversion of outstanding Class B Shares.
(2) The address of Stephen H. Marcus and Diane Marcus Gershowitz is c/o 250
East Wisconsin Avenue, Suite 1700, Milwaukee, Wisconsin 53202-4220.
(3) Includes 3,777, 3,522, 2,393, 1,343 and 1,774 Common Shares held for the
respective accounts of Stephen H. Marcus, Bruce J. Olson, H. Fred
Delmenhorst, Thomas F. Kissinger and Douglas A. Neis in our Pension Plus
Plan as of May 30, 2002, the end of our fiscal 2002 year. See "Executive
Compensation -- Summary Compensation Information."
(4) Includes (a) 7,375 Common Shares subject to acquisition by each of Diane
Marcus Gershowitz, Daniel F. McKeithan, Jr., Allan H. Selig and Timothy E.
Hoeksema; (b) 4,750 Common Shares subject to acquisition by Philip L.
Milstein; (c) 3,000 Common Shares subject to acquisition by Bronson J.
Haase; and (d) 2,000 Common Shares subject to acquisition by James D.
Ericson, in each case pursuant to the exercise of vested stock options held
on the Record Date pursuant to our 1994 Nonemployee Director Stock Option
Plan. Also includes 784 restricted Common Shares held by each of Diane
Marcus Gershowitz, Daniel F. McKeithan, Jr., Allan H. Selig, Philip L.
Milstein, Timothy E. Hoeksema and Bronson J. Haase, 392 of which were
6
granted on each of September 25, 2000 and October 23, 2001. Also includes
392 restricted Common Shares granted on October 23, 2001 to James D.
Ericson. See "Director Compensation." The restrictions on these restricted
Common Shares terminate on the second anniversary of the date that they
were granted.
(5) Includes 62,055 Class B Shares held by Mr. Milstein as a partner of
Northmon Investment Co. Excludes the following shares, as to which Mr.
Milstein disclaims beneficial interest: (a) 5,625 Common Shares in the AB
Elbaum Trust, of which Philip L. Milstein is co-trustee; (b) 2,000 Common
Shares held by Mr. Milstein's wife; (c) 8,100 Common Shares held by Mr.
Milstein's children; and (d) 57,500 Common Shares held by the PLM
Foundation.
(6) Includes 108,874, 45,938, 38,625 and 44,438 Common Shares subject to
acquisition by Bruce J. Olson, H. Fred Delmenhorst, Thomas F. Kissinger and
Douglas A. Neis, respectively, pursuant to the exercise of vested stock
options held on the Record Date pursuant to our 1987 Stock Option Plan and
1995 Equity Incentive Plan. See "Executive Compensation -- Stock Options."
(7) In determining the aggregate beneficial ownership of Common Shares and
Class B Shares for all continuing directors and named executive officers as
a group, shares that are beneficially owned by more than one director or
officer are counted only once to avoid overstatement.
(8) Includes 277,125 Common Shares subject to acquisition pursuant to the
exercise of vested stock options held by our named executive officers and
continuing nonemployee directors on the Record Date pursuant to our 1987
Stock Option Plan, 1995 Equity Incentive Plan and the 1994 Nonemployee
Director Stock Option Plan. See "Executive Compensation -- Stock Options"
and "Director Compensation."
(9) The address of Private Capital Management, Inc. ("PCM") is 8889 Pelican Bay
Boulevard, Naples, Florida 34108.
(10) Other than share ownership percentage information, the information set
forth is as of February 15, 2002, as reported by PCM in its Schedule 13G/A
filed with us and the Securities and Exchange Commission.
(11) The address of Lord Abbett & Co. ("Lord Abbett") is 90 Hudson Street,
Jersey City, New Jersey 07302.
(12) Other than share ownership percentage information, the information set
forth is as of January 28, 2002, as reported by Lord Abbett in its Schedule
13G/A filed with us and the Securities and Exchange Commission.
(13) The address of Dimensional Fund Advisors ("DFA") is 1299 Ocean Avenue, 11th
Floor, Santa Monica, California 90401.
(14) Other than share ownership percentage information, the information set
forth is as of February 12, 2002, as reported by DFA in its Schedule 13G
filed with us and the Securities and Exchange Commission.
7
AUDIT COMMITTEE REPORT
To the Board of Directors of The Marcus Corporation
Our Audit Committee oversees the company's financial reporting process on
behalf of the board of directors. Our management is responsible for the
company's financial reporting process, including its system of internal
controls, and for the preparation of the company's consolidated financial
statements in accordance with generally accepted accounting principles. The
company's independent auditors, Ernst & Young LLP, are responsible for auditing
those financial statements. Our responsibility is to monitor and review these
processes. It is not our duty or our responsibility to conduct auditing or
accounting reviews or procedures. We are not employees of the company and we are
not accountants or auditors by profession or experts in the fields of accounting
or auditing. Therefore, we have relied, without independent verification, on
management's representation that the company's financial statements have been
prepared with integrity and objectivity and in conformity with generally
accepted accounting principles. We have also relied on the representations of
Ernst & Young included in its report on the company's fiscal 2002 financial
statements. Our discussions with management and Ernst & Young do not assure that
the company's financial statements are presented in accordance with generally
accepted accounting principles, that the audit of the company's financial
statements has been carried out in accordance with generally accepted auditing
standards or that Ernst & Young is in fact "independent."
Our Audit Committee reviewed with Ernst & Young their judgments as to the
quality, not just the acceptability, of the company's accounting principles and
such other matters as are required to be discussed with our Audit Committee
under generally accepted auditing standards. In addition, our Audit Committee
discussed with Ernst & Young their independence from management and the company,
including the matters in the written disclosures required by the Independence
Standards Board, and considered the compatibility of Ernst & Young's provision
of nonaudit services with their independence.
Our Audit Committee discussed with Ernst & Young the overall scope and
plans for their audit. We met with Ernst & Young, with and without management
present, to discuss the results of their examination, their evaluation of the
company's internal controls, and the overall quality of the company's financial
reporting.
In reliance on the reviews and discussions referred to above, our Audit
Committee recommended to the board of directors that the company's audited
consolidated financial statements be included in the Annual Report on Form 10-K
at and for the fiscal year ended May 30, 2002 for filing with the Securities and
Exchange Commission.
Messrs. McKeithan, Milstein and Ericson are independent directors as
defined by the rules of the New York Stock Exchange. As stated in "Certain
Transactions" below, Mr. Selig is the President, Chief Executive Officer and
sole owner of Selig Executive Leasing Co., Inc., an automobile leasing agency
that, in fiscal 2002, received payments of approximately $552,000 from the
company from the lease of approximately 90 vehicles. As in past years, virtually
all of these lease payments represent reimbursement of actual costs incurred by
Selig Executive Leasing to purchase and finance the vehicles, with Selig
Executive Leasing retaining less than $20,000 as an administrative fee. Because
of this relationship, Mr. Selig is not technically considered an "independent"
director under the listing standards of the New York Stock Exchange. The board
of directors considered this relationship, including the fact that this
relationship is relatively minor to us, Mr. Selig and Selig Executive Leasing,
and concluded that this relationship will not interfere with Mr. Selig's
exercise of independent judgment for purposes of the New York Stock Exchange's
audit committee independence requirements. As a result, the board of directors
found that, based on its business judgment, it is in the best interests of the
company and its shareholders for Mr. Selig to serve as a member of the Audit
Committee.
This report and the information herein do not constitute soliciting
material and shall not be deemed to be incorporated by reference by any general
statement incorporating by reference this proxy statement into any filing by or
of the company under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under
such Acts.
By the Audit Committee:
Daniel F. McKeithan, Jr., Chairman
Philip L. Milstein
Allan H. Selig
James D. Ericson
8
EXECUTIVE COMPENSATION
Report on Executive Compensation
Our Compensation and Nominating Committee consists entirely of independent,
nonemployee directors and is responsible for evaluating and determining the
compensation of the company's executive officers. The compensation paid to the
company's executive officers consists of (i) salary; (ii) an incentive bonus;
(iii) stock option grants; and (iv) other benefits under the company's employee
benefit plans. We strive to provide executive officers with fair and competitive
compensation that rewards corporate and individual performance and helps
attract, retain and motivate highly qualified individuals who contribute to the
company's long-term growth and success. Our compensation policies are designed
to encourage the continuation of the company's entrepreneurial spirit by
encouraging its executives and other employees to take appropriate market
responsive risk-taking actions that facilitate its growth and success. We
establish the compensation of executive officers, including the company's Chief
Executive Officer, Stephen H. Marcus, in accordance with these philosophies and
policies.
Salary
Each executive officer's salary is based on the level of his or her
responsibilities and the relationship of such responsibilities to those of the
company's other executive officers. When evaluating and adjusting salaries of
executive officers (other than Mr. Marcus), we act on the recommendations of Mr.
Marcus. In making his recommendations, Mr. Marcus takes into account (i) the
company's financial performance as a whole and on a divisional basis, when
appropriate, for the most recent fiscal year compared to its historical and
anticipated performance; (ii) general economic conditions (including inflation)
and the impact such conditions had on the company's operations; (iii) each
executive officer's past, and anticipated future, contributions to the company's
performance; (iv) how each executive officer's salary compares to the range of
the salaries of similarly situated executives at both the national and local
level; (v) new responsibilities, if any, recently delegated, or to be delegated,
to such officer; and (vi) the executive's participation in significant corporate
achievements during the prior fiscal year.
When evaluating and adjusting Mr. Marcus' salary, we subjectively consider
the factors cited above, the comparative salaries and total compensation
packages of other comparable chief executive officers, especially those based in
the Milwaukee, Wisconsin area. When determining Mr. Marcus' salary for fiscal
2003, we also took into account the company's revenue and earnings performance
in fiscal 2002 and its long-term record of financial success.
Bonus
Bonuses for each fiscal year are granted to executive officers, including
Mr. Marcus, after the end of the fiscal year. Fiscal 2002 bonuses for executive
officers who have no direct operational responsibilities were based on the
recommendations of Mr. Marcus. Mr. Marcus made his recommendations based on the
company's overall financial performance in fiscal 2002 and such officer's
individual contributions and achievements during fiscal 2002, particularly as
such contributions and achievements related to advancing the company's
entrepreneurial spirit. Specific corporate performance factors that we
considered when we established fiscal 2002 bonuses included (i) the contribution
that each executive officer made to his specific functional area; (ii) the
company's overall performance; (iii) the company's 3.9% increase in revenues
compared to fiscal 2001; (iv) the company's 3.1% increase in earnings compared
to fiscal 2001; and (v) the total cash compensation of other similarly situated
executives. The fiscal 2002 bonus for Bruce J. Olson, who has direct managerial
responsibilities for the company's theatre division, was based on the financial
and operating performance of this division, together with the company's overall
financial performance in fiscal 2002. Mr. Marcus' fiscal 2002 bonus was based on
a pre-established formula which provides for the annual payment of a bonus equal
to three-fourths of one percent of the company's pre-tax earnings, as defined,
for the fiscal year.
9
Stock Options
Stock options are granted each year to selected executive officers and
other employees. Such options have a per share exercise price equal to the fair
market value of the company's Common Shares on the date of grant. Since the
economic value of each option is directly dependent upon future increases in the
value of the Common Shares, we believe that option grants help to better align
the interests of option recipients with those of the company's shareholders. We
further believe that stock option grants provide a long-term incentive for
option recipients to improve financial performance and, in turn, the price of
the Common Shares. We have the flexibility to grant other types of equity-based
incentive awards (including stock appreciation rights, restricted stock and
performance shares) in addition to stock options under the 1995 Equity Incentive
Plan. Consistent with our philosophy of encouraging entrepreneurism throughout
the organization, we grant options annually to a broad number of key employees
including unit and multi-unit managers. Option grants to these key employees are
based on the level of responsibility and length of service. Option grants in
fiscal 2002 to key employees other than the named executive officers constituted
81.6% of all non-board option grants.
Since Mr. Marcus and his family own approximately 30.4% of the outstanding
Common Shares and Class B Shares, his economic interests are already
substantially directly linked to the price performance of the Common Shares.
Therefore, at the time the 1995 Equity Incentive Plan was adopted, we decided it
was not necessary to provide Mr. Marcus with any stock option grants or other
awards under the 1995 Equity Incentive Plan. The size of option grants to the
other named executive officers was based on (i) the officer's length of service,
responsibilities and contributions to the company's performance over the past
year; (ii) the officer's anticipated future contributions to the company's
success; (iii) historical levels of option grants to, and the level of existing
stock ownership of, such officer and other executive officers; and (iv) the
relative levels of option grants then being made to all employees and other
executive officers.
Other Benefits
We also attempt to provide other competitive compensatory benefits to the
company's executive officers, including participation in the company's Pension
Plus Plan, nonqualified retirement income plan, employee stock purchase plan,
nonqualified deferred compensation plan, health insurance, life and disability
insurance and other benefits.
As a result of current executive compensation levels, we do not intend to
take any action to conform our compensation plans to comply with the regulations
under Internal Revenue Code Section 162(m) relating to the $1 million cap on
executive compensation deductibility imposed by the Omnibus Revenue
Reconciliation Act of 1993.
This report, the information herein and the performance graphs included
elsewhere in this proxy statement do not constitute soliciting material and
shall not be deemed to be incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing by or of the
company under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, and shall not otherwise be deemed filed under such
Acts.
By the Compensation and Nominating Committee:
Timothy E. Hoeksema, Chairman
Bronson J. Haase
Daniel F. McKeithan, Jr.
Philip L. Milstein
10
Summary Compensation Information
The following table sets forth certain information concerning compensation
paid by us during our last three fiscal years to our Chief Executive Officer and
our four other highest paid executive officers. The persons named in the table
below are sometimes referred to herein as the "named executive officers."
Summary Compensation Table
Annual Compensation Stock Option
Name and Fiscal ---------------------------------- Grants All Other
Principal Positions Year Salary(1) Bonus(1) Other(2) (Shares)(3) Compensation(4)
------------------------ ------ --------- --------- -------- ------------- ---------------
Stephen H. Marcus 2002 $ 458,077 $ 246,964 $ -- N/A $ 5,439(5)
Chairman of the Board, 2001 $ 440,000 $ 269,714 $ -- N/A $ 7,061(5)
President and Chief 2000 $ 420,000 $ 275,106 $ -- N/A $ 5,521(5)
Executive Officer
Bruce J. Olson 2002 $ 298,269 $ 166,175 $ -- 50,000 $ 4,043
Group Vice President 2001 $ 285,000 $ 10,784 $ -- 50,000 $ 135,041
2000 $ 261,058 $ 76,577 $ -- 10,000 $ 3,812
H. Fred Delmenhorst 2002 $ 159,308 $ 10,000 $ -- 15,000 $ 4,482
Vice President-Human 2001 $ 154,000 $ 10,000 $ -- 15,000 $ 9,462
Resources 2000 $ 147,087 $ 15,000 $ -- 5,000 $ 3,812
Thomas F. Kissinger 2002 $ 180,596 $ 35,000 $ -- 15,000 $ 3,718
General Counsel and 2001 $ 166,000 $ 20,000 $ -- 15,000 $ 19,185
Secretary 2000 $ 157,961 $ 28,000 $ -- 5,000 $ 3,974
Douglas A. Neis 2002 $ 148,269 $ 25,000 $ -- 15,000 $ 3,500
Chief Financial Officer 2001 $ 135,000 $ 10,000 $ -- 15,000 $ 33,389
and Treasurer 2000 $ 123,846 $ 15,000 $ -- 5,000 $ 3,550
-----------------
(1) Includes amounts deferred at the election of the named executive officer
under Section 401(k) of the Internal Revenue Code and our Deferred
Compensation Plan. Our Deferred Compensation Plan is a defined contribution
program whereby an eligible employee may voluntarily make an irrevocable
election to defer receipt of up to 100% of his or her annual compensation
on a pre-tax basis. The irrevocable election must be made during an
employee's first 60 days of eligibility or, if later, prior to the start of
any calendar year to which it applies and must specify both a benefit
payment commencement date and a form of payment (i.e., lump sum, periodic
installments or monthly annuity), either of which may be substantially
changed by written election before the calendar year in which payments
would otherwise commence. During each quarter of the deferral period, we
apply to the deferred amount an earnings credit based on the average prime
interest rate of a designated Milwaukee bank. The benefits payable under
the Deferred Compensation Plan (i.e., the employee's deferred amount plus
his or her earnings credits) will be paid out of our general corporate
assets as they become due (i.e., after the employee's specified
commencement date).
(2) The value of all perquisites and other personal benefits provided to each
named executive officer is significantly less than the required Securities
and Exchange Commission reporting thresholds of the lesser of $50,000 or
10% of the annual salary and bonus reported for each named executive
officer.
(3) Fiscal 2002, 2001 and 2000 options were granted at 100% of fair market
value on the date of grant under our 1995 Equity Incentive Plan. See
footnote (1) to the table set forth under "Stock Options -- Option Grants
in 2002 Fiscal Year."
11
(4) Includes our contributions on behalf of each named executive officer to our
defined contribution Pension Plus Plan and the dollar value of imputed life
insurance premiums paid by, or on behalf of, us during our fiscal year with
respect to term life insurance for the benefit of the named executive
officer. The Pension Plus Plan is a profit sharing plan with Internal
Revenue Code Section 401(k) features and covers all of our eligible
employees and eligible employees of our subsidiaries, including the named
executive officers, and uses a participating employee's aggregate direct
compensation as the basis for determining the employee and employer
contributions that are allocated to the employee's account. A participating
employee may elect to make pre-tax deposits of up to 14% of his or her
annual compensation. The Pension Plus Plan also provides for three types of
employer contributions: (i) a basic contribution equal to 1% of a
participating employee's annual compensation; (ii) a matching contribution
equal to one-fourth of the employee's pre-tax deposits not exceeding 6% of
such annual compensation; and (iii) a discretionary profit performance
contribution determined by our board each year. For purposes of the profit
performance contribution, we and our subsidiaries are divided into eight
profit sharing groups, and the profit performance contribution for the
participating employees employed by a particular profit sharing group is
dependent on our overall operations meeting profitability targets, our
having achieved a positive return on shareholders' equity and that profit
sharing group's operating performance having been profitable. A
participating employee's share of the annual profit performance
contribution, if any, for the employee's profit sharing group is determined
by multiplying the contribution amount by the ratio of the participating
employee's annual compensation to the aggregate annual compensation of all
participating employees in that profit sharing group. The employee's
pre-tax savings deposits and the employer basic contributions allocated to
a participating employee's account are fully vested upon deposit, and the
employer matching and profit performance contribution are subject to a
graduated vesting schedule resulting in full vesting after seven years of
service. Each participating employee has the right to direct the investment
of the pre-tax savings deposits and employer matching contributions
allocated to the employee's account in one or more of several available
investment funds. The allocated employer basic contributions are generally
expected to be invested in Common Shares but, at the direction of the
Pension Plus Plan's administrative committee, may be invested in a
different manner. The allocated employer profit performance contributions
are invested in the manner selected by the Pension Plus Plan's
administrative committee, which may include investment in Common Shares.
The vested portion of a participating employee's account balance becomes
distributable in a lump sum payment only after the employee's termination
of employment, although the employee has the right while employed to borrow
a portion of such vested portion or make a withdrawal of pre-tax savings
deposits for certain hardship reasons that are prescribed by applicable
federal law. We also provide all named executive officers with long-term
disability protection. The other compensation amounts listed for fiscal
2001 for Messrs. Olson, Delmenhorst, Kissinger and Neis include special
commissions as a result of such officers' integral involvement in
consummation of the successful sale of our KFC and KFC/Taco Bell
restaurants.
(5) In fiscal 2002 we paid approximately $668,000 of premiums on six
split-dollar insurance policies on the life of Mr. Marcus. We paid
approximately $368,000 of premiums on three split-dollar insurance policies
on the life of Mr. Marcus in fiscal 2001 and 2000. The foregoing data is
excluded from the table because, upon surrender of these policies to us or
the death of Mr. Marcus, these premium payments will be reimbursed in full
to us. Based on an assumed retirement age of 70, the present value of the
excess cash surrender value of all of such policies over the premium
payments is estimated to be approximately $612,000.
Stock Options
We have a 1987 Stock Option Plan ("1987 Plan") pursuant to which options to
acquire Common Shares may have been granted prior to June 1997 to our officers
and key employees and to the officers and key employees of our subsidiaries.
However, Stephen H. Marcus, Diane Marcus Gershowitz and any other person who
owned, directly or indirectly, 5% or more of our voting power were not eligible
to receive options under the 1987 Plan. No new options may be granted under the
1987 Plan, but certain options granted under the 1987 Plan are still outstanding
and may be exercised pursuant to their terms.
12
We also have a 1995 Equity Incentive Plan ("1995 Plan") pursuant to which
options to acquire Common Shares may be granted until June 2005 to our officers
and other key employees and to the officers and key employees of our
subsidiaries. However, Stephen H. Marcus, Diane Marcus Gershowitz and any other
person who owns, directly or indirectly, 5% or more of our voting power cannot
receive options under the 1995 Plan.
The following table sets forth information concerning the grant of stock
options under our 1995 Plan during our fiscal 2002 to the named executive
officers.
Option Grants in 2002 Fiscal Year
Potential Realizable Value
Common Percentage of at Assumed Annual Rates of
Shares Total Options Stock Price Appreciation
Underlying Granted to All for Option Term(3)
Options Employees in 2002 Exercise Price Expiration --------------------------
Name Granted(1) Fiscal Year (per Share)(2) Date 5% 10%
---- ---------- ----------------- -------------- ---------- -------- ----------
Stephen H. Marcus N/A N/A N/A N/A N/A N/A
Bruce J. Olson 50,000 9.7% $14.05 7/12/11 $441,798 $1,119,604
H. Fred Delmenhorst 15,000 2.9% $14.05 7/12/11 $132,540 $ 335,881
Thomas F. Kissinger 15,000 2.9% $14.05 7/12/11 $132,540 $ 335,881
Douglas A. Neis 15,000 2.9% $14.05 7/12/11 $132,540 $ 335,881
------------------
(1) Options granted under the 1995 Plan may be designed to qualify as either
"incentive stock options" within the meaning of Section 422A of the
Internal Revenue Code or as "nonstatutory stock options." The options
reflected in the table were granted on July 12, 2001 at an exercise price
equal to 100% of the fair market value of the Common Shares on that date.
These options vest and are exercisable with respect to 40% of the shares
after two years from the grant date, 60% after three years, 80% after four
years and 100% after five years, but may not be exercised after the
ten-year option period. Not reflected in this table are 50,000 Common
Shares subject to incentive stock options which were granted to the named
executive officers after our fiscal 2002 year end (Olson - 20,000,
Delmenhorst - 10,000, Kissinger - 10,000 and Neis - 10,000) at an exercise
price of $15.55 per share.
(2) The exercise price of options may be paid in cash, by delivering previously
issued Common Shares or any combination thereof.
(3) The potential realizable values set forth under these columns represent the
difference between the option exercise price and the market value of the
Common Shares based on certain assumed rates of stock price appreciation
and assuming the exercise of the options on their stated expiration date.
The potential realizable values set forth under the columns do not take
into account applicable tax and expense payments that may be associated
with such option exercises. Actual realizable value, if any, will be
dependent on the future stock price of the Common Shares on the actual date
of exercise, which may be earlier than the stated expiration date. The 5%
and 10% assumed rates of stock price appreciation over the ten-year
exercise period of the options used in the table above are mandated by the
rules of the Securities and Exchange Commission and do not represent our
estimate or projection of the future price of the Common Shares on any
date. There can be no assurance that the stock price appreciation rates for
the Common Shares assumed for purposes of this table will actually be
achieved.
13
The following table sets forth certain information with respect to the
named executive officers concerning their unexercised stock
options held as of the end of our fiscal 2002. No options were exercised by any
of the named executive officers during our fiscal 2002.
Fiscal 2002 Year-End Value Table
Number of Common Shares Value of Unexercised
Underlying Unexercised Options In-the-Money Options at
at End of Fiscal 2002(1) End of Fiscal 2002(3)
Name Exercisable(2)/Unexercisable(2) Exercisable/Unexercisable
---- ------------------------------- -------------------------
Stephen H. Marcus N/A N/A
Bruce J. Olson 83,874 / 110,500 $ 176,971 / $ 90,090
H. Fred Delmenhorst 37,438 / 35,250 $ 82,046 / $ 28,020
Thomas F. Kissinger 30,125 / 35,250 $ 35,333 / $ 28,020
Douglas A. Neis 36,088 / 35,100 $ 82,046 / $ 28,020
----------------
(1) See vesting schedule of stock options set forth in footnote (1) under the
"Option Grants in 2002 Fiscal Year" table.
(2) Excludes 50,350 Common Shares subject to previously granted stock options
that vested and became exercisable after our 2002 fiscal year end (Olson --
25,000, Delmenhorst -- 8,500, Kissinger -- 8,500 and Neis -- 8,350). Also
excludes 50,000 Common Shares subject to stock options that were granted to
the named executive officers after our fiscal 2002 year end (Olson -
20,000, Delmenhorst - 10,000, Kissinger - 10,000 and Neis - 10,000) at an
exercise price of $15.55 per share.
(3) The dollar values were calculated by determining the difference between the
fair market value of the underlying Common Shares and the applicable
exercise prices of the named executive officers' outstanding options at the
end of our fiscal 2002. The closing sale price of the Common Shares on the
New York Stock Exchange on May 30, 2002, the end of our fiscal 2002, was
$13.14 per share.
Pension Plan
We have a nonqualified defined benefit pension plan ("Supplemental Plan")
for our eligible employees. An employee participating in the Supplemental Plan
is entitled to receive annual benefits substantially in accordance with the
table set forth below, except that the amounts shown in the table do not reflect
the applicable reductions for Social Security benefits and benefits funded by
employer contributions that are payable under our other employee benefit plans.
For an employee entitled to the highest level of Social Security benefits who
retires at age 65 during calendar year 2002, the reduction in annual
Supplemental Plan benefits would equal approximately $10,200.
Estimated Annual Pension Plan Benefits
for Representative Years of Service
Final Five-Year --------------------------------------------------------
Average Compensation 15 20 25 30 35
-------------------- -------- -------- -------- -------- --------
$100,000 $ 25,000 $ 33,300 $ 41,667 $ 50,000 $ 50,000
200,000 50,000 66,600 83,334 100,000 100,000
350,000 87,500 116,550 145,834 175,000 175,000
500,000 125,000 166,500 208,335 250,000 250,000
650,000 162,500 216,450 270,835 325,000 325,000
800,000 200,000 266,400 333,333 400,000 400,000
950,000 237,500 316,350 395,836 475,000 475,000
The Supplemental Plan is available to eligible employees with annual
compensation in excess of a specified level (e.g., $90,000 in 2002), including
each of our named executive officers. The Supplemental Plan is a defined benefit
retirement income program that provides benefits based on the employee's average
total compensation for the five highest compensation years within the employee's
last ten compensation years. The amounts accrued for named executive officers
under the Supplemental Plan are not readily ascertainable and therefore are not
included in the "Summary Compensation Table" above. In calculating employee
compensation for purposes of
14
determining its contribution to the Supplemental Plan, we use a participating
employee's total direct compensation (which, for the named executive officers,
is comprised of the salary and bonus amounts and, in fiscal 2001 only, certain
amounts included in "All Other Compensation" listed in the "Summary Compensation
Table" above) in determining its annual benefits, calculated on a straight life
annuity basis assuming benefits commence at age 65. In addition to a reduction
equal to 50% of Social Security benefits, the Supplemental Plan reduces its
benefits by the benefits attributable to the employer contributions received by
the participating employee under our other employee benefit plans, such as the
Pension Plus Plan and our former qualified pension plans.
A participating employee is entitled to benefits under the Supplemental
Plan upon normal retirement on or after age 65, early retirement after age 60
with at least five years of service, disability retirement after at least five
years of service and other termination of employment after at least five years
of service. A graduated vesting schedule, which provides for 50% vesting after
five years of service and an additional 10% for each year of service thereafter,
applies in the case of termination of employment before completing ten years of
service or qualifying for normal, early or disability retirement. Benefits
payable under the Supplemental Plan are paid out of our general corporate assets
as benefit payments as they become due after retirement or other termination. At
the end of our fiscal 2002, Stephen H. Marcus, Bruce J. Olson, H. Fred
Delmenhorst, Thomas F. Kissinger and Douglas A. Neis had 41, 28, 17, 8 and 16
years, respectively, of credited years of service under the Supplemental Plan.
Director Compensation
Each nonemployee director receives: (i) an annual retainer fee of $5,000 in
cash; (ii) 392 Common Shares; (iii) $1,750 for each board meeting and $350 for
each board committee meeting (or $500 per committee meeting if that person
serves as the committee's chairperson) that he or she attends; (iv) an option
under our 1994 Nonemployee Director Stock Option Plan (the "Director Plan") to
purchase 1,000 Common Shares upon his or her initial appointment or election to
the board; and (v) an option under our Director Plan to purchase 500 Common
Shares at the end of each of our fiscal years. The exercise price of options
granted under the Director Plan is equal to 100% of the fair market value of the
Common Shares on the date of grant. Under the Director Plan, on May 30, 2002,
each nonemployee director received his or her annual automatic option grant to
purchase 500 shares of Common Stock at an exercise price of $13.14 per share.
All options under the Director Plan have a term of ten years and are fully
vested and exercisable immediately after grant.
15
STOCK PERFORMANCE INFORMATION
Set forth below is a graph comparing the annual percentage change during
our last five fiscal years in our cumulative total shareholder return (stock
price appreciation on a dividend reinvested basis) on our Common Shares,
compared to (i) the cumulative total return of a composite peer group index
selected by us and (ii) companies included in the Russell 2000 Index. The
composite peer group index is comprised of the Standard & Poor's Hotel/Motel
Index (weighted 63%) and a theatre index we selected, which includes Carmike
Cinemas, Inc., Cineplex Odeon Corp., Loews Cineplex Entertainment Corp. and AMC
Entertainment, Inc. (weighted 37%). The indices within the composite peer group
index are weighted to approximate the relative revenue contributions of each of
our business segments (counting the limited-service lodging and hotel/resort
segments as one segment) to our total revenues in our fiscal 2002. The
shareholder returns of the companies included in the theatre index are weighted
based on each company's relative market capitalization as of the beginning of
the presented periods. The performance for this group only reflects the
performance of (i) Cineplex Odeon Corp. until May 1998, when it was acquired by
Loews Cineplex Entertainment Corp.; (ii) Carmike Cinemas, Inc. until August
2000, when it filed for bankruptcy; and (iii) Loews Cineplex Entertainment Corp.
until February 2001, when it filed for bankruptcy.
[OBJECT OMITTED]
============================================================================================
5/31/97 5/31/98 5/31/99 5/31/00 5/31/01 5/31/02
============================================================================================
The Marcus Corporation $ 100 $ 108 $ 78 $ 69 $ 89 $ 90
--------------------------------------------------------------------------------------------
Composite Peer Group Index $ 100 $ 113 $ 126 $ 94 $ 90 $ 91
--------------------------------------------------------------------------------------------
Russell 2000 Index $ 100 $ 126 $ 121 $ 132 $ 137 $ 128
============================================================================================
CERTAIN TRANSACTIONS
As in prior years, during our fiscal 2002, we paid approximately $110,000
of interest to certain entities owned by Stephen H. Marcus, Diane Marcus
Gershowitz and certain trusts for the benefit of members of their families on
nine debts owed by us to such entities. These debts are due on demand and bear
interest at the prime rate (4.75% as of May 30, 2002). The largest aggregate
amount outstanding on the above debts during our 2002 fiscal year was
$2,870,000. As of the end of our 2002 fiscal year, the total amount outstanding
on the nine debts was $2,086,000. Payment of both principal and interest on
these debts is current.
In 1990, B&G Realty, Inc., one of our subsidiaries, entered into a lease
with Stephen H. Marcus and Diane Marcus Gershowitz for the land on which one of
our Baymont Inns & Suites is located. Similarly, in 1997, B&G
16
Realty, Inc. entered into a lease with Stephen H. Marcus and Diane Marcus
Gershowitz for the land on which one of our Woodfield Suites is located. The
lease payments under both of these leases were based upon various independent
appraisals and were approved by our board of directors. During our fiscal 2002,
aggregate lease payments under these leases were $179,000.
As in prior years, during our 2002 fiscal year, we leased automobiles from
Selig Executive Leasing Co., Inc. Aggregate lease payments from the lease of
approximately 90 vehicles were $552,000 in our fiscal 2002. As in past years,
virtually all of these lease payments represent reimbursement of actual costs
incurred by Selig Executive Leasing to purchase and finance the vehicles, with
Selig Executive Leasing retaining less than $20,000 as an administrative fee.
Allan H. Selig, one of our directors, is the President, Chief Executive Officer
and sole shareholder of Selig Executive Leasing.
We believe that all of the above transactions were consummated on terms at
least as favorable as could have been obtained from non-affiliated third
parties.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Our directors and executive officers are required to report their ownership
of Common Shares and Class B Shares and any changes in that ownership to the
Securities and Exchange Commission ("SEC") and the New York Stock Exchange. In
October 2001, a Form 4 was filed by Diane Marcus Gershowitz which included the
late reporting of a gift by her husband. Also in October and November 2001, Form
4s were filed by Stephen H. Marcus which included the late reporting of certain
transactions by several family trusts, of which Mr. Marcus is a trustee. In
making the above statements, we have relied upon the representations of the
persons involved and on copies of their reports filed with the SEC.
OTHER MATTERS
Ernst & Young LLP acted as our independent auditors in our fiscal 2002 and
was appointed to act as our independent auditors in our fiscal 2003. Ernst &
Young's fees for the most recent annual audit were approximately $130,000 and
all other fees paid during our fiscal 2002 totaled about $128,000, including
audit related services of approximately $47,000 and non-audit services
(primarily tax consulting and compliance) of $81,000. Audit related services
generally include fees for joint venture partnership audits and accounting
consultations. Representatives from Ernst & Young are expected to be present at
the Meeting and will have an opportunity to make a statement if they so desire
and will be available to respond to appropriate shareholder questions.
We have filed an Annual Report on Form 10-K with the Securities and
Exchange Commission for our 2002 fiscal year, which ended on May 30, 2002. A
copy of the Form 10-K (excluding exhibits) has been provided to each person who
was a record or beneficial owner of Common Shares or Class B Shares as of the
Record Date. Exhibits to the Form 10-K will be furnished upon payment of the fee
described in the list of exhibits accompanying the copy of Form 10-K. Requests
for any exhibits to our Form 10-K should be addressed to Thomas F. Kissinger,
General Counsel and Secretary, The Marcus Corporation, 250 East Wisconsin
Avenue, Suite 1700, Milwaukee, Wisconsin 53202-4220.
Our board does not intend to present at the Meeting any matters for
shareholder action other than the matter described in the Notice of Annual
Meeting. The board does not know of any other matters to be brought before the
Meeting that will require the vote of shareholders. If any other business or
matters properly come before the Meeting, the proxies named in the accompanying
proxy will vote on such business or matters in accordance with their best
judgment.
A shareholder wishing to include a proposal in our proxy statement for our
2003 Annual Meeting of Shareholders pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934 must forward the proposal to us by April 17, 2003. In
addition, a shareholder who otherwise intends to present business at our 2003
Annual Meeting of Shareholders (including nominating persons for election as
directors) must comply with
17
the requirements set forth in our By-laws. Among other things, to bring business
before an annual meeting, a shareholder must give written notice thereof,
complying with the By-laws, to our Secretary not later than 45 days prior to the
date in the current year corresponding to the date on which we first mailed our
proxy materials for the prior year's annual meeting. Accordingly, if we do not
receive notice of a shareholder proposal submitted otherwise than pursuant to
Rule 14a-8 prior to July 13, 2003, the notice will be considered untimely and we
will not be required to present such proposal at the 2003 Annual Meeting of
Shareholders. If our board of directors chooses to present such proposal at our
2003 Annual Meeting of Shareholders, the persons named in proxies solicited by
the board for the 2003 Annual Meeting of Shareholders may exercise discretionary
voting power with respect to such proposal.
We have paid the cost of soliciting proxies. We expect to solicit proxies
primarily by mail. Proxies may also be solicited personally and by telephone by
certain of our officers and employees. We will reimburse brokers and other
holders of record for their expenses in communicating with the persons for whom
they hold Common Shares or Class B Shares. It is not anticipated that anyone
will be specially engaged to solicit proxies or that special compensation will
be paid for that purpose, but we reserve the right to do so should we conclude
that such efforts are needed.
On Behalf of the Board of Directors
/s/ Thomas F. Kissinger
Thomas F. Kissinger
General Counsel and Secretary
Milwaukee, Wisconsin
September 5, 2002
18
THE MARCUS CORPORATION
PROXY FOR HOLDERS OF CLASS B COMMON STOCK
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE 2002 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
OCTOBER 10, 2002
The undersigned hereby constitutes and appoints STEPHEN H. MARCUS and
THOMAS F. KISSINGER, and each of them, with the power of substitution, as
proxies of the undersigned, to vote any and all shares of Class B Common Stock
of THE MARCUS CORPORATION which the undersigned is entitled to vote at the 2002
Annual Meeting of Shareholders to be held at 10:00 A.M., local time, October 10,
2002, at the Pfister Hotel, 424 East Wisconsin Avenue, Milwaukee, Wisconsin, and
at any adjournment thereof, upon such business as may properly come before the
meeting, including the items listed on the reverse, as more completely described
in the Proxy Statement for the meeting.
The undersigned acknowledges receipt of the Notice of the Annual Meeting,
the Proxy Statement, the 2002 Annual Report to Shareholders and the Form 10-K
and hereby revokes any other proxy heretofore executed by the undersigned for
such meeting.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted FOR all nominees for director and on such other matters as may properly
come before the meeting or any adjournment thereof in accordance with the best
judgment of the proxies named herein.
/\ FOLD AND DETACH HERE /\
Please mark
your votes as
indicated in [X]
this example
THE MARCUS CORPORATION 2002 ANNUAL MEETING
1. ELECTION OF DIRECTORS:
1.-Diane Marcus Gershowitz 2.-Timothy E. Hoeksema FOR all WITHHOLD
3.-Stephen H. Marcus 4.-Daniel F. McKeithan, Jr. nominees AUTHORITY
5.-Bruce J. Olson 6.-Allan H. Selig listed to to vote
7.-Philip L. Milstein 8.-Bronson J. Haase the left for all
9.-James D. Ericson (except as nominees
specified listed to
below). the left.
[ ] [ ]
(Instructions: To withhold authority to vote
for any indicated nominee, write the number(s) Check appropriate box
of the nominee(s) on the line below.) Indicate changes below:
______________________________________________ Address Change [ ]
Name Change [ ]
2. Upon such other business as may properly come
before the annual meeting or any adjournment
thereof in accordance with the best judgment of
such proxies.
Dated: , 2002
-----------------------
-----------------------------------
Signature
-----------------------------------
Signature if held jointly
Please sign exactly as your name
appears on your stock certificate.
Joint owners should each sign
personally. A corporation should
sign in full corporate name by a
duly authorized officer. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such.
/\ FOLD AND DETACH HERE /\
THE MARCUS CORPORATION
PROXY FOR HOLDERS OF COMMON STOCK
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE 2002 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
OCTOBER 10, 2002
The undersigned hereby constitutes and appoints STEPHEN H. MARCUS and
THOMAS F. KISSINGER, and each of them, with the power of substitution, as
proxies of the undersigned, to vote any and all shares of Common Stock of THE
MARCUS CORPORATION which the undersigned is entitled to vote at the 2002 Annual
Meeting of Shareholders to be held at 10:00 A.M., local time, October 10, 2002,
at the Pfister Hotel, 424 East Wisconsin Avenue, Milwaukee, Wisconsin, and at
any adjournment thereof, upon such business as may properly come before the
meeting, including the items listed on the reverse, as more completely described
in the Proxy Statement for the meeting.
The undersigned acknowledges receipt of the Notice of the Annual Meeting,
the Proxy Statement, the 2002 Annual Report to Shareholders and the Form 10-K
and hereby revokes any other proxy heretofore executed by the undersigned for
such meeting.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted FOR all nominees for director and on such other matters as may properly
come before the meeting or any adjournment thereof in accordance with the best
judgment of the proxies named herein.
/\ FOLD AND DETACH HERE /\
Please mark
your votes as
indicated in [X]
this example
THE MARCUS CORPORATION 2002 ANNUAL MEETING
1. ELECTION OF DIRECTORS:
1.-Diane Marcus Gershowitz 2.-Timothy E. Hoeksema FOR all WITHHOLD
3.-Stephen H. Marcus 4.-Daniel F. McKeithan, Jr. nominees AUTHORITY
5.-Bruce J. Olson 6.-Allan H. Selig listed to to vote
7.-Philip L. Milstein 8.-Bronson J. Haase the left for all
9.-James D. Ericson (except as nominees
specified listed to
below). the left.
[ ] [ ]
(Instructions: To withhold authority to vote
for any indicated nominee, write the number(s) Check appropriate box
of the nominee(s) on the line below.) Indicate changes below:
______________________________________________ Address Change [ ]
Name Change [ ]
2. Upon such other business as may properly come
before the annual meeting or any adjournment
thereof in accordance with the best judgment of
such proxies.
Dated: , 2002
-----------------------
-----------------------------------
Signature
-----------------------------------
Signature if held jointly
Please sign exactly as your name
appears on your stock certificate.
Joint owners should each sign
personally. A corporation should
sign in full corporate name by a
duly authorized officer. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such.
/\ FOLD AND DETACH HERE /\