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 Section 240.14a-11(c) or Section
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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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
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THE MARCUS CORPORATION
[LOGO]
250 East Wisconsin Avenue, Suite 1700
Milwaukee, Wisconsin 53202-4220
__________________________
NOTICE OF 1996 ANNUAL MEETING OF SHAREHOLDERS
To Be Held September 26, 1996
__________________________
To the Shareholders of
THE MARCUS CORPORATION:
NOTICE IS HEREBY GIVEN THAT the 1996 Annual Meeting of
Shareholders of THE MARCUS CORPORATION ("Company") will be held on
Thursday, September 26, 1996 at 10:00 A.M., local time, at the new
Hollywood Cinema, 3916 West College Avenue, Appleton, Wisconsin, for the
following purposes:
1. To elect nine directors for the ensuing year.
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 the Common Stock and Class B Common
Stock as of the close of business on August 9, 1996 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 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 and will vote together in each instance as a
single class.
Shareholders are cordially invited to attend the meeting in
person and a map has been provided to assist you in locating the Hollywood
Cinema in Appleton. As described on the following page, the Company will
also make available a bus from Milwaukee to the Hollywood Cinema in
Appleton to attend the meeting and has made other special arrangements at
the Hollywood Cinema to encourage your attendance in person. 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 return envelope the accompanying proxy which is
being solicited by the Board of Directors. You may revoke your proxy at
any time before it is actually voted by notice in writing to the
undersigned or by voting in person at the meeting.
Accompanying this Notice of 1996 Annual Meeting of Shareholders
is a form of proxy and Proxy Statement.
On Behalf of the Board of Directors
[Printer to insert new signature which
accompanies this document]
Thomas F. Kissinger
General Counsel and Secretary
Milwaukee, Wisconsin
August 30, 1996
Special Shareholder Arrangements for the 1996 Annual Meeting in Appleton
Special arrangements have been made for shareholders at Marcus Corporation
properties in conjunction with the 1996 annual meeting on Thursday,
September 26, 1996, at the Hollywood Cinema, 3916 West College Avenue,
Appleton, Wisconsin.
Complimentary Lunch
Following the annual meeting, shareholders are invited to enjoy a
complimentary buffet lunch of menu items from "Funset Cafe" at the new
Funset Boulevard family entertainment center adjacent to the Hollywood
Cinema movie theatre.
Lodging Discounts
Shareholders who stay overnight on Wednesday, September 25, or Thursday,
September 26, will receive a 25% discount at the Company's Budgetel Inn
and Woodfield Suites located just a short distance from the movie theatre.
Shareholders should make their reservations directly with Budgetel Inn at
(414) 734-6070 or Woodfield Suites (414) 734-7777. Indicate you are a
Marcus Corporation shareholder when making your reservation. You must
present your shareholder identification card at check-in.
Bus from Milwaukee to Appleton
A courtesy bus will be available from the Pfister Hotel, 424 East
Wisconsin Avenue, in Milwaukee to the annual meeting in Appleton on
September 26. The bus will depart from the Pfister Hotel's Jefferson
Street entrance at 7:45 a.m. and will leave Appleton after lunch at
approximately 2:00 p.m. for the return trip to Milwaukee. To reserve a
seat on the bus, please call Barbara Mangold at (414) 274-0531.
We hope to see you at the annual meeting!
THE MARCUS CORPORATION
[LOGO]
__________________________
PROXY STATEMENT
__________________________
For
1996 Annual Meeting of Shareholders
To be Held September 26, 1996
This Proxy Statement and accompanying form of proxy are being
furnished to the shareholders of THE MARCUS CORPORATION ("Company")
beginning on or about August 30, 1996 in connection with the solicitation
of proxies by the Board of Directors of the Company ("Board") for use at
the Company's 1996 Annual Meeting of Shareholders to be held on Thursday,
September 26, 1996 at 10:00 A.M., local time, at the new Hollywood Cinema,
3916 West College Avenue, Appleton, Wisconsin, and at any adjournment
thereof (collectively, "Meeting"), for the purposes set forth in the
attached Notice of 1996 Annual Meeting of Shareholders and as described
herein.
Execution of a proxy given in response to this solicitation will
not affect a shareholder's right to attend the Meeting and to vote in
person. Presence at the Meeting of a shareholder who has signed a proxy
does not in itself revoke a proxy. Any shareholder giving a proxy may
revoke it at any time before it is exercised by giving notice thereof to
the Company's Secretary in writing, by notifying the appropriate personnel
at the Meeting in writing or by voting in person at the Meeting. Unless
so revoked, the shares represented by proxies received by the Board will
be voted at the Meeting in accordance with the instructions thereon. If
no instructions are specified on the proxy, the votes represented thereby
will be voted (i) FOR the Board's nine director nominees set forth below
and (ii) on such other shareholder matters which 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 Common Stock ("Common
Shares") and Class B Common Stock ("Class B Shares") as of the close of
business on August 9, 1996 ("Record Date") are entitled to vote at the
Meeting. As of the Record Date, the Company had outstanding and entitled
to vote 10,816,145 Common Shares and 8,856,405 Class B Shares. 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
Common Shares and the holders of 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 99,380,195 consisting
of 10,816,145 votes represented by outstanding Common Shares and
88,564,050 votes represented by outstanding Class B Shares.
__________
* Note to Printer: This is Page 1 (but do not mark as such).
ELECTION OF DIRECTORS
At the Meeting, the shareholders will elect nine directors of
the Company, constituting the entire Board, to hold office until the
Company's next annual meeting of shareholders and until their successors
are duly qualified and elected. If, prior to the Meeting, any of the
Board's nominees should for any reason become unable to serve as a
director, the votes represented by proxies granting authority to vote for
all of the nominees named below or which do not contain any instructions
will be voted for another replacement nominee selected by the Board, if
any. Under Wisconsin law, directors are elected by a plurality of the
votes cast by the shares entitled to vote in the election, assuming a
quorum is present. For this purpose, "plurality" means that the
individuals receiving the largest number of votes are elected as
directors, up to the maximum number of directors to be chosen at the
election. Therefore, any shares which 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 the nominees are shareholder-elected directors of the
Company and have served continuously as directors since the indicated date
of their election, except for Bruce J. Olson who was appointed as a
director of the Company by the Board effective April 1, 1996. The names
of the nominees, together with certain information about each of them as
of the Record Date, are set forth below. On December 14, 1995, Ben
Marcus, the founder of the Company and retired Chairman of the Board,
retired from the Board and was appointed a director emeritus.
Director
Name Current Principal Occupation Age Since
[*] Stephen H. Chairman of the Board, President 61 1969
Marcus and Chief Executive Officer of the
Company (1)(2)(3)
[*] Diane Marcus Real estate management and 57 1985
Gershowitz investments (1)(3)
[*] George R. Retired Vice Chairman of Banc One 72 1981
Slater Corporation (bank holding company)
and retired Chairman of the Board
and Chief Executive Officer of Banc
One Wisconsin Corporation
(Wisconsin bank holding company)
[*] Lee Sherman President of Lee Sherman Dreyfus, 70 1983
Dreyfus Inc. (public communications
company), retired President and
Chief Operating Officer of Sentry
Insurance (a mutual insurance
company) and former Governor of the
State of Wisconsin(4)
[*] Daniel F. President and Chief Executive 60 1985
McKeithan, Jr. Officer of Tamarack Petroleum
(operator of oil and gas wells) and
President and Chief Executive
Officer of Active Investor
Management, Inc. (operator of oil
and gas wells)(5)
[*] John L. Murray Retired Chairman of the Board and 69 1987
Chief Executive Officer of
Universal Foods Corporation
(international manufacturer and
marketer of value-added food
products)(6)
[*] Allan H. Selig President and Chief Executive 61 1995
Officer of the Milwaukee Brewers
Baseball Club, Acting Commissioner
of Major League Baseball and
President and Chief Executive
Officer of Selig Executive Leasing
Co., Inc.(7)
[*] Timothy E. President of Midwest Express 49 1995
Hoeksema Airlines, Inc.
[*] Bruce J. Olson Group Vice President of the Company 46 1996
(2)
_____________
* Printer Note: Director's pictures are to be included on left margin
next to each respective name. Note: Bruce Olson is new this year;
Steve Marcus will have a new picture.
_________________
(1) Diane Marcus Gershowitz and Stephen H. Marcus are brother and sister.
(2) Since the Company operates as a holding company through subsidiary
corporations, Stephen H. Marcus and Bruce J. Olson are also officers
of certain of the Company's principal operating 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) Lee Sherman Dreyfus is a director of Associated Bank-Menomonee Falls,
a banking subsidiary of Associated Banc-Corp.
(5) Daniel F. McKeithan, Jr. is a director of Firstar Corporation,
Wisconsin Gas Company and WICOR, Inc. and is a trustee of The
Northwestern Mutual Life Insurance Company ("NML"). NML is also one
of the Company's principal lenders.
(6) John L. Murray is a director of Briggs & Stratton Corporation and
Twin Disc, Inc.
(7) Allan H. Selig is a director of Oil-Dri Corporation of America and
Robert W. Baird & Co., Incorporated.
The Board has an Audit Committee whose principal function is
to recommend annually a firm of independent certified public accountants
to serve as the Company's auditor, to meet with and review reports of the
Company's auditor and to recommend to the Board such actions within the
scope of its authority as it deems appropriate. The Audit Committee
currently consists entirely of independent directors, including Daniel F.
McKeithan, Jr. (Chairman), Lee Sherman Dreyfus and Timothy E. Hoeksema.
The Audit Committee met twice in fiscal 1996.
The Board has a Compensation and Nominating Committee whose
principal function is to recommend for approval to the Board the
compensation, bonuses and benefits of officers and other key employees of
the Company and its subsidiaries and to administer the Company's 1987
Stock Option Plan and 1995 Equity Incentive Plan. See "Executive
Compensation -- Stock Options." The Compensation and Nominating Committee
is also vested with authority to consider and nominate future directors of
the Company. Shareholders entitled to vote at the Meeting who wish to
propose director nominees for consideration at the Meeting may do so under
the Company's By-laws only by giving written notice of an intent to make
such a nomination to the Secretary of the Company not less than 15 days in
advance of the Meeting. Such notice must specify, among other things, the
nominee's name, biographical data and qualifications. Effective
immediately prior to the Company's 1997 annual meeting of shareholders,
the Company's By-laws provide that a non-employee director may not stand
for re-election if he or she has then attained the age of 70. This policy
is expected to result in the retirement from the Board of Messrs. Slater,
Dreyfus and Murray immediately prior to the Company's 1997 annual meeting
of shareholders. The Compensation and Nominating Committee currently
consists of entirely independent directors, including John L. Murray
(Chairman), Daniel F. McKeithan, Jr. and Allan H. Selig. The Compensation
and Nominating Committee met three times in fiscal 1996. See "Executive
Compensation -- Report on Executive Compensation."
During the Company's 1996 fiscal year, four meetings of the
Board were held. No director was absent from any meeting of the Board and
committees thereof on which he or she served held during fiscal 1996.
STOCK OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth information as of the Record Date
as to the Common Shares and any Class B Shares beneficially owned by (i)
each director and each executive officer named in the Summary Compensation
Table set forth below under "Executive Compensation -- Summary
Compensation;" (ii) all current directors and executive officers of the
Company as a group; and (iii) all other persons or entities known by the
Company to be the beneficial owner of more than 5% of either class of the
Company's 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. All of the share amounts set forth below have been
adjusted to reflect the Company's three-for-two stock split effected on
November 14, 1995 in the form of a 50% dividend on both of its Common
Shares and 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 Certain Executive Officers
Stephen H. Marcus(2)
Common Shares 1,576(3) 49,516 51,092(3)
* 31.9%
Class B Shares 1,844,289 1,322,760 3,167,049
(35.8%)
Diane Marcus Gershowitz(2)
Common Shares 2,750(4) 100 2,850(4)
* 24.7%
Class B Shares 1,525,312 932,416 2,457,728
(27.8%)
George R. Slater
Common Shares 3,500(4) -0- 3,500(4)
* *
Lee Sherman Dreyfus
Common Shares 7,250(4) -0- 7,250(4)
* *
Daniel F. McKeithan, Jr.
Common Shares 4,250(4) -0- 4,250(4)
* *
John L. Murray
Common Shares 5,000(4) -0- 5,000(4)
* *
Allan H. Selig
Common Shares 2,900(4) -0- 2,900(4)
* *
Timothy E. Hoeksema
Common Shares 2,750(4) -0- 2,750(4)
* *
Bruce J. Olson
Common Shares 41,883(3)(5) 21,840 63,723(3)(5)
* *
Kenneth A. MacKenzie
Common Shares 19,185(3)(5) 600 19,785(3)(5)
* *
H. Fred Delmenhorst
Common Shares 13,972(3)(5) 3,363 17,335(3)(5)
* *
Thomas F. Kissinger
Common Shares 4,800(5) -0- 4,800(5)
* *
Douglas A. Neis
Common Shares 7,939(3)(5) 4,278 12,217(3)(5)
* *
All directors and executive
officers as a group
(13 persons)(6)
Common Shares(7) 117,755(3) 79,697 197,452(3)
(1.8%) 49.6%
Class B Shares 3,369,601 1,536,118 4,905,719
(55.4%)
Other Five Percent Shareholders
Ben Marcus(2)
Common Shares 915 -0- 915
* 33.6%
Class B Shares -0- 3,340,581 3,340,581
(37.7%)
Neuberger & Berman(8)
Common Shares(9) 1,032,010 -0- 1,032,010 *
(9.5%)
<FN>
__________________
* Less than 1%.
(1) There are included 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. The number of Class B Shares (included in the beneficial ownership
figures detailed above) set forth after each of the following individuals has also been included in the beneficial
ownership of at least one other director: Stephen H. Marcus (719,058), Diane Marcus Gershowitz (719,058) and Ben
Marcus (299,547). 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, in order to avoid overstatement of the aggregate beneficial ownership of
both classes of the Company's outstanding capital stock, the Common Shares listed in the table do not include Common
Shares which 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 which may be issued upon conversion of outstanding Class B Shares.
(2) The address of Stephen H. Marcus, Diane Marcus Gershowitz and Ben Marcus is 250 East Wisconsin Avenue, Suite 1700,
Milwaukee, Wisconsin 53202-4220.
(3) Includes 1,426, 1,249, 685, 665 and 364 Common Shares held for the respective accounts of Stephen H. Marcus, Bruce
J. Olson, Kenneth A. MacKenzie, H. Fred Delmenhorst and Douglas A. Neis and all directors and officers as a group
in the Company's Pension Plus Plan as of December 31, 1995, the latest practicable date for which such data is
available. See "Executive Compensation -- Summary Compensation Information."
(4) Includes 2,750 Common Shares subject to acquisition by each of the listed nonemployee directors (Diane Marcus
Gershowitz, George R. Slater, Lee Sherman Dreyfus, Daniel F. McKeithan, Jr., John L. Murray, Allan H. Selig, and
Timothy E. Hoeksema) pursuant to the exercise of vested stock options held on the Record Date pursuant to the 1994
Nonemployee Director Stock Option Plan. See "Director Compensation."
(5) Includes 17,250, 7,053, 7,575, 4,650 and 7,575 Common Shares subject to acquisition by Bruce J. Olson, Kenneth A.
MacKenzie, 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 the 1987 Stock Option Plan. See "Executive Compensation
-- Stock Options."
(6) In determining the aggregate beneficial ownership of Common Shares and Class B Shares for all directors and executive
officers as a group, shares which are beneficially owned by more than one director or officer have been counted only
once to avoid overstatement. See footnote (1).
(7) Includes 63,353 Common Shares subject to acquisition pursuant to the exercise of vested stock options held by executive
officers and nonemployee directors of the Company on the Record Date pursuant to the 1987 Stock Option Plan and the
1994 Nonemployee Director Stock Option Plan. See "Executive Compensation--Stock Options."
(8) The address of Neuberger & Berman ("N&B") is 605 Third Avenue, New York, New York 10158-3698.
(9) Other than share ownership percentage information, the information set forth is as of February 12, 1996, as reported
by N&B in its amended Schedule 13G filed with the SEC and the Company. According to such Schedule 13G, partners of
N&B own 57,750 shares and N&B disclaims beneficial ownership of these shares which were purchased with the personal
funds of the N&B partners.
EXECUTIVE COMPENSATION
Report on Executive Compensation
The Company strives to provide fair and competitive compensation
which 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. One of the Company's guiding
philosophies is to encourage its executives and other employees to take
appropriate market responsive risk-taking actions which facilitate the
growth and success of the Company. The Company's compensation policies
attempt to encourage the continuation of this entrepreneurial spirit.
The Compensation and Nominating Committee of the Board
("Committee") is responsible for evaluating and determining the
compensation of the Company's executive officers, including the Company's
Chief Executive Officer Stephen H. Marcus, in accordance with the
foregoing philosophies and policies. The Committee is composed entirely
of independent, nonemployee directors. Executive officer compensation
consists of base salary, annual bonus payments, stock option grants and
other benefits under the Company's several employee benefit plans.
Each executive officer's base salary has been established based
on the level of responsibilities delegated to the executive and the
relationship of such responsibilities to those of other Company executive
officers. In evaluating and adjusting base salaries of executives (other
than Mr. Marcus) from year-to-year, the Committee acts on the
recommendations of Mr. Marcus, who in making his recommendations takes
into account (i) the financial performance of the Company as a whole and
on a divisional basis, when appropriate, for the fiscal year then ended,
compared to its respective historical and anticipated performance; (ii)
general economic conditions (including inflationary factors) and the
impact such conditions had on the industry segments in which the Company
operates; (iii) each executive officer's past, and anticipated future,
contributions to the Company's performance; (iv) each executive officer's
existing base salary compared to the range of the base salaries of
similarly situated executives; (v) any new responsibilities delegated, or
to be delegated, to such officer; and (vi) the extent of participation of
the executive in any significant corporate achievements over the prior
fiscal year. In evaluating and adjusting Mr. Marcus' base salary, the
Committee subjectively considers the same factors cited above, as well as
the comparative salaries and total compensation packages of other chief
executive officers, with particular reference to local market
circumstances. In determining the adjustment to Mr. Marcus' base salary
for fiscal 1997, the Committee specifically took into account the
Company's revenue and earnings performance for fiscal 1996 and the
Company's long-term record of financial success.
Bonus awards attributable to each fiscal year are granted by the
Committee to the named executive officers, including Mr. Marcus,
subsequent to the fiscal year-end. Fiscal 1996 bonus awards for the named
executive officers who have no direct operational responsibilities were
based on the recommendations of Mr. Marcus, who made his recommendations
based on the Company's overall financial performance for the year then
ended and such officer's individual contributions and achievements over
fiscal 1996, particularly as such contributions and achievements related
to advancing the Company's entrepreneurial philosophy. Specific corporate
performance factors considered in making fiscal 1996 bonus determinations
for such executives were the contribution that each executive made to his
specific functional area and overall Company performance, the Company's
14.1% increase in comparable earnings and 13.0% increase in comparable
earnings per share, all compared to fiscal 1995. The fiscal 1996 bonus
award for Bruce J. Olson, who has direct managerial responsibilities for
two operating divisions of the Company, was determined based on the
financial and operating performance of those divisions, the favorable
coordination and execution of the sale of the Company's Applebee's
restaurants, together with the over-all financial performance of the
Company in fiscal 1996. Mr. Marcus received a fiscal 1996 bonus payment
based on a pre-established formula which provides for his receipt of a
performance bonus equal to three-fourths of one percent of the Company's
pre-tax earnings for the fiscal year.
Stock options are granted each year by the Committee to selected
executive officers as part of such officers' compensation package.
Options granted by the Committee have a per share exercise price equal to
100% of the fair market value of the Common Shares on the date of grant.
Therefore, since the economic value of each option is directly dependent
upon future increases in the value of the Common Shares, the Committee
believes option grants help to better align the interests of option
recipients with the economic interests of the Company's shareholders. The
Committee believes stock option grants provide a long-term incentive for
option recipients to improve the Company's financial performance and, in
turn, its stock price. The Committee has 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 in accordance with the 1995 Equity Incentive Plan. Mr. Marcus is
not eligible to receive option grants under the Company's 1987 Stock
Option Plan or the 1995 Equity Incentive Plan. Since Mr. Marcus and his
family own approximately 41% of the outstanding Common Shares and Class B
Shares, his economic interests are directly linked to the price
performance of the Company's Common Shares. Therefore, at the time the
Company's 1987 Stock Option Plan and 1995 Equity Incentive Plan was
adopted, it was determined unnecessary to provide Mr. Marcus with the
opportunity to receive stock option grants.
Consistent with the Company's philosophy of encouraging
entrepreneurism throughout the organization, the Committee grants options
annually to a broad number of key employees. Option grants in fiscal 1996
to key employees other than the named executive officers constituted
almost 84% of all non-Board option grants. The size of option grants to
the named executive officers is based on (i) each officer's length of
service and relative responsibilities and contributions to the Company's
performance over the past year; (ii) the officer's anticipated future
contributions to the success of the Company; (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.
The Committee also attempts 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, nonqualified deferred compensation plan, health insurance,
life and disability insurance and other benefits.
As a result of current executive compensation levels, the
Committee does not intend currently to take any action to conform its
compensation plans to comply with the regulations proposed 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.
By the Compensation and Nominating Committee:
John L. Murray, Chairman
Daniel F. McKeithan, Jr.
Allan H. Selig
Summary Compensation Information
The following table sets forth certain information concerning
compensation paid by the Company for the last three fiscal years to the
Company's Chief Executive Officer and the other executive officers of the
Company who earned over $100,000 in salary and bonuses in fiscal 1996.
The persons named in the table below are hereinafter sometimes referred to
as the "named executive officers." All of the shares subject to options
set forth below have been retroactively adjusted to reflect the Company's
three-for-two stock split effected on November 14, 1995 in the form of a
50% dividend on both of its Common Shares and Class B Shares.
Summary Compensation Table
Stock
Annual Compensation Option
Name and Principal Fiscal Grants(4) All Other
Positions Year Salary(1) Bonus(2) Other(3) (shares) Compensation(5)
Stephen H. Marcus 1996 $341,538 $545,568 $ -- N/A $8,934(6)
Chairman of the Board, 1995 $296,154 $313,391 $ 500 N/A $4,856(6)
President and Chief 1994 $275,543 $243,711 $2,250 N/A $4,151(6)
Executive Officer (3)
Bruce J. Olson 1996 $205,962 $258,335 $ -- 7,500 $3,732
Group Vice President 1995 $183,269 $ 97,923 $ -- 7,500 $3,260
1994 $162,661 $103,755 $ -- 15,000 $1,593
Kenneth A. MacKenzie 1996 $114,692 $ 16,000 $ -- 3,000 $2,423
Chief Financial Officer 1995 $105,308 $ 14,000 $ -- 3,000 $2,395
and Treasurer 1994 $ 96,018 $ 12,000 $ -- 6,000 $2,762
H. Fred Delmenhorst 1996 $118,500 $ 16,000 $ -- 3,000 $2,612
Vice President-Human 1995 $106,192 $ 14,000 $ -- 3,000 $2,608
Resources 1994 $ 99,525 $ 12,000 $ -- 6,000 $1,914
Thomas F. Kissinger 1996 $104,538 $ 25,000 $ -- 3,000 $ 949
General Counsel and 1995 $ 90,346 $ 15,000 $ -- 3,000 $ 66
Secretary 1994 $ 66,219 $ 8,000 $ -- 6,750 $ 40
Douglas A. Neis 1996 $ 93,808 $ 45,000 $ -- 3,000 $1,480
Corporate Controller 1995 $ 84,420 $ 10,000 $ -- 3,000 $1,115
1994 $ 79,744 $ 10,000 $ -- 6,000 $ 65
<FN>
_________________
(1) Includes amounts deferred by the Company at the election of the named executive officer under Section 401(k) of the
Internal Revenue Code and the Company's Deferred Compensation Plan and Mr. Marcus' salary amount listed for fiscal
1994 includes $25,000 paid during fiscal 1995. The Company's 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
the employee's annual compensation on a pre-tax basis. The irrevocable election must be made prior to the start of
any calendar year to which it applies and must specify both a benefit payment commencement date beyond the end of
the last such calendar year and the form of payment (i.e., lump sum, periodic installments or monthly annuity).
During the period of deferral, the Company quarterly applies to the deferred amount an earnings credit equal to the
average prime interest rate of a designated Milwaukee bank. The benefits payable under the Deferred Compensation
Plan (i.e., the employee's deferred amounts plus his earnings credits) will be paid out of the Company's general
corporate assets as benefit payments become due after the employee's specified commencement date.
(2) The bonus amounts listed for fiscal 1996 for Messrs. Olson and Neis include a special bonus of $135,000 and $30,000,
respectively, in each case as a result of such officer's integral involvement in consummation of the successful sale
of the Company's Applebee's restaurants and related rights. Bonus amounts listed relate to the fiscal year to which
such bonuses are attributable.
(3) Includes for Mr. Marcus the amount of directors' fees he earned in fiscal 1995 and 1994. Mr. Marcus, as an
executive officer of the Company, is no longer entitled to receive director fees. See "Director Compensation"
below. The value of all perquisites and other personal benefits provided to each named executive officer by or on
behalf of the Company 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 respective named
executive officer.
(4) Fiscal 1994, 1995 and 1996 options were granted at 100% of fair market value on the date of grant under the
Company's 1987 Stock Option Plan. See footnote (1) to the table set forth under "Stock Options -- Option Grants in
1996 Fiscal Year" below for additional information.
(5) Includes the Company's contributions on behalf of each named executive officer to its defined contribution Pension
Plus Plan and the dollar value of imputed life insurance premiums paid by, or on behalf of, the Company during the
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 eligible employees
of the Company and its 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 under the Pension Plus Plan. A participating employee may elect to make pre-tax
deposits of up to 14% of the employee's 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 the Board each year. For
purposes of the profit performance contribution, the Company and its subsidiaries have been divided into eight
profit sharing groups, and the profit performance contribution for the participating employees employed by a
particular profit sharing group is dependent upon the Company's overall operations meeting profitability targets,
the Company 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. The 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 also 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 which are prescribed by applicable federal law.
The Company also provides all named executive officers with long-term disability protection.
(6) In each of fiscal 1996, 1995 and 1994, the Company paid approximately $349,000 of premiums on three split-dollar
insurance policies on the life of Mr. Marcus. The foregoing data is excluded from the table above because upon
surrender of these policies to the Company or the death of Mr. Marcus, these premium payments will be reimbursed in
full to the Company. Based on an assumed retirement age of 65, the present value of the excess cash surrender value
of all of such policies over the premium payments is estimated to be approximately $117,000.
Stock Options
The Company has a 1987 Stock Option Plan ("1987 Plan") pursuant to
which options to acquire Common Shares may be granted until June 1997 by
the Committee to officers and other key employees of the Company and its
subsidiaries, including executive officers and directors. However, Ben
Marcus, Stephen H. Marcus, Diane Marcus Gershowitz and any other person
who owns, directly or indirectly, 5% or more of the Company's voting power
cannot receive options under the 1987 Plan.
The Company also has a 1995 Equity Incentive Plan ("1995 Plan")
pursuant to which options to acquire Common Shares may be granted until
June 2005 by the Committee to officers and other key employees of the
Company and its subsidiaries, including executive officers. However, Ben
Marcus, Stephen H. Marcus, Diane Marcus Gershowitz and any other person
who owns, directly or indirectly, 5% or more of the Company's voting power
cannot receive options under the 1995 Plan.
The following table sets forth information concerning the grant of
stock options under the 1987 Plan during fiscal 1996 to the named
executive officers. The share amounts for options granted during the 1996
fiscal year set forth below have been adjusted to reflect the Company's
three-for-two stock split effected on November 14, 1995 in the form of a
50% dividend.
Option Grants in 1996 Fiscal Year
Percentage of
Common Shares Total Options Potential Realizable Value at
Underlying Granted to All Assumed Annual Rates of Stock Price
Options Employees in 1996 Exercise Price(2) Expiration Appreciation for Option Term(3)
Name Granted(1) Fiscal Year (per share) Date 5% 10%
Stephen H. Marcus . N/A N/A N/A N/A N/A N/A
Bruce J. Olson . . 7,500 6.2% $19.50 6/21/05 $91,976 $233,085
Kenneth A. MacKenzie 3,000 2.5% $19.50 6/21/05 $36,790 $ 93,234
H. Fred Delmenhorst 3,000 2.5% $19.50 6/21/05 $36,790 $ 93,234
Thomas F. Kissinger 3,000 2.5% $19.50 6/21/05 $36,790 $ 93,234
Douglas A. Neis . . 3,000 2.5% $19.50 6/21/05 $36,790 $ 93,234
<FN>
__________________
(1) Options granted under the 1987 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 are incentive stock options under the Internal Revenue Code and were granted on June 22, 1995. The
exercise price of each option granted was equal to 100% of the fair market value of the Common Shares on the date of
grant, as determined by the Committee. Options granted under the 1987 Plan vest and are exercisable with respect to
40% of the subject shares after two years from the grant date, 60% after three years, 80% after four years and 100%
after four years and six months, but not after the ten-year option period.
(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 the columns represent the difference between the stated option
exercise price and the market value of the Common Shares based on certain assumed rates of stock price appreciation
and assuming that the options are exercised on their stated expiration date; the potential realizable values set
forth do not take into account applicable tax and expense payments which 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 the Company's estimate or projection of the
future price of the Common Shares on any date. There can be no assurances that the stock price appreciation rates
for the Common Shares assumed for purposes of this table will actually be achieved.
The following table sets forth certain information with respect to the
named executive officers concerning their stock options exercised in
fiscal 1996 and unexercised stock options held as of the end of fiscal
1996.
Aggregated Option Exercises and Fiscal 1996 Year-End Value Table
Number of Common Shares
Underlying Unexercised
Number of Options at Value of Unexercised
Common Shares End of Fiscal 1996(2) In-the-Money Options at
Acquired Upon Value Exercisable(3)/ End of Fiscal 1996(4)
Name Exercise Received(1) Unexercisable(3) Exercisable/Unexercisable
Stephen H. Marcus . . N/A N/A N/A N/A
Bruce J. Olson . . . 11,250* $204,806 12,750 / 28,500 $161,813 / $261,000
Kenneth A. MacKenzie 1,080* $16,470 4,905 / 11,850 $ 61,654 / $111,488
870* $8,628
H. Fred Delmenhorst . 675* $9,900 5,775 / 11,850 $ 75,356 / $111,488
Thomas F. Kissinger . -- -- 2,700 / 10,050 $ 27,176 / $ 83,513
Douglas A. Neis . . . -- -- 5,775 / 11,850 $ 75,356 / $111,488
<FN>
________________
* The options exercised in fiscal 1996 set forth above have been retroactively adjusted to reflect the Company's
three-for-two stock split effected on November 14, 1995 in the form of a 50% dividend on its Common Shares.
(1) Reflects the dollar value difference between the closing sale price of the Common Shares on the New York Stock
Exchange on the date of exercise, less the stock option's exercise price, multiplied by the number of Common Shares
acquired upon exercise.
(2) See vesting schedule of options set forth in footnote (1) under the Option Grants in 1996 Fiscal Year table above.
(3) Not reflected herein are 11,850 Common Shares subject to options which have vested and become exercisable after the
fiscal year end (Olson-4,500, MacKenzie-1,800, Delmenhorst-1,800, Kissinger-1,950 and Neis-1,800).
(4) The dollar values were calculated by determining the difference between the fair market value of the underlying
Common Shares and the various applicable exercise prices of the named executive officers' outstanding options at the
end of fiscal 1996. The closing sale price of the Common Shares on the New York Stock Exchange on May 30, 1996 was
$25.75 per share.
Pension Plan
The Company has a nonqualified defined benefit pension plan
("Supplemental Plan") for the eligible employees of the Company and its
subsidiaries with annual compensation in excess of a specified level
(e.g., $66,000 in 1996), including named executive officers of the
Company. The Supplemental Plan is a defined benefit retirement income
program which provides benefits based upon the employee's final five-year
average compensation. The amounts accrued for named executive officers
under the Supplemental Plan cannot be readily ascertained and are,
therefore, not included in the Summary Compensation Table above. In
calculating employee compensation for purposes of determining its
contribution to the Supplemental Plan, the Company uses a participating
employee's total direct compensation in determining its annual benefits
(which, for the named executive officers, would be comprised of the salary
and bonus amounts listed in the Summary Compensation Table above),
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 also reduces its benefits by the benefits
attributable to employer contributions which the participating employee
received under other Company-sponsored plans, such as the Pension Plus
Plan and the Company's former qualified pension plans. An employee
participating in the Supplemental Plan will be 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 which are payable under other Company-sponsored plans. For
an employee entitled to the highest level of Social Security benefits who
retired at age 65 during fiscal year 1996, the reduction in annual
Supplemental Plan benefits would have been approximately $7,488.
Estimated Annual Pension Plan Benefits
for Representative Years of Service
Final Five-Year
Average
Compensation 15 20 25 30 35
$ 60,000 $ 15,000 $ 20,000 $ 25,000 $ 30,000 $ 30,000
120,000 30,000 40,000 50,000 60,000 60,000
180,000 45,000 60,000 75,000 90,000 90,000
240,000 60,000 80,000 100,000 120,000 120,000
400,000 100,000 133,000 167,000 200,000 200,000
600,000 150,000 200,000 250,000 300,000 300,000
800,000 200,000 267,000 333,000 400,000 400,000
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 10 years of service or
qualifying for normal, early or disability retirement. Benefits payable
under the Supplemental Plan will be paid out of the Company's general
corporate assets as benefit payments become due after retirement or other
termination. At the end of fiscal 1996, Stephen H. Marcus, Bruce J.
Olson, Kenneth A. MacKenzie, H. Fred Delmenhorst, Thomas F. Kissinger and
Douglas A. Neis had 35, 22, 17, 12, 3 and 10 years, respectively, of
credited years of service under the Supplemental Plan.
Director and Director Emeritus Compensation
Under the Company's standard director compensation policy, each
nonemployee director receives an annual retainer fee of $10,000, together
with $1,750 for each meeting of the Board and $350 for each committee
meeting thereof (or $500 per committee meeting, if that person serves as
the committee's chairman), which he or she attends. In addition, under
the 1994 Nonemployee Director Stock Option Plan ("Director Plan") adopted
at the Company's 1994 annual meeting, all then serving nonemployee
directors were automatically granted stock options to purchase Common
Shares. Upon their appointment to the Board in March 1995, each of
Messrs. Selig and Hoeksema were also automatically granted stock options
under the Director Plan. Under the Director Plan, each nonemployee
director received his or her annual automatic option grant to purchase 500
shares of Common Stock on May 30, 1996 at an exercise price of $25.75 per
share. The options have a term of ten years and were fully vested and
exercisable immediately after grant.
Ben Marcus, the founder of the Company in 1935, retired from his
position as the Company's Chairman of the Board in December 1991. In
December 1995, Ben Marcus retired from the Board and was appointed a
director emeritus. Mr. Marcus also continues to serve the Company as a
nonofficer employee. The Committee has adopted a compensation policy
applicable to Ben Marcus that attempts to recompense him for his many
years of service and dedication to the founding, development and growth of
the Company. To help ensure Ben Marcus' continued availability to consult
with officers and employees of the Company, and to recognize his
contributions to the founding and success of the Company, Mr. Marcus is
entitled to receive for the remainder of his life (and thereafter his wife
will be entitled to receive for the remainder of her life) a consulting
fee partially linked to a percentage of the Company's pre-tax and pre-
corporate bonus earnings. Mr. Marcus is also entitled to receive
continued salary payments as an employee of the Company. In fiscal 1996,
Ben Marcus earned total cash compensation of $365,250 from the Company.
STOCK PERFORMANCE INFORMATION
Set forth below is a line graph comparing the annual percentage
change during the Company's last five fiscal years in the Company's
cumulative total shareholder return (stock price appreciation on a
dividend reinvested basis) on the Common Shares, compared to the
cumulative total return of companies included within the S&P 500 Composite
Index and to a composite peer group index selected in good faith by the
Company. The composite peer group index is comprised of the Standard &
Poor's Hotel/Motel Index (weighted 66%), Standard & Poor's Restaurants
Index (weighted 10%) and a Company-selected theatre index (weighted 24%)
which includes Carmike Cinemas, Inc., Cineplex Odeon Corp. and AMC
Entertainment, Inc. The indices within the composite industry peer group
index have been weighted to approximate the relative revenue contributions
of each of the Company's respective business segments (counting the motel
and hotel/resort segments as one segment) to the Company's total revenues
in fiscal 1996. The shareholder returns of the companies included in the
theatre index have been weighted based on each such company's relative
market capitalization as of the beginning of the presented periods.
Comparison of Five-Year Total Returns
(on a dividend reinvested basis)
[Stock Performance Graph]
5/31/91 5/31/92 5/31/93 5/31/94 5/31/95 5/31/96
The Marcus $100 $108 $216 $253 $270 $374
Corporation
S&P 500 $100 $92 $136 $170 $193 $252
Composite Index
Composite Peer $100 $110 $123 $128 $154 $197
Group Index
CERTAIN TRANSACTIONS
The Company leases, under capital and operating leases, real
estate occupied by three of the Company's facilities under long-term
leases from an entity wholly-owned by Ben Marcus, Stephen H. Marcus, Ida
Lowe and certain spouses, family members and trusts for the benefit of
members of their families ("Affiliated Parties") for an aggregate annual
rental of approximately $224,000 and from Stephen H. Marcus and Diane
Marcus Gershowitz for an aggregate annual rental of approximately $44,000.
The Company has renewal options for all of these leases which, if fully
exercised, would result in these leases expiring at various times between
2005 and 2030. Ida Lowe is the sister of Ben Marcus.
During the 1996 fiscal year, the Company paid approximately
$192,000 of interest to certain entities owned by certain of the
Affiliated Parties on nine debts of the Company owed to such entities.
These debts are due on demand and bear interest at the prime rate (8.25%
at May 30, 1996). The largest aggregate amount outstanding on the above
debts during the Company's 1996 fiscal year was $3,050,000. As of the end
of the 1996 fiscal year, the amount outstanding on the nine debts was
$2,690,000. Payment of both principal and interest on these debts is
current.
As has been the case for prior years, during the 1996 fiscal
year, the Company leased automobiles from Selig Executive Leasing Co.,
Inc. Aggregate lease payments were $358,000 in fiscal 1996. Allan H.
Selig, a director of the Company, is the President, Chief Executive
Officer and sole shareholder of Selig Executive Leasing Co., Inc.
The Company believes that all of the above transactions were
consummated on terms at least as favorable as could have been obtained
from non-affiliated third parties.
OTHER MATTERS
Representatives from Ernst & Young LLP 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.
The Board does not intend to present at the Meeting any matters
for shareholder action other than the matters described in the Notice of
Annual Meeting. The Board knows of no other matters to be brought before
the Meeting which will require the vote of shareholders. For other
business to be properly brought before the Meeting by a shareholder, such
shareholder must give written notice of such proposed business complying
with the Company's By-laws to the Secretary of the Company not less than
15 days in advance of the Meeting. If any other business or matters
should 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.
The Company has filed an Annual Report on Form 10-K with the
Securities and Exchange Commission for its 1996 fiscal year which ended on
May 30, 1996. The Company will provide a copy of such Form 10-K
(excluding exhibits) without charge to each person who is a record or
beneficial owner of Common Shares or Class B Shares on the Record Date and
who submits a written request therefor. 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 copies of the Form 10-K
and any exhibits thereto should be addressed to Thomas F. Kissinger,
General Counsel and Secretary, The Marcus Corporation, 250 East Wisconsin
Avenue, Suite 1700, Milwaukee, Wisconsin 53202-4220.
The cost of soliciting proxies will be paid by the Company. The
Company expects to solicit proxies primarily by mail. Proxies may also be
solicited personally and by telephone by certain officers and regular
employees of the Company. It is not anticipated that anyone will be
specially engaged to solicit proxies or that special compensation will be
paid for that purpose, but the Company reserves the right to do so should
it conclude that such efforts are needed. The Company 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.
A shareholder wishing to include a proposal in the Company's
proxy statement for its 1997 Annual Meeting of Shareholders must forward
the proposal to the Company by May 2, 1997.
On Behalf of the Board of Directors
[Printer to insert new signature]
Thomas F. Kissinger
General Counsel and Secretary
Milwaukee, Wisconsin
August 30, 1996