Important Information for Shareholders Attending
The Marcus Corporation 2013 Annual Meeting

9:00 a.m. Local Time
Thursday, October 17, 2013
InterContinental Milwaukee Hotel
139 East Kilbourn Avenue
Milwaukee, Wisconsin 53202
www.intercontinentalmilwaukee.com

Directions:

From the South

Take I-94/I-43 North toward Milwaukee. Take Exit 73A McKinley Avenue and follow McKinley over the river. Turn right onto Water Street. Take Water Street five blocks south and the hotel will be on the right-hand side, at the corner of Kilbourn and Water.

From the West

Take I-94 East toward Milwaukee to the Van Buren exit (far left lane). Go north on Van Buren to Kilbourn Avenue. Turn left (west) on Kilbourn Avenue. Continue five blocks to the hotel.

From the North

Take I-43 south to Exit 73A McKinley Avenue (merge to the right side of freeway). Take a left at the lights onto McKinley. Take McKinley over the river and turn right onto Water Street. Take Water Street five blocks south and the hotel will be on the right-hand side, at the corner of Water and Kilbourn.

Parking:

The InterContinental Milwaukee is located on the southwest corner of Kilbourn Avenue and Water Street. Entrances to the InterContinental Milwaukee parking ramp are located on Kilbourn Avenue and on Water Street. Parking in the InterContinental Milwaukee parking ramp is on a space available basis. Additional parking facilities are located at 1000 N. Water St., 330 E. Kilbourn Ave. and 330 E. Wells St.

Experience the InterContinental Milwaukee

Shareholders staying for lunch at the InterContinental Milwaukee following the annual meeting on Thursday, October 17 will receive a 20% discount on their bill. Visit Kil@Wat, where you will experience creative cuisine and vibrant décor overlooking the city. Enjoy familiar menu favorites, including products from local markets prepared with an interesting and unique twist. For a glance at our menu, please visit www.kilawatcuisine.com. Tell your server that you are a Marcus Corporation shareholder.

THE MARCUS CORPORATION

 

PROXY STATEMENT

 

For
2013 Annual Meeting of Shareholders
To Be Held Thursday, October 17, 2013

This proxy statement and accompanying form of proxy are being furnished to our shareholders beginning on or about September 6, 2013, in connection with the solicitation of proxies by our board of directors for use at our 2013 Annual Meeting of Shareholders to be held on Thursday, October 17, 2013, at 9:00 a.m., local time, at the InterContinental Milwaukee Hotel, 139 East Kilbourn Avenue, Milwaukee, Wisconsin and at any postponement or adjournment thereof (collectively, “Meeting”), for the purposes set forth in the attached Notice of 2013 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: (1) for the board’s eleven director nominees set forth below; (2) for the approval, by advisory vote, of the compensation of our named executive officers; (3) in favor of the ratification of the selection of Deloitte & Touche LLP as our independent auditor for fiscal 2014; and (4) on such other matters that may properly come before the Meeting and at any postponement or adjournment thereof in accordance with the best judgment of the persons named as proxies.

Only holders of record of shares of our Common Stock (“Common Shares”) and our Class B Common Stock (“Class B Shares”) as of the close of business on August 6, 2013 (“Record Date”) are entitled to vote at the Meeting. As of the Record Date, we had 18,327,771 Common Shares and 8,757,039 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 105,898,161, consisting of 18,327,771 votes represented by outstanding Common Shares and 87,570,390 votes represented by outstanding Class B Shares.

IMPORTANT: If you hold your shares in a brokerage account, you should be aware that your broker is not permitted to vote your shares for the election of directors or the approval, by advisory vote, of the compensation of our named executive officers if you do not instruct your broker how to vote within 10 days prior to the Meeting. Therefore, you must affirmatively take action to vote your shares at the Meeting. If you do not, your shares will not be voted with respect to such matters.

PROPOSAL 1 — ELECTION OF DIRECTORS

At the Meeting, our shareholders will elect all eleven members of our board of directors. The directors elected at the Meeting will hold office until our 2014 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 becomes 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 of directors. 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 all of our director nominees have served continuously as directors since the date indicated below. The names of the director nominees, together with certain information about each of them as of the Record Date, are set forth below. Unless otherwise indicated, all of our director nominees have held the same principal occupation indicated below for at least the last five years.

		Name		Current Principal Occupation		Age		Director     Since
		Stephen H. Marcus		Our chairman of the board. In January 2009, he retired as our chief executive officer, a position he had held since 1988. Mr. Marcus’ long-time service as our chief executive officer and chairman of the board has led to our conclusion that he should serve as a director of the Company, including as our chairman of the board.(1)(3)		78		1969
		Gregory S. Marcus		Our chief executive officer since January 2009 and our president since January 2008. Prior thereto, he was our senior vice president — corporate development. Mr. Marcus’ experience with our Company since 1999 in various positions, including his current role as our chief executive officer, has led to our conclusion that he should serve as a director of the Company.(1)(2)(3)		48		2005
		Diane Marcus Gershowitz		Real estate management and investments. Ms. Gershowitz’s long-standing service on our board and her expertise in real estate matters has led to our conclusion that she should serve as a director of the Company.(1)(3)		74		1985

		Name		Current Principal Occupation		Age		Director     Since
		Bronson J. Haase		Retired president of Pabst Farms Equity Ventures LLC (real estate development organization); retired president and chief executive officer of Wisconsin Gas Company (gas utility) and vice president of WICOR, Inc. (utility holding company); and former president and chief executive officer of Ameritech Wisconsin (telecommunications company). Mr. Haase’s long-standing tenure on our board, his experience in real estate development matters and his leadership of public utility and telecommunication companies has led to our conclusion that he should serve as a director of the Company.		69		1998
		James D. Ericson		Retired president, chief executive officer and chairman of the board of trustees of The Northwestern Mutual Life Insurance Company (life insurance company). Mr. Ericson’s long-standing tenure on our board and his experience as the chief executive officer at one of the country’s largest and most recognized mutual life insurance companies has led to our conclusion that he should serve as a director of the Company.(6)		77		2001
		Brian J. Stark		Founding principal, chief executive officer and chief investment officer of Stark Investments (global alternative investment firm). Mr. Stark’s extensive executive level experience in the investment industry and financial markets led to our conclusion that he should serve as a director of the Company.		58		2012

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE BOARD’S NOMINEES. COMMON SHARES OR CLASS B SHARES REPRESENTED AT THE MEETING BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED “FOR” EACH OF THE BOARD’S NOMINEES.

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Independence of Directors

Based on a review by our board of directors of the direct and indirect relationships that each of the eleven directors currently serving on the board of directors has with the Company, including the relationships between the Company and Selig Executive Leasing Co., Inc. and Major League Baseball, the board of directors has determined that each of Messrs. McKeithan, Selig, Hoeksema, Milstein, Haase, Ericson and Stark are “independent directors” as defined by the rules of the New York Stock Exchange (“NYSE”) and the Securities and Exchange Commission (“SEC”).

Board Leadership Structure

Currently, Mr. Gregory Marcus serves as our chief executive officer and Mr. Stephen Marcus serves as our chairman of the board of directors. Our board of directors does not have a policy on whether or not the roles of chief executive officer and chairman of the board should be separate. Instead, our Corporate Governance Policy Guidelines provide that our board of directors has the authority to choose its chairman in any way it deems best for the Company and its shareholders at any given point in time. Since Mr. Stephen Marcus’ retirement as chief executive officer in 2009, our board of directors has determined that the separation of these roles most appropriately suits our Company because of Mr. Stephen Marcus’ long history with our Company, including his tenure as our chief executive officer, and his skills and experience within the industries that we operate. Further, our board of directors believes that this split in roles allows Mr. Gregory Marcus to focus more of his energies on the management of our Company’s business. Our board of directors believes that there is no single board of directors leadership structure that would be most effective in all circumstances and therefore retains the authority to modify this structure to best address our Company’s and our board of directors’ then current circumstances as and when appropriate.

Our board of directors and, in particular, the Audit Committee are involved on an ongoing basis in the general oversight of our material identified enterprise-related risks. Each of our chief executive officer, chief financial officer and general counsel, with input as appropriate from other management members, report and provide relevant information directly to our board of directors and/or the Audit Committee on various types of identified material financial, reputational, legal, environmental and business risks to which we are or may be subject, as well as mitigation strategies for certain key identified material risks. These reports, information and strategies are then reviewed, approved and monitored on an ongoing basis by our board of directors and/or the Audit Committee. Our board of directors’ and Audit Committee’s roles in our risk oversight process have not affected our board of directors leadership structure.

Code of Conduct

The board of directors has adopted The Marcus Corporation Code of Conduct that applies to all of our directors, officers and employees. It is available under the “Human Resources” section of our corporate web site, www.marcuscorp.com. If you would like us to mail you a copy of our Code of Conduct, free of charge, please contact Thomas F. Kissinger, Vice President, General Counsel and Secretary, The Marcus Corporation, 100 East Wisconsin Avenue, Suite 1900, Milwaukee, Wisconsin 53202-4125.

Committees of the Board of Directors

Our board of directors has an Audit Committee, Compensation Committee, Corporate Governance and Nominating Committee and Finance Committee. Each committee operates under a written charter and the charters of our Audit, Compensation and Corporate Governance and Nominating Committees are available under the “Governance” section of our web site at www.marcuscorp.com. Our board of directors and each committee also operate under our Corporate Governance Policy Guidelines, which are available under the “Corporate Governance and Nominating Committee” tab of the “Governance” section of our web site. If you would like us to mail you a copy of our Corporate Governance Policy Guidelines or a committee charter, free of charge, please contact Mr. Kissinger at the above address.

Audit Committee.  Our board of directors has an Audit Committee whose principal functions are to: (1) appoint and establish the compensation for and oversee our independent auditors; (2) review annual audit plans with management and our independent auditors; (3) pre-approve all audit and non-audit services provided by our independent auditors; (4) oversee management’s evaluation of the adequacy of our internal and business controls, disclosure controls and procedures, and risk assessment and management; (5) review areas of financial risk that could have a material adverse effect on our results of operations and financial condition with management and our independent auditors; (6) evaluate the independence of our independent auditors; (7) review, in consultation with management and our independent auditors, financial reporting and accounting practices of comparable companies that differ from our own; and (8) receive, retain and address complaints (including employees’ confidential, anonymous submission of concerns) regarding financial disclosure and accounting and auditing matters. From June 1, 2012 until January 8, 2013, our Audit Committee consisted of James D. Ericson, Daniel F. McKeithan, Jr., Philip L. Milstein and Brian J. Stark, with Mr. McKeithan serving as Chairman during such period. From January 8, 2013 until May 30, 2013, our Audit Committee consisted of Messrs. Milstein, McKeithan and Stark, with Mr. Milstein serving as Chairman during such period. Each current member of our Audit Committee, as well as Mr. Ericson, is an independent, non-employee director as defined by the rules of the NYSE and the SEC. In addition, the board of directors has determined that each current member of our Audit Committee, as well as Mr. Ericson, is an “audit committee financial expert,” as that term is defined by the rules and regulations of the SEC. The Audit Committee met four times during our fiscal 2013. See “Audit Committee Report.”

Compensation Committee.  Our board of directors also has a Compensation Committee whose principal functions are to: (1) evaluate and establish the compensation, bonuses and benefits of our officers and other key employees and of the officers and other key employees of our subsidiaries and (2) administer our executive compensation plans, programs and arrangements. See “Compensation Discussion and Analysis.” From June 1, 2012 until January 8, 2013, our Compensation Committee consisted of Bronson J. Haase, Timothy E. Hoeksema, Daniel F. McKeithan, Jr. and Philip L. Milstein, with Mr. Hoeksema serving as Chairman during such period. From January 8, 2013 until May 30, 2013, our Compensation Committee consisted of Allan H. Selig, James D. Ericson and Philip L. Milstein, with Mr. Selig serving as Chairman during such period. Each current member of our Compensation Committee, as well as Messrs. Haase, Hoeksema and McKeithan, is an independent, non-employee director as defined by the rules of the NYSE and the SEC. The Compensation Committee met one time during our fiscal 2013. See “Compensation Discussion and Analysis.”

Corporate Governance and Nominating Committee.  Our board of directors also has a Corporate Governance and Nominating Committee whose principal functions are to: (1) develop and maintain our Corporate Governance Policy Guidelines; (2) develop and maintain our Code of Conduct; (3) oversee the interpretation and enforcement of our Code of Conduct; (4) receive and review matters brought to the committee’s attention pursuant to our Code of Conduct; (5) evaluate the performance of our board of directors, its committees and committee chairmen and our directors; and (6) recommend individuals to be elected to our board of directors. From June 1, 2012 until January 8, 2013, our Corporate Governance and Nominating Committee consisted of Bronson J. Haase, Timothy E. Hoeksema and Allan H. Selig, with Mr. Haase serving as Chairman during such period. From January 8, 2013 until May 30, 2013, our Corporate Governance and Nominating Committee consisted of Bronson J. Haase, Timothy E. Hoeksema, Daniel F. McKeithan, Jr. and Brian J. Stark, with Mr. Haase serving as Chairman during such period. Each current member of our Corporate Governance and Nominating Committee, as well as Mr. Selig, is an independent, non-employee director as defined by the rules of the NYSE and the SEC. The Corporate Governance and Nominating Committee met two times during our fiscal 2013.

The Corporate Governance and Nominating Committee performs evaluations of the board of directors as a whole, the non-management directors as a group, and each director individually. In addition, the Corporate Governance and Nominating Committee regularly assesses the appropriate size of our board of directors and whether any vacancies on the board of directors are expected due to retirement or otherwise. In the event that vacancies are anticipated or otherwise arise, the Corporate Governance and Nominating Committee will identify prospective nominees, including those nominated by management, members of our board of directors and shareholders, and will evaluate such prospective nominees against the standards and qualifications set out

in the Corporate Governance and Nominating Committee Charter, including the individual’s range of experience, wisdom, integrity, ability to make independent analytical inquiries, business experience and acumen, understanding of our business and ability and willingness to devote adequate time to board of directors and committee duties. While the Corporate Governance and Nominating Committee does not specifically have a formal policy relating to the consideration of diversity in its process to select and evaluate director nominees, our Corporate Governance Policy Guidelines provide that the board of directors shall be committed to a diversified membership. Accordingly, the Corporate Governance and Nominating Committee seeks to have our board of directors represent a diversity of backgrounds, experience, gender and race. The Corporate Governance and Nominating Committee does not evaluate shareholder nominees differently from any other nominee. Pursuant to procedures set forth in our By-laws, the Corporate Governance and Nominating Committee will consider shareholder nominations for directors if we receive timely written notice, in proper form, of the intent to make a nomination at a meeting of shareholders. We did not receive any shareholder nominations for directors to be considered at the Meeting. To be timely for the 2014 Annual Meeting of Shareholders, any shareholder director nominations must be received by the date identified under the heading “Other Matters.” To be in proper form, the nomination must, among other things, include each nominee’s written consent to serve as a director if elected, a description of all arrangements or understandings between the nominating shareholder and each nominee and information about the nominating shareholder and each nominee. These requirements are detailed in our By-laws, which are attached as an exhibit to our Quarterly Report on Form 10-Q for the quarterly period ended November 27, 2008. A copy of our By-laws will be provided upon written request to Mr. Kissinger at the above address.

Finance Committee.  Our board of directors also has a Finance Committee whose principal functions are to, upon the request of Company management, provide preliminary review, advice, direction, guidance and/or consultation with respect to potential transactions. During our fiscal 2013, our Finance Committee consisted of Stephen H. Marcus, James D. Ericson, Diane Marcus Gershowitz, Philip L. Milstein and Allan H. Selig, with Mr. Marcus serving as Chairman. The Finance Committee did not meet during our fiscal 2013.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee has served as one of our officers or employees at any time. None of our executive officers serves as a member of the board of directors or compensation committee of any other company that has one or more executive officers serving as a member of our board of directors or Compensation Committee.

Board Meetings, Director Attendance, Executive Sessions and Presiding Director

Our board of directors met five times during our fiscal 2013. Each of our directors attended at least 75% of the aggregate of the number of board meetings and number of meetings of the committees on which he or she served during his or her tenure during fiscal 2013. Our non-management directors meet periodically in executive sessions without management present. The non-management directors who serve as chairmen of our Audit, Compensation and Corporate Governance and Nominating Committees serve as the chairman of these meetings of non-management directors on a rotating basis.

Directors are expected to attend our annual meeting of shareholders each year. At the 2012 annual meeting of shareholders, all of our directors were in attendance in person.

Contacting the Board

Interested parties may contact our board of directors, a group of directors (including our non-management directors), or a specific director by sending a letter, regular or express mail, addressed to our board of directors or the specific director in care of Mr. Kissinger at the above address. Mr. Kissinger will promptly forward appropriate communications from interested parties to the board of directors or the applicable director.

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: (1) each of our directors and nominees for director; (2) each of our executive officers named in the Summary Compensation Table set forth below under “Compensation Discussion and Analysis”; (3) all such directors and executive officers as a group; and (4) 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.

Name of Individual or Group/Class of Stock		Sole Voting and Investment Power(1)				Shared Voting and Investment Power(1)				Total Share Ownership and Percentage of Class(1)				Percentage of Aggregate Voting Power(1)
			Directors and Named Executive Officers
Stephen H. Marcus(2)
Common Shares			21,895				6,003				27,898
											*				45.3	%
Class B Shares			4,742,241				52,070				4,794,311
											54.7	%
Diane Marcus Gershowitz(2)
Common Shares			10,186	(3)			0				10,186	(3)
											*				30.1	%
Class B Shares			2,936,862				247,104				3,183,966
											36.4	%
Gregory S. Marcus
Common Shares			299,371	(4)(5)			75				299,446	(4)(5)
											1.6	%			2.4	%
Class B Shares			210,230				18,233				228,463
											2.6	%
Daniel F. McKeithan, Jr.
Common Shares			8,630	(3)			15,888				24,518	(3)
											*				*
Allan H. Selig
Common Shares			20,243	(3)			0				20,243	(3)
											*				*
Timothy E. Hoeksema
Common Shares			6,984	(3)			14,002				20,986	(3)
											*				*
Philip L. Milstein
Common Shares			40,319	(3)(6)			0				40,319	(3)(6)
											*				*
Class B Shares			—				62,055	(7)(8)			62,055	(7)(8)
											*
Bronson J. Haase
Common Shares			18,695	(3)			0				18,695	(3)
											*				*
Brian J. Stark
Common Shares			3,634	(3)			0				3,634	(3)
											*				*
James D. Ericson
Common Shares			15,258	(3)			0				15,258	(3)
											*				*

COMPENSATION DISCUSSION AND ANALYSIS

This compensation discussion and analysis, or “CD&A,” is intended to provide information about our compensation philosophy, principles and processes for our chairman of the board, our chief executive officer, our chief financial officer and our two other most highly compensated executive officers for fiscal 2013, including Bruce J. Olson, our senior vice president and president of Marcus Theatres Corporation, who will retire from our company effective September 27, 2013. We sometimes collectively refer to these executive officers in this CD&A as our “named executive officers.”

This CD&A is intended to provide you with a better understanding of why and how we make our executive compensation decisions and facilitate your reading of the information contained in the tables and descriptions that follow this discussion. This CD&A is organized as follows:

Overview of Our Executive Compensation Philosophy

Our executive compensation and benefit programs are designed to advance the following core compensation philosophies and principles:

At our 2012 annual meeting of shareholders, our shareholders were asked to approve, by advisory vote, the compensation of our named executive officers as disclosed in the proxy statement for our 2012 annual meeting. At our 2012 annual meeting, over 99% of the votes cast and over 96% of all shares entitled to vote at the meeting were voted in favor of the compensation of our named executive officers. In developing our executive compensation and benefit programs for fiscal 2013, we considered our shareholders’ resounding approval of our executive compensation and benefit programs for fiscal 2012 at our 2012 annual meeting. As a result, and as we describe in this CD&A, we kept in place for fiscal 2013 many of the same executive compensation and benefit programs that were overwhelmingly approved by our shareholders at our 2012 annual meeting.

Role of Our Compensation Committee

Our Compensation Committee attempts to ensure that our executive compensation and benefit programs are consistent with our core compensation philosophies and principles by:

Our Compensation Committee annually engages the services of Towers Watson to provide the Committee with then current survey and benchmarking compensation data on a position-by-position basis for each of our named executive officers on a composite aggregated basis for various selected industry sectors. Specifically, Towers Watson has annually provided our Committee with composite aggregated data respecting the base salary and total direct compensation (i.e., base salary and bonus) for similarly situated executives at other companies with comparable annual revenue levels in the following sectors: (1) all organizations (including and excluding financial service organizations); (2) all non-manufacturing organizations; (3) service organizations; and (4) leisure and hospitality organizations (including motion picture theatre organizations). The Committee chose these sectors so as to provide it with both a broad scope of applicable executive compensation data to consider, as well as more specific information at similarly-sized companies in comparable sectors. Towers Watson has not provided, and our Compensation Committee has not received, reviewed or considered, the individual identities of the companies which comprised these general sector categories of benchmarked organizations. For each of these sectors, Towers Watson has provided our Committee with aggregated compiled data and identified the 25^th percentile, median and 75^th percentile amounts for the base salary and total direct compensation amounts for executives similarly situated to the named executive officers in each sector. In particular, when reviewing this survey data, our Committee has paid particular attention to the composite benchmark salary and direct compensation data related to the service organizations and leisure and hospitality companies because our Committee believes that they are the most similar to our Hotels and Resorts and Theatre Divisions. In connection with our Committee’s long-term equity-based incentive award grants, Towers Watson also provided our Committee with composite aggregated data regarding the value of competitive long-term incentive plans for similarly situated executives at other companies with comparable revenue levels, identifying the 25^th percentile, median and 75^th percentile amounts.

Our Compensation Committee has the final authority to engage and terminate any compensation consultant, including Towers Watson, and is responsible for periodically evaluating any compensation consultant that it engages. Our Compensation Committee also has the responsibility to consider the independence of any compensation consultant before engaging the consultant. Subsequent to Tower’s Watson’s appointment for fiscal 2013, and following the publication of SEC rules and NYSE listing standards regarding the independence of compensation committee advisors, our Compensation Committee reviewed the independence of Towers Watson and the individual representatives of Towers Watson who serve as consultants to the Committee in light of the new requirements and the specific factors set forth therein and concluded that Towers Watson’s work for the Committee does not raise any conflict of interest.

In addition to Towers Watson’s work for our Compensation Committee, a different division of Towers Watson provides actuarial services and pension plan consulting to us. In fiscal 2013, we paid such division approximately $45,000 for such actuarial and pension plan services which, given the relative sizes of both our organizations, we believe to be a relatively immaterial amount. As a result, our Compensation Committee concluded that Towers Watson’s provision of such actuarial and pension plan consulting services does not raise any conflict of interest.

In July 2013, our Compensation Committee conducted a thorough risk assessment of our compensation policies and practices. Our Committee evaluated the levels of risk-taking that could be potentially encouraged by each of our material compensation arrangements, after taking into account any relevant risk-mitigation features. As a result of this review, our Committee concluded that our compensation policies and practices do not encourage excessive or unnecessary risk-taking.

Total Compensation

The compensation paid to our named executive officers consists of four main elements: (1) salary; (2) an annual incentive cash bonus; (3) a long-term incentive compensation award, which includes an annual stock option grant, an annual restricted stock award and an annual long-term performance cash award; and (4) other benefits, including those made available under our employee benefit plans. The combination of these elements is intended to provide our named 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 our long-term success and value creation. Additionally, these compensation elements, particularly our annual incentive cash bonus and long-term incentive awards, are designed to foster a shareholder mentality and the continuation of our entrepreneurial spirit by encouraging our executives to take appropriate market-responsive risk-taking actions that help create long-term shareholder value.

While the relative amounts of salaries and benefits provided to our named executive officers are intended to be set at competitive levels compared to our surveyed group of benchmarked companies, we provide our executives with the opportunity to earn significant additional amounts through performance-based annual cash bonuses and long-term incentive compensation programs.

For fiscal 2013, the total direct compensation (i.e., salary and annual cash bonus) paid to our named executive officers generally fell between the 50^th and 75^th percentile of the total direct compensation amounts paid to executives holding equivalent positions at our surveyed group of benchmarked sectors. In establishing these relative levels of compensation, our Committee first established the relative level of each of our named executive officer’s base salary at between the 50^th and 75^th percentile of the salary paid to similarly situated executives at our surveyed group of benchmarked sectors. These decisions were based on the considerations discussed in more detail below under “Elements of Compensation — Base Salaries.” Then, our Committee established the relative level of each of our named executive officer’s targeted annual cash bonus award that, if earned, would result in our payment of total direct compensation amounts that would generally fall between the 50^th and 75^th percentile of the total direct compensation paid to similarly situated executives at our surveyed group of benchmarked companies. These decisions were based on the considerations discussed in more detail below under “Elements of Compensation — Annual Cash Bonuses.” Our Committee subjectively believed that the targeted relative levels of total direct compensation to our named executive officers resulting from this process generally reflected the highly experienced nature of our senior executive team and was generally consistent with our historical corporate financial performance, the individual performance of our named executive officers and our prior shareholder return. Our Committee also believed that these total direct compensation levels were reasonable in their totality and supported our core compensation philosophies and principles. However, in establishing these relative compensation levels, our Committee did not specifically compare any of the criteria listed in the prior two sentences to our surveyed group of benchmarked sectors. For fiscal 2014, our Committee established the range of potential total direct compensation payable to our named executive officers at the same relative levels compared to updated recent information for our benchmarked sectors.

Mr. Greg Marcus, as our chief executive officer, has a higher percentage of his total compensation based on achieving his incentive bonus targets because our Committee believes that he has the most potential to

impact our corporate financial performance. Our Committee believes that this emphasis and allocation most effectively links pay-for-performance.

Elements of Compensation

Base Salary

Our Compensation Committee, in consultation with our chief executive officer (other than with respect to decisions affecting himself and our chairman), strives to establish competitive base salaries for our named executive officers set at between the 50^th and 75^th percentile of the salaries paid to similarly situated executives at our surveyed group of benchmarked sectors. Each executive officer’s salary is initially based on the level of his responsibilities, the relationship of such responsibilities to those of our other executive officers and his tenure at our company. We evaluate and adjust the base salaries of our named executive officers annually as of July 1 of each fiscal year. When evaluating and adjusting the salaries of our named executive officers (other than our chairman and chief executive officer), we consider the recommendations of our chief executive officer. In making his recommendations, our chief executive officer generally takes into account: (1) our corporate financial performance as a whole and on a divisional basis, when appropriate, for the most recent fiscal year compared to our historical and budgeted performance; (2) general economic conditions (including inflation) and the impact such conditions had on our operations and results; (3) each executive officer’s past, and anticipated future, contributions to our performance; (4) each executive officer’s compensation history with our company and the past levels of each element of total compensation; (5) how each executive officer’s salary compares to the range of salaries of similarly situated executives at our surveyed group of benchmarked companies; (6) new responsibilities, if any, recently delegated, or to be delegated, to such officer; and (7) the executive’s participation in significant corporate achievements during the prior fiscal year. Our Compensation Committee, while looking to our chief executive officer for his recommendations as to the salaries of our other named executive officers (other than with respect to himself and our chairman), also engages in its own independent review and judgment concerning such base salary adjustments based on the foregoing factors. When evaluating and adjusting our chief executive officer’s and chairman’s salary, our Compensation Committee independently, and without input from our chief executive officer, considers the factors cited above, as well as their respective ability to inspire subordinates with the vision of our company, and makes decisions accordingly. The seven factors listed above are only generally, and not individually or separately, analyzed, assessed and weighted by our Committee in its determination of the amount of base salary of each individual named executive officer. Our Committee subjectively assesses these factors in the aggregate based on the recommendations of our chief executive officer for all named executive officers other than himself and our chairman and, in the case of our chairman and chief executive officer, by our Committee on its own accord.

As a result of the process described above, for fiscal 2013, Stephen H. Marcus, Gregory S. Marcus, Douglas A. Neis, Bruce J. Olson and Thomas F. Kissinger received increases of 4.1%, 3.7%, 3.0%, 3.4% and 5.0%, respectively, in their base salaries. In fiscal 2013, the base salaries paid to Messrs. Stephen Marcus, Greg Marcus, Neis, Olson and Kissinger represented 56%, 36%, 47%, 48% and 49%, respectively, of their respective total compensation for such fiscal year as set forth below in the Summary Compensation Table. Based on our analyzing similar factors earlier this year, for fiscal 2014, Messrs. Stephen Marcus, Greg Marcus, Neis, Olson and Kissinger received an increase in their annual base salary of 3.9%, 5.4%, 2.9%, 2.2% and 6.1%, respectively.

Annual Cash Bonuses

We establish targeted potential annual cash bonus awards at the beginning of each fiscal year pursuant to our variable incentive plan, which our Compensation Committee administers. Our variable incentive plan allows our Committee to select from a variety of appropriate financial metrics upon which to base the financial targets for achieving a corresponding annual incentive bonus. Under our variable incentive plan, our Committee may choose from one or more of the following financial metrics, either in absolute terms or in comparison to prior year performance or publicly available industry standards or indices: revenues; gross operating profit; operating income; pre-tax earnings; net earnings; earnings per share; earnings before interest, taxes, depreciation and amortization (“EBITDA”); economic profit; operating margins and statistics; financial return and leverage ratios; total shareholder return metrics; or a company-specific financial metric (such as

Adjusted EBITDA, adjusted consolidated pre-tax income (“API”) or adjusted division pre-tax income (“ADI”)). Additional financial measures not specified in the variable incentive plan may be considered if our Committee determines that the specific measure contributes to achieving the primary goal of our incentive plan — sustained growth in long-term shareholder value. Our Committee retains the ability to consider whether an adjustment of the selected financial goals for any year is necessitated by exceptional circumstances. This ability is intended to be narrowly and infrequently used.

Targeted annual bonus awards under the variable incentive plan may be based on our relative achievement of the selected consolidated financial targets and/or divisional financial targets, as well as on discretionary individual performance measures that help enhance shareholder value as subjectively determined by our Compensation Committee. Our Committee also from time to time has granted special compensation awards to our named executive officers and other key employees to reward their integral involvement in significant corporate achievements or events. Our Committee did not grant any special compensation awards to any of our named executive officers in fiscal 2011. In fiscal 2012, our Committee granted special compensation awards to Messrs. Neis and Kissinger to reward their recognition as leaders in their respective areas of professional practice. In fiscal 2013, our Committee granted special compensation awards to Messrs. Greg Marcus, Neis and Kissinger to reward their involvement in several successful financing transactions, the settlement of all legal matters related to our Las Vegas property and our recent recognition by Forbes magazine as one of “America’s 100 Most Trustworthy Companies.” The special award to Mr. Greg Marcus also was in recognition of his role as interim President of the hotel division for a portion of the fiscal year.

At the beginning of each fiscal year, our Committee establishes applicable financial targets for such fiscal year for purposes of granting our named executive officers’ target incentive cash bonus opportunities for that fiscal year. For each selected applicable financial target, our Committee also establishes a threshold minimum level of financial performance and a maximum level of financial performance relative to such target. If our actual financial performance equals our targeted financial metric, then the portion of our incentive bonus payouts based on achieving that financial target will be equal to 100% of the targeted bonus amount. If we do not achieve the specified minimum threshold level of financial performance, then no incentive bonus payouts based on financial performance will be paid. If we equal or exceed the specified maximum level of financial performance, then we will pay out up to 200% of the targeted amount of the incentive bonuses based on the level that we exceed the selected financial performance metric. Financial performance between the threshold and target levels and between the target and maximum levels will result in a prorated portion of the financial-based bonus being paid.

Our Committee established the financial component of each named executive officer’s fiscal 2013 target incentive bonus opportunity as a percentage of API for corporate officers and as a percentage of theatre division ADI for Mr. Olson. Additionally, the Committee established each named executive officer’s individual performance component of their fiscal 2013 target incentive bonus opportunity as a fixed percentage of their base salary, which was generally intended to approximate 25 – 35% of the total fiscal 2013 target incentive bonus opportunity for our chairman, chief executive officer and Theatre Division president and 40 – 50% for all of our other named executive officers, although these percentages may vary from year to year. If earned, our Committee believed that the bonuses at the target levels would result in our payment of total direct compensation to our named executive officers that would generally fall between the 50^th and 75^th percentile of total direct compensation paid to similarly situated executives at our benchmarked sectors. For fiscal 2013, targeted incentive bonus amounts for Messrs. Stephen Marcus, Greg Marcus, Neis, Olson and Kissinger were $98,554, $324,216, $100,545, $133,458 and $104,670, respectively.

As a result of the foregoing, the targeted fiscal 2013 incentive bonus award for Mr. Olson was based approximately 67% on achieving the fiscal 2013 ADI target of the theatre division, and approximately 33% on achieving his individual performance measures. The targeted fiscal 2013 Theatre Division ADI was approximately $11.9 million. The targeted fiscal 2013 incentive bonus awards for Messrs. Stephen Marcus and Greg Marcus were based approximately 60 – 75% on achieving our fiscal 2013 consolidated API target of $30.0 million and approximately 25 – 40% on achieving their applicable individual performance measures. The targeted fiscal 2013 incentive bonus amounts for Messrs. Neis and Kissinger were based approximately 50% on achieving our fiscal 2013 consolidated API target and approximately 50% on achieving their

applicable individual performance measures. We established these API and ADI targets based on stretch goals for fiscal 2013 for both our company and our theatre division. We established these targets with the belief that the level of achievability of the targets would likely be consistent with the relative level of achievement of our historical financial targets. Since the implementation of our incentive plan, we have achieved between 25% – 153% of the applicable bonus based upon our consolidated financial targets and 0% – 178% of the applicable bonus based upon our division financial targets. Individual performance measures for fiscal 2013 included such officer’s individual contributions and achievements during fiscal 2013, particularly as such contributions and achievements relate to advancing our entrepreneurial spirit. For purposes of determining the relative achievement of our fiscal 2013 financial targets, we defined “API” as consolidated earnings before income taxes, excluding gains and losses from dispositions of assets, preopening expenses and unusual items, and less a goodwill amortization charge. Similarly, for these purposes, we defined “ADI” generally in the same manner as we do API, except that division earnings before income taxes is our beginning baseline metric instead of consolidated earnings before income taxes, and we also subtract an intercompany rent charge for company-owned real estate associated with each division. Our Committee also retained the ability to consider whether an adjustment of the selected financial goals for any year is necessitated by exceptional circumstances. This ability is intended to be narrowly and infrequently used and no such adjustments were made in fiscal 2013.

For fiscal 2013, our actual API was approximately $27.7 million, or approximately 92% of our target amount of $30.0 million, resulting in a bonus achievement based upon this financial measure of approximately 80%. Similarly, our actual fiscal 2013 theatre division ADI was approximately $8.1 million, or 68% of the target amount of $11.9 million, resulting in a bonus achievement based upon this financial measure of approximately 36%. Our Compensation Committee subjectively analyzed on a discretionary basis an executive officer’s relative achievement of other fiscal 2013 individual performance measures, including achievements relating to advancing entrepreneurial spirit, with respect to each individual executive officer based on the recommendations of our chief executive officer for all named executive officers other than himself and our chairman and, in the case of our chief executive officer and our chairman, by our Committee on its own accord. As a result, and because each named executive officer was determined to have successfully achieved each of his respective individual performance criterion, Messrs. Stephen Marcus, Greg Marcus, Neis, Olson and Kissinger earned fiscal 2013 incentive bonus amounts of $86,670, $276,681, $90,865, $73,291 and $94,990, respectively.

The targeted fiscal 2014 incentive bonus awards for Messrs. Stephen Marcus and Greg Marcus is based approximately 60 – 75% on achieving our fiscal 2014 consolidated API target and approximately 25 – 40% on achieving his applicable individual performance measures. The targeted fiscal 2014 incentive bonus amounts for Messrs. Neis and Kissinger are based approximately 50% on achieving our fiscal 2014 consolidated API target and approximately 50% on achieving their applicable individual performance measures. As was the case for fiscal 2013, we established these API and ADI targets based on stretch goals for fiscal 2014 for our company. Similarly, we established these targets with the belief that the level of achievability of the targets would likely be consistent with the relative level of achievement of our historical financial targets. We did not establish performance criteria in respect of, and Mr. Olson will not receive, an incentive bonus award for fiscal 2014 as a result of his retirement effective September 27, 2013.

Long-Term Incentive Awards

We believe that long-term incentive awards support our core compensation philosophies and objectives because they encourage entrepreneurism and help our named executive officers to maintain a shareholder mentality in managing our businesses. We believe that using long-term incentive awards as an important component of our executive compensation package will further our goals of promoting continuity of management and increasing incentive and personal interest in our welfare by those employees who are primarily responsible for shaping or carrying out our long-range plans and securing our continued growth and financial success. Historically, we have granted stock options to a broad range of employees because we believe it is beneficial to our shareholders to have our employees maintain a shareholder orientation and an entrepreneurial spirit. In fiscal 2013, 53% of our employee stock options were granted to employees other than our named executive officers. For fiscal 2014, this percentage remained similarly high at 63%.

Our long-term incentive plan for our senior executives includes a mix of three compensation elements: stock options (typically expected to constitute approximately 50% of each annual long-term incentive award), performance cash (typically expected to constitute approximately 40% of each annual long-term incentive award) and restricted stock (typically expected to constitute approximately 10% of each annual long-term incentive award). Our Committee tries to target the relative size of our annual long-term incentive grants to place us at or above the median level of long-term grants provided by our benchmarked companies. Stock options granted under the plan generally become exercisable 40% after two years, 60% after three years, 80% after four years and 100% after five years of the date of grant. The options generally expire ten years from the date of grant as long as the optionee is still employed with the Company. Our restricted stock grants have a vesting schedule of 50% after the third anniversary of grant and 100% after the fifth anniversary. Mr. Stephen Marcus is not eligible to receive any equity-based award grants under our stock option and equity awards plans.

Our long-term incentive plan for our senior executives includes a performance cash component in order to increase the plan’s emphasis on linking the total compensation of our named executive officers to the relative level of our operating performance over the longer term. The performance cash component’s measurement period is four years for grants made in fiscal 2011 and five years for grants made in fiscal 2012, fiscal 2013 and fiscal 2014. The performance measures for the performance cash component are our average return on invested capital, or ROIC, during the relevant measurement period, and our Adjusted EBITDA growth rate during the relevant measurement period, each of which is measured and calculated independently of each other, but with the relative achievement of our ROIC levels weighted 75% of the targeted total pay-out amount and our relative achievement of our Adjusted EBITDA growth rate weighted 25%. Under our cash performance plan, if our relative ROIC and/or Adjusted EBITDA growth rate over the relevant measurement period is equal to the 25^th percentile of the respective Russell 2000 ROIC and/or Adjusted EBITDA growth rate over the measurement period, then the payment made to our named executive officers will be equal to 25% of the target pay-out amount for such respective performance measure. If we achieve performance of either or both measures equal to the 50^th percentile, then the pay-out will be 100% of the target pay-out amount for such respective performance measure. If we achieve performance of either or both measures equal to the 75^th percentile, then the pay-out will be 150% of the target pay-out amount for such respective performance measure. Performance achievements in between these percentiles will result in prorated pay-outs based on the foregoing pay-out ratios.

Based on the foregoing considerations, our Committee granted the following fiscal 2013 long-term incentive awards to our named executive officers (other than to our chairman) based on benchmarking data provided to it by Towers Watson, as well as the recommendations of our chief executive officer (other than with respect to himself).

Name		Total Dollar Value of Long-Term Incentive Award (100%)				Dollar Value/ Shares(1) of Option Component (47-50%)				Dollar Value/ Shares(2) of Restricted Stock Component (10-11%)				Dollar Value of Performance Cash Component Target Award (39-42%)
Mr. G. Marcus		$	574,229			$	270,816 / 52,000			$	63,413 / 4,450			$	240,000
Mr. D. Neis		$	213,069			$	101,556 / 19,500			$	23,513 / 1,650			$	88,000
Mr. B. Olson		$	298,391			$	140,616 / 27,000			$	32,775 / 2,300			$	125,000
Mr. T. Kissinger		$	228,089			$	114,576 / 22,000			$	23,513 / 1,650			$	90,000

Our Committee granted the following fiscal 2014 long-term incentive awards to our named executive officers (other than to our chairman) based on benchmarking data provided to it by Towers Watson, as well as the recommendations of our chief executive officer (other than with respect to himself).

Name		Total Dollar Value of Long-Term Incentive Award (100%)				Dollar Value/ Shares(1) of Option Component (51%)				Dollar Value/ Shares(2) of Restricted Stock Component (10%)				Dollar Value of Performance Cash Component Target Award (39%)
Mr. G. Marcus		$	609,702			$	310,500 / 57,500			$	59,202 / 4,600			$	240,000
Mr. D. Neis		$	223,279			$	113,400 / 21,000			$	21,879 / 1,700			$	88,000
Mr. B. Olson(3)			N/A				N/A				N/A				N/A
Mr. T. Kissinger		$	241,016			$	122,850 / 22,750			$	23,166 / 1,800			$	95,000

Stock Option Policies

We generally follow a practice of granting stock options to all selected and then serving executives once a year on an annual fixed-date basis, with an effective grant date as of the third business day after the public release of our prior fiscal year financial results. We follow this practice so that the exercise price associated with our annual stock option grants is generally then most likely to reflect all then currently publicly available material information about our company. For newly-hired executives or other employees to whom we determine to grant equity-based awards, such grants are effective on the date on which our Committee approves such grants. We only grant options with an exercise price equal to the closing sale price of our Common Shares on the effective date of grant. All options are granted with an exercise price equal to 100% of the fair market value (i.e., closing sale price) of our Common Shares on the date of grant. Our options generally vest and become 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, and expire ten years after the grant date.

We have adopted a policy that prohibits the repricing of stock options, and we have never repriced any options (other than in connection with making equitable adjustments as required under our stock option and equity awards plans in connection with stock splits and our special cash dividend). Similarly, we have never engaged in any type of so-called stock option “back dating” practices or other similar grant date manipulations of stock options, and we will never do so in the future. While our chief executive officer recommends the recipients of our equity-based awards and the relative level of such awards, we do not delegate grant authority to him or any other members of our management.

We try to maintain our so-called “burn rate” of annual equity grants at around 1% of our fully-diluted outstanding Common Shares. In fiscal 2013 and fiscal 2014 to date, our total annual burn rate was approximately 1.1%, with less than 0.4% attributable to stock options and restricted stock granted to our named executive officers.

Other Benefits

Qualified Retirement Plan

Our Pension Plus Plan is a profit-sharing plan with Code Section 401(k) features and covers all of our eligible employees and eligible employees of our subsidiaries, including our 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 60% of his or her annual compensation. The Pension Plus Plan also provides

for three types of employer contributions: (1) a basic contribution equal to 1% of a participating employee’s annual compensation; (2) a discretionary matching contribution, which is currently equal to one-fourth of the employee’s pre-tax deposits not exceeding 6% of such annual compensation; and (3) a discretionary profit performance contribution determined by our board of directors each year. For purposes of the profit performance contribution, we and our subsidiaries are divided into three 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 six or seven years of service. Each participating employee has the right to direct the investment of the employee’s account in one or more of several available investment funds, including Common Shares. The vested portion of a participating employee’s account balance becomes distributable only after the employee’s termination of employment or upon attainment of age 59½, 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.

Nonqualified Deferred Compensation

Our Deferred Compensation Plan is a nonqualified defined contribution program whereby our eligible employees, including our named executive officers, may voluntarily make irrevocable elections to defer receipt of up to 100% of their annual direct compensation (i.e., salary and/or incentive bonus) 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 and a form of payment (i.e., lump sum or periodic installments). 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, Wisconsin 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).

Our Retirement Income and Supplemental Retirement Plan, or our “Supplemental Plan,” is available to the president of our hotels division and other eligible employees with annual compensation in excess of a specified level ($115,000 for calendar year 2013), including each of our named executive officers. The Supplemental Plan includes two components. The first component applies to certain participants (called “RIP Participants”) and provides nonqualified pension benefits consistent with those that the Supplemental Plan has historically provided. The second component applies to all other participants (called “SRP Participants”) and provides an account-based supplemental retirement benefit. All benefits payable under the Supplemental Plan are paid out of our general corporate assets as they become due after retirement or other termination.

A RIP Participant is an eligible employee who was a participant in the Supplemental Plan on December 31, 2008, and who met at least one of the following requirements on January 1, 2009: (1) the participant was age 50 or older; (2) the participant had 20 or more years of service; or (3) the participant was a member of the Corporate Executive Committee. All of our named executive officers are RIP Participants.

A RIP Participant 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 a RIP Participant entitled to the highest level of Social Security benefits who retires at age 65 during calendar year 2013, the reduction in annual Supplemental Plan benefits would equal approximately $14,568.

		Estimated Annual Pension Plan Benefits for Representative Years of Service
Final Five-Year Average Compensation		15				20				25				30
$100,000		$	25,000			$	33,300			$	41,667			$	50,000
200,000			50,000				66,600				83,334				100,000
350,000			87,500				116,550				145,834				175,000
500,000			125,000				166,500				208,335				250,000
650,000			162,500				216,450				270,835				325,000
800,000			200,000				266,400				333,333				400,000
950,000			237,500				316,350				395,836				475,000

The Supplemental Plan provides annual benefits to RIP Participants (calculated on a straight life annuity basis assuming the benefits commence at age 65) based on a formula that takes into account the employee’s average total compensation for the five highest compensation years within the employee’s last ten compensation years and the employee’s years of service (up to a maximum of 30). In calculating employee compensation for purposes of determining contributions to the Supplemental Plan for RIP Participants, we use a participating employee’s total direct compensation (which, for the named executive officers, is comprised of the salary and bonus amounts listed in the “Summary Compensation Table” below). In addition to a reduction equal to 50% of Social Security benefits, the Supplemental Plan reduces its benefits for RIP Participants 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 RIP Participant 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.

The Supplemental Plan provides that the retirement benefits to which Mr. Stephen Marcus, who is a RIP Participant, is entitled upon his separation from service with us commenced effective January 1, 2009 and we calculate such benefits as if Mr. Stephen Marcus had terminated his employment with us on December 31, 2008. As a result, Mr. Stephen Marcus receives approximately $300,127 in payments under our Supplemental Plan each fiscal year until his death. Mr. Stephen Marcus received total payments of $311,670 during fiscal 2013 due to the inclusion of an extra bi-weekly pay period during the fiscal year.

The SRP Participants in the Supplemental Plan as of December 31, 2008 had their nonqualified supplemental pension benefits converted into an account balance benefit. The opening account balance for each of these individuals equaled the present value of his or her vested accrued supplemental pension benefit calculated under the Supplemental Plan as if such participant terminated employment on December 31, 2008. Each new SRP Participant in the Supplemental Plan will have an account balance benefit with an opening balance of zero.

Each SRP Participant’s account is credited with an allocation as of the last day of each calendar year if (1) the participant is considered a highly compensated employee for such year (for 2013, had annual compensation in excess of $115,000 during the prior year) or the participant is the president of our hotels division, and (2) the participant has been credited with 1,000 hours of service during such year and is employed by us on the last day of such year, or has terminated employment during such year as a result of death, total and permanent disability, or retirement on or after age 65 with five years of service.

Each SRP Participant’s annual allocation depends on his or her employment status as of the last day of the calendar year. A SRP Participant who is a member of our corporate executive committee (group one), or who is a senior vice president, vice president, senior corporate associate or hotel general manager (group two), receives an allocation equal to a percentage of such participant’s compensation depending on such participant’s number of points. Points are determined by combining a participant’s age (as of his or her most

recent birthday) and years of service as of the last day of a calendar year. The participant’s compensation for this purpose is his or her total direct compensation. Each participant in group one or group two is eligible for an allocation equal to the percentage of compensation as forth in the following table:

Points		Group One Percentage of Compensation		Group Two Percentage of Compensation
<60		4%		2.0%
60 - 69		5%		2.5%
70 - 79		6%		3.0%
80+		7%		3.5%

Each other SRP Participant, other than the president of our hotels division, receives an allocation equal to 0.5% of his or her compensation, without regard to points. The president of our hotels division receives an annual allocation equal to 7% of his compensation, without regard to points. All accounts are credited quarterly with simple interest at the reference rate declared by Chase Bank N.A.

Each SRP Participant is 100% vested in his or her account upon termination of employment due to death, total and permanent disability, or retirement on or after age 65 with five years of service. In all other cases, an SRP Participant is vested in accordance with a graduated vesting schedule which provides for 50% vesting after five years of service and an additional 10% for each year of service thereafter. Each SRP Participant was required prior to December 31, 2008, to irrevocably elect the benefit payment date (or commencement date) and a form of payment for his or her account. Each new SRP Participant is required to make this election within the first 30 days of his or her participation date. Thereafter, every five years (e.g., 2010, 2015, 2020), a participant may make a new irrevocable election to apply to the allocations made to his or her account in the subsequent five years. An SRP Participant’s vested account will be paid on the later of his or her separation from service or the age elected by him or her, which must not be earlier than age 60 or later than age 65. An SRP Participant may elect to have his or her vested account paid in a single lump sum payment or installment payments over a number of years selected by the participant (not more than 10). If no election is made, an SRP Participant’s vested account will be paid in the form of a lump sum at the participant’s attainment of age 65, or separation from service, if later.

Executive Long Term Disability Plan

Our Executive Long Term Disability Plan provides supplemental long term disability insurance coverage for certain of our senior employees, including our named executive officers. The long term disability benefits that we provide under our Executive Long Term Disability Plan are in addition to any long term disability benefits that we provide to our employees generally and are fully insured under one or more individual insurance policies that we issue to each participant in the Executive Long Term Disability Plan. We are the named fiduciary for benefit claims under our Executive Long Term Disability Plan, and we have the right to determine all claims and appeals relating to the benefits that we provide under our Executive Long Term Disability Plan.

Perquisites

While our named executive officers may from time to time use certain of our properties for personal reasons, we generally incur no, or in some cases only nominal, incremental costs associated with such usage. We encourage our executive officers to personally use our properties because we believe that it is very important for our executives to be intimately familiar with our properties, our service and product offerings, and our markets. We believe that such personal hands-on experiences help us to enhance our customer services and be better positioned to understand, manage and operate our businesses. We otherwise provide only nominal perquisites to our named executive officers. No perquisites that we provided in fiscal 2013 to any named executive officer, individually or in the aggregate, had an incremental cost to us of in excess of $10,000.

Executive Stock Ownership

We have not adopted any executive or director stock ownership guidelines, although, as of the Record Date, the Marcus family beneficially owned approximately 31.6% of our outstanding Common Shares and comprised the largest shareholder group in our company. Our other named executives each beneficially own

significant amounts of our Common Shares through direct stock ownership, restricted stock awards and stock option grants. As of the Record Date, Messrs. Olson, Kissinger and Neis beneficially owned 207,733 shares, 151,399 shares, and 153,567 shares, respectively. As a result, we believe that our senior management team’s financial interests are significantly and directly related to the economic interests of our shareholders without the necessity of imposing arbitrary stock ownership guidelines. We have adopted a policy prohibiting our directors, executive officers and substantial shareholders from trading in puts, calls and other derivative securities relating to our Common Shares. Our policy also prohibits our directors, executive officers and substantial shareholders from engaging in hedging or pledging transactions relating to our Common Shares. We believe that hedging against losses in our Common Shares breaks the alignment between our shareholders and our executives that the equity grants described in this CD&A are intended to build.

Impact of Tax, Accounting and Dilution Considerations

Prior to fiscal 2012, as a result of our executives’ compensation levels at the time, we did not take any action to qualify bonuses earned under our annual incentive bonus plan or restricted stock awards to comply with the regulations under Section 162(m) of the Code relating to the $1 million cap on executive compensation deductibility. We believed that stock options granted under our various stock option plans would qualify for tax deductibility under Section 162(m). At our 2011 annual meeting of shareholders, our shareholders approved an amendment and restatement of our 2004 Equity and Incentive Awards Plan (the “Plan”) to, among other things, make compensation awarded under the Plan eligible to qualify as “performance-based compensation” for purposes of Section 162(m), which qualification preserves the tax deductibility of such compensation in excess of the $1 million cap. The amendment and restatement also authorized the grant of cash-based incentive awards under the Plan to enable us to establish our future incentive award programs (annual and long-term) under the Plan and qualify the programs as performance-based compensation for purposes of Section 162(m) of the Code.

In addition to Section 162(m) deductibility considerations, our Compensation Committee carefully considers the accounting and financial reporting expenses associated with our grants of equity-based awards. We also consider the relative level of potential dilution to our shareholders resulting from such grants. As a result, we attempt to maintain an annual equity-based grant burn rate level of approximately 1% of our fully-diluted outstanding Common Shares.

Summary Compensation Table

Set forth below is information regarding the compensation earned by, paid or awarded to the following executive officers during fiscal 2013, fiscal 2012 and fiscal 2011: (1) Stephen H. Marcus, our chairman of the board; (2) Gregory S. Marcus, our president and our chief executive officer; (3) Douglas A. Neis, our chief financial officer and treasurer; (4) Bruce J. Olson, our senior vice president and president of Marcus Theatres Corporation; and (5) Thomas F. Kissinger, our vice president, general counsel and secretary. Messrs. Stephen Marcus, Greg Marcus, Neis, Olson and Kissinger comprised our named executive officers for fiscal 2013.

The following table sets forth for our named executive officers the following information for each of our last three fiscal years: (1) the dollar amount of base salary earned; (2) the grant date fair value of all long-term equity-based awards held by each named executive officer; (3) the dollar amount of cash bonuses earned under our incentive bonus plan; (4) the change in pension value and the dollar amount of above-market earnings on nonqualified deferred compensation; (5) the dollar amount of all other compensation; and (6) the dollar value of total compensation.

Name and Current Principal Position		Fiscal Year				Salary(1)				Bonus				Restricted Stock Awards(2)				Option Awards(3)				Non-Equity Incentive Plan Compensation(4)				Change in Pension Value and Non-Qualified Deferred Compensation Earnings(5)				All Other Compensation(6)(7)				Total
Stephen H. Marcus Chairman of the Board			2013			$	383,846			$	—			$	—			$	—			$	86,670			$	(153,637	)		$	371,452			$	688,331
			2012				383,115				—				—				—				128,743				265,000				347,822				1,124,680
			2011				358,823				—				—				—				63,931				60,000				361,602				844,456
Gregory S. Marcus CEO and President			2013				558,462				40,000				63,413				270,816				276,681				298,426				43,831				1,551,629
			2012				559,096				—				51,030				243,600				624,313				406,000				18,110				1,902,149
			2011				522,307				—				54,548				299,400				150,000				229,000				10,005				1,265,260
Douglas A. Neis CFO and Treasurer			2013				339,231				20,000				23,513				101,556				90,865				122,000				26,569				723,734
			2012				341,577				5,000				18,468				91,350				189,298				309,000				15,720				970,413
			2011				318,923				—				19,741				112,275				61,108				177,000				9,588				698,635
Bruce J. Olson(8) Senior Vice President, President of Marcus Theatres Corporation			2013				448,846				—				32,775				140,616				73,291				197,123				36,223				928,874
			2012				450,615				—				26,244				121,800				305,037				430,000				22,407				1,356,103
			2011				423,923				—				28,053				149,700				42,500				258,000				10,669				912,845
Thomas F. Kissinger Vice President, General Counsel and Secretary			2013				366,154				25,000				23,513				114,576				94,990				91,252				26,693				742,178
			2012				362,346				5,000				19,440				101,500				192,298				222,000				14,759				917,343
			2011				338,923				—				19,741				112,275				75,000				107,000				9,311				662,250

Grants of Plan-Based Awards

We maintain our 1995 Equity Incentive Plan, 2004 Equity and Incentive Awards Plan and our Long Term Incentive Plan, pursuant to which grants of restricted stock, stock options, performance stock awards and performance cash awards may be made to our named executive officers (other than Mr. Stephen Marcus, who is not eligible to receive any equity-based awards under our equity plans), as well as other employees. The following table sets forth information regarding all such incentive plan awards that were granted to our named executive officers in fiscal 2013. The amounts set forth below should not be added to amounts set forth in the Summary Compensation Table.

Name		Grant Date(1)				Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2)												Estimated Future Payouts Under Equity Incentive Plan Awards												All Other Stock Awards: No. of Shares of Stock or Units				All Other Option Awards: No. of Securities Under- lying Options				Exercise or Base Price of Option Awards				Grant Date Fair Value of Stock and Option Awards(3)
						Threshold				Target				Maximum				Threshold				Target				Maximum
Mr. S. Marcus			N/A				—				—				—				—				—				—				—				—				—				—
							0			$	98,554			$	230,673				—				—				—				—				—				—				—
Mr. G. Marcus			07/18/12				—				—				—				—				—				—				4,450				—				—			$	63,413
			07/31/12				—				—				—				—				—				—				—				52,000			$	13.12			$	270,816
							0			$	564,216			$	1,212,691				—				—				—				—				—				—				—
Mr. Neis			07/18/12				—				—				—				—				—				—				1,650				—				—			$	23,513
			07/31/12				—				—				—				—				—				—				—				19,500			$	13.12			$	101,556
							0			$	188,545			$	341,544				—				—				—				—				—				—				—
Mr. Olson			07/18/12				—				—				—				—				—				—				2,300				—				—			$	32,775
			07/31/12				—				—				—				—				—				—				—				27,000			$	13.12			$	140,616
							0			$	258,458			$	516,666				—				—				—				—				—				—				—
Mr. Kissinger			07/18/12				—				—				—				—				—				—				1,650				—				—			$	23,513
			07/31/12				—				—				—				—				—				—				—				22,000			$	13.12			$	114,576
							0			$	194,670			$	348,669				—				—				—				—				—				—				—

The portion of the above amounts of non-equity incentive plan (i.e., cash bonus) awards under our incentive plan were determined pursuant to our achievement in fiscal 2013 of the specific performance targets described above in the CD&A. The portion of the above amounts of non-equity incentive plan (i.e., long-term performance cash) awards under our long-term incentive plan were determined pursuant to our achievement in fiscal 2017 of the specific five-year performance targets described above in the CD&A. The number of our Common Shares subject to stock options and restricted stock awards granted to our named executive officers were also determined as described above in the CD&A.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information on outstanding stock option and restricted stock awards held by our named executive officers at our fiscal 2013 year-end on May 30, 2013, including the number of Common Shares underlying both exercisable and unexercisable portions of each stock option, as well as the exercise price and expiration date of each outstanding option.

		Option Awards																				Restricted Stock Awards
Name		No. of Common Shares Underlying Unexercised Options (#Exercisable)				No. of Common Shares Underlying Unexercised Options (#Unexercisable)				Equity Incentive Plan Awards: No. of Common Shares Underlying Unexercised Unearned Options				Option Exercise Price				Option Expiration Date				No. of Common Shares That Have Not Vested				Market Value of Common Shares That Have Not Vested(1)				Equity Incentive Plan Awards: No. of Unearned Common Shares That Have Not Vested				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares That Have Not Vested
Mr. S. Marcus			N/A				—				—				—				—				—				—				—				—
Mr. G. Marcus			3,870				—				—				12.73				08/18/2014				—				—				—				—
			14,258				—				—				14.07				10/06/2015				—				—				—				—
			15,000				—				—				19.74				07/31/2016				—				—				—				—
			15,000				—				—				20.40				08/02/2017				—				—				—				—
			80,000				20,000	(2)			—				15.59				07/29/2018				—				—				—				—
			33,000				22,000	(3)			—				13.34				07/28/2019				—				—				—				—
			24,000				36,000	(4)			—				11.89				07/27/2020				—				—				—				—
			—				60,000	(5)			—				10.00				07/26/2021				—				—				—				—
			—				52,000	(6)			—				13.12				07/31/2022				—				—				—				—
			—				—				—				—				—				3,750	(7)		$	50,438				—				—
			—				—				—				—				—				1,575	(8)			21,184				—				—
			—				—				—				—				—				1,575	(9)			21,184				—				—
			—				—				—				—				—				2,475	(10)			33,289				—				—
			—				—				—				—				—				5,250	(11)			70,613				—				—
			—				—				—				—				—				5,250	(12)			70,613				—				—
																							4,450	(13)			59,853
Mr. Neis			10,693				—				—				12.73				08/18/2014												—				—
			14,258				—				—				14.07				10/06/2015				—				—				—				—
			15,000				—				—				19.74				07/31/2016				—				—				—				—
			15,000				—				—				20.40				08/02/2017				—				—				—				—
			16,000				4,000	(14)			—				15.59				07/29/2018				—				—				—				—
			12,000				8,000	(15)			—				13.34				07/28/2019				—				—				—				—
			9,000				13,500	(16)			—				11.89				07/27/2020				—				—				—				—
							22,500	(17)			—				10.00				07/26/2021				—				—				—				—
			—				19,500	(18)			—				13.12				07/31/2022				—				—				—				—
			—				—				—				—				—				2,500	(19)			33,625				—				—
			—				—				—				—				—				625	(20)			8,406				—				—
			—				—				—				—				—				625	(21)			8,406				—				—
			—				—				—				—				—				900	(22)			12,105				—				—
			—				—				—				—				—				1,900	(23)			25,555				—				—
			—				—				—				—				—				1,900	(24)			25,555				—				—
			—				—				—				—				—				1,650	(25)			22,193				—				—
Mr. Olson			8,555				—				—				10.25				09/08/2013				—				—				—				—
			14,258				—				—				12.73				08/18/2014				—				—				—				—
			14,258				—				—				14.07				10/06/2015				—				—				—				—
			15,000				—				—				19.74				07/31/2016				—				—				—				—
			15,000								—				20.40				08/02/2017				—				—				—				—
			20,000				5,000	(26)			—				15.59				07/29/2018				—				—				—				—
			18,000				12,000	(27)			—				13.34				07/28/2019				—				—				—				—
			12,000				18,000	(28)			—				11.89				07/27/2020				—				—				—				—
			—				30,000	(29)			—				10.00				07/26/2021				—				—				—				—
			—				27,000	(30)			—				13.12				07/31/2022				—				—				—				—
			—				—				—				—				—				3,750	(7)			50,438				—				—
			—				—				—				—				—				1,350	(31)			18,158				—				—
			—				—				—				—				—				2,700	(32)			36,315				—				—
			—				—				—				—				—				2,700	(33)			36,315				—				—
			—				—				—				—				—				2,300	(34)			30,935				—				—

		Option Awards																				Restricted Stock Awards
Name		No. of Common Shares Underlying Unexercised Options (#Exercisable)				No. of Common Shares Underlying Unexercised Options (#Unexercisable)				Equity Incentive Plan Awards: No. of Common Shares Underlying Unexercised Unearned Options				Option Exercise Price				Option Expiration Date				No. of Common Shares That Have Not Vested				Market Value of Common Shares That Have Not Vested(1)				Equity Incentive Plan Awards: No. of Unearned Common Shares That Have Not Vested				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares That Have Not Vested
Mr. Kissinger			10,693				—				—				12.73				08/18/2014				—				—				—				—
			14,258				—				—				14.07				10/06/2015				—				—				—				—
			15,000				—				—				19.74				07/31/2016				—				—				—				—
			15,000				—				—				20.40				08/02/2017				—				—				—				—
			16,000				4,000	(14)			—				15.59				07/29/2018				—				—				—				—
			12,000				8,000	(15)			—				13.34				07/28/2019				—				—				—				—
			9,000				13,500	(16)			—				11.89				07/27/2020				—				—				—				—
			—				25,000	(35)			—				10.00				07/26/2021				—				—				—				—
			—				22,000	(36)			—				13.12				07/31/2022				—				—				—				—
			—				—				—				—				—				2,500	(19)			33,625				—				—
			—				—				—				—				—				925	(37)			12,441				—				—
			—				—				—				—				—				925	(38)			12,441				—				—
			—				—				—				—				—				900	(22)			12,105				—				—
			—				—				—				—				—				1,900	(23)			25,555				—				—
			—				—				—				—				—				2,000	(39)			26,900				—				—
			—				—				—				—				—				1,650	(25)			22,193				—				—

_____________

Option Exercises and Restricted Stock Vested

The following table sets forth information regarding each exercise of stock options and vesting of restricted stock that occurred during fiscal 2013 for each of our named executive officers on an aggregated basis. The amounts set forth below should not be added to the amounts set forth in the Summary Compensation Table.

Name		Number of Shares Acquired on Option Exercise				Value Realized on Option Exercise(1)				Number of Shares Acquired on Vesting of Restricted Shares				Value Realized on Vesting of Restricted Shares(2)
Mr. S. Marcus			N/A				—				N/A				—
Mr. G. Marcus			53,162			$	129,868				2,475			$	33,041
Mr. Neis			10,693				40,025				900				12,015
Mr. Olson			11,407				25,025				1,350				18,023
Mr. Kissinger			10,693				38,421				900				12,015

Pension Benefits

The following table sets forth the actuarial present value of each named executive officer’s accumulated benefits under our Supplemental Plan as of our fiscal 2013 year-end on May 30, 2013, assuming benefits are paid at normal retirement age based on current levels of compensation, as well as payments made to Mr. Stephen Marcus during fiscal 2013 under our Supplemental Plan as a result of his retirement on January 6, 2009 as our chief executive officer. The table also shows the number of years of credited service under each such plan, which are subject to a maximum of 30. The amounts set forth below should not be added to the amounts set forth in the Summary Compensation Table.

Name		Plan Name				Number of Years Credited   Service				Present Value of Accumulated    Benefits				Payments During Last Fiscal    Year
Mr. S. Marcus			Supplemental Plan				30	(1)		$	3,474,000			$	311,670
Mr. G. Marcus			Supplemental Plan				21				1,335,000				—
Mr. Neis			Supplemental Plan				27				1,073,000				—
Mr. Olson			Supplemental Plan				30	(1)			2,866,000				—
Mr. Kissinger			Supplemental Plan				19				680,000				—

Our Supplemental Plan benefits payable to Messrs. Stephen Marcus, Greg Marcus, Neis, Olson and Kissinger are determined under the formula illustrated above in the CD&A. Covered compensation for purposes of the Supplemental Plan consists of salary, bonus and non-equity incentive compensation. As of our fiscal 2013 year-end on May 30, 2013, the estimated annual benefits payable under the Supplemental Plan at normal retirement age to Messrs. Stephen Marcus, Greg Marcus, Neis, Olson and Kissinger were $300,000, $209,000, $130,000, $235,000 and $90,000, respectively. The payments to Mr. Stephen Marcus under the Supplemental Plan in fiscal 2013 are discussed above under “Nonqualified Deferred Compensation.”

Nonqualified Deferred Compensation

The following table sets forth annual executive and Company contributions under our Deferred Compensation Plan, as well as each named executive officer’s withdrawals, earnings and fiscal year end balances in those plans. The amounts set forth below should not be added to the amounts set forth in the Summary Compensation Table.

Name		Executive Contributions in Fiscal 2013				Company Contributions in Fiscal 2013				Aggregate Earnings in Fiscal 2013(1)				Aggregate Withdrawals/ Distributions In Fiscal 2013				Aggregate Balance at May 30, 2013
Mr. S. Marcus		$	—			$	—			$	11,554			$	79,793			$	311,377
Mr. G. Marcus			50,339				—				3,690				—				135,411
Mr. Neis			—				—				—				—				—
Mr. Olson			24,412				—				1,033				14,462				32,549
Mr. Kissinger			54,390				—				19,581				—				641,102

Disclosure Regarding Termination and Change in Control Provisions

Employment, Severance and Change in Control Agreements

We do not provide our executives with individual employment, severance or change-in-control agreements, other than the benefit plans otherwise described above in the CD&A and our standard policies generally applicable to all salaried employees. Generally, the vesting period for our stock option grants, restricted stock awards and performance cash awards will be accelerated upon normal retirement or death. Our Compensation Committee has discretion to accelerate the vesting of such grants and awards upon a potential future change-in-control of our company.

Non-Employee Director Compensation

The following table sets forth information regarding the compensation received by each of our non-employee directors during fiscal 2013. Our other directors are named executive officers and receive no compensation for their services as directors and are therefore omitted from the table.

Name		Fees Earned or Paid in Cash				Stock Awards(1)				Restricted Stock Awards(2)				Option Awards(3)				Non-Equity Incentive Plan Compensation				Change in Pension Value and Non-Qualified Deferred Compensation Earnings				All Other Compensation(4)				Total
Diane Marcus Gershowitz		$	30,000			$	8,411			$	16,813			$	5,420				—				—			$	68,620			$	129,264
Daniel F. McKeithan, Jr.			37,750				8,411				16,813				5,420				—				—				4,020				72,414
Allan H. Selig			31,250				8,411				16,813				5,420				—				—				4,020				65,914
Timothy E. Hoeksema			32,250				8,411				16,813				5,420				—				—				4,020				66,914
Philip L. Milstein			36,750				8,411				16,813				5,420				—				—				4,020				71,414
Bronson J. Haase			32,250				8,411				16,813				5,420				—				—				4,020				66,914
James D. Ericson			32,500				8,411				16,813				5,420				—				—				4,020				67,164
Brian J. Stark			40,500				8,411				16,813				5,420				—				—				2,010				73,154