Edgar Filing: MARCUS CORP

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

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THE MARCUS CORPORATION
(Name of Registrant as Specified in its Charter)

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

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THE MARCUS CORPORATION

[LOGO]
100 East Wisconsin Avenue, Suite 1900
Milwaukee, Wisconsin 53202-4125
______________________________________
NOTICE OF 2003 ANNUAL MEETING OF SHAREHOLDERS
To Be Held Wednesday, October 8, 2003
_____________________________________

To the Shareholders of
THE MARCUS CORPORATION

NOTICE IS HEREBY GIVEN THAT the 2003 Annual Meeting of Shareholders of THE
MARCUS CORPORATION will be held on Wednesday, October 8, 2003, at 10:00 A.M.,
local time, at the Grand Geneva Resort & Spa, 7036 Grand Geneva Way, Hwy. 50
East, Lake Geneva, Wisconsin, for the following purposes:

1. to elect nine directors for the ensuing year; and

2. to consider and act upon any other business which may be properly
brought before the meeting or any adjournment thereof.

Only holders of record of our Common Stock and Class B Common Stock as of
the close of business on August 8, 2003, will be entitled to notice of, and to
vote at, the meeting and any adjournment thereof. Shareholders may vote in
person or by proxy. The holders of our Common Stock will be entitled to one vote
per share and the holders of our Class B Common Stock will be entitled to ten
votes per share on each matter submitted for shareholder consideration.

Shareholders are cordially invited to attend the meeting in person. A map
is provided on the following page to assist you in locating the Grand Geneva
Resort & Spa. As described on the following page, we will make a bus available
from Milwaukee to the Grand Geneva and we have also made other special
arrangements at the resort to encourage your attendance in person. Even if you
expect to attend the meeting in person, to help ensure your vote is represented
at the meeting, please complete, sign, date and return in the enclosed postage
paid envelope the accompanying proxy, which is being solicited by our board of
directors. You may revoke your proxy at any time before it is actually voted by
giving notice thereof in writing to the undersigned or by voting in person at
the meeting.

Accompanying this Notice of 2003 Annual Meeting of Shareholders is a form
of proxy and proxy statement.

On Behalf of the Board of Directors

Thomas F. Kissinger
General Counsel and Secretary
Milwaukee, Wisconsin
September 5, 2003

THE MARCUS CORPORATION 2003 ANNUAL MEETING

Wednesday, October 8, 2003 at 10:00 a.m.
Grand Geneva Resort & Spa
7036 Grand Geneva Way at Highways 50 East and 23
Lake Geneva, Wisconsin

DIRECTIONS:

[GRAPHIC OMITTED][MAP TO GRAND GENEVA RESORT]

From Milwaukee: Take I-94 South to Highway 50 in Kenosha. Exit to Highway 50
West toward Lake Geneva, and proceed approximately 25-30 miles. The Resort will
be on your right just before Highway 12.

From Madison: Take I-90 South to Janesville. Exit Highway 11/14 East to Delavan.
Proceed on Highway 11 East to Elkhorn. In Elkhorn, remain on Highway 11 through
town to Highway 12 East. Proceed on Highway 12 East to Lake Geneva. At Lake
Geneva, exit Highway 50 East. Turn right on Highway 50. The Resort will be on
your left.

From Chicago and Vicinity: From the Loop, take I-94 North to Highway 50 in
Kenosha. Exit to Highway 50 West toward Lake Geneva, and proceed approximately
25-30 miles. The Resort will be on your right just before Highway 12.

HAVE A GRAND DAY AT THE GRAND GENEVA. Shareholders attending our annual meeting
on Wednesday, October 8 at the Grand Geneva Resort & Spa have an opportunity to
enjoy special annual meeting discounts just for our shareholders. Tear-off the
shareholder identification card below and bring it with you to receive the
special discounts.

REDUCED ROOM RATE. Shareholders who stay overnight on Tuesday, October 7 or
Wednesday, October 8 will receive a discounted room rate of $79 per night.
Advance reservations are required and can be made by calling the Grand Geneva at
(262) 248-8811 or (800) 558-3417. Indicate that you are a shareholder when
making your reservation. You must show your shareholder identification card upon
check in.

DINING DISCOUNT. Shareholders dining at one of the resort's three restaurants
the evening of October 7 or anytime on October 8 will receive a 20% discount on
food. Beverages are not included. Enjoy Ristorante Brissago, the Newport Grill
or The Grand Cafe. Dinner reservations are suggested. Call (262) 248-8811 or
(800) 558-3417 to make dining reservations. You must present your shareholder
identification card to receive the discount.

DISCOUNTED GOLF. Shareholders may enjoy one round of golf at one of the resort's
two championship golf courses on October 7 through October 9 at a discounted
price of $59. Availability is limited and advance reservations are required. For
reservations, call the Pro Shop at (262) 248-2556 or (800) 558-3417 and indicate
that you are a Marcus Corporation shareholder. You must present your shareholder
identification card upon check in.

MERCHANDISE DISCOUNT. A 20% shareholder discount will be offered October 7 and 8
at three Grand Geneva shops: The Links pro shop, White River Trading Company and
Lake Country Styles. You must present your shareholder identification card to
receive the discount.

BUS FROM MILWAUKEE AREA TO THE GRAND GENEVA. A courtesy bus will be available
from the Pfister Hotel, 424 E. Wisconsin Ave. in Milwaukee, to the Grand Geneva
for the annual meeting on October 8. The bus will depart from the Pfister
Hotel's Jefferson Street entrance at 8:00 a.m. and will stop at the Ridge
Cinema, I-43 and Moorland Road, at approximately 8:30 a.m. The bus will leave
the Grand Geneva at 1:30 p.m. for the return trip to Milwaukee. To reserve a
seat on the bus, call Barbara Mangold at (414) 905-1500 by Monday, October 6.

[GRAPHIC OMITTED][MAP TO RIDGE CINEMA]

Ridge Cinema
5200 S. Moorland Road
New Berlin, Wisconsin

THE MARCUS CORPORATION

[LOGO]

Shareholder Identification Card
Tear-off and bring this card with you to receive special
Shareholder discounts at the Grand Geneva.
Valid only for dates and discounts
specified above.

THE MARCUS CORPORATION
[LOGO]

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PROXY STATEMENT
--------------------------------------

For
2003 Annual Meeting of Shareholders
To Be Held Wednesday, October 8, 2003

This proxy statement and accompanying form of proxy are being furnished to
our shareholders beginning on or about September 5, 2003, in connection with the
solicitation of proxies by our board of directors for use at our 2003 Annual
Meeting of Shareholders to be held on Wednesday, October 8, 2003, at 10:00 A.M.,
local time, at the Grand Geneva Resort & Spa, 7036 Grand Geneva Way, Hwy. 50
East, Lake Geneva, Wisconsin and at any postponement or adjournment thereof
(collectively, the "Meeting"), for the purposes set forth in the attached Notice
of 2003 Annual Meeting of Shareholders and as described herein.

Execution of a proxy will not affect your right to attend the Meeting and
to vote in person, nor will your presence revoke a previously submitted proxy.
You may revoke a previously submitted proxy at any time before it is exercised
by giving written notice of your intention to revoke the proxy to our Secretary,
by notifying the appropriate personnel at the Meeting in writing or by voting in
person at the Meeting. Unless revoked, the shares represented by proxies
received by our board of directors will be voted at the Meeting in accordance
with the instructions thereon. If no instructions are specified on a proxy, the
votes represented thereby will be voted: (i) for the board's nine director
nominees set forth below and (ii) on such other matters that may properly come
before the Meeting in accordance with the best judgment of the persons named as
proxies.

Only holders of record of shares of our Common Stock (the "Common Shares")
and our Class B Common Stock (the "Class B Shares") as of the close of business
on August 8, 2003 (the "Record Date") are entitled to vote at the Meeting. As of
the Record Date, we had 20,073,325 Common Shares and 9,480,185 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 114,875,175 consisting of
20,073,325 votes represented by outstanding Common Shares and 94,801,850 votes
represented by outstanding Class B Shares.

ELECTION OF DIRECTORS

At the Meeting, our shareholders will elect all nine members of our board
of directors. The directors elected at the Meeting will hold office until our
2004 Annual Meeting of Shareholders and until their successors are duly
qualified and elected. If, prior to the Meeting, one or more of the board's
nominees become unable to serve as a director for any reason, the votes
represented by proxies granting authority to vote for all of the board's
nominees, or containing no voting instructions, will be voted for a replacement
nominee selected by the board. Under Wisconsin law, if a quorum of shareholders
is present, directors are elected by a plurality of the votes cast by the
shareholders entitled to vote in the election. This means that the individuals
receiving the largest number of votes will be elected as directors, up to the
maximum number of directors to be chosen at the election. Therefore, any shares
that are not voted on this matter at the Meeting, whether by abstention, broker
nonvote or otherwise, will have no effect on the election of directors at the
Meeting.

All of our director nominees have been elected by our shareholders and have
served continuously as directors since the date indicated below. The names of
the nominees, together with certain information about each of them as of the
Record Date, are set forth below.

Name Current Principal Occupation Age Director
---- ---------------------------- --- Since
-----

[Photo] Stephen H. Marcus Our Chairman of the Board, President and Chief 68 1969
Executive Officer(1)(2)(3)

[Photo] Diane Marcus Gershowitz Real estate management and investments(1)(3) 64 1985

[Photo] Daniel F. McKeithan, Jr. President of Tamarack Petroleum Company, Inc. 67 1985
(operator of oil and gas wells) and President of
Active Investor Management, Inc. (manager of oil
and gas wells)(4)(5)

[Photo] Allan H. Selig Commissioner of Major League Baseball and 68 1995
President and Chief Executive Officer of Selig
Executive Leasing Co., Inc. (automobile leasing
agency)(5)(6)

Name Current Principal Occupation Age Director
---- ---------------------------- --- Since
-----

[Photo] Timothy E. Hoeksema Chairman of the Board, President and Chief 56 1995
Executive Officer of Midwest Express Holdings,
Inc. (commercial airline carrier)(5)

[Photo] Bruce J. Olson Our Group Vice President(2)(7) 53 1996

[Photo] Philip L. Milstein Principal of Ogden CAP Properties, LLC (real 54 1996
estate and investments) and Co-Chairman of
Emigrant Savings Bank (savings bank)(5)

[Photo] Bronson J. Haase Retired President and Chief Executive Officer of 59 1998
Wisconsin Gas Company (gas utility) and Vice
President of WICOR, Inc. (utility holding
company) and former President and Chief Executive
Officer of Ameritech Wisconsin(5)

[Photo] James D. Ericson Retired President, Chief Executive Officer and 67 2001
Chairman of the Board of Trustees of Northwestern
Mutual Life Insurance Company (life insurance
company)(5)(8)

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

(1) Stephen H. Marcus and Diane Marcus Gershowitz are brother and sister.

(2) Stephen H. Marcus and Bruce J. Olson are also officers of certain of our
subsidiaries.

(3) As a result of their beneficial ownership of Common Shares and Class B
Shares, Stephen H. Marcus and/or Diane Marcus Gershowitz may be deemed to
control, or share in the control of, the company. See "Stock Ownership of
Management and Others."

(4) Daniel F. McKeithan, Jr. is a trustee of Northwestern Mutual Life Insurance
Company ("NML"). NML is one of our principal lenders.

(5) Messrs. McKeithan, Selig, Hoeksema, Milstein, Haase and Ericson are
independent directors, as defined by the rules of the New York Stock
Exchange. Our independent directors meet periodically in executive sessions
without management present. The independent directors who also serve as
chairmen of our board committees serve as the chairmen of these meetings of
independent directors on a rotating basis.

(6) Allan H. Selig is a director of Oil-Dri Corporation of America.

(7) Bruce J. Olson is a director of Fresh Brands, Inc.

(8) James D. Ericson is a director of Kohl's Corporation, Green Bay Packaging,
Inc. and a trustee of NML.

Our board of directors has an Audit Committee whose principal functions are
to: (i) appoint, establish the compensation for and oversee our independent
auditors; (ii) review annual audit plans with management and our independent
auditors; (iii) preapprove all audit and non-audit services provided by our
independent auditors; (iv) oversee management's evaluation of the adequacy of
our internal and business controls, disclosure controls and procedures and risk
assessment and management; (v) 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; (vi) evaluate the independence of
our independent auditors; (vii) review, in consultation with management and our
independent auditors, financial reporting and accounting practices of comparable
companies that differ from our own; and (viii) receive, retain and address
complaints (including employees' confidential, anonymous submission of concerns)
regarding financial disclosure and accounting and auditing matters. At the end
of our fiscal 2003, the Audit Committee consisted of Daniel F. McKeithan, Jr.
(Chairman), James D. Ericson and Philip L. Milstein. Each member of the Audit
Committee is an independent, nonemployee director as defined by the rules of the
New York Stock Exchange and the Securities and Exchange Commission. Each of the
members of the Audit Committee are "audit committee financial experts" as
defined by the Securities and Exchange Commission. The Audit Committee met three
times in our fiscal 2003. See "Audit Committee Report."

Our board of directors also has a Compensation and Nominating Committee
whose principal functions are to: (i) evaluate and establish the compensation,
bonuses and benefits of officers and other key employees of the company and its
subsidiaries; (ii) administer our 1995 Equity Incentive Plan; and (iii)
recommend individuals to be elected to our board of directors. See "Executive
Compensation." The Compensation and Nominating Committee will consider director
nominees recommended by our shareholders, but has no established procedures that
shareholders must follow to make such a recommendation. Our By-laws require that
shareholders give advance notice and furnish certain information to us in order
to nominate a person as a director. During our fiscal 2003, the Compensation and
Nominating Committee consisted of Timothy E. Hoeksema (Chairman), Bronson J.
Haase, Daniel F. McKeithan, Jr. and Philip L. Milstein. Each member of the
Compensation and Nominating Committee is an independent, nonemployee director as
defined by the rules of the New York Stock Exchange and the Securities and
Exchange Commission. The Compensation and Nominating Committee met twice in our
fiscal 2003. See "Executive Compensation."

Our board of directors also has a Corporate Governance Committee whose
principal functions are to: (i) develop and maintain our corporate governance
policy guidelines; (ii) develop and maintain our Code of Conduct; (iii) oversee
the interpretation and enforcement of our Code of Conduct; (iv) receive and
review matters brought to the committee's attention pursuant to our Code of
Conduct; and (v) evaluate the performance of our board, its committees and
committee chairmen and our directors. During our fiscal 2003, the Corporate
Governance Committee consisted of Bronson J. Haase (Chairman), Timothy E.
Hoeksema and Allan H. Selig. Each member of the Corporate Governance Committee
is an independent, nonemployee director as defined by the rules of the New York
Stock Exchange and the Securities and Exchange Commission. The Corporate
Governance Committee, which was formed in fiscal 2003, met once in fiscal 2003.

Our board met four times in our fiscal 2003. All of our directors attended
100% of the fiscal 2003 meetings of our board or board committees on which they
served.

STOCK OWNERSHIP OF MANAGEMENT AND OTHERS

The following table sets forth information as of the Record Date as to our
Common Shares and Class B Shares beneficially owned by: (i) each of our
directors; (ii) each of our executive officers named in the Summary Compensation
Table set forth below under "Executive Compensation -- Summary Compensation;"
(iii) all such directors and executive officers as a group; and (iv) all other
persons or entities known by us to be the beneficial owner of more than 5% of
either class of our outstanding capital stock. A row for Class B Share ownership
is not included for individuals or entities who do not beneficially own any
Class B Shares.

Total Share Percentage of
Sole Voting Shared Voting and Ownership and Aggregate
Name of Individual or and Investment Investment Percentage of Voting
Group/Class of Stock Power(1) Power(1) Class(1) Power(1)
-------------------- -------- -------- -------- --------
Directors and Named Executive Officers

Stephen H. Marcus(2)
Common Shares 25,921(3) 6,003 31,924(3)
* 58.0%
Class B Shares 2,547,458 4,111,809 6,659,267
(70.2%)
Diane Marcus Gershowitz(2)
Common Shares 78,940(4) 0 78,940(4)
* 48.5%
Class B Shares 1,733,594 3,829,807 5,563,401
(58.7%)
Daniel F. McKeithan, Jr.
Common Shares 11,693(4) 0 11,693(4)
* *
Allan H. Selig
Common Shares 9,668(4) 0 9,668(4)
* *
Timothy E. Hoeksema
Common Shares 9,443(4) 0 9,443(4)
* *
Philip L. Milstein
Common Shares 58,583(4)(5) 0 58,583(4)(5)
* *
Class B Shares 39,601 62,055(5) 101,656(5)
(1.1%)
Bronson J. Haase
Common Shares 5,068(4) 0 5,068(4)
* *
James D. Ericson
Common Shares 3,284(4) 0 3,284(4)
* *
Bruce J. Olson
Common Shares 179,399(3)(6) 37,766 217,165(3)(6)
(1.1%) *
James R. Abrahamson
Common Shares 30,326(3)(6) 0 30,326(3)(6)
* *
William J. Otto
Common Shares 41,448(3)(6) 0 41,448(3)(6)
* *

Thomas F. Kissinger
Common Shares 51,674(3)(6) 0 51,674(3)(6)
* *
All directors and executive officers as a group
(12 persons)(7)
Common Shares(8) 505,447(3) 43,769 549,216(3)
(2.7%) 77.1%
Class B Shares 4,320,653 4,495,436 8,816,089
(93.0%)

Other Five Percent Shareholders
Private Capital Management, L.P.(9)
Common Shares(10) 0 6,880,692 6,880,692
(34.3%) 6.0%
Lord, Abbett & Co.(11)
Common Shares(12) 1,523,000 0 1,523,000
(7.6%) 1.3%
Dimensional Fund Advisors Inc.(13)
Common Shares(14) 1,099,233 0 1,099,233
(5.5%) *

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

* Less than 1%.

(1) Includes, in some cases, shares over which a person has or shares voting
power and/or investment power, as to which beneficial ownership may be
disclaimed. 3,508,235 shares of Class B Shares held in certain trusts are
included in the beneficial ownership figures for both Stephen H. Marcus and
Diane Marcus Gershowitz because both of them are trustees of these trusts.
The outstanding Class B Shares are convertible on a share-for-share basis
into Common Shares at any time at the discretion of each holder. As a
result, a holder of Class B Shares is deemed to beneficially own an equal
number of Common Shares. However, to avoid overstatement of the aggregate
beneficial ownership of both classes of our outstanding capital stock, the
Common Shares listed in the table do not include Common Shares that may be
acquired upon the conversion of outstanding Class B Shares. Similarly, the
percentage of outstanding Common Shares beneficially owned is determined
with respect to the total number of outstanding Common Shares, excluding
Common Shares that may be issued upon conversion of outstanding Class B
Shares.

(2) The address of Stephen H. Marcus and Diane Marcus Gershowitz is c/o 100
East Wisconsin Avenue, Suite 1900, Milwaukee, Wisconsin 53202-4125.

(3) Includes 4,026, 3,804, 326, 1,198 and 1,553 Common Shares held for the
respective accounts of Stephen H. Marcus, Bruce J. Olson, James R.
Abrahamson, William J. Otto and Thomas F. Kissinger in our Pension Plus
Plan as of May 29, 2003, the end of our fiscal 2003. See "Executive
Compensation -- Summary Compensation Information."

(4) Includes: (i) 7,875 Common Shares subject to acquisition by each of Diane
Marcus Gershowitz, Daniel F. McKeithan, Jr., Allan H. Selig and Timothy E.
Hoeksema; (ii) 5,250 Common Shares subject to acquisition by Philip L.
Milstein; (iii) 3,500 Common Shares subject to acquisition by Bronson J.
Haase; and (iv) 2,500 Common Shares subject to acquisition by James D.
Ericson, in each case pursuant to the exercise of vested stock options held
on the Record Date pursuant to our 1994 Nonemployee Director Stock Option
Plan. This number also includes 784 restricted Common Shares held by each
of Diane Marcus Gershowitz, Daniel F. McKeithan, Jr., Allan H. Selig,
Philip L. Milstein, Timothy E. Hoeksema,

James D. Ericson and Bronson J. Haase, of which 392 were granted on each of
October 10, 2002 and October 23, 2001. See "Director Compensation." The
restrictions on these restricted Common Shares terminate on the second
anniversary of the date on which they were granted.

(5) Includes 62,055 Class B Shares held by Mr. Milstein as a partner of
Northmon Investment Co. Excludes the following shares, as to which Mr.
Milstein disclaims beneficial interest: (i) 5,625 Common Shares in the AB
Elbaum Trust, of which Philip L. Milstein is co-trustee; (ii) 2,000 Common
Shares held by Mr. Milstein's wife; (iii) 8,100 Common Shares held by Mr.
Milstein's children; and (iv) 57,500 Common Shares held by the PLM
Foundation.

(6) Includes 114,249, 30,000, 40,250 and 43,750 Common Shares subject to
acquisition by Bruce J. Olson, James R. Abrahamson, William J. Otto and
Thomas F. Kissinger, respectively, pursuant to the exercise of vested stock
options held on the Record Date pursuant to our 1987 Stock Option Plan and
1995 Equity Incentive Plan. See "Executive Compensation -- Stock Options."

(7) In determining the aggregate beneficial ownership of Common Shares and
Class B Shares for all continuing directors and named executive officers as
a group, shares that are beneficially owned by more than one director or
officer are counted only once to avoid overstatement.

(8) Includes 270,999 Common Shares subject to acquisition pursuant to the
exercise of vested stock options held by our named executive officers and
continuing nonemployee directors on the Record Date pursuant to our 1987
Stock Option Plan, 1995 Equity Incentive Plan and the 1994 Nonemployee
Director Stock Option Plan. See "Executive Compensation -- Stock Options"
and "Director Compensation."

(9) The address of Private Capital Management, L.P. ("PCM") is 8889 Pelican Bay
Boulevard, Naples, Florida 34108.

(10) Other than share ownership percentage information, the information set
forth is as of February 15, 2003, as reported by PCM in its Schedule 13G/A
filed with us and the Securities and Exchange Commission.

(11) The address of Lord, Abbett & Co. ("Lord Abbett") is 90 Hudson Street,
Jersey City, New Jersey 07302.

(12) Other than share ownership percentage information, the information set
forth is as of January 28, 2003, as reported by Lord Abbett in its Schedule
13G/A filed with us and the Securities and Exchange Commission.

(13) The address of Dimensional Fund Advisors Inc. ("DFA") is 1299 Ocean Avenue,
11th Floor, Santa Monica, California 90401.

(14) Other than share ownership percentage information, the information set
forth is as of February 3, 2003, as reported by DFA in its Schedule 13G
filed with us and the Securities and Exchange Commission.

AUDIT COMMITTEE REPORT

To the Board of Directors of The Marcus Corporation

Each of the undersigned Audit Committee members: (i) served on the Audit
Committee during the entire fiscal year ended May 29, 2003; (ii) is an
independent, nonemployee director as defined by the rules of the New York Stock
Exchange and the Securities and Exchange Commission; and (iii) is an "audit
committee financial expert," as defined by the Securities and Exchange
Commission. On January 8, 2003, the Audit Committee amended and restated its
charter. The Audit Committee Charter is attached to this proxy statement as
Appendix A.

Our Audit Committee oversees the company's financial reporting process on
behalf of the board of directors. Our management is responsible for the
company's financial reporting process, including its system of internal
controls, and for the preparation of the company's consolidated financial
statements in accordance with generally accepted accounting principles. The
company's independent auditors, Ernst & Young LLP, are responsible for auditing
those financial statements. Our responsibility is to monitor and review these
processes. It is not our duty or our responsibility to conduct auditing or
accounting reviews or procedures. We are not employees of the company and we are
not accountants or auditors by profession or experts in the fields of accounting
or auditing. Therefore, we have relied, without independent verification, on
management's representation that the company's financial statements have been
prepared with integrity and objectivity and in conformity with generally
accepted accounting principles. We have also relied on the representations of
Ernst & Young included in its report on the company's fiscal 2003 financial
statements. Our discussions with management and Ernst & Young do not assure that
the company's financial statements are presented in accordance with generally
accepted accounting principles, that the audit of the company's financial
statements has been carried out in accordance with generally accepted auditing
standards or that Ernst & Young is in fact "independent."

Our Audit Committee reviewed with Ernst & Young their judgments as to the
quality, not just the acceptability, of the company's accounting principles and
such other matters as are required to be discussed with our Audit Committee
under generally accepted auditing standards. In addition, our Audit Committee
discussed with Ernst & Young their independence from management and the company,
including the matters in the written disclosures required by the Independence
Standards Board, and considered the compatibility of Ernst & Young's provision
of nonaudit services with their independence.

Our Audit Committee discussed with Ernst & Young the overall scope and
plans for their audit. We met with Ernst & Young, with and without management
present, to discuss the results of their examination, their evaluation of the
company's internal controls, and the overall quality of the company's financial
reporting.

In reliance on the reviews and discussions referred to above, our Audit
Committee recommended to the board of directors that the company's audited
consolidated financial statements be included in the Annual Report on Form 10-K
at and for the fiscal year ended May 29, 2003 for filing with the Securities and
Exchange Commission.

At the beginning of fiscal 2003, Allan H. Selig was a member of the Audit
Committee. In fiscal 2003, Mr. Selig began serving on the Corporate Governance
Committee and no longer serves on the Audit Committee.

This report and the information herein do not constitute soliciting
material and shall not be deemed to be incorporated by reference by any general
statement incorporating by reference this proxy statement into any filing by or
of the company under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under
such Acts.

By the Audit Committee:

Daniel F. McKeithan, Jr., Chairman
Philip L. Milstein
James D. Ericson

EXECUTIVE COMPENSATION

Report on Executive Compensation

Our Compensation and Nominating Committee consists entirely of independent,
nonemployee directors and is responsible for evaluating and determining the
compensation of the company's executive officers. The compensation paid to the
company's executive officers consists of: (i) salary; (ii) an incentive bonus;
(iii) stock option grants and restricted stock awards; and (iv) other benefits
under the company's employee benefit plans. We strive to provide executive
officers with fair and competitive compensation that rewards corporate and
individual performance and helps attract, retain and motivate highly qualified
individuals who contribute to the company's long-term growth and success. Our
compensation policies are designed to encourage the continuation of the
company's entrepreneurial spirit by encouraging its executives and other
employees to take appropriate market responsive risk-taking actions that
facilitate its growth and success. We establish the compensation of executive
officers, including the company's Chief Executive Officer, Stephen H. Marcus, in
accordance with these philosophies and policies.

Salary

Each executive officer's salary is based on the level of his or her
responsibilities and the relationship of such responsibilities to those of the
company's other executive officers. When evaluating and adjusting salaries of
executive officers (other than Mr. Marcus), we review the recommendations of Mr.
Marcus. In making his recommendations, Mr. Marcus takes into account: (i) the
company's financial performance as a whole and on a divisional basis, when
appropriate, for the most recent fiscal year compared to its historical and
anticipated performance; (ii) general economic conditions (including inflation)
and the impact such conditions had on the company's operations; (iii) each
executive officer's past, and anticipated future, contributions to the company's
performance; (iv) how each executive officer's salary compares to the range of
the salaries of similarly situated executives at both the national and local
level; (v) new responsibilities, if any, recently delegated, or to be delegated,
to such officer; and (vi) the executive's participation in significant corporate
achievements during the prior fiscal year. The Committee, while looking to Mr.
Marcus for recommendations as to the salaries of executive officers, engaged in
its own independent review and judgment concerning such compensation.

When evaluating and adjusting Mr. Marcus' salary, we subjectively consider
the factors cited above and the comparative salaries and total compensation
packages of other comparable chief executive officers, especially those based in
the Milwaukee, Wisconsin area. When determining Mr. Marcus' salary for fiscal
2004, we also took into account the company's revenue and earnings performance
in fiscal 2003 and its long-term record of financial success.

Bonus

Bonuses for each fiscal year are granted to executive officers, including
Mr. Marcus, after the end of the fiscal year. Fiscal 2003 bonuses for executive
officers who have no direct operational responsibilities were based on the
recommendations of Mr. Marcus. Mr. Marcus made his recommendations based on the
company's overall financial performance in fiscal 2003 and such officer's
individual contributions and achievements during fiscal 2003, particularly as
such contributions and achievements related to advancing the company's
entrepreneurial spirit. Specific corporate performance factors that we
considered when we established fiscal 2003 bonuses included: (i) the
contribution that each executive officer made to his specific functional area;
(ii) the company's overall performance; (iii) the company's 1.8% increase in
revenues compared to fiscal 2002; and (iv) the total cash compensation of other
similarly situated executives. The fiscal 2003 bonuses for Messrs. Olson,
Abrahamson and Otto, who have direct managerial responsibilities for the
company's three divisions, were based on the financial and operating
performances of their respective divisions, along with the company's overall
financial performance in fiscal 2003. Mr. Marcus' fiscal 2003 bonus was based on
a pre-established formula which provides for the annual payment of a bonus equal
to three-fourths of one percent of the company's pre-tax earnings, as defined,
for the fiscal year.

Stock Options and Restricted Stock

Stock options are granted each year to selected key employees, including
unit and multi-unit managers. Such options have a per share exercise price equal
to the fair market value of the company's Common Shares on the date of grant.
Option grants in fiscal 2003 to key employees other than the named executive
officers constituted 80.1% of all non-board option grants.

In fiscal 2004, we will begin to place a greater emphasis on restricted
stock awards, using them to complement the stock option grants to our top
executives. We believe that using restricted stock awards will further our goals
of promoting continuity of management, encouraging entrepreneurism 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.

Since Mr. Marcus and his family own approximately 30.0% of the outstanding
Common Shares and Class B Shares, his economic interests are already
substantially directly linked to the price performance of the Common Shares.
Therefore, at the time the 1995 Equity Incentive Plan was adopted, we decided it
was not necessary to provide Mr. Marcus with any stock option grants, restricted
stock or other awards under the 1995 Equity Incentive Plan. The size of option
grants to the other named executive officers was based on: (i) the officer's
length of service, responsibilities and contributions to the company's
performance over the past year; (ii) the officer's anticipated future
contributions to the company's success; (iii) historical levels of option grants
to, and the level of existing stock ownership of, such officer and other
executive officers; and (iv) the relative levels of option grants then being
made to all employees and other executive officers.

Other Benefits

We also attempt to provide other competitive compensatory benefits to the
company's executive officers, including participation in the company's Pension
Plus Plan, nonqualified retirement income plan, employee stock purchase plan,
nonqualified deferred compensation plan, health insurance, life and disability
insurance and other benefits.

As a result of current executive compensation levels, we do not intend to
take any action to conform our compensation plans to comply with the regulations
under Internal Revenue Code Section 162(m) relating to the $1 million cap on
executive compensation deductibility imposed by the Omnibus Revenue
Reconciliation Act of 1993.

This report, the information herein and the performance graphs included
elsewhere in this proxy statement do not constitute soliciting material and
shall not be deemed to be incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing by or of the
company under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, and shall not otherwise be deemed filed under such
Acts.

By the Compensation and Nominating Committee:

Timothy E. Hoeksema, Chairman
Bronson J. Haase
Daniel F. McKeithan, Jr.
Philip L. Milstein

Summary Compensation Information

The following table sets forth certain information concerning compensation
paid by us during our last three fiscal years to our Chief Executive Officer and
our four other highest paid executive officers. The persons named in the table
below are sometimes referred to herein as the "named executive officers."

Summary Compensation Table
Stock Option
Name and Principal Fiscal Annual Compensation Grants All Other
Positions Year Salary(1) Bonus(1) Other(2) (Shares) (3) Compensation(4)
--------- ---- --------- -------- -------- ------------ ---------------

Stephen H. Marcus 2003 $ 478,077 $ 255,644 $ -- N/A $ 6,610(5)
Chairman of the Board, 2002 $ 458,077 $ 245,075 $ -- N/A $ 5,439(5)
President and Chief 2001 $ 440,000 $ 269,714 $ -- N/A $ 7,061(5)
Executive Officer

Bruce J. Olson 2003 $ 309,039 $ 181,480 $ -- 20,000 $ 25,570
Group Vice President 2002 $ 298,269 $ 166,175 $ -- 50,000 $ 4,043
2001 $ 285,000 $ 10,784 $ -- 50,000 $ 135,041

James R. Abrahamson 2003 $ 322,596 $ 20,769 $ -- 20,000 $ 34,716
President, Baymont 2002 $ 298,558 $ 180,000 $ -- 50,000 $ 35,524
Inns & Suites 2001 $ 284,038 $ 180,000 $ -- 30,000 $ 28,350

William J. Otto 2003 $ 207,160 $ 52,410 $ -- 15,000 $ 4,689
President, Marcus Hotels & 2002 $ 188,654 $ 67,068 $ -- 15,000 $ 3,716
Resorts 2001 $ 167,243 $ 81,953 $ -- 20,000 $ 3,844

Thomas F. Kissinger 2003 $ 193,798 $ 35,000 $ -- 10,000 $ 7,793
General Counsel and 2002 $ 180,596 $ 35,000 $ -- 15,000 $ 3,718
Secretary 2001 $ 166,000 $ 20,000 $ -- 15,000 $ 19,185

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

(1) Includes amounts deferred at the election of the named executive officer
under Section 401(k) of the Internal Revenue Code and our Deferred
Compensation Plan. Our Deferred Compensation Plan is a defined contribution
program whereby an eligible employee may voluntarily make an irrevocable
election to defer receipt of up to 100% of his or her annual compensation
on a pre-tax basis. The irrevocable election must be made during an
employee's first 60 days of eligibility or, if later, prior to the start of
any calendar year to which it applies and must specify both a benefit
payment commencement date and a form of payment (i.e., lump sum, periodic
installments or monthly annuity), either of which may be substantially
changed by written election before the calendar year in which payments
would otherwise commence. During each quarter of the deferral period, we
apply to the deferred amount an earnings credit based on the average prime
interest rate of a designated Milwaukee bank. The benefits payable under
the Deferred Compensation Plan (i.e., the employee's deferred amount plus
his or her earnings credits) will be paid out of our general corporate
assets as they become due (i.e., after the employee's specified
commencement date).

(2) The value of all perquisites and other personal benefits provided to each
named executive officer is significantly less than the required Securities
and Exchange Commission reporting thresholds of the lesser of $50,000 or
10% of the annual salary and bonus reported for each named executive
officer.

(3) All options were granted at 100% of fair market value on the date of grant
under our 1995 Equity Incentive Plan. See footnote (1) to the table set
forth under "Stock Options -- Option Grants in 2003 Fiscal Year."

(4) Includes our contributions on behalf of each named executive officer to our
defined contribution Pension Plus Plan and the dollar value of imputed life
insurance premiums paid by, or on behalf of, us during our

fiscal year with respect to term life insurance for the benefit of the
named executive officer. The Pension Plus Plan is a profit sharing plan
with Internal Revenue Code Section 401(k) features and covers all of our
eligible employees and eligibleemployees of our subsidiaries, including the
named executive officers, and uses a participating employee's aggregate
direct compensation as the basis for determining the employee and employer
contributions that are allocated to the employee's account. A participating
employee may elect to make pre-tax deposits of up to 14% of his or her
annual compensation. The Pension Plus Plan also provides for three types of
employer contributions: (i) a basic contribution equal to 1% of a
participating employee's annual compensation; (ii) a matching contribution
equal to one-fourth of the employee's pre-tax deposits not exceeding 6% of
such annual compensation; and (iii) a discretionary profit performance
contribution determined by our board each year. For purposes of the profit
performance contribution, we and our subsidiaries are divided into eight
profit sharing groups, and the profit performance contribution for the
participating employees employed by a particular profit sharing group is
dependent on our overall operations meeting profitability targets, our
having achieved a positive return on shareholders' equity and that profit
sharing group's operating performance having been profitable. A
participating employee's share of the annual profit performance
contribution, if any, for the employee's profit sharing group is determined
by multiplying the contribution amount by the ratio of the participating
employee's annual compensation to the aggregate annual compensation of all
participating employees in that profit sharing group. The employee's
pre-tax savings deposits and the employer basic contributions allocated to
a participating employee's account are fully vested upon deposit, and the
employer matching and profit performance contribution are subject to a
graduated vesting schedule resulting in full vesting after seven years of
service. Each participating employee has the right to direct the investment
of the pre-tax savings deposits and employer matching contributions
allocated to the employee's account in one or more of several available
investment funds. The allocated employer basic contributions are generally
expected to be invested in Common Shares but, at the direction of the
Pension Plus Plan's administrative committee, may be invested in a
different manner. The allocated employer profit performance contributions
are invested in the manner selected by the Pension Plus Plan's
administrative committee, which may include investment in Common Shares.
The vested portion of a participating employee's account balance becomes
distributable in a lump sum payment only after the employee's termination
of employment, although the employee has the right while employed to borrow
a portion of such vested portion or make a withdrawal of pre-tax savings
deposits for certain hardship reasons that are prescribed by applicable
federal law. We also provide all named executive officers with long-term
disability protection. The other compensation amounts listed for fiscal
2001 for Messrs. Olson and Kissinger include special commissions as a
result of such officers' integral involvement in consummation of the
successful sale of our KFC and KFC/Taco Bell restaurants. The other
compensation amounts listed for Mr. Abrahamson include amounts related to a
car allowance and a prorated portion of a four-year, interest-free loan
made to Mr. Abrahamson when he joined the company, which loan will be
forgiven if Mr. Abrahamson remains an employee of the company for at least
four years.

(5) In fiscal 2003 and 2002 we paid approximately $123,000 and $668,000,
respectively, of premiums on six split-dollar insurance policies on the
life of Mr. Marcus. We paid approximately $368,000 of premiums on three
split-dollar insurance policies on the life of Mr. Marcus in fiscal 2001.
The foregoing data is excluded from the table because, upon surrender of
these policies to us or the death of Mr. Marcus, these premium payments
will be reimbursed in full to us. Based on an assumed retirement age of 70,
the present value of the excess cash surrender value of all of such
policies over the premium payments is estimated to be approximately
$1,065,000.

Stock Options and Restricted Stock

We have a 1987 Stock Option Plan ("1987 Plan") pursuant to which options to
acquire Common Shares may have been granted prior to June 1997 to our officers
and key employees and to the officers and key employees of our subsidiaries.
However, Stephen H. Marcus, Diane Marcus Gershowitz and any other person who
owned, directly or indirectly, 5% or more of our voting power were not eligible
to receive options under the 1987 Plan. No new options may be granted under the
1987 Plan, but certain options granted under the 1987 Plan are still outstanding
and may be exercised pursuant to their terms.

We also have a 1995 Equity Incentive Plan ("1995 Plan") pursuant to which
restricted stock awards and options to acquire Common Shares may be granted
until September 2005 to our officers and other key employees and to the officers
and key employees of our subsidiaries. However, Stephen H. Marcus, Diane Marcus
Gershowitz and any other person who owns, directly or indirectly, 5% or more of
our voting power cannot receive options or restricted stock awards under the
1995 Plan.

The following table sets forth information concerning the grant of stock
options under our 1995 Plan during our fiscal 2003 to the named executive
officers.

Option Grants in 2003 Fiscal Year

Common Percentage of
Shares Total Options Potential Realizable Value at Assumed
Underlying Granted to All Annual Rates of Stock Price
Options Employees in 2003 Exercise Price Expiration Appreciation for Option Term(3)
Name Granted(1) Fiscal Year (per share)(2) Date 5% 10%
---- ---------- ----------- -------------- ---- -- ---

Stephen H. Marcus N/A N/A N/A N/A N/A N/A
Bruce J. Olson 20,000 6.1% $15.55 7/11/12 $195,586 $495,654
James R. Abrahamson 20,000 6.1% $15.55 7/11/12 $195,586 $495,654
William J. Otto 15,000 4.6% $15.55 7/11/12 $146,690 $371,740
Thomas F. Kissinger 10,000 3.1% $15.55 7/11/12 $ 97,793 $247,827

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

(1) Options granted under the 1995 Plan may be designed to qualify as either
"incentive stock options" within the meaning of Section 422A of the
Internal Revenue Code or as "nonstatutory stock options." The options
reflected in the table were granted on July 11, 2002 at an exercise price
equal to 100% of the fair market value of the Common Shares on that date.
These options vest and are exercisable with respect to 40% of the shares
after two years from the grant date, 60% after three years, 80% after four
years and 100% after five years, but may not be exercised after the
ten-year option period.

(2) The exercise price of options may be paid in cash, by delivering previously
issued Common Shares or any combination thereof.

(3) The potential realizable values set forth under these columns represent the
difference between the option exercise price and the market value of the
Common Shares based on certain assumed rates of stock price appreciation
and assuming the exercise of the options on their stated expiration date.
The potential realizable values set forth under the columns do not take
into account applicable tax and expense payments that may be associated
with such option exercises. Actual realizable value, if any, will be
dependent on the future stock price of the Common Shares on the actual date
of exercise, which may be earlier than the stated expiration date. The 5%
and 10% assumed rates of stock price appreciation over the ten-year
exercise period of the options used in the table above are mandated by the
rules of the Securities and Exchange Commission and do not represent our
estimate or projection of the future price of the Common Shares on any
date. There can be no assurance that the stock price appreciation rates for
the Common Shares assumed for purposes of this table will actually be
achieved.

The following table sets forth certain information with respect to the
named executive officers concerning their stock options exercised and
unexercised stock options held as of the end of our fiscal 2003.

Fiscal 2003 Year-End Value Table

Number of Common Shares Value of Unexercised
Number of Common Underlying Unexercised Options at In-the-Money Options
Shares Acquired Value End of Fiscal 2003(2) at End of Fiscal 2003(4)
Name Upon Exercise Received(1) Exercisable(3)/Unexercisable(3) Exercisable/Unexercisable
---- ------------- ----------- ------------------------------- -------------------------

Stephen H. Marcus N/A N/A N/A N/A
Bruce J. Olson 16,875 $ 133,031 91,999/105,500 $134,679/$ 69,345
James R. Abrahamson 50,000 $ 185,954 0/120,000 $0/$ 129,625
William J. Otto 3,657 $ 8,228 30,350/ 44,900 $16,288/$ 15,390
Thomas F. Kissinger 2,500 $ 9,720 36,125/ 36,750 $47,856/$ 21,818

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

(1) Reflects the dollar value difference between the closing sale price of the
Common Shares on the New York Stock Exchange on the date of exercise, less
the stock option's exercise price, multiplied by the number of Common
Shares acquired upon exercise.

(2) See vesting schedule of stock options set forth in footnote (1) under the
"Option Grants in 2003 Fiscal Year" table.

(3) Excludes 84,150 Common Shares subject to previously granted stock options
that vested and became exercisable after our 2003 fiscal year end (Olson -
33,500, Abrahamson - 30,000, Otto - 9,900 and Kissinger - 10,750).

(4) The dollar values were calculated by determining the difference between the
fair market value of the underlying Common Shares and the applicable
exercise prices of the named executive officers' outstanding options at the
end of our fiscal 2003. The closing sale price of the Common Shares on the
New York Stock Exchange on May 29, 2003, the end of our fiscal 2003, was
$13.58 per share.

Pension Plan

We have a nonqualified defined benefit pension plan ("Supplemental Plan")
for our eligible employees. An employee participating in the Supplemental Plan
is entitled to receive annual benefits substantially in accordance with the
table set forth below, except that the amounts shown in the table do not reflect
the applicable reductions for Social Security benefits and benefits funded by
employer contributions that are payable under our other employee benefit plans.
For an employee entitled to the highest level of Social Security benefits who
retires at age 65 during calendar year 2003, the reduction in annual
Supplemental Plan benefits would equal approximately $10,200.

Estimated Annual Pension Plan Benefits
for Representative Years of Service
------------------------------------------------------------------------
Final Five-Year
Average Compensation 15 20 25 30 35
-------------------- -- -- -- -- --

$100,000 $ 25,000 $ 33,300 $ 41,667 $ 50,000 $ 50,000
200,000 50,000 66,600 83,334 100,000 100,000
350,000 87,500 116,550 145,834 175,000 175,000
500,000 125,000 166,500 208,335 250,000 250,000
650,000 162,500 216,450 270,835 325,000 325,000
800,000 200,000 266,400 333,333 400,000 400,000
950,000 237,500 316,350 395,836 475,000 475,000

The Supplemental Plan is available to eligible employees with annual
compensation in excess of a specified level (e.g., $90,000 in 2003), including
each of our named executive officers. The Supplemental Plan is a defined benefit
retirement income program that provides benefits based on the employee's average
total compensation

for the five highest compensation years within the employee's last ten
compensation years. The amounts accrued for named executive officers under the
Supplemental Plan are not readily ascertainable and therefore are not included
in the "Summary Compensation Table" above. In calculating employee compensation
for purposes of determining its contribution to the Supplemental Plan, we use a
participating employee's total direct compensation (which, for the named
executive officers, is comprised of the salary and bonus amounts and, in fiscal
2001 only, certain amounts included in "All Other Compensation" listed in the
"Summary Compensation Table" above) in determining its annual benefits,
calculated on a straight life annuity basis assuming benefits commence at age
65. In addition to a reduction equal to 50% of Social Security benefits, the
Supplemental Plan reduces its benefits by the benefits attributable to the
employer contributions received by the participating employee under our other
employee benefit plans, such as the Pension Plus Plan and our former qualified
pension plans.

A participating employee is entitled to benefits under the Supplemental
Plan upon normal retirement on or after age 65, early retirement after age 60
with at least five years of service, disability retirement after at least five
years of service and other termination of employment after at least five years
of service. A graduated vesting schedule, which provides for 50% vesting after
five years of service and an additional 10% for each year of service thereafter,
applies in the case of termination of employment before completing ten years of
service or qualifying for normal, early or disability retirement. Benefits
payable under the Supplemental Plan are paid out of our general corporate assets
as benefit payments as they become due after retirement or other termination. At
the end of our fiscal 2003, Stephen H. Marcus, Bruce J. Olson, James R.
Abrahamson, William J. Otto and Thomas F. Kissinger had 41, 29, 3, 10 and 9
years, respectively, of credited years of service under the Supplemental Plan.

Director Compensation

In fiscal 2003, each nonemployee director received: (i) an annual retainer
fee of $5,000 in cash; (ii) 392 Common Shares; (iii) $1,750 for each board
meeting attended and $350 for each board committee meeting attended (or $500 per
committee meeting attended if that person served as the committee's
chairperson); (iv) an option under our 1994 Nonemployee Director Stock Option
Plan (the "Director Plan") to purchase 1,000 Common Shares upon his or her
initial appointment or election to the board; and (v) an option under our
Director Plan to purchase 500 Common Shares at the end of each of our fiscal
years. The exercise price of options granted under the Director Plan is equal to
100% of the fair market value of the Common Shares on the date of grant. Under
the Director Plan, on May 29, 2003, each nonemployee director received his or
her annual automatic option grant to purchase 500 shares of Common Stock at an
exercise price of $13.58 per share. All options under the Director Plan have a
term of ten years and are fully vested and exercisable immediately after grant.

Effective in fiscal 2004, the following changes were made to the
compensation paid to our nonemployee directors: (i) the annual cash retainer was
increased from $5,000 to $7,500; (ii) compensation for each board meeting
attended was increased from $1,750 to $2,000; and (iii) compensation for each
committee meeting attended was increased from $350 to $500 (or $750 per
committee meeting attended if that person served as the committee's
chairperson), except that each member of the Audit Committee receives $750 per
committee meeting attended and the chairman of the Audit Committee receives
$1,000 per committee meeting attended.

STOCK PERFORMANCE INFORMATION

Set forth below is a graph comparing the annual percentage change during
our last five fiscal years in our cumulative total shareholder return (stock
price appreciation on a dividend reinvested basis) on our Common Shares,
compared to: (i) the cumulative total return of a composite peer group index
selected by us and (ii) companies included in the Russell 2000 Index. The
composite peer group index is comprised of the Standard & Poor's Hotel/Motel
Index (weighted 62%) and a theatre index we selected and which initially
included Carmike Cinemas, Inc., Loews Cineplex Entertainment Corp. and AMC
Entertainment, Inc. (weighted 38%). However, the performance for this group
currently only reflects the performance of AMC Entertainment, Inc. because the
performances of Carmike Cinemas, Inc. and Loews Cineplex Entertainment Corp. are
only included through the filing of their bankruptcy cases in August 2000 and
February 2001, respectively. The indices within the composite peer group index
are weighted to approximate the relative revenue contributions of each of our
business segments (counting the limited-service lodging and hotel/resort
segments as one segment) to our total revenues in our fiscal 2003. The
shareholder returns of the companies included in the theatre index are weighted
based on each company's relative market capitalization as of the beginning of
the presented periods.

[GRAPHIC OMITTED]

========================================================================================================
5/31/98 5/31/99 5/31/00 5/31/01 5/31/02 5/31/03
========================================================================================================

The Marcus Corporation $ 100 $ 71 $ 62 $ 81 $ 82 $ 78
--------------------------------------------------------------------------------------------------------
Composite Peer Group Index $ 100 $ 81 $ 42 $ 75 $ 90 $ 73
--------------------------------------------------------------------------------------------------------
Russell 2000 Index $ 100 $ 96 $ 104 $ 109 $ 107 $ 97
========================================================================================================

CERTAIN TRANSACTIONS

As in prior years, during our fiscal 2003, we paid approximately $66,000 of
interest to certain entities owned by Stephen H. Marcus, Diane Marcus Gershowitz
and certain trusts for the benefit of members of their families on nine debts
owed by us to such entities. The largest aggregate amount outstanding on the
above debts during our 2003 fiscal year was $2,087,000. The total amount
outstanding on the above nine debts was paid off during fiscal 2003, leaving no
outstanding balance on these debts as of the end of our fiscal year.

In 1990, B&G Realty, Inc., one of our subsidiaries, entered into a lease
with Stephen H. Marcus and Diane Marcus Gershowitz for the land on which one of
our Baymont Inns & Suites is located. Similarly, in 1997, B&G Realty, Inc.
entered into a lease with Stephen H. Marcus and Diane Marcus Gershowitz for the
land on which one of our Woodfield Suites is located. The lease payments under
both of these leases were based upon various independent appraisals and were
approved by our board of directors. During our fiscal 2003, aggregate lease
payments under these leases were $179,000.

As in prior years, during our 2003 fiscal year, we leased automobiles from
Selig Executive Leasing Co., Inc. Aggregate lease payments from the lease of
approximately 90 vehicles were $556,000 in our fiscal 2003. As in past years,
virtually all of these lease payments represent reimbursement of actual costs
incurred by Selig Executive Leasing to purchase and finance the vehicles, with
Selig Executive Leasing retaining less than $20,000 as an administrative fee.
Allan H. Selig, one of our directors, is the President, Chief Executive Officer
and sole shareholder of Selig Executive Leasing.

We believe that all of the above transactions were consummated on terms at
least as favorable as could have been obtained from non-affiliated third
parties.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Our directors and executive officers are required to report their ownership
of Common Shares and Class B Shares and any changes in that ownership to the
Securities and Exchange Commission ("SEC") and the New York Stock Exchange. In
fiscal 2003, a Form 4 for one of our executive officers and a Form 4 for one of
our directors were inadvertently filed late. In making the above statements, we
have relied upon the representations of the persons involved and on copies of
their reports filed with the SEC.

OTHER MATTERS

Ernst & Young LLP acted as our independent auditors in our fiscal 2003 and
was appointed to act as our independent auditors in our fiscal 2004. Ernst &
Young's fees for the most recent two fiscal years are summarized in the
following table:

2003 2002
---- ----
Audit Fees $ 139,100 $ 130,000
Audit-Related Fees 41,340 47,150
Tax Fees 75,288 81,002
All Other Fees -- --
-------------- ---------- ----------
Total Fees $ 255,728 $ 258,152

As noted in the Audit Committee Report, our Audit Committee has considered
whether Ernst & Young's provision of non-audit services is compatible with their
independence. Representatives from Ernst & Young are expected to be present at
the Meeting and will have an opportunity to make a statement if they so desire
and will be available to respond to appropriate shareholder questions.

We have filed an Annual Report on Form 10-K with the Securities and
Exchange Commission for our 2003 fiscal year, which ended on May 29, 2003. A
copy of the Form 10-K (excluding exhibits) has been provided to each person who
was a record or beneficial owner of Common Shares or Class B Shares as of the
Record Date and is available on our corporate web site (www.marcuscorp.com).
Exhibits to the Form 10-K will be furnished upon payment of the fee described in
the list of exhibits accompanying the copy of Form 10-K. Requests for any
exhibits to our Form 10-K should be addressed to Thomas F. Kissinger, General
Counsel and Secretary, The Marcus Corporation, 100 East Wisconsin Avenue, Suite
1900, Milwaukee, Wisconsin 53202-4125.

Our board does not intend to present at the Meeting any matters for
shareholder action other than the matter described in the Notice of Annual
Meeting. The board does not know of any other matters to be brought before the
Meeting that will require the vote of shareholders. If any other business or
matters properly come before the Meeting, the proxies named in the accompanying
proxy will vote on such business or matters in accordance with their best
judgment.

A shareholder wishing to include a proposal in our proxy statement for our
2004 Annual Meeting of Shareholders pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934 must forward the proposal to us by April 17, 2004. In
addition, a shareholder who otherwise intends to present business at our 2004
Annual Meeting of Shareholders (including nominating persons for election as
directors) must comply with the requirements set forth in our By-laws. Among
other things, to bring business before an annual meeting, a shareholder must
give written notice thereof, complying with the By-laws, to our Secretary not
later than 45 days prior to the date in the current year corresponding to the
date on which we first mailed our proxy materials for the prior year's annual
meeting. Accordingly, if we do not receive notice of a shareholder proposal
submitted otherwise than pursuant to Rule 14a-8 prior to July 13, 2004, the
notice will be considered untimely and we will not be required to present such
proposal at the 2004 Annual Meeting of Shareholders. If our board of directors
chooses to present such proposal at our 2004 Annual Meeting of Shareholders, the
persons named in proxies solicited by the board for the 2004 Annual Meeting of
Shareholders may exercise discretionary voting power with respect to such
proposal.

We have paid the cost of soliciting proxies. We expect to solicit proxies
primarily by mail. Proxies may also be solicited personally and by telephone by
certain of our officers and employees. We will reimburse brokers and other
holders of record for their expenses in communicating with the persons for whom
they hold Common Shares or Class B Shares. It is not anticipated that anyone
will be specially engaged to solicit proxies or that special compensation will
be paid for that purpose, but we reserve the right to do so should we conclude
that such efforts are needed.

On Behalf of the Board of Directors

/s/ Thomas F. Kissinger

Thomas F. Kissinger
General Counsel and Secretary

Milwaukee, Wisconsin
September 5, 2003

APPENDIX A
----------

THE MARCUS CORPORATION
Audit Committee Charter

Adopted: January 8, 2003

This Audit Committee Charter ("Charter") is intended to assist the Audit
Committee ("Committee") of the Board of Directors ("Board") of The Marcus
Corporation ("Company") in carrying out its duties and responsibilities. This
Charter is in addition to, and is not intended to change or interpret, any
federal or state law or regulation, including the rules of the Securities and
Exchange Commission ("SEC"), the listing standards of the New York Stock
Exchange ("NYSE"), the Wisconsin Business Corporation Law, or the Company's
Articles of Incorporation or Bylaws. This Charter is not intended to, and does
not, create any legal or fiduciary duties or responsibilities or form the basis
for a breach of fiduciary duty or potential liability if not complied with. This
Charter is subject to modification and interpretation by the Board.

A. General Role.
------------

The Committee shall perform the responsibilities required of it by the
NYSE, SEC and other applicable laws, including assisting the Board's
oversight of: (i) the integrity of the Company's financial statements; (ii)
the Company's compliance with legal and regulatory requirements related to
its financial statements; (iii) the performance of the Company's internal
audit function and independent auditors; and (iv) the retention, oversight
and evaluation of the Company's independent auditing firm.

B. Members.
-------

The Committee shall consist of at least three directors, one of whom shall
be the Chairman of the Committee, all of whom shall meet the independence
and other requirements of the SEC, the listing standards of the NYSE, other
applicable laws and the Company's Bylaws, except as otherwise determined by
the Board in accordance with the requirements of the SEC, the listing
standards of the NYSE, other applicable laws and the Company's Bylaws. Each
member of the Committee must also be "financially literate", as such
qualification is interpreted by the Board in its business judgment in
accordance with the listing standards of the NYSE. Additionally, at least
one member of the Committee must have "accounting or related financial
management expertise" and/or qualify as a "financial expert", in each case
as determined by the Board in its business judgment in accordance with the
listing standards of the NYSE, the requirements of the SEC and other
applicable law. The Company shall properly publicly disclose each Committee
member who is determined to be a "financial expert" in accordance with the
requirements of the SEC and other applicable laws. Other than in his or her
capacity as a member of the Committee, the Board or another committee
thereof, no member of the Committee shall be allowed to accept any
consulting, advisory, or other compensatory fee from the Company, or
otherwise be an affiliated person of the Company. Committee members may be
removed in accordance with the Company's Bylaws.

C. Meetings.
--------

Absent unusual circumstances, the Committee shall meet separately at least
twice annually with, as appropriate, the Company's management, internal
auditors (or other personnel responsible for the internal audit function)
and the Company's independent auditing firm, all in accordance with the
Company's Bylaws. In addition, special meetings shall be held as
circumstances require as determined by the Committee's Chairman or by any
two other members of the Committee in accordance with the Company's Bylaws.
The Committee or its Chairman may invite to its meetings such other
directors, members of Company management and such other persons and
advisors as the Committee or its Chairman deems necessary or appropriate in
order to carry out the Committee's duties and responsibilities. The
Committee, through its Chairman, shall report its activities to the

A-1

Board at the Board meeting next following each Committee meeting so that
the Board is kept fully informed of the Committee's activities on a current
basis. Minutes of each Committee meeting shall also be distributed to the
Board as and when appropriate.

D. Responsibilities.
----------------

1. The Committee's responsibilities with respect to overseeing (i) the
integrity of the Company's financial statements; (ii) the Company's
compliance with legal and regulatory requirements related to its
financial statements; and (iii) the performance of the Company's
internal audit function shall include the following:

a. To be well-informed about the Company's quarterly and annual
financial reports filed with the SEC, including the section
thereof entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations", by receiving,
reviewing and discussing preliminary copies of all such reports
with management and the Company's independent auditing firm
before they are filed with the SEC. The Committee should ask
management and the Company's independent auditing firm whether
the other sections of each such report are consistent with the
information reflected in the report's financial statements. The
Committee may delegate its duties under this subparagraph to its
Chairman or one or more other Committee members.

b. To, before they are filed with the SEC, review and discuss with
the Company's Chief Executive Officer and Chief Financial Officer
any certifications related to the Company's financial statements
or internal controls, including their certifications that: (i) to
the best of their knowledge, (a) the Company's quarterly and
annual reports filed with the SEC fully comply with the
requirements of the Securities Exchange Act of 1934; and (b) that
the information contained in such reports fairly present, in all
material respects, the financial condition and results of
operations of the Company; and (ii) regarding the Company's
internal controls, including: (a) that it is management's
responsibility for establishing, maintaining and evaluating such
controls; (b) that it is management's duty to disclose any
significant deficiencies in such controls and any fraud involving
associates significantly involved with such controls to the
Committee and the Company's independent auditing firm; and (c)
whether or not there were significant changes in such internal
controls or in other factors that could significantly affect such
controls. The Committee should also review and discuss with the
Company's chief executive officer and chief financial officer the
procedures implemented and steps taken in connection with
supporting and verifying the accuracy of such certifications. The
Committee may delegate its duties under this subparagraph to its
Chairman or one or more other Committee members.

c. To, before they are submitted to the NYSE, review and discuss
with the Company's Chief Executive Officer and Chief Financial
Officer any certifications required to be submitted to the NYSE.
The Committee should also review and discuss with the Company's
Chief Executive Officer and Chief Financial Officer the
procedures implemented and steps taken in connection with
supporting and verifying the accuracy of such certifications. The
Committee may delegate its duties under this subparagraph to its
Chairman or one or more other Committee members.

d. To, at each Committee meeting and at such other times as the
Committee deems necessary or appropriate, generally discuss with
management the Company's earnings press releases and earnings
guidance and other forward-looking statements provided to the
Company's shareholders (paying particular attention to any use of
"pro forma" or "adjusted" non-GAAP information). The Committee
need not discuss in advance each earnings release or instance in
which the Company provides forward-looking statements.

e. The Committee shall review and discuss the Company's annual
audited financial statements with management and the Company's
independent auditing firm and shall further discuss with the
independent auditing firm all matters required to be discussed by
Statement on Auditing Standards No. 61 relating to the conduct of
the audit.

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f. The following are other general post-audit review considerations
and guidelines:

o The Committee should focus on the "quality" of the Company's
financial results and condition and the underlying
accounting principles and practices used by the Company.

o The Committee should obtain from the Company's Chief
Financial Officer satisfactory explanations for all
significant variances in the Company's financial statements
between fiscal years and quarterly periods.

o The Committee should request and receive a satisfactory
explanation from management and the Company's independent
auditing firm of changes in accounting standards or rules
promulgated by the Public Company Accounting Oversight
Board, FASB, SEC or other regulatory bodies that have or
will have a material effect on the Company's financial
statements or accounting policies or practices.

o The Committee should request and receive satisfactory
explanations about the existence and substance of any
significant accounting accruals, reserves or estimates made
by management that have or will have a material impact on
the Company's financial statements. If any such accruals,
reserves or estimates have changed materially from prior
fiscal years or periods, the Committee should request and
receive satisfactory explanations about the reasons for such
changes and the likelihood of additional material changes in
the future.

o The Committee should meet in executive session, without
management present, with the Company's independent auditing
firm to request its opinion on various matters, including
the capabilities of the Company's financial and accounting
personnel, the adequacy of the Company's internal controls,
and whether or not there were any disagreements between the
Company's auditing firm and the Company's management about
financial disclosures or accounting policies, practices or
treatment. The Committee shall be responsible for resolving
any such disagreements between the Company's auditing firm
and management.

o During such executive sessions, the Committee may ask the
independent auditing firm what its greatest concerns were in
the course of the audit and if it believes anything else
should be discussed with the Committee while not in the
presence of management. Additional questions that the
Committee may ask include the following:

o If the independent auditing firm were solely
responsible for the preparation of the Company's
financial statements, would the Company's financial
statements have been prepared differently than the
manner selected by management? The Committee may
inquire as to both material and nonmaterial
differences. If the independent auditing firm would
have done anything differently than management, a
satisfactory explanation should be provided of
management's position and the independent auditing
firm's position.

o If the independent auditing firm were an investor, is
the firm receiving the information from the Company in
its financial statements and SEC reports essential to a
proper understanding of the Company's financial
performance and condition for the reporting period?

o Is the Company following the same internal audit
procedures that would be followed if the auditing firm
itself were the Company's chief executive officer or
chief financial officer? If not, what are the
differences and why?

o In such executive sessions, the Committee should also review
the letter of management representations given to the
independent auditing firm and inquire whether the auditing
firm encountered any difficulties in obtaining the letter or
any specific representations therein.

o In such executive sessions, the Committee should also review
with the Company's independent auditing firm any
difficulties the firm encountered in the course of its audit
work, including any restrictions on the scope of its
activities or on access to requested information.

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g. To, at least annually and otherwise when the Committee determines
it to be necessary or appropriate, meet with the Company's
General Counsel and/or outside legal counsel, to discuss pending
or threatened legal matters that may have a significant impact on
the Company's financial statements. The Committee should discuss
with the Company's management and the independent auditing firm
the substance of any significant issues raised by the Company's
General Counsel and/or outside legal counsel concerning
litigation, contingencies, claims or other assessments. The
Committee should understand how such matters are reflected in the
Company's financial statements and SEC reports.

h. To, at least annually, review and analyze with the Company's
Chief Executive Officer, Chief Financial Officer and the
Company's independent auditing firm comparable public company
financial reporting and accounting policies and practices that
materially differ from those of the Company.

i. To, at least annually, inquire with the Company's Chief Executive
Officer and Chief Financial Officer whether there are any
significant tax matters that have been or might be reasonably
disputed by the IRS or state tax agencies, and inquire as to the
status of the Company's related tax reserves and disclosures.

j. To, on a timely basis, obtain and review all other reports by the
Company's independent auditing firm required by the SEC, the NYSE
or other applicable law, rule or requirement to be provided to
the Committee, including reports to the Committee describing: (i)
all critical accounting policies and practices used by the
Company in its financial statements; (ii) alternative treatments
within generally accepted accounting principles discussed with
management, the effects of using or not using such treatments,
and the auditor's preferred treatment; and (iii) other material
written communications with management, such as any management
letter or schedule of unadjusted differences. The Committee shall
discuss such reports with the Company's Chief Executive Officer,
Chief Financial Officer and/or its principal accounting officer
and the Company's independent auditing firm.

k. To, at least annually, review with the Company's Chief Executive
Officer, Chief Financial Officer, and the Company's independent
auditing firm the Company's internal audit functions.

l. To review management's report on and assessment of the Company's
internal controls to be included in the Company's annual report
to shareholders, as well as the report on, and attestation to,
such management report by the Company's independent auditing
firm.

m. To, at each Committee meeting and at such other times as the
Committee deems necessary or appropriate, review with the
Company's Chief Executive Officer, Chief Financial Officer and
the Company's independent auditing firm the areas of financial
risk that could have a material adverse effect on the Company's
results of operation or financial condition and the Company's
risk assessment and risk management policies.

n. To, at each Committee meeting and at such other times as the
Committee deems necessary or appropriate, review and confirm with
the Company's Chief Executive Officer, Chief Financial Officer
and the Company's independent auditing firm that the Company's
(i) off-balance sheet transactions, arrangements, liabilities,
obligations and commitments (including contingent obligations and
commitments); (ii) other relationships with unconsolidated
entities or related parties; and (iii) derivative transactions
are all properly accounted for and disclosed in accordance with
generally accepted accounting principles, the requirements of the
SEC, the listing standards of the NYSE and other applicable laws.

o. To, at least annually, review the terms and conditions of all
relationships and transactions between or involving the Company
and any of its directors, officers and their related parties to
ensure that such relationships and transactions were properly
approved by the Board's Corporate Governance Committee, that all
material terms and conditions thereof are not materially less
favorable to the Company than could be obtained from independent
third parties, and are properly disclosed in the Company's SEC
reports or as otherwise legally required.

p. To pre-approve any Company request to seek a second opinion on
any significant accounting issue from an accounting or auditing
firm other than the Company's independent auditing firm.

A-4

q. To annually make a recommendation to the Board whether or not the
Company's annual audited financial statements should be included
in the Company's Form 10-K report.

2. The Committee's responsibilities related to the retention, oversight
and evaluation of the Company's independent auditing firm shall
include the following:

a. To, at least annually, review with the Company's Chief Executive
Officer and Chief Financial Officer the Company's annual audit
plans.

b. To annually retain the Company's independent auditing firm on
terms (including fees) approved by the Committee and to
preapprove of all audit services to be provided by the auditing
firm. The Committee shall make it clear to the auditing firm that
the Committee retains the auditing firm; that the auditing firm
shall report directly to the Committee; and that the Committee
shall resolve any disagreements that may arise between the
auditing firm and management on financial disclosure or
accounting policies, practices and treatment. Factors to be
considered in selecting or retaining an independent public
accounting firm to serve as the Company's independent auditing
firm shall include, without limitation, the following:

o Opinions by appropriate management personnel, particularly
the Company's Chief Financial Officer, on the capabilities,
resources and performance of the firm.

o The firm's proposed audit fee and, if applicable,
satisfactory explanations for any material fee changes from
prior years.

o The expected level of personal participation by the firm's
partner designated to be primarily responsible for the
Company's account and other auditing firm management and
supervisory personnel in the audit examination of the
Company, and the mix of skills and experience of the
auditing firm's staff and its staff rotation policy with
respect to the Company.

o If a new public accounting firm is being considered, the
report of the firm's latest peer review conducted pursuant
to a professional quality control program and any
significant litigation problems or disciplinary actions or
sanctions by the SEC, FASB, Public Company Accounting
Oversight Board, AICPA, state licensing authorities or
others.

o If a new public accounting firm is being considered, the
proposed firm's credentials, capabilities, reputation and a
list of its representative clients in the same geographical
area and in the same industries.

o If a new public accounting firm is being considered, the
steps planned to ensure a smooth and effective transition.

c. Other than with respect to certain "de minimis" non-audit
services, to preapprove all engagements of the Company's
independent auditing firm to perform any non-audit related
services for or on behalf of the Company (except as legally
prohibited below). However, the Committee shall not in any event
approve the provision by the Company's independent auditing firm
of any of the following legally prohibited non-audit services:
(i) bookkeeping or other services related to the Company's
accounting records or financial statements; (ii) financial
information systems design and implementation; (iii) appraisal or
valuation services, fairness opinions and contribution-in-kind
reports; (iv) actuarial services; (v) internal audit outsourcing
services; (vi) management or human resources functions; (vii)
broker-dealer, investment advisor or investment banking services;
(viii) legal and expert services unrelated to the audit; or (ix)
any other service that is prohibited by the Public Company
Accounting Oversight Board. "De minimis" non-audit services which
do not require Committee preapproval shall mean those non-audit
services for which the aggregate fees constitute no more than 5%
of the total amount of fees paid by the Company to the auditing
firm during the fiscal year in which such non-audit services are
provided, as long as (A) such de minimis non-audit services were
not recognized by the Company at the time of the engagement of
the auditing firm for that year; (B) the provision of such de

A-5

minimis non-audit services is promptly brought to the attention
of the Committee; and (C) such de minimis non-audit services are
approved by the Committee prior to the completion of that year's
audit. Approval by the Committee of any non-audit service to be
performed by the Company's auditing firm shall be publicly
disclosed by the Company in accordance with the requirements of
the SEC, the NYSE listing standards and applicable law. The
Committee may delegate its duties under this subparagraph to its
Chairman or one or more other Committee members.

d. To, at least annually, obtain and review a report by the
Company's independent auditing firm describing all relationships
between the independent auditing firm and the Company and
confirming that the auditing firm is independent from the Company
within the meaning of the Securities Act of 1933, as amended, and
within the requirements of the Independence Standards Board, to
discuss such reports with the independent auditing firm and to
take appropriate action to satisfy the Committee of the
independence of the Company's independent auditing firm.

e. To, at least annually, obtain and review a report by the
independent auditing firm describing the firm's internal
quality-control procedures and any material issues raised by the
most recent internal quality-control review, or peer review, of
the auditing firm, and of any material inquiry or investigation
by any governmental or professional authorities, within the
preceding five years, respecting one or more independent audits
carried out by the auditing firm, and any steps taken to deal
with any such issues.

f. To, at least annually, evaluate the performance of the Company's
independent auditing firm and, if determined necessary or
appropriate, to replace the firm.

3. The Committee's other responsibilities shall include the following:

a. To establish clear hiring policies for employees or former
employees of the Company's independent auditing firm consistent
with the requirements of the SEC, the listing standards of the
NYSE and other legal requirements. In accordance with applicable
law, the Company's independent auditing firm may not perform any
audit services for the Company if the Company's Chief Executive
Officer, Chief Financial Officer, controller or any other
associate serving in an equivalent position was employed by the
auditing firm and participated in the audit of the Company within
the one-year period preceding the initiation of the audit.

b. To develop and communicate procedures to receive, retain and
address complaints regarding financial disclosure or accounting
and auditing matters, including employees' confidential,
anonymous submissions of concerns regarding questionable
accounting or auditing matters. These procedures may be or
include those included in the Company's Code of Conduct. At least
annually, the Committee shall review such procedures to ensure
their effectiveness and their compliance with all applicable NYSE
listing standards, SEC rules and other legal requirements, and
take such actions as the Committee shall deem necessary or
appropriate.

c. To annually prepare the Audit Committee report required by the
rules of the SEC to be included in the Company's proxy statement
for its annual meeting of shareholders.

d. To, from time to time, if the Committee determines it to be
necessary or appropriate, conduct such reviews, investigations
and surveys as the Committee may consider necessary or
appropriate in the exercise of its duties and responsibilities.

E. Unrestricted Committee Communications.
-------------------------------------

The Committee shall, at all times, have unrestricted lines of communication
with the chief executive officer, chief financial officer and/or principal
accounting officer of the Company, as well as the Company's independent
auditing firm. The Committee may, as it deems necessary or appropriate,
obtain advice and assistance from outside legal, accounting or other
advisors, which advisors shall be paid for by the Company.

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F. Annual Review of Charter.
------------------------

The Committee shall review and reassess the adequacy of this Charter not
less than annually and may seek the input of the Company's independent
auditing firm and the Company's Chief Executive Officer, Chief Financial
Officer, General Counsel and/or other advisors with regard to the adequacy
of this Charter and the necessity or desirability of any amendments.

G. Annual Performance Review.
-------------------------

The Committee shall, at least annually, be subject to a performance
evaluation by the Board's Corporate Governance Committee in accordance with
the Company's Corporate Governance Policy Guidelines.

A-7

PROXY PROXY

THE MARCUS CORPORATION

PROXY FOR HOLDERS OF COMMON STOCK
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE 2003 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
ON OCTOBER 8, 2003

The undersigned hereby constitutes and appoints STEPHEN H. MARCUS and
THOMAS F. KISSINGER, and each of them, with the power of substitution, as
proxies of the undersigned, to vote any and all shares of Common Stock of THE
MARCUS CORPORATION which the undersigned is entitled to vote at the 2003 Annual
Meeting of Shareholders to be held at 10:00 A.M., local time, October 8, 2003,
at the Grand Geneva Resort & Spa, 7036 Grand Geneva Way, Hwy. 50 East, Lake
Geneva, Wisconsin, and at any adjournment thereof, upon such business as may
properly come before the meeting, including the items listed on the reverse, as
more completely described in the Proxy Statement for the meeting.

The undersigned acknowledges receipt of the Notice of the Annual Meeting,
the Proxy Statement, the 2003 Annual Report to Shareholders and the Form 10-K
and hereby revokes any other proxy heretofore executed by the undersigned for
such meeting.

This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted FOR all nominees for director and on such other matters as may properly
come before the meeting or any adjournment thereof in accordance with the best
judgment of the proxies named herein.

PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY IN THE ENCLOSED ENVELOPE PROVIDED.
(Continued and to be signed on reverse side.)

--------------------------------------------------------------------------------
FOLD AND DETACH HERE

6702--The Marcus Corp.

THE MARCUS CORPORATION 2003 ANNUAL MEETING
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER
USING DARK INK ONLY.

[ ]
CONTROL NUMBER

1. ELECTION OF DIRECTORS:

01-Diane Marcus Gershowitz 02-Timothy E. Hoeksema
03-Stephen H. Marcus 04-Daniel F. McKeithan, Jr.
05-Bruce J. Olson 06-Allan H. Selig
07-Philip L. Milstein 08-Bronson J. Haase
09-James D. Ericson

For All Withhold All For All Except

[ ] [ ] [ ]
_________________________________________________________

(Instructions: To withhold authority to vote for any
indicated nominee, write the number of the nominee(s) on
the line above.)

2. Upon such other business as may properly come before the annual meeting or
any adjournment thereof in accordance with the best judgment of such
proxies.

Check appropriate box indicate changes below:

Address Change [ ]

Dated: _____________________________________________________, 2003

________________________________________________________________________
Signature

________________________________________________________________________
Signature if held jointly

Please sign exactly as your name appears on your stock certificate. Joint owners
should each sign personally. A corporation should sign in full corporate name by
a duly authorized officer. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.

--------------------------------------------------------------------------------
FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY BY MAIL

THE MARCUS CORPORATION
PROXY VOTING INSTRUCTION CARD

Your vote is important. Casting your vote in one of the three ways described on
this instruction card votes all shares of Common Stock of The Marcus Corporation
that you are entitled to vote.

Please consider the issues discussed in the proxy statement and cast your vote
by:

o Accessing the World Wide Web site http://www.eproxyvote.com/mcs/ to
vote via the internet.

o Using a touch-tone telephone to vote by phone toll free from the U.S.
or Canada. Simply dial 1-866-207-3912 and follow the instructions.
When you are finished voting, your vote will be confirmed, and the
call will end.

o Completing, dating, signing and mailing the proxy card in the
postage-paid envelope included with the proxy statement.

You can vote by phone or via the internet any time prior to 11:59 P.M. Central
Time, October 7, 2003. You will need the control number printed at the top of
this instruction card to vote by phone or via the Internet. If you do so, you do
not need to mail in your proxy card.

6702--The Marcus Corp.

PROXY PROXY

THE MARCUS CORPORATION

PROXY FOR HOLDERS OF CLASS B COMMON STOCK
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE 2003 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
ON OCTOBER 8, 2003

The undersigned hereby constitutes and appoints STEPHEN H. MARCUS and
THOMAS F. KISSINGER, and each of them, with the power of substitution, as
proxies of the undersigned, to vote any and all shares of Class B Common Stock
of THE MARCUS CORPORATION which the undersigned is entitled to vote at the 2003
Annual Meeting of Shareholders to be held at 10:00 A.M., local time, October 8,
2003, at the Grand Geneva Resort & Spa, 7036 Grand Geneva Way, Hwy. 50 East,
Lake Geneva, Wisconsin, and at any adjournment thereof, upon such business as
may properly come before the meeting, including the items listed on the reverse,
as more completely described in the Proxy Statement for the meeting.

PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY IN THE ENCLOSED ENVELOPE PROVIDED.
(Continued and to be signed on reverse side.)

--------------------------------------------------------------------------------
FOLD AND DETACH HERE

6705--The Marcus Corp. (Class B)

THE MARCUS CORPORATION 2003 ANNUAL MEETING
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER
USING DARK INK ONLY.

[ ]

1. ELECTION OF DIRECTORS:
01-Diane Marcus Gershowitz 02-Timothy E. Hoeksema
03-Stephen H. Marcus 04-Daniel F. McKeithan, Jr.
05-Bruce J. Olson 06-Allan H. Selig
07-Philip L. Milstein 08-Bronson J. Haase
09-James D. Ericson

For All Withhold All For All Except
[ ] [ ] [ ]

________________________________________________________
(Instructions: To withhold authority to vote for any
indicated nominee, write the number of the nominee(s) on
the line above.)

2. Upon such other business as may properly come before the annual meeting or
any adjournment thereof in accordance with the best judgment of such
proxies.

Check appropriate box indicate changes below:

Address Change [ ]

Dated: _____________________________________________________, 2003

________________________________________________________________________
Signature

________________________________________________________________________
Signature if held jointly

--------------------------------------------------------------------------------
FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY BY MAIL

6705--The Marcus Corp. (Class B)