FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended May 25, 1995
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______ to __________
Commission file number 1-12604
THE MARCUS CORPORATION
(Exact name of registrant)
as specified in its charter)
Wisconsin 39-1139844
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
250 East Wisconsin Avenue - Suite 1700
Milwaukee, Wisconsin 53202-4220
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (414) 272-6020
Securities registered pursuant to
Section 12(b) of the Act: Common Stock, $1 par value
Securities registered pursuant to
Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
State the aggregate market value of the voting stock held by
non-affiliates of the registrant as of August 11, 1995: $218,319,728.
Number of shares outstanding of each of the classes of the registrant's
capital stock as of August 11, 1995:
Common Stock, $1 par value: 7,009,139 shares
Class B Common Stock, $1 par value: 6,068,952 shares
PORTIONS OF THE FOLLOWING DOCUMENTS ARE INCORPORATED HEREIN BY REFERENCE:
Proxy Statement for 1995 annual meeting of shareholders (incorporated by
reference into Part III, to the extent indicated therein).
<PAGE>
PART I
Unless the context indicates otherwise, references to the number
of the Company's various facilities set forth in this Form 10-K Annual
Report are as of June 30, 1995.
Item 1. Business.
The Marcus Corporation and its subsidiaries (collectively
referred to herein as the "Company") are engaged in four business
segments: motels; hotels and resorts; restaurants; and movie theatres.
The Company's motel operations include a chain of 110 Budgetel
Inn limited service motels in 27 states and three Woodfield Suites all-
suite hotels. Of the 110 Budgetel Inns, 84 are owned or operated by the
Company and 26 are franchised.
The Company's hotel and resort operations include the Pfister
and the Milwaukee Hilton (formerly the Marc Plaza) which are full-service
hotels in the Milwaukee, Wisconsin metropolitan area, and the Grand Geneva
Resort & Spa, which is a full-facility destination resort in Lake Geneva,
Wisconsin. The Company also operates or contract manages two hotels for
third parties: the Mead Inn in Wisconsin Rapids, Wisconsin and the
Crowne-Plaza Northstar in Minneapolis, Minnesota.
The Company's restaurant division includes 34 KFC (Kentucky
Fried Chicken) restaurants in Wisconsin. During fiscal 1995, the Company
sold, leased or closed its Marc's Big Boy restaurants, Marc's Cafe &
Coffee Mill restaurants, Big Boy Express restaurants and Original Gino's
East of Chicago Restaurant in Wisconsin. On June 30, 1995, the Company
also sold its 18 Applebee's Neighborhood Grill & Bar ("Applebee's")
restaurants and related development rights in Wisconsin and Illinois. The
Company currently is committed to operating KFC restaurants.
The Company operates 36 movie theatres with an aggregate of 200
screens throughout Wisconsin and in Northern Illinois.
The Company is currently in the second year of an aggressive
multi-year expansion plan which is expected to impact all four divisions.
The Company's current plans include pursuing the following goals:
- Increasing the number of Budgetel Inns to 300 by the year
2000, with up to 10 new Company-owned and up to 20 new
franchised motels planned to open in fiscal 1996. The
Company believes that much of its anticipated future growth
will ultimately come from its increasing emphasis on
opening new franchised Budgetel Inns.
- Continuing to expand the number of Company-owned Woodfield
Suites by up to one or two units each year for the next few
fiscal years, including up to two new facilities in fiscal
1996.
- Doubling the number of movie theatre screens to 400 by the
year 2000, with continued expansion outside of Wisconsin.
A total of up to 44 new screens are currently planned to
open in fiscal 1996, including 16 screens at two new multi-
plex theatres (including one in Illinois) and new screen
additions at five existing locations.
- Adding up to one or two hotel properties each year over the
next few fiscal years, either Company-owned or managed for
others.
- Expanding the Company's franchised KFC restaurants by
approximately one or two new units per year, in addition to
exploring the opening of new or converted KFC/Taco Bell
combination restaurants.
The actual number, mix and timing of future new facilities will depend in
large part on continuing favorable industry and general economic
conditions, the competitive environment, evolving customer needs and
trends, and the availability of attractive opportunities. It is likely
that the Company's expansion goals will continue to evolve and change in
response to these and other factors.
Business Segment Data
Set forth below is certain business segment data for the
Company's three most recent fiscal years relating to the Company's four
industry segments. Intersegment sales and transfers are not material.
Fiscal Year
1995 1994 1993
(Dollars in thousands)
Revenues from
unaffiliated customers:
Motels $ 104,356 $89,043 $80,622
Hotels and resorts 45,292 32,330 28,462
Restaurants 74,076 70,404 59,014
Theatres 53,968 50,494 43,832
Corporate items(1) 298 343 980
---------- -------- --------
$ 277,990 $242,614 $212,910
========= ======== =========
Operating income (loss):
Motels $ 31,992 $ 26,041 $ 23,801
Hotels and resorts 1,473 2,550 2,093
Restaurants 3,318 1,499 599
Theatres 12,175 11,483 9,612
Corporate items(1) (2,163) (3,689) (2,971)
-------- -------- --------
$ 46,795 $ 37,884 $ 33,134
======== ======== ========
Identifiable assets:
Motels $ 211,112 $182,174 $166,193
Hotels and resorts 68,731 45,787 24,041
Restaurants 53,090 51,896 46,282
Theatres 46,928 47,244 36,898
Corporate items(1) 27,221 34,505 36,041
-------- -------- --------
$ 407,082 $361,606 $309,455
========= ======== =========
__________
(1) Corporate items include amounts not allocable to specific business
segments. Revenues consist principally of rent and the corporate
operating loss includes general corporate expenses. Corporate assets
include primarily cash and cash equivalents, notes receivable,
receivables from joint ventures and land held for development.
Motel Operations
Budgetel Inns
The Company owns, operates or franchises 110 economy motels,
with over 11,000 rooms, under the name "Budgetel Inn" in 27 states. The
Company operates 26 Budgetel Inns through franchisees. The remaining
Budgetel Inns are either Company-owned (78) or operated under joint
venture agreements (6).
Targeted at the business traveler, Budgetel Inns feature an
upscale, contemporary exterior appearance, are generally located in high
traffic commercial areas in close proximity to interstate highway exits
and major thoroughfares and typically vary in size between 60 and 150
rooms.
The Company believes that providing amenities not typically
associated with limited service motels help distinguish Budgetel Inns from
many of its competitors. These amenities include executive conference
centers, room-delivered complimentary continental breakfasts, king-sized
beds, free local telephone calls and incoming fax transmissions, non-
smoking rooms, in-room coffeemakers and hair dryers, remote control cable
televisions, extra-long telephone cords and large working desks. To
enhance customer security, the Company has converted all of its Company-
owned and franchised Budgetel Inn rooms to "card key" locking systems and
provides well-lighted parking areas and all-night front desk staffing.
The interior of each Budgetel Inn is refurbished in accordance with a
strict periodic schedule.
Budgetel Inns operates a nationwide guest reservation center,
where travelers can call 1-800-4-BUDGET toll-free to obtain Budgetel Inn
room reservations and other information.
The Company has a national franchise program for its Budgetel
Inns and intends to increase its emphasis on opening more franchised
Budgetel Inns. Franchisees pay an initial franchise fee and annual
marketing assessments, reservation system assessments and royalty fees
based on room revenues. The Company is qualified to sell, and anticipates
ultimately selling, franchises in all 50 states.
Depending upon continuing favorable industry conditions, the
Company currently plans to add up to 30 new Budgetel Inns in fiscal 1996
(10 Company-owned and 20 franchised). During fiscal 1995, six new
Company-owned units opened and four franchised units were opened. An
additional 11 franchise inns were under development at the end of fiscal
1995 and seven new Company-owned Budgetel Inns were under construction.
Woodfield Suites
The Company operates three mid-priced, all-suite hotels under
the name "Woodfield Suites" and plans to open two more Woodfield Suites in
fiscal 1996. Woodfield Suites offers all of its guests the use of its
centrally-located swimming pool, whirlpool and game room. Each suite has
a bedroom and separate living room and features an extra-length bed,
sleeper sofa for additional guests, microwave, refrigerator, wet bar,
television and hair dryer. Some suites also have a kitchenette. All guests
receive a free continental breakfast and are invited to a free cocktail
hour. The Company plans to open two new Woodfield Suites in fiscal 1996.
Hotels and Resorts Operations
The Pfister Hotel
The Company owns and operates the Pfister Hotel in downtown
Milwaukee. The Pfister Hotel, a full service, luxury hotel, has 307 rooms
(including 80 luxury suites), three restaurants, two cocktail lounges, a
night club, an indoor swimming pool, an exercise facility and a 275-car
parking ramp. The Pfister has 20,000 square feet of banquet and
convention facilities. Banquet and meeting rooms can accommodate up to
3,000 persons and features two large ballrooms, including the largest
ballroom in the Milwaukee metropolitan area, with banquet seating for
1,200 people. A portion of the Pfister's first-floor space is leased for
use by retail tenants. In fiscal 1995, the Pfister Hotel earned its 19th
consecutive four-diamond award from the American Automobile Association.
The Pfister is also a member of the Preferred Hotels and Resorts Worldwide
Association, an organization of independent luxury hotels and resorts, and
the Association of Historic Hotels of America.
The Milwaukee Hilton
The Company owns and operates the 500-room Milwaukee Hilton.
Formerly known as the Marc Plaza Hotel, the Company secured a Hilton
franchise for the hotel which reopened on June 1, 1995 after a six-month
renovation and restoration project. All 500 guest rooms, bathrooms,
public areas and 30,000 square feet of meeting space have been remodeled.
The hotel will be connected by skywalk to the proposed new convention
center. The Company leases office suites on two floors of the Milwaukee
Hilton to professional and other business tenants on a short- to
intermediate-term basis and provides such tenants with various secretarial
and other office-type services. The Hilton franchise affiliation is
expected to benefit the Milwaukee Hilton through the Hilton's
international centralized reservation and marketing system, advertising
cooperatives and frequent stay programs.
The Grand Geneva Resort & Spa
The Grand Geneva Resort & Spa in Lake Geneva, Wisconsin is a
full-facility destination resort located on 1,300 acres. The largest
convention resort in Wisconsin includes 355 guest rooms, a 13,000 square
foot convention center, three speciality restaurants, two cocktail
lounges, two championship golf courses, several ski-hills, four indoor
tennis courts, two racquetball courts, four swimming pools, a fitness and
sports complex, horse stables and an on-site airport.
Completed renovation projects at the Grand Geneva in fiscal 1995
included the addition of an 8000 square foot ballroom (bringing total
meeting and convention space to 50,000 square feet), a full European spa
and lap pool, a totally renovated fitness and sports complex and five
outdoor tennis courts.
Chicago and northern Illinois remain the principal targeted
markets for the resort, which caters to sports and recreation leisure
travelers and corporate, association and convention groups.
Operated and Managed Hotels
The Company operates the Crowne Plaza-Northstar Hotel in
Minneapolis, Minnesota pursuant to a management agreement. The Crowne
Plaza - Northstar Hotel is located in downtown Minneapolis and has 226
rooms, 13 meeting rooms, 6370 square feet of ballroom and convention
space, one restaurant, one cocktail lounge, and an exercise facility.
Formerly known as the Northstar Hotel, the property was substantially
remodeled in early 1994 and repositioned as the Crowne Plaza-Northstar,
the luxury brand of the Holiday Inn system. The hotel caters primarily to
upscale business travelers. The Company has the sole and exclusive rights
to supervise and direct the management and operation of the Crowne Plaza,
including determining operating policies, standards of operations, quality
of service and any other matters affecting customer relations. In
addition, all phases of promotion and publicity with respect to the Crowne
Plaza are solely and exclusively the responsibility of the Company.
The Company manages the Mead Inn in Wisconsin Rapids, Wisconsin,
pursuant to a management agreement. The Company has the sole and
exclusive right to supervise and manage the marketing and operations of
the Mead Inn. The Mead Inn has 154 guest rooms, 11 meeting rooms totaling
8,180 square feet of meeting space, two cocktail lounges, and an indoor
pool with sauna and whirlpool. Two new restaurants were added to the Mead
Inn in fiscal 1995. The Mead Inn caters primarily to business and leisure
travelers and, because of its central state location, to Wisconsin
associations.
The Company did not renew the operating agreement for the 150-
room Sheraton Mayfair Inn.
Restaurant Operations
Substantial changes occurred in the Company's restaurant
division during and shortly after fiscal 1995. Consistent with the
Company's previously announced plan to close or sell limited potential
restaurant locations, during the fiscal year the Company divested 11
Marc's Cafe & Coffee Mill restaurants by leasing the restaurants to a
group of former restaurant division employees and closed the three
remaining Marc's Big Boy, two Big Boy Express, one KFC and one Original
Gino's East of Chicago restaurants. On June 30, 1995, the Company sold
its Applebee's restaurants and associated development rights for
approximately $48.3 million. The Company continues to operate KFC
restaurants.
The Company has non-exclusive franchise rights to operate KFC
restaurants in the Milwaukee metropolitan area and in northeast Wisconsin.
The Company has operated KFC restaurants for 35 years, currently operates
34 KFC restaurants and is the largest operator of KFC restaurants in
Wisconsin, based on the number of facilities operated. The restaurants
feature Kentucky Fried Chicken and other franchisor-authorized food items,
including Colonel's Rotisserie Gold non-fried chicken which was introduced
in fiscal 1994.
Virtually all of the Company's KFC restaurants feature inside
seating for approximately 40 customers, drive-thru windows and updated
electronic equipment to better facilitate food preparation and order
processing. In fiscal 1995, the Company closed two older, limited
potential KFC restaurants. The Company plans to build two new KFC's in
late fiscal 1996 and is currently working with Pepsico to possibly convert
certain KFC locations to combined KFC/Taco Bell restaurants. The Company
plans on closing three limited potential KFC's in fiscal 1996.
The Company's KFC locations operate under individual franchise
agreements ranging in terms from 10 to 20 years in length. Franchise fees
approximate 4% of gross sales and, in addition, an initial flat fee of
$20,000 is payable for each new KFC restaurant. The KFC franchise
arrangement has been, and is expected to continue to be, material to the
success of the Company's restaurant division.
The KFC franchisor specifies certain product requirements and
provide for certain approved suppliers of products and supplies in order
to maintain the franchise's quality standards.
Theatre Operations
The Company operates 36 movie theatre locations with an
aggregate of 200 screens in Wisconsin and Northern Illinois for an average
of 5.6 screens per location. The Company's facilities include 34 multi-
screen complexes and two single-screen theatres. The Company's long-term
growth strategy is to focus on multi-screen theatres, which typically vary
in seating capacity from 150 to 450 seats per screen, allowing the Company
to offer a diversified selection of films to attract additional customers,
exhibit movies in larger or smaller auditoriums within the same theatre
depending on the popularity of the movie and benefit from the economies of
having common box office, concession, projection and lobby facilities.
The Company's last remaining outdoor theatre will not be reopened in
fiscal 1996. Virtually all of the Company's movie theatres feature
exclusively first-run films, although the Company is exploring opening
discount movie theatre locations.
The results of the Company's movie theatre business (and the
movie theatre industry in general) are largely dependent upon the box
office appeal and marketing of available first-run films. Movie
production has been stimulated in large part by additional demand from
ancillary markets such as home video, pay-per-view and cable television,
as well as increased demand from European film markets. The annual number
of first run film releases has more than doubled since 1981. Over 160
first-run films were released in fiscal 1995, including such box office
hits as The Lion King, Forrest Gump, Disclosure, Dumb & Dumber, The Santa
Clause, Speed, Mask, True Lies and others.
In fiscal 1995, the Company opened 18 new screens, including 16
at two new eight-plex theatres in Delafield and Green Bay, Wisconsin.
Three theatres with a total of five screens were closed in fiscal 1995,
two of which were sold, and the Company did not renew the lease on its
last outdoor theatre. Since the end of fiscal 1988, the number of screens
in the Marcus theatre circuit has grown by 59, representing a 42%
increase. In fiscal 1996, the Company plans on opening approximately 44
new screens, including a new ten-plex theatre in Orland Park, Illinois, a
new eight-plex theatre in New Berlin, Wisconsin, a new eight-plex theatre
in Appleton, Wisconsin and adding screens to a number of existing
theatres.
The Company obtains its films from all of the various national
motion picture production and distribution companies, has never
experienced difficulties in obtaining an adequate supply of available
first-run films and is not dependent on any single motion picture
supplier. Bookings, advertising, refreshment purchases and promotion are
handled centrally by an administrative staff.
The Company strives to provide its movie patrons with high-
quality picture and sound presentation in clean, comfortable, attractive
and contemporary theatre environments. Substantially all of the Company's
movie theatre complexes feature either digital sound, Dolby or other
stereo sound systems; acoustical ceilings; side wall insulation;
engineered drapery folds to eliminate sound imbalance, reverberation and
distortion; tiled floors; loge seats; cup-holder chair-arms; and computer-
controlled heating, air conditioning and ventilation. Computerized box
offices permit most of the Company's movie theatres to sell tickets in
advance and allow tracking of attendance by film title and time. Most of
the Company's theatres are accessible to persons with disabilities and
provide wireless headphones for hearing-impaired moviegoers. The Company
also operates an exclusive customer information telephone system in
Milwaukee and Madison, allowing customers to call for information as to
the locations, times and titles of movies being shown by the Company
throughout each metropolitan area. In fiscal 1995, the Company introduced
digital sound systems at eight of its screens, with seven additional
theatres scheduled to be upgraded to digital sound in fiscal 1996.
The Company sells food and beverage concessions at all of its
movie theatres. The Company believes a wide variety of food and beverage
items, properly merchandised, increases concession revenue per patron.
Although popcorn still remains the traditional favorite with moviegoers,
the Company continues to upgrade its available concessions by offering a
wide range of choices. For example, some of the Company's theatres offer
hot dogs, pizza, ice cream, pretzel bites, frozen yogurt, coffee, mineral
water and juices.
The Company plans to introduce IMAX Ridefilm giant screen three-
dimensional ride immersion motion simulators at one or two of its multi-
plex theatres in fiscal 1996. The Company is also exploring developing
family entertainment centers as part of its theatre complexes. These
planned 40,000 square foot entertainment centers would feature soft play
areas for toddlers, lasertag for teenagers, mini golf for the family and
other entertainment options.
Competition
All of the Company's business segments are highly competitive
and there are other facilities in close proximity to most of the Company's
facilities which compete directly with those of the Company. In each of
its businesses, the Company experiences intense competition from national
and/or regional chain and franchise operations, some of which have
substantially greater financial and marketing resources than the Company.
The Company's Budgetel Inns compete with such national limited
service motel chains as Days Inn, Hampton Inn (owned by The Promus
Companies Incorporated), Fairfield Inn (owned by Marriott Corporation),
Red Roof Inn, La Quinta Inn, Comfort Inn and others, as well as a large
number of regional and local motels.
The Company's hotels compete in the Milwaukee metropolitan area
with the hotels operated by Hyatt Corporation, Marriott Corporation,
Ramada Inns, Holiday Inns and Wyndham Hotels. The major competition for
the Grand Geneva Resort & Spa consists primarily of independently operated
full-service resorts in the Lake Geneva area and other full service and
destination resorts in Wisconsin and Illinois. The Mead Inn competes with
limited-service motels in Wisconsin Rapids for business, and with other
central Wisconsin properties such as the Holiday Inn of Stevens Point, for
groups. The Crowne Plaza in Minneapolis competes with Hilton Hotels,
Hyatt Corporation, Marriott Corporation, Radisson Hotels and Holiday Inns.
In the restaurant business, the Company's KFC restaurants
compete locally with Hardee's, Boston Chicken, Popeye's and similar
national, as well as regional, fast food chains and individual restaurants
offering chicken.
The Company's movie theatres compete with large national movie
theatre operators, such as United Artists, Cinemark and Carmike Cinemas,
Inc., as well as with a wide array of smaller first-run and discount
exhibitors. Although movie exhibitors in general also compete with the
home video, pay-per-view and cable television markets, the Company
believes that such markets have assisted the growth of the movie theatre
industry by encouraging a significant increase in the number of first-run
movies produced and released for initial movie theatre exhibition, which
establishes the demand in the ancillary markets.
The Company believes that the principal factors of competition
in each of its businesses, in varying degrees, are the price and quality
of its product, quality and location of its facilities, and customer
service. The Company believes that it is well positioned to compete on the
basis of these factors.
Seasonality
Historically, the Company's first and fourth fiscal quarters
have produced the strongest operating results, since such periods coincide
with the typical summer seasonality of the movie theatre industry and the
spring and summer strength of the travel and food service aspects of the
Company's business. However, the Company has been experiencing less
seasonality in its theatre segment over the past several fiscal years due
to the increased movie industry emphasis on producing films directed to
more diverse and mature audiences and a more consistent distribution
release pattern.
Research and Development
Research and development expenditures for the Company are not
material.
Environmental Regulation
The Company does not expect federal, state or local
environmental legislation to have a material effect on the Company's
capital expenditures, earnings or competitive position. However, the
Company's activities in acquiring and selling real estate for business
development purposes have been complicated by the continued increased
emphasis placed by Company personnel on properly analyzing real estate
sites for potential environmental problems. This circumstance has resulted
in, and is expected to continue to result in, greater time and increased
costs involved in acquiring and selling properties associated with the
Company's various businesses.
Employees
As of the end of fiscal 1995, the Company had approximately
6,800 employees, a majority of whom were employed on a part-time basis. A
majority of the Company's hotel employees in Milwaukee are covered by
collective bargaining agreements. Relations with employees have been
satisfactory and there have been no work stoppages due to labor disputes.
Item 2. Properties.
The Company owns a substantial portion of its facilities,
including the Pfister Hotel, the Milwaukee Hilton and the Grand Geneva
Resort and Spa, and leases the remainder. The Company also manages two
hotel properties for third parties. Additionally, the Company owns
properties acquired for the future construction and operation of new
Company operating facilities. Some of its properties are leased from
entities owned by principal shareholders of the Company. All of the
Company's properties are suitably maintained and adequately utilized to
cover the respective business segment served.
The operating properties owned and leased by the Company as of
June 30, 1995 are summarized in the following table:
<TABLE>
<CAPTION>
Total Number Leased From Leased From Managed for Managed for
of Facilities Unrelated Related Related Unrelated
Operation in Operation Owned(1) Parties Parties Parties Parties
<S> <C> <C> <C> <C> <C> <C>
Restaurants:
KFC 34 34 0 0 0 0
Movie Theatre
Screens:
Indoor 200 144 50 6 0 0
Hotels and Resorts
Hotels 4 2 0 0 0 2
Resorts 1 1 0 0 0 0
Motels
Budgetel 84 78 0 1 19 1
Woodfield Suites 3 3 0 0 0 0
---- ---- ---- ---- ---- ----
TOTALS 326 262 50 7 19 3
<FN>
________________
(1) Three of the KFC restaurants, 17 of the movie theatre screens
owned by the Company, and one of the motels are on land leased from
unrelated parties under long-term leases. The Company's partnership
interests in 19 Budgetel Inns that it manages and six indoor movie theatre
screens that it leases are not included in this column.
</TABLE>
Certain of the above individual properties or facilities are
subject to purchase money or construction mortgages or commercial lease
financing arrangements, none of which encumbrances are considered in the
aggregate to be material to the Company.
Assuming exercise by the Company of all renewal and extension
options, the terms of the Company's operating property leases expire on
various dates, with over 90% of the leases expiring after 1996.
Item 3. Legal Proceedings.
The Company does not believe that any pending legal proceeding
involving the Company is material to its business. No legal proceeding
required to be disclosed under this item was terminated during the fourth
quarter of the Company's 1995 fiscal year.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of the Company's
shareholders during the fourth quarter of the Company's 1995 fiscal year.
EXECUTIVE OFFICERS OF COMPANY
Each of the current executive officers of the Company is
identified below together with information about each such officer's age,
current position with the Company and employment history for at least the
past five years:
Name Position Age
Stephen H. Marcus Chairman of the Board, President
and Chief Executive Officer 60
Bruce J. Olson Group Vice President 45
H. Fred Delmenhorst Vice President-Human Resources 54
Kenneth A. MacKenzie Chief Financial Officer,
Treasurer and Controller 61
Thomas F. Kissinger General Counsel and Secretary 35
Stephen H. Marcus became Chairman of the Board of the Company in
December 1991. He also served as Treasurer of the Company prior to the
election of Mr. MacKenzie to such position in September 1987. In December
1988, he became the Chief Executive Officer of the Company, in addition to
Chief Operating Officer. Mr. Marcus has been with the Company for 35
years.
Bruce J. Olson has been employed in his present position with
the Company since July 1991. Mr. Olson previously served as Vice
President-Administration and Planning for the Company from September 1987
until July 1991 and as Executive Vice President and Chief Operating
Officer of Marcus Theatres Corporation from August 1978 until October
1988, when he was appointed President of that corporation. Mr. Olson
joined the Company in 1974.
H. Fred Delmenhorst has been the Vice President-Human Resources
since he joined the Company in December 1984.
Kenneth A. MacKenzie has been the Controller of the Company or
its Marcus Restaurants, Inc. subsidiary since June 1979. He was elected
Treasurer of the Company in September 1987 and Chief Financial Officer in
June 1993.
Thomas F. Kissinger joined the Company in August 1993 as
Secretary and Director of Legal Affairs and in August 1994 was promoted to
General Counsel and Secretary. Prior thereto, Mr. Kissinger was
associated with the law firm of Foley & Lardner for five years.
The executive officers of the Company are generally elected
annually by the Board of Directors after the annual meeting of
shareholders. Each executive officer holds office until his successor has
been duly qualified and elected or until his earlier death, resignation or
removal.
<PAGE>
PART II
Item 5. Market for the Company's Common Equity and Related Shareholder
Matters.
Last Sale Price Range of Common Stock*
First Second Third Fourth
Quarter Quarter Quarter Quarter
Fiscal Year Ended May 25, 1995
High $28 5/8 $28 $28 $30 3/4
Low $24 5/8 $25 $24 $25 5/8
Fiscal Year Ended May 26, 1994
High $24 1/4 $26 1/4 $29 1/4 $28 1/2
Low $20 1/2 $23 3/4 $23 1/4 $25 3/4
_________________________
*The Company's Common Stock began trading on the New York Stock
Exchange on December 14, 1993. Prior thereto, the Common Stock was quoted
on the Nasdaq National Market.
On August 11, 1995, there were 1,731 shareholders of record for
the Common Stock and 33 shareholders of record for the Class B Common
Stock.
See Item 6 for information on the Company's cash dividends paid
on its Common Stock. Cash dividends paid on the Company's Class B Common
Stock were $.31 and $.25 per share in each of fiscal 1995 and 1994,
respectively. On June 22, 1995, the Company's Board of Directors declared
a cash dividend of $.40 per Common Share and $.3636 per Class B Common
Share payable on August 1, 1995 to shareholders of record on July 20,
1995.
Item 6. Selected Financial Data.
<TABLE>
<CAPTION>
Fiscal Year
1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Operating Results
(Dollars In Thousands)
Revenues $277,990 $242,614 $212,910 $204,297 $188,008 $176,592
Effective income tax rate 40.0% 39.3% 39.1% 39.5% 38.4% 34.2%
Net earnings $ 24,136 $22,829* $ 16,482 $ 13,289 $ 11,618 $ 10,781
Common Stock Data
Net earnings per share $ 1.84 $ 1.74* $ 1.42 $ 1.18 $ 1.02 $ .94
Cash dividends per common
share $ 0.34 $ 0.28 $ 0.26 $ 0.22 $ 0.20 $ 0.18
Average shares outstanding
(In Thousands) 13,127 13,107 11,648 11,255 11,364 11,484
Book value per share $ 16.41 $ 14.88 $ 13.40 $ 11.19 $ 10.22 $ 9.37
Financial Position (Year
End) (In Thousands)
Total assets $407,082 $361,606 $309,455 $274,394 $255,117 $230,789
Long-term debt 116,364 107,681 78,995 100,032 96,183 85,563
Shareholders' equity 214,464 193,918 173,980 124,874 114,697 106,983
Capital expenditures 77,083 75,825 47,237 27,238 39,861 42,385
Financial Ratios
Current ratio (year end) .41 .67 .90 .73 .65 .91
Return on revenues 8.7% 9.4% 7.7% 6.5% 6.2% 6.1%
Return on average
shareholders' equity 11.8% 12.4% 11.0% 11.1% 10.5% 10.5%
<CAPTION>
Fiscal Year
1989 1988 1987 1986 1985
<S> <C> <C> <C> <C> <C>
Operating Results
(Dollars In Thousands)
Revenues $166,710 $162,393 $152,531 $141,202 $131,844
Effective income tax rate 34.5% 40.3% 45.4% 39.7% 41.8%
Net earnings $ 10,042 $ 10,073 $ 8,078 $ 8,719 $ 8,215
Common Stock Data
Net earnings per share $ .87 $ .87 $ .70 $ .75 $ .71
Cash dividends per common
share $ 0.17 $ 0.15 $ 0.15 $ 0.13 $ 0.13
Average shares outstanding
(In Thousands) 11,537 11,576 11,576 11,543 11,552
Book value per share $ 8.61 $ 7.93 $ 7.20 $ 6.65 $ 6.04
Financial Position (Year End)
(In Thousands)
Total assets $197,898 $181,354 $167,289 $156,343 $122,170
Long-term debt 64,163 56,635 55,255 52,316 31,537
Shareholders' equity 98,250 91,318 82,952 76,328 69,011
Capital expenditures 34,253 23,591 28,234 38,865 25,096
Financial Ratios
Current ratio (year end) .75 1.00 .94 1.13 1.09
Return on revenues 6.0% 6.2% 5.3% 6.2% 6.2%
Return on average
shareholders' equity 10.6% 11.6% 10.1% 12.0% 12.4%
<FN>
___________________________
* Includes one-time accounting change benefit of $1.8 million or $0.14
per share. See Item 7.
</TABLE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operation.
RESULTS OF OPERATIONS
GENERAL
The Marcus Corporation and its four divisions report their
consolidated and individual segment results of operations on either a 52-
or 53-week fiscal year. Each of fiscal 1995, 1994 and 1993 was a 52-week
year for the Company and each of its divisions. Fiscal 1996 will be a 53-
week fiscal year for the Company and the theatre division, while the
remaining divisions will report on a 52-week fiscal year.
Total consolidated revenues for fiscal 1995 were $278.0 million,
an increase of $35.4 million, or 14.6%, compared to fiscal 1994
consolidated revenues of $242.6 million. Net earnings for fiscal 1995
were $24.1 million, or $1.84 per share. Earnings increased $3.1 million,
or 14.7%, over comparable fiscal 1994 earnings of $21.0 million, or $1.60
per share, excluding the one-time tax benefit described below. Including
the one-time $1.8 million tax benefit, or $0.14 per share, resulting from
the Company's adoption of SFAS 109 "Accounting for Income Taxes," fiscal
1994 net earnings were $22.8 million, or $1.74 per share. Weighted
average shares outstanding for both fiscal 1995 and 1994 were $13.1
million. As a result of the recent substantial changes effected within
the Company's restaurant division, as described below, the Company expects
fiscal 1996 revenues to be lower than in fiscal 1995 and to be weighted
more from the Company's two lodging segments and less from the Company's
restaurant division. Fiscal 1996 net earnings should not be affected
adversely by these changes.
The Company's income tax expense for fiscal 1995 was $16.1
million, an increase of $2.5 million from fiscal 1994. The Company's
effective tax rate for fiscal 1995 was 40.0% versus the prior fiscal
year's 39.3%.
Historically, the Company's first and fourth fiscal quarters
have produced the strongest operating results, since such periods coincide
with the typical summer seasonality of the movie theatre industry and the
spring and summer strength of the travel and food service aspects of the
Company's business. However, the Company has been experiencing less
seasonality in its theatre segment over the past several fiscal years due
to the continued movie industry emphasis on producing films directed to
more diverse and mature audiences and a more consistent movie distribution
release pattern.
The Company is currently in the second year of an aggressive
multi-year expansion plan which is expected to impact all four divisions.
The Company's current plans include the following goals:
- Increasing the number of Budgetel Inns up to 300 by the
year 2000, with up to 10 new Company-owned and up to 20 new
franchised motels planned to open in fiscal 1996. The
Company believes that much of this anticipated future
growth will ultimately come from its increasing emphasis on
opening new franchised Budgetel Inns.
- Continuing to expand the number of Company-owned Woodfield
Suites by up to one or two units each year for the next few
fiscal years, including up to two new facilities in fiscal
1996.
- Doubling the number of movie theatre screens to 400 by the
year 2000, with continued expansion outside of Wisconsin.
A total of 44 new screens are currently planned to open in
fiscal 1996, including 16 screens at two new multi-plex
theatres (including one in Illinois) and new screen
additions at five existing locations.
- Adding up to one or two hotel properties each year over the
next few fiscal years, either Company-owned or managed for
others.
- Expanding the Company's franchised KFC restaurants by
approximately two new units per year, in addition to
exploring the opening of new or converted KFC/Taco Bell
combination restaurants.
The actual number, mix and timing of future new facilities will
depend in large part on continuing favorable industry and general economic
conditions, the competitive environment, evolving customer needs and
trends, and the availability of attractive opportunities. It is likely
that the Company's expansion goals will continue to evolve and change in
response to these and other factors.
MOTELS
Fiscal 1995 Versus Fiscal 1994
Total revenues in fiscal 1995 for the motel division were $104.4
million, an increase of $15.4 million, or 17.2%, compared to $89.0 million
in fiscal 1993. The motel division's operating profits in fiscal 1995
totaled $32.0 million, an increase of $6.0 million, or 22.9%, over the
division's fiscal 1994 operating profits of $26.0 million.
Average daily room rates increased by 6.3% at the Company's
motels in fiscal 1995 principally as a result of increased demand from
continued favorable lodging and general economic conditions. The
Company's motel occupancy percentage in fiscal 1995 remained consistent
with fiscal 1994, well above industry averages.
At June 30, 1995, there were 110 Budgetel Inns and three
Woodfield Suites in operation, compared to 98 Budgetel Inns and one
Woodfield Suites at 1994 fiscal year end. Six new Company-owned Budgetel
locations and four new franchised Budgetel locations opened in fiscal
1995. Together with the two new Woodfield Suites, the Company's new motels
contributed additional revenues of $9.9 million and nominal operating
profits in fiscal 1995. Similar comparative results are expected for new
facilities opened in fiscal 1996.
Fiscal 1994 Versus Fiscal 1993
Total revenues in fiscal 1994 for the motel division were $89.0
million, an increase of $8.4 million, or 10.4%, compared to fiscal 1993.
The motel division's operating profits in fiscal 1994 totaled $26.0
million, an increase of $2.2 million, or 9.4%, over the division's fiscal
1993 operating profits of $23.8 million.
Occupancy and average daily room rates continued to increase at
the Company's motels in fiscal 1994, principally as a result of improved
economic conditions and an effective Budgetel advertising campaign. The
Company's motel occupancy percentage increased by 1.4 percentage points
in fiscal 1994 from fiscal 1993 and the average daily motel room rate
increased by 4.0% in fiscal 1994 from 1993. The increased average
occupancy percentage and daily room rate contributed almost $3.8 million
to the motel division's increased fiscal 1994 revenues.
At the close of fiscal 1994, there were 98 Budgetel Inns and one
Woodfield Suites in operation, compared to 92 Budgetel Inns and one
Woodfield Suites at 1993 fiscal year end. Five new Company-owned Budgetel
locations and one new franchised Budgetel location opened in fiscal 1994.
Together, the six new facilities contributed additional revenues of $4.6
million and nominal operating profits in fiscal 1994.
THEATRES
Fiscal 1995 Versus Fiscal 1994
The theatre division's fiscal 1995 revenues were $54.0 million,
an increase of $3.5 million, or 6.9%, over $50.5 million in fiscal 1994.
Operating profits for fiscal 1995 were $12.2 million, an increase of
almost $700,000, or 6.0%, from $11.5 million in fiscal 1994.
At June 30, 1995, the Company operated 200 screens at 36
locations in Wisconsin and Illinois, compared to 189 screens at 36
locations at the end of fiscal 1994. Consistent with the Company's long-
term strategic plan to focus on operating large multi-screen theatres, the
Company opened new eight-plex theatres in Delafield, Wisconsin, in
November 1994 and in Green Bay, Wisconsin, on the first day of fiscal
1996. Additionally, three theatres with a total of five screens were
closed in fiscal 1995, two of which were sold, and the Company did not
renew the lease for fiscal 1996 on its last outdoor theatre. These
locations contributed $632,000 of revenues in fiscal 1995, with associated
pretax operating losses of $175,000. The addition of the new Delafield
theatre for a part of the fiscal year and the operation of the Gurnee
Mills ten-plex theatre for an entire year generated additional revenues of
over $3.8 million compared to fiscal 1994.
Revenues of the theatre business are heavily dependent on the
general audience appeal of available films, together with studio
marketing, advertising and support campaigns, factors over which the
Company has no control. In fiscal 1995, over 160 first-run films were
released, including such box office hits as The Lion King, Forrest Gump,
The Santa Clause, True Lies and Speed. Each of these films produced box
office receipts in excess of $1.0 million for the theatre division.
Approximately the same number of first-run films were released in fiscal
1994. The Company had six films contribute box office receipts in excess
of $1 million in fiscal 1994.
Total box office receipts in fiscal 1995 were $38.3 million, an
increase of $2.8 million, or 8.0%, from $35.5 million in fiscal 1994.
This increase can be attributed to a 3.1% increase in attendance and a
4.8% increase in the average ticket price. The increase in attendance was
due solely to the addition of the new Delafield theatre for the last half
of the fiscal year and the operation of Gurnee Mills for an entire fiscal
year. Attendance at other comparable locations decreased 2.0% between
fiscal years.
Vending revenues in fiscal 1995 were $14.6 million, an increase
of $1.0 million, or 7.3%, over $13.6 million in fiscal 1994, due to the
increase in theatre attendance and the 3.5% increase in the average
concession sales per person in fiscal 1995 from fiscal 1994.
Fiscal 1994 Versus Fiscal 1993
The theatre division's fiscal 1994 revenues were $50.5 million,
an increase of $6.7 million, or 15.2%, over fiscal 1993. Operating
profits for fiscal 1994 were $11.5 million, an increase of $1.9 million,
or 19.5%, over $9.6 million in fiscal 1993.
At fiscal 1994 year end, the Company operated 189 screens at 36
locations in Wisconsin and Illinois, compared to 184 screens at 38
locations at the end of fiscal 1993. The Company opened its first
Illinois location in fiscal 1994 at Gurnee Mills in metropolitan Chicago,
sold a previously closed outdoor theatre, sold two indoor theatres having
a total of three screens and closed one twin-screen theatre. These
theatre sales and closure resulted in a reduction of approximately
$445,000 of revenues from fiscal 1993. In fiscal 1994, over 160 first-run
films were released, including such box office hits as Jurassic Park,
Mrs. Doubtfire, The Fugitive, Sleepless in Seattle, The Firm and
Schindler's List. Each of these films produced box office receipts in
excess of $1.0 million for the theatre division.
Total box office receipts in fiscal 1994 were $35.5 million, an
increase of almost $5.0 million, or 16.2% from fiscal 1993. This increase
can be attributed to a 7.4% increase in attendance and an 8.1% increase in
the average ticket price. The increase in attendance was due principally
to the abundance of high-quality popular films released in fiscal 1994 and
the opening of the Gurnee Mills ten-plex theatre.
Vending revenues in fiscal 1994 were $13.6 million, an increase
of $1.7 million, or 14.6%, over fiscal 1993, due to the increase in
theatre attendance and the 6.4% increase in the average concession sales
per person in fiscal 1994 from fiscal 1993.
HOTELS AND RESORTS
Fiscal 1995 Versus Fiscal 1994
Total revenues from the Company's hotels and resorts division in
fiscal 1995 increased by $13.0 million, or 40.1%, to $45.3 million,
compared to the $32.3 million recognized in the previous fiscal year,
while operating profits decreased by $1.1 million, or 42.2%, to $1.5
million, compared to the $2.6 million earned in fiscal 1994. The reason
for the reduction in operating profits was the continuing non-capitalized
start-up and renovation expenses incurred for ongoing upgrades at the
Grand Geneva Resort & Spa.
The division's increase in revenues in fiscal 1995 was
attributable principally to an 11.4% increase in occupancy rates and a
16.5% increase in room rates. The increase in occupancy rates was due
primarily to generally favorable economic conditions and the increase in
room rates was mainly due to the relatively higher room rates at the newly
renovated Grand Geneva which was open for the entire fiscal year. These
factors contributed $14.2 million to the division's revenues in fiscal
1995. Additionally, the continuing favorable customer response to the
fiscal 1994 renovation of the Pfister Hotel contributed positively to
fiscal 1995 revenues, while the temporary closing of the Marc Plaza for
major renovation and remodeling for the last half of fiscal 1995 modestly
reduced revenues. The remainder of the fiscal 1995 revenue increase was
derived from an entire fiscal year of management fees from operating the
Mead Inn and the Crowne Plaza-Northstar. The Company elected not to renew
its Sheraton-Mayfair Inn operating agreement for fiscal 1996. This
decision should reduce revenues modestly in fiscal 1996, with no
significant expected effect on operating profits.
The Marc Plaza Hotel reopened as the Milwaukee Hilton on June 1,
1995. The Company believes that its new franchise affiliation with Hilton
Hotels Corporation, together with favorable customer reaction to its
renovation, will positively impact the hotel's occupancy and room rates in
fiscal 1996.
Fiscal 1994 Versus Fiscal 1993
Total revenues from the Company's hotels and resorts division in
fiscal 1994 increased by $3.9 million, or 13.6%, to $32.3 million, over
the previous fiscal year, while operating profits increased by $500,000,
or 21.8%, to $2.6 million, over fiscal 1993. Fiscal 1994 occupancy rates
at the Company's three continuing hotels increased by 5.8% and average
room rates for the division increased by 1.4% in fiscal 1994. The
increase in occupancy and room rates contributed $1.2 million to the
division's revenues in fiscal 1994. The remainder of the division's
increase in revenues in fiscal 1994 was attributable principally to the
opening of the Grand Geneva Resort & Spa and, to a significantly lesser
extent, management fees derived from the partial year of operating the
Company's two newly managed hotels during fiscal 1994.
During fiscal 1994, the hotels and resorts division added three
new properties totaling 735 rooms through the Company's July 1993 purchase
of the Grand Geneva Resort & Spa and by entering into two hotel management
contracts, one for the 226-room Crowne Plaza-Northstar in November 1993,
and the other for the 154-room Mead Inn in February 1994.
RESTAURANTS
Fiscal 1995 Versus Fiscal 1994
Substantial changes occurred in the Company's restaurant
division during and shortly after fiscal 1995. Consistent with the
Company's previously announced plan to close or sell limited potential
restaurant locations, during the fiscal year the Company divested 11
Marc's Cafe & Coffee Mill restaurants by leasing the restaurants to a
group of former restaurant division employees and closed its three
remaining Marc's Big Boy, two Big Boy Expresses, one KFC and one Original
Gino's East of Chicago restaurants.
On June 30, 1995, the Company sold its Applebee's Neighborhood
Grill & Bar restaurants and associated development rights for
approximately $48.3 million and recognized a pretax gain on disposition of
approximately $27.5 million. The Company also continues to lease two of
these restaurants to the buyer. The sale of its Applebee's restaurants,
together with the fiscal 1995 divestiture of its other restaurants, is
expected to reduce fiscal 1996 restaurant division revenues by
approximately $46 million, but fiscal 1996 operating profits are not
expected to be materially adversely affected. The Company currently plans
to continue operating its franchised KFC restaurants. The estimated $1.3
million in annual rental income from leasing the 11 divested Marc's Cafes
and the two sold Applebee's will be treated as restaurant division revenue
in fiscal 1996.
Restaurant division revenues totaled almost $74.1 million for
fiscal 1995, an increase of almost $3.7 million, or 5.2%, from $70.4
million in fiscal 1994. The revenue increase was due almost entirely to
the Company's five newly opened Applebee's, the operation of three
additional Applebee's for an entire fiscal year, and increasing customer
counts and average check amounts at the Company's 10 continuing Applebee's
and 34 KFC restaurants. The division's operating profits for fiscal 1994
were $3.3 million, an increase of $1.8 million, or 121.3%, from operating
profits of $1.5 million in fiscal 1994. Fiscal 1995 operating profit
improvements were derived principally from improved same store sales at
continuing Applebee's and KFCs and expense savings realized from divesting
its underperforming restaurants.
The Company's KFC operating profits increased significantly in
fiscal 1995 over fiscal 1994. KFC's decreased fiscal 1995 guest counts
were more than offset by an increase in average check amounts, resulting
in a same store sales increase of 1.7% in fiscal 1995 over fiscal 1994.
The Company believes that this result was largely caused by the focus of
the franchisor's promotional campaign on higher priced family meals. The
Company plans to open one or two new KFCs in fiscal 1996.
The Company is also exploring the potential conversion of
several of its KFC restaurants into combination KFC/Taco Bell restaurants,
but does not expect any such determination to have a material effect on
the division's fiscal 1996 revenues. The Company closed one KFC
restaurant in fiscal 1995 and plans to close three additional units in
fiscal 1996. Such closures are expected to have a positive effect on
KFC's operating profits in fiscal 1996.
Fiscal 1994 Versus Fiscal 1993
Restaurant division revenues totaled $70.4 million for fiscal
1994, an increase of $11.4 million, or 19.3%, from fiscal 1993. The
revenue increase was due almost entirely to the Company's newly opened
Applebee's restaurants and increasing customer counts and average check
amounts at the Company's continuing Applebee's and KFC restaurants. The
division's operating profits for fiscal 1994 were $1.5 million, an
increase of $900,000 from fiscal 1993. Fiscal 1994 operating profit
improvements were derived principally from improved same store sales at
continuing Applebee's and cost savings realized from closing or selling a
number of underperforming Big Boy restaurants during the last two fiscal
years.
In fiscal 1994, the Company's continuing Applebee's restaurants
achieved an 8.8% increase in same store sales and a 3.9% increase in guest
counts. These factors contributed a $715,000 increase in the division's
fiscal 1994 revenues.
Additionally, the Company opened two new Applebee's restaurants
during fiscal 1994 in its metropolitan Chicago franchise market, together
with one new restaurant and one expanded location in its Wisconsin
franchise area. These new and expanded locations contributed $4.3 million
in additional revenues in fiscal 1994, although start-up costs associated
with the new restaurants resulted in a $278,000 reduction in the
division's operating profits.
KFC experienced an increase in guest counts, coupled with an
increase in average check amounts, which resulted in a same store sales
increase of 5.2%, or approximately $1.2 million, over fiscal 1993. During
fiscal 1994, the Company's KFC restaurants introduced two new franchisor-
sponsored products, The Colonel's Rotisserie Gold Chicken in the fall of
1993, and a new eight-piece fried chicken cut with larger breast pieces in
May 1994. These new products contributed approximately $2.0 million in
revenues in fiscal 1994. Additionally, the Company realized $288,000 in
additional revenue during the year from the relocation of two KFC
restaurants in Milwaukee.
The Company continued to reduce its number of underperforming
Marc's Big Boy restaurants by closing one Big Boy during fiscal 1994. The
Big Boy closing, combined with the other Big Boy closings in fiscal 1993,
resulted in a loss of $2.1 million of fiscal 1993 revenues, but had a
positive impact of $340,000 on the division's fiscal 1994 operating
profits.
The Marc's Cafe & Coffee Mill concept entered its second year in
fiscal 1994, continuing its developmental process as customer counts and
same store sales varied by location. On an aggregate basis, revenues and
operating profits in fiscal 1994 from Marc's Cafes were flat compared to
fiscal 1993.
FINANCIAL CONDITION
The Company's lodging, movie theatre and restaurant businesses
each generate significant and consistent daily amounts of cash because
each segment's revenue is derived predominantly from consumer cash
purchases. The Company believes that these consistent and predictable
cash sources, together with the availability to the Company of $27 million
in unused credit lines at fiscal 1995 year end, should be adequate to
support the ongoing operational liquidity needs of the Company's
businesses.
Net cash provided by operations increased by $6.7 million, or
13.4%, in fiscal 1995 to $56.9 million compared to fiscal 1994. The
increase resulted from increased net earnings, an increase in depreciation
and amortization expense reflecting the Company's continuing facilities
expansion and an increase in deferred income taxes.
Net cash used in investing activities decreased by $7.3 million,
or 9.8%, to $67.5 million in fiscal 1995. The decrease was due primarily
to an increase of $3.7 million in cash received from joint ventures. The
Company also made a $2.9 million loan to an affiliated hotel in fiscal
1994. The most significant amount of capital spent by the Company during
fiscal 1995 was on the continued improvements at the Grand Geneva and on
the remodeling and renovation of the Milwaukee Hilton. Other significant
capital expenditures in fiscal 1995 were made in opening the Company's two
new multi-plex theatres and its newly opened Budgetel Inns and Woodfield
Suites.
Principally as a result of funding a portion of the Company's
fiscal 1995 facility expansions and renovations, the Company's total debt
increased to $125.6 million at the close of fiscal 1995, compared to
$112.0 million at the end of fiscal 1994, primarily through increased
borrowings on its line of credit and from commercial paper issuances. Net
cash provided by financing activities was $9.4 million in fiscal 1995, a
decrease of $9.3 million, or 49.7%, from fiscal 1994, as the Company
financed more of its capital requirements from operating activities. The
Company's debt-capitalization ratio remained constant at 0.37 at May 25,
1995, compared to the prior fiscal year end. Additionally, the Company
received $48.3 million from the sale of its Applebee's restaurants in June
1995, which the Company intends to use to help finance its growth plans.
The current aggregate estimated cost of the Company's multi-year
expansion plan, which began in fiscal 1994, is between $350 million and
$400 million, with total expenditures (including normal continuing capital
maintenance projects) of $75.8 million and $77.1 million incurred in
fiscal 1994 and 1995, respectively, and estimated total capital
expenditures in fiscal 1996 expected to be $130 million. The Company's
fiscal 1996 expansion plans are expected to be funded by cash generated
from operations, the funds received from its disposition of its Applebee's
restaurants and other sold facilities and additional bank debt.
At the end of fiscal 1995, the Company maintained one interest
rate swap agreement on a notional amount of $15.0 million in order to
ensure a favorable long-term interest rate. This swap agreement has not
had, and is not expected to have, any material adverse impact on the
Company's results of operations or financial condition. (See Note 4 of
Notes to Consolidated Financial Statements.)
Item 8. Financial Statements and Supplementary Data.
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
of The Marcus Corporation
We have audited the accompanying consolidated balance sheets of The Marcus
Corporation (the Company) as of May 25, 1995 and May 26, 1994, and the
related consolidated statements of earnings, shareholders' equity and cash
flows for each of the three years in the period ended May 25, 1995. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of the
Company at May 25, 1995 and May 26, 1994, and the consolidated results of
its operations and its cash flows for each of the three years in the
period ended May 25, 1995, in conformity with generally accepted
accounting principles.
As discussed in Note 7 to the consolidated financial statements, effective
May 28, 1993, the Company changed its method of accounting for income
taxes.
Milwaukee, Wisconsin ERNST & YOUNG LLP
July 21, 1995
<PAGE>
THE MARCUS CORPORATION
CONSOLIDATED BALANCE SHEETS
May 25, 1995 May 26, 1994
(In Thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 8,798 $ 9,974
Accounts and notes receivable (Note 3) 6,166 6,359
Receivables from joint ventures (Note 9) 1,861 7,983
Other current assets 4,817 3,049
------- -------
Total current assets 21,642 27,365
PROPERTY AND EQUIPMENT, net (Note 3) 374,284 321,871
OTHER ASSETS:
Investments in joint ventures (Notes 8 and
9) 629 662
Other (Note 10) 10,527 11,708
-------- -------
Total other assets 11,156 12,370
-------- -------
Total assets $407,082 $361,606
========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable (Note 9) $ 4,452 $ 4,533
Accounts payable 17,886 13,248
Income taxes 2,069 2,796
Taxes other than income taxes 9,091 7,307
Accrued compensation 1,458 1,448
Other accrued liabilities 8,052 6,978
Current maturities on long-term debt
(Note 4) 9,245 4,357
-------- -------
Total current liabilities 52,253 40,667
LONG-TERM DEBT (Note 4) 116,364 107,681
DEFERRED INCOME TAXES (Note 7) 19,957 15,999
DEFERRED COMPENSATION AND OTHER (Note 6) 4,044 3,341
COMMITMENTS, LICENSE RIGHTS AND CONTINGENCIES
(Note 8)
SHAREHOLDERS' EQUITY (Note 5):
Preferred Stock, $1 par; authorized
1,000,000 shares; none issued
Common Stock:
Common Stock, $1 par; authorized
30,000,000 shares; issued 7,522,368
shares in 1995 and 7,365,987 shares in
1994 7,522 7,366
Class B Common Stock, $1 par; authorized
20,000,000 shares; issued and
outstanding 6,068,952 shares in 1995
and 6,225,333 shares in 1994 6,069 6,225
Capital in excess of par 45,154 44,745
Retained earnings 159,675 139,777
-------- --------
218,420 198,113
Less cost of Common Stock in treasury
(525,847 shares in 1995 and 559,608
shares in 1994) 3,956 4,195
-------- --------
Total shareholders' equity 214,464 193,918
-------- --------
Total liabilities and shareholders' equity $407,082 $361,606
======== ========
See accompanying notes.
<PAGE>
THE MARCUS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
THREE YEARS ENDED MAY 25, 1995
May 25, May 26, May 27,
1995 1994 1993
(In Thousands, Except Per Share Data)
REVENUES:
Rooms and telephone $119,705 $100,691 $ 91,332
Food and beverage 89,755 81,948 69,225
Theatre operations 53,733 50,263 43,551
Other income 14,797 9,712 8,802
-------- -------- -------
Total revenues 277,990 242,614 212,910
COSTS AND EXPENSES:
Rooms and telephone 42,780 37,100 33,603
Food and beverage 69,137 63,470 54,565
Theatre operations 32,612 30,212 26,285
Advertising and marketing 16,241 13,348 11,997
Administrative 23,080 21,569 18,794
Depreciation and amortization 23,570 20,385 18,273
Rent (Note 8) 3,727 3,572 3,028
Property taxes 9,488 8,873 8,320
Other operating expenses 10,560 6,201 4,911
-------- -------- --------
Total costs and expenses 231,195 204,730 179,776
-------- -------- --------
OPERATING INCOME 46,795 37,884 33,134
OTHER INCOME (LOSS):
Interest income 1,525 2,162 1,825
Interest expense (8,587) (6,931) (7,200)
Gain (loss) on disposition
of property and equipment 463 1,539 (717)
------- ------- -------
(6,599) (3,230) (6,092)
------- -------- -------
EARNINGS BEFORE INCOME TAXES AND
CHANGE IN ACCOUNTING PRINCIPLE 40,196 34,654 27,042
INCOME TAXES (Note 7) 16,060 13,607 10,560
------- ------- -------
EARNINGS BEFORE CHANGE IN
ACCOUNTING PRINCIPLE 24,136 21,047 16,482
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING FOR INCOME TAXES
(Note 7) - 1,782 -
--------- --------- --------
NET EARNINGS $ 24,136 $ 22,829 $ 16,482
======== ========= =========
EARNINGS PER SHARE:
Earnings before change in
accounting principle $ 1.84 $ 1.60 $ 1.42
Cumulative effect of change
in accounting for income
taxes - .14 -
-------- --------- ---------
Net earnings $ 1.84 $ 1.74 $ 1.42
========= ========= =========
WEIGHTED AVERAGE SHARES
OUTSTANDING (Note 5) 13,127 13,107 11,648
======== ========= =========
See accompanying notes.
<PAGE>
THE MARCUS CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
THREE YEARS ENDED MAY 25, 1995
Class B Capital
Common Common in Excess Retained Treasury
Stock Stock of Par Earnings Stock
(In Thousands)
BALANCES AT MAY 28,
1992 $3,508 $4,384 $15,666 $106,675 $(5,359)
Cash dividends:
$.23 per share
Class B Common
Stock - - - (1,203) -
$.26 per share
Common Stock - - - (1,525) -
Three-for-two stock
split 1,767 2,177 (3,944) - -
Secondary stock
offering 1,755 - 32,856 - -
Exercise of stock
options - - (226) - 646
Purchase of treasury
stock - - - - (50)
Savings and
profit-sharing
contribution - - 203 - 163
Reissuance of
treasury stock - - 2 - 3
Conversions of Class
B Common Stock 239 (239) - - -
Net earnings for the
year - - - 16,482 -
-------- ------- -------- -------- -------
BALANCES AT MAY 27,
1993 7,269 6,322 44,557 120,429 (4,597)
Cash dividends:
$.25 per share
Class B Common
Stock - - - (1,609) -
$.28 per share
Common Stock - - - (1,872) -
Exercise of stock
options - - (38) - 389
Purchase of treasury
stock - - - - (148)
Savings and
profit-sharing
contribution - - 224 - 160
Reissuance of
treasury stock - - 2 - 1
Conversions of Class
B Common Stock 97 (97) - - -
Net earnings for the
year - - - 22,829 -
-------- ------- -------- --------- --------
BALANCES AT MAY 26,
1994 7,366 6,225 44,745 139,777 (4,195)
Cash dividends:
$.31 per share
Class B Common
Stock - - - (1,924) -
$.34 per share
Common Stock - - - (2,314) -
Exercise of stock
options - - - - 186
Savings and
profit-sharing
contribution - - 404 - 49
Reissuance of
treasury stock - - 5 - 4
Conversions of Class
B Common Stock 156 (156) - - -
Net earnings for the
year - - - 24,136 -
------- ------- -------- --------- --------
BALANCES AT MAY 25,
1995 $7,522 $6,069 $45,154 $159,675 $(3,956)
======= ======= ======== ========= =========
See accompanying notes.
<PAGE>
THE MARCUS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE YEARS ENDED MAY 25, 1995
May 25, May 26, May 27,
1995 1994 1993
(In Thousands)
OPERATING ACTIVITIES
Net earnings $24,136 $22,829 $16,482
Adjustments to reconcile net
earnings to net cash provided by
operating activities:
Earnings on investments in joint
ventures (701) (533) (641)
Loss (gain) on disposition of
property and equipment (463) (1,539) 717
Depreciation and amortization 23,570 20,385 18,273
Deferred income taxes 3,958 1,643 1,580
Deferred compensation and other 703 901 211
Contribution of Company stock to
savings and profit-sharing plan 453 384 366
Changes in assets and
liabilities:
Accounts and notes receivable 193 (862) (166)
Other current assets (1,768) (1,375) 374
Accounts payable 4,638 6,398 (363)
Income taxes (727) 2,535 (1,610)
Taxes other than income taxes 1,784 (12) 1,027
Accrued compensation 10 (106) (734)
Other accrued liabilities 1,074 1,272 1,277
------- ------- --------
Total adjustments 32,724 29,091 20,311
Cumulative effect of change in
accounting for income taxes
(Note 7) - (1,782) -
------- -------- -------
Net cash provided by operating
activities 56,860 50,138 36,793
INVESTING ACTIVITIES
Additions to property and
equipment (77,083) (75,825) (47,237)
Proceeds from disposals of
property and equipment 1,695 3,349 1,782
Payment for purchase of interest
in joint ventures, net of cash
acquired - (692) -
Net distributions from joint
ventures 734 841 -
Loan to affiliated hotel - (2,860) -
(Increase) decrease in other
assets 1,049 (1,986) (126)
Cash received from (advanced to)
joint ventures 6,122 2,389 (24)
-------- -------- --------
Net cash used in investing
activities (67,483) (74,784) (45,605)
FINANCING ACTIVITIES
Debt transactions:
Net proceeds from issuance of
long-term debt 17,984 64,650 3,695
Principal payments on notes
payable and long-term debt (4,494) (42,594) (19,401)
Equity transactions:
Proceeds from secondary stock
offering - - 34,611
Treasury stock transactions,
except for stock options 9 (145) (45)
Exercise of stock options 186 351 420
Dividends paid (4,238) (3,481) (2,728)
------- -------- --------
Net cash provided by financing
activities 9,447 18,781 16,552
------ --------- --------
Net increase (decrease) in cash
and cash equivalents (1,176) (5,865) 7,740
Cash and cash equivalents at
beginning of year 9,974 15,839 8,099
-------- ------- -------
Cash and cash equivalents at
end of year $ 8,798 $ 9,974 $15,839
======== ======== =======
See accompanying notes.
<PAGE>
THE MARCUS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 25, 1995
1. Summary of Significant Accounting Policies
Principles of Consolidation - The consolidated financial statements
include the accounts of The Marcus Corporation and all of its subsidiaries
(the Company). Investments in 50%-owned affiliates for which the Company
has the ability to exercise significant influence are accounted for on the
equity method. All intercompany accounts and transactions have been
eliminated in consolidation.
Fiscal Year - The Company reports on a 52/53-week year ending the last
Thursday of May. All periods presented include 52 weeks.
Cash Equivalents - The Company considers all highly liquid investments
with maturities of three months or less when purchased to be cash
equivalents. Cash equivalents are carried at cost, which approximates
market.
Inventories - Inventories, consisting principally of food and beverages,
are stated at average cost or at first-in, first-out cost.
Preopening Costs - Certain costs incurred prior to opening new or
remodeled motels, remodeled hotels and certain restaurant concepts are
deferred and charged to operations over the 12 months subsequent to the
opening. Similar expenses incurred in connection with the opening and
remodeling of theatres and all other restaurants are deferred and charged
to operations at the time of opening.
Depreciation and Amortization - Depreciation and amortization of property
and equipment, including capital leases, is provided using the
straight-line method over the following estimated useful lives:
Years
Land improvements 10 - 33
Buildings and improvements 10 - 33
Leasehold improvements 3 - 33
Furniture, fixtures and
equipment 3 - 15
Advertising and Marketing Costs - The Company expenses all advertising and
marketing costs as incurred.
Net Earnings Per Share - Net earnings per share were computed based on the
weighted average number of shares of Common Stock, Class B Common Stock
and common stock equivalents (stock options) outstanding during the year.
Capitalization of Interest - The Company capitalizes interest on borrowed
funds during construction periods by adding such interest to the cost of
property and equipment. Interest of approximately $867,000, $726,000 and
$314,000 was capitalized in fiscal 1995, 1994 and 1993, respectively.
Reclassifications - Certain items in the accompanying fiscal 1994 and 1993
financial statements have been reclassified to conform to the fiscal 1995
presentation.
2. Disposition of Restaurant Properties
Pursuant to an asset purchase agreement dated April 12, 1995, the Company
completed the sale of its 18 existing Applebee's Neighborhood Grill & Bar
restaurants (Applebee's), two Applebee's under construction, five
Applebee's under development and its development rights for Applebee's to
Apple South, Inc. (the Purchaser). On June 5, 1995, the Company entered
into a management agreement with the Purchaser, whereby the Purchaser
would commence immediately managing, operating and assuming all of the
Company's existing operating and development responsibilities related to
the Company's Applebee's restaurant operations. The Purchaser is entitled
to all profits of the restaurants since June 5, 1995, as reimbursement for
its management service.
On June 30, 1995, proceeds from the sale of approximately $48.3 million
were received in cash. The Company expects to realize a pretax gain of
approximately $27.5 million. Operating results related to the Company's
Applebee's operations were as follows:
Year ended
May 25, 1995 May 26, 1994 May 27, 1993
(In Thousands)
Revenues $35,574 $24,438 $12,456
Operating income
(loss) 2,250 983 (307)
On February 27, 1995, the Company leased 11 of its Marc's Cafe & Coffee
Mill restaurants to a group led by former members of the restaurants'
management team. The lease terms, which include certain buyout incentives,
differ for each location with the leases expiring on various dates from
February 28, 1996 through February 28, 2001. Revenues related to the
Company's operation of the 11 restaurants were $10,169,000, $14,958,000
and $14,677,000 for fiscal years ended May 25, 1995, May 26, 1994 and May
27, 1993, respectively. The leasing of the restaurants is not expected to
have a significant impact on operating income.
3. Additional Balance Sheet Information
The composition of accounts and notes receivable is as follows:
May 25, 1995 May 26, 1994
(In Thousands)
Trade receivables $2,667 $2,720
Notes receivable 758 1,603
Other receivables 2,741 2,036
------- ------
$6,166 $6,359
======= =======
The composition of property and equipment, which is stated at cost, is as
follows:
May 25, 1995 May 26, 1994
(In Thousands)
Land and improvements $ 54,740 $ 49,618
Buildings and improvements 290,219 231,905
Leasehold improvements 7,562 7,565
Furniture, fixtures and equipment 128,035 118,123
Construction in progress 27,434 37,302
------- --------
Total property and equipment 507,990 444,513
Less accumulated depreciation and
amortization 133,706 122,642
-------- --------
$374,284 $321,871
======== ========
4. Long-Term Debt
Long-term debt is summarized as follows:
May 25, 1995 May 26, 1994
(In Thousands)
Mortgage notes due to 2000 $ 10,513 $ 13,130
Senior notes, unsecured, due 2005 at
10.22% 27,298 28,773
Industrial Development Revenue Bonds
due to 2006 9,814 10,135
Unsecured term notes 60,000 60,000
Commercial paper 12,984 -
Revolving credit agreement 5,000 -
------- --------
125,609 112,038
Less current maturities 9,245 4,357
-------- --------
$116,364 $107,681
======== =========
Substantially all of the mortgage notes, both fixed rate and adjustable,
bear interest from 7.75% to 9.25% at May 25, 1995. Adjustable rate
Industrial Development Revenue Bonds ($5,665,000 at May 25, 1995) bear
interest at 76.5% of prime plus 1% (8.43% at May 25, 1995), or are
adjustable based on high quality tax-exempt obligation rates
(approximately 4.5% at May 25, 1995). The Company's remaining Industrial
Development Revenue Bonds bear interest at approximately 8.8%.
The mortgage notes and the Industrial Development Revenue Bonds are
secured by the related land, buildings and equipment.
The Company has three unsecured term notes outstanding, as follows:
May 25, 1995 May 26, 1994
(In thousands)
Note due May 31, 2004, with quarterly
principal payments of $781,250 due
beginning May 31, 1996. The variable
interest rate is based on the LIBOR
rate with an effective rate of 6.88%
at May 25, 1995. $25,000 $25,000
Note due February 1, 2001, with
quarterly principal payments of
$714,286 due beginning May 1, 1997.
The variable interest rate is based
on the LIBOR rate with an effective
rate of 7.13% at May 25, 1995. 20,000 20,000
Note due November 1, 2000, with
quarterly principal payments of
$750,000 due beginning January 1,
1996. The variable interest rate is
based on the LIBOR rate with an
effective rate of 5.83% at May 25,
1995. 15,000 15,000
------- -------
$60,000 $60,000
======== =======
The Company issues commercial paper through an agreement with a bank. The
agreement requires the Company to maintain unused bank lines of credit at
least equal to the principal amount of its outstanding commercial paper.
At May 25, 1995, after reduction for outstanding commercial paper
borrowings, the Company had $27,016,000 of unused credit lines available
under various bank revolving credit agreements. Interest on amounts
outstanding under one of the revolving credit agreements was 7.35% at May
25, 1995. There is an annual commitment fee of .25% of the unused portion
of $40,000,000 of these commitments. Interest on outstanding commercial
paper borrowings at May 25, 1995, ranged from 6.15% to 6.25%. The Company
has the ability to replace commercial paper borrowings with long-term
borrowings under its revolving credit agreement, which matures October 31,
1997. Accordingly, the Company has classified its outstanding commercial
paper borrowings at May 25, 1995, as long-term debt.
Scheduled annual principal payments on long-term debt for the five years
subsequent to May 25, 1995, are:
Fiscal (In
Year Thousands)
1996 $ 9,245
1997 9,385
1998 29,741
1999 16,834
2000 12,695
Interest paid, net of amounts capitalized, in 1995, 1994 and 1993 totaled
$8,610,000, $7,266,000 and $7,277,000, respectively.
The Company entered into interest rate swap agreements on a notional
amount aggregating $30,000,000. Two of the swap agreements covering
$15,000,000 were terminated during 1995 at a loss of $185,000. The
remaining swap agreement covering $15,000,000 expires October 31, 2000,
and requires the Company to pay interest at a defined fixed rate of 5.08%
while receiving interest at a defined variable rate of three-month LIBOR
(6.125% at May 25, 1995), which effectively converts $15,000,000 of the
Company's variable rate unsecured term notes to a fixed rate of 5.08%. The
Company recorded the net interest expense related to these swap agreements
as incurred, totaling $61,000 and $94,000 in 1995 and 1994, respectively.
The accompanying consolidated balance sheet at May 25, 1995, does not
reflect the fair market value of the remaining swap agreement as
determined by the lender, which totals approximately $475,000.
The carrying amounts of the Company's long-term debt, based on the
respective rates and prepayment provisions, approximates their fair value.
5. Shareholders' Equity
Shareholders may convert their shares of Class B Common Stock into shares
of Common Stock at any time. Class B Common Stock shareholders are
substantially restricted in their ability to transfer their Class B Common
Stock. Holders of Common Stock are entitled to cash dividends per share
equal to 110% of all dividends declared and paid on each share of the
Class B Common Stock. Holders of Class B Common Stock are entitled to ten
votes per share while holders of Common Stock are entitled to one vote per
share on any matters brought before the shareholders of the Company.
Liquidation rights are the same for both classes of stock.
Shareholders have approved the issuance of up to 612,500 shares of Common
Stock under various stock option plans. The options generally become
exercisable 40% after two years, 60% after three years and 80% after four
years. The remaining options are exercisable four and one-half years after
the date of the grant. At May 25, 1995, there were 158,045 shares
available for grants under the plans.
Transactions with respect to the Company's stock option plans for each of
the three years in the period ended May 25, 1995, are summarized as
follows:
Price Range Number of
Shares
Outstanding at May 28,
1992 $7.00 - $9.67 164,775
Granted $15.00 119,550
Exercised $7.00 - $9.67 (64,080)
Canceled $7.00 - $9.67 (7,080)
--------
Outstanding at May 27,
1993 $7.00 - $15.00 213,165
Granted $20.75 - $27.00 140,850
Exercised $7.00 - $15.00 (32,085)
Canceled $7.00 - $15.00 (28,215)
--------
Outstanding at May 26, 1994 $7.00 - $27.00 293,715
Granted $26.63 - $28.75 83,700
Exercised $7.00 - $15.00 (17,210)
Canceled $7.67 - $27.00 (44,490)
-------
Outstanding at May 25, 1995 $7.00 - $28.75 315,715
========
Shares exercisable at May 25,
1995 67,425
=======
The Company's Board of Directors has approved the repurchase of up to
750,000 shares of Common Stock to be held in treasury. The Company intends
to reissue these shares upon the exercise of stock options. The Company
purchased 6,167 and 3,451 shares pursuant to this plan during 1994 and
1993, respectively. There were no purchases in 1995. At May 25, 1995,
there were 236,538 shares available for repurchase under this
authorization.
The Company's loan agreements include, among other covenants, restrictions
on retained earnings and maintenance of certain financial ratios. At May
25, 1995, retained earnings of approximately $60,563,000 were
unrestricted.
6. Employee Benefit Plans
The Company has a qualified profit-sharing savings plan (401(k) plan)
covering eligible employees. The 401(k) plan provides for a contribution
of a minimum of 1% of defined compensation for all plan participants and
matching of 25% of employee contributions up to 6% of defined
compensation. In addition, the Company may make additional discretionary
contributions. The Company also sponsors unfunded nonqualified defined
benefit and deferred compensation plans. Pension and profit-sharing
expense for all plans was $917,000, $1,138,000 and $902,000 for 1995, 1994
and 1993, respectively.
7. Income Taxes
Income tax expense consists of the following:
Year ended
May 25, May 26, May 27,
1995 1994 1993
Currently payable: (In Thousands)
Federal, after jobs tax
credits of $185,000,
$300,000 and $350,000,
respectively $ 9,273 $ 9,470 $ 7,068
State 2,829 2,494 1,912
Deferred 3,958 1,643 1,580
------- ------- -------
$16,060 $13,607 $10,560
======= ======== ========
Effective May 28, 1993, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
which requires recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred tax
assets and liabilities are determined based on the difference between the
financial statement and tax basis of assets and liabilities using enacted
tax rates for the year in which the differences are expected to reverse.
As of May 28, 1993, the Company recorded a tax benefit of $1,782,000, or
$.14 per share, which represents the net change in its deferred income tax
assets and liabilities at that date. Such amount has been reflected in the
consolidated statement of earnings as the cumulative effect of change in
accounting for income taxes.
The components of the net deferred tax liability were as follows:
May 25, May 26,
1995 1994
(In Thousands)
Deferred tax assets:
Tax credit carryforwards $ - $ 921
Accrued employee benefits 787 604
Other accrued liabilities 294 203
------ ------
Total deferred assets 1,081 1,728
Deferred tax liability -
Depreciation and amortization 21,038 17,727
------- -------
Net deferred tax liability included
in balance sheet $19,957 $15,999
======= =======
A reconciliation of the statutory federal tax rate to the effective tax
rate follows:
Year ended
May 25, May 26, May 27,
1995 1994 1993
Expected tax expense: 35.0% 35.0% 34.0%
State income taxes, net of
federal income tax
benefit 5.3 5.3 5.3
Jobs tax credits (.3) (.6) (0.9)
Other - (.4) 0.7
------ ----- -----
40.0% 39.3% 39.1%
====== ===== =====
Income taxes paid in 1995, 1994 and 1993 totaled $12,830,000, $9,445,000
and $10,610,000, respectively.
8. Commitments, License Rights and Contingencies
Lease Commitments - The Company leases real estate under various
noncancellable operating leases with an initial term greater than one
year. Percentage rentals are based on the revenues at the specific rented
property. Rent expense charged to operations under operating leases was as
follows:
Year ended
May 25, May 26, May 27,
1995 1994 1993
(In Thousands)
Fixed minimum rentals $2,358 $2,519 $2,208
Percentage rentals 1,551 1,218 1,012
Sublease rental income (182) (165) (192)
------- ------- -------
$3,727 $3,572 $3,028
======= ======= =======
Payments to affiliated parties for operating lease obligations were
approximately $335,000, $390,000 and $491,000 in 1995, 1994 and 1993,
respectively.
Aggregate minimum rental commitments at May 25, 1995, are as follows:
Fiscal Year Operating
Leases
(In Thousands)
1996 $ 1,291
1997 1,153
1998
1999 898
2000 872
After 2000 9,106
------
$14,261
=======
Included in the above commitments is $1,686,000 in minimum rental
commitments to affiliated parties.
Construction Commitments - The Company has commitments for the completion
of construction at various properties, excluding the Applebee's properties
(see Note 2), totaling approximately $9,183,000 at May 25, 1995.
License Rights - The Company owns the license rights in certain areas to
operate its restaurants and to sell products using the Kentucky Fried
Chicken trademark. In addition, the Company has license rights to operate
a hotel using the Hilton trademark. Under the terms of the licenses, the
Company is obligated to pay fees based on defined gross sales. The
Kentucky Fried Chicken license also requires the Company to pay an
additional fee for each new location established.
Contingencies - The Company guarantees the debt of joint ventures totaling
approximately $13,397,000 at May 25, 1995. The debt has been
collateralized by the real estate, buildings and improvements, and all
equipment of each joint venture.
9. Joint Venture Transactions
At May 25, 1995 and May 26, 1994, the Company held investments of $629,000
and $662,000, respectively, in various approximately 50%-owned affiliates
(joint ventures) which are accounted for under the equity method.
The Company has receivables from the joint ventures of $1,861,000 and
$7,983,000 at May 25, 1995 and May 26, 1994, respectively. The Company
earns interest on $1,082,000 and $7,373,000 of the receivables at
approximately prime to prime plus 1.5% at May 25, 1995 and May 26, 1994,
respectively.
Included in notes payable at May 25, 1995 and May 26, 1994, is $1,211,000
and $1,223,000, respectively, due to joint ventures in connection with
cash advanced to the Company. The Company pays interest on the cash
advances based on the 90-day certificate of deposit rates.
10. Business Segment Information
The Company operates principally in four business segments: Restaurants,
Theatres, Hotels/Resorts and Motels. Following is a summary of business
segment information for 1993 through 1995:
<TABLE>
<CAPTION>
Hotels/ Corporate
Motels Theatres Resorts Restaurants Items Total
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
1995
Revenues $104,356 $53,968 $45,292 $74,076 $ 298 $277,990
Operating income
(loss) 31,992 12,175 1,473 3,318 (2,163) 46,795
Depreciation and
amortization 12,883 2,766 4,101 3,385 435 23,570
Assets 211,112 46,928 68,731 53,090 27,221 407,082
Capital
expenditures 32,880 10,999 27,207 5,900 97 77,083
1994
Revenues 89,043 50,494 32,330 70,404 343 242,614
Operating income
(loss) 26,041 11,483 2,550 1,499 (3,689) 37,884
Depreciation and
amortization 11,246 2,519 3,030 3,112 478 20,385
Assets 182,174 47,244 45,787 51,896 34,505 361,606
Capital
expenditures 33,377 7,305 23,654 11,039 450 75,825
1993
Revenues 80,622 43,832 28,462 59,014 980 212,910
Operating income
(loss) 23,801 9,612 2,093 599 (2,971) 33,134
Depreciation and
amortization 10,224 2,463 2,572 2,503 511 18,273
Assets 166,193 36,898 24,041 46,282 36,041 309,455
Capital
expenditures 22,536 4,282 6,358 12,451 1,610 47,237
</TABLE>
Corporate items include amounts not allocable to the business segments.
Corporate revenues consist principally of rent and the corporate operating
loss includes general corporate expenses. Corporate assets primarily
include cash and cash equivalents, notes receivable, receivables from
joint ventures and land held for development.
During 1994, the Company entered into contracts to manage two hotel
properties. The Company also has loans outstanding of $2,897,000 at May
25, 1995, to one of these hotels, which bears interest at the prime rate
plus 1% and matures December 31, 2008. Interest on this note totaled
$292,000 for the year ended May 25, 1995.
<TABLE>
<CAPTION>
Supplementary Quarterly Consolidated Financial Data
(Unaudited, dollars in thousands, except per share data)
16 Weeks Ended 12 Weeks Ended 12 Weeks Ended 12 Weeks Ended
Fiscal 1995 May 25, 1995 February 2, 1995 November 10, 1994 August 18, 1994
<S> <C> <C> <C> <C>
Revenues $77,643 $59,258 $64,738 $76,351
Operating income 12,978 6,176 10,468 17,173
Net earnings 6,993 2,550 5,503 9,090
Net earnings
per share $ 0.54 $ 0.19 $ 0.42 $ 0.69
<CAPTION>
16 Weeks Ended 12 Weeks Ended 12 Weeks Ended 12 Weeks Ended
Fiscal 1994 May 26, 1994 February 3, 1994 November 11, 1993 August 19, 1993
<S> <C> <C> <C> <C>
Revenues $73,175 $50,559 $54,599 $64,281
Operating income 10,723 4,435 8,391 14,335
Net earnings 6,535 2,223 4,494 9,577
Net earnings
per share $ 0.50 $ 0.17 $ 0.34 $ 0.73
</TABLE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Company.
The information required by this item with respect to directors
is incorporated herein by reference to the information pertaining thereto
set forth under the caption entitled "Election of Directors" in the Proxy
Statement. The required information with respect to executive officers
appears at the end of Part I of this Form 10-K.
Item 11. Executive Compensation.
The information required by this item is incorporated herein by
reference to the information pertaining thereto set forth under the
caption entitled "Executive Compensation" in the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information required by this item is incorporated herein by
reference to the information pertaining thereto set forth under the
caption entitled "Stock Ownership of Management and Others" in the Proxy
Statement.
Item 13. Certain Relationships and Related Transactions.
The information required by this item, to the extent applicable,
is incorporated herein by reference to the information pertaining thereto
set forth under the caption entitled "Certain Transactions" in the Proxy
Statement.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
1. Financial Statement Schedules.
(a) All schedules are omitted because they are inapplicable,
not required under the instructions or the financial
information is included in the consolidated financial
statements or notes thereto.
2. Exhibits and Reports on Form 8-K.
(a) The exhibits filed herewith or incorporated by reference
herein are set forth on the attached Exhibit Index.*
(b) No reports on Form 8-K were required to be filed by the
Company during the fourth quarter of fiscal 1995; however, on July 17,
1995 the Company filed a Form 8-K with the Securities and Exchange
Commission reporting the sale of its Applebee's restaurants under Items 2
and 7 of such form.
__________________
* Exhibits to this Form 10-K will be furnished to shareholders upon
advance payment of a fee of $0.20 per page, plus mailing expenses.
Requests for copies should be addressed to Thomas F. Kissinger, General
Counsel and Secretary, The Marcus Corporation, 250 East Wisconsin Avenue,
Suite 1700, Milwaukee, Wisconsin 53202.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
THE MARCUS CORPORATION
Date: August 23, 1995 By: /s/ Stephen H. Marcus
Stephen H. Marcus,
Chairman of the Board and
President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the Company and in the capacities as of the date indicated above.
By: /s/ Stephen H. Marcus By: /s/ George R. Slater
Stephen H. Marcus, George R. Slater,
Chairman of the Board and Director
President (Chief
Executive and Financial
Officer)
By: /s/ Kenneth A. MacKenzie By: /s/ Lee Sherman Dreyfus
Kenneth A. MacKenzie, Lee Sherman Dreyfus,
Treasurer and Controller Director
(Chief Accounting
Officer)
By: /s/ Ben Marcus By: /s/ Daniel F. McKeithan,
Ben Marcus, Director Jr.
Daniel F. McKeithan, Jr.,
Director
By: /s/ John L. Murray By: /s/ Diane Marcus
John L. Murray, Director Gershowitz
Diane Marcus Gershowitz,
Director
By: /s/ Allan H. Selig By: /s/ Timothy E. Hoeksema
Allan H. Selig, Director Timothy E. Hoeksema,
Director
<PAGE>
EXHIBIT INDEX
Sequential Page No.
3.1 Articles of Incorporation. N/A
[Incorporated by reference to Exhibit
3.1 to the Company's Form S-3
Registration Statement (No.
33-57468).]
3.2 Bylaws, as amended as of March 23, 51
1995.
4 Senior Note Purchase Agreement dated N/A
May 31, 1990 between the Company and
The Northwestern Mutual Life
Insurance Company. [Incorporated by
reference to Exhibit 4 to the
Company's Annual Report on From 10-K
for the fiscal year ended May 31,
1990.]
4.1 Other than as set forth in Exhibit N/A
(4), the Company has numerous
instruments which define the rights
of holders of long-term debt. These
instruments, primarily promissory
notes, have arisen from the purchase
of operating properties in the
ordinary course of business. These
instruments are not being filed with
this Annual Report on Form 10-K in
reliance upon Item 601(b)(4)(iii) of
Regulation S-K. Copies of these
instruments will be furnished to the
Securities and Exchange Commission
upon request.
10.1 The Company is the guarantor and/or N/A
obligor under various loan agreements
in connection with operating
properties (primarily Budgetel Inns)
which were financed through the
issuance of industrial development
bonds. These loan agreements and the
additional documentation relating to
these projects are not being filed
with this Annual Report on Form 10-K
in reliance upon Item 601(b)(4)(iii)
of Regulation S-K. Copies of these
documents will be furnished to the
Securities and Exchange Commission
upon request.
10.2 Comprehensive Image Enhancement N/A
Agreement dated October 12, 1988
between the Company and KFC
Corporation. [Incorporated by
reference to Exhibit 10.11 to the
Company's Annual Report on Form 10-K
for the fiscal year ended May 25,
1989.]
10.3 Form of individual Kentucky Fried N/A
Chicken franchise agreement between
the Company and KFC Corporation.
[Incorporated by reference to Exhibit
10.12 to the Company's Annual Report
on Form 10-K for the fiscal year
ended May 25, 1989.]
10.4 Area Development Agreement dated N/A
September 27, 1993 between Gino's
East Restaurant Corp. and Marcus
Restaurants, Inc. for the State of
Wisconsin Development Area.
[Incorporated by reference to Exhibit
10.16 to the Company's Form 10-Q/A
for its fiscal quarter ended August
19, 1993.] [Marcus Restaurants, Inc.
is a party to Area Development
Agreements dated September 27, 1993
with Gino's East Restaurant Corp. for
the State of Iowa Development Area
and State of Minnesota Development
Area, respectively, each of which
Area Development Agreements are
substantially identical in all
material respects with the Area
Development Agreement incorporated by
reference herein, except with respect
to the designated market area and
applicable restaurant development
schedules. Such other Area
Development Agreements are not being
filed or incorporated by reference
herein, but a copy thereof will be
provided to the Commission upon
request.]
10.5 Master Development Agreement dated N/A
September 27, 1993 between Gino's
East Restaurant Corp. and Marcus
Restaurants, Inc. [Incorporated by
reference to Exhibit 10.17 to the
Company's Form 10-Q/A for its fiscal
quarter ended August 19, 1993.]
10.6 Form of Gino's East Restaurant Corp. N/A
Franchise Agreement between Gino's
East Restaurant Corp. and Marcus
Restaurants, Inc. [Incorporated by
reference to Exhibit 10.18 to the
Company's Form 10-Q/A for its fiscal
quarter ended August 19, 1993.]
10.7* Proposed form of The Marcus N/A
Corporation 1995 Equity Incentive
Plan. [Incorporated by reference to
Appendix A to the Company's 1995
Proxy Statement.]
10.8* The Marcus Corporation 1994 N/A
Nonemployee Director Stock Option
Plan. [Incorporated by reference to
Exhibit A to the Company's 1994 Proxy
Statement.]
21 Subsidiaries of the Company as of May 73
25, 1995.
23.1 Consent of Ernst & Young LLP. 75
27 Financial Data Schedule 76
99 Proxy Statement for Annual Meeting of N/A
Shareholders scheduled to be held on
September 28, 1995. (To be filed
with the Securities and Exchange
Commission under Regulation 14A
within 120 days of May 25, 1995 and,
upon such filing, to be hereby
incorporated by reference herein to
the extent indicated).
---------------
* This exhibit is a management contract or compensatory plan or
arrangement required to be filed as an exhibit to this form pursuant to
Item 14(c) of Form 10-K.
Exhibit 3.2
BY-LAWS
OF
THE MARCUS CORPORATION
(a Wisconsin corporation)
ARTICLE I. OFFICES
1.01. Principal and Business Offices. The corporation may
have such principal and other business offices, either within or without
the State of Wisconsin, as the Board of Directors may designate or as the
business of the corporation may require from time to time.
1.02. Registered Office. The registered office of the
corporation required by the Wisconsin Business Corporation Law to be
maintained in the State of Wisconsin may be, but need not be, identical
with the principal office in the State of Wisconsin, and the address of
the registered office may be changed from time to time by the Board of
Directors or by the registered agent. The business office of the
registered agent of the corporation shall be identical to such registered
office.
ARTICLE II. SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the
shareholders shall be held on such day in September or October of each
year as may be designated by or under the authority of the Board of
Directors, for the purpose of electing directors and for the transaction
of such other business as may come before the meeting. If the day fixed
for the annual meeting shall be a legal holiday in the State of Wisconsin,
such meeting shall be held on the next succeeding business day.
2.02. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise prescribed by
the Wisconsin Business Corporation Law, may be called by the Chairman of
the Board, the President or the Board of Directors. The corporation shall
call a special meeting of shareholders in the event that the holders of at
least 10% of all of the votes entitled to be cast on any issue proposed to
be considered at the proposed special meeting sign, date and deliver to
the corporation one or more written demands for the meeting describing one
or more purposes for which it is to be held. The corporation shall give
notice of such a special meeting within thirty days after the date that
the demand is delivered to the corporation.
2.03. Place of Meeting. The Board of Directors may
designate any place, either within or without the State of Wisconsin, as
the place of meeting for any annual or special meeting of shareholders.
If no designation is made, the place of meeting shall be the principal
office of the corporation. Any meeting may be adjourned to reconvene at
any place designated by vote of the shares represented thereat.
2.04. Notice of Meeting. Written notice stating the date,
time and place of any meeting of shareholders and, in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten days nor more than sixty days before the date
of the meeting (unless a different time is provided by the Wisconsin
Business Corporation Law or the articles of incorporation), either
personally or by mail, by or at the direction of the President or the
Secretary, to each shareholder of record entitled to vote at such meeting
and to such other persons as required by the Wisconsin Business
Corporation Law. If mailed, such notice shall be deemed to be effective
when deposited in the United States mail, addressed to the shareholder at
his or her address as it appears on the stock record books of the
corporation, with postage thereon prepaid. If an annual or special meeting
of shareholders is adjourned to a different date, time or place, the
corporation shall not be required to give notice of the new date, time or
place if the new date, time or place is announced at the meeting before
adjournment; provided, however, that if a new record date for an adjourned
meeting is or must be fixed, the corporation shall give notice of the
adjourned meeting to persons who are shareholders as of the new record
date.
2.045. Proper Business or Purposes of Shareholder Meetings.
To be properly brought before a meeting of shareholders for voting
consideration, business must be (a) specified in the notice of the meeting
(or any supplement thereto) given by or at the discretion of the Board of
Directors or otherwise as provided in Section 2.04 hereof; (b) otherwise
properly brought before the meeting by or at the direction of the Board of
Directors; or (c) otherwise properly brought before the meeting by a
shareholder. For business to be properly brought before a meeting by a
shareholder, the shareholder must have given written notification thereof,
either by personal delivery or by United States mail, postage prepaid, to
the Secretary of the corporation at its principal business office, and, in
the case of an annual meeting of shareholders, such notification must be
given not later than fifteen (15) days in advance of the Originally
Scheduled Date of such meeting. Any such notification shall set forth as
to each matter the shareholder proposes to bring before the meeting for
voting consideration (i) a brief description of the business desired to be
brought before the meeting and the reasons for conducting such business at
the meeting and, in the event that such business includes a proposal to
amend either the articles of incorporation or bylaws of the corporation,
the exact language of the proposed amendment; (ii) whether or not such
business is in the nature of a precatory proposal; (iii) the name and
address of the shareholder proposing such business; (iv) a representation
that the shareholder is a holder of record of stock of the corporation
entitled to vote at such meeting and intends to appear in person or by
proxy at the meeting to propose such business; and (v) any material
interest of the shareholder in such business. No business shall be
conducted at a meeting of shareholders except in accordance with this
Section 2.045, and the chairperson of any meeting of shareholders may
refuse to permit any business to be brought before such meeting without
compliance with the foregoing procedures. For purposes of these bylaws,
the "Originally Scheduled Date" of any meeting of shareholders shall be
the date such meeting is scheduled to occur as specified in the notice of
such meeting first generally given to shareholders regardless of whether
any subsequent notice is given for such meeting or the record date of such
meeting is changed. Nothing contained in this Section 2.045 shall be
construed to limit the rights of a shareholder to submit proposals to the
corporation which comply with Regulation 14A of the Securities Exchange
Act of 1934, as amended ("Registration 14A"), for inclusion in the
corporation's proxy statement for voting consideration at shareholder
meetings.
2.05. Waiver of Notice. A shareholder may waive any notice
required by the Wisconsin Business Corporation Law, the articles of
incorporation or these bylaws before or after the date and time stated in
the notice. The waiver shall be in writing and signed by the shareholder
entitled to the notice, contain the same information that would have been
required in the notice under applicable provisions of the Wisconsin
Business Corporation Law (except that the time and place of meeting need
not be stated) and be delivered to the corporation for inclusion in the
corporate records. A shareholder's attendance at a meeting, in person or
by proxy, waives objection to all of the following: (a) lack of notice or
defective notice of the meeting, unless the shareholder at the beginning
of the meeting or promptly upon arrival objects to holding the meeting or
transacting business at the meeting; and (b) consideration of a particular
matter at the meeting that is not within the purpose described in the
meeting notice, unless the shareholder objects to considering the matter
when it is presented.
2.06. Fixing of Record Date. The Board of Directors may fix
in advance a date as the record date for the purpose of determining
shareholders entitled to notice of and to vote at any meeting of
shareholders, shareholders entitled to demand a special meeting as
contemplated by Section 2.02 hereof, shareholders entitled to take any
other action, or shareholders for any other purpose. Such record date
shall not be more than seventy days prior to the date on which the
particular action, requiring such determination of shareholders, is to be
taken. If no record date is fixed by the Board of Directors or by the
Wisconsin Business Corporation Law for the determination of shareholders
entitled to notice of and to vote at a meeting of shareholders, the record
date shall be the close of business on the day before the first notice is
given to shareholders. If no record date is fixed by the Board of
Directors or by the Wisconsin Business Corporation Law for the
determination of shareholders entitled to demand a special meeting as
contemplated in Section 2.02 hereof, the record date shall be the date
that the first shareholder signs the demand. Except as provided by the
Wisconsin Business Corporation Law for a court-ordered adjournment, a
determination of shareholders entitled to notice of and to vote at a
meeting of shareholders is effective for any adjournment of such meeting
unless the Board of Directors fixes a new record date, which it shall do
if the meeting is adjourned to a date more than 120 days after the date
fixed for the original meeting. The record date for determining
shareholders entitled to a distribution (other than a distribution
involving a purchase, redemption or other acquisition of the corporation's
shares) or a share dividend is the date on which the Board of Directors
authorized the distribution or share dividend, as the case may be, unless
the Board of Directors fixes a different record date.
2.07. Shareholders' List for Meetings. After a record date
for a special or annual meeting of shareholders has been fixed, the
corporation shall prepare a list of the names of all of the shareholders
entitled to notice of the meeting. The list shall be arranged by class or
series of shares, if any, and show the address of and number of shares
held by each shareholder. Such list shall be available for inspection by
any shareholder, beginning two business days after notice of the meeting
is given for which the list was prepared and continuing to the date of the
meeting, at the corporation's principal office or at a place identified in
the meeting notice in the city where the meeting will be held. A
shareholder or his or her agent may, on written demand, inspect and,
subject to the limitations imposed by the Wisconsin Business Corporation
Law, copy the list, during regular business hours and at his or her
expense, during the period that it is available for inspection pursuant to
this Section 2.07. The corporation shall make the shareholders' list
available at the meeting and any shareholder or his or her agent or
attorney may inspect the list at any time during the meeting or any
adjournment thereof. Refusal or failure to prepare or make available the
shareholders' list shall not affect the validity of any action taken at a
meeting of shareholders.
2.08. Quorum and Voting Requirements. Shares entitled to
vote as a separate voting group may take action on a matter at a meeting
only if a quorum of those shares exists with respect to that matter. If
the corporation has only one class of stock outstanding, such class shall
constitute a separate voting group for purposes of this Section 2.08.
Except as otherwise provided in the articles of incorporation, any bylaw
adopted under authority granted in the articles of incorporation, or the
Wisconsin Business Corporation Law, a majority of the votes entitled to be
cast on the matter shall constitute a quorum of the voting group for
action on that matter. Once a share is represented for any purpose at a
meeting, other than for the purpose of objecting to holding the meeting or
transacting business at the meeting, it is considered present for purposes
of determining whether a quorum exists for the remainder of the meeting
and for any adjournment of that meeting unless a new record date is or
must be set for the adjourned meeting. If a quorum exists, except in the
case of the election of directors, action on a matter shall be approved if
the votes cast within the voting group favoring the action exceed the
votes cast opposing the action, unless the articles of incorporation, any
bylaw adopted under authority granted in the articles of incorporation, or
the Wisconsin Business Corporation Law requires a greater number of
affirmative votes. Unless otherwise provided in the articles of
incorporation, directors shall be elected by a plurality of the votes cast
by the shares entitled to vote in the election of directors at a meeting
at which a quorum is present. For purposes of this Section 2.08,
"plurality" means that the individuals with the largest number of votes
are elected as directors up to the maximum number of directors to be
chosen at the meeting. Though less than a quorum of the outstanding votes
of a voting group are represented at a meeting, a majority of the votes so
represented may adjourn the meeting from time to time without further
notice. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
2.09. Conduct of Meeting. The Chief Executive Officer, and
in his or her absence, the Chairman of the Board or the President, as the
case may be, and in their absence, a Vice President in the order provided
under Section 4.09 hereof, and in their absence, any person chosen by the
shareholders represented at the meeting in person or by proxy shall call
the meeting of the shareholders to order and shall act as chairperson of
the meeting, and the Secretary of the corporation shall act as secretary
of all meetings of the shareholders, but, in the absence of the Secretary,
the presiding officer may appoint any other person to act as secretary of
the meeting.
2.10. Proxies. At all meetings of shareholders, a
shareholder may vote his or her shares in person or by proxy. A
shareholder may appoint a proxy to vote or otherwise act for the
shareholder by signing an appointment form, either personally or by his or
her attorney-in-fact. An appointment of a proxy is effective when
received by the Secretary or other officer or agent of the corporation
authorized to tabulate votes. An appointment is valid for eleven months
from the date of its signing unless a different period is expressly
provided in the appointment form.
2.11. Voting of Shares. Except as provided in the articles
of incorporation or in the Wisconsin Business Corporation Law, each
outstanding share of Common Stock is entitled to one (1) vote, and each
outstanding share of Class B Common Stock shall be entitled to ten (10)
votes, upon each matter voted on at a meeting of shareholders.
2.12. Action without Meeting. Any action required or
permitted by the articles of incorporation or these bylaws or any
provision of the Wisconsin Business Corporation Law to be taken at a
meeting of the shareholders may be taken without a meeting and without
action by the Board of Directors if a written consent or consents,
describing the action so taken, is signed by all of the shareholders
entitled to vote with respect to the subject matter thereof and delivered
to the corporation for inclusion in the corporate records.
2.13. Acceptance of Instruments Showing Shareholder Action.
If the name signed on a vote, consent, waiver or proxy appointment
corresponds to the name of a shareholder, the corporation, if acting in
good faith, may accept the vote, consent, waiver or proxy appointment and
give it effect as the act of a shareholder. If the name signed on a vote,
consent, waiver or proxy appointment does not correspond to the name of a
shareholder, the corporation, if acting in good faith, may accept the
vote, consent, waiver or proxy appointment and give it effect as the act
of the shareholder if any of the following apply:
(a) The shareholder is an entity and the name signed
purports to be that of an officer or agent of the entity.
(b) The name purports to be that of a personal
representative, administrator, executor, guardian or conservator
representing the shareholder and, if the corporation requests,
evidence of fiduciary status acceptable to the corporation is
presented with respect to the vote, consent, waiver or proxy
appointment.
(c) The name signed purports to be that of a receiver or
trustee in bankruptcy of the shareholder and, if the corporation
requests, evidence of this status acceptable to the corporation
is presented with respect to the vote, consent, waiver or proxy
appointment.
(d) The name signed purports to be that of a pledgee,
beneficial owner, or attorney-in-fact of the shareholder and, if
the corporation requests, evidence acceptable to the corporation
of the signatory's authority to sign for the shareholder is
presented with respect to the vote, consent, waiver or proxy
appointment.
(e) Two or more persons are the shareholders as co-tenants
or fiduciaries and the name signed purports to be the name of at
least one of the co-owners and the person signing appears to be
acting on behalf of all co-owners.
The corporation may reject a vote, consent, waiver or proxy appointment if
the Secretary or other officer or agent of the corporation who is
authorized to tabulate votes, acting in good faith, has reasonable basis
for doubt about the validity of the signature on it or about the
signatory's authority to sign for the shareholder.
ARTICLE III. BOARD OF DIRECTORS
3.01. General Powers and Number. All corporate powers shall
be exercised by or under the authority of, and the business and affairs of
the corporation managed under the direction of, the Board of Directors.
The number of directors constituting the Board of Directors of the
corporation shall initially be seven (7) and thereafter such number as is
fixed from time to time by a majority vote of the Board of Directors then
in office.
3.02. Tenure and Qualifications. Each director shall hold
office until the next annual meeting of shareholders and until his or her
successor shall have been elected and, if necessary, qualified, or until
there is a decrease in the number of directors which takes effect after
the expiration of his or her term, or until his or her prior death,
resignation or removal. A director may be removed by the shareholders
only at a meeting called for the purpose of removing the director, and the
meeting notice shall state that the purpose, or one of the purposes, of
the meeting is removal of the director. A director may be removed from
office with or without cause if the number of votes cast to remove the
director exceeds the number of votes cast not to remove such director. A
director may resign at any time by delivering written notice which
complies with the Wisconsin Business Corporation Law to the Board of
Directors, to the President (in his or her capacity as chairperson of the
Board of Directors) or to the corporation. A director's resignation is
effective when the notice is delivered unless the notice specifies a later
effective date. Directors need not be residents of the State of Wisconsin
or shareholders of the corporation.
3.025. Shareholder Nomination Procedure. Nominations for the
election of directors may be made by (a) the Board of Directors; (b) a
committee appointed by the Board of Directors; or (c) any shareholder
entitled to vote for the election of directors at such meeting who
complies fully with the requirements of this Section 3.025. Any
shareholder entitled to vote for the election of directors at a meeting
may nominate a person or persons for election as a director or directors
only if written notice of such shareholder's intent to make any such
nomination is given, either by personal delivery or by United States mail,
postage prepaid, to the Secretary of the corporation at its principal
business office not later than fifteen (15) days in advance of the
Originally Scheduled Date of such meeting. Each such notice shall set
forth: (a) the name and address of the shareholder who intends to make the
nomination and of the person or persons to be nominated; (b) a
representation that the shareholder is a holder of record of stock of the
corporation entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all arrangements or
understandings between the shareholder and each nominee and any other
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the shareholder; (d) such
background and other information regarding each nominee proposed by such
shareholder as would have been required to be included in a proxy
statement filed pursuant to Regulation 14A had each nominee been
nominated, or intended to be nominated, by the Board of Directors; and (e)
the written consent of each nominee to serve as a director of the
corporation if so elected. The chairperson of any meeting of shareholders
to elect directors and the Board of Directors may refuse to acknowledge
the nomination by a shareholder of any person not made in compliance with
the foregoing procedure.
3.03. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this bylaw immediately
after the annual meeting of shareholders and each adjourned session
thereof. The place of such regular meeting shall be the same as the place
of the meeting of shareholders which precedes it, or such other suitable
place as may be announced at such meeting of shareholders. The Board of
Directors may provide, by resolution, the date, time and place, either
within or without the State of Wisconsin, for the holding of additional
regular meetings of the Board of Directors without other notice than such
resolution.
3.04. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Chief Executive
Officer, the Chairman of the Board, the President, the Secretary or any
two directors. The President or Secretary may fix any place, either
within or without the State of Wisconsin, as the place for holding any
special meeting of the Board of Directors, and if no other place is fixed
the place of the meeting shall be the principal office of the corporation
in the State of Wisconsin.
3.05. Notice; Waiver. Notice of each meeting of the Board
of Directors (unless otherwise provided in or pursuant to Section 3.03)
shall be given by written notice delivered in person, by telegraph,
teletype, facsimile or other form of wire or wireless communication, or by
mail or private carrier, to each director at his business address or at
such other address as such director shall have designated in writing filed
with the Secretary, in each case not less than forty-eight (48) hours
prior to the meeting. The notice need not describe the purpose of the
meeting of the Board of Directors or the business to be transacted at such
meeting. If mailed, such notice shall be deemed to be effective when
deposited in the United States mail so addressed, with postage thereon
prepaid. If notice is given by telegram, such notice shall be deemed to
be effective when the telegram is delivered to the telegraph company. If
notice is given by private carrier, such notice shall be deemed to be
effective when delivered to the private carrier. Whenever any notice
whatever is required to be given to any director of the corporation under
the articles of incorporation or these bylaws or any provision of the
Wisconsin Business Corporation Law, a waiver thereof in writing, signed at
any time, whether before or after the date and time of meeting, by the
director entitled to such notice shall be deemed equivalent to the giving
of such notice. The corporation shall retain any such waiver as part of
the permanent corporate records. A director's attendance at or
participation in a meeting waives any required notice to him or her of the
meeting unless the director at the beginning of the meeting or promptly
upon his or her arrival objects to holding the meeting or transacting
business at the meeting and does not thereafter vote for or assent to
action taken at the meeting.
3.06. Quorum. Except as otherwise provided by the Wisconsin
Business Corporation Law or by the articles of incorporation or these
bylaws, a majority of the number of directors specified in Section 3.01 of
these bylaws shall constitute a quorum for the transaction of business at
any meeting of the Board of Directors. Except as otherwise provided by
the Wisconsin Business Corporation Law or by the articles of incorporation
or by these bylaws, a quorum of any committee of the Board of Directors
created pursuant to Section 3.12 hereof shall consist of a majority of the
number of directors appointed to serve on the committee. A majority of
the directors present (though less than such quorum) may adjourn any
meeting of the Board of Directors or any committee thereof, as the case
may be, from time to time without further notice.
3.07. Manner of Acting. The affirmative vote of a majority
of the directors present at a meeting of the Board of Directors or a
committee thereof at which a quorum is present shall be the act of the
Board of Directors or such committee, as the case may be, unless the
Wisconsin Business Corporation Law, the articles of incorporation or these
bylaws require the vote of a greater number of directors.
3.08. Conduct of Meetings. The Chief Executive Officer, and
in his or her absence, the Chairman of the Board or the President, as the
case may be, and in their absence, a Vice President, in the order provided
under Section 4.09, and in their absence, any director chosen by the
directors present, shall call meetings of the Board of Directors to order
and shall act as chairperson of the meeting. The Secretary of the
corporation shall act as secretary of all meetings of the Board of
Directors but in the absence of the Secretary, the presiding officer may
appoint any other person present to act as secretary of the meeting.
Minutes of any regular or special meeting of the Board of Directors shall
be prepared and distributed to each director.
3.09. Vacancies. Except as provided below, any vacancy
occurring in the Board of Directors, including a vacancy resulting from an
increase in the number of directors, may be filled by any of the
following: (a) the shareholders; (b) the Board of Directors; or (c) if
the directors remaining in office constitute fewer than a quorum of the
Board of Directors, the directors, by the affirmative vote of a majority
of all directors remaining in office. In the case of a vacancy created by
the removal of a director by vote of the shareholders, the shareholders
shall have the right to fill such vacancy at the same meeting or any
adjournment thereof. If the vacant office was held by a director elected
by a voting group of shareholders, only the holders of shares of that
voting group may vote to fill the vacancy if it is filled by the
shareholders, and only the remaining directors elected by that voting
group may vote to fill the vacancy if it is filled by the directors. A
vacancy that will occur at a specific later date, because of a resignation
effective at a later date or otherwise, may be filled before the vacancy
occurs, but the new director may not take office until the vacancy occurs.
3.10. Compensation. The Board of Directors, irrespective of
any personal interest of any of its members, may establish reasonable
compensation of all directors for services to the corporation as directors
or may delegate such authority to an appropriate committee. The Board of
Directors also shall have authority to provide for or delegate authority
to an appropriate committee to provide for reasonable pensions, disability
or death benefits, and other benefits or payments, to directors, officers
and employees and to their estates, families, dependents or beneficiaries
on account of prior services rendered by such directors, officers and
employees to the corporation.
3.11. Presumption of Assent. A director who is present and
is announced as present at a meeting of the Board of Directors or any
committee thereof created in accordance with Section 3.12 hereof, when
corporate action is taken, assents to the action taken unless any of the
following occurs: (a) the director objects at the beginning of the
meeting or promptly upon his or her arrival to holding the meeting or
transacting business at the meeting; (b) the director dissents or abstains
from an action taken and minutes of the meeting are prepared that show the
director's dissent or abstention from the action taken; (c) the director
delivers written notice that complies with the Wisconsin Business
Corporation Law of his or her dissent or abstention to the presiding
officer of the meeting before its adjournment or to the corporation
immediately after adjournment of the meeting; or (d) the director dissents
or abstains from an action taken, minutes of the meeting are prepared that
fail to show the director's dissent or abstention from the action taken,
and the director delivers to the corporation a written notice of that
failure that complies with the Wisconsin Business Corporation Law promptly
after receiving the minutes. Such right of dissent or abstention shall
not apply to a director who votes in favor of the action taken.
3.12. Committees. The Board of Directors by resolution
adopted by the affirmative vote of a majority of all of the directors then
in office may create one or more committees, appoint members of the Board
of Directors to serve on the committees and designate other members of the
Board of Directors to serve as alternates. Each committee shall have two
or more members who shall, unless otherwise provided by the Board of
Directors, serve at the pleasure of the Board of Directors. A committee
may be authorized to exercise the authority of the Board of Directors,
except that a committee may not do any of the following: (a) authorize
distributions; (b) approve or propose to shareholders action that the
Wisconsin Business Corporation Law requires to be approved by
shareholders; (c) fill vacancies on the Board of Directors or, unless the
Board of Directors provides by resolution that vacancies on a committee
shall be filled by the affirmative vote of the remaining committee
members, on any Board committee; (d) amend the corporation's articles of
incorporation; (e) adopt, amend or repeal bylaws; (f) approve a plan of
merger not requiring shareholder approval; (g) authorize or approve
reacquisition of shares, except according to a formula or method
prescribed by the Board of Directors; and (h) authorize or approve the
issuance or sale or contract for sale of shares, or determine the
designation and relative rights, preferences and limitations of a class or
series of shares, except that the Board of Directors may authorize a
committee to do so within limits prescribed by the Board of Directors.
Unless otherwise provided by the Board of Directors in creating the
committee, a committee may employ counsel, accountants and other
consultants to assist it in the exercise of its authority.
3.13. Telephonic Meetings. Except as herein provided and
notwithstanding any place set forth in the notice of the meeting or these
bylaws, members of the Board of Directors (and any committees thereof
created pursuant to Section 3.12 hereof) may participate in regular or
special meetings by, or through the use of, any means of communication by
which all participants may simultaneously hear each other, such as by
conference telephone. If a meeting is conducted by such means, then at
the commencement of such meeting the presiding officer shall inform the
participating directors that a meeting is taking place at which official
business may be transacted. Any participant in a meeting by such means
shall be deemed present in person at such meeting. Notwithstanding the
foregoing, no action may be taken at any meeting held by such means on any
particular matter which the presiding officer determines, in his or her
sole discretion, to be inappropriate under the circumstances for action at
a meeting held by such means. Such determination shall be made and
announced in advance of such meeting.
3.14. Action Without Meeting. Any action required or
permitted by the Wisconsin Business Corporation Law to be taken at a
meeting of the Board of Directors or a committee thereof created pursuant
to Section 3.12 hereof may be taken without a meeting if the action is
taken by all members of the Board or of the committee. The action shall
be evidenced by one or more written consents describing the action taken,
signed by each director or committee member and retained by the
corporation. Such action shall be effective when the last director or
committee member signs the consent, unless the consent specifies a
different effective date.
ARTICLE IV. OFFICERS
4.01. Number. The principal officers of the corporation
shall be a President, a Secretary, and a Treasurer, each of whom shall be
elected by the Board of Directors. A Chairman of the Board, any number of
Vice Presidents, other officers and assistant officers as may be deemed
necessary may be elected or appointed by the Board of Directors. The
Board of Directors may also authorize any duly appointed officer to
appoint one or more officers or assistant officers. The Chief Executive
Officer, designated in accordance with Section 4.06 of these By-laws, may
from time to time appoint any number of Vice Presidents as he shall
determine necessary who shall hold their offices for such terms and shall
exercise such powers and perform such duties as the Chief Executive
Officer shall from time to time determine. Any two or more offices may be
held by the same person.
4.02. Election and Term of Office. The officers of the
corporation to be elected by the Board of Directors shall be elected
annually by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of the shareholders. If the
election of officers shall not be held at such meeting, such election
shall be held as soon thereafter as is practicable. Each officer shall
hold office until his or her successor shall have been duly elected or
until his or her prior death, resignation or removal.
4.03. Removal. The Board of Directors may remove any
officer and, unless restricted by the Board of Directors or these By-laws,
an officer may remove any officer or assistant officer appointed by that
officer, at any time, with or without cause and notwithstanding the
contract rights, if any, of the officer removed. The appointment of an
officer does not of itself create contract rights.
4.04. Resignation. An officer may resign at any time by
delivering notice to the corporation that complies with the Wisconsin
Business Corporation Law. The resignation shall be effective when the
notice is delivered, unless the notice specifies a later effective date
and the corporation accepts the later effective date.
4.05. Vacancies. A vacancy in any principal office because
of death, resignation, removal, disqualification or otherwise, shall be
filled by the Board of Directors for the unexpired portion of the term.
If a resignation of an officer is effective at a later date as
contemplated by Section 4.04 hereof, the Board of Directors may fill the
pending vacancy before the effective date if the Board provides that the
successor may not take office until the effective date.
4.06. Chief Executive Officer. The Board of Directors shall
from time to time designate the Chairman of the Board, if any, or the
President of the corporation as the Chief Executive Officer of the
corporation. The President shall be the Chief Executive Officer whenever
the office of Chairman of the Board of the corporation is vacant. Subject
to the control of the Board of Directors, the Chief Executive Officer
shall in general supervise and control all of the business and affairs of
the corporation. He shall preside at all meetings of the shareholders and
of the Board of Directors. He shall have authority, subject to such rules
as may be prescribed by the Board of Directors, to appoint and remove such
agents and employees of the corporation as he shall deem necessary, to
prescribe their powers, duties and compensation, and to delegate authority
to them. He shall have authority to sign, execute and acknowledge, on
behalf of the corporation, all deeds, mortgages, securities, contracts,
leases, reports, and all other documents or other instruments necessary or
proper to be executed in the course of the corporation's regular business,
or which shall be authorized by resolution of the Board of Directors; and,
except as otherwise provided by law or the Board of Directors, he may
authorize any elected Vice President or other officer or agent of the
corporation to sign, execute and acknowledge such documents or instruments
in his place and stead. In general, he shall perform all duties incident
to the office of Chief Executive Officer of the corporation and such other
duties as may be prescribed by the Board of Directors from time to time.
4.07. Chairman of the Board. The Chairman of the Board, if
one be chosen by the Board of Directors, when present, and in the absence
of the Chief Executive Officer if the President is designated as the Chief
Executive Officer, shall preside at all meetings of the Board of Directors
and of the shareholders and shall perform all duties incident to the
office of Chairman of the Board of the corporation and such other duties
as may be prescribed by the Board of Directors from time to time.
4.08. President. The President shall be the principal
executive officer of the corporation and, subject to the direction of the
Board of Directors, shall in general supervise and control all of the
business and affairs of the corporation; provided, however, that should
the Board of Directors elect a Chairman of the Board, any or all of the
powers customarily incidental to the office of President may be assigned
by the Board of Directors to the Chairman of the Board. If the Chairman
of the Board is designated as the Chief Executive Officer, the President
shall be the chief operating officer of the corporation. Unless the Board
of Directors otherwise provides, in the absence of the Chairman of the
Board or in the event of his inability or refusal to act, or in the event
of a vacancy in the office of the Chairman of the Board, the President
shall perform the duties of the Chairman of the Board, and when so acting
shall have all the powers of and be subject to all the restrictions upon
the Chairman of the Board. The President shall, when present, preside at
all meetings of the shareholders and of the Board of Directors. He or she
shall have authority, subject to such rules as may be prescribed by the
Board of Directors, to appoint such agents and employees of the
corporation as he or she shall deem necessary, to prescribe their powers,
duties and compensation, and to delegate authority to them. Such agents
and employees shall hold office at the discretion of the President. He or
she shall have authority to sign, execute and acknowledge, on behalf of
the corporation, all deeds, mortgages, bonds, stock certificates,
contracts, leases, reports and all other documents or instruments
necessary or proper to be executed in the course of the corporation's
regular business, or which shall be authorized by resolution of the Board
of Directors; and, except as otherwise provided by law or the Board of
Directors, he or she may authorize any Vice President or other officer or
agent of the corporation to sign, execute and acknowledge such documents
or instruments in his or her place and stead. In general he or she shall
perform all duties incident to the office of President and such other
duties as may be prescribed by the Board of Directors from time to time.
4.09. The Vice Presidents. In the absence of the Chairman
of the Board, if any, and the President or in the event of their death,
inability or refusal to act, or in the event for any reason it shall be
impracticable for the Chairman of the Board and the President to act
personally, the Vice President (or in the event there be more than one
Vice President, the Vice Presidents in the order designated by the Board
of Directors or the Chief Executive Officer, or in the absence of any
designation, then in the order of their election) shall perform the duties
of the Chairman of the Board and/or the President, and when so acting,
shall have all the powers of and be subject to all the restrictions upon
the Chairman of the Board and/or the President. Any Vice President may
sign, with the Secretary or Assistant Secretary, certificates for shares
of the corporation; and shall perform such other duties and have such
authority as from time to time may be delegated or assigned to him or her
by the Chief Executive Officer, the President or the Board of Directors.
The execution of any instrument of the corporation by any Vice President
shall be conclusive evidence, as to third parties, of his or her authority
to act in the stead of the Chairman of the Board and/or the President.
4.10. The Secretary. The Secretary shall: (a) keep minutes
of the meetings of the shareholders and of the Board of Directors (and of
committees thereof) in one or more books provided for that purpose
(including records of actions taken by the shareholders or the Board of
Directors (or committees thereof) without a meeting); (b) see that all
notices are duly given in accordance with the provisions of these bylaws
or as required by the Wisconsin Business Corporation Law; (c) be custodian
of the corporate records and of the seal of the corporation and see that
the seal of the corporation is affixed to all documents the execution of
which on behalf of the corporation under its seal is duly authorized; (d)
maintain a record of the shareholders of the corporation, in a form that
permits preparation of a list of the names and addresses of all
shareholders, by class or series of shares and showing the number and
class or series of shares held by each shareholder; (e) sign with the
President, or a Vice President, certificates for shares of the
corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors; (f) have general charge of the stock
transfer books of the corporation; and (g) in general perform all duties
incident to the office of Secretary and have such other duties and
exercise such authority as from time to time may be delegated or assigned
by the Chief Executive Officer, the President or by the Board of
Directors.
4.11. The Treasurer. The Treasurer shall: (a) have charge
and custody of and be responsible for all funds and securities of the
corporation; (b) maintain appropriate accounting records; (c) receive and
give receipts for moneys due and payable to the corporation from any
source whatsoever, and deposit all such moneys in the name of the
corporation in such banks, trust companies or other depositaries as shall
be selected in accordance with the provisions of Section 5.04; and (d) in
general perform all of the duties incident to the office of Treasurer and
have such other duties and exercise such other authority as from time to
time may be delegated or assigned by the Chief Executive Officer or by the
Board of Directors. If required by the Board of Directors, the Treasurer
shall give a bond for the faithful discharge of his or her duties in such
sum and with such surety or sureties as the Board of Directors shall
determine.
4.12. Assistant Secretaries and Assistant Treasurers. There
shall be such number of Assistant Secretaries and Assistant Treasurers as
the Board of Directors or the Chief Executive Officer may from time to
time authorize. The Assistant Secretaries may sign with the President or
a Vice President certificates for shares of the corporation the issuance
of which shall have been authorized by a resolution of the Board of
Directors. The Assistant Treasurers shall respectively, if required by
the Board of Directors, give bonds for the faithful discharge of their
duties in such sums and with such sureties as the Board of Directors shall
determine. The Assistant Secretaries and Assistant Treasurers, in
general, shall perform such duties and have such authority as shall from
time to time be delegated or assigned to them by the Secretary or the
Treasurer, respectively, or by the Chief Executive Officer, the President
or the Board of Directors.
4.13. Other Assistants and Acting Officers. The Board of
Directors and the Chief Executive Officer shall have the power to appoint,
or to authorize any duly appointed officer of the corporation to appoint,
any person to act as assistant to any officer, or as agent for the
corporation in his or her stead, or to perform the duties of such officer
whenever for any reason it is impracticable for such officer to act
personally, and such assistant or acting officer or other agent so
appointed by the Board of Directors or the Chief Executive Officer shall
have the power to perform all the duties of the office to which he or she
is so appointed to be an assistant, or as to which he or she is so
appointed to act, except as such power may be otherwise defined or
restricted by the Board of Directors or the appointing officer.
4.14. Salaries. The salaries of the principal officers
shall be fixed from time to time by the Board of Directors or by a duly
authorized committee thereof, and no officer shall be prevented from
receiving such salary by reason of the fact that he or she is also a
director of the corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS
AND DEPOSITS; SPECIAL CORPORATE ACTS
5.01. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or
execute or deliver any instrument in the name of and on behalf of the
corporation, and such authorization may be general or confined to specific
instances. In the absence of other designation, all deeds, mortgages and
instruments of assignment or pledge made by the corporation shall be
executed in the name of the corporation by the Chief Executive Officer,
the President or one of the Vice Presidents and by the Secretary, an
Assistant Secretary, the Treasurer or an Assistant Treasurer; the
Secretary or an Assistant Secretary, when necessary or required, shall
affix the corporate seal, if any, thereto; and when so executed no other
party to such instrument or any third party shall be required to make any
inquiry into the authority of the signing officer or officers.
5.02. Loans. No indebtedness for borrowed money shall be
contracted on behalf of the corporation and no evidences of such
indebtedness shall be issued in its name unless authorized by or under the
authority of a resolution of the Board of Directors. Such authorization
may be general or confined to specific instances.
5.03. Checks, Drafts, etc. All checks, drafts or other
orders for the payment of money, notes or other evidences of indebtedness
issued in the name of the corporation, shall be signed by such officer or
officers, agent or agents of the corporation and in such manner as shall
from time to time be determined by or under the authority of a resolution
of the Board of Directors.
5.04. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the
corporation in such banks, trust companies or other depositaries as may be
selected by or under the authority of a resolution of the Board of
Directors.
5.05. Voting of Securities Owned by this Corporation.
Subject always to the specific directions of the Board of Directors, (a)
any shares or other securities issued by any other corporation and owned
or controlled by this corporation may be voted at any meeting of security
holders of such other corporation by the President of this corporation if
he or she be present, or in his or her absence by any Vice President of
this corporation who may be present, and (b) whenever, in the judgment of
the President, or in his or her absence, of any Vice President, it is
desirable for this corporation to execute a proxy or written consent in
respect to any shares or other securities issued by any other corporation
and owned by this corporation, such proxy or consent shall be executed in
the name of this corporation by the President or one of the Vice
Presidents of this corporation, without necessity of any authorization by
the Board of Directors, affixation of corporate seal, if any, or
countersignature or attestation by another officer. Any person or persons
designated in the manner above stated as the proxy or proxies of this
corporation shall have full right, power and authority to vote the shares
or other securities issued by such other corporation and owned by this
corporation the same as such shares or other securities might be voted by
this corporation.
ARTICLE VI. CERTIFICATES FOR SHARES; TRANSFER OF SHARES
6.01. Certificates for Shares. Certificates representing
shares of the corporation shall be in such form, consistent with the
Wisconsin Business Corporation Law, as shall be determined by the Board of
Directors. Such certificates shall be signed by the President or a Vice
President and by the Secretary or an Assistant Secretary. All
certificates for shares shall be consecutively numbered or otherwise
identified. The name and address of the person to whom the shares
represented thereby are issued, with the number of shares and date of
issue, shall be entered on the stock transfer books of the corporation.
All certificates surrendered to the corporation for transfer shall be
cancelled and no new certificate shall be issued until the former
certificate for a like number of shares shall have been surrendered and
cancelled, except as provided in Section 6.06 hereof.
6.02. Facsimile Signatures and Seal. The seal of the
corporation, if any, on any certificates for shares may be a facsimile.
The signature of the President or Vice President and the Secretary or
Assistant Secretary upon a certificate may be facsimiles if the
certificate is manually signed on behalf of a transfer agent, or a
registrar, other than the corporation itself or an employee of the
corporation.
6.03. Signature by Former Officers. The validity of a share
certificate is not affected if a person who signed the certificate (either
manually or in facsimile) no longer holds office when the certificate is
issued.
6.04. Transfer of Shares. Prior to due presentment of a
certificate for shares for registration of transfer the corporation may
treat the registered owner of such shares as the person exclusively
entitled to vote, to receive notifications and otherwise to have and
exercise all the rights and power of an owner. Where a certificate for
shares is presented to the corporation with a request to register for
transfer, the corporation shall not be liable to the owner or any other
person suffering loss as a result of such registration of transfer if (a)
there were on or with the certificate the necessary endorsements, and (b)
the corporation had no duty to inquire into adverse claims or has
discharged any such duty. The corporation may require reasonable
assurance that such endorsements are genuine and effective and compliance
with such other regulations as may be prescribed by or under the authority
of the Board of Directors.
6.05. Restrictions on Transfer. The face or reverse side of
each certificate representing shares shall bear a conspicuous notation of
any restriction imposed by the corporation upon the transfer of such
shares.
6.06. Lost, Destroyed or Stolen Certificates. Where the
owner claims that certificates for shares have been lost, destroyed or
wrongfully taken, a new certificate shall be issued in place thereof if
the owner (a) so requests before the corporation has notice that such
shares have been acquired by a bona fide purchaser, (b) files with the
corporation a sufficient indemnity bond if required by the Board of
Directors or any principal officer, and (c) satisfies such other
reasonable requirements as may be prescribed by or under the authority of
the Board of Directors.
6.07. Consideration for Shares. The Board of Directors may
authorize shares to be issued for consideration consisting of any tangible
or intangible property or benefit to the corporation, including cash,
promissory notes, services performed, contracts for services to be
performed or other securities of the corporation. Before the corporation
issues shares, the Board of Directors shall determine that the
consideration received or to be received for the shares to be issued is
adequate. The determination of the Board of Directors is conclusive
insofar as the adequacy of consideration for the issuance of shares
relates to whether the shares are validly issued, fully paid and
nonassessable. The corporation may place in escrow shares issued in whole
or in part for a contract for future services or benefits, a promissory
note, or other property to be issued in the future, or make other
arrangements to restrict the transfer of the shares, and may credit
distributions in respect of the shares against their purchase price, until
the services are performed, the benefits or property are received or the
promissory note is paid. If the services are not performed, the benefits
or property are not received or the promissory note is not paid, the
corporation may cancel, in whole or in part, the shares escrowed or
restricted and the distributions credited.
6.08. Stock Regulations. The Board of Directors shall have
the power and authority to make all such further rules and regulations not
inconsistent with law as it may deem expedient concerning the issue,
transfer and registration of shares of the corporation.
ARTICLE VII. SEAL
7.01. The Board of Directors may provide for a corporate
seal for the corporation.
ARTICLE VIII. INDEMNIFICATION
8.01. Certain Definitions. All capitalized terms used in
this Article VIII and not otherwise hereinafter defined in this Section
8.01 shall have the meaning set forth in Section 180.0850 of the Statute.
The following capitalized terms (including any plural forms thereof) used
in this Article VIII shall be defined as follows:
(a) "Affiliate" shall include, without limitation, any
corporation, partnership, joint venture, employee benefit plan,
trust or other enterprise that directly or indirectly through
one or more intermediaries, controls or is controlled by, or is
under common control with, the Corporation.
(b) "Authority" shall mean the entity selected by the
Director or Officer to determine his or her right to
indemnification pursuant to Section 8.04.
(c) "Board" shall mean the entire then elected and serving
Board of Directors of the Corporation, including all members
thereof who are Parties to the subject Proceeding or any related
Proceeding.
(d) "Breach of Duty" shall mean the Director or Officer
breached or failed to perform his or her duties to the
Corporation and his or her breach of or failure to perform those
duties is determined, in accordance with Section 8.04, to
constitute misconduct under Section 180.0851(2)(a) l, 2, 3 or 4
of the Statute.
(e) "Corporation," as used herein and as defined in the
Statute and incorporated by reference into the definitions of
certain other capitalized terms used herein, shall mean this
Corporation, including, without limitation, any successor
corporation or entity to this Corporation by way of merger,
consolidation or acquisition of all or substantially all of the
capital stock or assets of this Corporation.
(f) "Director or Officer" shall have the meaning set forth
in the Statute; provided, that, for purposes of this Article
VIII, it shall be conclusively presumed that any Director or
Officer serving as a director, officer, partner, trustee, member
of any governing or decision-making committee, employee or agent
of an Affiliate shall be so serving at the request of the
Corporation.
(g) "Disinterested Quorum" shall mean a quorum of the
Board who are not Parties to the subject Proceeding or any
related Proceeding.
(h) "Party" shall have the meaning set forth in the
Statute; provided, that, for purposes of this Article VIII, the
term "Party" shall also include any Director or Officer or
employee of the Corporation who is or was a witness in a
Proceeding at a time when he or she has not otherwise been
formally named a Party thereto.
(i) "Proceeding" shall have the meaning set forth in the
Statute; provided, that, in accordance with Section 180.0859 of
the Statute and for purposes of this Article VIII, the term
"Proceeding" shall also include all Proceedings (i) brought
under (in whole or in part) the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, their
respective state counterparts, and/or any rule or regulation
promulgated under any of the foregoing; (ii) brought before an
Authority or otherwise to enforce rights hereunder; (iii) any
appeal from a Proceeding; and (iv) any Proceeding in which the
Director or Officer is a plaintiff or petitioner because he or
she is a Director or Officer; provided, however, that any such
Proceeding under this subsection (iv) must be authorized by a
majority vote of a Disinterested Quorum.
(j) "Statute" shall mean Sections 180.0850 through
180.0859, inclusive, of the Wisconsin Business Corporation Law,
Chapter 180 of the Wisconsin Statutes, as the same shall then be
in effect, including any amendments thereto, but, in the case of
any such amendment, only to the extent such amendment permits or
requires the Corporation to provide broader indemnification
rights than the Statute permitted or required the Corporation to
provide prior to such amendment.
8.02. Mandatory Indemnification of Directors and Officers.
To the fullest extent permitted or required by the Statute, the
Corporation shall indemnify a Director or Officer against all Liabilities
incurred by or on behalf of such Director or Officer in connection with a
Proceeding in which the Director or Officer is a Party because he or she
is a Director or Officer.
8.03. Procedural Requirements.
(a) A Director or Officer who seeks indemnification under
Section 8.02 shall make a written request therefor to the Corporation.
Subject to Section 8.03(b), within sixty days of the Corporation's receipt
of such request, the Corporation shall pay or reimburse the Director or
Officer for the entire amount of Liabilities incurred by the Director or
Officer in connection with the subject Proceeding (net of any Expenses
previously advanced pursuant to Section 8.05).
(b) No indemnification shall be required to be paid by the
Corporation pursuant to Section 8.02 if, within such sixty-day period, (i)
a Disinterested Quorum, by a majority vote thereof, determines that the
Director or Officer requesting indemnification engaged in misconduct
constituting a Breach of Duty or (ii) a Disinterested Quorum cannot be
obtained.
(c) In either case of nonpayment pursuant to Section 8.03(b),
the Board shall immediately authorize by resolution that an Authority, as
provided in Section 8.04, determine whether the Director's or Officer's
conduct constituted a Breach of Duty and, therefore, whether
indemnification should be denied hereunder.
(d) (i) If the Board does not authorize an Authority to
determine the Director's or Officer's right to indemnification hereunder
within such sixty-day period and/or (ii) if indemnification of the
requested amount of Liabilities is paid by the Corporation, then it shall
be conclusively presumed for all purposes that a Disinterested Quorum has
affirmatively determined that the Director or Officer did not engage in
misconduct constituting a Breach of Duty and, in the case of subsection
(i) above (but not subsection (ii)), indemnification by the Corporation of
the requested amount of Liabilities shall be paid to the Director or
Officer immediately.
8.04. Determination of Indemnification.
(a) If the Board authorizes an Authority to determine a
Director's or Officer's right to indemnification pursuant to Section 8.03,
then the Director or Officer requesting indemnification shall have the
absolute discretionary authority to select one of the following as such
Authority:
(i) An independent legal counsel; provided, that such
counsel shall be mutually selected by such Director or Officer
and by a majority vote of a Disinterested Quorum or, if a
Disinterested Quorum cannot be obtained, then by a majority vote
of the Board;
(ii) A panel of three arbitrators selected from the panels
of arbitrators of the American Arbitration Association in
Wisconsin; provided, that (A) one arbitrator shall be selected
by such Director or Officer, the second arbitrator shall be
selected by a majority vote of a Disinterested Quorum or, if a
Disinterested Quorum cannot be obtained, then by a majority vote
of the Board, and the third arbitrator shall be selected by the
two previously selected arbitrators, and (B) in all other
respects (other than this Article VIII), such panel shall be
governed by the American Arbitration Association's then existing
Commerical Arbitration Rules; or
(iii) A court pursuant to and in accordance with
Section 180.0854 of the Statute.
(b) In any such determination by the selected Authority there
shall exist a rebuttable presumption that the Director's or Officer's
conduct did not constitute a Breach of Duty and that indemnification
against the requested amount of Liabilities is required. The burden of
rebutting such a presumption by clear and convincing evidence shall be on
the Corporation or such other party asserting that such indemnification
should not be allowed.
(c) The Authority shall make its determination within sixty
days of being selected and shall submit a written opinion of its
conclusion simultaneously to both the Corporation and the Director or
Officer.
(d) If the Authority determines that indemnification is
required hereunder, the Corporation shall pay the entire requested amount
of Liabilities (net of any Expenses previously advanced pursuant to
Section 8.05), including interest thereon at a reasonable rate, as
determined by the Authority, within ten days of receipt of the Authority's
opinion; provided, that, if it is determined by the Authority that a
Director or Officer is entitled to indemnification against Liabilities'
incurred in connection with some claims, issues or matters, but not as to
other claims, issues or matters, involved in the subject Proceeding, the
Corporation shall be required to pay (as set forth above) only the amount
of such requested Liabilities as the Authority shall deem appropriate in
light of all of the circumstances of such Proceeding.
(e) The determination by the Authority that indemnification is
required hereunder shall be binding upon the Corporation regardless of any
prior determination that the Director or Officer engaged in a Breach of
Duty.
(f) All Expenses incurred in the determination process under
this Section 8.04 by either the Corporation or the Director or Officer,
including, without limitation, all Expenses of the selected Authority,
shall be paid by the Corporation.
8.05. Mandatory Allowance of Expenses.
(a) The Corporation shall pay or reimburse from time to time or
at any time, within ten days after the receipt of the Director's or
Officer's written request therefor, the reasonable Expenses of the
Director or Officer as such Expenses are incurred; provided, the following
conditions are satisfied:
(i) The Director or Officer furnishes to the Corporation
an executed written certificate affirming his or her good faith
belief that he or she has not engaged in misconduct which
constitutes a Breach of Duty; and
(ii) The Director or Officer furnishes to the Corporation
an unsecured executed written agreement to repay any advances
made under this Section 8.05 if it is ultimately determined by
an Authority that he or she is not entitled to be indemnified by
the Corporation for such Expenses pursuant to Section 8.04.
(b) If the Director or Officer must repay any previously
advanced Expenses pursuant to this Section 8.05, such Director or Officer
shall not be required to pay interest on such amounts.
8.06. Indemnification and Allowance of Expenses of Certain
Others.
(a) The Board may, in its sole and absolute discretion as it
deems appropriate, pursuant to a majority vote thereof, indemnify a
director or officer of an Affiliate (who is not otherwise serving as a
Director or Officer) against all Liabilities, and shall advance the
reasonable Expenses, incurred by such director or officer in a Proceeding
to the same extent hereunder as if such director or officer incurred such
Liabilities because he or she was a Director or Officer, if such director
or officer is a Party thereto because he or she is or was a director or
officer of the Affiliate.
(b) The Corporation shall indemnify an employee who is not a
Director or Officer, to the extent he or she has been successful on the
merits or otherwise in defense of a Proceeding, for all reasonable
Expenses incurred in the Proceeding if the employee was a Party because he
or she was an employee of the Corporation.
(c) The Board may, in its sole and absolute discretion as it
deems appropriate, pursuant to a majority vote thereof, indemnify (to the
extent not otherwise provided in Section 8.06(b) hereof) against
Liabilities incurred by, and/or provide for the allowance of reasonable
Expenses of, an employee or authorized agent of the Corporation acting
within the scope of his or her duties as such and who is not otherwise a
Director or Officer.
8.07. Insurance. The Corporation may purchase and maintain
insurance on behalf of a Director or Officer or any individual who is or
was an employee or authorized agent of the Corporation against any
Liability asserted against or incurred by such individual in his or her
capacity as such or arising from his or her status as such, regardless of
whether the Corporation is required or permitted to indemnify against any
such Liability under this Article VIII.
8.08. Notice to the Corporation. A Director, Officer or
employee shall promptly notify the Corporation in writing when he or she
has actual knowledge of a Proceeding which may result in a claim of
indemnification against Liabilities or allowance of Expenses hereunder,
but the failure to do so shall not relieve the Corporation of any
liability to the Director, Officer or employee hereunder unless the
Corporation shall have been irreparably prejudiced by such failure (as
determined, in the case of Directors or Officers only, by an Authority
selected pursuant to Section 8.04(a)).
8.09. Severability. If any provision of this Article VIII
shall be deemed invalid or inoperative, or if a court of competent
jurisdiction determines that any of the provisions of this Article VIII
contravene public policy, this Article VIII shall be construed so that the
remaining provisions shall not be affected, but shall remain in full force
and effect, and any such provisions which are invalid or inoperative or
which contravene public policy shall be deemed, without further action or
deed by or on behalf of the Corporation, to be modified, amended and/or
limited, but only to the extent necessary to render the same valid and
enforceable; it being understood that it is the Corporation's intention to
provide the Directors and Officers with the broadest possible protection
against personal liability allowable under the Statute.
8.10. Nonexclusivity of Article VIII. The rights of a
Director, Officer or employee (or any other person) granted under this
Article VIII shall not be deemed exclusive of any other rights to
indemnification against Liabilities or allowance of Expenses which the
Director, Officer or employee (or such other person) may be entitled to
under any written agreement, Board resolution, vote of shareholders of the
Corporation or otherwise, including, without limitation, under the
Statute. Nothing contained in this Article VIII shall be deemed to limit
the Corporation's obligations to indemnify against Liabilities or allow
Expenses to a Director, Officer or employee under the Statute.
8.11. Contractual Nature of Article VIII; Repeal or
Limitation of Rights. This Article VIII shall be deemed to be a contract
between the Corporation and each Director, Officer and employee of the
Corporation and any repeal or other limitation of this Article VIII or any
repeal or limitation of the Statute or any other applicable law shall not
limit any rights of indemnification against Liabilities or allowance of
Expenses then existing or arising out of events, acts or omissions
occurring prior to such repeal or limitation, including, without
limitation, the right to indemnification against Liabilities or allowance
of Expenses for Proceedings commenced after such repeal or limitation to
enforce this Article VIII with regard to acts, omissions or events arising
prior to such repeal or limitation.
ARTICLE IX. AMENDMENTS
9.01. By Shareholders. These bylaws may be amended or
repealed and new bylaws may be adopted by the shareholders at any annual
or special meeting of the shareholders at which a quorum is in attendance.
9.02. By Directors. Except as otherwise provided by the
Wisconsin Business Corporation Law or the articles of incorporation, these
bylaws may also be amended or repealed and new bylaws may be adopted by
the Board of Directors by affirmative vote of a majority of the number of
directors present at any meeting at which a quorum is in attendance;
provided, however, that the shareholders in adopting, amending or
repealing a particular bylaw may provide therein that the Board of
Directors may not amend, repeal or readopt that bylaw.
9.03. Implied Amendments. Any action taken or authorized by
the shareholders or by the Board of Directors which would be inconsistent
with the bylaws then in effect but which is taken or authorized by
affirmative vote of not less than the number of shares or the number of
directors required to amend the bylaws so that the bylaws would be
consistent with such action shall be given the same effect as though the
bylaws had been temporarily amended or suspended so far, but only so far,
as is necessary to permit the specific action so taken or authorized.
Exhibit 21
Subsidiaries of the Company
as of May 25, 1995
The Company owns all of the stock of the following corporations:
Name State of Incorporation
Marcus Theatres Corporation Wisconsin
Marcus Restaurants, Inc. Wisconsin
B & G Realty, Inc. Wisconsin
First American Finance Corporation Wisconsin
Marc Plaza Corporation Wisconsin
Pfister Corporation Wisconsin
Marcus Geneva, Inc. Wisconsin
Marcus Hotels, Inc. Wisconsin
Budgetel Inns, Inc. Wisconsin
Marcus Theatres Corporation owns all of the stock of the
following corporations:
Name State of Incorporation
Appleton Theatres Corporation Wisconsin
Centre Theatres Corporation Wisconsin
La Crosse Amusement Company Wisconsin
Lake-Vue Drive-In Corp. Wisconsin
Marcus Cinemas, Inc. Wisconsin
Marcus Productions,, Inc. Wisconsin
M & S Amusement, Inc. Wisconsin
Pilgrim Theatre Corporation Wisconsin
Southtown Corporation Wisconsin
Starlight-24 Corporation Wisconsin
Stephen Amusement Corporation Wisconsin
Tower 41-Corporation Wisconsin
Vending Corporation Wisconsin
41-Bowl, Inc. Wisconsin
Marcus Amusement Co., Inc. Wisconsin
Budgetel Inns, Inc. owns all of the stock of the following
corporations:
Name State of Incorporation
Budgetel Partners, Inc. Wisconsin
Guest House Inn-Appleton, Inc. Wisconsin
Guest House Inn of Manitowoc, Inc. Wisconsin
Marc's Budgetel of Nebraska, Inc. Nebraska
Budgetel Franchises International, Inc. Wisconsin
Woodfield Refreshments of Colorado, Inc. Colorado
Marcus Restaurants, Inc. owns all of the stock of the following
corporations, except it owns 50% of 642, Inc.:
Name State of Incorporation
Marc's Carryout Corporation Wisconsin
Tops, Inc. Illinois
B & G Leasing Corporation Wisconsin
Captains-Juneau, Inc. Wisconsin
Captains-Mayfair, Inc. Wisconsin
Captains--Wausau, Inc. Wisconsin
Captains-Kenosha, Inc. Wisconsin
Colony Inns Southgate Corporation Wisconsin
Marc's Steak House, Inc. Wisconsin
642, Inc. Wisconsin
Red Garter-Manitowoc, Inc. Wisconsin
Captains-Appleton, Inc. Wisconsin
Speciality Products Corporation of Wisconsin Wisconsin
Glendale Refreshments, Inc. Wisconsin
Grand Avenue Refreshments, Inc. Wisconsin
Marcus Restaurants, Inc. has an option to purchase the remaining 50% of
the stock of 642, Inc. for $5.
Colony Inns Southgate Corporation owns 80% of the stock of
Colony Inns Refreshments, Inc., a Wisconsin corporation, and has an option
to purchase the remaining 20% for $5.
Marcus Hotels, Inc. owns all of the stock of Marcus Northstar,
Inc., a Minnesota corporation.
Exhibit 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in Registration Statements
(Forms S-8 No. 33-18801 and No. 33-55695) of The Marcus Corporation of our
report dated July 21, 1995, with respect to the consolidated financial
statements of The Marcus Corporation included in this Annual Report (Form
10-K) for the year ended May 25, 1995.
ERNST & YOUNG LLP
Milwaukee, Wisconsin
August 23, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCUS
CORPORATION'S FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-25-1995
<PERIOD-START> MAY-27-1994
<PERIOD-END> MAY-25-1995
<CASH> 8,798
<SECURITIES> 0
<RECEIVABLES> 6,166
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 21,642
<PP&E> 507,990
<DEPRECIATION> 133,706
<TOTAL-ASSETS> 407,082
<CURRENT-LIABILITIES> 52,253
<BONDS> 116,364
<COMMON> 7,522
0
0
<OTHER-SE> 206,942
<TOTAL-LIABILITY-AND-EQUITY> 407,082
<SALES> 263,193
<TOTAL-REVENUES> 277,990
<CGS> 144,529
<TOTAL-COSTS> 231,195
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (8,587)
<INCOME-PRETAX> 40,196
<INCOME-TAX> 16,060
<INCOME-CONTINUING> 24,136
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,136
<EPS-PRIMARY> 1.84
<EPS-DILUTED> 1.84
</TABLE>
