2003 Nominating Charter: MCS

Compensation and Nominating Committee Charter
Adopted: January 8, 2003
This Compensation and Nominating Committee Charter ("Charter") is intended to assist the
Compensation and Nominating Committee ("Committee") of the Board of Directors ("Board")
of The Marcus Corporation ("Company") in carrying out its duties and responsibilities. This
Charter is in addition to, and is not intended to change or interpret, any federal or state law or
regulation, the rules of the Securities and Exchange Commission ("SEC"), the listing standards
of the New York Stock Exchange ("NYSE"), the Wisconsin Business Corporation Law, or the
Company's Articles of Incorporation or Bylaws. This Charter is not intended to, and does not,
create any legal or fiduciary duties or responsibilities or form the basis for a breach of fiduciary
duty or potential liability. This Charter is subject to modification and interpretation by the
Board.
A. General Role.
The Committee is responsible for determining the compensation of the Company's
directors, officers and other key executives. The Committee also is responsible for
recommending to the Board a slate of director nominees for election at each of the
Company's annual meetings of shareholders, and otherwise for determining the Board
committee members and chairmen, subject to Board ratification, as well as
recommending to the Board director nominees to fill vacancies or new positions on the
Board or its committees that may occur or be created from time to time, all in accordance
with the Company's Bylaws and applicable law. The Committee is also responsible for
overseeing that a satisfactory system is in place for the education, development and
orderly succession of the Company's management.
B. Members.
The Committee shall consist of at least three directors, one of whom shall be designated
the Chairman of the Committee, all of whom shall meet the independence and other
requirements of the SEC, the listing standards of the NYSE, the Internal Revenue Code,
other applicable laws and the Company's Bylaws, except as otherwise determined by the
Board in accordance with the requirements of the SEC, the listing standards of the NYSE,
the Internal Revenue Code, other applicable laws and the Company's Bylaws.
Committee members may be removed in accordance with the Company's Bylaws.
C. Meetings.
Absent unusual circumstances, the Committee shall meet at least twice annually in
accordance with the Company's Bylaws. In addition, special meetings shall be held as
circumstances require as determined by the Committee's Chairman or by any two other
members of the Committee in accordance with the Company's Bylaws. The Committee
may invite to its meetings such other directors, members of Company management and
such other persons or advisors as the Committee or its Chairman deems necessary or
appropriate in order to carry out the Committee's duties and responsibilities. The
Committee, through its Chairman, shall report its activities to the Board at the Board
meeting next following each Committee meeting so that the Board is kept fully informed
of the Committee's activities on a current basis. Minutes of each Committee meeting
shall also be distributed to the Board as and when appropriate.
D. Executive Compensation Responsibilities.
In carrying out its responsibilities related to the compensation of the Company's officers
and other key executives, the Committee, in consultation with the Chairman of the Board
and Chief Executive Officer, shall strive to advance the Company's executive
compensation policy of providing to the Company's officers and other key executives
compensation packages that help (i) align the interests of the Company's officers and
other key executives with the interests of the Company's shareholders; (ii) provide fair
and competitive compensation which rewards corporate and individual performance;
(iii) attract, retain and motivate highly qualified individuals who contribute to the
Company's long-term growth and success; and (iv) advance the Company's philosophy
of encouraging its officers and other key executives to take appropriate market responsive
risk-taking actions that facilitate the growth and success of the Company by encouraging
the continuation of the Company's entrepreneurial spirit. The Committee believes that
there should be a strong link between executive compensation levels and the relative
financial performance of the Company.
The Committee's responsibilities related to executive compensation shall include the
following:
1. To, at least annually, review the Company's executive compensation philosophy
and take such actions as the Committee deems necessary or appropriate.
2. To, at least annually, review the Company's executive compensation plans,
programs and arrangements (including equity incentive plans) and take such
actions as the Committee deems necessary or appropriate.
3. To administer the Company's executive compensation plans, programs and
arrangements (including equity incentive plans) and take such actions as the
Committee deems necessary or appropriate.
4. To, on an annual basis, review the performance of, and determine the salaries,
bonuses, stock option grants, and other benefits for, the Company's Chairman and
Chief Executive Officer, officers and other key executives.
5. In determining the appropriate compensation level for the Company's Chairman
and Chief Executive Officer, the Committee shall compare such person's
performance with objectives deemed appropriate by this Committee and take into
account such other factors and circumstances the Committee believes are
necessary or appropriate.
6. In determining the appropriate compensation levels for the Company's officers
and other key executives (other than the Chairman and Chief Executive Officer),
the Committee shall review and consider the recommendations of the Chairman
and Chief Executive Officer, recognizing broad discretion in these matters, and
taking into account such other factors and circumstances the Committee believes
are necessary or appropriate.
7. To, at least annually, review the Company's policies and practices for evaluating
the performance of the Company's Chairman and Chief Executive Officer,
officers and other key executives and take such actions as the Committee deems
necessary or appropriate.
8. To, on an annual basis, prepare and approve the executive compensation report
required by the rules of the SEC to be included in the Company's proxy statement
for its annual meeting of shareholders.
9. To, from time to time, if the Committee determines it to be necessary or
appropriate, select and retain independent compensation and benefits consultants
and experts to provide independent advice to the Committee with respect to the
Company's current and proposed executive compensation and employee benefit
programs, and to otherwise assist the Committee in carrying out its duties and
responsibilities. The cost of such consultants and experts will be paid for by the
Company.
10. To, from time to time, if the Committee determines it to be necessary or
appropriate, conduct such reviews, investigations and surveys as the Committee
may consider necessary or appropriate in the exercise of its duties and
responsibilities.
E. Non-Employee Director Compensation Responsibilities.
In carrying out its responsibilities related to the compensation of the Company's nonemployee
directors, the Committee's philosophy is to strive to provide compensation that
is competitive and that helps attract, motivate and retain non-employee directors of the
highest quality. The Committee's responsibilities related to director compensation,
which shall be exercised in consultation with the Company's Chairman of the Board and
Chief Executive Officer, shall include the following:
1. To, from time to time, if the Committee determines it to be necessary or
appropriate, review the compensation paid to the Company's non-employee
directors, including in their roles as committee chairmen and members, and take
such actions as the Committee deems necessary or appropriate.
2. To, from time to time, if the Committee determines it to be necessary or
appropriate, select and retain independent compensation and benefits consultants
and experts to provide independent advice to the Committee with respect to the
Company's current and proposed non-employee director compensation and
benefit programs, and to otherwise assist the Committee in carrying out its duties
and responsibilities. The cost of such consultants and experts will be paid for by
the Company.
3. To, from time to time, if the Committee determines it to be necessary or
appropriate, conduct such reviews, investigations and surveys as the Committee
may consider necessary or appropriate in the exercise of its duties and
responsibilities.
F. Director Nomination Responsibilities.
The Committee's responsibilities related to the nomination of directors, which shall be
exercised in consultation with the Company's Chairman of the Board and Chief
Executive Officer, shall include the following:
1. To establish criteria for prospective director nominees, which may be or include
the criteria set forth in the Company's Corporate Governance Policy Guidelines.
2. To establish and effectively communicate to shareholders a method for
shareholders to recommend director nominees in accordance with the Company's
Bylaws for the Committee's consideration.
3. To evaluate all prospective director nominees, including those nominated by
shareholders in accordance with the Company's Bylaws.
4. To conduct appropriate inquiries into the backgrounds and qualifications of
prospective director nominees.
5. To annually recommend for approval by the Board and the Company's
shareholders a slate of director nominees, and to otherwise recommend for
approval by the Board director nominees to fill vacancies or new positions on the
Board as they may occur or be created from time to time, all in accordance with
the Company's Bylaws.
6. To review and recommend to the Board an appropriate course of action with
respect to or upon the resignation, retirement or removal of any then currently
serving director, including whether a new director should be appointed by the
Board prior to the Company's next shareholder meeting, all in accordance with
the Company's Bylaws.
7. To, on an annual basis, determine which directors shall serve as members and
chairmen of the Board's committees, subject to Board ratification. In making its
determinations, the Committee shall take into consideration (a) balancing the
benefits derived from continuity against the benefits derived from the diversity of
experience and viewpoints of the various directors which may result from the
rotation of committee members and chairmen; (b) subject matter expertise;
(c) applicable SEC, IRS or NYSE requirements; (d) tenure; and (e) the desires of
individual Board members.
8. To plan in advance for continuity on the Board as current directors are scheduled
to retire from the Board in accordance with the Company's Bylaws.
9. If a then serving director shall resign his or her position due to a change in the
employment position that he or she held when he or she first became a member of
the Board, the Committee shall review, in consultation with the Chairman of the
Board and Chief Executive Officer, the continued appropriateness of such
director's Board membership and shall take such action as the Committee deems
necessary or appropriate, subject to ratification by the Board and compliance with
the Company's Bylaws.
10. To, from time to time, if the Committee determines it to be necessary or
appropriate, select and retain independent consultants, search firms and experts to
provide independent advice to the Committee with respect to the Company's
director nominees and nominating policies, practices and procedures and to help
identify, screen and check potential director candidates, and to otherwise assist
the Committee in carrying out its duties and responsibilities. The cost of such
consultants, search firms and experts shall be paid for by the Company.
11. To, from time to time, if the Committee determines it to be necessary or
appropriate, conduct such reviews, investigations and surveys as the Committee
may consider necessary or appropriate in the exercise of its duties and
responsibilities.
G. Other Responsibilities.
To, from time to time, if the Committee determines it to be necessary or appropriate, take
such actions as it deems appropriate to ensure that a satisfactory system is in effect for the
education, development, and orderly succession of officers, key executives and mid-level
managers throughout the Company. In this regard, on an annual basis, the Chairman and
Chief Executive Officer shall prepare and distribute to the Committee, for its review and
approval, a report on succession planning for all officers and key executives of the
Company. In addition, on an annual basis, the Chairman and Chief Executive Officer
shall prepare and distribute to the Committee, for its review and approval, a short-term
succession plan which delineates a temporary delegation of authority to certain officers
and other key executives of the Company, if all or a portion of the officers should
unexpectedly become unable to perform their duties. The short-term succession plan
shall be in effect until the Committee has the opportunity to more fully consider the
applicable situation and take any appropriate or necessary action.
H. Unrestricted Committee Communications.
The Committee shall have unrestricted lines of communication with the Company's
Chairman of the Board and Chief Executive Officer, Chief Financial Officer, General
Counsel, independent auditors and outside legal counsel at all times. The Committee
may, as it deems necessary or appropriate, obtain advice and assistance from outside
legal, accounting or other advisors, which advisors shall be paid for by the Company.
I. Annual Review of Charter.
To, at least annually, review and reassess the adequacy of this Charter and, if determined
necessary or appropriate, make recommendations to the Board. During this review
process, the Committee may seek the input of the Company's Chairman of the Board and
Chief Executive Officer, Chief Financial Officer, General Counsel and/or other experts or
advisors with regard to the adequacy of this Charter and the necessity or desirability of
any amendments.
J. Annual Performance Review.
The Committee shall, at least annually, be subject to a performance evaluation by the
Board's Corporate Governance Committee in accordance with the Company's Corporate
Governance Policy Guidelines.