Marcus (MCS)

         Annual Cash Bonuses

        We establish targeted potential annual cash bonus awards at the beginning of each fiscal year pursuant to our variable incentive plan, which our Committee administers. Our variable incentive plan, as amended in July 2009, allows our Committee to select from a variety of appropriate financial metrics upon which to base the financial targets for achieving a corresponding annual incentive bonus. Our variable incentive plan allows our Committee to choose from one or more of the following financial metrics, either in absolute terms or in comparison to prior year performance or publicly available industry standards or indices: revenues; gross operating profit; operating income; pre-tax earnings; net earnings; earnings per share; earnings before interest, taxes, depreciation and amortization (“EBITDA”); economic profit; operating margins and statistics; financial return and leverage ratios; total shareholder return metrics; or a company-specific financial metric (such as Adjusted EBITDA, adjusted consolidated pre-tax income (“API”) or adjusted division pre-tax income (“ADI”)). Additional financial measures not specified in the variable incentive plan may be considered if our Committee determines that the specific measure contributes to achieving the primary goal of our incentive plan – sustained growth in long-term shareholder value. Our Committee retains the ability to consider whether an adjustment of the selected financial goals for any year is necessitated by exceptional circumstances. This ability is intended to be narrowly and infrequently used.

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        Targeted annual bonus awards under the variable incentive plan may be based on our relative achievement of the selected consolidated financial targets and/or divisional financial targets, as well as on discretionary individual performance measures that help enhance shareholder value as subjectively determined by our Compensation Committee. Our Committee also from time to time has granted special compensation awards to our named executive officers and other key employees to reward their integral involvement in significant corporate achievements or events, such as in connection with our sale of our limited service lodging division and Miramonte Resort in fiscal 2005 and the payment of our $7.00 per share special dividend in fiscal 2006. In fiscal 2007, our Committee granted special compensation awards to Messrs. Greg Marcus, Neis, Olson and Kissinger to reward their significant contributions in connection with our acquisition of 11 theatres from Cinema Entertainment Corporation in April 2007. In fiscal 2008, our Committee granted special compensation awards to Messrs. Greg Marcus, Neis, Olson and Kissinger to reward their significant contributions in connection with our acquisition of seven theatres from Douglas Theatre Company in April 2008. Our Committee did not grant any special compensation awards to any of our named executive officers in fiscal 2009.

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

        Under our variable incentive plan for fiscal 2009, our Compensation Committee approved for each named executive officer an annual incentive cash bonus target award that represented a percentage of each officer’s respective base salary. Taking into account the changes made to the targeted bonus awards for Messrs. Steve and Greg Marcus in connection with Mr. Steve Marcus’ retirement as our chief executive officer and Mr. Greg Marcus’ succession to the position of our chief executive officer in fiscal 2009, for fiscal 2009, the target incentive bonus percentages of base salary for our named executive officers were established at between 30% and 45%, and for Mr. Greg Marcus, at 80% (prorated for the fiscal year from the date of his promotion as our chief executive officer). Our Compensation Committee determined that these target bonus awards, if earned, would result in our payment of total direct compensation amounts that would generally fall between the 50^th and 75^th percentile of the total direct compensation paid to similarly situated executives at our surveyed group of benchmarked companies.

        The fiscal 2009 targeted incentive bonus awards for Messrs. Olson and Otto, who as our division presidents each have direct managerial responsibilities for their respective operating division, were based 64% on the relative achievement of our fiscal 2009 Adjusted EBITDA targets for their respective division (which were approximately $63.4 million for our Theatre Division and $42.7 million for our Hotels and Resorts Division), 16% based on the relative achievement of our fiscal 2009 consolidated Adjusted EBITDA target of approximately $96.1 million, and 20% on achieving their applicable individual performance measures. The fiscal 2009 target incentive bonus award for Mr. Steve Marcus was based 80% on achieving our fiscal 2009 consolidated Adjusted EBITDA target and 20% on achieving his applicable individual performance measures. The fiscal 2009 targeted incentive bonus awards for Messrs. Neis and Kissinger were based 60% on the relative achievement of our fiscal 2009 consolidated Adjusted EBITDA target and 40% on the achievement of their applicable individual performance measures. The fiscal 2009 target incentive bonus award for Mr. Greg Marcus was pro rated between the two formulas described in the preceding sentences based on the number of months during the fiscal year that he served as our president and the number of months thereafter during the fiscal year that he served as our chief executive officer and president. The applicable Adjusted EBITDA targets were based on stretch goals for our budgeted fiscal 2009 financial performance expectations for our company and each of our two operating divisions. Since the implementation of our incentive plan, we have achieved between 28% — 93% of the applicable bonus based upon our consolidated financial targets and 0% — 156% of the applicable bonus based upon our division financial targets. Individual performance measures included such officer’s individual contributions and achievements during fiscal 2009, particularly as such contributions and achievements related to advancing our entrepreneurial spirit. For fiscal 2009, our actual consolidated Adjusted EBITDA was approximately 78% of our target amount, resulting in a bonus achievement based upon this financial measure of 28%. Similarly, our actual fiscal 2009 Theatre Division Adjusted EBITDA was approximately 95% of the target amount, resulting in a bonus achievement based upon this financial measure of 83%. Our actual fiscal 2009 Hotels and Resorts Division Adjusted EBITDA was approximately 58% of the target amount, resulting in no bonus achievement based upon this financial measure. As a result, and because each named executive officer successfully achieved each of his respective individual performance criterion, Messrs. Steve Marcus, Greg Marcus, Neis, Olson, Otto and Kissinger earned fiscal 2009 incentive bonus amounts equal to approximately 32%, 25%, 20%, 39%, 7% and 20%, respectively, of their base salaries. For purposes of determining the relative achievement of our fiscal 2009 financial targets, we defined “Adjusted EBITDA” as operating income plus depreciation and amortization and preopening expense, less equity losses from unconsolidated joint ventures. Our Committee had the authority to make additional adjustments to either actual or targeted Adjusted EBITDA if our actual capital expenditures exceeded our pre-approved annual capital budget or our actual preopening expense exceeded our pre-approved operating budget. Our Committee also retained the ability to adjust the Adjusted EBITDA targets to take into account exceptional circumstances. No such adjustments were made to fiscal 2009 Adjusted EBITDA targets.

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        Our Compensation Committee subjectively analyzed on a discretionary basis individual performance measures, including achievements relating to advancing entrepreneurial spirit, with respect to each individual executive officer based on the recommendations of our chief executive officer for all named executive officers other than himself and our chairman and, in the case of our chief executive officer and our chairman, by our Committee on its own accord.

        Based on, and consistent with, the amendments to our variable incentive plan adopted in July 2009, instead of establishing target fiscal 2010 incentive bonus awards for our named executive officers as a percentage of their base salaries, our Committee established the financial component of each named executive officer’s fiscal 2010 target incentive bonus opportunity as a percentage of API for corporate officers and as a percentage of applicable ADI for our two division presidents. Additionally, the Committee established each named executive officer’s individual performance component of their fiscal 2010 target incentive bonus opportunity as a fixed percentage of their base salary, which was generally intended to approximate 20% of the total fiscal 2010 target incentive bonus opportunity for our chairman, chief executive officer and division presidents and 40% for all of our other named executive officers. Although our Committee modified the basis for determining our named executive officers’ incentive bonus opportunities for fiscal 2010 compared to fiscal 2009, our Committee nonetheless believed that the new basis for determining targeted annual bonus amounts for fiscal 2010 would result in roughly equivalent target bonus opportunities to those provided in fiscal 2009 and that targeted fiscal 2010 bonus opportunities, if earned, should continue to result in our payment of total direct compensation to our named executive officers that would generally fall between the 50^th and 75^th percentile of total direct compensation paid to similarly situated executives at our benchmarked sectors.

        As a result of the foregoing, the targeted fiscal 2010 incentive bonus awards for Messrs. Olson and Otto are based 80% on achieving the fiscal 2010 ADI target of their respective division, and 20% on achieving their applicable individual performance measures. The targeted fiscal 2010 incentive bonus awards for Messrs. Greg Marcus and Steve Marcus are based 80% on achieving our fiscal 2010 consolidated API target and 20% on achieving their applicable individual performance measures. The targeted fiscal 2010 incentive bonus amounts for Messrs. Neis and Kissinger are based 60% on achieving our fiscal 2010 consolidated API target and 40% on achieving their applicable individual performance measures. We established these API and ADI targets based on stretch goals for fiscal 2010 for both our company and each of our two divisions. We believe that the level of achievability of these targets will likely be consistent with the relative level of achievement of our historical financial targets. Individual performance measures for fiscal 2010 include such officer’s individual contributions and achievements during fiscal 2010, particularly as such contributions and achievements relate to advancing our entrepreneurial spirit. For purposes of determining the relative achievement of our fiscal 2010 financial targets, we defined “API” as consolidated earnings before income taxes, excluding gains and losses from dispositions of assets, preopening expenses and unusual items, and less a goodwill amortization charge. Similarly, for these purposes, we defined “ADI” generally in the same manner as we do API, except that division earnings before income taxes is our beginning baseline metric instead of consolidated earnings before income taxes, and we also subtract an intercompany rent charge for company-owned real estate associated with each division.

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