<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 13, 1995
REGISTRATION STATEMENT NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
MCDONALD'S CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-2361282
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION
OF INCORPORATION OR NUMBER)
ORGANIZATION)
ONE MCDONALD'S PLAZA
OAK BROOK, ILLINOIS 60521
(708) 575-3000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
SHELBY YASTROW
SENIOR VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
MCDONALD'S CORPORATION
ONE MCDONALD'S PLAZA
OAK BROOK, ILLINOIS 60521
(708) 575-6178
(NAME, ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT OF SERVICE)
COPIES TO:
ALAN BELLER
CLEARY, GOTTLIEB, STEEN & HAMILTON
ONE LIBERTY PLAZA
NEW YORK, NEW YORK 10006
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement as
determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the registration
statement number of the earlier effective registration statement for the same
offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. [_]
---------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT MAXIMUM MAXIMUM
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED REGISTERED PER UNIT(1)(2) OFFERING PRICE(1)(2) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Debt Securities........ $500,000,000(3) 100% $500,000,000 $172,414
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</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o).
(2) Exclusive of accrued interest, if any.
(3) Or, if any Debt Securities are issued at a discount, such greater amount
as shall result in an aggregate offering price to the public which shall
not exceed $500,000,000.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
PURSUANT TO THE PROVISIONS OF RULE 429 OF THE GENERAL RULES AND REGULATIONS
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE PROSPECTUS CONTAINED IN THIS
REGISTRATION STATEMENT ALSO RELATES TO THE SECURITIES REGISTERED PURSUANT TO
THE REGISTRANT'S REGISTRATION STATEMENT NO. 33-42642 ON FORM S-3. IN THE EVENT
ANY PREVIOUSLY REGISTERED DEBT SECURITIES ARE OFFERED PRIOR TO THE EFFECTIVE
DATE OF THIS REGISTRATION STATEMENT, THEY WILL NOT BE INCLUDED IN ANY
PROSPECTUS HEREUNDER.
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<PAGE>
EXPLANATORY NOTE
This Registration Statement contains (i) a base prospectus, consisting of a
cover page and numbered pages 2 through 13, relating to debt securities of
McDonald's Corporation (the "Company") having an aggregate initial public
offering price or purchase price of up to U.S.$584,662,000 or the equivalent
thereof in one or more foreign currencies or composite currencies, (ii) a
prospectus supplement, consisting of a cover page, numbered pages S-2 through
S-24 and a back cover page, relating to the possible offering in the United
States of such debt securities as medium-term notes (the "U.S. Offering") and
(iii) a prospectus supplement, consisting of a cover page, numbered pages S-2
through S-29 and a back cover page, relating to a possible concurrent offering
outside the United States of such debt securities as medium-term notes (the
"Euro Offering"). The prospectus supplement for the U.S. Offering follows
immediately. Following such prospectus supplement is the prospectus supplement
for the Euro Offering followed by the base prospectus. The base prospectus will
be used for both the U.S. Offering and the Euro Offering.
In the event that the Company decides, following the effectiveness of the
Registration Statement, to proceed with either the U.S. Offering, the Euro
Offering or both, the complete prospectus supplement for the U.S. Offering, the
Euro Offering or both, as the case may be, in the exact form in which it will
be used, will be filed with the Securities and Exchange Commission (the
"Commission") pursuant to Rule 424(b)(2). In the event that any such medium-
term notes are sold, pricing and certain other information with respect to such
medium-term notes will be included in one or more pricing supplements filed in
accordance with the rules and regulations of the Commission.
The Company may decrease the initial public offering price or purchase price
of medium-term notes that may be offered pursuant to either of the prospectus
supplements contained herein or otherwise modify in any respect the medium-term
note programs described in such prospectus supplements. Upon any material
change in either of the medium-term note programs, the Company will file an
additional prospectus supplement or prospectus supplements, as the case may be,
describing such change or changes in accordance with the rules and regulations
of the Commission. The Company also may offer additional debt securities in
other series pursuant to the base prospectus contained herein. Upon any public
offering of any debt securities of such other series, a prospectus supplement
or prospectus supplements describing such debt securities and the particular
terms of such offering will be filed in accordance with the rules and
regulations of the Commission.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS +
+SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY +
+NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH +
+OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR +
+QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JULY 13, 1995
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JULY , 1995)
$584,662,000
MCDONALD'S CORPORATION
MEDIUM-TERM NOTES, SERIES E
DUE FROM NINE MONTHS TO 60 YEARS FROM DATE OF ISSUE
----------
McDonald's Corporation (the "Company") may from time to time offer its
Medium-Term Notes, Series E (the "Notes") with an aggregate initial public
offering price or purchase price of up to $584,662,000, or the equivalent
thereof in one or more foreign or composite currencies including European
Currency Units ("ECU"), subject to reduction as a result of the sale of other
Debt Securities. In addition to the Notes in registered form ("Registered
Notes") being offered hereby in the United States, the Company may from time to
time offer Notes in bearer form ("Bearer Notes") outside the United States. A
separate Prospectus Supplement will be used for any such offering of Bearer
Notes. Any Bearer Notes sold will reduce correspondingly the principal amount
of Registered Notes that may be sold hereunder. See "Plan of Distribution."
Each Registered Note will mature on any day from nine months to 60 years from
its date of issue and may be subject to redemption at the option of the
Company, or to repayment at the option of the Holder, prior to Stated Maturity.
Each Registered Note will be denominated in the currency designated by the
Company (the "Specified Currency"). See "Important Currency Information" and
"Currency Risks." Each Registered Note will bear interest at a fixed rate (a
"Fixed Rate Note"), which may be zero in the case of certain Original Issue
Discount Notes, or at a floating rate (a "Floating Rate Note") determined by
reference to the CD Rate, the CMT Rate, the Commercial Paper Rate, the Federal
Funds Rate, LIBOR, the Prime Rate, the Treasury Rate or any other Base Rate, as
selected by the initial purchaser and agreed to by the Company, adjusted by the
Spread and/or Spread Multiplier, if any, applicable to such Note. A Registered
Note may be issued as an indexed note (an "Indexed Note") the interest amount
(an "Interest Indexed Note") or principal amount (a "Principal Indexed Note"
and, together with Interest Indexed Notes, "Indexed Notes") payable at Maturity
of which will be determined by reference to a designated stock, currency,
commodity or other index or will otherwise be determined by application of a
formula. See "Description of Registered Notes--Indexed Notes." The Specified
Currency, any applicable interest rate or interest rate formula, any applicable
index formula, reset provisions, Issue Price, Stated Maturity, any Interest
Payment Dates, any redemption and repayment provisions and certain other terms
applicable to each Registered Note will be established at the date of issue of
such Registered Note and set forth in a pricing supplement to this Prospectus
Supplement (a "Pricing Supplement").
Unless otherwise specified in the applicable Pricing Supplement, interest on
Fixed Rate Notes, other than in the case of Original Issue Discount Notes, will
be payable each February 15 and August 15 and at Maturity. Interest on Floating
Rate Notes will be payable on the dates determined at the time of issuance and
set forth in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, Registered
Notes will be issued only in minimum denominations of $100,000 and any larger
amount that is an integral multiple of $1,000 or, in the case of a Registered
Note having a Specified Currency other than U.S. dollars, in the minimum
denominations set forth in the applicable Pricing Supplement.
Each Registered Note will be represented either by a Global Security
registered in the name of a nominee of The Depository Trust Company, as
Depositary (a "Book-Entry Note"), or by a certificate issued in temporary or
definitive form (a "Certificated Note"), as set forth in the applicable Pricing
Supplement. Beneficial interests in Global Securities representing Book-Entry
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by the Depositary's participants. Book-Entry Notes will not
be issuable as Certificated Notes except under the circumstances described
herein.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, THE PROSPECTUS OR ANY
SUPPLEMENT HERETO. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
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<CAPTION>
PRICE TO PUBLIC(1) AGENTS' COMMISSION(2) PROCEEDS TO THE COMPANY(2)(3)
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<S> <C> <C> <C>
Per Note................ 100% .125% to .750% 99.875% to 99.250%
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Total(4)................ $584,662,000 $730,828 to $4,384,965 $583,931,173 to $580,277,035
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</TABLE>
(1) The Notes will be issued at 100% of their principal or, in the case of
Principal Indexed Notes, face amount, unless otherwise specified in the
applicable Pricing Supplement.
(2) The Company will pay a commission to Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., J.P. Morgan
Securities Inc., Morgan Stanley & Co. Incorporated, PaineWebber
Incorporated or Salomon Brothers Inc or others, each as agent (collectively
the "Agents"), in the form of a discount, ranging from .125% to .750%,
depending upon the Stated Maturity of the Note, of the principal or, in the
case of Principal Indexed Notes, face amount of any Note with a Stated
Maturity of nine months to 30 years sold through such Agent. Commissions
with respect to Notes with Stated Maturities in excess of 30 years which
are sold through an Agent will be negotiated between the Company and such
Agent at the time of such sale. The Company may also sell Notes to any
Agent as principal. Unless otherwise indicated in the applicable Pricing
Supplement, any Note sold to an Agent as principal will be purchased by
such Agent at a price to be agreed upon at the time of sale and may be
resold by such Agent to one or more investors or other purchasers at a
fixed public offering price or at varying prices relating to prevailing
market prices at the time or times of resale to be determined by such
Agent.
(3) Before deducting expenses payable by the Company estimated to be $ ,
including reimbursement of certain of the Agents' expenses.
(4) Or the equivalent thereof in foreign currencies or composite currencies
(including ECU).
----------
The Registered Notes are being offered on a continuous basis by the Company
through the Agents, which have agreed to use their reasonable best efforts to
solicit orders to purchase Registered Notes. The Company may sell Registered
Notes at a discount to any Agent for its own account or for resale to one or
more investors at a fixed public offering price or at varying prices relating
to prevailing market prices at the time or times of resale, to be determined by
such Agent. The Company also may arrange for such Registered Notes to be sold
through any Agent acting as an underwriter or may sell Registered Notes
directly to investors on its own behalf. It is not currently anticipated that
any Registered Notes will be listed on any securities exchange, and there can
be no assurance that the maximum amount of Registered Notes offered by this
Prospectus Supplement will be sold or that there will be a secondary market for
any Registered Notes. The Company reserves the right to withdraw, cancel or
modify the offer made hereby without notice. The Company or any Agent may
reject any order to purchase Registered Notes, whether or not solicited, in
whole or in part. See "Plan of Distribution."
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO.
INCORPORATED
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
----------
The date of this Prospectus Supplement is , 1995.
<PAGE>
IMPORTANT CURRENCY INFORMATION
Purchasers are required to pay for each Registered Note in the Specified
Currency for such Note. Currently, there are limited facilities in the United
States for conversion of U.S. dollars into foreign currencies and vice versa.
If requested by a prospective purchaser of a Registered Note denominated in a
Specified Currency other than U.S. dollars, the Agent which solicited the offer
to purchase such Note will use its reasonable best efforts to arrange for the
exchange of U.S. dollars into such Specified Currency to enable the purchaser
to pay for such Note. Such request must be made on or before the fifth Business
Day (as defined below) preceding the date of delivery of such Note or by such
later date as is determined by such Agent. Each such exchange will be made by
the relevant Agent on such terms and subject to such conditions, limitations
and charges as such Agent may from time to time establish in accordance with
its regular foreign exchange practice. All costs of exchange will be borne by
the purchaser.
References herein to "U.S. dollars" or "$" are to the lawful currency of the
United States of America.
DESCRIPTION OF REGISTERED NOTES
The following description of the particular terms of the Registered Notes (to
the extent not superseded in the applicable Pricing Supplement) supplements,
and to the extent inconsistent therewith replaces, the description of the
general terms and provisions of the Debt Securities set forth in the
Prospectus, to which description reference is hereby made.
GENERAL
The Notes are to be issued as a series of Debt Securities under the Indenture
limited to an aggregate initial public offering price or purchase price of
$584,662,000 or the equivalent thereof in one or more foreign or composite
currencies, including ECU, subject to reduction as a result of the sale of
other Debt Securities. The U.S. dollar equivalent of the public offering price
or purchase price of a Registered Note denominated in a Specified Currency
other than U.S. dollars will be determined by an agent designated by the
Company, which initially shall be The First National Bank of Chicago (the
"Paying Agent"), on the basis of the noon buying rate in The City of New York
for cable transfers in foreign currencies as certified for customs purposes by
the Federal Reserve Bank of New York (the "Market Exchange Rate") for such
Specified Currency on the date the Company agrees to sell such Notes; provided,
however, that in the case of ECU, the Market Exchange Rate shall be the rate of
exchange determined by the Commission of the European Communities (or any
successor thereof) as published in the Official Journal of the European
Communities, or any successor publication, on the Business Day immediately
preceding the applicable issue date.
The Notes will consist of Registered Notes and Bearer Notes, each of which
will be offered on a continuous basis. Registered Notes will be issued in fully
registered form only, without coupons. Registered Notes may not be exchanged
for Bearer Notes. A separate Prospectus Supplement will describe the terms of
any such Bearer Notes.
Each Registered Note will be issued initially as either a Book-Entry Note or
a Certificated Note. Except as set forth in the Prospectus under "Description
of Debt Securities--Global Securities," Book-Entry Notes will not be issuable
as Certificated Notes. See "Book-Entry System" below.
Unless otherwise specified in the applicable Pricing Supplement, in the case
of Book-Entry Notes, the authorized denominations of Registered Notes
denominated in U.S. dollars will be $100,000 and any larger amount that is an
integral multiple of $1,000. The authorized denominations of Registered Notes
denominated in a Specified Currency other than U.S. dollars will be set forth
in the applicable Pricing Supplement.
S-2
<PAGE>
Each Registered Note will mature on any day from nine months to 60 years from
its date of issue, as selected by the purchaser and agreed to by the Company.
Each Registered Note may also be subject to redemption at the option of the
Company or to repayment at the option of the Holder, prior to its Stated
Maturity (as defined below). Each Registered Note whose Specified Currency is
Japanese yen will have a Stated Maturity of not less than one year from its
Original Issue Date and will not be subject to optional redemption or repayment
prior to such time. Unless otherwise specified in the applicable Pricing
Supplement, each Floating Rate Note will mature on an Interest Payment Date for
such Note.
The Pricing Supplement relating to a Registered Note will describe the
following terms: (i) the Specified Currency for such Note (and, if the
Specified Currency is other than U.S. dollars, certain other terms relating to
such Note and such Specified Currency, including the authorized denominations
of such Note); (ii) whether such Note is a Fixed Rate Note, a Floating Rate
Note or an Indexed Note; (iii) the price (expressed as a percentage of the
aggregate principal (or, in the case of Principal Indexed Notes, face) amount
thereof) at which such Note will be issued (the "Issue Price"); (iv) the date
on which such Note will be issued (the "Original Issue Date"); (v) the date on
which such Note will mature (the "Stated Maturity"); (vi) if such Note is a
Fixed Rate Note, the rate per annum at which such Note will bear interest, if
any, and the dates on which interest will be payable if other than February 15
and August 15; (vii) if such Note is a Floating Rate Note, the Base Rate, the
Initial Interest Rate, the Interest Reset Period, the Interest Payment Dates,
the Index Maturity, the Maximum Interest Rate, if any, the Minimum Interest
Rate, if any, the Spread and/or Spread Multiplier, if any (all as defined
below), and any other terms relating to the particular method of calculating
the interest rate for such Note; (viii) whether such Note is an Original Issue
Discount Note (as defined below); (ix) if such Note is an Indexed Note, the
manner in which the principal amount of such Note payable at Stated Maturity
will be determined; (x) whether such Note may be redeemed at the option of the
Company, or repaid at the option of the Holder, prior to Stated Maturity as
described under "Optional Redemption, Repayment and Repurchase" below, and, if
so, the provisions relating to such redemption or repayment, including, in the
case of an Original Issue Discount Note or Indexed Note, the information
necessary to determine the amount due upon redemption or repayment; and (xi)
any other terms of such Note not inconsistent with the provisions of the
Indenture under which such Note will be issued.
"Business Day" with respect to any Registered Note means any day, other than
a Saturday or Sunday, that is (i) neither a legal holiday nor a day on which
banking institutions are authorized or required by law, regulation or executive
order to close in (a) The City of New York, (b) the City of Chicago or (c) if
the Specified Currency for such Note is other than U.S. dollars, the principal
financial center of the country issuing such Specified Currency (which, in the
case of ECU, shall be Luxembourg); (ii) if the Specified Currency for such Note
is ECU, not a day designated as an ECU Non-Settlement Day by the ECU Banking
Association (or otherwise generally regarded in the ECU interbank market as a
day on which payments in ECU shall not be made) and (iii) if such Note is a
LIBOR Note (as defined below), a London Business Day (as defined below).
"London Business Day" means any day (i) if the Index Currency (as defined
below) is other than ECU, on which dealings in such Index Currency are
transacted in the London interbank market or (ii) if the Index Currency is ECU,
that is not designated as an ECU Non-Settlement Day by the ECU Banking
Association (or otherwise generally regarded in the ECU interbank market as a
day on which payments in ECU shall not be made).
"Maturity," when used with respect to any Note, means the date on which the
principal of such Note or an installment of principal becomes due and payable
as provided therein or in the Indenture, whether at Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Original Issue Discount Note" means (i) a Registered Note, including any
such Registered Note whose interest rate is zero, that has a stated redemption
price at Stated Maturity that exceeds its Issue Price by at least 0.25% of its
aggregate principal amount, multiplied by the number of full years from the
Original Issue Date to the Stated Maturity for such Registered Note and (ii)
any other Registered Note designated by the Company as issued with original
issue discount for United States federal income tax purposes.
S-3
<PAGE>
PAYMENT OF PRINCIPAL AND INTEREST
The principal of and any premium and interest on each Registered Note are
payable by the Company in the Specified Currency for such Note. If the
Specified Currency for a Registered Note is other than U.S. dollars, the
Company or the Paying Agent will (unless otherwise specified in the applicable
Pricing Supplement) arrange to convert all payments in respect of such Note
into U.S. dollars in the manner described in the following paragraph. The
Holder of a Registered Note denominated in a Specified Currency other than U.S.
dollars may (if the applicable Pricing Supplement and such Note so indicate)
elect to receive all payments in respect of such Note in the Specified Currency
by delivery of a written notice to the Paying Agent not later than fifteen
calendar days prior to the applicable payment date, except under the
circumstances described in "Currency Risks--Payment Currency" below. Such
election will remain in effect until revoked by written notice to the Paying
Agent received not later than fifteen calendar days prior to the applicable
payment date.
In the case of a Registered Note denominated in a Specified Currency other
than U.S. dollars, the amount of any U.S. dollar payment in respect of such
Registered Note will be determined by the Paying Agent based on the highest
firm bid quotation expressed in U.S. dollars received by the Paying Agent at
approximately 11:00 a.m., New York City time, on the second Business Day
preceding the applicable payment date (or, if no such rate is quoted on such
date, the last preceding date on which such rate was quoted) from three (or, if
three are not available, then two) recognized foreign exchange dealers in The
City of New York (which may include the Agents, or affiliates thereof, or the
Paying Agent) selected by the Paying Agent, for the purchase by the quoting
dealer, for settlement on such payment date, of the aggregate amount of such
Specified Currency payable on such payment date in respect of all Registered
Notes denominated in such Specified Currency. All currency exchange costs will
be borne by the Holders of such Notes by deductions from such U.S. dollar
payments. If no such bid quotations are available, such payments will be made
in such Specified Currency, unless such Specified Currency is unavailable due
to the imposition of exchange controls or to other circumstances beyond the
Company's control, in which case such payments will be made as described under
"Currency Risks--Payment Currency" below.
Unless otherwise specified in the applicable Pricing Supplement, U.S. dollar
payments of interest on Registered Notes (other than interest payable at
Maturity) will be made, except as provided below, by check mailed to the
Registered Holders of such Notes as shown on the Debt Security Register at the
close of business on the related record date (which, in the case of Global
Securities representing Book-Entry Notes, will be a nominee of the Depositary);
provided, however, that in the case of a Registered Note issued between a
record date and the related Interest Payment Date (unless otherwise specified
in the related Pricing Supplement), interest for the period beginning on the
Original Issue Date for such Note and ending on such Interest Payment Date
shall be paid on the next succeeding Interest Payment Date to the Registered
Holder of such Note on the related record date. A Holder of $10,000,000 (or the
equivalent thereof in a Specified Currency other than U.S. dollars) or more in
aggregate principal (or, in the case of Principal Indexed Notes, face) amount
of Registered Notes of like tenor and term shall be entitled to receive such
U.S. dollar payments by wire transfer of immediately available funds, but only
if appropriate wire transfer instructions have been received in writing by the
Paying Agent not later than fifteen calendar days prior to the applicable
Interest Payment Date. Simultaneously with the election by any Holder to
receive payments in a Specified Currency other than U.S. dollars (as provided
above), such Holder shall provide appropriate wire transfer instructions to the
Paying Agent, and all payments to be made in the Specified Currency will be
made by wire transfer in immediately available funds to an account maintained
by the payee with a bank located outside the United States. Unless otherwise
specified in the applicable Pricing Supplement, principal and any premium and
interest payable at the Maturity of a Registered Note will be paid in
immediately available funds upon surrender of such Note at the corporate trust
office or an agency of the Paying Agent, which office or agency is located in
the City of Chicago. The corporate trust office of The First National Bank of
Chicago is located at One First National Bank Plaza, Chicago, Illinois.
S-4
<PAGE>
Any payment of principal, premium (if any) or interest required to be made in
respect of a Fixed Rate Note on a date that is not a Business Day for such Note
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on such date, and no additional
interest shall accrue as a result of such delayed payment.
Unless otherwise specified in the applicable Pricing Supplement, if the
principal of any Original Issue Discount Note is declared to be due and payable
immediately as described under "Description of Debt Securities--Events of
Default" in the Prospectus, the amount of principal due and payable with
respect to such Note shall be limited to the aggregate principal amount of such
Note multiplied by the sum of its Issue Price (expressed as a percentage of the
aggregate principal amount) plus the original issue discount amortized from the
Original Issue Date to the date of declaration, which amortization shall be
calculated using the "interest method" (computed in accordance with generally
accepted accounting principles in effect on the date of declaration).
The record date with respect to any Interest Payment Date for a Floating Rate
Note shall be the date (whether or not a Business Day) fifteen calendar days
immediately preceding such Interest Payment Date, and for a Fixed Rate Note
(unless otherwise specified in the applicable Pricing Supplement) shall be the
February 1 or August 1 (whether or not a Business Day) immediately preceding
such Interest Payment Date or Maturity, as the case may be.
Interest payments in respect of Registered Notes will equal the amount of
interest accrued from and including the immediately preceding Interest Payment
Date in respect of which interest has been paid or duly made available for
payment (or from and including the date of issue, if no interest has been paid
with respect to the applicable Note) to but excluding the related Interest
Payment Date or Maturity, as the case may be.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Original Issue Date at the
rate per annum stated on the face thereof until the principal amount thereof is
paid or made available for payment. Unless otherwise set forth in the
applicable Pricing Supplement, interest on each Fixed Rate Note will be payable
semiannually in arrears on each February 15 and August 15 and at maturity. Each
payment of interest in respect of an Interest Payment Date shall include
interest accrued through the day before such Interest Payment Date. Interest on
Fixed Rate Notes will be computed on the basis of a 360-day year of twelve 30-
day months.
FLOATING RATE NOTES
Each Floating Rate Note will bear interest from its Original Issue Date to
the first Interest Reset Date (as defined below) for such Note at the initial
interest rate set forth on the face thereof and in the applicable Pricing
Supplement (the "Initial Interest Rate"). Thereafter, the interest rate on such
Note for each Interest Reset Period (as defined below) will be determined by
reference to an interest rate basis (the "Base Rate"), plus or minus the
Spread, if any, and/or multiplied by the Spread Multiplier, if any. The
"Spread" is the number of basis points (one basis point equals one one-
hundredth of a percentage point) that may be specified in the applicable
Pricing Supplement as being applicable to such Note, and the "Spread
Multiplier" is the percentage that may be specified in the applicable Pricing
Supplement as being applicable to such Note. The applicable Pricing Supplement
will designate one or more of the following Base Rates as applicable to a
Floating Rate Note: (i) the CD Rate (a "CD Rate Note"), (ii) the CMT Rate (a
"CMT Rate Note"), (iii) the Commercial Paper Rate (a "Commercial Paper Rate
Note"), (iv) the Federal Funds Rate (a "Federal Funds Rate Note"), (v) LIBOR (a
"LIBOR Note"), (vi) the Prime Rate (a "Prime Rate Note"), (vii) the Treasury
Rate (a "Treasury Rate Note") or (viii) such other Base Rate or formula as is
set forth in such Pricing Supplement and in such Note. The "Index Maturity" for
any Note is the period of maturity of the instrument, obligation or index from
which the Base Rate is calculated.
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As specified in the applicable Pricing Supplement, a Floating Rate Note may
also have either or both of the following (in each case expressed as a rate per
annum on a simple interest basis): (i) a maximum limitation, or ceiling, on the
rate at which interest may accrue during any interest period ("Maximum Interest
Rate") and (ii) a minimum limitation, or floor, on the rate at which interest
may accrue during any interest period ("Minimum Interest Rate").
Notwithstanding any Maximum Interest Rate that may be applicable to any
Floating Rate Note, the interest rate on a Floating Rate Note will in no event
be higher than the maximum rate permitted by applicable law, as the same may be
modified by United States law of general application. The Notes will be
governed by the law of the State of New York and, under such law, the maximum
rate of interest, with certain exceptions, is 25% per annum on a simple
interest basis.
The Company will appoint, and enter into agreements with, agents (each a
"Calculation Agent") to calculate interest rates on Floating Rate Notes. All
determinations of interest rates by the Calculation Agent shall, in the absence
of manifest error, be conclusive for all purposes and binding on Holders of the
Floating Rate Notes. Unless otherwise specified in a Pricing Supplement, the
Paying Agent shall be the Calculation Agent for each Registered Note.
The interest rate on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually (such period being the "Interest
Reset Period" for such Note, and the first day of each Interest Reset Period
being an "Interest Reset Date"), as specified in the applicable Pricing
Supplement. Unless otherwise specified in the applicable Pricing Supplement,
the Interest Reset Dates will be, in the case of Floating Rate Notes that reset
daily, each Business Day; in the case of Floating Rate Notes (other than
Treasury Rate Notes) that reset weekly, Wednesday of each week; in the case of
Treasury Rate Notes that reset weekly, Tuesday of each week (except as provided
below under "Treasury Rate Notes"); in the case of Floating Rate Notes that
reset monthly, the third Wednesday of each month; in the case of Floating Rate
Notes that reset quarterly, the third Wednesday of March, June, September and
December of each year; in the case of Floating Rate Notes that reset
semiannually, the third Wednesday of each of the two months of each year
specified in the applicable Pricing Supplement; and, in the case of Floating
Rate Notes that reset annually, the third Wednesday of one month of each year
specified in the applicable Pricing Supplement. If an Interest Reset Date for
any Floating Rate Note would otherwise be a day that is not a Business Day,
such Interest Reset Date shall be postponed to the next succeeding Business
Day, except that, in the case of a LIBOR Note, if such Business Day is in the
next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day.
Unless otherwise specified in the applicable Pricing Supplement, interest
payable in respect of Floating Rate Notes shall be the accrued interest from
and including the Original Issue Date or the last date to which interest has
been paid or duly provided for, as the case may be, to but excluding the
applicable Interest Payment Date or Maturity, as the case may be.
Unless otherwise specified in the applicable Pricing Supplement, with respect
to a Floating Rate Note, accrued interest shall be calculated by multiplying
the principal amount of such Note (or, in the case of an Indexed Note, unless
otherwise specified in the applicable Pricing Supplement, the face amount of
such Indexed Note) by an accrued interest factor. Such accrued interest factor
will be computed by adding the interest factors calculated for each day in the
period for which accrued interest is being calculated. Unless otherwise stated
in the applicable Pricing Supplement, the interest factor (expressed as a
decimal calculated to seven decimal places without rounding) for each such day
shall be computed by dividing the interest rate in effect on such day by 360,
in the case of CD Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate
Notes, LIBOR Notes and Prime Rate Notes, or by the actual number of days in the
year, in the case of Treasury Rate Notes or CMT Rate Notes. For purposes of
making the foregoing calculation, the interest rate in effect on any Interest
Reset Date will be the applicable rate as reset on such date.
Unless otherwise specified in the applicable Pricing Supplement, all
percentages resulting from any calculation of the rate of interest on a
Floating Rate Note will be rounded, if necessary, to the nearest 1/100,000 of
1% (.0000001), with five one-millionths of a percentage point rounded upward,
and all currency
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amounts used in or resulting from such calculation on Floating Rate Notes will
be rounded to the nearest one-hundredth of a unit (with .005 of a unit being
rounded upward).
Unless otherwise indicated in the applicable Pricing Supplement and except as
provided below, interest will be payable, in the case of Floating Rate Notes
that reset daily, weekly or monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December of each year, as
specified in the applicable Pricing Supplement; in the case of Floating Rate
Notes that reset quarterly, on the third Wednesday of March, June, September,
and December of each year; in the case of Floating Rate Notes that reset
semiannually, on the third Wednesday of each of two months of each year
specified in the applicable Pricing Supplement; and, in the case of Floating
Rate Notes that reset annually, on the third Wednesday of one month of each
year specified in the applicable Pricing Supplement (each such day being an
"Interest Payment Date") and, in each case, at Maturity. If an Interest Payment
Date (other than at Maturity) with respect to any Floating Rate Note would
otherwise be a day that is not a Business Day, such Interest Payment Date shall
be postponed to the next succeeding Business Day, except that, in the case of a
LIBOR Note, if such Business Day would fall in the next succeeding calendar
month, such Interest Payment Date shall be the immediately preceding Business
Day.
If the Maturity of a Floating Rate Note falls on a day that is not a Business
Day, the required payment of principal, premium (if any) and/or interest will
be made on the next succeeding Business Day as if made on the date such payment
was due, and no interest shall accrue on such payment for the period from and
after Maturity to the date of such payment on the next succeeding Business Day.
Upon the request of the Holder of any Floating Rate Note, the Calculation
Agent for such Note will provide to such Holder the interest rate then in
effect, and, if determined, the interest rate that will become effective on the
next Interest Reset Date, with respect to such Floating Rate Note.
"H.15(519)" means the publication entitled "Statistical Release H.15(519),
Selected Interest Rates", or any successor publication, published by the Board
of Governors of the Federal Reserve System. "Composite Quotations" means the
daily statistical release entitled "Composite 3:30 p.m. Quotations for U.S.
Government Securities" published by the Federal Reserve Bank of New York.
CD Rate Notes
Each CD Rate Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the CD Rate and the Spread and/or
Spread Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "CD
Rate" for each Interest Reset Period, as determined by the Calculation Agent
for such CD Rate Note, shall be the rate as of the second Business Day prior to
the Interest Reset Date for such Interest Reset Period (a "CD Rate
Determination Date") for negotiable certificates of deposit having the Index
Maturity designated in the applicable Pricing Supplement, as published in
H.15(519) under the heading "CDs (Secondary Market)". In the event that such
rate is not published prior to 3:00 p.m., New York City time, on the
Calculation Date (as defined below) pertaining to such CD Rate Determination
Date, then the "CD Rate" for such Interest Reset Period will be the rate on
such CD Rate Determination Date for negotiable certificates of deposit of the
Index Maturity designated in the applicable Pricing Supplement as published in
Composite Quotations under the heading "Certificates of Deposit". If by 3:00
p.m., New York City time, on such Calculation Date such rate is not yet
published in either H.15(519) or Composite Quotations, then the "CD Rate" for
such Interest Reset Period will be calculated by the Calculation Agent for such
CD Rate Note and will be the arithmetic mean of the secondary market offered
rates as of 10:00 a.m., New York City time, on such CD Rate Determination Date,
of three leading nonbank dealers in negotiable U.S. dollar certificates of
deposit in The City of New York selected by the Calculation Agent for such CD
Rate Note for negotiable certificates of deposit of major money market banks
(in the market for negotiable certificates of deposit) with a remaining
maturity closest to the
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Index Maturity designated in the Pricing Supplement in a denomination of
$5,000,000; provided, however, that if the three dealers selected as aforesaid
by such Calculation Agent are not quoting offered rates as mentioned in this
sentence, the "CD Rate" for such Interest Reset Period will be the CD Rate in
effect on such CD Rate Determination Date, or, if none, the Initial Interest
Rate.
The "Calculation Date" pertaining to any CD Rate Determination Date shall be
the earlier of (i) the tenth calendar day after such CD Rate Determination Date
or, if such day is not a Business Day, the next succeeding Business Day or (ii)
the Business Day immediately preceding the applicable Interest Payment Date or
Maturity, as the case may be.
Commercial Paper Rate Notes
Each Commercial Paper Rate Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the Commercial Paper
Rate and the Spread and/or Spread Multiplier, if any, specified in such Note
and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Commercial Paper Rate" for each Interest Reset Period will be determined by
the Calculation Agent for such Commercial Paper Rate Note as of the second
Business Day prior to the Interest Reset Date for such Interest Reset Period (a
"Commercial Paper Rate Determination Date") and shall be the Money Market Yield
(as defined below) on such Commercial Paper Rate Determination Date of the rate
for commercial paper having the Index Maturity specified in the applicable
Pricing Supplement, as such rate shall be published in H.15(519) under the
heading "Commercial Paper". In the event that such rate is not published prior
to 3:00 p.m., New York City time, on the Calculation Date (as defined below)
pertaining to such Commercial Paper Rate Determination Date, then the
"Commercial Paper Rate" for such Interest Reset Period shall be the Money
Market Yield on such Commercial Paper Rate Determination Date of the rate for
commercial paper of the specified Index Maturity as published in Composite
Quotations under the heading "Commercial Paper". If by 3:00 p.m., New York City
time, on such Calculation Date such rate is not yet published in either
H.15(519) or Composite Quotations, then the "Commercial Paper Rate" for such
Interest Reset Period shall be the Money Market Yield of the arithmetic mean of
the offered rates, as of 11:00 a.m., New York City time, on such Commercial
Paper Rate Determination Date of three leading dealers of commercial paper in
The City of New York selected by the Calculation Agent for such Commercial
Paper Rate Note for commercial paper of the specified Index Maturity placed for
an industrial issuer whose bonds are rated "AA" or the equivalent by a
nationally recognized statistical rating agency; provided, however, that if the
three dealers selected as aforesaid by such Calculation Agent are not quoting
offered rates as mentioned in this sentence, the "Commercial Paper Rate" for
such Interest Reset Period will be the Commercial Paper Rate in effect on such
Commercial Paper Rate Determination Date, or, if none, the Initial Interest
Rate.
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
D X 360
Money Market Yield = --------------------- X 100
360 - (D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal, and "M" refers to the
actual number of days in the period for which accrued interest is being
calculated.
The "Calculation Date" pertaining to any Commercial Paper Rate Determination
Date shall be the earlier of (i) the tenth calendar day after such Commercial
Paper Rate Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding the
applicable Interest Payment Date or Maturity, as the case may be.
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Federal Funds Rate Notes
Each Federal Funds Rate Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the Federal Funds Rate
and the Spread and/or Spread Multiplier, if any, specified in such Note and in
the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "Federal
Funds Rate" for each Interest Reset Period shall be the effective rate on the
second Business Day immediately prior to the Interest Reset Date for such
Interest Reset Period (a "Federal Funds Rate Determination Date") for Federal
Funds as published in H.15(519) under the heading "Federal Funds (Effective)".
In the event that such rate is not published prior to 3:00 p.m., New York City
time, on the Calculation Date (as defined below) pertaining to such Federal
Funds Rate Determination Date, the "Federal Funds Rate" for such Interest Reset
Period shall be the rate on such Federal Funds Rate Determination Date as
published in Composite Quotations under the heading "Federal Funds/Effective
Rate". If by 3:00 p.m., New York City time, on such Calculation Date such rate
is not yet published in either H.15(519) or Composite Quotations, then the
"Federal Funds Rate" for such Interest Reset Period shall be the arithmetic
mean of the rate, as of 9:00 a.m., New York City time, on the Federal Funds
Rate Determination Date for the last transaction of not less than $5,000,000 in
overnight federal funds arranged by each of three leading brokers of federal
funds transactions in the City of New York selected by the Calculation Agent
for such Federal Funds Rate Note; provided, however, that if the brokers
selected as aforesaid by the Calculation Agent are not quoting as set forth
above, the "Federal Funds Rate" for such Interest Reset Period will be the
Federal Funds Rate in effect on such Federal Funds Rate Determination Date, or,
if none, the Initial Interest Rate.
The "Calculation Date" pertaining to any Federal Funds Rate Determination
Date shall be the earlier of (i) the tenth calendar day after such Federal
Funds Rate Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding the
applicable Interest Payment Date or Maturity, as the case may be.
LIBOR Notes
Each LIBOR Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to LIBOR and the Spread and/or Spread
Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "LIBOR" for
each Interest Reset Period as determined by the Calculation Agent for such
LIBOR Notes shall be as follows:
(i) On the second London Business Day prior to the Interest Reset Date
for such Interest Reset Period (a "LIBOR Interest Determination Date"), the
Calculation Agent for such LIBOR Note will determine (a) if "LIBOR Reuters"
is specified in the applicable Pricing Supplement, the arithmetic mean of
the offered rates (unless the specified Designated LIBOR Page by its terms
provides only for a single rate, in which case such single rate shall be
used) for deposits in the Index Currency having the Index Maturity
designated in the applicable Pricing Supplement, commencing on the second
London Business Day immediately following such LIBOR Interest Determination
Date, that appear on the Designated LIBOR Page specified in the applicable
Pricing Supplement as of 11:00 a.m., London time, on such LIBOR Interest
Determination Date, if at least two such offered rates appear (unless, as
aforesaid, only a single rate is required) on such Designated LIBOR Page,
or (b) if "LIBOR Telerate" is specified in the applicable Pricing
Supplement or if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified
as the method for calculating LIBOR, the rate for deposits in the Index
Currency having the Index Maturity designated in the applicable Pricing
Supplement commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date that appears on the
Designated LIBOR Page specified in the applicable Pricing Supplement as of
11:00 a.m., London time, on such LIBOR Interest Determination Date. If
fewer than two such offered rates appear, or if no such rate appears, as
applicable, LIBOR in respect of the related LIBOR Interest Determination
Date will be determined in accordance with the provisions described in
clause (ii) below.
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(ii) With respect to a LIBOR Note and an Interest Reset Period to which
this clause (ii) applies, the Calculation Agent will request the principal
London offices of each of four major reference banks in the London
interbank market, as selected by the Calculation Agent, to provide the
Calculation Agent with its offered quotation for deposits in the Index
Currency for the period of the Index Maturity designated in the applicable
Pricing Supplement, commencing on the second London Business Day
immediately following such LIBOR Interest Determination Date, to prime
banks in the London interbank market at approximately 11:00 a.m., London
time, on such LIBOR Interest Determination Date and in a principal amount
that is representative for a single transaction in such Index Currency in
such market at such time. If at least two such quotations are provided,
LIBOR determined on such LIBOR Interest Determination Date will be the
arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBOR determined on such LIBOR Interest Determination Date will
be the arithmetic mean of the rates quoted at approximately 11:00 a.m., in
the applicable Principal Financial Center, on such LIBOR Interest
Determination Date by three major banks in such Principal Financial Center
selected by the Calculation Agent for loans in the Index Currency to
leading European banks, having the Index Maturity designated in the
applicable Pricing Supplement commencing on the second London Business Day
immediately following such LIBOR Interest Determination Date and in a
principal amount that is representative for a single transaction in such
Index Currency in such market at such time; provided, however, that if the
banks so selected by the Calculation Agent are not quoting as mentioned in
this sentence, LIBOR determined as of such LIBOR Interest Determination
Date will be LIBOR in effect on such LIBOR Interest Determination Date.
"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is specified in
the applicable Pricing Supplement, the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London interbank rates of major
banks for the applicable Index Currency, or (b) if "LIBOR Telerate" is
specified in the applicable Pricing Supplement or neither "LIBOR Reuters" nor
"LIBOR Telerate" is specified as the method for calculating LIBOR, the display
on the Dow Jones Telerate Service for the purpose of displaying the London
interbank rates of major banks for the applicable Index Currency.
"Index Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency for which LIBOR
shall be calculated. If no such currency is specified in the applicable Pricing
Supplement, the Index Currency shall be U.S. dollars.
"Principal Financial Center" will generally be the capital city of the
country of the specified Index Currency, except that with respect to U.S.
dollars, Italian lire and ECU, the Principal Financial Center shall be The City
of New York, Milan and Luxembourg, respectively.
Treasury Rate Notes
Each Treasury Rate Note will bear interest for each Interest Reset Period at
the interest rate calculated with reference to the Treasury Rate and the Spread
and/or Spread Multiplier, if any, specified in such Note and in the applicable
Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Treasury Rate" for each Interest Reset Period will be the rate for the auction
held on the Treasury Rate Determination Date (as defined below) for such
Interest Reset Period of direct obligations of the United States ("Treasury
bills") having the Index Maturity specified in the applicable Pricing
Supplement, as such rate shall be published in H.15(519) under the heading
"U.S. Government Securities-Treasury bills-auction average (investment)" or, in
the event that such rate is not published prior to 3:00 p.m., New York City
time, on the Calculation Date (as defined below) pertaining to such Treasury
Rate Determination Date, the auction average rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) on such Treasury Rate Determination Date as otherwise
announced by the United States Department of the Treasury. In the event that
the results of the auction of Treasury bills having the specified Index
Maturity are not published or reported as provided above by 3:00 p.m., New York
City time, on such Calculation Date, or if no such auction is held on such
Treasury Rate Determination Date, then the "Treasury Rate" for such Interest
Reset Period shall be calculated by the Calculation Agent for such Treasury
Rate Note and shall be
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a yield to maturity (expressed as a bond equivalent on the basis of a year of
365 or 366 days, as applicable, and applied on a daily basis) of the arithmetic
mean of the secondary market bid rates, as of approximately 3:30 p.m., New York
City time, on such Treasury Rate Determination Date, of three leading primary
United States government securities dealers selected by such Calculation Agent
for the issue of Treasury bills with a remaining maturity closest to the
specified Index Maturity; provided, however, that if the dealers selected as
aforesaid by such Calculation Agent are not quoting bid rates as mentioned in
this sentence, then the "Treasury Rate" for such Interest Reset Period will be
the Treasury Rate in effect on such Treasury Rate Determination Date, or, if
none, the Initial Interest Rate.
The "Treasury Rate Determination Date" for each Interest Reset Period will be
the day of the week in which the Interest Reset Date for such Interest Reset
Period falls on which Treasury bills would normally be auctioned. Treasury
bills are normally sold at auction on Monday of each week, unless that day is a
legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday. If, as
the result of a legal holiday, an auction is so held on the preceding Friday,
such Friday will be the Treasury Rate Determination Date pertaining to the
Interest Reset Period commencing in the next succeeding week. If an auction
date shall fall on any day that would otherwise be an Interest Reset Date for a
Treasury Rate Note, then such Interest Reset Date shall instead be the Business
Day immediately following such auction date.
The "Calculation Date" pertaining to any Treasury Rate Determination Date
shall be the earlier of (i) the tenth calendar day after such Treasury Rate
Determination Date or, if such a day is not a Business Day, the next succeeding
Business Day or (ii) the Business Day immediately preceding the applicable
Interest Payment Date or Maturity, as the case may be.
Prime Rate Notes
Each Prime Rate Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the Prime Rate and the Spread and/or
Spread Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "Prime
Rate" for each Interest Reset Period will be determined by the Calculation
Agent as of the second Business Day prior to the Interest Reset Date for such
Interest Reset Period (a "Prime Rate Determination Date") and shall be the rate
published in H.15(519) under the heading "Bank Prime Loan." In the event that
such rate is not published prior to 9 a.m., New York City time, on the
Calculation Date (as defined below), then the "Prime Rate" for such Interest
Reset Period shall be determined by the Calculation Agent and shall be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen NYMF Page (as defined below) as such bank's prime
rate or base lending rate as in effect for that Prime Rate Determination Date.
If fewer than four such rates but more than one such rate appear on the Reuters
Screen NYMF Page for the Prime Rate Determination Date, the "Prime Rate" will
be determined by the Calculation Agent and will be the arithmetic mean of the
prime rates quoted on the basis of the actual number of days in the year
divided by a 360-day year as of the close of business on such Prime Rate
Determination Date by four major money center banks in The City of New York
selected by the Calculation Agent. If fewer than two such rates appear on the
Reuters Screen NYMF Page, the Prime Rate will be determined by the Calculation
Agent on the basis of the rates furnished in The City of New York by the
appropriate number of substitute banks or trust companies organized and doing
business under the laws of the United States, or any State thereof, having
total equity capital of at least U.S. $500,000,000 and being subject to
supervision or examination by Federal or State authority, selected by the
Calculation Agent to provide such rate or rates; provided, however, that if the
banks selected as aforesaid are not quoting as mentioned in this sentence, the
Prime Rate for such Interest Reset Period will be the Prime Rate in effect on
such Prime Rate Determination Date, or, if none, the Initial Interest Rate.
"Reuters Screen NYMF Page" means the display designated as page "NYMF" on the
Reuters Monitor Money Rates Service (or such other page as may replace the NYMF
page on that service for the purpose of displaying prime rates or base lending
rates of major United States banks).
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The "Calculation Date" pertaining to a Prime Rate Determination Date will be
the earlier of (i) the tenth calendar day after such Prime Rate Determination
Date or, if such day is not a Business Day, the next succeeding Business Day or
(ii) the Business Day immediately preceding the applicable Interest Payment
Date or Maturity, as the case may be.
CMT Rate Notes
Each CMT Rate Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the CMT Rate and the Spread and/or
Spread Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "CMT
Rate" for each Interest Reset Period as determined by the Calculation Agent for
such CMT Rate Note shall be the rate (i) in the case where the Designated CMT
Telerate Page (as defined below) is 7055, as of the second Business Day prior
to the Interest Reset Date for such Interest Reset Period (a "CMT Determination
Date") or (ii) in the case where the Designated CMT Telerate Page is 7052, for
the week or the month, as specified in the applicable Pricing Supplement, ended
immediately preceding the week in which the CMT Determination Date occurs, in
either case, for the Index Maturity specified in the applicable Pricing
Supplement, as displayed on the Designated CMT Telerate Page under the caption
". . . Treasury Constant Maturities . . . Federal Reserve Board Release H.15
. . . Mondays Approximately 3:45 P.M." If such rate is no longer displayed on
the relevant page, or if not displayed by 3:00 p.m., New York City time, on the
Calculation Date (as defined below) pertaining to such CMT Determination Date,
then the "CMT Rate" for such Interest Reset Period shall be such treasury
constant maturity rate for the Index Maturity specified in the applicable
Pricing Supplement as published in the relevant H.15(519) opposite the caption
"U.S. Government Securities, Treasury Constant Maturities". If such rate is no
longer published, or if not published by 3:00 p.m., New York City time, on the
Calculation Date relating to such CMT Determination Date, then the "CMT Rate"
for such Interest Reset Period shall be such treasury constant maturity rate
for the Index Maturity specified in the applicable Pricing Supplement (or other
United States Treasury rate for such Index Maturity) as may then be published
by either the Board of Governors of the Federal Reserve System or the United
States Department of Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519). If such information is not provided by
3:00 p.m., New York City time, on the Calculation Date relating to such CMT
Determination Date, then the "CMT Rate" for the Interest Reset Period shall be
calculated by the Calculation Agent and will be a yield to maturity, based on
the arithmetic mean of the secondary market closing offer side prices as of
approximately 3:30 p.m., New York City time, on the CMT Determination Date
reported, according to their written records, by three leading primary United
States government securities dealers (each, a "Reference Dealer") in The City
of New York (which may include the Agents or their affiliates) selected by the
Calculation Agent (from five such Reference Dealers selected by the Calculation
Agent and eliminating the highest quotation (or, in the event of equality, one
of the highest) and the lowest quotation (or, in the event of equality, one of
the lowest)), for the most recently issued direct noncallable fixed rate
obligations of the United States ("Treasury Notes") with an original maturity
of approximately the Index Maturity specified in the applicable Pricing
Supplement and a remaining term to maturity of not less than such Index
Maturity minus one year. If the Calculation Agent cannot obtain three such
Treasury Note quotations, the "CMT Rate" for such Interest Reset Period shall
be calculated by the Calculation Agent and will be a yield to maturity based on
the arithmetic mean of the secondary market offer side prices as of
approximately 3:30 p.m., New York City time, on the CMT Determination Date of
three Reference Dealers in The City of New York (from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest quotation
(or, in the event of equality, one of the lowest)), for the Treasury Notes with
an original maturity of the number of years that is the next highest to the
Index Maturity specified in the applicable Pricing Supplement and a remaining
term to maturity closest to the Index Maturity specified in the applicable
Pricing Supplement and in an amount of at least $100 million. If three or four
(and not five) of such Reference
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Dealers are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offer prices obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided, however, that if fewer than
three Reference Dealers selected by the Calculation Agent are quoting as
described herein, the "CMT Rate" will be the CMT Rate in effect on such CMT
Determination Date, or, if none, the Initial Interest Rate. If two Treasury
Notes with an original maturity as described in the second preceding sentence
have remaining terms to maturity equally close to the Index Maturity specified
in the applicable Pricing Supplement, the quotes for the Treasury Note with the
shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page designated in the applicable Pricing Supplement (or any
other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)), for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519). If
no such page is specified in the applicable Pricing Supplement, the Designated
CMT Telerate Page shall be 7052, for the most recent week.
The "Calculation Date" pertaining to any CMT Determination Date shall be the
earlier of (i) the tenth calendar day after such CMT Determination Date or, if,
such day is not a Business Day, the next succeeding Business Day or (ii) the
Business Day immediately preceding the applicable Interest Payment Date or
Maturity, as the case may be.
INDEXED NOTES
The Company may from time to time offer Notes ("Indexed Notes") the principal
amount payable at Stated Maturity of which (the "Indexed Principal Amount") or
the interest amount payable on which is determined by reference to a measure
(the "Index") which will be related to (i) the rate of exchange between the
Specified Currency for such Note and the other currency or composite currency
(the "Indexed Currency") specified in the applicable Pricing Supplement (such
Indexed Notes, "Currency Indexed Notes"); (ii) the difference in the price of a
specified commodity (the "Indexed Commodity") on specified dates (such Indexed
Notes, "Commodity Indexed Notes"), (iii) the difference in the level of a
specified stock index (the "Stock Index"), which may be based on U.S. or
foreign stocks, on specified dates (such Indexed Notes, "Stock Indexed Notes")
or (iv) such other objective price or economic measures as are described in the
applicable Pricing Supplement. The manner of determining the Indexed Principal
Amount of an Indexed Note, and historical and other information concerning the
Indexed Currency, Indexed Commodity, Stock Index or other price or economic
measures used in such determination, will be set forth in the applicable
Pricing Supplement, together with information concerning tax consequences to
the holders of such Indexed Notes.
Unless otherwise specified in the applicable Pricing Supplement, interest on
an Indexed Note will be payable by the Company based on the amount designated
in the applicable Pricing Supplement as the "Face Amount" of such Indexed Note.
The applicable Pricing Supplement will describe whether the principal amount of
the related Indexed Note that would be payable upon redemption or repayment
prior to Stated Maturity will be the Face Amount of such Indexed Note, the
Indexed Principal Amount of such Indexed Note at the time of redemption or
repayment, or another amount described in such Pricing Supplement.
An investment in Indexed Notes entails significant risks that are not
associated with similar investment in a conventional fixed-rate debt security.
Indexation of the interest rate of such a Note may result in an interest rate
that is less than that payable on a conventional fixed-rate debt security
issued at the same time, including the possibility that no interest will be
paid. Indexation of the principal of and/or premium on such a Note may result
in an amount of principal and/or premium payable in respect thereof that is
less than the original purchase price of such Note if allowed pursuant to the
terms thereof, including the possibility that no such amount will be paid. The
secondary market for such Notes will be affected by a number of factors,
independent of the credit worthiness of the Company and the value of the
Indexed Currency, the Indexed Commodity or the Stock Index, including the
volatility of the Indexed Currency, the Indexed Commodity or the Stock Index,
the time remaining to the maturity of such Notes, the amount outstanding of
such Notes and market interest rates. The value of the Indexed Currency, the
Indexed Commodity or the Stock Index
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depends on a number of interrelated factors, including economic, financial and
political events, over which the Company has no control. Additionally, if the
formula used to determine the amount of principal, premium and/or interest
payable with respect to such Notes contains a multiple or leverage factor, the
effect of any change in the Indexed Currency, the Indexed Commodity or the
Stock Index will be increased. The historical experience of the relevant
Indexed Currency, Indexed Commodity or Stock Index should not be taken as an
indication of future performance of such Indexed Currency, Indexed Commodity or
Stock Index during the term of any Indexed Note. The credit ratings assigned to
the Company's medium-term note program are a reflection of the Company's credit
status and are in no way a reflection of the potential impact of the factors
discussed above, or any other factors, on the market value of Indexed Notes.
Accordingly, prospective investors should consult their own financial and legal
advisors as to the risks entailed by an investment in Indexed Notes and the
suitability of such Notes in light of such prospective investors' particular
circumstances.
BOOK-ENTRY SYSTEM
Upon issuance, all Notes having the same Original Issue Date and otherwise
identical terms will be represented by a single Global Security. Each Global
Security representing Book-Entry Notes will be deposited with, or on behalf of,
The Depository Trust Company, New York, New York (the "Depositary"), and
registered in the name of a nominee of the Depositary. Book-Entry Notes will
not be exchangeable for Certificated Notes and, except under the limited
circumstances described in the Prospectus under "Description of Debt
Securities--Global Securities", will not otherwise be issuable as Certificated
Notes.
The Depositary has advised the Company and the Agents as follows: The
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended. The Depositary was created to hold
securities of its participants and to facilitate the clearance and settlement
of securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers (including the
Agents), banks, trust companies, clearing corporations, and certain other
organizations, some of whom (and/or their representatives) own the Depositary.
Access to the Depositary's book-entry system is also available to others, such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
A further description of the Depositary's procedures with respect to Global
Securities representing Book-Entry Notes is set forth in the Prospectus under
"Description of Debt Securities--Global Securities". The Depositary has
confirmed to the Company, the Agents and the Trustee that it intends to follow
such procedures.
OTHER PROVISIONS; ADDENDA
Any provisions with respect to any Registered Note, including the
determination of a Base Rate, the calculation of the interest rate applicable
to a Floating Rate Note, and the specification of one or more Base Rates, the
Interest Payment Dates, the Stated Maturity or any other variable term relating
thereto, may be modified as specified under "Other Provisions" on the face of
such Note or in an Addendum relating thereto, if so specified on the face of
such Note and in the applicable Pricing Supplement.
AMORTIZING NOTES
The Company may from time to time offer Amortizing Notes. Unless otherwise
specified in the applicable Pricing Supplement, interest on each Amortizing
Note will be computed on the basis of a 360-day year of twelve 30-day months.
Payments with respect to Amortizing Notes will be applied first to interest due
and payable thereon and then to the reduction of the unpaid principal amount
thereof. Further
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information concerning additional terms and provisions of Amortizing Notes will
be specified in the applicable Pricing Supplement. A table setting forth
repayment information in respect of each Amortizing Note will be included in
the applicable Pricing Supplement and set forth in each such Note.
OPTIONAL REDEMPTION, REPAYMENT AND REPURCHASE
The Pricing Supplement relating to each Registered Note will indicate either
that such Note cannot be redeemed prior to Stated Maturity or that such Note
will be redeemable at the option of the Company, in whole or in part, and the
date or dates (each an "Optional Redemption Date") on which such Note may be
redeemed and the price (the "Redemption Price") at which (together with accrued
interest to such Optional Redemption Date) such Note may be redeemed on each
such Optional Redemption Date. The Company may exercise such option with
respect to a Registered Note by notifying the Trustee and the Paying Agent for
such Note at least 45 days prior to any Optional Redemption Date. At least 30
but not more than 60 days prior to the Optional Redemption Date, the Trustee
shall mail notice or cause the Paying Agent to mail notice of such redemption,
first class, postage prepaid, to the record Holder of such Registered Note. In
the event of redemption of a Registered Note in part only, a new Note or Notes
for the unredeemed portion thereof shall be issued to the Holder thereof upon
the cancellation thereof. Unless otherwise specified in the applicable Pricing
Supplement, the Registered Notes will not be subject to any sinking fund.
The Pricing Supplement relating to each Registered Note will also indicate
whether the Holder of such Note will have the option to elect repayment of such
Note by the Company prior to its Stated Maturity, and, if so, such Pricing
Supplement will specify the date or dates on which such Note may be repaid
(each an "Optional Repayment Date") and the price (the "Optional Repayment
Price") at which (together with accrued interest to such Optional Repayment
Date) such Note may be repaid on each such Optional Repayment Date.
In order for a Registered Note to be repaid, the Paying Agent for such
Registered Note must receive, at least 30 but not more than 45 days prior to an
Optional Repayment Date (i) such Registered Note with the form entitled "Option
to Elect Repayment" on the reverse thereof duly completed, or (ii) a telegram,
telex, facsimile transmission or letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company in the United States setting forth the name of
the Holder of such Registered Note, the principal amount of such Registered
Note to be repaid, the certificate number or a description of the tenor and
terms of such Registered Note, a statement that the option to elect repayment
is being exercised thereby and a guarantee that the Registered Note to be
repaid with the form entitled "Option to Elect Repayment" on the reverse of the
Registered Note duly completed will be received by such Paying Agent not later
than five Business Days after the date of such telegram, telex, facsimile
transmission or letter. If the procedure described in clause (ii) of the
preceding sentence is followed, then such Registered Note and form duly
completed must be received by such Paying Agent by such fifth Business Day. Any
tender of a Registered Note by the Holder for repayment shall be irrevocable.
The repayment option may be exercised by the Holder of a Registered Note for
less than the entire principal amount of such Note, provided that the principal
amount of such Note remaining outstanding after repayment is an authorized
denomination. Upon such partial repayment, such Registered Note shall be
cancelled and a new Note or Notes for the remaining principal amount thereof
shall be issued in the name of the Holder of such repaid Note.
If a Registered Note is represented by a Global Security, the Depositary's
nominee will be the Holder of such Note and therefore will be the only entity
that can exercise a right to repayment. In order to ensure that the
Depositary's nominee will timely exercise a right to repayment with respect to
a particular Registered Note, the beneficial owner of such Note must instruct
the broker or other direct or indirect participant through which such
beneficial owner holds an interest in such Note to notify the Depositary of its
desire to exercise a right to repayment. Cut-off times for accepting
instructions from their customers are established on an individual basis by
each such broker or participant and, accordingly, each beneficial owner should
consult the broker or such participant through which such beneficial owner
holds an interest in a Registered
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Note in order to ascertain the cut-off time by which such an instruction must
be given in order for timely notice to be delivered to the Depositary.
Notwithstanding anything in this Prospectus Supplement to the contrary, if a
Registered Note is an Original Issue Discount Note (other than an Indexed
Note), the amount payable on such Note in the event of redemption or repayment
prior to its Stated Maturity shall be the Amortized Face Amount of such Note as
of the date of redemption or the date of repayment, as the case may be. The
"Amortized Face Amount" of an Original Issue Discount Note shall be the amount
equal to (i) the Issue Price set forth in the applicable Pricing Supplement
plus (ii) that portion of the difference between the Issue Price and the
principal amount of such Note that has accrued at the Yield to Maturity set
forth in the Pricing Supplement (computed in accordance with generally accepted
United States bond yield computation principles) by such date of redemption or
repayment, but in no event shall the Amortized Face Amount of an Original Issue
Discount Note exceed its principal amount.
The Company may at any time purchase Registered Notes at any price in the
open market or otherwise. Registered Notes so purchased by the Company may, at
the discretion of the Company, be held or resold or surrendered to the Trustee
for cancellation.
CURRENCY RISKS
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in a Registered Note having a Specified Currency other than
U.S. dollars entails significant risks that are not associated with a similar
investment in a security denominated in U.S. dollars. Such risks include,
without limitation, the possibility of significant changes in rates of exchange
between the U.S. dollar and such Specified Currency and the possibility of the
imposition or modification of foreign exchange controls with respect to such
Specified Currency by either the United States or foreign governments. Such
risks generally depend on factors over which the Company has no control, such
as economic and political events and the supply of and demand for the relevant
currencies. In recent years, rates of exchange between the U.S. dollar and
certain currencies have been highly volatile, and such volatility may occur in
the future. Fluctuations in any particular exchange rate that have occurred in
the past, however, are not necessarily indicative of fluctuations in the rate
that may occur during the term of any Registered Note. Depreciation of the
Specified Currency for a Registered Note against the U.S. dollar would result
in a decrease in the effective yield of such Note (on a U.S. dollar basis)
below its coupon rate and, in certain circumstances, could result in a loss to
the investor on a U.S. dollar basis.
Governments have from time to time imposed, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a Specified Currency for making payments in respect of Registered Notes
denominated in such currency. At present, the Company has identified the
following currencies in which payments of principal, premium and/or interest on
Registered Notes may be made: Australian dollars, Canadian dollars, Danish
kroner, Italian lire, Japanese yen, New Zealand dollars, U.S. dollars and ECU.
However, the Company may determine at any time to issue Registered Notes with
Specified Currencies other than those listed. There can be no assurances that
exchange controls will not restrict or prohibit payments of principal, premium
and/or interest in any Specified Currency. Even if there are no actual exchange
controls, it is possible that, on a payment date with respect to any particular
Registered Note, the currency in which amounts then due in respect of such Note
are payable would not be available to the Company. In that event, the Company
will pay such amounts in the manner set forth under "Description of Registered
Notes--Payment of Principal and Interest" above.
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT DESCRIBE
ALL THE RISKS OF AN INVESTMENT IN REGISTERED NOTES DENOMINATED IN A CURRENCY
OTHER THAN U.S. DOLLARS. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN
FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY
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AN INVESTMENT IN REGISTERED NOTES DENOMINATED IN A CURRENCY OTHER THAN U.S.
DOLLARS. SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR PERSONS WHO ARE
UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
The information set forth in this Prospectus Supplement is directed to
prospective purchasers of Registered Notes who are United States residents, and
the Company disclaims any responsibility to advise prospective purchasers who
are residents of countries other than the United States with respect to any
matters that may affect the purchase or holding of, or receipt of payments of
principal, premium and/or interest in respect of, Registered Notes. Such
persons should consult their own legal and financial advisors with regard to
such matters.
Any Pricing Supplement relating to Registered Notes having a Specified
Currency other than U.S. dollars will contain information concerning historical
exchange rates for such currency against the U.S. dollar, a brief description
of such currency and any exchange controls affecting such currency, and any
other required information concerning such currency.
PAYMENT CURRENCY
Except as set forth below, if payment in respect of a Registered Note is
required to be made in a Specified Currency other than U.S. dollars and such
currency is unavailable to the Company due to the imposition of exchange
controls or other circumstances beyond the Company's control or is no longer
used by the government of the country issuing such currency or for the
settlement of transactions by public institutions of or within the
international banking community, then all payments in respect of such Note
shall be made in U.S. dollars until such currency is again available to the
Company or so used. The amounts so payable on any date in such currency shall
be converted into U.S. dollars on the basis of the most recently available
Market Exchange Rate for such currency or as otherwise indicated in the
applicable Pricing Supplement. Any payment in respect of such Note made under
such circumstances in U.S. dollars will not constitute an Event of Default
under the Indenture under which such Note shall have been issued.
Notwithstanding the foregoing, if a Specified Currency is unavailable to the
Company solely because such currency no longer constitutes legal tender because
it has been replaced by the ECU or the new single currency of the European
Union once monetary union takes effect pursuant to Article 109l of the Treaty
establishing the European Community, the amounts so payable in respect of such
Note shall, beginning with the date such replacement becomes effective, be made
in the relevant new single currency of the European Union; the amounts so
payable on any date shall be converted into such single currency on the basis
of the conversion officially in effect in the European Union on the effective
date of such replacement.
If payment in respect of a Registered Note is required to be made in ECU and
ECU are unavailable to the Company due to the imposition of exchange controls
or other circumstances beyond the Company's control or are no longer used in
the European Monetary System, then all payments in respect of such Note shall
be made in U.S. dollars until ECU are again available to the Company or so
used. The amount of each payment in U.S. dollars shall be computed on the basis
of the equivalent of the ECU in U.S. dollars, determined as described below, as
of the second Business Day prior to the date on which such payment is due.
The equivalent of the ECU in U.S. dollars as of any date (the "Day of
Valuation") shall be determined by the Paying Agent on the following basis. The
component currencies of the ECU for this purpose (the "Components") shall be
the currency amounts that were components of the ECU as of the last date on
which the ECU was used in the European Monetary System. The equivalent of the
ECU in U.S. dollars shall be calculated by aggregating the U.S. dollar
equivalents of the Components. The U.S. dollar equivalent of each of the
Components shall be determined by the Paying Agent on the basis of the most
recently available Market Exchange Rates for such Components or as otherwise
indicated in the applicable Pricing Supplement.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
shall be divided or multiplied in the same proportion. If
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two or more component currencies are consolidated into a single currency, the
amounts of those currencies as Components shall be replaced by an amount in
such single currency equal to the sum of the amounts of the consolidated
component currencies expressed in such single currency. If any component
currency is divided into two or more currencies, the amount of that currency as
a Component shall be replaced by amounts of such two or more currencies, each
of which shall be equal to the amount of the former component currency divided
by the number of currencies into which that currency was divided.
All determinations referred to above made by the Paying Agent shall be at its
sole discretion and shall, in the absence of manifest error, be conclusive for
all purposes and binding on holders of Registered Notes.
FOREIGN CURRENCY JUDGMENTS
The Notes will be governed by and construed in accordance with the law of the
State of New York. Courts in the United States customarily have not rendered
judgments for money damages denominated in any currency other than the U.S.
dollar. A 1987 amendment to the Judiciary Law of the State of New York
provides, however, that an action based upon an obligation denominated in a
currency other than U.S. dollars will be rendered in the foreign currency of
the underlying obligation and converted into U.S. dollars at the rate of
exchange prevailing on the date of the entry of the judgment or decree.
UNITED STATES TAX CONSIDERATIONS
The following is a summary of certain United States federal income tax
considerations that may be relevant to a Holder of a Registered Note that is a
U.S. Person (as defined in the Prospectus) or that otherwise is subject to
United States federal income taxation on a net income basis in respect of a
Registered Note (a "United States holder"). This summary is based on laws,
regulations, rulings and decisions now in effect, all of which are subject to
change which change could apply retroactively and could affect the continued
validity of this summary. This summary deals only with United States holders
that will hold Registered Notes as capital assets, and does not address tax
considerations applicable to investors that may be subject to special tax
rules, such as banks, insurance companies, dealers in securities or currencies,
persons that will hold Registered Notes as part of an integrated investment
(including a "straddle"), tax exempt organizations or persons that have a
"functional currency" other than the U.S. dollar.
Investors should consult their own tax advisors in determining the tax
consequences to them of holding Registered Notes, including the application to
their particular situation of the tax considerations discussed below, as well
as the application of state, local or other tax laws.
PAYMENTS OR ACCRUALS OF INTEREST
Payments of or accruals of "qualified stated interest" (as defined below
under "Original Issue Discount") on a Registered Note will be taxable to a
United States holder as ordinary interest income at the time that such amounts
are accrued or received (in accordance with the United States holder's method
of tax accounting). If a United States holder elects to receive payments of
interest pursuant to the terms of a Registered Note in a currency or currency
unit other than U.S. dollars (a "foreign currency"), the amount of interest
income realized by the United States holder will be the U.S. dollar value of
the foreign currency payment based on the exchange rate in effect on the date
of receipt regardless of whether the payment in fact is converted into U.S.
dollars. In the case of an accrual basis United States holder, the amount of
interest income will be based on the average exchange rate in effect during the
interest accrual period (or with respect to an interest accrual period that
spans two taxable years, at the average exchange rate for the partial period
within the taxable year). Alternatively, such United States holder may elect to
translate all interest income on foreign currency-denominated Registered Notes
at the spot rate on the last day of the accrual period (or the last day of the
taxable year, in the case of an accrual period that spans more than one taxable
year) or on the date the interest payment is received if such date is within
five business days of the end of the accrual
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period. A United States holder that makes such an election must apply it
consistently to all debt instruments from year to year and cannot change the
election without the consent of the Internal Revenue Service (the "IRS"). A
United States holder that uses the accrual method of accounting for tax
purposes will recognize foreign currency gain or loss, as the case may be, on
the receipt of a foreign currency interest payment if the exchange rate in
effect on the date the payment is received differs from the rate applicable to
a previous accrual of that interest income. This foreign currency gain or loss
will be treated as ordinary income or loss but generally will not be treated as
an adjustment to interest income received on the Registered Note.
PURCHASE, SALE AND RETIREMENT OF REGISTERED NOTES
A United States holder's tax basis in a Registered Note generally will equal
the cost of such Note to such holder, increased by any amounts includible in
income by such holder as original issue discount and market discount and
reduced by any amortized premium (each as described below) and any payments
other than qualified stated interest made on such Note. In the case of a
Registered Note denominated in a currency other than the U.S. dollar (a
"Foreign Currency Registered Note"), the cost of such Note to a United States
holder will be the U.S. dollar value of the foreign currency purchase price on
the date of purchase calculated at the exchange rate in effect on the date of
purchase. In the case of a Foreign Currency Registered Note that is traded on
an established securities market, a cash-basis United States holder (or, if it
so elects, an accrual-basis United States holder) will determine the U.S.
dollar value of the cost of such Foreign Currency Registered Note by
translating the amount paid at the spot rate of exchange on the settlement date
of the purchase. The amount of any subsequent adjustments to a United States
holder's tax basis in a Registered Note in respect of foreign currency-
denominated original issue discount, market discount and premium will be
determined in the manner described below for such adjustments. The conversion
of U.S. dollars to a foreign currency and the immediate use of that currency to
purchase a Registered Note generally will not result in taxable gain or loss
for a United States holder.
Upon the sale, exchange or retirement of a Registered Note, a United States
holder generally will recognize gain or loss equal to the difference between
the amount realized on the sale, exchange or retirement (less any accrued
qualified stated interest, which will be taxable as such) and the United States
holder's tax basis in the Registered Note. If a United States holder elects to
receive foreign currency in respect of the sale, exchange or retirement of a
Foreign Currency Registered Note, the amount realized generally will be the
dollar value of the foreign currency received calculated at the exchange rate
in effect on the date the Foreign Currency Registered Note is disposed of or
retired. In the case of a Foreign Currency Registered Note that is traded on an
established securities market, a cash-basis United States holder (or, if it so
elects, an accrual-basis United States holder) will determine the U.S. dollar
value of the amount realized by translating such amount at the spot rate of
exchange on the settlement date of the sale, exchange or retirement.
The election available to accrual-basis United States holders in respect of
the purchase and sale of Foreign Currency Registered Notes traded on an
established securities market, which is discussed in the two preceding
paragraphs, must be applied consistently to all debt instruments from year to
year and cannot be changed without the consent of the IRS.
Except as discussed below with respect to market discount and foreign
currency gain or loss, gain or loss recognized by a United States holder on the
sale, exchange or retirement of a Registered Note generally will be long-term
capital gain or loss if the United States holder has held the Note for more
than one year at the time of disposition. The Internal Revenue Code of 1986, as
amended (the "Code"), provides preferential treatment under certain
circumstances for net long-term capital gains realized by individual investors.
The ability of United States holders to offset capital losses against ordinary
income is limited.
Notwithstanding the foregoing, gain or loss recognized by a United States
holder on the sale, exchange or retirement of a Foreign Currency Registered
Note generally will be treated as ordinary income or loss to the extent that
the gain or loss is attributable to changes in exchange rates during the period
in which such
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holder held such Note. This foreign currency gain or loss will not be treated
as an adjustment to interest income on the Note.
ORIGINAL ISSUE DISCOUNT
United States holders of Original Issue Discount Notes generally will be
subject to the special tax accounting rules for original issue discount
obligations provided by the Code and certain Treasury regulations thereunder
(the "OID Regulations"). United States holders of such Notes should be aware
that, as described in greater detail below, they generally must include
original issue discount in ordinary gross income for United States federal
income tax purposes as it accrues, in advance of the receipt of cash
attributable to that income.
Registered Notes issued with original issue discount for U.S. tax purposes
include (i) any Registered Note where the difference between (x) the first
price at which a substantial amount of the Registered Notes that are part of
the same issue is sold for money (other than to an underwriter, placement agent
or wholesaler) (the "Issue Price") and (y) the stated redemption price at
maturity of the Registered Note is at least 0.25% of that stated redemption
price multiplied by the number of full years from the issue date of the
Registered Note until its maturity and (ii) any other Registered Notes
designated by the Company as issued with original issue discount for U.S.
federal income tax purposes. All such Registered Notes are referred to herein
as Discount Notes. The stated redemption price at maturity of a Discount Note
is the total of all payments to be made under the Discount Note other than
payments of "qualified stated interest." The term "qualified stated interest"
generally means stated interest that is unconditionally payable in cash or
property (other than debt instruments issued by the Company) at least annually
during the entire term of a Discount Note at a single fixed rate of interest
or, subject to certain conditions, based on one or more interest indices.
In general, each United States holder of a Discount Note having a maturity in
excess of one year, whether such United States holder uses the cash or the
accrual method of tax accounting, will be required to include in ordinary gross
income the sum of the "daily portions" of original issue discount on that Note
for all days during the taxable year that the United States holder owns the
Note. The daily portions of original issue discount on a Discount Note are
determined by allocating to each day in any accrual period a ratable portion of
the original issue discount allocable to that accrual period. Accrual periods
may be any length and may vary in length over the term of a Discount Note,
provided that each accrual period is no longer than one year and each scheduled
payment of principal or interest occurs on the final day or on the first day of
an accrual period. In the case of an initial holder, the amount of original
issue discount on a Discount Note allocable to each accrual period is
determined by (i) multiplying the "adjusted issue price" (as defined below) of
the Note at the beginning of the accrual period by a fraction, the numerator of
which is the annual yield to maturity of the Note and the denominator of which
is the number of accrual periods in a year and (ii) subtracting from that
product the amount (if any) payable as qualified stated interest allocable to
that accrual period. In the case of a Discount Note that is a Floating Rate
Note, both the "annual yield to maturity" and the "qualified stated interest"
will be determined for these purposes as though the Note will bear interest in
all periods at a fixed rate generally equal to the rate that would be
applicable to interest payments on the Note on its date of issue or, in the
case of certain Floating Rate Notes, the rate that reflects the yield that is
reasonably expected for the Note. (Additional rules may apply if interest on a
Floating Rate Note is based on more than one interest index.) The "adjusted
issue price" of a Discount Note at the beginning of any accrual period will
generally be the sum of its Issue Price (including accrued interest, if any)
and the amount of original issue discount allocable to all prior accrual
periods, reduced by the amount of all payments other than qualified stated
interest payments (if any) made with respect to such Note in all prior accrual
periods. All payments on a Discount Note (other than qualified stated interest)
will generally be viewed first as payments of previously accrued original issue
discount (to the extent thereof), with payments considered made from the
earliest accrual periods first, and then as a payment of principal. The "annual
yield to maturity" of a Note is the discount rate (appropriately adjusted to
reflect the length of accrual periods) that causes the present value on the
issue date of all payments on the Note to equal the Issue Price. As a result of
S-20
<PAGE>
this "constant yield" method of including original issue discount income, the
amounts so includible in gross income by a United States holder in respect of a
Discount Note denominated in U.S. dollars are lesser in the early years and
greater in the later years than amounts that would be includible on a straight-
line basis.
A United States holder generally may make an irrevocable election to include
in its income its entire return on a Note (i.e., the excess of all remaining
payments to be received on the Note, including payments of qualified stated
interest, over the amount paid by such United States holder for such Note)
under the constant yield method described above. For Notes purchased at a
premium or bearing market discount in the hands of the United States holder,
the United States holder making such election will also be deemed to have made
the election (discussed below in "Premium and Market Discount") to amortize
premium or to accrue market discount in income currently on a constant yield
basis.
In the case of a Discount Note that is also a Foreign Currency Registered
Note, a United States holder should determine the U.S. dollar amount includible
as original issue discount for each accrual period by (i) calculating the
amount of original issue discount allocable to each accrual period in the
foreign currency using the constant yield method described above, and (ii)
translating the foreign currency amount so received at the average exchange
rate in effect during that accrual period (or, with respect to an interest
accrual period that spans two taxable years, at the average exchange rate for
the partial period within the United States holder's taxable year).
Alternatively, such holder may translate the foreign currency amount so derived
at the spot rate of exchange on the last day of the accrual period (or the last
day of the taxable year, in the case of an accrual period that includes more
than one taxable year) provided that the United States holder has made an
election as described under "Payments of Interest" above. Because exchange
rates may fluctuate, a United States holder of a Discount Note that is also a
Foreign Currency Registered Note may recognize a different amount of original
issue discount income in each accrual period than would the holder of an
otherwise similar Discount Note denominated in U.S. dollars. Upon the receipt
of an amount attributable to original issue discount (whether in connection
with a payment of an amount that is not qualified stated interest or the sale
or retirement of the Discount Note), a United States holder will recognize
ordinary income or loss measured by the difference between the amount received
(translated into U.S. dollars at the exchange rate in effect on the date of
receipt or on the date of disposition of the Discount Note, as the case may be)
and the amount accrued (using the exchange rate applicable to such previous
accrual).
A subsequent United States holder of a Discount Note that purchases the Note
at a cost less than its remaining redemption amount (as defined below) also
generally will be required to include in gross income the daily portions of
original issue discount, calculated as described above. However, if the
subsequent United States holder acquires the Discount Note at a price greater
than its adjusted issue price, the subsequent United States holder may reduce
its periodic inclusions of original issue discount income to reflect the
premium paid over the adjusted issue price. The "remaining redemption amount"
for a Discount Note is the total of all future payments to be made on the Note
other than payments of qualified stated interest.
Certain of the Discount Notes may be redeemed prior to their Maturity Date,
either at the option of the Company or at the option of the holder. Discount
Notes containing such features may be subject to rules that differ from the
general rules discussed above. Investors that purchase Discount Notes with such
features should carefully examine the applicable Pricing Supplement and should
consult their own tax advisers with respect to such features since the tax
consequences with respect to original issue discount will depend, in part, on
the particular terms and features of the purchased Discount Notes.
SHORT-TERM NOTES
The rules set forth above will also generally apply to Discount Notes having
maturities of not more than one year ("Short-Term Notes"), but with certain
modifications.
First, the OID Regulations provide that no payments of interest on a Short-
Term Note will be considered to be qualified stated interest, but rather treat
such interest payments as part of the Short-Term Note's stated
S-21
<PAGE>
redemption price at maturity, thereby giving rise to original issue discount.
Thus, all Short-Term Notes will be Discount Notes. Except as noted below, a
cash-basis United States holder of a Short-Term Note that does not identify the
Short-Term Note as part of a hedging transaction will generally not be required
to accrue original issue discount currently, but such United States holder will
be required to treat any gain realized on a sale, exchange or retirement of the
Short-Term Note as ordinary income to the extent such gain does not exceed the
original issue discount accrued with respect to the Short-Term Note during the
period the United States holder held the Short-Term Note. Such a United States
holder may not be allowed to deduct all of the interest paid or accrued on any
indebtedness incurred or maintained to purchase or carry such Note until the
Maturity of the Note or its earlier disposition in a taxable transaction.
Notwithstanding the foregoing, a cash-basis United States holder of a Short-
Term Note may elect to accrue original issue discount into income on a current
basis (in which case the limitation on the deductibility of interest described
above will not apply). A United States holder using the accrual method of tax
accounting and certain cash method United States holders (including banks,
securities dealers, regulated investment companies and certain trust funds)
generally will be required to include original issue discount on a Short-Term
Note in gross income on a current basis. Original issue discount will be
treated as accruing for these purposes on a ratable basis or, at the election
of the United States holder, on a constant yield basis based on daily
compounding.
Second, any United States holder of a Short-Term Note (whether a cash- or
accrual-basis holder) can elect to accrue the "acquisition discount," if any,
with respect to the Note on a current basis. Acquisition discount is the excess
of the remaining redemption amount of the Note at the time of acquisition over
the purchase price. Acquisition discount will be treated as accruing ratably
or, at the election of the holder, under a constant yield method based on daily
compounding. If the election to accrue acquisition discount is made, the
original issue discount rules will not apply with respect to the Short-Term
Note.
Finally, the market discount rules described below will not apply to Short-
Term Notes.
As described above, certain of the Registered Notes may be subject to special
redemption features. These features may affect the determination of whether a
Registered Note has a maturity of not more than one year and thus is a Short-
Term Note. Investors that purchase Registered Notes with such features should
carefully examine the applicable Pricing Supplement, and should consult their
own tax advisers with respect to such features.
PREMIUM AND MARKET DISCOUNT
A United States holder of a Registered Note that purchases the Note at a cost
greater than its principal amount will be considered to have purchased the Note
at a premium, and may elect to amortize such premium as an offset to interest
income, using a constant yield method, over the remaining term of the Notes.
Such election, once made, generally applies to all debt instruments held or
subsequently acquired by such United States holder during or after the first
taxable year to which the election applies and may not be revoked without the
consent of the IRS. A United States holder that elects to amortize such premium
must reduce its tax basis in a Registered Note by the amount of the premium
amortized during its holding period. Discount Notes purchased at a premium will
not be subject to the original issue discount rules described above. In the
case of a premium in respect of a Foreign Currency Registered Note, a United
States holder should calculate that amortization of the premium in the foreign
currency. Amortization deductions attributable to a period reduce interest
payments in respect of that period, and therefore are translated into U.S.
dollars at the rate used by the United States holder for such interest
payments. Exchange gain or loss will be realized with respect to amortized
premium on a Foreign Currency Note based on the difference between the exchange
rate computed as described above and the exchange rate on the date on which the
United States holder acquired the Note. With respect to a United States holder
that does not elect to amortize premium, the amount of premium will be included
in the United States holder's tax basis when the Note matures or is disposed of
by the United States holder. Therefore, a United States holder that does not
elect to amortize such premium will generally be required to treat the premium
as capital loss when the Note matures.
S-22
<PAGE>
If a United States holder of a Registered Note purchases such Note at a
price that is lower than its remaining redemption amount, or in the case of a
Discount Note, its adjusted issue price, by 0.25% or more of its remaining
redemption amount, (or adjusted issue price) multiplied by the number of
remaining whole years to maturity, the Registered Note will be considered to
bear "market discount" in the hands of such United States holder. In such
case, gain realized by the United States holder on the disposition of the
Registered Note generally will be treated as ordinary interest income to the
extent of the market discount that accrued on such Note while held by such
United States holder. In addition, such United States holder could be required
to defer the deduction of a portion of the interest paid on any indebtedness
incurred or continued to purchase or carry the Registered Note. In general
terms, market discount on a Registered Note will be treated as accruing
ratably over the term of such Note, or, at the election of such United States
holder, under a constant yield method. Market discount on a Foreign Currency
Note will be accrued by a United States holder in the Specified Currency. The
amount includible in income by a United States holder in respect of such
accrued market discount will be the U.S. dollar value of the amount accrued,
generally calculated at the exchange rate in effect on the date that the Note
is disposed of by the United States holder.
A United States holder may elect to include market discount in gross income
currently as it accrues (on either a ratable or constant yield basis), in lieu
of treating a portion of any gain realized on a sale of a Note as ordinary
income. If a United States holder elects to include market discount on a
current basis, the interest deduction deferral rule described above will not
apply. Such election, once made, applies to all market discount debt
instruments acquired by the United States holder on or after the first day of
the first taxable year to which such election applies, and may not be revoked
without the consent of the IRS. Any accrued market discount on a Foreign
Currency Registered Note that is currently includible in income will be
translated into U.S. dollars at the average exchange rate for the accrual
period (or portion thereof within the United States holder's taxable year).
INDEXED NOTES AND OTHER CONTINGENT PAYMENT NOTES
The tax treatment of a United States holder of an Indexed Note will depend
on factors including the specific index or indices used to determine indexed
payments on the Note and the amount and timing of any noncontingent payments
of principal and interest. Tax considerations relevant to holders of Indexed
Notes and other Notes providing for contingent payments will be discussed in
the applicable Pricing Supplement.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Paying Agent will be required to file information returns with the IRS
with respect to payments made to certain United States holders of Notes. In
addition, certain United States holders may be subject to a 31 percent backup
withholding tax in respect of such payments if they do not provide their
taxpayer identification numbers to the Paying Agent. Persons holding Notes who
are not United States holders may be required to comply with applicable
certification procedures to establish that they are not United States holders
in order to avoid the application of such information reporting requirements
and backup withholding tax.
PLAN OF DISTRIBUTION
The Registered Notes are being offered on a continuous basis by the Company
through the Agents, which have agreed to use their reasonable best efforts to
solicit orders to purchase Registered Notes. Initial purchasers may propose
certain terms of the Registered Notes, but the Company will have the right to
accept orders to purchase Registered Notes and may reject proposed purchases
in whole or in part. The Agents shall have the right, in their discretion
reasonably exercised, to reject any proposed purchase of Registered Notes in
whole or in part. The Company will pay any Agent a commission of from .125% to
.750% of the principal amount of Registered Notes with a Stated Maturity of
nine months to 30 years sold through it, depending upon Stated Maturity.
Commissions with respect to Notes with Stated Maturities in excess of 30 years
which are sold through an Agent will be negotiated between the Company and
such Agent at the time of such sale.
S-23
<PAGE>
The Company may arrange for Registered Notes to be sold through any Agent
acting as underwriter or may sell Registered Notes directly to investors on its
own behalf. In the case of sales made directly by the Company, no commission or
discount in lieu thereof will be paid or allowed. The Company also may sell
Registered Notes to any Agent as principal for its own account at a price to be
agreed upon at the time of sale. Such Notes may be resold by such Agent to one
or more investors at a fixed public offering price or at prevailing market
prices, or at prices related thereto, at the time of such resale, as determined
by such Agent. Unless otherwise specified in the applicable Pricing Supplement,
any Registered Note sold to an Agent as principal will be purchased by such
agent at a price equal to 100% of the principal amount thereof less a
percentage of the principal amount equal to the commission applicable to an
agency sale (as described below) of a Note of identical maturity.
Any Agent may sell Registered Notes it has purchased from the Company as
principal to other dealers for resale to investors and other purchasers, and
may allow any portion of the discount received in connection with such purchase
from the Company to such dealers. After the initial public offering of
Registered Notes, the public offering price (in the case of Registered Notes to
be resold at a fixed public offering price), the concession and the discount
may be changed.
No Registered Note will have an established trading market when issued. The
Registered Notes will not be listed on any securities exchange. The Agents may
make a market in the Registered Notes, but the Agents are not obligated to do
so and may discontinue any market-making at any time without notice. There can
be no assurance of a secondary market for any Registered Notes, or that any
Registered Notes will be sold.
The Agents, whether acting as agent or principal, may be deemed to be
"underwriters" within the meaning of the Securities Act. The Company has agreed
to indemnify the Agents against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments that the Agents may be
required to make in respect thereof.
The Registered Notes have not been and will not be registered under the
Securities and Exchange Law of Japan. The Company and the Agents will agree not
to offer or sell any Registered Note directly or indirectly in Japan or to
residents of Japan or for the benefit of any Japanese person (which term as
used herein means any person resident in Japan, including any corporation or
other entity organized under the laws of Japan) or to others for reoffering or
resale directly or indirectly in Japan or to any Japanese person except in
circumstances that result in compliance with any applicable laws, regulations
and ministerial guidelines of Japan taken as a whole.
In addition to the Registered Notes being offered through the Agents as
described herein, Bearer Notes that may have terms identical or similar to the
terms of the Registered Notes may be concurrently offered by the Company on a
continuous basis outside the United States (as defined in the Prospectus)
pursuant to a distribution agreement with affiliates of the Agents. Pursuant to
such distribution agreement, such affiliates may also purchase Bearer Notes as
principal for their own accounts or for resale, and the Company may make direct
sales of Bearer Notes on its own behalf. Any Bearer Notes so offered and sold
will reduce correspondingly the maximum aggregate principal amount of
Registered Notes that may be offered by this Prospectus Supplement and the
accompanying Prospectus.
In the ordinary course of their respective businesses, affiliates of J.P.
Morgan Securities Inc. have engaged, and will in the future engage, in normal
commercial banking transactions with the Company and certain of its
subsidiaries.
S-24
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS +
+SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY +
+NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH +
+OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR +
+QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JULY 13, 1995
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JULY , 1995)
U.S.$584,662,000
MCDONALD'S CORPORATION
MEDIUM-TERM NOTES, SERIES E
DUE FROM 184 DAYS TO 60 YEARS FROM DATE OF ISSUE
----------
McDonald's Corporation (the "Company" or "McDonald's") may from time to time
offer its Medium-Term Notes, Series E (the "Notes") with an aggregate initial
public offering price or purchase price of up to $584,662,000, or the
equivalent thereof in one or more other currencies or composite currencies
including European Currency Units ("ECU"), subject to reduction as a result of
the sale of other Debt Securities. In addition to the Notes in bearer form
("Bearer Notes") being offered hereby outside the United States, the Company
may from time to time offer Notes in registered form ("Registered Notes") in
the United States. A separate Prospectus Supplement will be used for any such
offering of Registered Notes. Any Registered Notes sold will reduce
correspondingly the principal amount of Bearer Notes that may be sold
hereunder. See "Plan of Distribution."
Each Bearer Note will not, in connection with its original issuance, or
during the period of 40 days after its Original Issue Date, be offered, sold or
delivered, directly or indirectly, within the United States or to U.S. Persons,
except to the extent permitted under U.S. Treasury regulations. See "Plan of
Distribution." All Bearer Notes that have the same Original Issue Date and
otherwise identical terms will be represented initially by a Temporary Global
Note to be delivered to a common depositary outside the United States for
Euroclear and Cedel. Beneficial interests in a Temporary Global Note will be
exchangeable for beneficial interests in a Permanent Global Note or for
individual Bearer Notes only in the manner and upon compliance with the
procedures described under "Description of Bearer Notes--Denomination, Form and
Transfer."
Payments in respect of Bearer Notes will be made without deduction for United
States withholding taxes to the extent described herein. Each Bearer Note may
be redeemed in whole, at the redemption price thereof, if certain events occur
involving United States withholding taxes or information reporting
requirements. See "Tax Redemption" and "Special Tax Redemption" under
"Description of Bearer Notes."
Each Bearer Note will mature on any day 184 days from its Original Issue Date
and may be subject to redemption at the option of the Company, or to repayment
at the option of the Holder, prior to Stated Maturity. Each Bearer Note will be
denominated in the currency designated by the Company (the "Specified
Currency"). See "Currency Risks." Each Bearer Note will bear interest at a
fixed rate (a "Fixed Rate Note"), which may be zero in the case of certain
Original Issue Discount Notes, or at a floating rate (a "Floating Rate Note")
determined by reference to the CD Rate, the CMT Rate, the Commercial Paper
Rate, the Federal Funds Rate, LIBOR, the Prime Rate, the Treasury Rate or any
other Base Rate, as selected by the initial purchaser and agreed to by the
Company, adjusted by the Spread and/or Spread Multiplier, if any, applicable to
such Note. A Bearer Note may be issued as an indexed note (an "Indexed Note")
the interest amount (an "Interest Indexed Note") or principal amount (a
"Principal Indexed Note" and, together with Interest Indexed Notes, "Indexed
Notes") payable at Maturity of which will be determined by reference to a
designated stock, currency, commodity or other index or will otherwise be
determined by application of a formula. See "Description of Bearer Notes--
Indexed Notes." The Specified Currency, any applicable interest rate or
interest rate formula, any applicable index formula, reset provisions, Issue
Price, Stated Maturity, any Interest Payment Dates, any redemption and
repayment provisions and certain other terms applicable to each Bearer Note
will be established at the Original Issue Date of such Bearer Note and set
forth in a pricing supplement to this Prospectus Supplement (a "Pricing
Supplement").
Unless otherwise specified in the applicable Pricing Supplement, interest on
Fixed Rate Notes, other than in the case of Original Issue Discount Notes, will
be payable each February 15 and August 15 and at Maturity. Interest on Floating
Rate Notes will be payable on the dates determined at the time of issuance and
set forth in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, Bearer Notes
will be issued only in minimum denominations of U.S.$25,000 and any larger
amount that is an integral multiple of U.S.$5,000 or, in the case of a Bearer
Note having a Specified Currency other than U.S. dollars, in the minimum
denominations set forth in the applicable Pricing Supplement.
Application has been made to list the Bearer Notes on the Luxembourg Stock
Exchange. Unlisted Bearer Notes may also be issued as indicated in the
applicable Pricing Supplement.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, THE PROSPECTUS OR ANY
SUPPLEMENT HERETO. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OF-
FENSE.
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO PUBLIC(1) AGENTS' COMMISSION(2) PROCEEDS TO THE COMPANY(2)(3)
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note................ 100% .125% to .750% 99.875% to 99.250%
- - ---------------------------------------------------------------------------------------------------------------
Total(4)................ U.S.$584,662,000 U.S.$730,828 to U.S.$4,384,965 U.S.$583,931,173 to U.S.$580,277,035
- - ---------------------------------------------------------------------------------------------------------------
</TABLE>
- - --------------------------------------------------------------------------------
(1) The Notes will be issued at 100% of their principal or, in the case of
Principal Indexed Notes, face amount, unless otherwise specified in the
applicable Pricing Supplement.
(2) The Company will pay a commission to Merrill Lynch International Limited,
Goldman Sachs International, J.P. Morgan Securities Ltd., Morgan Stanley &
Co. International Limited or Salomon Brothers International Limited or
others, each as agent (collectively the "Agents"), in the form of a
discount, ranging from .125% to .750%, depending upon the Stated Maturity
of the Note, of the principal or, in the case of Principal Indexed Notes,
face amount of any Note with a Stated Maturity of 184 days to 30 years sold
through such Agent. Commissions with respect to Notes with Stated
Maturities in excess of 30 years which are sold through an Agent will be
negotiated between the Company and such Agent at the time of such sale. The
Company may also sell Notes to any Agent as principal. Unless otherwise
indicated in the applicable Pricing Supplement, any Note sold to an Agent
as principal will be purchased by such Agent at a price to be agreed upon
at the time of sale and may be resold by such Agent to one or more
investors and other purchasers at a fixed public offering price or at
varying prices relating to prevailing market prices at the time or times of
resale to be determined by such Agent.
(3) Before deducting expenses payable by the Company estimated to be $ ,
including reimbursement of certain of the Agents' expenses.
(4) Or the equivalent thereof in other currencies or composite currencies
(including ECU).
----------
The Bearer Notes are being offered on a continuous basis by the Company
through the Agents, which have agreed to use their reasonable best efforts to
solicit orders to purchase Bearer Notes. The Company may sell Bearer Notes at a
discount to any Agent for its own account or for resale to one or more
investors at a fixed public offering price or at varying prices relating to
prevailing market prices at the time or times of resale, to be determined by
such Agent. The Company also may arrange for such Bearer Notes to be sold
through any Agent acting as an underwriter or may sell Bearer Notes directly to
investors on its own behalf. There can be no assurance that the maximum amount
of Bearer Notes offered by this Prospectus Supplement will be sold or that
there will be a secondary market for any Bearer Notes. The Company reserves the
right to withdraw, cancel or modify the offer made hereby without notice. The
Company or any Agent may reject any order to purchase Bearer Notes, whether or
not solicited, in whole or in part. See "Plan of Distribution."
----------
MERRILL LYNCH INTERNATIONAL LIMITED
GOLDMAN SACHS INTERNATIONAL
J.P. MORGAN SECURITIES LTD.
MORGAN STANLEY & CO.
INTERNATIONAL
SALOMON BROTHERS INTERNATIONAL LIMITED
----------
The date of this Prospectus Supplement is July , 1995.
<PAGE>
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in this Prospectus
Supplement (including the accompanying Pricing Supplement) or the Prospectus
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Company or any underwriter or agent. This
Prospectus Supplement (including the accompanying Pricing Supplement) and the
Prospectus do not constitute an offer to sell or a solicitation of an offer to
buy any of the securities offered hereby in any jurisdiction to any person to
whom it is unlawful to make such offer in such jurisdiction. The delivery of
this Prospectus Supplement (including the accompanying Pricing Supplement) or
the Prospectus does not imply that the information herein or therein is correct
as of any time subsequent to their respective dates. Investors are advised to
read this Prospectus Supplement (including the accompanying Pricing Supplement)
together with the Prospectus and the documents incorporated by reference herein
and therein.
References herein to "U.S. dollars" or "$" are to the lawful currency of the
United States of America.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS SUPPLEMENT PAGE
--------------------- ----
<S> <C>
Incorporation of Certain Documents
by Reference...................... S-2
McDonald's Corporation............. S-3
Summary Consolidated Financial
Data.............................. S-4
Capitalization of McDonald's
Corporation....................... S-5
Description of Bearer Notes........ S-6
Currency Risks..................... S-23
Taxation in the United States...... S-26
Plan of Distribution............... S-27
General Information................ S-29
</TABLE>
<TABLE>
<CAPTION>
PROSPECTUS PAGE
---------- ----
<S> <C>
Available Information.............. 2
Incorporation of Certain Documents
by Reference...................... 2
McDonald's Corporation............. 3
Use of Proceeds.................... 3
Ratio of Earnings to Fixed Charges. 3
Description of Debt Securities..... 4
Limitations on Issuance of Bearer
Securities........................ 11
Plan of Distribution............... 12
Legal Matters...................... 13
Experts............................ 13
</TABLE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the United States
Securities and Exchange Commission (the "Commission") pursuant to Section 13 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, as amended by the Company's Form 10-K/A filed on June
27, 1995; and
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act ((which include the Company's annual reports on Form
10-K (including the portions of the Company's annual report to shareholders
incorporated by reference therein) and quarterly reports on Form 10-Q)
subsequent to the date of the Prospectus and prior to the termination of the
offering of the Debt Securities (including the Notes)) referred to in the
Prospectus shall be deemed to be incorporated by reference herein. Any
statement contained in the Prospectus, this Prospectus Supplement or a document
incorporated or deemed incorporated by reference herein shall be deemed to be
modified or superseded for purposes hereof to the extent that a statement
contained in this Prospectus Supplement or the Prospectus or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part hereof.
S-2
<PAGE>
Copies of any documents incorporated herein by reference will be available
without charge at the office of Banque Generale du Luxembourg S.A. (the
"Listing Agent"), 27 Avenue Monterey, L-2951, Luxembourg, Luxembourg. Any
person receiving a copy of this Prospectus Supplement may obtain, without
charge, upon written or oral request, a copy of any document incorporated by
reference herein, except for the exhibits to such documents (unless such
exhibits are specifically incorporated by reference in such documents). Written
or telephone requests for any such document should be directed to Merrill Lynch
International Limited, Ropemaker Place, 25 Ropemaker Street, London, England
EC2Y 9LY, telephone: 876-3995.
This Prospectus Supplement may be used for the offer, sale and listing of
Bearer Notes with an aggregate initial offering price of up to
U.S.$584,662,000, or the equivalent thereof in other currencies, subject to
reduction as a result of the sale of other Debt Securities. Pursuant to the
Euro Distribution Agreement, the Company will represent to the Agents that as
of the Original Issue Date of any Bearer Note, neither the Prospectus nor any
amendment thereof or supplement thereto will contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The Company has undertaken in connection with the listing
of the Bearer Notes on the Luxembourg Stock Exchange that, so long as any
Bearer Notes remain outstanding and listed on such Exchange, in the event of
any material adverse change in the business or financial condition of the
Company that is not reflected in the Prospectus as then amended or
supplemented, the Company will prepare an amendment or supplement to the
Prospectus or publish a new Prospectus for use in connection with any
subsequent offering and listing by the Company of Bearer Notes.
MCDONALD'S CORPORATION
McDonald's Corporation and its subsidiaries develop, operate, franchise and
service a worldwide system of restaurants which prepare, assemble, package and
sell a limited menu of value-priced foods. These restaurants are operated by
the Company and its subsidiaries or, under the terms of franchise agreements,
by franchisees who are independent third parties, or by affiliates operating
under joint venture agreements between the Company or its subsidiaries and
local businesspeople.
McDonald's restaurants offer a substantially uniform menu consisting of
hamburgers and cheeseburgers, including the Big Mac and Quarter Pounder with
Cheese sandwiches, the Filet-O-Fish, McGrilled Chicken and McChicken
sandwiches, french fries, Chicken McNuggets, salads, shakes, sundaes and cones
made with low fat frozen yogurt, pies, cookies and a limited number of soft
drinks and other beverages. In addition, the restaurants sell a variety of
products during limited promotional time periods. McDonald's restaurants
operating in the United States are open during breakfast hours and offer a full
breakfast menu including the Egg McMuffin and the Sausage McMuffin with Egg
sandwiches, hotcakes and sausage; three varieties of biscuit sandwiches; Apple-
Bran muffins; and cereals. McDonald's restaurants in many countries around the
world offer many of these same products as well as other products and limited
breakfast menus. The Company tests new products on an ongoing basis.
McDonald's restaurants are located in all fifty of the United States and the
District of Columbia, and in many foreign locations, principally Japan, Canada,
Germany, England, Australia and France. At March 31, 1995, there were 15,370
restaurants worldwide, of which 9,795 were located in the United States and
5,575 in 78 other countries. An additional 327 restaurants were under
construction at March 31, 1995, including 228 outside the United States.
At March 31, 1995, 68% of McDonald's restaurants were operated by independent
franchisees, 21% were operated by the Company and its subsidiaries and 11% were
operated by affiliates (entities in which the Company and/or its subsidiaries
have an equity interest of 50% or less and in which the remaining equity
interest generally is owned by a local resident).
The Company's principal executive offices are located at One McDonald's
Plaza, Oak Brook, Illinois 60521, telephone: (708) 575-3000.
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<PAGE>
MCDONALD'S CORPORATION
SUMMARY CONSOLIDATED FINANCIAL DATA(1)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
----------------- -------------------------------------------------
1995(2) 1994(2) 1994 1993 1992 1991 1990
-------- -------- --------- --------- --------- --------- ---------
(U.S. DOLLARS IN MILLIONS, EXCEPT PER SHARE OF COMMON STOCK DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Systemwide sales
(unaudited)(3)......... $6,671.6 $5,709.2 $25,987.4 $23,586.9 $21,885.4 $19,928.2 $18,758.9
======== ======== ========= ========= ========= ========= =========
Income statement data:
Sales by Company-
operated restaurants. 1,511.6 1,244.7 5,792.6 5,157.2 5,102.5 4,908.5 5,018.9
Revenues from
franchised
restaurants.......... 649.7 551.3 2,528.2 2,250.9 2,030.8 1,786.5 1,620.7
-------- -------- --------- --------- --------- --------- ---------
Total revenues........ 2,161.3 1,796.0 8,320.8 7,408.1 7,133.3 6,695.0 6,639.6
Income before
provision for income
taxes................ 435.1 377.4 1,886.6 1,675.7 1,448.1 1,299.4 1,246.3
Net income............ 280.7 243.4 1,224.4 1,082.5 958.6 859.6 802.3
======== ======== ========= ========= ========= ========= =========
Balance sheet data:
Shareholders' equity
at end of period..... $7,246.6 $6,462.8 $ 6,885.4 $ 6,274.1 $ 5,892.4 $ 4,835.1 $ 4,182.3
Long-term debt at end
of period............ 3,986.4 3,560.0 2,935.4 3,489.4 3,176.4 4,267.4 4,428.7
Total assets at end of
period............... 14,213.5 12,183.1 13,591.9 12,035.2 11,681.2 11,349.1 10,667.5
======== ======== ========= ========= ========= ========= =========
Per share of Common
Stock:(4)..............
Net income............ $ 0.39 $ 0.33 $ 1.68 $ 1.45 $ 1.30 $ 1.17 $ 1.10
Dividends declared.... 0.06 0.05 0.23 0.21 0.20 0.18 0.17
======== ======== ========= ========= ========= ========= =========
Other data:
Ratio of earnings to
fixed charges(5)..... 4.66 4.70 5.26 4.86 3.96 3.53 3.48
======== ======== ========= ========= ========= ========= =========
Number of restaurants
at end of period:
Operated by
franchisees........ 10,477 9,886 10,458 9,832 9,237 8,735 8,131
Operated by the
Company............ 3,143 2,741 3,083 2,699 2,551 2,547 2,643
Operated by
affiliates......... 1,750 1,491 1,664 1,462 1,305 1,136 1,029
-------- -------- --------- --------- --------- --------- ---------
Total restaurants. 15,370 14,118 15,205 13,993 13,093 12,418 11,803
======== ======== ========= ========= ========= ========= =========
</TABLE>
- - --------
(1) The summary Income statement data, Balance sheet data and Number of
restaurants data should be read in conjunction with the audited
consolidated financial statements and accompanying Financial comments and
the unaudited condensed consolidated financial statements and accompanying
Financial comments of the Company in the documents incorporated by
reference herein. See "Incorporation of Certain Documents by Reference."
(2) The financial information presented for the three months ended March 31,
1995 and 1994 is unaudited. In the opinion of the Company, all adjustments
(consisting of normal recurring accruals) necessary for a fair presentation
have been included.
(3) Systemwide sales represent sales by all Company-operated, franchised and
affiliated restaurants.
(4) Per share of Common Stock data has been restated to reflect a two-for-one
Common Stock split which was effected in the form of a stock dividend
distributed on June 24, 1994, to common shareholders of record on June 7,
1994.
(5) The ratios of earnings to fixed charges shown above have been computed on a
total enterprise basis. Earnings represent income before provision for
income taxes and fixed charges. Fixed charges consist of interest on all
indebtedness, amortization of debt issuance costs and discount or premium
relating to any indebtedness, and such portion of rental charges (after
reduction for related sublease income) considered to be representative of
the interest component in the particular case.
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<PAGE>
CAPITALIZATION OF MCDONALD'S CORPORATION
The following table sets forth the capitalization of the Company and its
consolidated subsidiaries at March 31, 1995 and as adjusted to give effect to
the issuance on June 13, 1995 of bonds totaling DM125 million and the
application of the proceeds of that issuance.
<TABLE>
<CAPTION>
MARCH 31, 1995
---------------------
AS
OUTSTANDING ADJUSTED
----------- ---------
(IN MILLIONS)
<S> <C> <C>
Short-term debt, including current portion of long-
term debt............................................ $ 499.8 $ 499.8
Long-term debt, less current portion.................. 3,986.4 3,910.3(1)
DM125,000,000 bonds, 3.25% due 2000................... -- 80.9(2)
Shareholders' equity(3)............................... 7,246.6 7,246.6
--------- ---------
Total capitalization(3)(4)............................ $11,732.8 $11,737.6
========= =========
</TABLE>
- - --------
(1) Reflects the application of the net proceeds of U.S.$76.1 million from the
issuance of DM125 million bonds.
(2) Principal less unamortized discount translated at June 27, 1995 foreign
exchange rate. There has not been a material change in this rate subsequent
to June 27, 1995.
(3) At March 31, 1995, the Company had 1.25 billion authorized shares of Common
Stock, without par value, of which 830.3 million were issued and 694.8
million were outstanding. In addition, at March 31, 1995 the Company had
165.0 million authorized shares of preferred stock, without par value, of
which 11.2 million were issued and outstanding. There has been no material
change in the consolidated capitalization of the Company since March 31,
1995.
(4) The capitalization table presented above does not reflect the exchange
offer of the Company's Preferred Stock, Series E for 8.35% subordinated
deferrable interest debentures due 2025. The exchange offer was completed
on June 30, 1995 and was effective as of July 1, 1995. The transaction will
be recorded as an increase in debt and a reduction in Shareholders' equity
of approximately $129 million. The transaction has no effect on the
consolidated capitalization of the Company.
S-5
<PAGE>
DESCRIPTION OF BEARER NOTES
The following description of the particular terms of the Bearer Notes (to the
extent not superseded in the applicable Pricing Supplement) supplements, and to
the extent inconsistent therewith replaces, the description of the general
terms and provisions of the Debt Securities set forth in the Prospectus, to
which description reference is hereby made.
GENERAL
The Notes are to be issued as a series of Debt Securities under the Indenture
limited to an aggregate initial public offering price or purchase price of
$584,662,000 or the equivalent thereof in one or more foreign or composite
currencies, including ECU, subject to reduction as a result of the sale of
other Debt Securities. The U.S. dollar equivalent of the public offering price
or purchase price of a Bearer Note denominated in a Specified Currency other
than U.S. dollars will be determined by an agent designated by the Company,
which initially shall be Morgan Guaranty Trust Company of New York, 60 Victoria
Embankment, London, England EC4Y-OJP (the "Principal Paying Agent"), on the
basis of the noon buying rate in The City of New York for cable transfers in
foreign currencies as certified for customs purposes by the Federal Reserve
Bank of New York (the "Market Exchange Rate") for such Specified Currency on
the Business Day (as defined below) immediately prior to the applicable issue
date; provided, however, that in the case of ECU, the Market Exchange Rate
shall be the rate of exchange determined by the Commission of the European
Communities (or any successor thereof) as published in the Official Journal of
the European Communities, or any successor publication, on the Business Day
immediately preceding the applicable issue date.
The Notes will consist of Bearer Notes and Registered Notes, each of which
will be offered on a continuous basis. In connection with their original
issuance and during the period of 40 days after their Original Issue Dates,
Bearer Notes will not be offered, sold or delivered, directly or indirectly, to
a U.S. Person or to any person within the United States, except to the extent
permitted under U.S. Treasury regulations, as more fully set forth under "Plan
of Distribution." As used herein, "United States" means the United States of
America and its possessions, and "U.S. Person" means a citizen or resident of
the United States, a corporation, partnership or other entity created or
organized in or under the laws of the United States, or an estate or trust the
income of which is subject to United States federal income taxation regardless
of its source. A separate Prospectus Supplement will describe the terms of any
such Registered Notes.
Payments in respect of Bearer Notes will be made without deduction for United
States withholding taxes to the extent described under "Payment of Additional
Amounts" below. Each Bearer Note may be redeemed at the Redemption Price
applicable thereto, if certain events occur involving United States withholding
taxes or information reporting requirements. See "Tax Redemption" and "Special
Tax Redemption" below. Other than in such event, Bearer Notes may not be
redeemed by the Company prior to Stated Maturity (as defined below) unless
otherwise specified in the applicable Pricing Supplement. See "Optional
Redemption, Repayment and Repurchase" below. Unless otherwise specified in the
applicable Pricing Supplement, the Bearer Notes will not be subject to any
sinking fund.
Each Bearer Note will mature at par (unless otherwise specified in the
applicable Pricing Supplement) on any day from 184 days to 60 years from its
Original Issue Date (as defined below), as selected by the purchaser and agreed
to by the Company. Each Bearer Note whose Specified Currency is Japanese yen
will have a Stated Maturity of not less than one year from its Original Issue
Date, and will not be subject to optional redemption or repayment prior to such
time. Each Bearer Note may also be subject to redemption at the option of the
Company, or to repayment at the option of the Holder, at a price specified in
the applicable Pricing Supplement prior to its Stated Maturity. Each Floating
Rate Note will mature on an Interest Payment Date for such Note.
The Pricing Supplement relating to a Bearer Note will describe the following
terms: (i) the Specified Currency for such Note (and, if the Specified Currency
is other than U.S. dollars, certain other terms relating
S-6
<PAGE>
to such Note and such Specified Currency, including the authorized
denominations of such Note); (ii) whether such Note is a Fixed Rate Note, a
Floating Rate Note or an Indexed Note; (iii) the price (expressed as a
percentage of the aggregate principal (or, in the case of a Principal Indexed
Note, face) amount thereof) at which such Note will be issued (the "Issue
Price"); (iv) the date on which such Note will be issued (the "Original Issue
Date"); (v) the date on which such Note will mature (the "Stated Maturity");
(vi) if such Note is a Fixed Rate Note, the rate per annum at which such Note
will bear interest, if any, and the dates on which interest will be payable if
other than February 15 and August 15; (vii) if such Note is a Floating Rate
Note, the Base Rate, the Initial Interest Rate, the Interest Reset Period, the
Interest Payment Dates, the Index Maturity, the Maximum Interest Rate, if any,
the Minimum Interest Rate, if any, the Spread and/or Spread Multiplier, if any
(all as defined below), and any other terms relating to the particular method
of calculating the interest rate for such Note; (viii) whether such Note is an
Original Issue Discount Note (as defined below); (ix) if such Note is an
Indexed Note, the manner in which the principal amount of such Note payable at
Stated Maturity will be determined; (x) whether such Note may be redeemed at
the option of the Company, or repaid at the option of the Holder, prior to
Stated Maturity as described under "Optional Redemption, Repayment and
Repurchase" below, and, if so, the provisions relating to such redemption or
repayment, including, in the case of an Original Issue Discount Note or Indexed
Note, the information necessary to determine the amount due upon redemption or
repayment; and (xi) any other terms of such Note not inconsistent with the
provisions of the Indenture under which such Note will be issued.
"Business Day" with respect to any Bearer Note means any day, other than a
Saturday or Sunday, that is (i) neither a legal holiday nor a day on which
banking institutions are authorized or required by law, regulation or executive
order to be close in (a) The City of New York, (b) the City of Chicago, (c)
London, England, (d) the place in which such Note or any coupon relating
thereto is presented for payment or (e) if the Specified Currency for such Note
is other than U.S. dollars, the principal financial center of the country
issuing such Specified Currency (which, in the case of ECU, shall be
Luxembourg); (ii) if the Specified Currency for such Note is ECU, not a day
designated as an ECU Non-Settlement Day by the ECU Banking Association (or
otherwise generally regarded in the ECU interbank market as a day on which
payments in ECU shall not be made) and (iii) if such Note is a LIBOR Note (as
defined below), a London Business Day (as defined below). "London Business Day"
means any day (i) if the Index Currency (as defined below) is other than ECU,
on which dealings in such Index Currency are transacted in the London interbank
market or (ii) if the Index Currency is ECU, that is not designated as an ECU
Non-Settlement Day by the ECU Banking Association (or otherwise generally
regarded in the ECU interbank market as a day on which payments in ECU shall
not be made).
"Maturity," when used with respect to any Note, means the date on which the
principal of such Note or an installment of principal becomes due and payable
as provided therein or in the Indenture, whether at Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Original Issue Discount Note" means (i) a Bearer Note, including any such
Bearer Note whose interest rate is zero, that has a stated redemption price at
Stated Maturity that exceeds its Issue Price by at least 0.25% of its aggregate
principal amount, multiplied by the number of full years from the Original
Issue Date to the Stated Maturity for such Bearer Note and (ii) any other
Bearer Note designated by the Company as issued with original issue discount
for United States federal income tax purposes.
DENOMINATION, FORM AND TRANSFER
The minimum aggregate principal amount of Bearer Notes that may be purchased
is U.S.$25,000 (or, unless otherwise set forth in the applicable Pricing
Supplement, the approximate equivalent thereof in other currencies). Unless
otherwise specified in the applicable Pricing Supplement, the authorized
denominations of Bearer Notes denominated in U.S. dollars will be U.S.$25,000
and any larger amount that is an integral multiple of U.S.$5,000. The
authorized denominations of Bearer Notes having a Specified Currency other than
U.S. dollars will be set forth in the applicable Pricing Supplement.
S-7
<PAGE>
All Bearer Notes that have the same Original Issue Date and otherwise
identical terms will be represented initially by interests in a temporary
Global Security in bearer form, without coupons (a "Temporary Global Note"), to
be deposited with a common depositary in London (the "Depositary") for Morgan
Guaranty Trust Company of New York, Brussels office, as operator of the
Euroclear System ("Euroclear") and Cedel Bank, societe anonyme ("Cedel"), for
credit to the accounts designated by or on behalf of the purchasers thereof. On
or after the 40th day following the issuance of a Temporary Global Note (the
"Exchange Date"), and subject to the receipt of a Certificate of Non-U.S.
Beneficial Ownership, beneficial interests in that Temporary Global Note will
be exchangeable for interests in a definitive Global Security in bearer form,
without coupons (a "Permanent Global Note"), in a denomination equal to the
aggregate principal amount of all interests in the Temporary Global Note so
exchanged. A "Certificate of Non-U.S. Beneficial Ownership" is a certificate,
delivered on the Exchange Date or on any Interest Payment Date prior to the
Exchange Date, to the effect that the beneficial interest to which the
certificate relates is owned by a person that is not a U.S. Person or is owned
by or through a financial institution in compliance with applicable U.S.
Treasury regulations. Each Permanent Global Note will be deposited with the
Depositary for credit to the account or accounts designated by or on behalf of
the beneficial owner or owners thereof. If the beneficial owner of a Bearer
Note represented by an interest in a Permanent Global Note gives 30 days'
notice to the Principal Paying Agent for such Note through either Euroclear or
Cedel, such Permanent Global Note shall be exchanged in its entirety, at no
expense to the beneficial owners of interests therein, for definitive
individual Bearer Notes, with appropriate coupons attached, in any authorized
denomination or denominations. No Bearer Note will be delivered in or to the
United States. References herein to "Bearer Notes" shall, except where
otherwise indicated, include interests in a Temporary or Permanent Global Note
as well as individual Bearer Notes and any appurtenant coupons.
Transfers of interests in a Temporary or Permanent Global Note will be made
by Euroclear or Cedel in accordance with their customary operating procedures.
Title to individual Bearer Notes and coupons will pass by physical delivery.
The bearer of each coupon, whether or not the coupon is attached to an
individual Bearer Note, shall be subject to and bound by all the provisions
contained in the individual Bearer Note to which such coupon relates. The
bearer of any individual Bearer Note and any coupon may, to the fullest extent
permitted by applicable law, be treated at all times by all persons and for all
purposes as the absolute owner of such Note or coupon, as the case may be,
regardless of any notice of ownership, theft or loss or of any writing thereon.
The following legend will appear on each Permanent Global Note and on all
individual Bearer Notes and any coupons: "Any United States Person who holds
this obligation will be subject to limitations under the United States income
tax laws, including the limitations provided in Sections 165(j) and 1287(a) of
the Internal Revenue Code." The sections referred to in the legend provide
that, with certain exceptions, a United States taxpayer that holds an interest
in a Global Security or an individual Bearer Note or coupon will not be
permitted to deduct any loss, and will not be eligible for capital gain
treatment with respect to any gain, realized on a sale, exchange, redemption or
other disposition of an interest in such Global Security or such individual
Bearer Note or coupon. See "Limitations on Issuance of Bearer Securities" in
the accompanying Prospectus.
Bearer Notes may not be exchanged for Registered Notes.
PAYMENTS AND PAYING AGENTS
Unless otherwise specified in the applicable Pricing Supplement and except,
under certain circumstances, for Bearer Notes having Specified Currencies other
than U.S. dollars, payments of the principal of and any premium and interest on
a Bearer Note will be made only in the Specified Currency for such Note. See
"Currency Risks" below.
S-8
<PAGE>
Principal or interest on each Temporary Global Note will be paid to each of
Euroclear and Cedel with respect to that portion of such temporary Global Note
held for its account, but only upon receipt as of the relevant Interest Payment
Date of a Certificate of Non-U.S. Beneficial Ownership and upon notation
thereon of such payment. Each of Euroclear and Cedel will undertake in such
circumstances to credit such interest received by it to the respective accounts
having an interest in such Temporary Global Note.
The principal of and any premium or interest on each Permanent Global Note
will be paid to each of Euroclear and Cedel with respect to that portion of
such Permanent Global Note held for its account upon notation thereon of such
payment. Each of Euroclear and Cedel will undertake in such circumstances to
credit such principal, premium and interest received by it to the respective
accounts having an interest in such Permanent Global Note. All such payments
will be made to Euroclear and Cedel in immediately available funds.
A payment in respect of an individual Bearer Note or any coupon will be made
only against surrender of such Note or coupon at the offices of such Paying
Agents (as defined below) outside the United States as the Company may from
time to time appoint. At the direction of the Holder of such a Note or coupon,
and subject to applicable laws and regulations, such payments will be made by
check drawn on a bank in The City of New York mailed to an address outside the
United States furnished by such Holder or, at the option of such Holder, by
wire transfer (pursuant to written instructions supplied by such Holder) to an
account maintained by the payee with a bank located outside the United States.
No payment in respect of an individual Bearer Note or coupon will be made upon
presentation of such Note or coupon at any office or agency of the Trustee or
any other paying agency maintained by the Company in the United States, nor
will any such payment be made by transfer to an account, or mailed to an
address, in the United States. Notwithstanding the foregoing, if U.S. dollar
payments in respect of Bearer Notes or any coupons at the offices of all Paying
Agents outside the United States become illegal or are effectively precluded
because of the imposition of exchange controls or similar restrictions on the
full payment or receipt of such amounts in U.S. dollars, the Company will
appoint an office or agency (which may be the Trustee) in the United States at
which such payments may be made.
Payments of principal, premium (if any) and interest (if any) with respect to
Notes denominated and payable in ECU will be made at the specified office of a
Paying Agent outside the United States by credit or transfer to an ECU account
specified by the payee. Payments in a component currency (if required, as set
forth under "Currency Risks--Payment Currency" below) will be made in the
Payment Currency (as defined below) at the specified office of a Paying Agent
in the country of the Payment Currency or, if none or at the option of the
holder, at the specified office of any Paying Agent outside the United States
either by a check drawn on, or by transfer to an account specified by the payee
with, a bank in the financial center of the country of the Payment Currency.
Payments will be subject in all cases to any fiscal or other laws and
regulations applicable thereto, but without prejudice to the provisions
regarding taxation discussed below.
The specified office of the Trustee and the names and offices of the initial
paying agents (each, including its successors, a "Paying Agent") are set forth
on the back cover of this Prospectus Supplement. The Company reserves the right
at any time to vary or terminate the appointment of any Paying Agent and to
appoint additional or other Paying Agents and to approve any change in the
office through which any Paying Agent acts, provided that there will at all
times be a Paying Agent (which may be the Trustee) in at least one city in
Europe, which, so long as the Bearer Notes are listed on the Luxembourg Stock
Exchange and the rules of the exchange so require, shall include (or be)
Luxembourg. Notice of any such termination or appointment and of any changes in
the specified offices of a Trustee or any Paying Agent will be given to the
Holders of Bearer Notes in accordance with "Notices" below.
Unless otherwise specified in the applicable Pricing Supplement, if the
principal of any Original Issue Discount Note is declared to be due and payable
immediately as described under "Description of Debt Securities--Events of
Default" in the Prospectus, the amount of principal due and payable with
respect to such Note shall be limited to the aggregate principal amount of such
Note multiplied by the sum of its Issue
S-9
<PAGE>
Price (expressed as a percentage of the aggregate principal amount) plus the
original issue discount amortized from the Original Issue Date to the date of
declaration, which amortization shall be calculated using the "interest method"
(computed in accordance with generally accepted accounting principles in effect
on the date of declaration).
Interest payments in respect of Bearer Notes will equal the amount of
interest accrued from and including the immediately preceding Interest Payment
Date in respect of which interest has been paid or duly made available for
payment (or from and including the date of issue, if no interest has been paid
with respect to the applicable Note) to but excluding the related Interest
Payment Date or Maturity, as the case may be.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Original Issue Date at the
rate per annum stated on the face thereof and in the applicable Pricing
Supplement until the principal amount thereof is paid or made available for
payment. Unless otherwise set forth in the applicable Pricing Supplement,
interest on each Fixed Rate Note will be payable semiannually in arrears on
each February 15 and August 15 and at Maturity. Each payment of interest in
respect of an Interest Payment Date shall include interest accrued through the
day before such Interest Payment Date. Interest on Fixed Rate Notes will be
computed on the basis of a 360-day year of twelve 30-day months.
Any payment of principal, premium or interest required to be made in respect
of a Fixed Rate Note on a date that is not a Business Day for such Note need
not be made on such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on such date, and no additional
interest shall accrue as a result of such delayed payment.
FLOATING RATE NOTES
Each Floating Rate Note will bear interest from its Original Issue Date to
the first Interest Reset Date (as defined below) for such Note at the initial
interest rate set forth on the face thereof and in the applicable Pricing
Supplement (the "Initial Interest Rate"). Thereafter, the interest rate on such
Note for each Interest Reset Period (as defined below) will be determined by
reference to an interest rate basis (the "Base Rate"), plus or minus the
Spread, if any, and/or multiplied by the Spread Multiplier, if any. The
"Spread" is the number of basis points (one basis point equals one one-
hundredth of a percentage point) that may be specified in the applicable
Pricing Supplement as being applicable to such Note, and the "Spread
Multiplier" is the percentage that may be specified in the applicable Pricing
Supplement as being applicable to such Note. The applicable Pricing Supplement
will designate one or more of the following Base Rates as applicable to a
Floating Rate Note: (i) the CD Rate (a "CD Rate Note"), (ii) the CMT Rate (a
"CMT Rate Note"), (iii) the Commercial Paper Rate (a "Commercial Paper Rate
Note"), (iv) the Federal Funds Rate (a "Federal Funds Rate Note"), (v) LIBOR (a
"LIBOR Note"), (vi) the Prime Rate (a "Prime Rate Note"), (vii) the Treasury
Rate (a "Treasury Rate Note") or (viii) such other Base Rate or formula as is
set forth in such Pricing Supplement and in such Note. The "Index Maturity" for
any Note is the period of maturity of the instrument, obligation or index from
which the Base Rate is calculated.
As specified in the applicable Pricing Supplement, a Floating Rate Note may
also have either or both of the following (in each case expressed as a rate per
annum on a simple interest basis): (i) a maximum limitation, or ceiling, on the
rate at which interest may accrue during any interest period ("Maximum Interest
Rate") and (ii) a minimum limitation, or floor, on the rate at which interest
may accrue during any interest period ("Minimum Interest Rate").
Notwithstanding any Maximum Interest Rate that may be applicable to any
Floating Rate Note, the interest rate on a Floating Rate Note will in no event
be higher than the maximum rate permitted by applicable law, as the same may be
modified by United States law of general application. The Notes will be
governed by the law of the State of New York and, under such law, the maximum
rate of interest, with certain exceptions, is 25% per annum on a simple
interest basis.
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The Company will appoint, and enter into agreements with, agents (each a
"Calculation Agent") to calculate interest rates on Floating Rate Notes. Unless
otherwise specified in a Pricing Supplement, the Principal Paying Agent shall
be the Calculation Agent for each Bearer Note.
The interest rate on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually (such period being the "Interest
Reset Period" for such Note, and the first day of each Interest Reset Period
being an "Interest Reset Date"), as specified in the applicable Pricing
Supplement. Unless otherwise specified in the applicable Pricing Supplement,
the Interest Reset Dates will be, in the case of Floating Rate Notes that reset
daily, each Business Day; in the case of Floating Rate Notes (other than
Treasury Rate Notes) that reset weekly, Wednesday of each week; in the case of
Treasury Rate Notes that reset weekly, Tuesday of each week (except as provided
below under "Treasury Rate Notes"); in the case of Floating Rate Notes that
reset monthly, the third Wednesday of each month; in the case of Floating Rate
Notes that reset quarterly, the third Wednesday of March, June, September and
December of each year; in the case of Floating Rate Notes that reset
semiannually, the third Wednesday of each of the two months of each year
specified in the applicable Pricing Supplement; and, in the case of Floating
Rate Notes that reset annually, the third Wednesday of one month of each year
specified in the applicable Pricing Supplement. If an Interest Reset Date for
any Floating Rate Note would otherwise be a day that is not a Business Day,
such Interest Reset Date shall be postponed to the next succeeding Business
Day, except that, in the case of a LIBOR Note, if such Business Day is in the
next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day.
Unless otherwise specified in the applicable Pricing Supplement, interest
payable in respect of Floating Rate Notes shall be the accrued interest from
and including the Original Issue Date or the last date to which interest has
been paid or duly provided for, as the case may be, to but excluding the
applicable Interest Payment Date or Maturity, as the case may be.
Unless otherwise specified in the applicable Pricing Supplement, with respect
to a Floating Rate Note, accrued interest shall be calculated by multiplying
the principal amount of such Note (or, in the case of an Indexed Note, unless
otherwise specified in the applicable Pricing Supplement, the face amount of
such Indexed Note) by an accrued interest factor. Such accrued interest factor
will be computed by adding the interest factors calculated for each day in the
period for which accrued interest is being calculated. Unless otherwise
specified in the applicable Pricing Supplement, the interest factor (expressed
as a decimal calculated to seven decimal places without rounding) for each such
day shall be computed by dividing the interest rate in effect on such day by
360, in the case of CD Rate Notes, Commercial Paper Rate Notes, Federal Funds
Rate Notes, LIBOR Notes and Prime Rate Notes, or by the actual number of days
in the year, in the case of Treasury Rate Notes or CMT Rate Notes. For purposes
of making the foregoing calculation, the interest rate in effect on any
Interest Reset Date will be the applicable rate as reset on such date.
Unless otherwise specified in the applicable Pricing Supplement, all
percentages resulting from any calculation of the rate of interest on a
Floating Rate Note will be rounded, if necessary, to the nearest 1/100,000 of
1% (.0000001), with five one-millionths of a percentage point rounded upward,
and all currency amounts used in or resulting from such calculation on Floating
Rate Notes will be rounded to the nearest one-hundredth of a unit (with .005 of
a unit being rounded upward).
Unless otherwise indicated in the applicable Pricing Supplement and except as
provided below, interest will be payable, in the case of Floating Rate Notes
that reset daily, weekly or monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December of each year, as
specified in the applicable Pricing Supplement; in the case of Floating Rate
Notes that reset quarterly, on the third Wednesday of March, June, September,
and December of each year; in the case of Floating Rate Notes that reset
semiannually, on the third Wednesday of each of two months of each year
specified in the applicable Pricing Supplement; and, in the case of Floating
Rate Notes that reset annually, on the third Wednesday of one month of each
year specified in the applicable Pricing Supplement (each such day being
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an "Interest Payment Date") and, in each case, at Maturity. If an Interest
Payment Date (other than at Maturity) with respect to any Floating Rate Note
would otherwise be a day that is not a Business Day, such Interest Payment Date
shall be postponed to the next succeeding Business Day, except that, in the
case of a LIBOR Note, if such Business Day would fall in the next succeeding
calendar month, such Interest Payment Date shall be the immediately preceding
Business Day.
If the Maturity of a Floating Rate Note falls on a day that is not a Business
Day, the required payment of principal, premium (if any) and/or interest will
be made on the next succeeding Business Day as if made on the date such payment
was due, and no interest shall accrue on such payment for the period from and
after Maturity to the date of such payment on the next succeeding Business Day.
Upon the request of the Holder of any Floating Rate Note, the Calculation
Agent for such Note will provide to such Holder the interest rate then in
effect, and, if determined, the interest rate that will become effective on the
next Interest Reset Date, with respect to such Floating Rate Note. In addition,
such information will be communicated to the Luxembourg Stock Exchange and will
be made available at the offices of the Principal Paying Agent in London and at
the Luxembourg Stock Exchange.
"H.15(519)" means the publication entitled "Statistical Release H.15(519),
Selected Interest Rates", or any successor publication, published by the Board
of Governors of the Federal Reserve System. "Composite Quotations" means the
daily statistical release entitled "Composite 3:30 p.m. Quotations for U.S.
Government Securities" published by the Federal Reserve Bank of New York.
CD RATE NOTES
Each CD Rate Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the CD Rate and the Spread and/or
Spread Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "CD
Rate" for each Interest Reset Period, as determined by the Calculation Agent
for such CD Rate Note, shall be the rate as of the second Business Day prior to
the Interest Reset Date for such Interest Reset Period (a "CD Rate
Determination Date") for negotiable certificates of deposit having the Index
Maturity designated in the applicable Pricing Supplement, as published in
H.15(519) under the heading "CDs (Secondary Market)". In the event that such
rate is not published prior to 3:00 p.m., New York City time, on the
Calculation Date (as defined below) pertaining to such CD Rate Determination
Date, then the "CD Rate" for such Interest Reset Period will be the rate on
such CD Rate Determination Date for negotiable certificates of deposit of the
Index Maturity designated in the applicable Pricing Supplement as published in
Composite Quotations under the heading "Certificates of Deposit". If by 3:00
p.m., New York City time, on such Calculation Date such rate is not yet
published in either H.15(519) or Composite Quotations, then the "CD Rate" for
such Interest Reset Period will be calculated by the Calculation Agent for such
CD Rate Note and will be the arithmetic mean of the secondary market offered
rates as of 10:00 a.m., New York City time, on such CD Rate Determination Date,
of three leading nonbank dealers in negotiable U.S. dollar certificates of
deposit in The City of New York selected by the Calculation Agent for such CD
Rate Note for negotiable certificates of deposit of major money market banks
(in the market for negotiable certificates of deposit) with a remaining
maturity closest to the Index Maturity designated in the Pricing Supplement in
a denomination of $5,000,000; provided, however, that if the three dealers
selected as aforesaid by such Calculation Agent are not quoting offered rates
as mentioned in this sentence, the "CD Rate" for such Interest Reset Period
will be the CD Rate in effect on such CD Rate Determination Date, or, if none,
the Initial Interest Rate.
The "Calculation Date" pertaining to any CD Rate Determination Date shall be
the earlier of (i) the tenth calendar day after such CD Rate Determination Date
or, if such day is not a Business Day, the next succeeding Business Day or (ii)
the Business Day immediately preceding the applicable Interest Payment Date or
Maturity, as the case may be.
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COMMERCIAL PAPER RATE NOTES
Each Commercial Paper Rate Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the Commercial Paper
Rate and the Spread and/or Spread Multiplier, if any, specified in such Note
and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Commercial Paper Rate" for each Interest Reset Period will be determined by
the Calculation Agent for such Commercial Paper Rate Note as of the second
Business Day prior to the Interest Reset Date for such Interest Reset Period (a
"Commercial Paper Rate Determination Date") and shall be the Money Market Yield
(as defined below) on such Commercial Paper Rate Determination Date of the rate
for commercial paper having the Index Maturity specified in the applicable
Pricing Supplement, as such rate shall be published in H.15(519) under the
heading "Commercial Paper". In the event that such rate is not published prior
to 3:00 p.m., New York City time, on the Calculation Date (as defined below)
pertaining to such Commercial Paper Rate Determination Date, then the
"Commercial Paper Rate" for such Interest Reset Period shall be the Money
Market Yield on such Commercial Paper Rate Determination Date of the rate for
commercial paper of the specified Index Maturity as published in Composite
Quotations under the heading "Commercial Paper". If by 3:00 p.m., New York City
time, on such Calculation Date such rate is not yet published in either
H.15(519) or Composite Quotations, then the "Commercial Paper Rate" for such
Interest Reset Period shall be the Money Market Yield of the arithmetic mean of
the offered rates, as of 11:00 a.m., New York City time, on such Commercial
Paper Rate Determination Date of three leading dealers of commercial paper in
The City of New York selected by the Calculation Agent for such Commercial
Paper Rate Note for commercial paper of the specified Index Maturity placed for
an industrial issuer whose bonds are rated "AA" or the equivalent by a
nationally recognized statistical rating agency; provided, however, that if the
three dealers selected as aforesaid by such Calculation Agent are not quoting
offered rates as mentioned in this sentence, the "Commercial Paper Rate" for
such Interest Reset Period will be the Commercial Paper Rate in effect on such
Commercial Paper Rate Determination Date, or, if none, the Initial Interest
Rate.
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
D X 360
Money Market Yield = ----------------------- X 100
360 - (D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal, and "M" refers to the
actual number of days in the period for which accrued interest is being
calculated.
The "Calculation Date" pertaining to any Commercial Paper Rate Determination
Date shall be the earlier of (i) the tenth calendar day after such Commercial
Paper Rate Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding the
applicable Interest Payment Date or Maturity, as the case may be.
FEDERAL FUNDS RATE NOTES
Each Federal Funds Rate Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the Federal Funds Rate
and the Spread and/or Spread Multiplier, if any, specified in such Note and in
the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "Federal
Funds Rate" for each Interest Reset Period shall be the effective rate on the
second Business Day immediately prior to the Interest Reset Date for such
Interest Reset Period (a "Federal Funds Rate Determination Date") for Federal
Funds as published in H.15(519) under the heading "Federal Funds (Effective)".
In the event that such rate is not published prior to 3:00 p.m., New York City
time, on the Calculation Date (as defined below) pertaining to
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such Federal Funds Rate Determination Date, the "Federal Funds Rate" for such
Interest Reset Period shall be the rate on such Federal Funds Rate
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate". If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not yet published in either H.15(519) or
Composite Quotations, then the "Federal Funds Rate" for such Interest Reset
Period shall be the arithmetic mean of the rate, as of 9:00 a.m., New York City
time, on the Federal Funds Rate Determination Date for the last transaction of
not less than $5,000,000 in overnight federal funds arranged by each of three
leading brokers of federal funds transactions in the City of New York selected
by the Calculation Agent for such Federal Funds Rate Note; provided, however,
that if the brokers selected as aforesaid by the Calculation Agent are not
quoting as set forth above, the "Federal Funds Rate" for such Interest Reset
Period will be the Federal Funds Rate in effect on such Federal Funds Rate
Determination Date, or, if none, the Initial Interest Rate.
The "Calculation Date" pertaining to any Federal Funds Rate Determination
Date shall be the earlier of (i) the tenth calendar day after such Federal
Funds Rate Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding the
applicable Interest Payment Date or Maturity, as the case may be.
LIBOR NOTES
Each LIBOR Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to LIBOR and the Spread and/or Spread
Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "LIBOR" for
each Interest Reset Period will be determined by the Calculation Agent for such
LIBOR Note as follows:
(i) On the second London Business Day prior to the Interest Reset Date
for such Interest Reset Period (a "LIBOR Interest Determination Date"), the
Calculation Agent for such LIBOR Note will determine (a) if "LIBOR Reuters"
is specified in the applicable Pricing Supplement, the arithmetic mean of
the offered rates (unless the specified Designated LIBOR Page by its terms
provides only for a single rate, in which case such single rate shall be
used) for deposits in the Index Currency having the Index Maturity
designated in the applicable Pricing Supplement, commencing on the second
London Business Day immediately following such LIBOR Interest Determination
Date, that appear on the Designated LIBOR Page specified in the applicable
Pricing Supplement as of 11:00 a.m., London time, on such LIBOR Interest
Determination Date, if at least two such offered rates appear (unless, as
aforesaid, only a single rate is required) on such Designated LIBOR Page,
or (b) if "LIBOR Telerate" is specified in the applicable Pricing
Supplement or if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified
as the method for calculating LIBOR, the rate for deposits in the Index
Currency having the Index Maturity designated in the applicable Pricing
Supplement commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date that appears on the
Designated LIBOR Page specified in the applicable Pricing Supplement as of
11:00 a.m., London time, on such LIBOR Interest Determination Date. If
fewer than two such offered rates appear, or if no such rate appears, as
applicable, LIBOR in respect of the related LIBOR Determination Date will
be determined in accordance with the provisions described in clause (ii)
below.
(ii) With respect to a LIBOR Note and an Interest Reset Period to which
this clause (ii) applies, the Calculation Agent will request the principal
London offices of each of four major reference banks in the London
interbank market, as selected by the Calculation Agent, to provide the
Calculation Agent with its offered quotation for deposits in the Index
Currency for the period of the Index Maturity designated in the applicable
Pricing Supplement, commencing on the second London Business Day
immediately following such LIBOR Interest Determination Date, to prime
banks in the London interbank market at approximately 11:00 a.m., London
time, on such LIBOR Interest Determination Date and in a principal amount
that is representative for a single transaction in such Index Currency in
such market at such time. If at least two such quotations are provided,
LIBOR determined on such
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LIBOR Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR determined on
such LIBOR Interest Determination Date will be the arithmetic mean of the
rates quoted at approximately 11:00 a.m., in the applicable Principal
Financial Center, on such LIBOR Interest Determination Date by three major
banks in such Principal Financial Center selected by the Calculation Agent
for loans in the Index Currency to leading European banks, having the Index
Maturity designated in the applicable Pricing Supplement commencing on the
second London Business Day immediately following such LIBOR Interest
Determination Date and in a principal amount that is representative for a
single transaction in such Index Currency in such market at such time;
provided, however, that if the banks so selected by the Calculation Agent
are not quoting as mentioned in this sentence, LIBOR determined as of such
LIBOR Interest Determination Date will be LIBOR in effect on such LIBOR
Interest Determination Date.
"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is specified in
the applicable Pricing Supplement, the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London interbank rates of major
banks for the applicable Index Currency, or (b) if "LIBOR Telerate" is
specified in the applicable Pricing Supplement or neither "LIBOR Reuters" nor
"LIBOR Telerate" is specified as the method for calculating LIBOR, the display
on the Dow Jones Telerate Service for the purpose of displaying the London
interbank rates of major banks for the applicable Index Currency.
"Index Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency for which LIBOR
shall be calculated. If no such currency is specified in the applicable Pricing
Supplement, the Index Currency shall be U.S. dollars.
"Principal Financial Center" will generally be the capital city of the
country of the specified Index Currency, except that with respect to U.S.
dollars, Italian lire and ECU, the Principal Financial Center shall be The City
of New York, Milan and Luxembourg, respectively.
TREASURY RATE NOTES
Each Treasury Rate Note will bear interest for each Interest Reset Period at
the interest rate calculated with reference to the Treasury Rate and the Spread
and/or Spread Multiplier, if any, specified in such Note and in the applicable
Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Treasury Rate" for each Interest Reset Period will be the rate for the auction
held on the Treasury Rate Determination Date (as defined below) for such
Interest Reset Period of direct obligations of the United States ("Treasury
bills") having the Index Maturity specified in the applicable Pricing
Supplement, as such rate shall be published in H.15(519) under the heading
"U.S. Government Securities-Treasury bills-auction average (investment)" or, in
the event that such rate is not published prior to 3:00 p.m., New York City
time, on the Calculation Date (as defined below) pertaining to such Treasury
Rate Determination Date, the auction average rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) on such Treasury Rate Determination Date as otherwise
announced by the United States Department of the Treasury. In the event that
the results of the auction of Treasury bills having the specified Index
Maturity are not published or reported as provided above by 3:00 p.m., New York
City time, on such Calculation Date, or if no such auction is held on such
Treasury Rate Determination Date, then the "Treasury Rate" for such Interest
Reset Period shall be calculated by the Calculation Agent for such Treasury
Rate Note and shall be a yield to maturity (expressed as a bond equivalent on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 p.m., New York City time, on such Treasury Rate
Determination Date, of three leading primary United States government
securities dealers selected by such Calculation Agent for the issue of Treasury
bills with a remaining maturity closest to the specified Index Maturity;
provided, however, that if the dealers selected as aforesaid by such
Calculation Agent are not quoting bid rates as mentioned in this sentence, then
the "Treasury Rate" for such Interest Reset Period will be the Treasury Rate in
effect on such Treasury Rate Determination Date, or, if none, the Initial
Interest Rate.
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The "Treasury Rate Determination Date" for each Interest Reset Period will be
the day of the week in which the Interest Reset Date for such Interest Reset
Period falls on which Treasury bills would normally be auctioned. Treasury
bills are normally sold at auction on Monday of each week, unless that day is a
legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday. If, as
the result of a legal holiday, an auction is so held on the preceding Friday,
such Friday will be the Treasury Rate Determination Date pertaining to the
Interest Reset Period commencing in the next succeeding week. If an auction
date shall fall on any day that would otherwise be an Interest Reset Date for a
Treasury Rate Note, then such Interest Reset Date shall instead be the Business
Day immediately following such auction date.
The "Calculation Date" pertaining to any Treasury Rate Determination Date
shall be the earlier of (i) the tenth calendar day after such Treasury Rate
Determination Date or, if such a day is not a Business Day, the next succeeding
Business Day or (ii) the Business Day immediately preceding the applicable
Interest Payment Date or Maturity, as the case may be.
PRIME RATE NOTES
Each Prime Rate Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the Prime Rate and the Spread and/or
Spread Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "Prime
Rate" for each Interest Reset Period will be determined by the Calculation
Agent as of the second Business Day prior to the Interest Reset Date for such
Interest Reset Period (a "Prime Rate Determination Date") and shall be the rate
published in H.15(519) under the heading "Bank Prime Loan." In the event that
such rate is not published prior to 9 a.m., New York City time, on the
Calculation Date (as defined below), then the "Prime Rate" for such Interest
Reset Period shall be determined by the Calculation Agent and shall be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen NYMF Page (as defined below) as such bank's prime
rate or base lending rate as in effect for that Prime Rate Determination Date.
If fewer than four such rates but more than one such rate appear on the Reuters
Screen NYMF Page for the Prime Rate Determination Date, the "Prime Rate" will
be determined by the Calculation Agent and will be the arithmetic mean of the
prime rates quoted on the basis of the actual number of days in the year
divided by a 360-day year as of the close of business on such Prime Rate
Determination Date by four major money center banks in The City of New York
selected by the Calculation Agent. If fewer than two such rates appear on the
Reuters Screen NYMF Page, the Prime Rate will be determined by the Calculation
Agent on the basis of the rates furnished in The City of New York by the
appropriate number of substitute banks or trust companies organized and doing
business under the laws of the United States, or any State thereof, having
total equity capital of at least U.S. $500,000,000 and being subject to
supervision or examination by Federal or State authority, selected by the
Calculation Agent to provide such rate or rates; provided, however, that if the
banks selected as aforesaid are not quoting as mentioned in this sentence, the
Prime Rate for such Interest Reset Period will be the Prime Rate in effect on
such Prime Rate Determination Date, or, if none, the Initial Interest Rate.
"Reuters Screen NYMF Page" means the display designated as page "NYMF" on the
Reuters Monitor Money Rates Service (or such other page as may replace the NYMF
page on that service for the purpose of displaying prime rates or base lending
rates of major United States banks).
The "Calculation Date" pertaining to a Prime Rate Determination Date will be
the earlier of (i) the tenth calendar day after such Prime Rate Determination
Date or, if such day is not a Business Day, the next succeeding Business Day or
(ii) the Business Day immediately preceding the applicable Interest Payment
Date or Maturity as the case may be.
CMT RATE NOTES
Each CMT Rate Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the CMT Rate and the Spread and/or
Spread Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, the "CMT
Rate" for each Interest Reset Period as determined by the Calculation Agent for
such CMT Rate Note shall be the rate (i) in the case where the Designated CMT
Telerate Page (as defined below) is 7055, as of the second Business Day prior
to the Interest Reset Date for such Interest Reset Period (a "CMT Determination
Date") or (ii) in the case where the Designated CMT Telerate Page is 7052, for
the week or the month, as specified in the applicable Pricing Supplement, ended
immediately preceding the week in which the CMT Determination Date occurs, in
either case, for the Index Maturity specified in the applicable Pricing
Supplement, as displayed on the Designated CMT Telerate Page under the caption
". . . Treasury Constant Maturities . . . Federal Reserve Board Release H.15
. . . Mondays Approximately 3:45 P.M." If such rate is no longer displayed on
the relevant page, or if not displayed by 3:00 p.m., New York City time, on the
Calculation Date (as defined below) pertaining to such CMT Determination Date,
then the "CMT Rate" for such Interest Reset Period shall be such treasury
constant maturity rate for the Index Maturity specified in the applicable
Pricing Supplement as published in the relevant H.15(519) opposite the caption
"U.S. Government Securities, Treasury Constant Maturities". If such rate is no
longer published, or if not published by 3:00 p.m., New York City time, on the
Calculation Date relating to such CMT Determination Date, then the "CMT Rate"
for such Interest Reset Period shall be such treasury constant maturity rate
for the Index Maturity specified in the applicable Pricing Supplement (or other
United States Treasury rate for such Index Maturity) as may then be published
by either the Board of Governors of the Federal Reserve System or the United
States Department of Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519). If such information is not provided by
3:00 p.m., New York City time, on the Calculation Date relating to such CMT
Determination Date, then the "CMT Rate" for the Interest Reset Period shall be
calculated by the Calculation Agent and will be a yield to maturity, based on
the arithmetic mean of the secondary market closing offer side prices as of
approximately 3:30 p.m., New York City time, on the CMT Determination Date
reported, according to their written records, by three leading primary United
States government securities dealers (each, a "Reference Dealer") in The City
of New York (which may include the Agents or their affiliates) selected by the
Calculation Agent (from five such Reference Dealers selected by the Calculation
Agent and eliminating the higher quotation (or, in the event of equality, one
of the highest) and the lowest quotation (or, in the event of equality, one of
the lowest)), for the most recently issued direct noncallable fixed rate
obligations of the United States ("Treasury Notes") with an original maturity
of approximately the Index Maturity specified in the applicable Pricing
Supplement and a remaining term to maturity of not less than such Index
Maturity minus one year. If the Calculation Agent cannot obtain three such
Treasury Note quotations, the "CMT Rate" for such Interest Reset Period shall
be calculated by the Calculation Agent and will be a yield to maturity based on
the arithmetic mean of the secondary market offer side prices as of
approximately 3:30 p.m., New York City time, on the CMT Determination Date of
three Reference Dealers in The City of New York (from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest quotation
(or, in the event of equality, one of the lowest)), for the Treasury Notes with
an original maturity of the number of years that is the next highest to the
Index Maturity specified in the applicable Pricing Supplement and a remaining
term to maturity closest to the Index Maturity specified in the applicable
Pricing Supplement and in an amount of at least $100 million. If three or four
(and not five) of such Reference Dealers are quoting as described above, then
the CMT Rate will be based on the arithmetic mean of the offer prices obtained
and neither the highest nor the lowest of such quotes will be eliminated;
provided, however, that if fewer than three Reference Dealers selected by the
Calculation Agent are quoting as described herein, the "CMT Rate" will be the
CMT Rate in effect on such CMT Determination Date, or, if none, the Initial
Interest Rate. If two Treasury Notes with an original maturity as described in
the second preceding sentence have remaining terms to maturity equally close to
the Index Maturity specified in the applicable Pricing Supplement, the quotes
for the Treasury Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page designated in the applicable Pricing Supplement (or any
other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)), for the
purpose of
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<PAGE>
displaying Treasury Constant Maturities as reported in H.15(519). If no such
page is specified in the applicable Pricing Supplement, the Designated CMT
Telerate Page shall be 7052, for the most recent week.
The "Calculation Date" pertaining to any CMT Determination Date shall be the
earlier of (i) the tenth calendar day after such CMT Determination Date or, if
such day is not a Business Day, the next succeeding Business Day or (ii) the
Business Day immediately preceding the applicable Interest Payment Date or
Maturity, as the case may be.
INDEXED NOTES
The Company may from time to time offer Notes ("Indexed Notes") the principal
amount payable at Stated Maturity of which (the "Indexed Principal Amount") or
the interest amount payable on which is determined by reference to a measure
(the "Index") which will be related to (i) the rate of exchange between the
Specified Currency for such Note and the other currency or composite currency
(the "Indexed Currency") specified in the applicable Pricing Supplement (such
Indexed Notes, "Currency Indexed Notes"); (ii) the difference in the price of a
specified commodity (the "Indexed Commodity") on specified dates (such Indexed
Notes, "Commodity Indexed Notes"), (iii) the difference in the level of a
specified stock index (the "Stock Index"), which may be based on U.S. or
foreign stocks, on specified dates (such Indexed Notes, "Stock Indexed Notes")
or (iv) such other objective price or economic measures as are described in the
applicable Pricing Supplement. The manner of determining the Indexed Principal
Amount of an Indexed Note, and historical and other information concerning the
Indexed Currency, Indexed Commodity, Stock Index or other price or economic
measures used in such determination, will be set forth in the applicable
Pricing Supplement, together with information concerning tax consequences to
the holders of such Indexed Notes.
Unless otherwise specified in the applicable Pricing Supplement, interest on
an Indexed Note will be payable by the Company based on the amount designated
in the applicable Pricing Supplement as the "Face Amount" of such Indexed Note.
The applicable Pricing Supplement will describe whether the principal amount of
the related Indexed Note that would be payable upon redemption or repayment
prior to Stated Maturity will be the Face Amount of such Indexed Note, the
Indexed Principal Amount of such Indexed Note at the time of redemption or
repayment, or another amount described in such Pricing Supplement.
An investment in Indexed Notes entails significant risks that are not
associated with similar investment in a conventional fixed-rate debt security.
Indexation of the interest rate of such a Note may result in an interest rate
that is less than that payable on a conventional fixed-rate debt security
issued at the same time, including the possibility that no interest will be
paid. Indexation of the principal of and/or premium on such a Note may result
in an amount of principal and/or premium payable in respect thereof that is
less than the original purchase price of such Note if allowed pursuant to the
terms thereof, including the possibility that no such amount will be paid. The
secondary market for such Notes will be affected by a number of factors,
independent of the credit worthiness of the Company and the value of the
Indexed Currency, the Indexed Commodity or the Stock Index, including the
volatility of the Indexed Currency, the Indexed Commodity or the Stock Index,
the time remaining to the maturity of such Notes, the amount outstanding of
such Notes and market interest rates. The value of the Indexed Currency, the
Indexed Commodity or the Stock Index depends on a number of interrelated
factors, including economic, financial and political events, over which the
Company has no control. Additionally, if the formula used to determine the
amount of principal, premium and/or interest payable with respect to such Notes
contains a multiple or leverage factor, the effect of any change in the Indexed
Currency, the Indexed Commodity or the Stock Index will be increased. The
historical experience of the relevant Indexed Currency, Indexed Commodity or
Stock Index should not be taken as an indication of future performance of such
Indexed Currency, Indexed Commodity or Stock Index during the term of any
Indexed Note. The credit ratings assigned to the Company's medium-term note
program are a reflection of the Company's credit status and are in no way a
reflection of the potential impact of the factors discussed above, or any other
factors, on the market value of Indexed Notes. Accordingly, prospective
investors should consult their own financial and legal advisors as to the risks
entailed by an investment in Indexed Notes and the suitability of such Notes in
light of such prospective investors' particular circumstances.
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<PAGE>
OTHER PROVISIONS; ADDENDA
Any provisions with respect to any Bearer Note, including the determination
of a Base Rate, the calculation of the interest rate applicable to a Floating
Rate Note, and the specification of one or more Base Rates, the Interest
Payment Dates, the Stated Maturity or any other variable term relating thereto,
may be modified as specified under "Other Provisions" on the face of such Note
or in an Addendum relating thereto, if so specified on the face of such Note
and in the applicable Pricing Supplement.
AMORTIZING NOTES
The Company may from time to time offer Amortizing Notes. Unless otherwise
specified in the applicable Pricing Supplement, interest on each Amortizing
Note will be computed on the basis of a 360-day year of twelve 30-day months.
Payments with respect to Amortizing Notes will be applied first to interest due
and payable thereon and then to the reduction of the unpaid principal amount
thereof. Further information concerning additional terms and provisions of
Amortizing Notes will be specified in the applicable Pricing Supplement. A
table setting forth repayment information in respect of each Amortizing Note
will be included in the applicable Pricing Supplement and set forth in each
such Note.
OPTIONAL REDEMPTION, REPAYMENT AND REPURCHASE
The Pricing Supplement relating to each Bearer Note will indicate either that
such Note cannot be redeemed (other than as provided under "Tax Redemption" and
"Special Tax Redemption" below) prior to Stated Maturity or that such Note will
be redeemable at the option of the Company, in whole or in part, and the date
or dates (each an "Optional Redemption Date") on which such Note may be
redeemed and the price (the "Redemption Price") at which (together with accrued
interest to such Optional Redemption Date) such Note may be redeemed on each
such Optional Redemption Date. The Company may exercise such option with
respect to a Bearer Note by notifying the Trustee and the Principal Paying
Agent for such Note at least 45 days prior to any Optional Redemption Date. At
least 30 but not more than 60 days prior to Optional Redemption Date, the
Trustee or the Principal Paying Agent shall provide notice of such redemption
to the record Holder of such Bearer Note in accordance with "Notices" below. In
the event of redemption of a Bearer Note in part only, a new Note or Notes for
the unredeemed portion thereof shall be issued to the record Holder thereof
upon the cancellation thereof. Bearer Notes redeemed prior to Stated Maturity
must be presented for payment together with all unmatured coupons, if any,
appertaining thereto, failing which the amount of any missing unmatured coupon
will be deducted from the sum due for payment. Unless otherwise specified in
the applicable Pricing Supplement, the Bearer Notes will not be subject to any
sinking fund.
The Pricing Supplement relating to each Bearer Note will also indicate
whether the Holder of such Note will have the option to elect repayment of such
Note by the Company prior to its Stated Maturity, and, if so, such Pricing
Supplement will specify the date or dates on which such Note may be repaid
(each an "Optional Repayment Date") and the price (the "Optional Repayment
Price") at which (together with accrued interest to such Optional Repayment
Date) such Note may be repaid on each such Optional Repayment Date.
In order for a Bearer Note to be repaid, the Principal Paying Agent must
receive the Bearer Note at least 30 but not more than 45 days prior to an
Optional Repayment Date. Any tender of a Bearer Note for repayment shall be
irrevocable. The repayment option may be exercised by the Holder of a Bearer
Note for less than the entire principal amount of such Note, provided that the
principal amount of such Note remaining outstanding after repayment is an
authorized denomination. Upon such partial repayment, such Bearer Note shall be
cancelled and a new Note or Notes for the remaining principal amount thereof
shall be issued to the Holder of such repaid Note.
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<PAGE>
TAX REDEMPTION
If the Company determines that, as a result of any change in or amendment to
the laws (or any regulations or rulings promulgated thereunder) of the United
States or of any political subdivision or taxing authority thereof or therein
affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which
change or amendment is enacted or becomes effective (regardless of when
announced) on or after the applicable Original Issue Date, the Company has or
will become obligated to pay Additional Amounts (as defined below) with respect
to the Bearer Notes as described herein under "Payment of Additional Amounts",
and such obligation cannot be avoided by the Company taking reasonable measures
available to it, then the Company may, at its option, redeem the Bearer Notes,
as a whole but not in part, at any time prior to maturity, upon the giving of a
notice of redemption as described below, at a redemption price (the "Redemption
Price"), calculated without premium, equal to 100% of the principal amount of
the Bearer Notes, together with accrued interest to the date fixed for
redemption; provided, however, that if the Bearer Notes are Original Issue
Discount Notes, the Redemption Price for each such Bearer Note shall be limited
to the sum of (i) the aggregate principal amount of such Note multiplied by its
Issue Price (expressed as a percentage of the aggregate principal amount) and
(ii) the original issue discount accrued on such Note from the Original Issue
Date to the date fixed for redemption, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of notice of redemption).
Notice of redemption will be given by the Company not less than 30 nor more
than 60 days prior to the date fixed for redemption, which date and the
Redemption Price will be specified in such notice.
SPECIAL TAX REDEMPTION
If the Company shall determine that any payment made outside the United
States by the Company or any of its Paying Agents in respect of any Bearer Note
of a series or coupon appertaining thereto (an "Affected Security") would,
under any present or future laws or regulations of the United States, be
subject to any certification, identification, documentation, information or
other reporting requirement of any kind, the effect of which requirement is the
disclosure to the Company, any paying agent or any governmental authority of
the nationality, residence or identity of a beneficial owner of such Affected
Security that is a United States Alien (as defined herein under "Payment of
Additional Amounts") (other than such a requirement (a) that would not be
applicable to a payment made by the Company or any of its Paying Agents (i)
directly to the beneficial owner or (ii) to a custodian, nominee or other agent
of the beneficial owner, or (b) that can be satisfied by such custodian,
nominee or other agent certifying to the effect that such beneficial owner is a
United States Alien, provided that in each case referred to in clauses (a)(ii)
and (b) payment by such custodian, nominee or agent to such beneficial owner is
not otherwise subject to any such requirement), the Company shall, at its
election, either redeem the Affected Securities, as a whole, at the Redemption
Price, or, if the conditions of the second succeeding paragraph are satisfied,
pay the Additional Amounts specified in such paragraph. The Company shall make
such determination and election as soon as practicable and publish prompt
notice thereof (the "Determination Notice") stating the effective date of such
certification, documentation, identification, information or other reporting
requirement, whether the Company has elected to redeem the Affected Securities
or pay the Additional Amounts specified in the second succeeding paragraph and
(if applicable) the last date by which the redemption of the Affected
Securities must take place, as provided in the next succeeding sentence. If the
Company elects to redeem the Affected Securities, such redemption shall take
place on such date, not later than one year after the publication of the
Determination Notice, as the Company shall elect by notice to the Principal
Paying Agent at least 60 days prior to the date fixed for redemption. Notice of
such redemption of the Affected Securities will be given to the Holders of the
Affected Securities not more than 60 nor less than 30 days prior to the date
fixed for redemption. Notwithstanding the foregoing, the Company will not so
redeem the Affected Securities if the Company shall subsequently determine, not
less than 30 days prior to the date fixed for redemption, that subsequent
payments on the Affected Securities would not be subject to any such
certification, identification, documentation, information or other reporting
requirement, in which case the Company shall publish prompt notice of such
determination and any earlier redemption notice shall be revoked and of no
further effect.
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<PAGE>
Each notice referred to in the preceding paragraphs shall be given in the
manner described below under "Notices."
If and so long as the certification, identification, documentation,
information or other reporting requirement referred to in the second preceding
paragraph would be fully satisfied by payment of a backup withholding tax or
similar charge, the Company may elect to pay as Additional Amounts such amounts
as may be necessary so that every net payment made outside the United States
following the effective date of such requirement by the Company or any of its
Paying Agents in respect of any Affected Security of which the beneficial owner
is a United States Alien (but without any requirement that the nationality,
residence or identity of such beneficial owner be disclosed to the Company, any
Paying Agent or any governmental authority), after deduction or withholding for
or on account of such backup withholding tax or similar charge will not be less
than the amount provided for in such Affected Security to be then due and
payable. However, the Company may elect not to pay such Additional Amounts in
respect of any backup withholding tax or similar charge, which (a) would not be
applicable to a payment of principal of or interest on any Affected Security
made by the Company or any one of its Paying Agents (i) directly to the
beneficial owner or to a custodian, nominee or other agent of the beneficial
owner of such Affected Security or (ii) if such custodian, nominee or other
agent were to certify to the effect that such beneficial owner is a United
States Alien or (b) is imposed as a result of presentation of such Affected
Security for payment more than 10 days after the date on which such payment
became due and payable or on which payment thereof is duly provided for,
whichever occurred later. In the event the Company elects to pay any Additional
Amounts pursuant to this paragraph, the Company shall have the right to redeem
the Affected Securities at any time pursuant to the applicable provisions of
the second preceding paragraph, without reducing the Redemption Price for
applicable withholding taxes. If the Company elects to pay Additional Amounts
pursuant to this paragraph and the condition specified in the first sentence of
this paragraph should no longer be satisfied, then the Company shall redeem the
Affected Securities pursuant to the applicable provisions of the second
preceding paragraph. Any redemption payments made by the Company pursuant to
the two immediately preceding sentences shall be subject to the continuing
obligation of the Company to pay additional interest pursuant to this
paragraph. (Section 3.05)
PAYMENT OF ADDITIONAL AMOUNTS
The Company will, subject to the exceptions and limitations set forth below,
pay such additional amounts (the "Additional Amounts") to the Holder of any
Bearer Note or of any coupon that is a United States Alien as may be necessary
in order that every net payment on such Bearer Note or coupon, after deduction
or withholding for or on account of any present or future tax, assessment or
other governmental charge imposed by the United States (or any political
subdivision or taxing authority thereof or therein) upon, or as a result of,
such payment, will not be less than the amount provided for in such Bearer Note
or coupon to be then due and payable. However, the Company will not be required
to make any such payment of Additional Amounts to any such Holder for or on
account of:
(a) any tax, assessment or other governmental charge which would not have
been so imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of, or possessor of a power over, such
Holder, if such Holder is an estate, a trust, a partnership or a
corporation) and the United States, including, without limitation, such
Holder (or such fiduciary, settlor, beneficiary, member, shareholder or
possessor) being or having been a citizen or resident thereof or being or
having been engaged in a trade or business or present therein or having, or
having had, a permanent establishment therein or (ii) such Holder's past or
present status as a personal holding company, foreign personal holding
company, private foundation or other tax exempt organization in each case
with respect to the United States or as a corporation that accumulates
earnings to avoid United States federal income tax;
(b) any estate, inheritance, gift, sales, transfer or personal property
tax or any similar tax, assessment or other governmental charge;
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<PAGE>
(c) any tax, assessment or other governmental charge imposed by reason of
the presentation by the Holder of any such Bearer Note or coupon for
payment on a date more than 10 days after the date on which such payment
became due and payable or the date on which payment thereof is duly
provided for, whichever occurs later;
(d) any tax, assessment or other governmental charge that is payable
otherwise than by withholding from payments on or in respect of any Bearer
Note or coupon;
(e) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of principal of or interest
on any Bearer Note or coupon, if such payment can be made without such
withholding by any other Paying Agent in Western Europe;
(f) any tax, assessment or other governmental charge that would not have
been imposed but for the failure to comply with any certification,
identification, documentation, information or other reporting requirement
concerning the nationality, residence, identity or connection with the
United States of the Holder or beneficial owner of such Bearer Note or
coupon if, without regard to any tax treaty, such compliance is required by
statute or by regulation of the United States or of any political
subdivision or taxing authority thereof or therein as a precondition to
relief or exemption from such tax, assessment or other governmental charge;
(g) any tax, assessment or other governmental charge imposed by reason of
such Holder's past or present status as (i) a controlled foreign
corporation that is related to the Company through stock ownership or (ii)
the actual or constructive owner of 10% or more of the total combined
voting power of all classes of stock of the Company entitled to vote; or
(h) any combination of items (a), (b), (c), (d), (e), (f) or (g);
nor shall Additional Amounts be paid with respect to any payment in respect of
a Bearer Note or coupon to a United States Alien Holder that is a fiduciary or
partnership or other than the sole beneficial owner of such Bearer Note or
coupon to the extent that a beneficiary or settlor with respect to such
fiduciary or a member of such partnership or a beneficial owner would not have
been entitled to such Additional Amounts had such beneficiary, settlor, member
or beneficial owner been the Holder of the Bearer Note or coupon.
The term "United States Alien" means any Person that, for United States
federal income tax purposes, is a foreign corporation, a non-resident alien
individual, a non-resident alien fiduciary of a foreign estate or trust or
foreign partnership one or more of the members of which, for United States
federal income tax purposes, is a foreign corporation, a non-resident alien
individual or a non-resident alien fiduciary of a foreign estate or trust.
(Section 4.13)
REPLACEMENT OF BEARER NOTES AND COUPONS
If an individual Bearer Note or coupon is mutilated, destroyed, stolen or
lost it may be replaced at the specified office of the Principal Paying Agent
in London; or, so long as the Bearer Notes are listed on the Luxembourg Stock
Exchange, at the specified office of the Paying Agent in Luxembourg, upon
payment by the claimant of such expenses as may be incurred in connection
therewith and, in the case of destruction, theft or loss, on such terms as to
evidence thereof and indemnity as the Company, the Trustee or any paying agent
may reasonably require. Mutilated or defaced Bearer Notes or coupons must be
surrendered before replacements will be issued.
NOTICES
All notices to Holders of Bearer Notes will be deemed to have been duly given
if published on two Business Days in a leading London daily newspaper (which is
expected to be the Financial Times) and, so
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<PAGE>
long as the Bearer Notes are listed on the Luxembourg Stock Exchange and the
rules of such exchange so require, in Luxembourg in a newspaper of general
circulation in Luxembourg (which is expected to be the Luxemburger Wort). Such
notices shall be deemed to have been given on the date of the first such
publication.
UNCLAIMED MONIES
All monies paid by the Company to a Paying Agent for the payment of principal
of or any premium or interest on any Bearer Note or for any coupon which remain
unclaimed at the end of two years after such payments shall have become due and
payable will be repaid to the Company, at its request, and the Holder of such
Note or coupon will thereafter look only to the Company for payment, such
payment to be made only outside the United States.
GOVERNING LAW
The Notes will be governed by, and construed in accordance with, the laws of
the State of New York, without regard to the conflicts of law rules of such
State.
CURRENCY RISKS
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in a Bearer Note having a Specified Currency other than the
currency of the country in which a purchaser is resident or the currency
(including ECU and any other such composite currency) in which a purchaser
conducts its business or activities (the "home currency") entails significant
risks that are not associated with a similar investment in a security
denominated in the home currency. Such risks include, without limitation, the
possibility of significant changes in rates of exchange between the home
currency and such Specified Currency and the possibility of the imposition or
modification of foreign exchange controls with respect to such Specified
Currency. Such risks generally depend on factors over which the Company has no
control, such as economic and political events and the supply of and demand for
the relevant currencies. In recent years, rates of exchange for certain
currencies have been highly volatile, and such volatility may occur in the
future. Fluctuations in any particular exchange rate that have occurred in the
past, however, are not necessarily indicative of fluctuations in the rate that
may occur during the term of any Bearer Note. Depreciation of the Specified
Currency for a Bearer Note against the relevant home currency would result in a
decrease in the effective yield (on a U.S. dollar basis) of such Note below its
coupon rate and, in certain circumstances, could result in a loss to the
investor on a home currency basis.
Governments have from time to time imposed, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a Specified Currency for making payments in respect of Bearer Notes
denominated in such currency. At present, the Company has identified the
following currencies in which payments of principal, premium and/or interest on
Bearer Notes may be made: Australian dollars, Canadian dollars, Danish kroner,
Italian lire, Japanese yen, New Zealand dollars, U.S. dollars and ECU. However,
the Company may determine at any time to issue Bearer Notes with Specified
Currencies other than those listed. There can be no assurances that exchange
controls will not restrict or prohibit payments of principal, premium and/or
interest in any Specified Currency. Even if there are no actual exchange
controls, it is possible that, on a payment date with respect to any particular
Bearer Note, the currency in which amounts then due in respect of such Note are
payable would not be available to the Company. In that event, the Company will
pay such amounts in the manner set forth under "Payment Currency" below.
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THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT DESCRIBE
ALL THE RISKS OF AN INVESTMENT IN BEARER NOTES DENOMINATED IN A CURRENCY OTHER
THAN A PROSPECTIVE PURCHASER'S HOME CURRENCY. PROSPECTIVE PURCHASERS SHOULD
CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN
INVESTMENT IN BEARER NOTES DENOMINATED IN A CURRENCY OTHER THAN THE PURCHASER'S
HOME CURRENCY. SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR PERSONS WHO ARE
UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
Any Pricing Supplement relating to Bearer Notes having a Specified Currency
other than U.S. dollars will contain certain information concerning historical
exchange rates for such currency against the U.S. dollar, a brief description
of such currency and any material exchange controls affecting such currency,
and any other material information concerning such currency.
VALUE OF ECU
Subject to the provisions set forth under "Payment Currency" below, the value
of the ECU is equal to the value of the European Currency Unit that is at
present used in the European Monetary System and which is at present valued on
the basis of specified amounts of the currencies of twelve member countries of
the European Communities (the "EC") as shown below.
Pursuant to Council Regulation (EEC) No. 1971/89 dated June 19, 1989, the ECU
is at present defined as the sum of the following components:
<TABLE>
<CAPTION>
PERCENTAGES
-----------
<S> <C>
German mark........... 30.10
Pound sterling........ 13.00
French franc.......... 19.00
Italian lire.......... 10.15
Dutch guilder......... 9.40
Belgian franc......... 7.60
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGES
-----------
<S> <C>
Luxembourg franc...... 0.30
Danish krone.......... 2.45
Irish pound........... 1.10
Greek drachma......... 0.80
Spanish peseta........ 5.30
Portuguese escudo..... 0.80
</TABLE>
The EC may change this definition of the ECU, including by making changes in
the foregoing components, which will cause the basis for the valuation of a
Bearer Note denominated in ECU to change accordingly.
PAYMENT CURRENCY
Except as set forth below, if payment in respect of a Bearer Note is required
to be made in a Specified Currency other than U.S. dollars and such currency is
unavailable to the Company due to the imposition of exchange controls or other
circumstances beyond the Company's control or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions of or within the international banking
community, then all payments in respect of such Note shall be made in U.S.
dollars until such currency is again available to the Company or so used. The
amounts so payable on any date in such currency shall be converted into U.S.
dollars on the basis of the most recently available Market Exchange Rate for
such currency or as otherwise indicated in the applicable Pricing Supplement.
Any payment in respect of such Note made under such circumstances in U.S.
dollars will not constitute an Event of Default under the Indenture under which
such Note shall have been issued. Notwithstanding the foregoing, if a Specified
Currency is unavailable to the Company solely because such currency no longer
constitutes legal tender because it has been replaced by the ECU or the new
single currency of the European Union once monetary union takes effect pursuant
to Article 109l of the Treaty establishing the European Community, the amounts
so payable in respect of such Note shall, beginning with the date such
replacement becomes effective, be made in the relevant new single currency of
the European Union; the amounts so
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payable on any date shall be converted into such single currency on the basis
of the conversion officially in effect in the European Union on the effective
date of such replacement.
If payment in respect of a Bearer Note is required to be made in ECU and the
ECU is not then used in the European Monetary System, then the Trustee for such
Note shall, without liability on its part, choose a component currency (the
"Payment Currency") of the ECU in which all payments in respect of such Note
and any related coupons shall be made until the ECU is again so used. Notice of
the Payment Currency selected by such Trustee shall be given in accordance with
"Description of Bearer Notes--Notices" above. The amount of each payment in
such Payment Currency shall be computed on the basis of the equivalent of the
ECU in that currency, determined as described below, as of the fourth
Luxembourg business day prior to the date on which such payment is due. Any
payment in respect of such Note made under such circumstances in the Payment
Currency will not constitute an Event of Default under the Indenture under
which such Note shall have been issued.
Notwithstanding the foregoing, on the first Luxembourg business day on which
the ECU is no longer used in the European Monetary System, each Trustee shall,
without liability on its part, choose a Payment Currency in which all payments
in respect of Bearer Notes and coupons for which such Trustee serves as Trustee
denominated in ECU having a due date prior thereto but not yet presented for
payment are to be made. The amount of each payment in such Payment Currency
shall be computed on the basis of the equivalent of the ECU in that currency,
determined as described below, as of such first Luxembourg business day. Any
payment in respect of such Notes made under such circumstances in the Payment
Currency will not constitute an Event of Default under the Indenture under
which such Notes shall have been issued.
The equivalent of the ECU in the relevant Payment Currency as of any date
(the "Day of Valuation") shall be determined by the Luxembourg Stock Exchange
on the following basis. The component currencies of the ECU for this purpose
(the "Components") shall be the currency amounts that were components of the
ECU when the ECU was most recently used in the European Monetary System or for
the settlement of transactions by public institutions of or within the EC. The
equivalent of the ECU in the Payment Currency shall be calculated by, first,
aggregating the U.S. dollar equivalents of the Components, and then, using the
rate used for determining the U.S. dollar equivalent of the Components in the
Payment Currency as set forth below, calculating the equivalent in the Payment
Currency of such aggregate amount in U.S. dollars.
The U.S. dollar equivalent of each of the Components for each series of
Bearer Notes shall be determined by the Luxembourg Stock Exchange on the basis
of the middle spot delivery quotations prevailing at 2:30 p.m. Luxembourg time
on the Day of Valuation, as obtained by the Luxembourg Stock Exchange from one
or more major banks, selected by the Trustee for such Notes (with the approval
of the Company), in the country of issue of the Component in question.
If the official unit of any component currency of the ECU is altered by way
of combination or subdivision, the number of units of that currency as a
Component shall be divided or multiplied in the same proportion. If two or more
component currencies are consolidated into a single currency, the amounts of
those currencies as Components shall be replaced by an amount in such single
currency equal to the sum of the amounts of the consolidated component
currencies expressed in such single currency. If any component currency is
divided into two or more currencies, the amount of that currency as a Component
shall be replaced by amounts of such two or more currencies, each of which
shall be equal to the amount of the former component currency divided by the
number of currencies into which that currency was divided.
If no direct quotations are available for a Component on a Day of Valuation
from any of the banks selected by the Trustee (with the approval of the
Company) for this purpose, because foreign exchange markets are closed in the
country of issue of that Component, or for any other reason, in computing the
U.S. dollar equivalent of such Component the Luxembourg Stock Exchange shall
(except as provided below) use the most recent direct quotations for such
Component obtained by it; provided that such most recent quotations may be used
only if they were prevailing in the country of issue not more than two
Luxembourg
S-25
<PAGE>
business days before such Day of Valuation. Beyond such period of two
Luxembourg business days, the Luxembourg Stock Exchange shall determine the
U.S. dollar equivalent of such Component on the basis of cross rates derived
from the middle spot delivery quotations for such Component and for the U.S.
dollar prevailing at 2:30 p.m. Luxembourg time on such Day of Valuation, as
obtained by the Luxembourg Stock Exchange from one or more major banks,
selected by such Trustee (with the approval of the Company), in a country other
than the country of issue of such Component. Notwithstanding the foregoing,
within such period of two Luxembourg business days, the Luxembourg Stock
Exchange shall determine the U.S. dollar equivalent of such Component on the
basis of such cross rates if such Trustee and the Company judge that the
equivalent so calculated is more representative than the U.S. dollar equivalent
calculated on the basis of such most recent direct quotations. Unless otherwise
specified by such Trustee, if there is more than one market for dealing in any
component currency by reason of foreign exchange regulations or for any other
reason, the market to be referred to in respect of such currency shall be that
upon which a non-resident issuer of securities denominated in such currency
would purchase such currency in order to make payments in respect of such
securities.
All determinations referred to above made by the Trustee or the Luxembourg
Stock Exchange shall be at their respective sole discretion (except to the
extent expressly provided herein that any determination made by a Trustee is
subject to the approval of the Company) and shall, in the absence of manifest
error, be conclusive for all purposes and binding on holders of Bearer Notes,
and such Trustee shall have no liability therefor.
FOREIGN CURRENCY JUDGMENTS
The Notes will be governed by and construed in accordance with the law of the
State of New York. Courts in the United States customarily have not rendered
judgments for money damages denominated in any currency other than the U.S.
dollar. A 1987 amendment to the Judiciary Law of the State of New York
provides, however, that an action based upon an obligation denominated in a
currency other than U.S. dollars will be rendered in the foreign currency of
the underlying obligation and converted into U.S. dollars at the rate of
exchange prevailing on the date of the entry of the judgment or decree.
TAXATION IN THE UNITED STATES
Under current United States federal income and estate tax law, (a) payment on
a Bearer Note or coupon by the Company or any paying agent to a holder that is
a United States Alien will not be subject to withholding of United States
federal income tax, provided that, with respect to payments of interest, the
holder does not actually or constructively own ten percent or more of the
combined voting power of all classes of stock of the Company and is not a
controlled foreign corporation related to the Company through stock ownership;
(b) a holder of a Bearer Note or coupon that is a United States Alien will not
be subject to United States federal income tax on gain realized on the sale,
exchange or redemption of such Note or coupon, provided that such holder does
not have a connection with or status with respect to the United States
described in clause (a) under "Payment of Additional Amounts"; (c) a beneficial
owner of a Bearer Note or coupon that is a United States Alien will not be
required to disclose its nationality, residence or identity to the Company, a
paying agent (acting in its capacity as such) or any United States governmental
authority in order to receive payment on such Note or coupon from the Company
or a paying agent outside the United States; and (d) a Bearer Note or coupon
will not be subject to United States federal estate tax as a result of the
death of a holder who is not a citizen or resident of the United States at the
time of death, provided that such holder did not at the time of death actually
or constructively own ten percent or more of the combined voting power of all
classes of stock of the Company and, at the time of such holder's death,
payments of interest on such Note or coupon would not have been effectively
connected with the conduct by such holder of a trade or business in the United
States.
United States information reporting requirements and backup withholding tax
will not apply to payments on a Bearer Note or coupon made outside the United
States by the Company or any paying agent
S-26
<PAGE>
(acting in its capacity as such) to a holder that is a United States Alien.
Information reporting requirements and backup withholding tax also will not
apply to any payment on a Bearer Note or coupon outside the United States by a
foreign office of a custodian, nominee or other agent of the beneficial owner
of such Note or coupon, provided that such custodian, nominee or agent (i) is
not a U.S. Person, (ii) derives less than 50% of its gross income for certain
periods from the conduct of a trade or business in the United States and (iii)
is not a controlled foreign corporation as to the United States (a person
described in (i), (ii) and (iii) hereinafter a "foreign controlled person").
Payment in respect of a Bearer Note or coupon outside the United States to the
beneficial owner thereof by a foreign office of any custodian, nominee or agent
that is not a foreign controlled person will not be subject to backup
withholding tax, but will be subject to information reporting requirements
unless such custodian, nominee or agent has documentary evidence in its records
that the beneficial owner is a United States Alien or the beneficial owner
otherwise establishes an exemption.
Information reporting requirements and backup withholding tax will not apply
to any payment of the proceeds of the sale of a Bearer Note or coupon effected
outside the United States by a foreign office of a "broker" (as defined in
applicable Treasury regulations), provided that such broker is a foreign
controlled person. Payment of the proceeds of the sale of a Bearer Note or
coupon effected outside the United States by a foreign office of any broker
that is not a foreign controlled person will not be subject to backup
withholding tax, but will be subject to information reporting requirements
unless such broker has documentary evidence in its records that the beneficial
owner is a United States Alien and certain other conditions are met, or the
beneficial owner otherwise establishes an exemption.
These backup withholding and information reporting rules are under review by
the United States Treasury, and their application to the Bearer Notes and
coupons could be changed prospectively by future regulations.
PLAN OF DISTRIBUTION
The Bearer Notes are being offered on a continuous basis by the Company
through the Agents, which have agreed to use their reasonable best efforts to
solicit orders to purchase Bearer Notes. Initial purchasers may propose certain
terms of the Bearer Notes, but the Company will have the right to accept orders
to purchase Bearer Notes and may reject proposed purchases in whole or in part.
The Agents shall have the right, in their discretion reasonably exercised, to
reject any proposed purchase of Bearer Notes in whole or in part. The Company
will pay any Agent a commission of from .125% to .750% of the principal amount
of Bearer Notes with a Stated Maturity of 184 days to 30 years sold through
such Agent, depending upon Stated Maturity. Commissions with respect to Notes
with Stated Maturities in excess of 30 years which are sold through an Agent
will be negotiated between the Company and such Agent at the time of such sale.
The Company may arrange for Bearer Notes to be sold through any Agent acting
as underwriter or may sell Bearer Notes directly to investors on its own
behalf. In the case of sales made directly by the Company, no commission or
discount in lieu thereof will be paid or allowed. The Company also may sell
Bearer Notes to any Agent as principal for its own account at a price to be
agreed upon at the time of sale. Such Notes may be resold by such Agent to one
or more investors at a fixed public offering price or at prevailing market
prices, or at prices related thereto, at the time of such resale, as determined
by such Agent. Unless otherwise specified in the applicable Pricing Supplement,
any Bearer Note sold to an Agent as principal will be purchased by such agent
at a price equal to 100% of the principal amount thereof less a percentage of
the principal amount equal to the commission applicable to an agency sale (as
described below) of a Note of identical maturity.
Any Agent may sell Bearer Notes it has purchased from the Company as
principal to other dealers for resale to investors and other purchasers, and
may allow any portion of the discount received in connection with such purchase
from the Company to such dealers. After the initial public offering of Bearer
Notes, the public offering price (in the case of Bearer Notes to be resold at a
fixed public offering price), the concession and the discount may be changed.
S-27
<PAGE>
In compliance with United States federal income tax laws and regulations, the
Company and the Agent have agreed that in connection with the original issuance
of any Bearer Note or during the period of 40 days after the Original Issue
Date of such Note they will not offer, sell or deliver such Note, directly or
indirectly, to a U.S. Person or to any person within the United States, except
to the extent permitted under U.S. Treasury regulations. Under those
regulations, Bearer Notes may be offered and sold during that period to
international organizations, foreign central banks and to foreign branches of
U.S. financial institutions that satisfy requirements prescribed by the
regulations.
The Bearer Notes have not been and will not be registered under the
Securities and Exchange Law of Japan. The Company and the Agents will agree not
to offer or sell any Bearer Note directly or indirectly in Japan or to
residents of Japan or for the benefit of any Japanese person (which term as
used herein means any person resident in Japan, including any corporation or
other entity organized under the laws of Japan) or to others for reoffering or
resale directly or indirectly in Japan or to any Japanese person except in
circumstances that result in compliance with any applicable laws, regulations
and ministerial guidelines of Japan taken as a whole.
Each Agent will represent and agree that (i) it has not offered or sold and
will not offer or sell, prior to the date six months after their date of issue,
any Notes, having a maturity of one year or greater, to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purpose of their businesses or otherwise in circumstances that have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (ii) it
has complied and will comply with all applicable provisions of the Financial
Services Act 1986 with respect to anything done by it in relation to the Notes
in, from or otherwise involving the United Kingdom; and (iii) it has only
issued or passed on and will only issue or pass on in the United Kingdom any
document received by it in connection with the issue of any Notes to a person
who is of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1995 or is a person to whom such
document may otherwise lawfully be issued or passed on.
There can be no assurance as to the existence of a secondary market for any
Bearer Notes, or that any Bearer Notes will be sold.
The Agents, whether acting as agent or principal, may be deemed to be
"underwriters" within the meaning of the Securities Act. The Company has agreed
to indemnify the Agents against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments that the Agents may be
required to make in respect thereof.
In addition to the Bearer Notes being offered through the Agents as described
herein, Registered Notes that may have terms identical or similar to the terms
of the Bearer Notes may be concurrently offered by the Company on a continuous
basis in the United States (as defined in the Prospectus) pursuant to a
distribution agreement with affiliates of the Agents. Pursuant to such
distribution agreement, such affiliates may also purchase Registered Notes as
principal for their own account or for resale, and the Company may make direct
sales of Registered Notes on its own behalf. Any Registered Notes so offered
and sold will reduce correspondingly the maximum aggregate principal amount of
Bearer Notes that may be offered by this Prospectus Supplement and the
accompanying Prospectus.
In the ordinary course of their respective businesses, affiliates of J.P.
Morgan Securities Ltd. have engaged, and will in the future engage, in normal
commercial banking transactions with the Company and certain of its
subsidiaries.
S-28
<PAGE>
GENERAL INFORMATION
Application has been made to list the Bearer Notes on the Luxembourg Stock
Exchange. In connection with such listing, the Restated Certificate of
Incorporation and By-Laws of the Company and a legal notice relating to the
issuance of the Bearer Notes have been deposited with the Chief Registrar of
the District Court of Luxembourg, where copies may be obtained upon request.
The issuance of the Notes was authorized by actions of the Board of Directors
of the Company on April 18, 1991, August 21, 1991 and November 15, 1994.
So long as any Bearer Notes are listed on the Luxembourg Stock Exchange,
copies of the Pricing Supplements for such Notes, the Registration Statement
(and the documents incorporated by reference therein), the annual and quarterly
reports of the Company, Restated Certificate of Incorporation and By-Laws of
the Company, the Indenture for such series of Notes and the distribution
agreement between the Company and the Agents will be available for inspection
at the office of the Listing Agent or at the office of the Principal Paying
Agent for such Notes in Luxembourg during the term of the Bearer Notes. In
addition, copies of such annual and quarterly reports and such Pricing
Supplements may be obtained at such offices.
Except as otherwise disclosed herein, the Company is not involved in any
litigation or arbitration proceedings relating to claims or amounts which it
believes will be material in the context of the issue of the Bearer Notes and
is not aware that any such litigation or arbitration proceedings are pending or
threatened.
As of the date of this Prospectus Supplement, there has been no material
adverse change in the financial position of the Company since the date of the
latest audited financial statements contained or incorporated by reference in
the accompanying Prospectus.
The Bearer Notes have been accepted for clearance through Euroclear and
Cedel.
S-29
<PAGE>
PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY
One McDonald's Plaza
Oak Brook, Illinois 60521
AUDITORS TO THE COMPANY
Ernst & Young LLP
233 S. Wacker Dr.
Chicago, Illinois 60606
LEGAL ADVISERS
To the Company To the Agents
Shelby Yastrow Cleary, Gottlieb, Steen & Hamilton
Senior Vice President, One Liberty Plaza
General Counsel and Secretary New York, New York 10006
McDonald's Corporation
One McDonald's Plaza
Oak Brook, Illinois 60521
TRUSTEE
First Fidelity Bank, National Association
Broad and Walnut Streets
Philadelphia, Pennsylvania 19109
PRINCIPAL PAYING AGENT
Morgan Guaranty Trust Company of New York
60 Victoria Embankment
London EC4Y OJP
PAYING AGENT
Banque Generale du Luxembourg S.A.
27 Avenue Monterey
L-2951 Luxembourg
Luxembourg
LISTING AGENT
Banque Generale du Luxembourg S.A.
27 Avenue Monterey
L-2951 Luxembourg
Luxembourg
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JULY 13, 1995
PROSPECTUS
$584,662,000
MCDONALD'S CORPORATION
DEBT SECURITIES
McDonald's Corporation (the "Company") intends to issue from time to time in
one or more series its unsecured debt securities ("Debt Securities") with an
aggregate initial public offering price or purchase price of up to
$584,662,000, or the equivalent thereof in one or more foreign or composite
currencies, including the European Currency Unit ("ECU"). Debt Securities of
each series will be offered on terms to be determined at the time of sale. Debt
Securities may be sold for U.S. dollars or for one or more foreign or composite
currencies, and the principal of, premium, if any, and any interest on Debt
Securities may be payable in U.S. dollars or in one or more foreign or
composite currencies. Debt Securities of a series may be issuable as individual
securities in registered form without coupons ("Registered Securities"), in
bearer form with or without coupons attached ("Bearer Securities") or as one or
more global securities in registered or bearer form (each a "Global Security").
The specific designation, aggregate principal (or, if principal payable is
determined by reference to an index, face) amount, the currency in which the
principal, premium, if any, and any interest are payable, the rate (or method
of calculation) and the time and place of payment of any interest, authorized
denominations, maturity, offering price, any redemption terms and any other
specific terms of the Debt Securities in respect of which this Prospectus is
being delivered will be set forth in an accompanying Prospectus Supplement (as
supplemented with respect to Notes of any series by any pricing supplement
relating thereto, a "Prospectus Supplement").
The Debt Securities may be sold by the Company directly, through agents
designated from time to time, through dealers or one or more underwriters, or
through a syndicate of underwriters managed by one or more underwriters. If
underwriters or agents are involved in any offering of Debt Securities, the
names of the underwriters or agents will be set forth in the applicable
Prospectus Supplement. If an underwriter, agent or dealer is involved in any
offering of Debt Securities, the underwriter's discount, agent's commission or
dealer's purchase price will be set forth in, or may be calculated from the
information set forth in, the applicable Prospectus Supplement, and the net
proceeds to the Company from such offering will be the public offering price of
such Debt Securities less such discount, in the case of an offering through an
underwriter, or the purchase price of such Debt Securities less such
commission, in the case of an offering through an agent, and less, in each
case, the other expenses of the Company associated with the issuance and
distribution of such Debt Securities. See "Plan of Distribution" for specific
details.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------
The date of this Prospectus is July , 1995.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549 and at the following Regional
Offices of the Commission: New York Regional Office, Seven World Trade Center,
13th Floor, New York, New York 10048 and Chicago Regional Office, 500 W.
Madison Street, Suite 1400, Chicago, Illinois 60661; and copies of such
material can be obtained from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such
reports, proxy statements and other information can also be inspected at the
offices of the New York Stock Exchange and Chicago Stock Exchange. The Company
is not required to, and will not, provide an annual report or any other
periodic report to any holder of its debt securities unless specifically
requested by such holder.
The Company has filed with the Commission a Registration Statement on Form S-
3 (such Registration Statement, together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), relating to the Debt Securities. This
Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted from this Prospectus
in accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement.
A Company franchisee provides food services exclusively to United States
government personnel stationed at the United States naval station in Guantanamo
Bay, Cuba. This statement is made pursuant to the disclosure requirements of
Florida law and is accurate as of the date of this Prospectus. Investors may
obtain current information by contacting the Florida Department of Banking and
Finance, The Capitol, Tallahassee, Florida 32399-0350, telephone: (904) 488-
9805.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission (File No. 1-5231)
pursuant to the Exchange Act and are incorporated herein by reference and made
a part of this Prospectus:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, as amended by the Company's Form 10-K/A filed on
June 27, 1995; and
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date hereof and prior to the termination of
the offering of the Debt Securities shall be deemed to be incorporated herein
and to be a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein, in the
accompanying Prospectus Supplement, in an applicable Pricing Supplement or in
any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute part of this Prospectus.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any or all of the documents
described above, other than certain exhibits to such documents. Written or
telephone requests should be directed to: McDonald's Shareholder Services,
McDonald's Corporation, Kroc Drive, Oak Brook, Illinois 60521, (708) 575-7428.
----------------
References herein to "U.S. dollars", "dollars" or "$" are to the lawful
currency of the United States of America.
2
<PAGE>
MCDONALD'S CORPORATION
McDonald's Corporation and its subsidiaries develop, operate, franchise and
service a worldwide system of restaurants which prepare, assemble, package and
sell a limited menu of value-priced foods. These restaurants are operated by
the Company and its subsidiaries or, under the terms of franchise agreements,
by franchisees who are independent third parties, or by affiliates operating
under joint venture agreements between the Company or its subsidiaries and
local businesspeople.
McDonald's restaurants offer a substantially uniform menu consisting of
hamburgers and cheeseburgers, including the Big Mac and Quarter Pounder with
Cheese sandwiches, the Filet-O-Fish, McGrilled Chicken and McChicken
sandwiches, french fries, Chicken McNuggets, salads, shakes, sundaes and cones
made with low fat frozen yogurt, pies, cookies and a limited number of soft
drinks and other beverages. In addition, the restaurants sell a variety of
products during limited promotional time periods. McDonald's restaurants
operating in the United States are open during breakfast hours and offer a full
breakfast menu including the Egg McMuffin and the Sausage McMuffin with Egg
sandwiches, hotcakes and sausage; three varieties of biscuit sandwiches; Apple-
Bran muffins; and cereals. McDonald's restaurants in many countries around the
world offer many of these same products as well as other products and limited
breakfast menus. The Company tests new products on an ongoing basis.
McDonald's restaurants are located in all fifty of the United States and the
District of Columbia, and in many foreign locations, principally Japan, Canada,
Germany, England, Australia and France. At March 31, 1995, there were 15,370
restaurants worldwide, of which 9,795 were located in the United States and
5,575 in 78 other countries. An additional 327 restaurants were under
construction at March 31, 1995, including 228 outside the United States.
At March 31, 1995, 68% of McDonald's restaurants were operated by independent
franchisees, 21% were operated by the Company and its subsidiaries and 11% were
operated by affiliates (entities in which the Company and/or its subsidiaries
have an equity interest of 50% or less and in which the remaining equity
interest generally is owned by a local resident).
The Company's principal executive offices are located at One McDonald's
Plaza, Oak Brook, Illinois 60521, telephone: (708) 575-3000.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Debt
Securities for general corporate purposes, which may include debt refinancings
and capital expenditures such as the acquisition and development of McDonald's
restaurants. Specific allocations of net proceeds for such purposes have not
been made at this time. The amount and timing of any such debt refinancings or
capital expenditures will depend upon the Company's requirements and the
availability of other funds to the Company.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
--------- ------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges........... 4.66 4.70 5.26 4.86 3.96 3.53 3.48
</TABLE>
The ratios of earnings to fixed charges shown above have been computed on a
total enterprise basis. Earnings represent income before provision for income
taxes and fixed charges. Fixed charges consist of interest on all indebtedness,
amortization of debt issuance costs and discount or premium relating to any
indebtedness, and such portion of rental charges (after reduction for related
sublease income) considered to be representative of the interest component in
the particular case.
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture dated as of March 1,
1987, and any indentures supplemental thereto (collectively, the "Indenture"),
between the Company and First Fidelity Bank, National Association (formerly
Fidelity Bank, National Association), as Trustee (the "Trustee"). The following
statements with respect to the Debt Securities are summaries of the detailed
provisions of the Indenture, a copy of which is filed as an exhibit to the
Registration Statement. References in italics are to sections of the Indenture.
Wherever particular provisions of the Indenture are referred to, such
provisions are incorporated by reference as a part of the statements made, and
the statements are qualified in their entirety by such reference. As used under
this caption, the term "Debt Securities" includes the debt securities being
offered by this Prospectus and all other debt securities issued from time to
time by the Company under the Indenture.
GENERAL
The Debt Securities will be unsecured obligations of the Company, ranking
equally with all other unsecured and unsubordinated indebtedness for borrowed
money of the Company. Certain unsecured obligations of the Company may,
however, under certain circumstances, become secured by mortgages pursuant to
negative pledge covenants applicable to such obligations while the Debt
Securities remain unsecured.
Reference is made to the Prospectus Supplement for the terms of the series of
Debt Securities being offered thereby, including, where applicable: (i) the
title of such Debt Securities; (ii) the limit, if any, upon the aggregate
principal amount of such Debt Securities; (iii) the date or dates on which the
principal and premium, if any, of such Debt Securities is or are payable; (iv)
the rate or rates and/or the method of determination thereof, at which such
Debt Securities will bear interest, if any; the date or dates from which such
interest will accrue; the interest payment dates on which such interest will be
payable; and, in the case of Registered Securities, the record dates for the
interest payable on such interest payment dates; (v) whether such Debt
Securities are to be issued as Original Issue Discount Securities (as defined
below) and the amount of discount with which such Debt Securities will be
issued; (vi) the place or places where the principal of, and premium, if any,
and any interest on such Debt Securities will be payable; (vii) the price or
prices at which, the period or periods within which and the terms and
conditions upon which such Debt Securities may be redeemed in whole or in part,
at the option of the Company, pursuant to any sinking fund or otherwise; (viii)
the obligation, if any, of the Company to redeem or purchase such Debt
Securities pursuant to any sinking fund or analogous provisions or at the
option of a Holder and the price or prices at which, the period or periods
within which and the terms and conditions upon which such Debt Securities will
be redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation; (ix) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which such Debt Securities will be
issuable; (x) if other than the principal amount, the portion of the principal
amount of such Debt Securities which will be payable upon declaration of
acceleration of the maturity thereof pursuant to the Indenture; (xi) if other
than U.S. dollars, the coin, currency or currencies in which payment of the
principal of (and premium, if any) and interest, if any, on such Debt
Securities will be payable; (xii) if the principal of (and premium, if any) or
interest, if any, on such Debt Securities are to be payable, at the election of
the Company or a Holder, in a coin, currency or currencies other than that in
which the Debt Securities are stated to be payable, the period or periods
within which, and the terms and conditions upon which, such election may be
made; (xiii) if the amount of payments of principal of (and premium, if any) or
interest, if any, on such Debt Securities may be determined with reference to
an index based on a coin or currency or currencies other than that in which the
Debt Securities are stated to be payable, the manner in which such amount will
be determined; (xiv) any additional Events of Default provided for with respect
to such Debt Securities; (xv) provisions, if any, for the defeasance of such
Debt Securities; (xvi) whether such Debt Securities are to be issued in
registered or bearer form, with or without coupons; (xvii) whether such Debt
Securities are to be issued in whole or in part in the form of one or more
Global Securities and, if so, the identity of the Depositary (as defined below)
for such Global Security or Securities; (xviii) if any Debt Securities of the
series are to be issued as Bearer Securities or as one or more Global Debt
Securities
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representing individual Bearer Securities of the series; and (xix) any other
terms of such Debt Securities not inconsistent with the provisions of the
Indenture. (Section 2.02)
If Bearer Securities are issued, certain special considerations applicable to
such Bearer Securities, including limitations on their issuance, will be
described in the Prospectus Supplement relating thereto.
If the principal of (and premium, if any) or any interest on Debt Securities
of any series are payable in a foreign or composite currency, the restrictions,
elections, federal income tax consequences, specific terms and other
information with respect to such Debt Securities and such currency will be
described in the Prospectus Supplement relating thereto.
One or more series of Debt Securities may be sold at a discount below their
stated principal amount, bearing no interest or interest at a rate that at the
time of issuance is below market rates ("Original Issue Discount Securities").
Unless otherwise provided in the applicable Prospectus Supplement, the
principal of (and premium, if any) and any interest on Registered Securities
will be payable at the corporate trust office of the Trustee at Broad and
Walnut Streets, Philadelphia, Pennsylvania 19019; provided, however, that
payment of interest on Registered Securities may be made at the option of the
Company by check mailed to the Registered Holders thereof or, if so provided in
the applicable Prospectus Supplement, at the option of the Registered Holder by
wire transfer to an account designated by such Registered Holder. Provisions
with respect to the payment of principal of (and premium, if any) and any
interest on Bearer Securities or Global Securities will be set forth in the
applicable Prospectus Supplement. (Sections 2.02 and 4.01)
Unless otherwise provided in the applicable Prospectus Supplement, Registered
Securities may be transferred or exchanged at the office or agency maintained
by the Company for such purpose, subject to the limitations provided in the
Indenture, without the payment of any service charge, other than any tax or
governmental charge payable in connection therewith. (Section 2.05) Bearer
Securities will be transferable by delivery. Provisions with respect to the
exchange of Bearer Securities will be described in the applicable Prospectus
Supplement.
All moneys paid by the Company to the Trustee for the payment of principal of
(and premium, if any) or any interest on any Debt Security that remains
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will be repaid to the Company on demand, and
the Registered Holder of such Debt Security or any coupon appertaining thereto
will thereafter look only to the Company for payment thereof. (Section 12.05)
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the form
of one or more Global Securities that will be deposited with, or on behalf of,
a depositary (the "Depositary") identified in the Prospectus Supplement
relating to such series. Global Securities may be issued in either registered
or bearer form and in either temporary or definitive form. Unless and until it
is exchanged in whole or in part for individual Debt Securities, a Global
Security may not be transferred except as a whole by the Depositary for such
Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor of such Depositary or a nominee
of such successor. (Sections 2.03 and 2.05)
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will
apply to all depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal (or, if the amount of principal payable is
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determined by reference to an index (a "Principal Indexed Security"), face)
amounts of the individual Debt Securities represented by such Global Security
to the accounts of institutions that have accounts with such Depositary
("participants"). The accounts to be credited shall be designated by the
underwriters of such Debt Securities or, if such Debt Securities are offered
and sold directly by the Company or through one or more agents, by the Company
or such agent or agents. Ownership of beneficial interests in a Global Security
will be limited to participants or persons that may hold beneficial interests
through participants. Ownership of beneficial interests in a Global Security
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the Depositary for such Global Security (with
respect to participants' interests) and by participants or persons that hold
through participants (with respect to beneficial owners' interests). The laws
of some states require that certain purchasers of securities take physical
delivery of such securities. Such limits and such laws may impair the ability
to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the owner
of such Global Security, such Depositary or such nominee, as the case may be,
will be considered the Holder of the individual Debt Securities represented by
such Global Security for all purposes under the Indenture governing such Debt
Securities. Except as set forth below, owners of beneficial interests in a
Global Security will not be entitled to have any of the individual Debt
Securities represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of any such Debt
Securities and will not be considered the Holders thereof under the Indenture
governing such Debt Securities.
Subject to the restrictions discussed under "Limitations on Issuance of
Bearer Securities" below, payments of principal of (and premium, if any) and
any interest on the Debt Securities represented by a Global Security will be
made to the Depositary or its nominee, as the case may be, as the Holder of
such Global Security. None of the Company, the Trustee, any paying agent or
transfer agent for such Debt Securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in such Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. (Section 8.03)
The Company expects that the Depositary for Debt Securities of a series, upon
receipt of any payment of principal of (and premium, if any) or interest on a
definitive Global Security representing any of such Debt Securities, will
credit immediately participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal (or, in
the case of a Principal Indexed Security, face) amount of such Global Security
as shown on the records of such Depositary. The Company also expects that
payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name,"
and will be the responsibility of such participants. Receipt by owners of
beneficial interests in a temporary Global Security of payments of principal of
(and premium, if any) or interest on such Global Security will be subject to
the restrictions discussed under "Limitations on Issuance of Bearer Securities"
below.
If a Depositary of Debt Securities of a series is at any time unwilling or
unable to continue as Depositary and a successor Depositary is not appointed by
the Company within ninety days, the Company will issue individual Debt
Securities of such series in exchange for the Global Security or Securities
representing such Debt Securities. In addition, the Company may at any time and
in its sole discretion determine not to have any Debt Securities of a series
represented by one or more Global Securities and, in such event, will issue
individual Debt Securities of such series in exchange for the Global Security
or Securities representing such series of Debt Securities. (Section 2.05)
Further, if the Company so specifies with respect to the Debt Securities of a
series, an owner of a beneficial interest in a Global Security representing
Debt Securities of such series may, on terms acceptable to the Company and the
Depositary for such Global Security, receive individual Debt Securities in
exchange for such beneficial interest. In any such instance, an owner of a
beneficial interest in a Global Security will be entitled to physical delivery
of individual Debt Securities of the series represented by such Global Security
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equal in principal (or, in the case of a Principal Indexed Security, face)
amount to such beneficial interest and to have such Debt Securities registered
in its name (if the Debt Securities of such series are issuable as Registered
Securities). Individual Debt Securities of such series so issued will be issued
(a) in registered form in authorized denominations if the Debt Securities of
such series are issuable as Registered Securities, (b) in bearer form in
authorized denominations, with or without coupons attached, if the Debt
Securities of such series are issuable as Bearer Securities or (c) as either
Registered or Bearer Securities, if the Debt Securities of such series are
issuable in either form (Section 2.05). See, however, "Limitations on Issuance
of Bearer Securities" below for a description of certain restrictions on the
issuance of individual Bearer Securities in exchange for beneficial interests
in a Global Security.
CERTAIN COVENANTS OF THE COMPANY UNDER THE INDENTURE
The Indenture contains certain covenants described below which are applicable
to the Company with respect to any and all series of Debt Securities issued
thereunder. Specific covenants, if any, peculiar to a particular series of Debt
Securities to be offered hereby will be described in the Prospectus Supplement
relating thereto.
The Section 4.11 Covenant. The Company has agreed that (A) after the date of
the Indenture neither the Company nor any Restricted Subsidiary will create,
incur or assume any Real Property Mortgage, other than an Excepted Mortgage, as
security for Indebtedness of the Company or any subsidiary unless the Debt
Securities are equally and ratably secured with such Indebtedness, and (B) if
any Negative Pledge Mortgage is created, incurred or assumed by the Company or
any Restricted Subsidiary, the Company will, unless the "Section 4.11 Ratio" is
satisfied, if required by the Trustee, within 60 days deliver First Mortgages
on parcels of Real Property having a net book value of at least 125% of the
then unpaid principal amount of Debt Securities. The "Section 4.11 Ratio" is
satisfied if, after giving effect to the delivery of a Negative Pledge
Mortgage, the sum of (1) the unpaid principal amount of all Indebtedness of the
Company secured by Real Property Mortgages executed and delivered or assumed
after December 15, 1977 (other than those Excepted Mortgages listed in clauses
(ii), (iii), (iv) and (v) of the definition of Excepted Mortgage set forth
below) and (2) the unpaid principal amount of Funded Debt of Restricted
Subsidiaries incurred after December 15, 1977, does not exceed the greater of
$250,000,000 or 15% of Consolidated Capitalization. (Section 4.11)
The term "Consolidated Capitalization" means the total assets of the Company
and its Restricted Subsidiaries determined on a consolidated basis (but
exclusive of investments in, and loans and advances to, Unrestricted
Subsidiaries) less the total current liabilities of the Company and its
Restricted Subsidiaries determined on a consolidated basis. (Section 1.01)
The term "Excepted Mortgage" means any Real Property Mortgage which:
(i) secures Negative Pledge Debt;
(ii) is assumed or given in favor of the seller of Real Property when the
Company or any Restricted Subsidiary (or any predecessor thereof) acquires
(or acquired, in the case of such a predecessor) the Real Property;
(iii) must be created, incurred or assumed to permit the Company or any
Restricted Subsidiary to perform or comply with any contract or subcontract
made by it with, or at the request of, the United States of America, the
District of Columbia, any state or territory of the United States of
America, any political subdivision thereof, or any agency, department or
instrumentality of any thereof;
(iv) is a "Refunding Mortgage", that is, it secures Indebtedness
("Refunding Indebtedness") created, incurred or assumed in connection with
any extension, renewal, replacement or refunding of any Indebtedness
("Refunded Indebtedness") secured by any Real Property Mortgage; provided
that the Refunding Indebtedness shall not exceed the Refunded Indebtedness
and that the Refunding Mortgage shall not create a mortgage on any Real
Property other than that which secured the Refunded Indebtedness;
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(v) is a "Replacement Mortgage", that is, it is given in replacement of
another Real Property Mortgage ("Replaced Mortgage") to secure the same
Indebtedness; provided that the net book value of the Real Property covered
by the Replacement Mortgage does not exceed the net book value of the Real
Property covered by the Replaced Mortgage; or
(vi) secures Indebtedness (other than Indebtedness secured by an Excepted
Mortgage described under any other clause of this definition of "Excepted
Mortgage") which is created, incurred or assumed subsequent to December 15,
1977 if, immediately after giving effect thereto, the Section 4.11 Ratio is
satisfied. (Section 4.11)
The term "First Mortgages" means mortgages in recordable form securing the
Debt Securities and naming the Trustee as mortgagee, beneficiary, grantee or
secured party. First Mortgages shall be in form reasonably acceptable to the
Trustee and shall afford a first lien (except for encumbrances permitted by the
Indenture) on Real Property. At all times when First Mortgages are to be
delivered to or held by the Trustee pursuant to the Indenture, no less than 50%
of the net book value of the Real Property subject to such First Mortgages
shall be attributable to Real Property consisting of land, and buildings and
improvements located on land, owned in fee simple by the Company and/or its
subsidiaries, and up to 50% of the net book value of the Real Property subject
to such First Mortgages may be attributable to other Real Property. (Section
1.01)
The term "Funded Debt" means Indebtedness, whether secured or unsecured, if
such Indebtedness by its terms matures at, or is extendable or renewable at the
option of the obligor to, a date more than 12 months after the date of
determination of such Indebtedness. (Section 1.01)
The term "Funded Debt of Restricted Subsidiaries" means, at the date of
determination, the aggregate of Funded Debt of all Restricted Subsidiaries
other than Funded Debt:
(a) of any Restricted Subsidiary which is a guarantor of the Debt
Securities ("Guarantor")*, pursuant to a guaranty delivered to the Trustee
on or prior to such date of determination, provided such Funded Debt is not
secured by a Real Property Mortgage;
(b) which constitutes subordinated debt of Restricted Subsidiaries which,
if guaranteed by the Company or any Guarantor, is guaranteed solely
pursuant to a subordinated guaranty; or
(c) of Restricted Subsidiaries which have been acquired by the Company
after December 15, 1977, provided that such Funded Debt (i) is not
guaranteed by the Company or any Guarantor, (ii) is guaranteed pursuant to
a subordinated guaranty, or (iii) is Funded Debt of a Restricted Subsidiary
which was acquired by the Company not more than 60 days prior to such date
of determination. (Section 1.01)
The term "Indebtedness" means any and all obligations (other than obligations
of the Company to any Restricted Subsidiary or of any Restricted Subsidiary to
the Company or to any other Restricted Subsidiary and other than deferred
income taxes, security deposits by lessees and interim loans for construction)
incurred either for money borrowed or in connection with the acquisition of any
or all stock or assets of a corporation or other entity (whether by purchase,
merger or otherwise). (Section 1.01)
The term "Lease" means an original lease, a sublease or any lease under and
subsequent to a sublease. (Section 1.01)
The term "Mortgages" shall mean mortgages, deeds of trust, deeds to secure
debt and other similar instruments pursuant to which a lien on Real Property is
created in favor of, or title to Real Property is held by or transferred to a
Person for the benefit of, a Person as security for Indebtedness. (Section
1.01)
The term "Negative Pledge Debt" means Indebtedness of the Company or any
Restricted Subsidiary which (a) is not secured by a Real Property Mortgage on
the date of the Indenture or on the date of issuance
- - --------
* The Company is not obligated to cause any Restricted Subsidiary to become a
Guarantor, and does not presently intend to do so.
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of such Indebtedness, and (b) is issued pursuant to an instrument which
requires the Company, on the occurrence or nonoccurrence of an event specified
therein, to secure such Indebtedness with a Real Property Mortgage. (Section
4.11)
The term "Negative Pledge Mortgage" means any Real Property Mortgage
delivered to secure Negative Pledge Debt pursuant to one of the requirements
referred to in the definition of Negative Pledge Debt. (Section 4.11)
The term "Real Property" means land, Leases, buildings and improvements on
owned or leased land or leased premises, either owned in fee simple or leased
by the Company or one of its subsidiaries. (Section 1.01)
The term "Real Property Mortgage" shall mean a Mortgage upon or affecting
Real Property. (Section 1.01)
The term "Restricted Subsidiary" means any subsidiary which has not been
designated as an Unrestricted Subsidiary by the Company. The Company may
designate an Unrestricted Subsidiary as a Restricted Subsidiary at any time so
long as such subsidiary has not been a Restricted Subsidiary within 12 months
prior to such designation as a Restricted Subsidiary; provided, however, that
such change of designation does not result in an Event of Default under the
Indenture or an event which after notice or lapse of time, or both, would
constitute an Event of Default under the Indenture. (Section 1.01)
The term "Unrestricted Subsidiary" means any subsidiary which has been
designated an Unrestricted Subsidiary by the Company. The Company may designate
a Restricted Subsidiary as an Unrestricted Subsidiary at any time so long as
(i) such subsidiary has not been an Unrestricted Subsidiary within 12 months
prior to such designation as an Unrestricted Subsidiary, (ii) such change of
designation does not result in an Event of Default under the Indenture or an
event which after notice or lapse of time, or both, would constitute an Event
of Default under the Indenture, and (iii) such subsidiary does not own any real
property in the United States which is primarily used for the operation of a
McDonald's restaurant. (Section 1.01)
Other Covenants. The Indenture contains certain other covenants applicable
to all series of Debt Securities issued thereunder, including covenants
respecting the payment of taxes, maintenance of properties and other matters.
(Article Four)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than 66 2/3% in principal amount of
the Outstanding Debt Securities of all series issued under the Indenture which
are affected by the modification or amendment (voting as one class), to execute
supplemental indentures modifying the Indenture or any supplemental indenture,
provided that, without the consent of all Holders of then Outstanding Debt
Securities affected, no such modification shall extend the fixed maturity of
any Debt Securities, or reduce the principal amount thereof, or reduce the rate
or extend the time of payment of interest thereon, or reduce any premium
payable upon redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon
acceleration of the Stated Maturity thereof, or change the aforesaid percentage
of Debt Securities, the consent of Holders of which will be required for any
such modification. (Section 10.02) Generally, the principal amount of the Debt
Securities that is deemed "Outstanding" is the principal amount thereof, except
(a) as to Original Issue Discount Securities, it is the portion of the
principal amount thereof that then would be due and payable upon an
acceleration of the Stated Maturity thereof pursuant to an Event of Default;
and (b) as to Debt Securities denominated in a currency other than U.S.
dollars, it is the amount of U.S. dollars that could be obtained for such
principal amount on the basis of the spot rate of exchange for purchasing U.S.
dollars with such currency at or about the date of determination. (Section
1.01)
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EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to any series of Debt
Securities as being any one of the following events: (a) default for 30 days in
any payment of interest on such series; (b) default in any payment of principal
of (and premium, if any, on) such series when due; (c) default in the payment
of any sinking fund installment when due; (d) default in the performance of a
particular covenant applicable to that series after appropriate notice and
opportunity to cure such default, if any; (e) default for 60 days, after
appropriate notice, in the performance of any other covenants in the Indenture
(other than the Section 4.11 covenant and any other covenant included in the
Indenture solely for the benefit of a series of Debt Securities other than that
series), provided that such default shall not be an Event of Default if it
cannot with due diligence be cured within such 60-day period due to causes
beyond the control of the Company, unless the Company shall fail to proceed
promptly to cure such default and thereafter prosecute the curing of such
default with diligence and continuity; (f) default for 120 days after
appropriate notice in the performance of the Section 4.11 covenant; (g) a
default under any other indenture or instrument (including an Event of Default
with respect to a series of Debt Securities other than that series) under which
the Company has outstanding at the date of such default an aggregate principal
amount of Indebtedness in excess of 15% of Consolidated Capitalization,
provided that such Indebtedness shall have been accelerated so that such
Indebtedness shall be or become due and payable prior to the date on which the
same would otherwise have become due and payable; (h) default in the payment at
the maturity thereof of an aggregate principal amount of Indebtedness
(including such a default with respect to a series of Debt Securities other
than that series) in excess of 15% of Consolidated Capitalization; or (i)
certain events of bankruptcy, insolvency or reorganization. An Event of Default
with respect to a particular series of Debt Securities issued under the
Indenture does not necessarily constitute an Event of Default with respect to
any other series of Debt Securities issued thereunder. In case an Event of
Default under clause (a), (b), (c) or (d) shall occur and be continuing with
respect to any series of Debt Securities, the Trustee or the Holders of not
less than 25% in aggregate principal amount of Debt Securities then Outstanding
of such series may declare the entire principal (or, if the Debt Securities of
such series are Original Issue Discount Securities, the portion of the
principal amount specified in the terms of such series) of such series to be
due and payable. In case an Event of Default under clause (e), (f), (g), (h) or
(i) shall occur and be continuing, the Trustee or Holders of not less than 25%
in aggregate principal amount of all the Outstanding Debt Securities may
declare the entire principal (or, if any Debt Securities are Original Issue
Discount Securities, the portion of the principal amount specified in the terms
thereof) of Outstanding Debt Securities of all series to be due and payable.
Any Event of Default with respect to a particular series of Debt Securities (or
of all the Debt Securities, as the case may be) may be waived by the Holders of
a majority in aggregate principal amount of the Outstanding Debt Securities of
such series (or of all the Outstanding Debt Securities, as the case may be),
except in each case a failure to pay principal or premium, if any, or interest
on such Debt Securities. (Section 6.01; Section 6.06)
The Indenture requires the Company to file with the Trustee an Officers'
Certificate annually as to knowledge of any default under the terms of the
Indenture. (Section 4.06) The Indenture provides that the Trustee may withhold
notice to the Holders of the Debt Securities of any default (except in payment
of principal or premium, if any, or interest) if the Trustee considers it in
the interest of the Holders of the Debt Securities to do so. (Section 6.07)
Subject to the provisions of the Indenture relating to the duties of the
Trustee, the Indenture provides that the Trustee shall be under no obligation
to exercise any of its rights or powers under the Indenture at the request,
order or direction of the Holders of the Debt Securities unless such Holders
shall have offered to the Trustee reasonable indemnity. (Sections 6.04, 7.01
and 7.02) Subject to such provisions regarding indemnification of and certain
other rights of the Trustee, the Indenture provides that the Holders of a
majority (voting as one class) in principal amount of the Outstanding Debt
Securities of any or all series affected will have the right to direct the
time, method, and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee.
(Section 6.06) The Indenture provides that notwithstanding any other provisions
thereof, the right of any Holder to receive
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payment of the principal of (and premium, if any) and interest on the Debt
Securities or to institute suit for the enforcement thereof shall not be
impaired or affected without such Holder's consent. (Section 6.04)
DEFEASANCE
Unless otherwise provided in the Prospectus Supplement with respect to any
series of Debt Securities, the Company, at its option, (a) will be discharged
from any and all obligations in respect of such Debt Securities (except in each
case for certain obligations to register the transfer or exchange of such Debt
Securities, replace stolen, lost or mutilated Debt Securities, maintain paying
agencies and hold moneys for payment in trust) or (b) need not comply with
certain restrictive covenants of the Indenture (including those described under
"Certain Covenants of the Company Under the Indenture" above) and will not be
limited by any restrictions with respect to merger, consolidation or sales of
assets, in each case if the Company deposits with the Trustee, in trust, (x)
money or (y) U.S. Government Obligations or a combination of (x) and (y) which,
through the payment of interest thereon and principal thereof in accordance
with their terms, will provide money in an amount sufficient to pay all the
principal (including any mandatory sinking fund payments) of, if any, and
premium, if any, and interest on, such Debt Securities on the dates such
payments are due in accordance with the terms of such series. (Section 12.02)
In order to avail itself of either of the foregoing options, the Company must
provide to the Trustee an opinion of counsel or a ruling from, or published by,
the Internal Revenue Service, to the effect that Holders of the Debt Securities
of such series will not recognize income, gain or loss for Federal income tax
purposes as a result of the Company's exercise of its option and will be
subject to Federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such option had not been
exercised. (Section 12.02) "U.S. Government Obligations" means generally (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof.
(Section 1.01) In addition, the Company can also obtain a discharge under the
Indenture with respect to all the Debt Securities of a series by depositing
with the Trustee, in trust, funds sufficient to pay at maturity or upon
redemption all of the Debt Securities of such series, provided that all of the
Debt Securities of such series are by their terms to become due and payable
within one year or are to be called for redemption within one year. No such
opinion of counsel or ruling from the Internal Revenue Service is required with
respect to a discharge pursuant to the immediately preceding sentence. In the
event of any discharge of Debt Securities pursuant to the terms of the
Indenture described above, the Holders of such Debt Securities will thereafter
be able to look solely to such trust fund, and not to the Company, for payments
of principal, premium, if any, and interest, if any. (Sections 12.01 and 12.02)
CONCERNING THE TRUSTEE
The Company, its subsidiaries and affiliates maintain banking relationships
(including the extension of credit) in the ordinary course of business with the
Trustee.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with U.S. federal income tax laws and regulations, the Company
and any underwriter, agent or dealer participating in the offering of any
Bearer Security will agree, in connection with the original issuance of such
Bearer Security and during the period of 40 days after the issue date of such
Bearer Security, not to offer, sell or deliver such Bearer Security, directly
or indirectly, to a U.S. Person or to any person within the United States,
except to the extent permitted under U.S. Treasury regulations.
Bearer Securities and any coupons attached thereto will bear a legend to the
following effect: "Any United States Person who holds this obligation will be
subject to limitations under the United States income
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tax laws, including the limitations provided in Sections 165(j) and 1287(a) of
the Internal Revenue Code." The sections referred to in the legend provide
that, with certain exceptions, a United States taxpayer that holds Bearer
Securities will not be allowed to deduct any loss, and will not be eligible for
capital gain treatment with respect to any gain, realized on a sale, exchange,
redemption or other disposition of such Bearer Securities.
As used herein, "United States" means the United States of America and its
possessions, and "U.S. Person" means a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in or
under the laws of the United States, or an estate or trust the income of which
is subject to United States federal income taxation regardless of its source.
Pending the availability of a definitive Global Security in bearer form or
individual Bearer Securities, as the case may be, Debt Securities that are
issuable as Bearer Securities may initially be represented by a single
temporary Global Security in bearer form, without interest coupons, to be
deposited with a common depositary in London for Morgan Guaranty Trust Company
of New York, Brussels Office, as operator of the Euroclear System
("Euroclear"), and Cedel Bank, societe anonyme ("Cedel") for credit to the
accounts designated by or on behalf of the purchasers thereof. Following the
availability of a definitive Global Security in bearer form, without coupons
attached, or individual Bearer Securities, with or without coupons, and subject
to any further limitations described in the applicable Prospectus Supplement,
the temporary Global Security will be exchangeable for interests in such
definitive Global Security or for such individual Bearer Securities,
respectively, only upon receipt of a Certificate of Non-U.S. Beneficial
Ownership. A "Certificate of Non-U.S. Beneficial Ownership" is a certificate to
the effect that a beneficial interest in a temporary Global Security is owned
by a person that is not a U.S. Person or is owned by or through a financial
institution in compliance with applicable U.S. Treasury regulations. No Bearer
Security will be delivered in or to the United States. If so specified in the
applicable Prospectus Supplement, interest on a temporary Global Security will
be paid to each of Euroclear and Cedel with respect to that portion of such
temporary Global Security held for its account, but only upon receipt as of the
relevant interest payment date of a Certificate of Non-U.S. Beneficial
Ownership.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities in any of three ways: (i) through
underwriters or dealers; (ii) directly to one or more purchasers; or (iii)
through agents. The applicable Prospectus Supplement will set forth the terms
of the offering of any Debt Securities, including the names of any underwriters
or agents, the purchase price of such Debt Securities and the net proceeds to
the Company from such sale, any underwriting discounts and other items
constituting underwriters' compensation or agents' commission, any initial
public offering price, any discounts or concessions allowed or reallowed or
paid to dealers, any securities exchanges on which such Debt Securities may be
listed and any restrictions on the sale and delivery of Debt Securities in
bearer form.
If underwriters or dealers are used in the sale, Debt Securities will be
acquired by such underwriters or dealers for their own account and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Such Debt Securities may be offered to the public either
through underwriting syndicates represented by managing underwriters or by
underwriters without a syndicate. Unless otherwise set forth in the applicable
Prospectus Supplement, the obligations of the underwriters to purchase such
Debt Securities will be subject to certain conditions precedent, and the
underwriters will be obligated to purchase all of such Debt Securities if any
of such Debt Securities are purchased. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
Debt Securities may also be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of Debt Securities will be named, and any
12
<PAGE>
commissions payable by the Company to such agent will be set forth, in the
applicable Prospectus Supplement. Unless otherwise indicated in the applicable
Prospectus Supplement, any such agent will act on a best efforts basis for the
period of its appointment.
Any underwriters, dealers or agents participating in the distribution of Debt
Securities may be deemed to be underwriters and any discounts or commissions
received by them on the sale or resale of Debt Securities may be deemed to be
underwriting discounts and commissions under the Securities Act. Agents and
underwriters may be entitled under agreements entered into with the Company to
indemnification by the Company against certain civil liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments that the agents or underwriters may be required to make in respect of
such liabilities. Agents and underwriters may be customers of, engage in
transactions with, or perform services for, the Company or its subsidiaries or
affiliates in the ordinary course of business.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters to solicit offers by certain institutions to purchase
the Debt Securities being offered hereby from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to Delayed
Delivery Contracts ("Contracts") providing for payment and delivery on the date
or dates stated in the Prospectus Supplement. Each Contract will be for an
amount not less than, and unless the Company otherwise agrees the aggregate
principal (or face) amount of Debt Securities sold pursuant to Contracts shall
be not less nor more than, the respective amounts stated in the Prospectus
Supplement. Institutions with which Contracts, when authorized, may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and other
institutions, but shall in all cases be subject to the approval of the Company.
Contracts will not be subject to any conditions except that (i) the purchase by
an institution of the Debt Securities covered by its Contract shall not at the
time of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject, and (ii) if the Debt Securities
being offered hereby are being sold to underwriters, the Company shall have
sold to such underwriters the total principal (or face) amount of such Debt
Securities less the principal amount thereof covered by the Contracts.
LEGAL MATTERS
The legality of the Debt Securities offered hereby will be passed upon for
the Company by Shelby Yastrow, Senior Vice President, General Counsel and
Secretary of the Company. Mr. Yastrow is a full-time employee of the Company
and owns, and holds options to purchase, shares of the Company's Common Stock.
Certain legal matters will be passed on for any underwriters or agents by
Cleary, Gottlieb, Steen & Hamilton, One Liberty Plaza, New York, New York
10006. From time to time Cleary, Gottlieb, Steen & Hamilton provides legal
services to the Company.
EXPERTS
The consolidated financial statements of the Company included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994 have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein, and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
13
<PAGE>
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTA-
TIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT (INCLUDING ANY
ACCOMPANYING PRICING SUPPLEMENT) OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHO-
RIZED. THIS PROSPECTUS SUPPLEMENT (INCLUDING ANY ACCOMPANYING PRICING SUPPLE-
MENT) AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY OF THE SECURITIES OTHER THAN THE SECURITIES OFFERED BY
THIS PROSPECTUS SUPPLEMENT (INCLUDING ANY PRICING SUPPLEMENT) OR AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SUCH SECURITIES IN ANY JURISDIC-
TION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION
IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT (IN-
CLUDING ANY ACCOMPANYING PRICING SUPPLEMENT) NOR THE PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF
OR THEREOF OR THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SINCE ITS DATE.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
Important Currency Information............................................. S-2
Description of Registered Notes............................................ S-2
Currency Risks............................................................. S-16
United States Tax Considerations........................................... S-18
Plan of Distribution....................................................... S-23
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents By Reference............................ 2
McDonald's Corporation..................................................... 3
Use of Proceeds............................................................ 3
Ratio of Earnings to Fixed Charges......................................... 3
Description of Debt Securities............................................. 4
Limitations on Issuance of Bearer Securities............................... 11
Plan of Distribution....................................................... 12
Legal Matters.............................................................. 13
Experts.................................................................... 13
</TABLE>
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
$584,662,000
MCDONALD'S CORPORATION
MEDIUM-TERM NOTES DUE FROM NINE MONTHS TO 60 YEARS FROM DATE OF ISSUE
[LOGO] MCDONALDS
------------------
PROSPECTUS SUPPLEMENT
------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO.
INCORPORATED
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
JULY , 1995
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses in connection with the issuance
and distribution of the Debt Securities being registered. All the amounts are
estimated, except the Securities and Exchange Commission Registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration fee............. $172,414
Fees and expenses of accountants................................ 20,000
Fees and expenses of counsel.................................... 60,000
Blue Sky fees and expenses...................................... 15,000
Fees and expenses of Trustee and agents......................... 20,000
Printing expenses............................................... 50,000
Rating Agency fees.............................................. 70,000
Miscellaneous................................................... 17,586
--------
Total......................................................... $425,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "GCL") provides for
indemnification of directors and officers against any legal liability (other
than liability arising from derivative suits) if the director or officer acted
in good faith and in a manner that he or she reasonably believed to be in or
not opposed to the best interests of the corporation. In criminal actions, the
director or officer must also have had no reasonable cause to believe that his
or her conduct was unlawful. A corporation may indemnify a director or officer
in a derivative suit if the director or officer acted in good faith and in a
manner that he or she reasonably believed to be in or not opposed to the best
interests of the corporation unless the director or officer is found liable to
the corporation (in which case a court may permit indemnity for such director
or officer to the extent it deems proper).
Article V of the Company's By-Laws provides that the Company shall indemnify
and hold harmless each director and officer to the fullest extent permitted
under the GCL, provided that the person seeking indemnification has met the
applicable standard of conduct set forth in the By-Laws. Such indemnification
could cover all expenses as well as liabilities and losses incurred by
directors and officers. The Board of Directors has the authority by resolution
to provide for other indemnification of directors and officers as it deems
appropriate.
The By-Laws further provide that the Company may maintain insurance at its
expense to protect any director or officer against any expenses, liabilities or
losses, whether or not the Company would have the power to indemnify such
director or officer against such expenses, liabilities or losses under the GCL.
Pursuant to this provision, the Company maintains insurance against any
liability incurred by its directors and officers in defense of any action in
which they are made parties by reason of their positions as directors and
officers.
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<CAPTION>
ITEM 601 OF
REGULATION S-K
EXHIBIT REFERENCE
NUMBER
-----------------
<C> <S>
1(a) Form of Underwriting Agreement.*
(b) Form of U.S. Distribution Agreement.
(c) Form of Euro Distribution Agreement.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
ITEM 601 OF
REGULATION S-K
EXHIBIT REFERENCE
NUMBER
-----------------
<C> <S>
4(a) Form of Indenture dated as of March 1, 1987 between McDonald's
Corporation and First Fidelity Bank, National Association (formerly
Fidelity Bank, National Association), as Trustee.**
(b) Form of Supplemental Indenture No. 22 between McDonald's Corporation and
First Fidelity Bank, National Association, as Trustee (Exhibits A
through H to Supplemental Indenture No. 22 are included as Exhibits
4(c) through (j), respectively, of this Registration Statement).
(c) Form of Series E Fixed Rate Registered Note.
(d) Form of Series E Floating Rate Registered Note.
(e) Form of Fixed Rate Temporary Global Note representing Medium-Term Notes,
Series E.
(f) Form of Floating Rate Temporary Global Note representing Medium-Term
Notes, Series E.
(g) Form of Fixed Rate Permanent Global Note representing Medium-Term Notes,
Series E.
(h) Form of Floating Rate Permanent Global Note representing Medium Term
Notes, Series E.
(i) Form of Series E Fixed Rate Bearer Note.
(j) Form of Series E Floating Rate Bearer Note.
(k) Form of Fixed/Floating Rate Note.**
(l) Form of Sinking Fund Note.**
(m) Form of Original Issue Discount Note.**
(n) Form of Zero Coupon Note.**
5 Opinion and consent of Shelby Yastrow, Senior Vice President, General
Counsel and Secretary of the Company.
12 Statement re: Computation of Ratios of Earnings to Fixed Charges.***
23(a) Consent of Ernst & Young LLP, independent auditors.
23(b) Consent of Shelby Yastrow, Senior Vice President, General Counsel and
Secretary of the Company, is included in Exhibit 5.
24 Powers of Attorney (set forth on page II-4 of this Registration
Statement).
25 Statement of Eligibility and Qualification on Form T-1 of First Fidelity
Bank, National Association, as Trustee.
</TABLE>
- - --------
* Exhibit 1(a) was previously filed as Exhibit 1 to the Company's Registration
Statement on Form S-3 (File No. 33-50025) and is incorporated herein by
reference.
**Exhibits 4(a), 4(k), 4(l), 4(m), and 4(n) above were previously filed as
Exhibits 4(a), 4(b), 4(c), 4(d), and 4(e), respectively, to the Company's
Registration Statement on Form S-3 (File No. 33-12364) and are incorporated
herein by reference.
***Exhibit 12 above was previously filed as Exhibit 12 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995 and is
incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement; notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Securities and Exchange Commission pursuant to Rule 424(b)
II-2
<PAGE>
of the Securities Act of 1933 if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that the undertakings set forth in clauses (i) and (ii)
above do not apply if the information required to be included in a post-
effective amendment by those clauses is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(d) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual reports pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in this Registration Statement shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(e) That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions referred
to in Item 15 of this Registration Statement, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3, AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE VILLAGE OF OAK BROOK, AND STATE OF ILLINOIS, ON THE 13TH DAY
OF JULY.
McDONALD'S CORPORATION
/s/ Jack M. Greenberg
By___________________________________
Jack M. Greenberg
Vice Chairman, Chief Financial
Officer and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Jack M. Greenberg, Michael L. Conley, Shelby
Yastrow and Carleton D. Pearl, and each of them, his true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto and all other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated and on the 13th day of July.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Hall Adams, Jr. Director
___________________________________________
Hall Adams, Jr.
/s/ Robert M. Beavers, Jr. Senior Vice President and Director
___________________________________________
Robert M. Beavers, Jr.
/s/ James R. Cantalupo President and Chief Executive Officer--
___________________________________________ McDonald's International and Director
James R. Cantalupo
/s/ Gordon C. Gray Director
___________________________________________
Gordon C. Gray
/s/ Jack M. Greenberg Vice Chairman, Chief Financial Officer and
___________________________________________ Director
Jack M. Greenberg
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Donald R. Keough Director
___________________________________________
Donald R. Keough
/s/ Donald G. Lubin Director
___________________________________________
Donald G. Lubin
/s/ Andrew J. McKenna Director
___________________________________________
Andrew J. McKenna
/s/ Michael R. Quinlan Chairman, Chief Executive Officer and
___________________________________________ Director
Michael R. Quinlan
/s/ Edward H. Rensi President and Chief Executive Officer--
___________________________________________ McDonald's U.S.A. and Director
Edward H. Rensi
/s/ Terry Savage Director
___________________________________________
Terry Savage
/s/ Paul D. Schrage Senior Executive Vice President, Chief
___________________________________________ Marketing Officer and Director
Paul D. Schrage
/s/ Ballard F. Smith Director
___________________________________________
Ballard F. Smith
/s/ Roger W. Stone Director
___________________________________________
Roger W. Stone
/s/ Robert N. Thurston Director
___________________________________________
Robert N. Thurston
/s/ Fred L. Turner Senior Chairman and Director
___________________________________________
Fred L. Turner
/s/ B. Blair Vedder, Jr. Director
___________________________________________
B. Blair Vedder, Jr.
/s/ Michael L. Conley Senior Vice President and Controller
___________________________________________
Michael L. Conley
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE
EXHIBIT NO.
------- ----
<C> <S> <C>
1(a) Form of Underwriting Agreement.*
(b) Form of U.S. Distribution Agreement.
(c) Form of Euro Distribution Agreement.
4(a) Form of Indenture dated as of March 1, 1987 between McDonald's
Corporation and First Fidelity Bank, National Association
(formerly Fidelity Bank, National Association), as Trustee.**
(b) Form of Supplemental Indenture No. 22 between McDonald's
Corporation and First Fidelity Bank, National Association, as
Trustee (Exhibits A through H to Supplemental Indenture No. 22
are included as Exhibits 4(c) through (j), respectively, of
this Registration Statement).
(c) Form of Series E Fixed Rate Registered Note.
(d) Form of Series E Floating Rate Registered Note.
(e) Form of Fixed Rate Temporary Global Note representing Medium-
Term Notes, Series E.
(f) Form of Floating Rate Temporary Global Note representing
Medium-Term Notes, Series E.
(g) Form of Fixed Rate Permanent Global Note representing Medium-
Term Notes, Series E.
(h) Form of Floating Rate Permanent Global Note representing Medium
Term Notes, Series E.
(i) Form of Series E Fixed Rate Bearer Note.
(j) Form of Series E Floating Rate Bearer Note.
(k) Form of Fixed/Floating Rate Note.**
(l) Form of Sinking Fund Note.**
(m) Form of Original Issue Discount Note.**
(n) Form of Zero Coupon Note.**
5 Opinion and consent of Shelby Yastrow, Senior Vice President,
General Counsel and Secretary of the Company.
12 Statement re: Computation of Ratios of Earnings to Fixed
Charges.***
23(a) Consent of Ernst & Young LLP, independent auditors.
23(b) Consent of Shelby Yastrow, Senior Vice President, General
Counsel and Secretary of the Company, is included in Exhibit
5.
24 Powers of Attorney (set forth on page II-4 of this Registration
Statement).
25 Statement of Eligibility and Qualification on Form T-1 of First
Fidelity Bank, National Association, as Trustee.
</TABLE>
- - --------
* Exhibit 1(a) was previously filed as Exhibit 1 to the Company's Registration
Statement on Form S-3 (File No. 33-50025) and is incorporated herein by
reference.
** Exhibits 4(a), 4(k), 4(l), 4(m) and 4(n) above were previously filed as
Exhibits 4(a), 4(b), 4(c), 4(d) and 4(e), respectively, to the Company's
Registration Statement on Form S-3 (File No. 33-12364) and are incorporated
herein by reference.
*** Exhibit 12 above was previously filed as Exhibit 12 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995 and is
incorporated herein by reference.
<PAGE>
Exhibit 1(b)
Draft of 7/5/95
McDonald's Corporation
U.S. $584,662,000
Medium-Term Notes, Series E
Due from Nine Months to 60 Years from Date of Issue
U.S. DISTRIBUTION AGREEMENT
_________________, 1995
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headuarters
North Tower, World Financial Center
23rd Floor
New York, New York 10281
Goldman Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, New York 10020
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
McDonald's Corporation, a Delaware corporation (the "Company"), confirms
its agreement with you with respect to the issue and sale by the Company of its
Medium-Term Notes, Series E due from nine months to 60 years from date of issue
having an aggregate
<PAGE>
initial public offering price or purchase price of up to U.S.$584,662,000 or its
equivalent in foreign currencies or currency units, including European Currency
Units (the "Notes").
The Notes are to be issued under an indenture dated as of March 1, 1987
between the Company and First Fidelity Bank, National Association (formerly
Fidelity Bank, National Association) (the "Trustee") and any indentures
supplemental thereto (collectively, the "Indenture"), will be issued in fully
registered definitive form in denominations of $100,000 and integral multiples
of $1,000 in excess thereof (or in such other denominations as shall be provided
in a supplement to the Basic Prospectus referred to below). Notes may bear
interest at fixed or floating rates to be provided in a supplement to the Basic
Prospectus referred to below, and may, whether or not bearing interest, be
issued with original issue discount. The Notes may be issued in amounts
denominated in United States dollars or in amounts denominated in foreign
currencies or in the European Currency Unit or other composite currencies.
References herein to amounts stated in United States dollars shall be deemed to
refer to the equivalent amount of foreign currency or European Currency Units or
other composite currency to the extent applicable.
Subject to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell Notes directly to investors on
its own behalf or through other agents, dealers or underwriters, the Company
hereby appoints each of you (individually as "Agent" and collectively the
"Agents") as an agent for the purpose of soliciting offers to purchase the Notes
from the Company by others and agrees that if and whenever the Company
determines to sell Notes directly to an Agent as principal for resale to others
it will enter into a Terms Agreement relating to such sale in accordance with
the provisions of Section 2(b) hereof. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, each Agent agrees, severally but not jointly, to use its reasonable best
efforts to solicit offers to purchase Notes upon terms acceptable to the Company
at such times and in such amounts as the Company shall from time to time
specify. In acting under this Agreement and in connection with the sale of any
Notes by the Company (other than Notes sold to an Agent as principal pursuant to
a Terms Agreement), each Agent is acting solely as agent of the Company and does
not assume any obligation towards or relationship of agency or trust with any
purchaser of the Notes.
1. Representations and Warranties. The Company represents and warrants
------------------------------
to and agrees with each Agent as follows:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), and has
filed with the Securities and Exchange Commission (the "Commission") a
registration statement on such Form (Registration No. 33-_____) and
such registration statement has become effective, for the registration
under the Securities Act of the offering of the Notes. Such
registration statement, including the exhibits thereto, as amended at
the date of the sale of any Notes, is hereinafter called the
"Registration Statement". The Indenture has been qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act")
and the Company has duly authorized the issuance of the Notes. The
Registration
- 2 -
<PAGE>
Statement, as amended at the date of this Agreement, meets the
requirements set forth in Rule 415(a)(1)(x) under the Securities Act
and complies in all other material respects with said Rule. The
Company proposes to file with the Commission from time to time,
pursuant to Rule 424(b) under the Securities Act, supplements to the
prospectus relating to the Notes included in the Registration
Statement, which will describe certain terms of the Notes, and prior
to any such filing will advise each Agent of all further information
(financial and other) with respect to the Company to be set forth
therein. Such prospectus in the form in which it appears in the
Registration Statement is called the "Basic Prospectus". The term
"Prospectus" means the Basic Prospectus together with the prospectus
supplement or supplements specifically relating to any Notes sold
pursuant to this Agreement (a "Prospectus Supplement"), as filed with,
or transmitted for filing with, the Commission pursuant to Rule 424
under the Securities Act. Any reference herein to the Registration
Statement, Basic Prospectus or Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 which have been filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied
or will comply when so filed in all material respects with the
Exchange Act and the rules and regulations thereunder, (ii) each part
of the Registration Statement (including the documents incorporated by
reference therein) filed with the Commission pursuant to the
Securities Act relating to the Notes, when such part became effective
or was incorporated by reference into the Registration Statement, did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement
and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities
Act and the applicable rules and regulations thereunder and (iv) the
Registration Statement and the Prospectus do not contain and, as
further amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except that the representations and warranties
set forth in this Section l(b) do not apply to (a) that part of the
Registration Statement that consists of the Statement of Eligibility
and Qualification (Form T-1) under the Trust Indenture Act of First
Fidelity Bank, National Association, as Trustee under the Indenture,
or (b) statements or omissions in the Registration Statement or the
Prospectus based upon information furnished to the Company in writing
by an Agent, relating to such Agent, expressly for use therein.
- 3 -
<PAGE>
2. Solicitations as Agent; Purchases as Principal.
----------------------------------------------
(a) Solicitations as Agent. On the basis of the representations and
----------------------
warranties herein contained, but subject to the terms and conditions
herein set forth, each Agent will use its reasonable best efforts to
solicit offers to purchase the Notes upon the terms and conditions set
forth in the Prospectus as then amended or supplemented; provided,
--------
however, that each Agent hereby represents and agrees that it will not
-------
make any representations or use any information other than that set
forth in the Prospectus (as then amended or supplemented) or solicit
any offer to purchase the Notes other than by means of such Prospectus
as then amended or supplemented.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase the Notes. Upon
receipt of notice from the Company, each Agent will forthwith suspend
solicitations of offers to purchase Notes from the Company until such
time as the Company has advised the Agents that such solicitation may
be resumed. During the period of time that this Agreement is
suspended the Company shall not be required to deliver any
certificates, opinions or letters in accordance with Sections 3(i),
(j) and (k); provided, however, that no Agent shall be required to
-------- -------
resume soliciting offers to purchase Notes until the Company has
delivered such certificates, opinions or letters as requested by such
Agent if any of the events described in Section 3(i), (j) or (k) have
occurred during the period of suspension.
The Company agrees to pay each Agent, as consideration for the sale of
any Notes resulting from a solicitation made by it, a commission in
the form of a discount from the principal amount of each Note sold by
the Company hereunder as a result of such solicitation. With respect
to Notes with a term of nine months to 30 years, such commission will
be equal to the following percentage of the principal amount of such
Note:
Term Commission Rate
---- ---------------
From 9 months to less than one year 0.125%
From one year to less than 18 months 0.150%
From 18 months to less than 2 years 0.200%
From 2 years to less than 3 years 0.250%
From 3 years to less than 4 years 0.350%
From 4 years to less than 5 years 0.450%
From 5 years to less than 6 years 0.500%
From 6 years to less than 7 years 0.550%
From 7 years to less than 10 years 0.600%
From 10 years to less than 20 years 0.625%
From 20 years to 30 years 0.750%
- 4 -
<PAGE>
and with respect to Notes with a term in excess of thirty years such
commission will be negotiated between the Company and the applicable
Agent at the time of sale. The Agents may reallow any portion of the
commission payable pursuant hereto to dealers or purchasers in
connection with the offer and sale of any Notes. The Agents are
authorized to solicit offers to purchase Notes only in the minimum
principal amount of $100,000 or any amount in excess thereof that is a
whole multiple of $1,000 (or in such other minimum purchase amounts
and multiples thereof as are described in a supplement to the Basic
Prospectus). Each Agent shall communicate to the Company, orally or
in writing, each offer to purchase Notes received by it as agent which
in its judgment should be considered by the Company. The Company
shall have the sole right to accept offers to purchase Notes and may
reject any offer in whole or in part. Each Agent shall have the right
to reject any offer to purchase Notes that it considers to be
unacceptable, and any such rejection shall not be deemed a breach of
its agreements contained herein.
(b) Purchases as Principal. Each sale of Notes to an Agent as principal
----------------------
shall be made in accordance with the terms of this Agreement and a
separate agreement which will provide for the sale of such Notes to
such Agent and the purchase and re-offering thereof by such Agent.
Each such separate agreement (which may initially be an oral
agreement, to be subsequently confirmed in writing) is herein referred
to as a "Terms Agreement". Unless the context otherwise requires,
each reference contained herein to "this Agreement" shall be deemed to
include any applicable Terms Agreement between the Company and an
Agent. Each such Terms Agreement, whether oral or in writing, shall
be with respect to such information (as applicable) as is specified in
Exhibit A hereto. An Agent's commitment to purchase Notes pursuant to
any Terms Agreement shall be deemed to have been made on the basis of
the representations and warranties of the Company herein contained and
shall be subject to the terms and conditions herein set forth. Each
Terms Agreement shall specify the principal amount of Notes to be
purchased pursuant thereto, the maturity date thereof, the price to be
paid to the Company for such Notes, the time and place of delivery of
and payment for such Notes (the "Settlement Date") and any other
relevant terms. An Agent may utilize a selling or dealer group in
connection with the resale of the Notes purchased. Such Terms
Agreement shall also specify any requirements for officers'
certificates, opinions of counsel and letters from the independent
auditors of the Company pursuant to Sections 3 and 4 hereof.
(c) Procedures. Each Agent and the Company agree to perform the respective
----------
duties and obligations specifically provided to be performed in the
Medium-Term Notes Administrative Procedures (attached hereto as
Exhibit B) (the "Procedures"), as amended from time to time. The
Procedures may be amended only by written agreement of the Company and
each Agent; provided that with respect to any single issuance of
--------
Notes, the Procedures may be
- 5 -
<PAGE>
modified by written agreement of the Company and the Agents soliciting
the purchase of such Notes (or purchasing such Notes pursuant to a
Terms Agreement).
(d) Delivery. The documents required to be delivered by Section 4 of this
--------
Agreement shall be delivered at the office of Cleary, Gottlieb, Steen
& Hamilton, counsel to the Agents, at One Liberty Plaza, New York, New
York 10006, not later than 5:00 p.m. New York City time, on the date
hereof, or at such other time and/or place as each Agent and the
Company may agree upon in writing (the "Commencement Date").
3. Agreements. The Company agrees with each Agent that:
----------
(a) Prior to the termination of the offering of the Notes pursuant to this
Agreement, the Company will not file any amendment to the Registration
Statement or any Prospectus Supplement relating to the Notes unless
the Company has previously furnished to each Agent (or, in the case of
Prospectus Supplements setting out only the interest rate, maturity
and other terms of Notes ("Pricing Supplements"), the Agent that has
solicited the applicable offer of Notes) a copy thereof for its review
and will not file any such proposed amendment or supplement to which
any Agent (or, in the case of Pricing Supplements, the Agent that has
solicited the applicable offer of Notes) reasonably objects; provided,
--------
however, that the foregoing requirement shall not apply to any of the
-------
Company's periodic filings with the Commission required to be filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act or
to any Pricing Supplement applicable to Notes sold by the Company
directly to investors on its own behalf; and provided further that
-------- -------
without the consent of, but after consultation with, the Agents,
including the furnishing of drafts thereof, the Company may file any
such proposed amendment or Prospectus Supplement which in the opinion
of its counsel it is required by law to file. Subject to the
foregoing sentence, the Company will promptly cause each Prospectus
Supplement to be mailed to the Commission for filing pursuant to Rule
424(b) or will promptly cause each Prospectus Supplement to be filed
with the Commission pursuant to said Rule. The Company will promptly
advise each Agent (i) of the filing of any amendment or supplement to
the Basic Prospectus, (ii) of the filing and effectiveness of any
amendment to the Registration Statement, (iii) of any request by the
Commission for any amendment of the Registration Statement or any
amendment of or supplement to the Basic Prospectus or for any
additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose
and (v) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof. If the
- 6 -
<PAGE>
Company files any amendment to the Registration Statement or any
Prospectus Supplement, which filing does not require the consent of
the Agents, the Company will provide each Agent with a copy of such
document promptly after the filing thereof and no Agent shall be
obligated to solicit offers for the purchase of Notes so long as it is
not reasonably satisfied with such document.
(b) If, at any time when a prospectus relating to the Notes is required to
be delivered under the Securities Act, any event occurs or condition
exists as a result of which the Registration Statement or the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if, in
the opinion of the Company, it is necessary at any time to amend or
supplement the Registration Statement or the Prospectus, as then
amended or supplemented, to comply with the Securities Act, the
Company will immediately notify each Agent to suspend solicitation of
offers to purchase Notes and, if so notified by the Company, each
Agent shall forthwith suspend such solicitation and cease using the
Prospectus as then amended or supplemented; and if the Company shall
decide to amend or supplement the Registration Statement or Prospectus
as then amended or supplemented, it will so advise each Agent promptly
by telephone (with confirmation in writing) and will prepare and cause
to be filed promptly with the Commission an amendment or supplement to
the Registration Statement or Prospectus as then amended or
supplemented which will include a description of such facts or events
and/or will correct such statement or omission or effect such
compliance and will supply such amended or supplemented Prospectus to
each Agent in such quantities as it may reasonably request; and, if
such amendment or supplement and any documents, certificates and
opinions furnished to an Agent pursuant to paragraph (f) below in
connection with the preparation or filing of such amendment or
supplement, are satisfactory in all respects to such Agent, upon the
filing of such amendment or supplement with the Commission or
effectiveness of an amendment to the Registration Statement such Agent
will resume the solicitation of offers to purchase Notes hereunder.
Notwithstanding any other provision of this Section 3(b), until the
distribution of any Notes any Agent may own as principal has been
completed, if any event occurs or condition exists as a result of
which it is necessary to amend or supplement the Registration
Statement or Prospectus to make the information therein comply with
the Securities Act or complete or accurate in all material respects,
the Company agrees to provide such Agent with immediate notice by
telephone (with confirmation in writing) to cease sales of any Notes,
and the Company will forthwith prepare and furnish, at its own
expense, any amendments or supplements to the Registration Statement
or Prospectus, satisfactory in all respects to such Agent, in such
quantities as it may reasonably request. If such amendment or
supplement and any documents, certificates and opinions furnished to
an Agent pursuant to paragraph (f) below in connection with the
preparation and filing of such amendment or supplement are
satisfactory in all respects to such Agent, upon the filing of such
amendment
- 7 -
<PAGE>
or supplement to the Registration Statement or Prospectus such Agent
may resume its resale of the Notes as principal.
(c) As soon as practicable, the Company will make generally available to
its security holders and to each Agent an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 under the Securities Act, and, not later than 45 days after
the end of the 12-month period beginning at the end of each fiscal
quarter of the Company (other than the last fiscal quarter of any
fiscal year) during which the effective date of any post-effective
amendment to the Registration Statement occurs, not later than 90 days
after the end of the fiscal year beginning at the end of each last
fiscal quarter of any fiscal year of the Company during which the
effective date of any post-effective amendment to the Registration
Statement occurs, and not later than 90 days after the end of each
fiscal year of the Company during which any Notes were issued, the
Company will make generally available to its securityholders an
earnings statement covering such 12-month period or such fiscal year,
as the case may be, that will satisfy the provisions of such Section
11(a) and Rule 158.
(d) The Company will furnish to each Agent, without charge, three
conformed copies of the Registration Statement including exhibits and
materials, if any, incorporated by reference therein and, during the
period mentioned in Section 3(b) above, as many copies of the
Prospectus, any documents incorporated by reference therein and any
supplements and amendments thereto as any Agent may reasonably
request. The terms "supplement" and "amendment" or "amend" as used in
this Agreement shall include all documents filed by the Company with
the Commission subsequent to the date of the Basic Prospectus,
pursuant to the Exchange Act, which are deemed to be incorporated by
reference in the Prospectus.
(e) (1) The Company will make every reasonable effort to qualify the
Notes for offer and sale under the securities or Blue Sky laws of such
jurisdictions as any Agent shall reasonably request and will pay all
expenses (including fees and disbursements of counsel) in connection
with such qualification and in connection with the determination of
the eligibility of the Notes for investment under the laws of such
jurisdictions as any Agent may designate; provided, however, that the
-------- -------
Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation in any jurisdiction
in which it is not so qualified, and (2) the Company or its designated
agent shall submit such reports or information as may be required from
time to time by applicable law, regulations and guidelines promulgated
by Japanese governmental and regulatory authorities in the case of the
issue and purchase of, and for so long as there are outstanding any,
Notes denominated in Japanese yen.
(f) During the term of this Agreement the Company shall furnish to each
Agent such certificates of officers of the Company relating to the
business, operations
- 8 -
<PAGE>
and affairs of the Company and its subsidiaries, the Registration
Statement, the Basic Prospectus, any amendments or supplements
thereto, the Indenture, the Notes, this Agreement, the Procedures, any
Terms Agreement and the performance by the Company of its obligations
hereunder as such Agent may from time to time reasonably request.
(g) The Company will, whether or not any sale of Notes is consummated, pay
all expenses incident to the performance of its obligations under this
Agreement, including: (i) the preparation and filing of the
Registration Statement and all amendments thereto, (ii) the
preparation, issuance and delivery of the Notes, (iii) the fees and
disbursements of the Company's accountants and of the Trustee and
Paying Agent and their respective counsel, (iv) the qualification of
the Notes under securities laws in accordance with the provisions of
Section 3(e) hereof, including filing fees and the reasonable fees and
disbursements of counsel to the Agents in connection therewith and in
connection with the preparation of any Blue Sky Memorandum, (v) the
printing and delivery to the Agents in quantities as hereinabove
stated of copies of the Registration Statement and all amendments
thereto, and of the Basic Prospectus and any amendments or supplements
thereto (including Pricing Supplements), (vi) the printing and
delivery to the Agents of copies of the Indenture and any Blue Sky
Memorandum and (vii) any fees charged by rating agencies for the
rating of the Notes.
The Company will also, whether or not any sale of the Notes is
consummated, reimburse the Agents promptly upon receipt of an invoice
therefor for the reasonable fees of their counsel, as agreed by the
Company and the Agents, incurred in connection with the preparation of
this Agreement and the offering and sale of the Notes as well as any
reasonable disbursements and out-of-pocket expenses incurred by such
counsel, as agreed by the Company and the Agents.
(h) Each acceptance by the Company of an offer for the purchase of Notes
solicited by an Agent, and each sale of Notes to an Agent pursuant to
a Terms Agreement, shall be deemed to be an affirmation that the
representations and warranties of the Company contained in this
Agreement and in any certificate theretofore delivered to such Agent
pursuant hereto are true and correct in all material respects at the
time of such acceptance or sale, as the case may be, and an
undertaking that such representations and warranties will be true and
correct in all material respects at the time of delivery to the
purchaser or his agent or to such Agent, of the Notes relating to such
acceptance or sale, as the case may be, as though made at and as of
each such time (and it is understood that such representations and
warranties shall relate to the Registration Statement and the Basic
Prospectus as amended and supplemented to each such time).
(i) Each time the Registration Statement or the Basic Prospectus is
amended or supplemented, (other than by a Pricing Supplement or an
amendment or supplement providing for a change deemed immaterial in
the reasonable opinion
- 9 -
<PAGE>
of the Agents), if so requested by any Agent, and each time the
Company sells Notes to an Agent pursuant to a Terms Agreement, the
Company will deliver or cause to be delivered forthwith to the
relevant Agent or Agents a certificate of the Company signed by the
Chairman of the Board, the President, the Vice Chairman of the Board,
any Vice President or the Treasurer, dated the date of the
effectiveness of such amendment or filing or supplement or sale, as
the case may be, in form reasonably satisfactory to such Agent or
Agents, of the same tenor as the certificate referred to in Section
4(c) relating to the Registration Statement and the Basic Prospectus
as amended and supplemented to the time of delivery of such
certificate.
(j) Each time the Registration Statement or the Basic Prospectus is
amended or supplemented, if in the reasonable judgment of any Agent
(or, in the case of a Pricing Supplement, in the reasonable judgment
of the Agent that has solicited the offer to purchase the relevant
Notes) the information contained in the amendment or supplement is of
such nature that an opinion of counsel should be furnished, and each
time the Company sells Notes to an Agent pursuant to a Terms
Agreement, if so indicated in the applicable Terms Agreement, the
Company shall furnish or cause to be furnished forthwith to such Agent
a written opinion of counsel of the Company. Any such opinion shall
be dated the date of such amendment or supplement or the date of such
sale, as the case may be, shall be in a form satisfactory to such
Agent and shall be of the same tenor as the opinion referred to in
Section 4(b)(i) but modified to relate to the Registration Statement
and the Basic Prospectus as amended and supplemented to the time of
delivery of such opinion. In lieu of such opinion, counsel last
furnishing such an opinion to such Agent may furnish to such Agent a
letter to the effect that it may rely on such last opinion to the same
extent as though it were dated the date of such letter (except that
statements in such last opinion will be deemed to relate to the
Registration Statement and the Basic Prospectus as amended and
supplemented to the time of delivery of such letter).
(k) Each time that the Registration Statement or the Basic Prospectus is
amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is
incorporated by reference in the Registration Statement or the Basic
Prospectus, if so requested by any Agent, or each time the Company
sells Notes to an Agent pursuant to a Terms Agreement, if so indicated
in the applicable Terms Agreement, the Company shall cause its
independent auditors forthwith to furnish each Agent or such Agent, as
appropriate, with a letter, dated the date of the effectiveness of
such amendment or the date of filing of such supplement, or the date
of such sale, as the case may be, in a form satisfactory to the
recipient, of the same tenor as the letter referred to in Section
4(d), with regard to the amended or supplemental financial information
included or incorporated by reference in the Registration Statement
and the Basic Prospectus, as amended or supplemented to the date of
such letter.
- 10 -
<PAGE>
(l) Between the date of any Terms Agreement and the Settlement Date, or
such later date as may be specified in such Terms Agreement, with
respect to such Terms Agreement, the Company will not, without the
prior consent of the Agent which is a party to such Terms Agreement,
offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company substantially similar in currency, maturity
and other material terms to the Notes, other than (i) the Notes that
are to be sold pursuant to such Terms Agreement, (ii) debt securities
issued for consideration other than cash and (iii) commercial paper in
the ordinary course of business, except as may otherwise be provided
in any such Terms Agreement.
(m) The Company will not issue any Notes except as have been duly
authorized by all necessary corporate action on the part of the
Company.
(n) The Company will not issue any Notes directly to investors or through
other agents, dealers or underwriters except in accordance with
applicable law.
4. Conditions of the Obligations of the Agents. The obligations of each
-------------------------------------------
Agent to solicit offers to purchase the Notes as agent of the Company and to
purchase Notes as principal pursuant to any Terms Agreement will be subject to
the accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of the Company's officers made in each
certificate furnished pursuant to the provisions hereof, to the performance and
observance by the Company of all covenants and agreements herein contained on
its part to be performed and observed and to the following additional conditions
precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for that purpose shall
have been instituted or threatened, and there shall have been no
material adverse change in the condition of the Company and its
consolidated subsidiaries, taken as a whole, from that set forth in
the Registration Statement or the Prospectus as amended or
supplemented to such date.
(b) At the Commencement Date, such Agent shall have received, and at each
Settlement Date with respect to any applicable Terms Agreement to
which such Agent is a party, if called for by such Terms Agreement,
such Agent shall have received:
(i) The opinion, dated as of such date, of either Shelby Yastrow,
Senior Vice President, General Counsel and Secretary for the
Company or Gloria Santona, Assistant General Counsel, Vice
President and Assistant Secretary for the Company, to the effect
that:
(A) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the
State of Delaware and is duly qualified to transact business
and is in good standing in each jurisdiction in which the
conduct of its business
- 11 -
<PAGE>
or its ownership or leasing of property requires such
qualification and has all corporate power and authority to
own its properties and conduct its business as set forth in
the Prospectus, except where such failure to be so qualified
or be in good standing cannot be reasonably expected to have
a material adverse effect on the Company and its
consolidated subsidiaries, taken as a whole.
(B) Each of the Significant Subsidiaries of the Company has been
duly organized, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation and is duly qualified to transact business and
is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of
property requires such qualification, and all of the issued
and outstanding shares of capital stock of each Significant
Subsidiary (except McDonald's Australia Limited and
McDonald's Property Company Limited, of which the Company
directly or indirectly owns a majority of the capital stock)
are owned, directly or indirectly, by the Company, have been
duly authorized and validly issued, and (except in the case
of McDonald's Deutschland, Inc., formerly McDonald's System
of Germany, Inc.) are fully paid and non-assessable, and are
so owned free and clear of any claim, lien, encumbrance or
security interest except where such failure to be so
qualified or be in good standing would not have a material
adverse effect on the Company and its consolidated
subsidiaries, taken as a whole.
(C) This Agreement (and, if the opinion is being given pursuant
to Section 3(j) on account of the Company having entered
into a Terms Agreement, the applicable Terms Agreement) has
been duly authorized, executed and delivered by the Company.
(D) The Indenture has been duly authorized, executed and
delivered by the Company, is a valid and binding agreement
of the Company and has been duly qualified under the Trust
Indenture Act.
(E) The Notes have been duly authorized and, when (1) executed
and authenticated in accordance with the Indenture, (2) paid
for by the purchasers thereof and (3) delivered to such
purchasers, will be valid and binding obligations of the
Company and will be entitled to the benefits of the
Indenture.
(F) The Registration Statement and any amendments thereto is
effective under the Securities Act, and, to the best of such
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<PAGE>
counsel's knowledge, no proceedings for a stop order are
pending or threatened by the Commission.
(G) The execution, delivery and performance of this Agreement,
the Notes and the Indenture will not contravene any
provision of applicable law or the Restated Certificate of
Incorporation or By-Laws of the Company or, to the knowledge
of such counsel, any agreement or other instrument binding
upon the Company and no consent, approval or authorization
of any governmental body or agency is required for the
performance by the Company of its obligations under this
Agreement, the Notes and the Indenture, except such as are
specified and have been obtained and except that the offer
and sale of the Notes in certain jurisdictions may be
subject to the Blue Sky or securities laws of such
jurisdictions.
(H) The statements in the Prospectus under the captions
"Description of Debt Securities", "Description of Registered
Notes", "Plan of Distribution" and "United States Tax
Considerations" insofar as such statements constitute
summaries of the documents, proceedings or matters referred
to therein, are accurate summaries of such documents,
proceedings and matters.
(I) Such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Company or any
of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is
subject that is required to be described in the Registration
Statement or the Prospectus and is not so described or of
any contract or other document which is required to be
described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement that
is not described or filed as required.
(J) Such counsel (1) is of the opinion that each document, if
any, filed pursuant to the Exchange Act (except for
financial statements included therein as to which such
counsel need not express any opinion) and incorporated by
reference in the Registration Statement and the Prospectus
complied when so filed as to form in all material respects
with the Exchange Act and the applicable rules and
regulations thereunder; (2) has no reason to believe that
(except for financial statements included therein as to
which such counsel need not express any belief) any part of
the Registration Statement (including the documents
incorporated by reference therein) filed with the Commission
pursuant to the Securities Act relating to the Notes, when
such part became effective, contained any untrue statement
of a material fact or omitted to state a material fact
required to be stated therein or
- 13 -
<PAGE>
necessary to make the statements therein not misleading; (3)
is of the opinion that the Registration Statement and
Prospectus, as amended or supplemented, if applicable
(except for financial statements included therein as to
which such counsel need not express any opinion), comply as
to form in all material respects with the Securities Act and
the applicable rules and regulations thereunder; and (4) has
no reason to believe that (except for financial statements
included therein as to which such counsel need not express
any belief) the Prospectus, as amended or supplemented, if
applicable, contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading.
It is understood that such counsel may limit his or her opinion
to the laws of the United States of America, the laws of the
State of Illinois, and the General Corporation Law of the State
of Delaware.
The opinions set forth in paragraphs (i)(D) and (i)(E) above
regarding the valid and binding nature of the Indenture and the
Notes may be limited by the inclusion of statements to the effect
that their enforceability may be limited by applicable
bankruptcy, insolvency, moratorium and other similar laws
affecting the enforceability of creditors' rights generally, and
general principles of equity. The opinions set forth in
paragraphs (i)(D) and (i)(E) above may be further limited by
inclusion of a statement to the effect that insofar as such
opinions relate to Notes denominated in a currency other than
United States dollars, the effective enforcement of a foreign
currency claim in the federal or state courts of the State of New
York may be limited by requirements that a claim (or a foreign
currency judgment in respect of such a claim) be converted into
United States dollars at the rate of exchange prevailing on the
judgment date.
For purposes of paragraph (i)(B) above, the term "Significant
Subsidiaries" shall mean the list of the Company's domestic and
foreign subsidiaries appearing in Exhibit 21 (or any successor
exhibit) to the Company's most recently filed Annual Report on
Form 10-K as of the Commencement Date or the applicable
Settlement Date, as the case may be.
(ii) The opinion dated as of such date, of Cleary, Gottlieb, Steen &
Hamilton, counsel to you, covering the matters in paragraphs
(i)(C), (i)(D), (i)(E), (i)(H) (with respect only to the
statements under the caption "Description of Debt Securities",
"Description of Registered Notes" and "Plan of Distribution") and
clauses (3) and (4) of (i)(J) above, provided that with respect
--------
to clauses (3) and (4) of (i)(J) above,
- 14 -
<PAGE>
such counsel may state that their belief is based upon their
participation in the preparation of the Registration Statement
and the Prospectus and any amendments or supplements thereto
(other than documents incorporated by reference) and review and
discussion of the contents thereof including documents
incorporated by reference) but is without independent check or
verification except as specified.
(c) On the Commencement Date, and at each Settlement Date with respect to
any Terms Agreement to which such Agent is a party, the Company shall
have furnished to such Agent, a certificate of the Company, signed by
the Chairman of the Board, the President, the Vice Chairman of the
Board, any Vice President or the Treasurer, dated as of the
Commencement Date or such Settlement Date, to the effect that the
signer of such certificate has examined the Registration Statement,
the Basic Prospectus, any Prospectus Supplement and this Agreement and
that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and
as of the date of such certificate, and the Company has complied
in all material respects with all the agreements and satisfied
in all material respects all the conditions on its part to be
performed or satisfied at or prior to the date of such
certificate;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or, to the Company's knowledge, threatened;
and
(iii) since the date of the most recent financial statements included
or incorporated by reference in the Prospectus, as amended or
supplemented, there has been no material adverse change in the
condition of the Company and its consolidated subsidiaries,
taken as a whole, from that set forth in the Registration
Statement and the Prospectus, as amended or supplemented.
(d) On the Commencement Date, and at each Settlement Date with respect to
any Terms Agreement to which such Agent is a party, if called for by
such Terms Agreement, the Company's independent auditors shall have
furnished to such Agent, a letter or letters, dated as of the
Commencement Date or such Settlement Date, in form and substance
satisfactory to it, confirming that they are independent auditors
within the meaning of the Securities Act and the respective applicable
published rules and regulations thereunder and containing statements
and information of the type ordinarily included in "comfort letters"
to underwriters with respect to the financial statements and certain
financial information contained or incorporated by reference in the
Registration Statement and the Prospectus as then amended or
supplemented.
- 15 -
<PAGE>
(e) On the Commencement Date and at each Settlement Date with respect to
any Terms Agreement to which such Agent is a party, the Company shall
have furnished to such Agent such appropriate further information,
certificates and documents as it may reasonably request.
5. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each Agent and each
person, if any, who controls such Agent within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages or liabilities
(including the reasonable fees and expenses of counsel in connection
with any governmental or regulatory investigation or proceeding)
caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement as originally
filed or in any amendment thereof or the Prospectus (if used within
the period set forth in paragraph (b) of Section 3 hereof and as
amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that the Company will not be liable in
-------- -------
any such case to the extent that any such loss, claim, damage or
liability is caused by (i) any such untrue statement or alleged untrue
statement or omission or alleged omission made therein based upon
information furnished in writing to the Company by an Agent relating
to such Agent expressly for use therein; (ii) any untrue statement or
alleged untrue statement or omission or alleged omission made in that
part of the Registration Statement that consists of the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act
of First Fidelity Bank, National Association (formerly Fidelity Bank,
National Association); or (iii) the fact that any Agent, as principal,
sold Notes to a person, or Notes were sold to a person solicited by
any Agent, to whom there was not sent or given, at or prior to the
confirmation of such sale, a copy of the Prospectus as most recently
amended or supplemented, and such untrue statement or alleged untrue
statement or omission or alleged omission was corrected in the form of
the Prospectus most recently provided by the Company to such Agent.
(b) Each Agent agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the
Registration Statement and any person controlling the Company and each
other Agent and any person controlling such Agent to the same extent
as the foregoing indemnity from the Company to such Agent, but only
with reference to information relating to such Agent furnished in
writing by it expressly for use in the Registration Statement or the
Prospectus.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity
may be sought
- 16 -
<PAGE>
pursuant to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and
the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party
may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention
of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm (in
addition to any local counsel) for all such indemnified parties and
that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by the indemnified
party. The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 5 is unavailable
to an indemnified party under paragraph (a) or (b) hereof or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company
on the one hand and each Agent participating in the offering of Notes
that gave rise to such losses, claims, damages or liabilities (a
"Relevant Agent") on the other from the offering of such Notes or (ii)
if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and each Relevant
Agent on the other in connection with the statements or omissions that
resulted in such losses, claims,
- 17 -
<PAGE>
damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and each Relevant Agent on the other in connection with the
offering of such Notes shall be deemed to be in the same respective
proportion as the total net proceeds from the offering of such Notes
(before deducting expenses) received by the Company bear to the total
discounts and commissions received by such Relevant Agent in respect
thereof. The relative fault of the Company on the one hand and of each
Relevant Agent on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or by such
Relevant Agent and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
If more than one Agent is a Relevant Agent in respect of a proceeding,
each Relevant Agent's obligation to contribute pursuant to this
Section 5 shall be several and not joint, and shall be in the
proportion that the principal amount of the Notes that are the subject
of such proceeding and that were offered and sold through such
Relevant Agent bears to the aggregate principal amount of the Notes
that are the subject of such proceeding.
(e) The Company and each Agent agree that it would not be just and
equitable if contribution pursuant to this Section 5 were determined
by pro rata allocation or by any other method of allocation that does
--- ----
not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5, no Agent shall be
required to contribute any amount in excess of the amount by which the
total price at which the Notes referred to in paragraph (d) above that
were offered and sold to the public through such Agent exceeds the
amount of any damages that such Agent has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(f) The remedies provided for in this Section 5 are not exclusive and
shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) The Company acknowledges that the statements set forth in the last
paragraph of the cover page and under the caption "Plan of
Distribution" in the Prospectus Supplement dated July ___, 1995
relating to the Notes constitute the only
- 18 -
<PAGE>
information furnished in writing by or on behalf of any Agent for
inclusion in the Basic Prospectus or such Prospectus Supplement and
the Agents confirm that such statements are correct.
6. Restrictions on Offers and Sales of Registered Notes.
----------------------------------------------------
(a) Each Agent represents and agrees that it will not offer or sell any
Note directly or indirectly in Japan or to residents of Japan or for
the benefit of any Japanese person (which term as used herein means
any person resident in Japan, including any corporation or other
entity organized under the laws of Japan) or to others for reoffering
or resale directly or indirectly in Japan or to any Japanese person
during the period of 90 days from the issue date of such Note (which
Note is denominated in Japanese yen) or 180 days from the issue date
of the Note (which Note is a dual currency Note, reverse dual currency
Note or optional dual currency Note) and that thereafter it will not
do so, except under circumstances that will result in compliance with
any applicable laws, regulations and ministerial guidelines of Japan
taken as a whole. Furthermore, in connection with the issuance of
Notes denominated in Japanese yen, the Company and each Agent agree to
comply with all applicable laws, regulations and guidelines as amended
from time to time of the Japanese governmental and regulatory
authorities.
(b) No Notes denominated in Japanese yen shall be sold without the
specific approval of the Japanese Ministry of Finance, except for
single currency Notes repayable at their non-variable principal or
redemption amount and bearing interest at a fixed rate or by reference
to yen LIBOR (plus or minus a spread) and structured Notes, such as
Nikkei-linked and DAX-linked issues, in each case which have
heretofore been permitted by the Japanese Ministry of Finance.
7. Position of the Agents. In soliciting offers to purchase the Notes,
----------------------
each Agent is acting solely as agent for the Company, and not as principal.
Each Agent shall make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes has been solicited
by it and accepted by the Company, but no Agent shall have any liability to the
Company in the event any such purchase is not consummated for any reason. Under
no circumstances will any Agent be obligated to purchase any Notes for its own
account other than pursuant to, and subject to the conditions set forth in, any
Terms Agreement.
8. Termination. This Agreement may be terminated at any time either (a)
-----------
by the Company as to any Agent or (b) by any Agent, insofar as this Agreement
relates to such Agent, upon the giving of written notice of such termination to
the other parties hereto. In the event of such termination with respect to any
Agent, this Agreement shall remain in full force and effect with respect to any
Agent as to which such termination has not occurred. Any Terms Agreement may be
terminated, immediately upon notice to the Company, at any time prior to the
Settlement Date relating to a Terms Agreement (i) if there has been, since the
respective dates as of which information is given in the Registration Statement,
as amended to
- 19 -
<PAGE>
the date of such Terms Agreement, any material adverse change in the condition
of the Company and its consolidated subsidiaries, taken as a whole, or (ii) if
there has occurred any material outbreak or escalation of hostilities or any
material adverse change in financial markets or any calamity or crisis the
effect of which is such as to make it, in the reasonable judgment of the Agent
which is a party to such Agreement, impracticable to market the Notes, or (iii)
if trading in securities generally on the New York Stock Exchange or the
American Stock Exchange has been suspended or materially limited or if a general
moratorium on commercial banking activities has been declared by either federal
or New York State authorities. In the event of termination of this Agreement or
any Terms Agreement, no party shall have any liability to the other parties
hereto, except (1) as provided in the first two sentences of the third paragraph
of Section 2(a) (with respect to any commissions earned by the Agents but not
yet paid by the Company at the time of such termination), Section 3(g), Section
5 and Section 9 and (2) if, at the time of termination, an Agent shall own any
Notes purchased pursuant to a Terms Agreement entered into prior to the
termination of this Agreement with the intention of reselling them or an offer
to purchase any Notes has been accepted by the Company but the time of delivery
to the purchaser or its agent of such Notes has not occurred, as provided in
Sections 3(b) through 3(e)(1), 3(h) through 3(k) and 3(n) hereof; provided that
--------
the exception set forth in clause (2) of this sentence shall be of no further
force or effect immediately after the earlier of (i) resale or delivery, as the
case may be, of the Notes referred to in such clause and (ii) in the case of
Notes purchased pursuant to a Terms Agreement entered into prior to the
termination of this Agreement, a date 270 calendar days from the date of such
termination. The provisions of Sections 3(e)(2), 3(g), 5 and 9 hereof shall
survive the termination or cancellation of any Terms Agreement.
9. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and each Agent set forth in or made pursuant to this
Agreement or any Terms Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Agent or the Company
or any of the officers, directors or controlling persons referred to in Section
5 hereof, and will survive delivery of and payment for the Notes.
10. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and shall be mailed, delivered or sent by facsimile
transmission and confirmed as follows:
(i) if to Merrill Lynch, Pierce, Fenner & Smith Incorporated at Merrill
Lynch & Co., Merrill Lynch World Headquarters, North Tower, World
Financial Center, 23rd Floor, New York, New York 10281, Attention:
MTN Product Management;
(ii) if to Goldman Sachs & Co., at _________________________________
(iii) if to J.P. Morgan Securities Inc., at 60 Wall Street, New York, New
York 10260;
- 20 -
<PAGE>
(iv) if to Morgan Stanley & Co. Incorporated, at 4th Floor, 1221 Avenue of
the Americas, New York, New York 10020, Attention: Managing Director,
Short- and Medium-Term Note Department; and to Morgan Stanley & Co.
Incorporated, at 28th Floor, 1251 Avenue of the Americas, New York,
New York 10020, Attention: Investment Banking Information Center,
Peter Cooper; and
(v) if to PaineWebber Incorporated, at 1285 Avenue of the Americas, 11th
Floor, New York, New York 10019, Attention: James W. Kilman, Jr.;
(vi) if to Salomon Brothers Inc, at Seven World Trade Center, 32nd Floor,
New York, New York 10048, Attention: Medium-Term Note Department; and
(vii) if to the Company, at One McDonald's Plaza, Oak Brook, Illinois
60521, Attention: Treasurer, with a copy to the Controller;
or at such other address as any party may notify to the other parties hereto
from time to time.
11. Successors. This Agreement and any Terms Agreement will inure to the
----------
benefit of and be binding upon the parties hereto and thereto and their
respective successors and the officers and directors and controlling persons
referred to in Section 5 hereof, and no other person will have any right or
obligation hereunder.
12. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
--------------
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicates hereof, whereupon this
letter and your acceptance shall represent a binding agreement between the
Company and you.
Very truly yours,
McDONALD'S CORPORATION
By:
------------------------------------
Title: Vice President and Treasurer
- 21 -
<PAGE>
The foregoing Agreement is hereby confirmed and accepted as of the date first
written above.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
---------------------------------
Title:
GOLDMAN SACHS & CO.
By:
---------------------------------
MORGAN STANLEY & CO. INCORPORATED
By:
---------------------------------
Title:
J.P. MORGAN SECURITIES INC.
By:
---------------------------------
Title:
PAINEWEBBER INCORPORATED
By:
---------------------------------
Title:
SALOMON BROTHERS INC
By:
---------------------------------
Title
- 22 -
<PAGE>
Exhibit A
McDonald's Corporation
MEDIUM-TERM NOTES, SERIES E
TERMS AGREEMENT
_______________, 19__
McDonald's Corporation
One McDonald's Plaza
Oak Brook, Illinois 60521
Attention: Treasurer
Re: U.S. Distribution Agreement dated _________________, 1995
The undersigned agrees to purchase the following principal amount of your
Medium-Term Notes: [Currency/Amount]
Initial Public Offering Price:
Stated Maturity:
Purchase Price:
Purchase Date and Time:
Settlement Date and Time:
Place of Delivery:
Form: Book-Entry __________ or
Certificated _____________
Redeemable by Company: ___Yes ___No
Redemption Price Schedule:
Date Price
---- -----
Repayable at option of Holder: ___Yes ___No
Repayment Price Schedule:
Date Price
---- -----
For Fixed Rate Notes:
Interest Rate:
Interest Payment Dates:
(if other than February 15 and August 15)
Regular Record Dates:
(if other than February 1 and August 1)
A-1
<PAGE>
For Floating Rate Notes:
Base Rate:
Initial Interest Rate:
Spread:
Spread Multiplier:
Index Maturity:
Interest Reset Period:
Interest Reset Dates:
Interest Payment Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
For Indexed Notes:
[specify appropriate terms]
For Original Issue Discount Notes:
[specify appropriate terms]
For Amortizing Notes:
[specify amortization schedule]
(Other terms)
The provisions of Sections 1, 2(b), 2(c), 2(d), 3 through 6 and 8 through
13 of the Distribution Agreement and the related definitions are incorporated by
reference herein and shall be deemed to have the same force and effect as if set
forth in full herein.
[The certificates referred to in Section 3(i) of the Distribution
Agreement, the opinion referred to in Section 3(j) of the Distribution Agreement
and the auditors' letter referred to in Section 3(k) of the Distribution
Agreement will be required.]
[The following opinions, letters, information, certificates and documents
referred to in Section 4 of the Distribution Agreement will be required:]
A-2
<PAGE>
[The lockup period referred to in Section 3(l) shall extend to a date ____
calendar days after the Settlement Date.]
[NAME OF PURCHASER]
By:
-----------------------------
Title:
Accepted as of the date written above:
McDONALD'S CORPORATION
By:
----------------------------
Title:
A-3
<PAGE>
Exhibit B
Medium-Term Note Administrative Procedures
------------------------------------------
Medium-Term Notes, Series E (the "Notes") are to be offered on a
continuing basis by McDonald's Corporation (the "Company"). Each of Merrill
Lynch & Co., Goldman Sachs & Co., J.P. Morgan Securities Inc., Morgan Stanley &
Co. Incorporated, PaineWebber Incorporated and Salomon Brothers Inc as agent
(each an "Agent"), has agreed to solicit offers to purchase the Notes and to
purchase Notes, as principal, for its own account. The Notes are being sold
pursuant to a U.S. Distribution Agreement between the Company and the Agents
dated _____________, 1995 (the "Agreement"). The Notes will be in registered
form and will be issued under an Indenture dated as of March 1, 1987, between
the Company and First Fidelity Bank, National Association (formerly Fidelity
Bank, National Association), as trustee (the "Trustee"), and any indenture
supplemental thereto. If any provision of these Administrative Procedures
limits or conflicts with any provision of the form of Note attached to these
Administrative Procedures as Annex I hereto, such provision in the form of Note
shall be controlling.
Each Note will be represented by either a Global Security (as defined
hereinafter) (a "Registered Note") or a certificate delivered to the Holder
thereof or a Person designated by such Holder (a "Certificated Note"). Each
Global Security representing Registered Notes will be delivered to Morgan
Guaranty Trust Company of New York ("Morgan Guaranty" or the "DTC Agent"),
acting as agent for The Depository Trust Company ("DTC"), and will be recorded
in the book-entry system maintained by DTC (a "Book-Entry Note"). Only
Registered Notes denominated and payable in U.S. dollars may be issued as Book-
Entry Notes. Except as set forth in the Basic Prospectus (as defined in the
Agreement), an owner of a Book-Entry Note will not be entitled to receive a
certificate representing such Note.
The procedures to be followed during, and the specific terms of, the
solicitation of orders by the Agents and the sale as a result thereof by the
Company are explained below. Administrative and record-keeping responsibilities
will be handled for the Company by its Treasury Department. The Company will
advise the Agents, the Paying Agent and the Trustee in writing of those persons
handling administrative responsibilities with whom the Agents, the Paying Agent
and the Trustee are to communicate regarding orders to purchase Notes and the
details of their delivery.
Administrative procedures and specific terms of the offering are
explained below. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, and Certificated Notes
will be issued in accordance with the administrative procedures set forth in
Part II hereof. Unless otherwise defined herein, terms defined in the Indenture
or in the Basic Prospectus shall be used herein as therein defined.
B-1
<PAGE>
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the DTC Agent will
perform the custodial, document control and administrative functions described
below for the Registered Notes. The DTC Agent will perform such functions in
accordance with its respective obligations under a Letter of Representations
from the Company and the DTC Agent to DTC dated as of the date hereof and a
Medium-Term Note Certificate Agreement between Morgan Guaranty and DTC, dated
April 18, 1989 and as amended to date, and its obligations as a participant in
DTC, including DTC's Same-Day Funds Settlement system ("SDFS").
Issuance: On any date of settlement (as defined under
- - -------- "Settlement" below) for one or more Fixed Rate Book-
Entry Notes, the Company will issue a single global
security in fully registered form without coupons (a
"Global Security") representing up to $200,000,000
principal amount of all such Notes that have the same
interest rate, Stated Maturity and redemption
provisions. On any settlement date for one or more
Floating Rate Book-Entry Notes, the Company will issue
a single Global Security representing up to
$200,000,000 principal amount of all such Notes that
have the same Base Rate, Initial Interest Rate, Index
Maturity, Spread or Spread Multiplier, Interest Reset
Period, Interest Payment Dates, redemption provisions,
Minimum Interest Rate (if any), Maximum Interest Rate
(if any) and Stated Maturity. On any settlement date
for one or more Indexed Book-Entry Notes, the Company
will issue a single Global Security representing up to
$200,000,000 principal amount of all such Notes that
have the same terms (as such terms are identified in
the Pricing Supplement relating to such Notes). Each
Global Security will be dated and issued as of the date
of its authentication by the Trustee for the Registered
Notes represented by such Global Security. No Global
Security will represent (i) more than one of a Fixed
Rate, Floating Rate and Indexed Book-Entry Notes or
(ii) any Certificated Note.
Identification Numbers: The Company has arranged with the CUSIP Service Bureau
- - ---------------------- of Standard & Poor's Corporation (the "CUSIP Service
Bureau") for the reservation of a series of CUSIP
numbers (including tranche numbers) for the Registered
Notes. Such series consists of approximately 900 CUSIP
numbers and relates to Global Securities representing
Book-Entry Notes and book-entry medium-term notes
B-2
<PAGE>
issued by the Company with other series designations.
The DTC Agent has obtained from the CUSIP Service
Bureau written lists of such reserved CUSIP numbers,
and caused such lists to be delivered to the DTC Agent
and to DTC. The DTC Agent will assign CUSIP numbers to
Global Securities as described below under Settlement
Procedure "B". DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that the DTC
Agent has assigned to Global Securities. The DTC Agent
will notify the Company at any time when fewer than 100
of the reserved CUSIP numbers remain unassigned to
Global Securities, and, if it deems necessary, the
Company will reserve additional CUSIP numbers for
assignment to Global Securities. Upon obtaining such
additional CUSIP numbers, the Company shall deliver a
list of such additional CUSIP numbers to the DTC Agent
and to DTC.
Registration: Each Global Security will be registered in the name of
- - ------------ CEDE & Co., as nominee for DTC. The beneficial owner
of a Book-Entry Note (or one or more indirect
participants in DTC designated by such owner) will
designate one or more direct participants in DTC (with
respect to such Note, the "Participants") to act as
agent or agents for such owner in connection with the
book-entry system maintained by DTC, and DTC will
record in book-entry form, in accordance with
instructions provided by such Participants, a credit
balance with respect to such beneficial owner in such
Note in the account of such Participants. The
ownership interest of such beneficial owner in such
Note will be recorded through the records of such
Participants or through the separate records of such
Participants and one or more indirect participants in
DTC.
Transfers: Transfers of a Book-Entry Note will be accomplished by
- - --------- book entries made by DTC and, in turn, by Participants
(and in certain cases, one or more indirect
participants in DTC) acting on behalf of beneficial
transferors and transferees of such Note.
Exchanges: The DTC Agent may deliver to DTC and the CUSIP Service
- - --------- Bureau at any time a written notice of consolidation
specifying (i) the CUSIP numbers of two or more
Outstanding Global Securities that represent (A)
B-3
<PAGE>
Fixed Rate Book-Entry Notes having the same interest
rate, Interest Payment Date, redemption provisions and
Stated Maturity and for which interest has been paid to
the same date, (B) Floating Rate Book-Entry Notes
having the same Base Rate, Index Maturity, Spread or
Spread Multiplier, Interest Reset Period, Interest
Payment Dates, redemption and repayment provisions,
Minimum Interest Rate (if any), Maximum Interest Rate
(if any) and Stated Maturity and for which interest has
been paid to the same date or (C) Indexed Book-Entry
Notes having the same terms (as such terms are
identified in the Pricing Supplement relating to such
Notes), (ii) a date, occurring at least 30 days after
such written notice is delivered and at least 30 days
before the next Interest Payment Date for such Book-
Entry Notes, on which such Global Securities shall be
exchanged for a single replacement Global Security and
(iii) a new CUSIP number to be assigned to such
replacement Global Security. Upon receipt of such a
notice, DTC will send to its participants (including
the DTC Agent) a written reorganization notice to the
effect that such exchange will occur on such date.
Prior to the specified exchange date, the DTC Agent
will deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and the new
CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the specified
exchange date, the DTC Agent will exchange such Global
Securities for a single Global Security bearing the new
CUSIP number and the CUSIP numbers of the exchanged
Global Securities will, in accordance with CUSIP
Service Bureau procedures, be cancelled and not
immediately reassigned. Notwithstanding the foregoing,
if the Global Securities to be exchanged exceed
$200,000,000 in aggregate principal amount, one Global
Security will be authenticated and issued to represent
each $200,000,000 of principal amount of the exchanged
Global Securities and an additional Global Security
will be authenticated and issued to represent any
remaining principal amount of such Global Securities
(see "Denominations" below).
Maturities: Each Book-Entry Note will mature on a date not less
- - ---------- than nine months nor more than 60 years after the
settlement date for such Note. A Floating Rate Book-
Entry Note
B-4
<PAGE>
will mature only on an Interest Payment Date for such
Note.
Any Note denominated in Japanese yen will mature on a
date not less than one year after the Original Issue
Date for such Note and will not be subject to optional
redemption or prepayment prior to such time.
Denominations: Unless otherwise specified in the applicable Pricing
- - ------------- Supplement, Book-Entry Notes will be issued in
principal amounts of $100,000 or any amount in excess
thereof that is an integral multiple of $1,000,
provided that the minimum denomination of a Book-Entry
--------
Note denominated in Japanese yen shall be at least
1,000,000,000 yen. Global Securities will be
denominated in principal amounts not in excess of
$200,000,000. If one or more Book-Entry Notes having
an aggregate principal amount in excess of $200,000,000
would, but for the preceding sentence, be represented
by a single Global Security, then one Global Security
will be authenticated and issued to represent each
$200,000,000 principal amount of such Book-Entry Note
or Notes and an additional Global Security will be
authenticated and issued to represent any remaining
principal amount of such Book-Entry Note or Notes. In
such a case, each of the Global Securities representing
such Book-Entry Note or Notes shall be assigned the
same CUSIP number.
Interest: General. Interest, if any, on each Book-Entry Note
- - -------- -------
will accrue from the Original Issue Date of the Global
Security representing such Note or from the last day to
which interest has been paid thereon or duly provided
for and will be calculated and paid in the manner
described in such Note and in the applicable Pricing
Supplement. The first payment of interest on any Book-
Entry Note originally issued between a Record Date and
an Interest Payment Date will be made on the next
succeeding Interest Payment Date. Unless otherwise
specified therein, each payment of interest for a Book-
Entry Note will include interest accrued to but
excluding the Interest Payment Date (provided that, in
the case of Floating Rate Book-Entry Notes that reset
daily or weekly, interest payments will include
interest to and excluding the Regular Record Date
immediately preceding the Interest Payment Date) or to
but excluding Maturity. Interest
B-5
<PAGE>
payable at the Maturity of a Book-Entry Note will be
payable to the Person to whom the principal of such
Note is payable. Standard & Poor's Corporation will use
the information received in the pending deposit message
described under Settlement Procedure "C" below in order
to include the amount of any interest payable and
certain other information regarding the related Global
Security in the appropriate weekly bond report
published by Standard & Poor's Corporation.
Regular Record Dates. The Regular Record Date with
--------------------
respect to any Interest Payment Date for a Fixed Rate
Book-Entry Note shall, unless otherwise specified, be
the February 1 or August 1 (whether or not a Business
Day) immediately preceding such Interest Payment Date.
The Regular Record Date with respect to any Interest
Payment Date for a Floating Rate Book-Entry Note shall
be the date (whether or not a Business Day) fifteen
calendar days immediately preceding such Interest
Payment Date.
Interest Payment Dates on Fixed Rate Book-Entry Notes.
-----------------------------------------------------
Unless otherwise specified pursuant to Settlement
Procedure "A" below, interest payments on Fixed Rate
Book-Entry Notes will be made semiannually on February
15 and August 15 of each year and at Maturity;
provided, however, that in the case of a Fixed Rate
-------- -------
Book-Entry Note issued between a Regular Record Date
and an Interest Payment Date, the first interest
payment will be made on the Interest Payment Date
following the next succeeding Regular Record Date.
Interest Payment Dates on Floating Rate Book-Entry
--------------------------------------------------
Notes. Unless otherwise specified, interest payments
-----
will be made on Floating Rate Book-Entry Notes monthly,
quarterly, semiannually or annually. Unless otherwise
specified, interest will be payable, in the case of
Floating Rate Book-Entry Notes that: reset daily,
weekly or monthly, on the third Wednesday of each month
or on the third Wednesday of March, June, September and
December of each year, as specified; reset quarterly,
on the third Wednesday of March, June, September and
December of each year; reset semiannually, on the third
Wednesday of each of two months specified pursuant to
Settlement Procedure "A" below; and reset annually, on
the third Wednesday of the month specified pursuant to
B-6
<PAGE>
Settlement Procedure "A" below; provided, however, that
-------- -------
if an Interest Payment Date for a Floating Rate Book-
Entry Note would otherwise be a day that is not a
Business Day with respect to such Floating Rate Book-
Entry Note, such Interest Payment Date will be the next
succeeding Business Day with respect to such Floating
Rate Book-Entry Note, except in the case of a Floating
Rate Book-Entry Note for which the Base Rate is LIBOR,
if such Business Day is in the next succeeding calendar
month, such Interest Payment Date will be the
immediately preceding Business Day; and provided,
--------
further, that in the case of a Floating Rate Book-Entry
-------
Note issued between a Regular Record Date and an
Interest Payment Date, the first interest payment will
be made on the Interest Payment Date following the next
succeeding Regular Record Date.
Notice of Interest Payment and Regular Record Dates.
---------------------------------------------------
On the first Business Day of January, April, July and
October of each year, the DTC Agent will deliver to the
Company and DTC a written list of Regular Record Dates
and Interest Payment Dates that will occur with respect
to Book-Entry Notes during the six-month period
beginning on such first Business Day. Promptly after
each Interest Determination Date for Floating Rate
Book-Entry Notes, Morgan Guaranty, as Calculation
Agent, will notify Standard & Poor's Corporation of the
interest rates determined on such Interest
Determination Date.
Calculation of Interest: Fixed Rate Book-Entry Notes. Interest on Fixed Rate
- - ----------------------- ---------------------------
Book-Entry Notes (including interest for partial
periods) will be calculated on the basis of a 360-day
year of twelve 30-day months.
Floating Rate Book-Entry Notes. Interest rates on
------------------------------
Floating Rate Book-Entry Notes will be determined as
set forth in the form of Notes. Interest on Floating
Rate Book-Entry Notes, except as otherwise set forth
herein, will be calculated on the basis of actual days
elapsed and a year of 360 days, except that in the case
of a Floating Rate Book-Entry Note for which the Base
Rate is the Treasury Rate or CMT, interest will be
calculated on the basis of the actual number of days in
the year.
B-7
<PAGE>
Payments of Principal Payment of Interest Only. Promptly after each Regular
- - --------------------- ------------------------
and Interest: Record Date the DTC Agent will deliver to the Company
- - ------------- and DTC a written notice specifying the CUSIP number,
the amount of interest to be paid on each Global
Security on the following Interest Payment Date (other
than an Interest Payment Date coinciding with Maturity)
and the total of such amounts. DTC will confirm the
amount payable on each Global Security on such Interest
Payment Date by reference to the daily bond reports
published by Standard & Poor's Corporation. The Company
will pay to the Paying Agent the total amount of
interest due on such Interest Payment Date (other than
at Maturity), and the Paying Agent will pay such amount
to DTC, at the times and in the manner set forth below
under "Manner of Payment". If any Interest Payment Date
for a Fixed Rate Book-Entry Note is not a Business Day
the payment due on such day shall be made on the next
succeeding Business Day and no interest shall accrue on
such payment for the period from and after such
Interest Payment Date.
Payments at Maturity. On or about the first Business
--------------------
Day of each month, the DTC Agent will deliver to the
Company and DTC a written list of principal and
interest to be paid on each Global Security maturing in
the following month. The Company, DTC and the DTC
Agent will confirm the amounts of such principal and
interest payments with respect to each such Global
Security on or about the fifth Business Day preceding
the Maturity of such Global Security. The Company will
pay to the Paying Agent the principal amount of such
Global Security, together with interest due at such
Maturity. The Paying Agent will pay such amount to DTC
at the times and in the manner set forth below under
"Manner of Payment". If any Maturity of a Global
Security representing Fixed Rate Book-Entry Notes is
not a Business Day, the payment due on such day shall
be made on the next succeeding Business Day and no
interest shall accrue on such payment for the period
from and after such Maturity. Promptly after payment
to DTC of the principal and interest due at the
Maturity of such Global Security, the Paying Agent will
cancel such Global Security and deliver it to the
Company with an appropriate debit advice.
B-8
<PAGE>
Manner of Payment. The total amount of any principal
-----------------
and interest due on Global Securities on any Interest
Payment Date or at Maturity shall be paid by the
Company to the Paying Agent in funds available for use
by the Paying Agent as of 9:30 a.m. (New York City
time) on such date. The Company will make such payment
on such Global Securities by instructing the Paying
Agent to withdraw funds from an account maintained by
the Company. The Company will confirm such
instructions in writing to the Paying Agent. For
Maturity, redemption and other principal payments, the
Paying Agent will pay, prior to 10:00 a.m. (New York
City time) on such date or as soon as possible
thereafter, by separate wire transfer (using Fedwire
message entry instructions in a form previously
specified by DTC) to an account at the Federal Reserve
Bank of New York previously specified by DTC, in funds
available for immediate use by DTC, each payment of
principal (together with interest thereon) due on a
Global Security on such date. Thereafter on such date,
DTC will pay, in accordance with its SDFS operating
procedures then in effect, such amounts in funds
available for immediate use to the respective
Participants in whose names the Book-Entry Notes
represented by such Global Security are recorded in the
book-entry system maintained by DTC. Payments of
interest shall be made to DTC in same day funds in
accordance with existing arrangements in place between
the DTC Agent and DTC. None of the Company, the Paying
Agent or the DTC Agent shall have any direct
responsibility or liability for the payment by DTC to
such Participants of the principal of and interest on
the Book-Entry Notes.
Withholding Taxes. The amount of any taxes required
-----------------
under applicable law to be withheld from any interest
payment on a Book-Entry Note will be determined and
withheld by the Participant, indirect participant in
DTC or other person responsible for forwarding payments
and materials directly to the beneficial owner of such
Note.
Procedures upon Company's
- - -------------------------
Exercise of Optional Redemption:
- - -------------------------------
Company Notice to Trustee and Paying Agent regarding
----------------------------------------------------
Exercise of Optional Redemption. At least 45
-------------------------------
days prior to the date on which it intends to redeem a
Book-Entry Note, the Company will notify the Trustee
and Paying
B-9
<PAGE>
Agent that it is exercising such option with respect to
such Book-Entry Note on such date.
Paying Agent Notice to DTC regarding Company's Exercise
-------------------------------------------------------
of Optional Redemption. After receipt of notice that
----------------------
the Company is exercising its option to redeem a Book-
Entry Note, the Trustee will, at least 30 days before
the redemption date of such Book-Entry Note, deliver to
DTC a notice identifying such Book-Entry Note by CUSIP
number and informing DTC of the Company's exercise of
such option with respect to such Book-Entry Note.
Deposit of Redemption Price. On or before any
---------------------------
redemption date, the Company shall deposit with the
Paying Agent an amount of money sufficient to pay the
redemption price, plus interest accrued to such
redemption date, for all the Book-Entry Notes or
portions thereof which are to be repaid on such
redemption date. The Paying Agent will use such money
to repay such Book-Entry Notes pursuant to the terms
set forth in such Notes.
Acceptance of Offers: The Company will have the sole right to accept offers
- - -------------------- to purchase Registered Notes. Each Agent will
communicate orally or in writing each reasonable offer
to purchase Registered Notes received by it. The
Company may reject any offer in whole or in part. Each
Agent may reject any offer received by it in whole or
in part in its reasonable discretion.
Settlement: The receipt by the Company of immediately available
- - ---------- funds in payment for a Book-Entry Note and the
authentication and issuance of the Global Security
representing such Note shall constitute "settlement"
with respect to such Note. All orders accepted by the
Company will be settled on the next Business Day
pursuant to the timetable for settlement set forth
below unless the Company and the purchaser agree to
settlement on a later date.
Settlement Procedures: Settlement Procedures with regard to each Book-Entry
- - --------------------- Note sold by the Company through an Agent shall be as
follows:
B-10
<PAGE>
A. Such Agent will advise the Company by telephone of
the following settlement information:
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate Book-Entry Note,
the interest rate and repayment or
redemption provisions (if any) or, in the
case of a Floating Rate Book-Entry Note, the
Base Rate, Initial Interest Rate (if known
at such time), Index Maturity, Spread or
Spread Multiplier (if any), Interest Reset
Dates, Interest Reset Period, Minimum
Interest Rate (if any), Maximum Interest
Rate (if any) and redemption provisions (if
any) or, in the case of a in Indexed Book-
Entry Note, the terms of such Notes as
specified in the Pricing Supplement relating
to such Note.
4. Specified Currency.
5. Settlement date.
6. Issue Date.
7. Issue Price.
8. Interest Payment Period.
9. Interest Payment Dates.
10. Any information applicable to Original
Discount Notes.
11. Agent's commission, determined as provided
in Section 2 of the U.S. Distribution
Agreement.
B. The Company will advise the DTC Agent by telephone
(confirmed in writing at any time on the same
date) or electronic transmission of the
information set forth in Settlement Procedure "A"
above. The DTC Agent will then assign a CUSIP
number to the Global Security representing such
Note and advise the Agent of such number. Each
such communication by the Company shall constitute
a representation and warranty by the Company to
the DTC Agent, the Trustee and such Agent that (i)
such Note is then, and at the time of issuance and
sale thereof will be, duly authorized for issuance
and sale by the Company and (ii) such Note, and
the Global Security representing such
B-11
<PAGE>
Note, will conform with the terms of the
Indenture.
C. The DTC Agent will enter a pending deposit message
through DTC's Participant Terminal System,
providing the following Settlement information to
DTC, such Agent, Standard & Poor's Corporation
and, upon request, the Trustee:
1. The information set forth in Settlement
Procedure "A".
2. Identification as a Fixed Rate Book-Entry
Note or a Floating Rate Book-Entry Note.
3. Initial Interest Payment Date for such Note,
number of days by which such date succeeds
the related DTC Record Date (which term
means the Regular Record Date, and in the
case of Floating Rate Notes that reset daily
or weekly the date that is five calendar
days immediately preceding the applicable
Interest Payment Date) and amount of
interest, if known, payable on such Interest
Payment Date.
4. Interest Payment Period or frequency of
Interest Payment Dates.
5. CUSIP number of the Global Security
representing such Note.
6. Whether such Global Security will represent
any other Book-Entry Note (to the extent
known at such time).
D. The Company will complete and deliver to the DTC
Agent the instructions necessary to complete the
Global Security representing such Note, with a
customer confirmation.
E. First National Bank of Chicago, as Authenticating
Agent, will authenticate the Global Security
representing such Note.
F. DTC will credit such Note to the DTC Agent's
participant account at DTC.
G. The DTC Agent will enter an SDFS delivery order
through DTC's Participant Terminal System
B-12
<PAGE>
instructing DTC to (i) debit such Note to the DTC
Agent's participant account and credit such Note
to such Agent's participant account and (ii) debit
such Agent's settlement account and credit the DTC
Agent's settlement account for an amount equal to
the price of such Note less such Agent's
commission. The entry of such a deliver order
shall constitute a representation and warranty by
the DTC Agent to DTC that (i) the Global Security
representing such Book-Entry Note has been issued
and authenticated and (ii) the DTC Agent is
holding such Global Security pursuant to the
Medium-Term Note Certificate Agreement between the
DTC Agent and DTC.
H. Such Agent will enter an SDFS delivery order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to such
Agent's participant account and credit such Note
to the participant accounts of the Participants
with respect to such Note and (ii) to debit the
settlement accounts of such Participants and
credit the settlement account of such Agent for an
amount equal to the price of such Note.
I. Transfers of funds in accordance with SDFS
delivery orders described in Settlement Procedures
"G" and "H" will be settled in accordance with
SDFS operating procedures in effect on the
settlement date.
J. The DTC Agent will credit to an account of the
Company maintained at the DTC Agent funds
available for immediate use in the amount
transferred to the DTC Agent in accordance with
Settlement Procedure "G".
K. Such Agent will confirm the purchase of such Note
to the purchaser either by transmitting to the
Participants with respect to such Note a
confirmation order or orders through DTC's
institutional delivery system or by mailing a
written confirmation to such purchaser.
B-13
<PAGE>
L. Periodically, the DTC Agent will send to the
Company a statement setting forth the principal
amount of Registered Notes Outstanding as of the
date of such statement and setting forth a brief
description of any sales of which the Company has
advised the DTC Agent but which have not yet been
settled.
Settlement Procedures For orders of Book-Entry Notes solicited by an
- - --------------------- Agent and accepted by the Company for settlement on
Timetable: the first Business Day after the sale date, Settlement
- - ---------- Procedures "A" through "K" set forth above shall be
completed as soon as possible but not later than the
respective times (New York City time) set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 a.m. on the sale date
B 12:00 Noon on the sale date
C 2:00 p.m. on the sale date
D 3:00 p.m. on day before settlement date
E 9:00 a.m. on settlement date
F 10:00 a.m. on settlement date
G-H 2:00 p.m. on settlement date
I 4:45 p.m. on settlement date
J-K 5:00 p.m. on settlement date
If a sale is to be settled more than one Business Day
after the sale date, Settlement Procedures "A", "B" and
"C" shall be completed as soon as practicable but not
later than 11:00 a.m., 12:00 Noon and 2:00 p.m.,
respectively, on the first Business Day after the sale
date. If the Initial Interest Rate for a Floating Rate
Book-Entry Note has not been determined at the time
that Settlement Procedure "A" is completed, Settlement
Procedures "B" and "C" shall be completed as soon as
such rate has been determined but no later than 11:00
a.m. and 2:00 p.m., respectively, on the second
Business Day before the settlement date. Settlement
Procedure "I" is subject to extension in accordance
with any extension of Fedwire closing deadlines and in
the other events specified in SDFS operating procedures
in effect on the settlement date.
B-14
<PAGE>
If settlement of a Book-Entry Note is rescheduled or
cancelled, the DTC Agent will deliver to DTC through
DTC's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 p.m. on
the Business Day immediately preceding the scheduled
settlement date.
Failure to Settle: If the DTC Agent fails to enter an SDFS delivery order
- - ----------------- with respect to a Book-Entry Note pursuant to
Settlement Procedure "G", the DTC Agent may deliver to
DTC, through DTC's Participant Terminal System, as soon
as practicable a withdrawal message instructing DTC to
debit such Note to the DTC Agent's participant account.
DTC will process the withdrawal message, provided that
the DTC Agent's participant account contains a
principal amount of the Global Security representing
such Note that is at least equal to the principal
amount to be debited. If a withdrawal message is
processed with respect to all the Book-Entry Notes
represented by a Global Security, the DTC Agent will
mark such Global Security "cancelled", make appropriate
entries in the DTC Agent's records and send such
cancelled Global Security to the Company. The CUSIP
number assigned to such Global Security shall, in
accordance with CUSIP Service Bureau procedures, be
cancelled and not immediately reassigned. If a
withdrawal message is processed with respect to one or
more, but not all, of the Book-Entry Notes represented
by a Global Security, the DTC Agent will exchange such
Global Security for two Global Securities, one of which
shall represent such Book-Entry Notes and shall be
cancelled immediately after issuance and the other of
which shall represent the other Book-Entry Notes
previously represented by the surrendered Global
Security and shall bear the CUSIP number of the
surrendered Global Security.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a person,
including an indirect participant in DTC, acting on
behalf of such purchaser), such Participants and, in
return, the Agent that solicited the order to purchase
such Book-Entry Note may enter SDFS delivery orders
through DTC's Participant Terminal System reversing the
orders entered pursuant to Settlement Procedures "H"
and "G",
B-15
<PAGE>
respectively. Thereafter, the DTC Agent will deliver
the withdrawal message and take the related actions
described in the preceding paragraph.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may take
any actions in accordance with its SDFS operating
procedures then in effect. In the event of a failure
to settle with respect to one or more, but not all, of
the Book-Entry Notes to have been represented by a
Global Security, the DTC Agent will provide, in
accordance with Settlement Procedures "D" and "E", for
the authentication and issuance of a Global Security
representing the other Book-Entry Notes to have been
represented by such Global Security and will make
appropriate entries in its records.
Procedure for Rate Changes;
- - ---------------------------
Preparation of Pricing The Company and the Agents will discuss from time to
- - ---------------------- time the rates to be borne by Registered Notes that
Supplements: may be sold as a result of the solicitation
- - ------------ of offers by any Agent. If any offer to purchase a
Registered Note is accepted by the Company, the Company
will prepare a Pricing Supplement reflecting the terms
of such Note and will arrange to have the Pricing
Supplement filed with the Commission in accordance with
the applicable paragraph of Rule 424(b) under the
Securities Act of 1933, as amended, and will supply by
facsimile transmission or by overnight express for
delivery by 11:00 a.m. on the Business Day next
following the date of acceptance one copy thereof (or
additional copies if requested) to each Agent which
presented the order (each, a "Presenting Agent") at
each address listed below and one copy to the Trustee.
The relevant Agent will cause a Prospectus and Pricing
Supplement to be delivered to the purchaser of the
Registered Note.
Copies of Pricing Supplements shall be sent to:
if Merrill Lynch & Co. is the Presenting Agent:
Merrill Lynch & Co. - Tritech Services
4 Corporate Place
Corporate Park 287
Piscateway, New Jersey 08854
B-16
<PAGE>
Attn: Final Prospectus Unit/Nachman Kimerling
Telephone: (908) 878-6526
Facsimile: (908) 878-6530
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center,
North Tower, 23rd Floor
New York, New York 10281-1323
Attn: MTN Product Management
Telephone: (212) 449-7582
Facsimile: (212) 449-2234
if Golman Sachs & Co. is the Presenting Agent:
------------------------------------
------------------------------------
------------------------------------
if J.P. Morgan Securities Inc. is the Presenting Agent:
J.P. Morgan Securities Inc.
60 Wall Street
2nd Floor-Capital Markets
New York, New York 10260
Telephone: (212) 648-0787
Facsimile: (212) 837-5939
if Morgan Stanley & Co. Incorporated is the Presenting
Agent:
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
4th Floor
New York, New York 10020
Attn: Carlos Cabrera
if PaineWebber Incorporated is Presenting Agent:
Debt Syndicate
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Attn: Peter Masco
Telephone: (212) 713-3357
B-17
<PAGE>
Facsimile: (212) 713-2285
if Salomon Brothers Inc is the Presenting Agent:
Enrique Castro
Salomon Brothers Inc
8800 Hidden River Parkway
Tampa, Florida 33637
Telephone: (813) 558-7165
Facsimile: (813) 558-4123
Suspension of Solicitation;
- - ---------------------------
Amendment or Supplement: The Company may instruct the Agents to suspend
- - ----------------------- solicitation of purchases at any time. Upon receipt of
notice from the Company, the Agents will forthwith
suspend solicitation until such time as the Company has
advised it that solicitation of purchases may be
resumed.
If the Company decides to amend or supplement the
Registration Statement or the Prospectus, it will
promptly advise the Agents and the Trustee and will
furnish each Agent and Trustee with the proposed
amendment or supplement in accordance with the terms of
the Agreement. The Company will mail to the Commission
for filing therewith any supplement to the Prospectus
(including any Pricing Supplement), provide each Agent
with copies of any supplement (or, in the case of a
Pricing Supplement, provide each relevant Agent with
copies of such Pricing Supplement), and confirm to each
Agent that such supplement has been mailed for filing
with the commission (or, in the case of a Pricing
Supplement, confirm such information with each relevant
Agent).
In the event that at the time the Company suspends
solicitation of purchases there shall be any orders
outstanding for settlement, the Company will promptly
advise the relevant Agent and the DTC Agent whether
such orders may be settled and whether copies of the
Prospectus as in effect at the time of the suspension
may be delivered in connection with the settlement of
such orders. The Company will have the sole
responsibility for such decision and for any
arrangements which may be made in the event that the
Company determines that such orders may not be settled
or that copies of such Prospectus may not be so
delivered.
B-18
<PAGE>
Delivery of Prospectus: A copy of the Prospectus and a Pricing Supplement
- - ---------------------- relating to a Book-Entry Note must accompany or precede
any written offer of such Note, confirmation of the
purchase of such Note and payment of such Note by its
purchaser. If notice of a change in the terms of the
Book-Entry Notes is received by an Agent between the
time an order for a Book-Entry Note is placed and the
time written confirmation thereof is sent by such Agent
to a customer or his agent, such confirmation shall be
accompanied by a Prospectus and Pricing Supplement
setting forth the terms in effect when the order was
placed. Subject to the second preceding paragraph,
each Agent will deliver a Prospectus and Pricing
Supplement as herein described with respect to each
Book-Entry Note sold by it. The Company will make such
delivery if such Note is sold directly by the Company
to a purchaser (other than an Agent).
Authenticity of The Company will cause the Trustee and the
- - --------------- Authenticating Agent (if other than the Trustee) to
Signatures: furnish each Agent from time to time with the specimen
- - ----------- signatures of each of the Trustee's or Authenticating
Agent's officers, employees or agents who have been
authorized by the Trustee to authenticate Notes, but no
Agent will have any obligation or liability to the
Company or the Trustee in respect of the authenticity
of the signature of any officer, employee or agent of
the Company, the Trustee or the Authenticating Agent on
any Note.
Payment of Selling
- - ------------------
Commissions and The Company agrees to pay each Agent a commission as
- - --------------- set forth in the Agreement in the form of a discount
Expenses: equal to the percentage of the principal amount of each
- - -------- Note sold by the Company as a result of a solicitation
made by such Agent.
B-19
<PAGE>
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
Maturities: Each Certificated Note will have a maturity from date
- - ---------- of issue of not less than nine months and not more than
60 years. A Floating Rate Certificated Note will
mature only on an Interest Payment Date for such Note.
Any Note denominated in Japanese yen will mature on a
date not less than one year after the Original Issue
Date for such Note and will not be subject to optional
redemption prior to such time.
Currency: The currency denomination with respect to any
- - -------- Certificated Note and the payment of principal, premium
(if any) and interest (if any) with respect to any such
Certificated Note, shall be as set forth therein and in
the applicable Pricing Supplement.
Denominations: Unless otherwise specified in the applicable Pricing
- - ------------- Supplement, Certificated Notes will be issued only in
minimum denominations of $100,000 and any larger amount
that is an integral multiple of $1,000. In the case of
a Certificated Note having a Specified Currency other
than U.S. dollars, the minimum denomination and other
authorized denominations shall be set forth in the
applicable Pricing Supplement and in such Certificated
Note, provided that the minimum denomination of a
--------
Certificated Note denominated in Japanese yen shall be
at least 1,000,000,000 yen.
Registration: Each Certificated Note will be issued in fully
- - ------------ registered definitive form.
Transfers and Exchanges: A Certificated Note may be presented for transfer or
- - ----------------------- exchange at the corporate trust office of the Trustee.
Certificated Notes will be exchangeable for
Certificated Notes having identical terms but different
authorized denominations without service charge.
Certificated Notes will not be exchangeable for Book-
Entry Notes.
Interest: General. Interest, if any, on each Certificated Note
- - -------- -------
will accrue from the Original Issue Date for the first
Interest Payment Period or the last date to which
interest has been paid, if any, for each subsequent
interest payment period, and will be calculated and
paid in the manner described in
B-20
<PAGE>
such Note and in the applicable Pricing Supplement.
Unless otherwise specified therein, each payment of
interest on a Certificated Note will include interest
accrued to but excluding the Interest Payment Date
(provided that, in the case of Floating Rate
Certificated Notes that reset daily or weekly, interest
payments will include accrued interest to and including
the Regular Record Date immediately preceding the
Interest Payment Date) or to but excluding Maturity.
Interest payable at the Maturity of a Certificated Note
will be payable to the Person to whom the principal of
such Note is payable.
Regular Record Dates. The Regular Record Date with
--------------------
respect to any Interest Payment Date for a Fixed Rate
Certificated Note shall, unless otherwise specified, be
the February 1 or August 1 (whether or not a Business
Day) immediately preceding such Interest Payment Date.
The Regular Record Date with respect to any Interest
Payment Date for a Floating Rate Certificated Note
shall be the date (whether or not a Business Day)
fifteen calendar days immediately preceding such
Interest Payment Date.
Interest Payment Dates on Fixed Rate Certificated
-------------------------------------------------
Notes. Unless otherwise specified pursuant to
------
Settlement Procedure "A" below, interest payments on
Fixed Rate Certificated Notes will be made semiannually
on February 15 and August 15 of each year and at
Maturity; provided, however, that in the case of a
-------- -------
Fixed Rate Certificated Note issued between a Regular
Record Date and an Interest Payment Date, the first
interest payment will be made on the Interest Payment
Date following the next succeeding Regular Record Date.
Interest Payment Dates on Floating Rate Certificated
----------------------------------------------------
Notes. Unless otherwise specified, interest payments
-----
will be made on Floating Rate Certificated Notes
monthly, quarterly, semiannually or annually. Unless
otherwise specified, interest will be payable, in the
case of Floating Rate Certificated Notes that: reset
daily, weekly or monthly, on the third Wednesday of
each month or on the third Wednesday of March, June,
September and December of each year, as specified;
reset quarterly, on the third Wednesday of March, June,
September and December of each year; reset
semiannually, on the third Wednesday of each of two
months specified pursuant to
B-21
<PAGE>
Settlement Procedure "A" below; and reset annually, on
the third Wednesday of the month specified pursuant to
Settlement Procedure "A" below; provided, however, that
-------- -------
if an Interest Payment Date for a Floating Rate
Certificated Note would otherwise be a day that is not
a Business Day with respect to such Floating Rate
Certificated Note, such Interest Payment Date will be
the next succeeding Business Day with respect to such
Floating Rate Certificated Note, except in the case of
a Floating Rate Certificated Note for which the Base
Rate is LIBOR, if such Business Day is in the next
succeeding calendar month, such Interest Payment Date
will be the immediately preceding Business Day; and
provided, further, that in the case of a Floating Rate
-------- -------
Certificated Note issued between a Regular Record Date
and an Interest Payment Date, the first interest
payment will be made on the Interest Payment Date
following the next succeeding Regular Date.
Calculation of Interest: Fixed Rate Certificated Notes. Interest on Fixed Rate
- - ----------------------- -----------------------------
Certificated Notes (including interest for partial
periods) will be calculated on the basis of a 360-day
year of twelve 30-day months.
Floating Rate Certificated Notes. Interest rates on
--------------------------------
Floating Rate Certificated Notes will be determined as
set forth in the form of Notes. Interest on Floating
Rate Certificated Notes, except as otherwise set forth
herein, will be calculated on the basis of actual days
elapsed and a year of 360 days, except that in the case
of a Floating Rate Certificated Note for which the Base
Rate is the Treasury Rate, interest will be calculated
on the basis of the actual number of days in the year.
Payments of Principal All interest payments (excluding interest
- - --------------------- payments made at Maturity) will be made by check drawn
and Interest: on the Paying Agent, and mailed to the person entitled
- - ------------- thereto as provided above not later than the applicable
Interest Payment Date; provided, however, that a Holder
-------- -------
of $10,000,000 (or the equivalent thereof in a
Specified Currency other than U.S. dollars) or more in
aggregate principal amount of Registered Notes of like
tenor and term shall be entitled to receive such U.S.
dollar payments by wire transfer of immediately
available funds if appropriate wire transfer
instructions have been
B-22
<PAGE>
received in writing by the Paying Agent not later than
fifteen calendar days prior to the applicable Interest
Payment Date. At Maturity, the principal of, premium,
if any, and interest on each Certificated Note will be
payable in immediately available funds by wire transfer
provided that the Paying Agent receives the
Certificated Note and appropriate information, in
writing. Certificated Notes presented to the Paying
Agent or the Trustee will be retained by the Trustee or
returned to the Company.
Redemption: The applicable Pricing Supplement will set forth all
- - ---------- terms, if any, relating to the redemption of Notes
prior to Maturity.
Acceptance of Offers: The Company will have the sole right to accept offers
- - -------------------- to purchase Certificated Notes. Each Agent will
communicate orally or in writing each reasonable offer
to purchase Certificated Notes received by it. The
Company may reject any offer in whole or in part. Each
Agent may reject any offer received by it in whole or
in part in its reasonable discretion.
Settlement: All offers accepted by the Company will be settled not
- - ---------- later than the fifth Business Day next succeeding the
date of acceptance unless otherwise agreed by any
purchaser and the Company.
Details for Settlement: Settlement procedures with regard to each Certificated
- - ---------------------- Note sold by any Agent, as agent, shall be as follows:
A. Such Agent will, for each offer to purchase
Certificated Notes received by it, provide by
telephone or facsimile transmission the following
information to the Vice President and Treasurer of
the Company or his designee.
1. Exact name of registered owner.
2. Exact address of registered owner (for
interest payments and notices).
3. Taxpayer identification number of registered
owner.
4. Principal amount of Certificated Note.
B-23
<PAGE>
5. Interest rate.
6. Date of Note.
7. Settlement date.
8. Stated Maturity.
9. In the case of a Fixed Rate Certificated
Note, the interest rate and repayment or
redemption provisions (if any) or, in the
case of a Floating Rate Certificated Note,
the Base Rate, Initial Interest Rate (if
known at such time), Index Maturity,
Interest Reset Dates, Interest Reset Period,
Spread or Spread Multiplier (if any),
Minimum Interest Rate (if any), Maximum
Interest Rate (if any) and repayment or
redemption provisions (if any) or, in the
case of an Indexed Note, the terms of such
Note as such terms are identified in the
Pricing Supplement relating to such Note.
10. The Agent's commission to be paid in the
form of a discount upon settlement.
11. Interest Payment Dates.
12. Proceeds.
13. Terms relating to redemption, if any.
14. Denomination.
15. Currency of Certificated Note.
16. Any information applicable to Original Issue
Discount Notes.
17. Other terms.
Such Agent will advise the Company of the
foregoing information for each sale made by it in
time for the Trustee's authenticating agent,
B-24
<PAGE>
including the Trustee itself if no authenticating
agent is appointed (the "Authenticating Agent") to
prepare the required Certificated Notes. If the
Company rejects an offer, the Company will
promptly notify the relevant Agent.
B. After receiving the details for each offer from an
Agent, the Company will, if it accepts such offer
and after recording the details and making any
necessary calculations, provide to the
Authenticating Agent the information necessary for
the Authenticating Agent to prepare each
Certificated Note (as more fully set forth in the
Agency Agreement dated as of ____________, 1995
among the Company, the Trustee and Morgan Guaranty
Trust Company (the "Agency Agreement").
C. The Authenticating Agent will complete and
distribute a pre-printed 5-ply Note packet
containing the following documents (or a 1-ply
Note with attached confirmation and 4
appropriately designated photocopies thereof) in
forms approved by the Company, the relevant Agent
and the Trustee:
1. Certificated Note with customer information.
2. Stub 1 -- For Trustee.
3. Stub 2 -- For relevant Agent.
4. Stub 3 -- For Company.
5. Stub 4 -- For Authenticating Agent.
In the event the relevant Agent refuses to accept
and pay for such Note because the Note was
incorrectly prepared, the relevant Agent shall not
be required to credit the Company's account as
provided below, or to cause such account to be so
credited.
B-25
<PAGE>
D. The Authenticating Agent will deliver the
Certificated Note (with the confirmation) and
stubs 1 and 2 to the relevant Agent or to its
representative designated in writing by it (the
"Representative") at an office of the relevant
Agent or the Representative located in the borough
of Manhattan and south of Chambers Street, and the
Agent or its Representative will acknowledge
receipt of the Certificated Note by stamping the
delivery receipt with the date and time received
and returning it to the Authenticating Agent.
Such delivery will be made only against such
receipt. In the event that the instructions given
by the relevant Agent for payment to the account
of the Company are revoked, the Company will as
promptly as possible credit or, cause to be
credited the account of such Agent designated by
it for such purpose in an amount of immediately
available funds equal to the amount of such
payment.
E. The relevant Agent or the representative will
deliver the Certificated Note (with confirmation)
to the customer against payment in immediately
available funds. In all cases, receipt by the
customer of the Prospectus, appropriately amended
or supplemented, must accompany or precede any
written offer of the Certificated Note, delivery
of the Certificated Note, and confirmation and
payment by the customer for the Certificated Note.
If the relevant Agent is instructed by the
purchaser to deliver the Certificated Note and
confirmation to different locations, the
Certificated Note and the confirmation will each
be accompanied or preceded by the Prospectus,
appropriately amended or supplemented, then in
effect.
F. The relevant Agent or the Representative will
obtain the acknowledgment of receipt of the
Certificated Note by the customer through
completion of stub 2.
G. The Authenticating Agent will send by first class
mail stub 3 to the Company's Treasury Department.
Periodically, the Authenticating
B-26
<PAGE>
Agent will also send to the Company's Treasury
Department a statement to the Company setting
forth the principal amount of the Notes
outstanding as of that date after giving effect to
such transaction (or make such reports available
through the MPI System). In the event of a
purchase of Certificated Notes by an Agent, as
principal, appropriate settlement details will be
set forth in the applicable Terms Agreement to be
entered into between such Agent and the Company
pursuant to the Agreement.
Settlement Procedures For offers accepted by the Company Settlement
- - --------------------- Procedures "A" through "G" set forth above shall be
Timetable: completed on or before the respective times (New York
- - --------- City time) set forth below.
Settlement
Procedure Time
--------- ----
A With respect to items 1-3 of Settlement Procedure
A, 1:00 p.m. on the second Business Day preceding
the date of settlement, and with respect to items
4-14 thereof, 11:00 a.m. on the Business Day
immediately following the day of offer; provided,
--------
that with respect to offers of Certificated Notes
denominated in a Specified Currency other than
U.S. dollars, items 12-14 thereof shall be
provided to the Company by 1:00 p.m. on the day of
offer (or as soon as practicable thereafter)
B 3:00 p.m. on the Business Day immediately
preceding the day of settlement; provided, that
--------
with respect to offers of Notes denominated in a
Specified Currency other than U.S. dollars, items
12-14 of Settlement Procedure A shall be provided
to the Authenticating Agent by 2:00 p.m. on the
day of offer (or as soon as practicable
thereafter)
C-D 2:15 p.m. on day of settlement
E-F 3:00 p.m. on day of settlement
G 5:00 p.m. on day of settlement
B-27
<PAGE>
Confirmation: Each Agent shall, for each Certificated Note offer
- - ------------ received by it and accepted by the Company, issue a
confirmation to the purchaser, setting forth such of
the details set forth above as is deemed appropriate by
such Agent.
Note Delivery and Upon instructions from the Company, the Authenticating
- - ----------------- Agent will deliver the Certificated Notes to the
Cash Payment: relevant Agent or the Representative (for the benefit
- - ------------ of the purchaser).
Delivery by the Authenticating Agent of the
Certificated Notes will be made in accordance with
paragraph D of the Details for Settlement.
Fails: For offers received by an Agent, in the event that a
- - ----- purchaser shall fail to accept delivery of and make
payment for a Certificated Note, such Agent will notify
the Trustee, the Authenticating Agent and the Company,
by telephone, confirmed in writing, and return the
Certificated Note to the Authenticating Agent promptly.
Upon receipt of the Certificated Note from such Agent,
the Authenticating Agent will notify the Company and
the Company will as promptly as possible credit or
cause to be credited the account of such Agent
designated by it for such purpose in an amount of
immediately available funds equal to the amount
previously credited thereto in respect of the
Certificated Note. Such debits and credits will be
made on the settlement date, if possible, and in any
event not later than the Business Day following the
settlement date.
If such fail shall have occurred for any reason other
than the failure of such Agent to provide the necessary
information to the Company as described above for
settlement or to provide a confirmation to the
purchasers within a reasonable period of time as
described above, the Company will reimburse such Agent
for its actual loss of the use of funds during the
period when such funds were credited to the account of
the Company.
Immediately upon receipt of the Certificated Note in
respect of which the fail occurred, the Authenticating
Agent will void the Note, make the appropriate entries
in
B-28
<PAGE>
its records and deliver the Note to the Trustee which
will, in turn, make appropriate entries in its records
and destroy the Certificated Note.
Maturity: At Maturity, the principal amount of each Note will be
- - -------- payable in immediately available funds provided that
the Trustee or other paying agent receives the
Certificated Note and appropriate information, in
writing. Certificated Notes presented to any paying
agent or the Trustee will be destroyed by the Trustee.
Procedure for Rate The Company and the Agents will discuss from time
- - ------------------ to time the rates to be borne by Certificated Notes
Changes: that may be sold as a result of the solicitation of
- - ------- offers by any Agent. If any offer to purchase a
Certificated Note is accepted by the Company, the
Company will prepare a Pricing Supplement reflecting
the terms of such Certificated Note and will arrange to
have the Pricing Supplements filed with the Commission
in accordance with the applicable paragraph of Rule
424(b) under the Securities Act of 1933, as amended,
and will supply by facsimile transmission or by
overnight express one copy for delivery by 11:00 a.m.
on the Business Day next following the date of
acceptance one copy thereof (or additional copies if
requested) to each Agent which presented the order
(each, a Presenting Agent") at each address listed
below and one copy to the Trustee. The Agent which
presented the order (each a "Presenting Agent") at each
address listed below and one copy to the Trustee. The
relevant Agent will cause a Prospectus and Pricing
Supplement to be delivered to the purchaser of the
Certificated Note. Copies of Pricing Supplements shall
be sent to:
if Merrill Lynch & Co. is the Presenting Agent:
Merrill Lynch & Co.
Tritech Services
4 Corporate Place
Corporate Park 287
Piscateway, New Jersey 08854
Attn: Final Prospectus Unit/
Nachman Kimerling
Telephone: (908) 878-6526
Facsimile: (908) 878-6530
B-29
<PAGE>
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center,
North Tower, 23rd Floor
New York, New York 10281-1323
Attn: MTN Product Management
Telephone: (212) 449-7582
Facsimile: (212) 449-2234
if Goldman Sachs & Co. is the Presenting Agent:
------------------------------------
------------------------------------
------------------------------------
if J. P. Morgan Securities Inc. is the Presenting
Agent:
J.P. Morgan Securities Inc.
60 Wall Street
2nd Floor-Capital Markets
New York, New York 10260
Telephone: (212) 648-0787
Facsimile: (212) 837-5939
if Morgan Stanley & Co. Incorporated is the Presenting
Agent:
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas 4th Floor
New York, New York 10020
Attn: Carlos Cabrera
if PaineWebber Incorporated is Presenting Agent:
Debt Syndicate
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Attn: Peter Masco
Telephone: (212) 713-3357
Facsimile: (212) 713-2285
B-30
<PAGE>
if Salomon Brothers Inc is the Presenting Agent:
Terry Alvarez
Salomon Brothers Inc
One New York Plaza
36th Floor
Balancing Operations
New York, New York 10004
Telephone: (212) 747-7493
Facsimile: (212) 635-5382
Suspension of Solicitation;
- - ---------------------------
Amendment or Supplement: The Company may instruct the agents to suspend
- - ----------------------- solicitation of purchases at any time. Upon receipt of
notice from the Company, the Agents will forthwith
suspend solicitation until such time as the Company has
advised them that solicitation of purchases may be
resumed.
If the Company decides to amend or supplement the
Registration Statement or the Prospectus, it will
promptly advise the Agents and the Trustee and will
furnish each Agent and Trustee with the proposed
amendment or supplement in accordance with the terms of
the Agreement. The Company will mail to the Commission
for filing therewith any supplement to the Prospectus
(including any Pricing Supplement), provide each Agent
with copies of any supplement (or, in the case of a
Pricing Supplement, provide each relevant Agent with
copies of such Pricing Supplement), and confirm to each
Agent that such supplement has been mailed for filing
with the Commission (or, in the case of a Pricing
Supplement, confirm such information with each relevant
Agent).
In the event that at the time the Company suspends
solicitation of purchases there shall be any orders
outstanding for settlement, the Company will promptly
advise the relevant Agent and the Trustee whether such
orders may be settled and whether copies of the
Prospectus as in effect at the time of the suspension
may be delivered in connection with the settlement of
such orders. The Company will have the sole
responsibility for such decision and for any
arrangements which may be made in the event that the
Company determines that such
B-31
<PAGE>
orders may not be settled or that copies of such
Prospectus may not be so delivered.
Authenticity of
- - ---------------
Signatures: The Company will cause the Trustee and the
- - ---------- Authenticating Agent (if other than the Trustee) to
furnish each Agent from time to time with the specimen
signatures of each of the Trustee's or Authenticating
Agent's officers, employees or agents who have been
authorized by the Trustee to authenticate Notes, but no
Agent will have any obligation or liability to the
Company or the Trustee in respect of the authenticity
of the signature of any officer, employee or agent of
the Company, the Trustee or the Authenticating Agent on
any Note.
Payment of Selling
- - ------------------
Commission and Expenses: The Company agrees to pay each Agent a commission as
- - ----------------------- set forth in the Agreement in the form of a discount
equal to the percentage of the principal amount of each
Note sold by the Company as a result of a solicitation
made by such Agent.
B-32
<PAGE>
Exhibit 1(c)
Draft of 7/5/95
McDonald's Corporation
US$584,662,000
Medium-Term Notes, Series E
Due from 184 Days to 60 Years from Date of Issue
EURO DISTRIBUTION AGREEMENT
_______________, 1995
Merrill Lynch International Limited
Ropemaker Place
25 Ropemaker Street
London, England EC2Y 9LY
Goldman Sachs International
Peterborough Court
133 Fleet Street
London, England EC4A 2BB
J.P. Morgan Securities Ltd.
60 Victoria Embankment
London, England EC4Y OJP
Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London, England E14 4QA
Salomon Brothers
International Limited
Victoria Plaza
111 Buckingham Palace Road
London, England SW1W 0SB
Ladies and Gentlemen:
McDonald's Corporation, a Delaware corporation (the "Company"), confirms
its agreement with you with respect to the issue and sale by the Company outside
the United States of its Medium-Term Notes, Series E, in bearer form due from
184 days to 60 years from date of issue and having an aggregate initial public
offering price or purchase price of up to U.S.$584,662,000 or its equivalent in
other currencies or currency units (the "Notes"). The
<PAGE>
Notes are to be issued under an indenture dated as of March 1, 1987 between the
Company and First Fidelity Bank, National Association (the "Trustee") and any
indentures supplemental thereto (collectively, the "Indenture"), will be issued
in temporary and permanent global, and individual definitive, bearer form in
denominations of US$25,000 and integral multiples of $5,000 in excess thereof
(or in such other denominations as shall be provided in a supplement to the
Basic Prospectus referred to below) and will bear interest at rates and have
such other terms as are provided in a supplement to the Basic Prospectus
referred to below. Notes may bear interest at fixed or floating rates to be
provided in a supplement to the Basic Prospectus referred to below, and may,
whether or not bearing interest, be issued with original issue discount. The
Notes may be issued in amounts denominated in United States dollars or in
amounts denominated in other currencies or in the European Currency Unit or
other composite currencies. References herein to amounts stated in United States
dollars shall be deemed to refer to the equivalent amount of other currency or
European Currency Units or other composite currency to the extent applicable.
Subject to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell Notes directly to investors on
its own behalf or through other agents, dealers or underwriters, the Company
hereby appoints each of you (individually an "Agent" and collectively the
"Agents") as an agent for the purpose of soliciting offers to purchase the Notes
from the Company by others and agrees that if and whenever the Company
determines to sell Notes directly to an Agent as principal for resale to others
it will enter into a Terms Agreement relating to such sale in accordance with
the provisions of Section 2(b) hereof. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, each Agent agrees, severally but not jointly, to use its reasonable best
efforts to solicit offers to purchase Notes upon terms acceptable to the Company
at such times and in such amounts as the Company shall from time to time
specify. In acting under this Agreement and in connection with the sale of any
Notes by the Company (other than Notes sold to an Agent as principal pursuant to
a Terms Agreement), each Agent is acting solely as agent of the Company and does
not assume any obligation towards or relationship of agency or trust with any
purchaser of the Notes.
1. Representations and Warranties. The Company represents and warrants to
-------------------------------
and agrees with each Agent as follows:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), and has
filed with the Securities and Exchange Commission (the "Commission") a
registration statement on such Form (Registration No. 33_______) and
such registration statement has become effective, for the registration
under the Securities Act of the offering of the Notes. Such
registration statement, including the exhibits thereto, as amended at
the date of the sale of any Notes, is hereinafter called the
"Registration Statement". The Indenture has been qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act")
and the Company has duly authorized the issuances of the Notes. The
Registration Statement, as amended at the date of this Agreement,
meets the requirements set
-2-
<PAGE>
forth in Rule 415(a)(1)(x) under the Securities Act and complies in
all other material respects with said Rule. The Company proposes to
file with the Commission from time to time, pursuant to Rule 424(b)
under the Securities Act, supplements to the prospectus relating to
the Notes included in the Registration Statement, which will describe
certain terms of the Notes, and prior to any such filing will advise
each Agent of all further information (financial and other) with
respect to the Company to be set forth therein. Such prospectus in the
form in which it appears in the Registration Statement is called the
"Basic Prospectus". The term "Prospectus" means the Basic Prospectus
together with the prospectus supplement or supplements specifically
relating to any Notes sold pursuant to this Agreement (a "Prospectus
Supplement"), as filed with, or transmitted for filing with, the
Commission pursuant to Rule 424 under the Securities Act. Any
reference herein to the Registration Statement, Basic Prospectus or
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3
which have been filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied
or will comply when so filed in all material respects with the
Exchange Act and the rules and regulations thereunder, (ii) each part
of the Registration Statement (including the documents incorporated by
reference therein) filed with the Commission pursuant to the
Securities Act relating to the Notes, when such part became effective
or was incorporated by reference into the Registration Statement, did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement
and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities
Act and the applicable rules and regulations thereunder and (iv) the
Registration Statement and the Prospectus do not contain and, as
further amended or supplemented, if applicable, will not contain any
untrue statements of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except that the representations and warranties
set forth in this Section 1(b) do not apply to (a) that part of the
Registration Statement that consists of the Statement of Eligibility
and Qualification (Form T-1) under the Trust Indenture Act of First
Fidelity Bank, National Association, as Trustee under the Indenture,
or (b) statements or omissions in the Registration Statement or the
Prospectus based upon information furnished to the Company in writing
by an Agent, relating to such Agent, expressly for use therein.
-3-
<PAGE>
2. Solicitations as Agent; Purchases as Principal.
-----------------------------------------------
(a) Solicitations as Agent. On the basis of the representations and
-----------------------
warranties herein contained, but subject to the terms and conditions
herein set forth, each Agent will use its reasonable best efforts to
solicit offers to purchase the Notes upon the terms and conditions set
forth in the Prospectus as then amended or supplemented; provided,
--------
however, that each Agent hereby represents and agrees that it will not
-------
make any representations or use any information other than that set
forth in the Prospectus (as then amended or supplemented) or solicit
any offer to purchase the Notes other than by means of such Prospectus
as then amended or supplemented.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase the Notes. Upon
receipt of notice from the Company, each Agent will forthwith suspend
solicitations of offers to purchase Notes from the Company until such
time as the Company has advised the Agents that such solicitation may
be resumed. During the period of time that this Agreement is
suspended the Company shall not be required to deliver any
certificates, opinions or letters in accordance with Sections 3(h),
(i) and (j); provided, however, that no Agent shall be required to
-------- --------
resume soliciting offers to purchase Notes until the Company has
delivered such certificates, opinions or letters as requested by such
Agent if any of the events described in Section 3(h), (i) or (j) have
occurred during the period of suspension.
The Company agrees to pay each Agent, as consideration for the sale of
any Notes resulting from a solicitation made by it, a commission in
the form of a discount from the principal amount of each Note sold by
the Company hereunder as a result of such solicitation. With respect
to Notes with a term of 184 days to 30 years, such commission will be
equal to the following percentage of the principal amount of such
Note:
Term Commission Rate
---- ---------------
From 184 days to less than one year 0.125%
From one year to less than 18 months 0.150%
From 18 months to less than 2 years 0.200%
From 2 years to less than 3 years 0.250%
From 3 years to less than 4 years 0.350%
From 4 years to less than 5 years 0.450%
From 5 years to less than 6 years 0.500%
From 6 years to less than 7 years 0.550%
From 7 years to less than 10 years 0.600%
From 10 years to less than 20 years 0.625%
From 20 years to 30 years 0.750%
-4-
<PAGE>
and with respect to Notes with a term in excess of thirty years such
commission will be negotiated between the Company and the applicable
Agent at the time of sale. The Agents may reallow any portion of the
commission payable pursuant hereto to dealers or purchasers in
connection with the offer and sale of any Notes. The Agents are
authorized to solicit offers to purchase Notes only in principal
amounts of US$25,000 or any amount in excess thereof that is an
integral multiple of $5,000 (or in such other minimum purchase amounts
and multiples thereof as are described in a supplement to the Basic
Prospectus). Each Agent shall communicate to the Company, orally or
in writing, each offer to purchase Notes received by it as agent which
in its judgment should be considered by the Company. The Company
shall have the sole right to accept offers to purchase Notes and may
reject any offer in whole or in part. Each Agent shall have the right
to reject any offer to purchase Notes that it considers to be
unacceptable, and any such rejection shall not be deemed a breach of
its agreements contained herein.
(b) Purchases as Principal. Each sale of Notes to an Agent as principal
----------------------
shall be made in accordance with the terms of this Agreement and a
separate agreement which will provide for the sale of such Notes to
such Agent and the purchase and re-offering thereof by such Agent.
Each such separate agreement (which may initially be an oral
agreement, to be subsequently confirmed in writing) is herein referred
to as a "Terms Agreement". Unless the context otherwise requires,
each reference contained herein to "this Agreement" shall be deemed to
include any applicable Terms Agreement between the Company and an
Agent. Each such Terms Agreement, whether oral or in writing, shall
be with respect to such information (as applicable) as is specified in
Exhibit A hereto. An Agent's commitment to purchase Notes pursuant to
any Terms Agreement shall be deemed to have been made on the basis of
the representations and warranties of the Company herein contained and
shall be subject to the terms and conditions herein set forth. Each
Terms Agreement shall specify the principal amount of Notes to be
purchased pursuant thereto, the maturity date thereof, the price to be
paid to the Company for such Notes, the time and place of delivery of
and payment for such Notes (the "Settlement Date") and any other
relevant terms. An Agent may utilize a selling or dealer group in
connection with the resale of the Notes purchased. Such Terms
Agreement shall also specify any requirements for officers'
certificates, opinions of counsel and letters from the independent
public auditors of the Company pursuant to Sections 3 and 4 hereof.
(c) Procedures. Each Agent and the Company agree to perform the
----------
respective duties and obligations specifically provided to be
performed in the Medium-Term Note Administrative Procedures (attached
hereto as Exhibit B) (the "Procedures"), as amended from time to time.
The Procedures may be amended only by written agreement of the Company
and each Agent; provided
--------
-5-
<PAGE>
that with respect to any single issuance of Notes, the Procedures may
be modified by written agreement of the Company and the Agents
soliciting the purchase of such Notes (or purchasing such Notes
pursuant to a Terms Agreement). The Company will furnish a copy of the
Procedures from time to time in effect to the Trustee, each
authenticating agent or paying agent designated pursuant to the
Indenture and the common depositary, if any, for the operator of the
Euroclear System ("Euroclear") and Cedel Bank, societe anonyme
("Cedel").
(d) Delivery. The documents required to be delivered by Section 4 of this
--------
Agreement shall be delivered at the office of Cleary, Gottlieb, Steen
& Hamilton, counsel to the Agents, at One Liberty Plaza, New York, New
York 10006 not later than 5:00 p.m. New York City Time, on the date
hereof, or at such other time and/or place as each Agent and the
Company may agree upon in writing (the "Commencement Date")
3. Agreements. The Company agrees with each Agent that:
-----------
(a) Prior to the termination of the offering of the Notes pursuant to this
Agreement, the Company will not file any amendment to the Registration
Statement or any Prospectus Supplement relating to the Notes unless
the Company has previously furnished to each Agent (or, in the case of
Prospectus Supplements setting out only the interest rate, maturity
and other terms of Notes ("Pricing Supplements"), the Agent that has
solicited the applicable offer to purchase Notes) a copy thereof for
its review and will not file any such proposed amendment or supplement
to which any Agent reasonably objects (or, in the case of Pricing
Supplements, the Agent that has solicited the applicable offer to
purchase Notes reasonably objects); provided, however, that the
-------- -------
foregoing requirement shall not apply to any of the Company's periodic
filings with the Commission required to be filed pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act or to any Pricing
Supplement applicable to Notes sold by the Company directly to
investors on its own behalf; and provided further that without the
-------- -------
consent of, but after consultation with, the Agents, including the
furnishing of drafts thereof, the Company may file any such proposed
amendment or Prospectus Supplement which in the opinion of its counsel
it is required by law to file. Subject to the foregoing sentence, the
Company will promptly cause each Prospectus Supplement to be filed
with the Commission pursuant to Rule 424(b). The Company will
promptly advise each Agent (i) of the filing of any amendment or
supplement to the Basic Prospectus, (ii) of the filing and
effectiveness of any amendment to the Registration Statement, (iii) of
any request by the Commission for any amendment of the Registration
Statement or any amendment of or supplement to the Basic Prospectus or
for any additional information, (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that
purpose and (v) of the
-6-
<PAGE>
receipt by the Company of any notification with respect to the
suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof. If the Company files any amendment to
the Registration Statement or any Prospectus Supplement, which filing
does not require the consent of the Agents, the Company will provide
each Agent with a copy of such document promptly after the filing
thereof and no Agent shall be obligated to solicit offers for the
purchase of Notes so long as it is not reasonably satisfied with such
document.
(b) If, at any time when a prospectus relating to the Notes is required to
be delivered under the Securities Act, any event occurs or condition
exists as a result of which the Registration Statement or the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if, in
the opinion of the Company, it is necessary at any time to amend or
supplement the Registration Statement or the Prospectus, as then
amended or supplemented, to comply with the Securities Act, the
Company will immediately notify each Agent to suspend solicitation of
offers to purchase Notes and, if so notified by the Company, each
Agent shall forthwith suspend such solicitation and cease using the
Prospectus as then amended or supplemented; and if the Company shall
decide to amend or supplement the Registration Statement or Prospectus
as then amended or supplemented, it will so advise each Agent promptly
by telephone (with confirmation in writing) and will prepare and cause
to be filed promptly with the Commission an amendment or supplement to
the Registration Statement or Prospectus as then amended or
supplemented which will include a description of such facts or events
and/or will correct such statement or omission or effect such
compliance and will supply such amended or supplemented Prospectus to
each Agent in such quantities as it may reasonably request; and, if
such amendment or supplement and any documents, certificates and
opinions furnished to an Agent pursuant to paragraph (f) below in
connection with the preparation or filing of such amendment or
supplement, are satisfactory in all respects to such Agent, upon the
filing of such amendment or supplement with the Commission or
effectiveness of an amendment to the Registration Statement such Agent
will resume the solicitation of offers to purchase Notes hereunder.
Notwithstanding any other provision of this Section 3(b), until the
distribution of any Notes any Agent may own as principal has been
completed, if any event occurs or condition exists as a result of
which it is necessary to amend or supplement the Registration
Statement or Prospectus to make the information therein comply with
the Securities Act or complete or accurate in all material respects,
the Company agrees to provide such Agent with immediate notice by
telephone (with confirmation in writing ) to cease sales of any Notes,
and the Company will forthwith prepare and furnish, at its
-7-
<PAGE>
own expense, any amendments or supplements to the Registration
Statement or Prospectus, satisfactory in all respects to such Agent,
in such quantities as it may reasonably request. If such amendment or
supplement and any documents, certificates and opinions furnished to
an Agent pursuant to paragraph (f) below in connection with the
preparation and filing of such amendment or supplement are
satisfactory in all respects to such Agent, upon the filing of such
amendment or supplement to the Registration Statement or Prospectus
such Agent may resume its resale of the Notes as principal.
(c) As soon as practicable, the Company will make generally available to
its security holders and to each Agent an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 under the Securities Act, and, not later than 45 days after
the end of the 12-month period beginning at the end of each fiscal
quarter of the Company (other than the last fiscal quarter of any
fiscal year) during which the effective date of any post-effective
amendment to the Registration Statement occurs, not later than 90 days
after the end of the fiscal year beginning at the end of each last
fiscal quarter of any fiscal year of the Company during which the
effective date of any post-effective amendment to the Registration
Statement occurs, and not later than 90 days after the end of each
fiscal year of the Company during which any Notes were issued, the
Company will make generally available to its security holders an
earnings statement covering such 12-month period or such fiscal year,
as the case may be, that will satisfy the provisions of such Section
11(a) and Rule 158.
(d) The Company will furnish to each Agent, without charge, three
conformed copies of the Registration Statement including exhibits and
materials, if any, incorporated by reference therein and, during the
period mentioned in Section 3(b) above, as many copies of the
Prospectus, any documents incorporated by reference therein and any
supplements and amendments thereto as any Agent may reasonably
request. The terms "supplement" and "amendment" or "amend" as used in
this Agreement shall include all documents filed by the Company with
the Commission subsequent to the date of the Basic Prospectus,
pursuant to the Exchange Act, which are deemed to be incorporated by
reference in the Prospectus.
(e) The Company or its designated agent shall submit such reports or
information as may be required from time to time by applicable law,
regulations and guidelines promulgated by Japanese governmental and
regulatory authorities in the case of the issue and purchase of, and
for so long as there are outstanding, any Notes denominated in
Japanese yen.
(f) During the term of this Agreement, the Company shall furnish to each
Agent such certificates of officers of the Company relating to the
business, operations and affairs of the Company and its subsidiaries,
the Registration Statement, the
-8-
<PAGE>
Basic Prospectus, any amendments or supplements thereto, the
Indenture, the Notes, this Agreement, the Procedures, any Terms
Agreement and the performance by the Company of its obligations
hereunder as such Agent may from time to time reasonably request.
(g) The Company will, whether or not any sale of Notes is consummated, pay
all expenses incident to the performance of its obligations under this
Agreement, including: (i) the preparation and filing of the
Registration Statement and all amendments thereto, (ii) the
preparation, issuance and delivery of the Notes, (iii) the fees and
disbursements of the Company's accountants and of the Trustee and
Paying Agent and their respective counsel, (iv) the qualification of
the Notes under securities laws, in accordance with the provisions of
Section 3(e), including filing fees and the reasonable fees and
disbursements of counsel to the Agents in connection therewith, (v)
the printing and delivery to the Agents in quantities as hereinabove
stated of copies of the Registration Statement and all amendments and
of the Basic Prospectus and any amendments or supplements thereto,
(vi) the listing of any Notes on the Luxembourg Stock Exchange and
(vii) any fees charged by rating agencies for the rating of the Notes.
The Company will also, whether or not any sale of the Notes is
consummated, reimburse the Agents promptly upon receipt of an invoice
therefor for the reasonable fees of their counsel, as agreed by the
Company and the Agents, incurred in connection with the preparation of
this Agreement and the offering and sale of the Notes as well as any
reasonable disbursements and out-of-pocket expenses incurred by such
counsel, as agreed by the Company and the Agents.
The Company will also indemnify and hold the Agents harmless against
any documentary, stamp or similar transfer or issue tax, including any
interest and penalties, on the issue of the temporary global Notes and
the Notes in accordance with the terms of this Agreement, on the
execution and delivery of the Indenture and this Agreement, and on the
exchange of the temporary global Notes for definitive Notes or
permanent global Notes, which are or may be required to be paid under
the laws of the United Kingdom, the United States or any political
subdivision or taxing authority thereof or therein.
(h) Each acceptance by the Company of an offer for the purchase of Notes
solicited by an Agent, and each sale of Notes to an Agent pursuant to
a Terms Agreement, shall be deemed to be an affirmation that the
representations and warranties of the Company contained in this
Agreement and in any certificate theretofore delivered to such Agent
pursuant hereto are true and correct in all material respects at the
time of such acceptance or sale, as the case may be, and an
undertaking that such representations and warranties will be true and
correct in all material respects at the time of delivery to the
purchaser or his agent, or to such Agent, of the Notes relating to
such acceptance or sale, as the case may be, as though made at and as
of each such time (and it is understood that such
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<PAGE>
representations and warranties shall relate to the Registration
Statement and the Basic Prospectus as amended and supplemented to each
such time).
(i) Each time the Registration Statement or the Basic Prospectus is
amended or supplemented (other than by a Pricing Supplement or an
amendment or supplement providing for a change deemed immaterial in
the reasonable opinion of the Agents), if so requested by any Agent,
and each time the Company sells Notes to an Agent pursuant to a Terms
Agreement, the Company will deliver or cause to be delivered forthwith
to the relevant Agent or Agents a certificate of the Company signed by
the Chairman of the Board, the President, the Vice Chairman of the
Board, any Vice President or the Treasurer, dated the date of the
effectiveness of such amendment or filing or supplement or sale, as
the case may be, in form reasonably satisfactory to such Agent or
Agents, of the same tenor as the certificate referred to in Section
4(c) relating to the Registration Statement and the Basic Prospectus
as amended and supplemented to the time of delivery of such
certificate.
(j) Each time the Registration Statement or the Basic Prospectus is
amended or supplemented, if in the reasonable judgment of any Agent
(or, in the case of a Pricing Supplement, in the reasonable judgment
of the Agent that has solicited the offer to purchase the relevant
Notes) the information contained in the amendment or supplement is of
such a nature that an opinion of counsel should be furnished, and each
time the Company sells Notes to an Agent pursuant to a Terms
Agreement, if so indicated in the applicable Terms Agreement, the
Company shall furnish or cause to be furnished forthwith to such Agent
a written opinion of counsel of the Company. Any such opinion shall
be dated the date of such amendment or supplement or the date of such
sale, as the case may be, shall be in a form satisfactory to such
Agent and shall be of the same tenor as the opinion referred to in
Section 4(b)(i) but modified to relate to the Registration Statement
and the Basic Prospectus as amended and supplemented to the time of
delivery of such opinion. In lieu of such opinion, counsel last
furnishing such an opinion to such Agent may furnish to such Agent a
letter to the effect that it may rely on such last opinion to the same
extent as though it were dated the date of such letter (except that
statements in such last opinion will be deemed to relate to the
Registration Statement and the Basic Prospectus as amended and
supplemented to the time of delivery of such letter).
(k) Each time that the Registration Statement or the Basic Prospectus is
amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is
incorporated by reference in the Registration Statement or the Basic
Prospectus, if so requested by any Agent, or each time the Company
sells Notes to an Agent pursuant to a Terms Agreement, if so indicated
in the applicable Terms Agreement, the Company shall cause its
independent public auditors forthwith to furnish each Agent or such
Agent, as appropriate, with a letter, dated the date of the
effectiveness of such amendment
-10-
<PAGE>
or the date of filing of such supplement, or the date of such sale, as
the case may be, in a form satisfactory to the recipient, of the same
tenor as the letter referred to in Section 4(d), with regard to the
amended or supplemental financial information included or incorporated
by reference in the Registration Statement and the Basic Prospectus,
as amended or supplemented to the date of such letter.
(l) Between the date of any Terms Agreement and the Settlement Date, or
such later date as may be specified in such Terms Agreement, with
respect to such Terms Agreement, the Company will not, without the
prior consent of the Agent which is a party to such Terms Agreement,
offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company substantially similar in currency, maturity
and other material terms to the Notes, other than (i) the Notes that
are to be sold pursuant to such Terms Agreement, (ii) debt securities
issued for consideration other than cash and (iii) commercial paper in
the ordinary course of business, except as may otherwise be provided
in any such Terms Agreement.
(m) The Company will not issue any Notes except as have been duly
authorized by all necessary corporate action on the part of the
Company.
(n) In connection with the application to list the Notes on the Luxembourg
Stock Exchange, the Company will furnish from time to time any and all
documents, instruments, information and undertakings and publish all
advertisements or other material that may be necessary in order to
effect such listing and maintain such listing until none of the listed
Notes is outstanding or until such time as payment in respect of
principal, premium, if any, and interest in respect of all the listed
Notes has been duly provided for, whichever is earlier; provided,
---------
however, that if the Company can no longer reasonably maintain such
--------
listing, it will use reasonable efforts to obtain and maintain the
quotation for, or listing of, the Notes on such other stock exchange
or exchanges as the Company may decide, with the approval of the
Agents. In addition, for so long as any Notes are listed, the Company
will maintain in Luxembourg, or in such other place as the Notes are
listed (if the Notes are no longer listed on the Luxembourg Stock
Exchange), a paying agent in respect of the Notes.
(o) The Company will not issue any Notes directly to investors or through
other agents, dealers or underwriters except in accordance with
applicable law.
4. Conditions of the Obligations of the Agents. The obligations of
--------------------------------------------
each Agent to solicit offers to purchase the Notes as agent of the Company and
to purchase Notes as principal pursuant to any Terms Agreement will be
conditioned upon the accuracy of the representations and warranties on the part
of the Company herein, to the accuracy of the statements of the Company's
officers made in each certificate furnished pursuant to the provisions hereof,
to the
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<PAGE>
performance and observance by the Company of all covenants and agreements herein
contained on its part to be performed and observed and to the following
additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for that purpose shall
have been instituted or threatened, and there shall have been no
material adverse change in the condition of the Company and its
consolidated subsidiaries, taken as a whole, from that set forth in
the Registration Statement or the Prospectus as amended or
supplemented to such date.
(b) At the Commencement Date, such Agent shall have received, and at each
Settlement Date with respect to any applicable Terms Agreement to
which such Agent is a party, if called for by such Terms Agreement,
such Agent shall have received:
(i) The opinion, dated as of such date, of either Shelby Yastrow,
Senior Vice President, General Counsel and Secretary for the
Company or Gloria Santona, Vice President, Assistant General
Counsel and Assistant Secretary for the Company, to the effect
that:
(A) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the
State of Delaware and is duly qualified to transact business
and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of
property requires such qualification and has all corporate
power and authority to own its properties and conduct its
business as set forth in the Prospectus, except where such
failure to be so qualified or be in good standing cannot be
reasonably expected to have a material adverse effect on the
Company and its consolidated subsidiaries, taken as whole.
(B) Each of the Significant Subsidiaries of the Company has been
duly organized, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation and is duly qualified to transact business and
is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of
property requires such qualification, and all of the issued
and outstanding shares of capital stock of each Significant
Subsidiary (except McDonald's Australia Limited and
McDonald's Property Company Limited, of which the Company
directly or indirectly owns a majority of the capital stock)
are owned, directly or indirectly, by the Company, have been
duly authorized and validly issued, and (except in the case
of McDonald's Deutschland, Inc., formerly McDonald's System
of
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<PAGE>
Germany, Inc.) are fully paid and non-assessable, and are
so owned free and clear of any claim, lien, encumbrance or
security interest except where such failure to be so
qualified or be in good standing would not have a material
adverse effect on the Company and its consolidated
subsidiaries, taken as a whole.
(C) This Agreement (and, if the opinion is being given pursuant
to Section 3(j) on account of the Company having entered
into a Terms Agreement, the applicable Terms Agreement) has
been duly authorized, executed and delivered by the Company.
(D) The Indenture has been duly authorized, executed and
delivered by the Company, is a valid and binding agreement
of the Company and has been duly qualified under the Trust
Indenture Act.
(E) The Notes have been duly authorized and, when (i) executed
and authenticated in accordance with the Indenture, (ii)
paid for by the purchasers thereof and (iii) delivered to
such purchasers, will be valid and binding obligations of
the Company and will be entitled to the benefits of the
Indenture.
(F) The Registration Statement and any amendments thereto is
effective under the Securities Act, and, to the best of such
counsel's knowledge, no proceedings for a stop order are
pending or threatened by the Commission.
(G) The execution, delivery and performance of this Agreement,
the Notes and the Indenture will not contravene any
provision of applicable law or the Restated Certificate of
Incorporation or By-Laws of the Company or, to the knowledge
of such counsel, any agreement or other instrument binding
upon the Company and no consent, approval or authorization
of any governmental body or agency is required for the
performance by the Company of its obligations under this
Agreement, the Notes and the Indenture, except such as are
specified and have been obtained and except that the offer
and sale of the Notes in any jurisdiction may be subject to
the securities or other laws of such jurisdiction.
(H) The statements in the Prospectus under the captions
"Description of Debt Securities", "Description of Bearer
Notes", "Plan of Distribution" and "United States Taxation"
insofar as such statements constitute summaries of the
documents, proceedings or matters referred to therein, are
accurate summaries of such documents, proceedings and
matters.
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<PAGE>
(I) Such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Company or any
of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is
subject that is required to be described in the Registration
Statement or the Prospectus and is not so described or of
any contract or other document which is required to be
described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement that
is not described or filed as required.
(J) Such counsel (1) is of the opinion that each document, if
any, filed pursuant to the Exchange Act (except for
financial statements included therein as to which such
counsel need not express any opinion) and incorporated by
reference in the Registration Statement and the Prospectus
complied when so filed as to form in all material respects
with the Exchange Act and the applicable rules and
regulations thereunder, (2) has no reason to believe that
(except for financial statements included therein as to
which such counsel need not express any belief) any part of
the Registration Statement (including the documents
incorporated by reference therein) filed with the Commission
pursuant to the Securities Act relating to the Notes, when
such part became effective, contained any untrue statement
of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, (3) is of the opinion
that the Registration Statement and Prospectus, as amended
or supplemented, if applicable (except for financial
statements included therein as to which such counsel need
not express any opinion), comply as to form in all material
respects with the Securities Act and the applicable rules
and regulations thereunder and (4) has no reason to believe
that (except for financial statements included therein as to
which such counsel need not express any belief) the
Prospectus, as amended or supplemented, if applicable,
contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
It is understood that such counsel may limit his or her
opinion to the laws of the United States of America, the
laws of the State of Illinois, and the General Corporation
Law of the State of Delaware.
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<PAGE>
The opinions set forth in paragraphs (i) (D) and (i) (E)
above regarding the valid and binding nature of the
Indenture and the Notes may be limited by the inclusion of
statements to the effect that their enforceability may be
limited by applicable bankruptcy, insolvency, moratorium and
other similar laws affecting the enforceability of
creditors' rights generally, and general principles of
equity. The opinions set forth in paragraphs (i) (D) and
(i)(E) above may be further limited by inclusion of a
statement to the effect that insofar as such opinions relate
to Notes denominated in a currency other than United States
dollars, the effective enforcement of a foreign currency
claim in the federal or state courts of the State of New
York may be limited by requirements that a claim (or a
foreign currency judgment in respect of such a claim) be
converted into United States dollars at the rate of exchange
prevailing on the judgment date.
For purposes of paragraph (B) above, the term "Significant
Subsidiaries" shall mean the list of the Company's domestic
and foreign subsidiaries appearing in Exhibit 21 (or any
successor exhibit) to the Company's most recently filed
Annual Report on Form 10-K as of the Commencement Date or
the applicable Settlement Date, as the case may be.
(ii) The opinion dated as of such date, of Cleary, Gottlieb, Steen &
Hamilton, counsel to you, covering the matters in paragraphs (C),
(D), (E), (H) (with respect only to the statements under the
caption "Description of Debt Securities", "Description of Bearer
Notes" and "Plan of Distribution") and clauses (3) and (4) of (J)
above, provided that with respect to clauses (3) and (4) of (J)
--------
above, such counsel may state that their belief is based upon
their participation in the preparation of the Registration
Statement and the Prospectus and any amendments or supplements
thereto (other than documents incorporated by reference) and
review and discussion of the contents thereof (including
documents incorporated by reference) but is without independent
check or verification except as specified.
(c) On the Commencement Date, and at each Settlement Date, with respect to
any Terms Agreement to which such Agent is a party, the Company shall
have furnished to such Agent, a certificate of the Company, signed by
the Chairman of the Board, the President, the Vice Chairman of the
Board, any Vice President or the Treasurer, dated as of the
Commencement Date or such Settlement Date, to the effect that the
signer of such certificate has examined the Registration Statement,
the Basic Prospectus, any Prospectus Supplement and this Agreement and
that:
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<PAGE>
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and
as of the date of such certificate, and the Company has complied
in all material respects with all the agreements and satisfied
in all material respects all the conditions on its part to be
performed or satisfied at or prior to the date of such
certificate;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or, to the Company's knowledge, threatened;
and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Prospectus, as
amended or supplemented, there has been no material adverse
change in the condition of the Company and its consolidated
subsidiaries, taken as a whole, from that set forth in the
Registration Statement and the Prospectus, as amended or
supplemented.
(d) On the Commencement Date, and at each Settlement Date with respect to
any Terms Agreement to which such Agent is a party, if called for by
such Terms Agreement, the Company's independent auditors shall have
furnished to such Agent, a letter or letters, dated as of the
Commencement Date or such Settlement Date, in form and substance
satisfactory to it, confirming that they are independent auditors
within the meaning of the Securities Act and the respective applicable
published rules and regulations thereunder and containing statements
and information of the type ordinarily included in "comfort letters"
to underwriters with respect to the financial statements and certain
financial information contained or incorporated by reference in the
Registration Statement and the Prospectus as then amended or
supplemented.
(e) On the Commencement Date and at each Settlement Date with respect to
any Terms Agreement to which such Agent is a party, the Company shall
have furnished to such Agent such appropriate further information,
certificates and documents as it may reasonably request.
(f) On the Commencement Date, application to list the Notes on the
Luxembourg Stock Exchange shall have been made and prior to the
issuance of the first Note, such listing shall have been granted upon
issuance of the temporary global Notes or definitive Notes, subject
only to delivery to such Exchange of Prospectuses as most recently
amended or supplemented.
(g) On each Settlement Date with respect to Notes that, as contemplated in
the Pricing Supplement or Term Sheet relating to such Notes, are to be
listed, the Luxembourg Stock Exchange shall have agreed to list such
Notes subject only to their issuance.
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<PAGE>
5. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each Agent and each
person, if any, who controls such Agent within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages or liabilities
(including the reasonable fees and expenses of counsel in connection
with any governmental or regulatory investigation or proceeding)
caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement as originally
filed or in any amendment thereof or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
---------
however, that the Company will not be liable in any such case to the
--------
extent that any such loss, claim, damage or liability is caused by (i)
any such untrue statement or alleged untrue statement or omission or
alleged omission made therein based upon information furnished in
writing to the Company by an Agent relating to such Agent expressly
for use therein; (ii) any untrue statement or alleged untrue statement
or omission or alleged omission made in that part of the Registration
Statement that consists of the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of First
Fidelity Bank, National Association; or (iii) the fact that any Agent,
as principal, sold Notes to a person, or Notes were sold to a person
solicited by any Agent as agent, to whom there was not sent or given
by such Agent, at or prior to the confirmation of such sale, a copy of
the Prospectus as most recently amended or supplemented, and such
untrue statement or alleged untrue statement or omission or alleged
omission was corrected in the form of the Prospectus most recently
provided by the Company to such Agent.
(b) Each Agent agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the
Registration Statement and any person controlling the Company and each
other Agent and any person controlling such Agent to the same extent
as the foregoing indemnity from the Company to such Agent, but only
with reference to information relating to such Agent furnished in
writing by it expressly for use in the Registration Statement or the
Prospectus.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity
may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party")
in writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and others the
-17-
<PAGE>
indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In
any such proceeding any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual
or potential differing interests between them. It is understood that
the indemnifying party shall not, in connection with any proceeding,
or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm (in
addition to any local counsel) for all such indemnified parties and
that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by the indemnified
party. The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 5 is unavailable
to an indemnified party under paragraph (a) or (b) hereof or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company
on the one hand and each Agent participating in the offering of Notes
that gave rise to such losses, claims, damages or liabilities (a
"Relevant Agent") on the other from the offering of such Notes or (ii)
if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and each Relevant
Agent on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and each Relevant Agent on the
other in connection with the offering of such Notes shall be deemed to
be in the same respective proportion as the total net proceeds from
-18-
<PAGE>
the offering of such Notes (before deducting expenses) received by the
Company bear to the total discounts and commissions received by such
Relevant Agent in respect thereof. The relative fault of the Company
on the one hand and of each Relevant Agent on the other shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the Company or by such Relevant Agent and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
If more than one Agent is a Relevant Agent in respect of a proceeding,
each Relevant Agent's obligation to contribute pursuant to this
Section 5 shall be several and not joint, and shall be in the
proportion that the principal amount of the Notes that are the subject
of such proceeding and that were offered and sold through such
Relevant Agent bears to the aggregate principal amount of the Notes
that are the subject of such proceeding.
(e) The Company and each Agent agree that it would not be just and
equitable if contribution pursuant to this Section 5 were determined
by pro rata allocation or by any other method of allocation that does
--------
not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, and any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5, no Agent shall be
required to contribute any amount in excess of the amount by which the
total price at which the Notes referred to in paragraph (d) above that
were offered and sold to the public through such Agent exceeds the
amount of any damages that such Agent has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(f) The remedies provided for in this Section 5 are not exclusive and
shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) The Company acknowledges that the statements set forth in the last
paragraph of the cover page and under the caption Plan of Distribution
in the Prospectus Supplement dated July ___, 1995 relating to the
Notes constitute the only information furnished in writing by or on
behalf of any Agent for inclusion
-19-
<PAGE>
in the Basic Prospectus or such Prospectus Supplement and the Agents
confirm that such statements are correct.
6. Offering Restrictions. Each Agent hereby represents and agrees:
---------------------
(a) except to the extent permitted under U.S. Treas. Reg. Section 1.163-
5(c)(2)(i)(D) (the "D Rules"), (1) it has not offered or sold, and
during the restricted period will not offer or sell, Bearer Notes to a
person who is within the United States or its possessions or to a
United States person, and (2) it has not delivered and will not
deliver within the United States or its possessions definitive Bearer
Notes that are sold during the restricted period;
(b) it has and throughout the restricted period will have in effect
procedures reasonably designed to ensure that its employees or agents
who are directly engaged in selling Bearer Notes are aware that such
Bearer Notes may not be offered or sold during the restricted period
to a person who is within the United States or its possessions or to a
United States person, except as permitted by the D Rules;
(c) if it is a United States person, it is acquiring the Bearer Notes for
purposes of resale in connection with their original issuance and if
it retains Bearer Notes for its own account, it will only do so in
accordance with the requirements of U.S. Treas. Reg. Section 1.163-
5(c)(2)(i)(D)(6);
(d) with respect to each affiliate of an Agent that acquires Bearer Notes
from such Agent for the purpose of offering or selling such Bearer
Notes during the restricted period, such Agent repeats and confirms
the representations and agreements contained in this Section 6 on such
affiliate's behalf;
(e) it has not entered and will not enter into any written contract with
respect to the distribution or delivery of the Notes, except with (i)
its affiliates, (ii) a member of the International Primary Markets
Association, or an affiliate of such member, from which it has
obtained, for the benefit of the Company and the several Agents, the
representations contained in, and such person's agreement to comply
with the provisions of, paragraphs (a) through (d) of this Section 6,
or (iii) the prior written consent of the Company;
(Terms used in paragraphs (a) through (e) of this Section 6 have the
meanings given to them by the U.S. Internal Revenue Code and
regulations thereunder, including the D Rules.)
(f) (1) it has not offered or sold and will not offer or sell, prior to
the date six months after their date of issue, any Notes, having a
maturity of one year or greater, to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of
-20-
<PAGE>
investments (as principal or agent) for the purpose of their
businesses or otherwise in circumstances which have not resulted and
will not result in an offer to the public in the United Kingdom within
the meaning of the Public Offers of Securities Regulations 1995; (2)
it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in
relation to the Notes in, from or otherwise involving the United
Kingdom; and (3) it has only issued or passed on and will only issue
or pass on in the United Kingdom any document received by it in
connection with the issue of any Notes to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1995 or is a person to
whom such document may otherwise lawfully be issued or passed on;
(g) it has not offered or sold and agrees that it will not offer or sell
any Note directly or indirectly in Japan or to residents of Japan or
for the benefit of any Japanese person (which term as used in this
paragraph (g) means any person resident in Japan, including any
corporation or other entity organized under the laws of Japan) or to
others for reoffering or resale directly or indirectly in Japan or to
any Japanese person except in circumstances that result in compliance
with any applicable laws, regulations and ministerial guidelines of
Japan taken as a whole; and
(h) without prejudice to the provisions of this Section 6 and subject to
the obligations of the Company set forth in Section 3 of this
Agreement, the Company shall have no responsibility for, and each
Agent will obtain, any consent, approval or permission required for
the subscription, offer, sale or delivery by such Agent of Notes under
the laws and regulations in force in any jurisdiction to which such
Agent is subject or in or from which such Agent makes any
subscription, offer, sale or delivery.
7. Position of the Agents. In soliciting offers to purchase the
----------------------
Notes, each Agent is acting solely as agent for the Company, and not as
principal. Each Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Notes has been
solicited by it and accepted by the Company, but no Agent shall have any
liability to the Company in the event any such purchase is not consummated for
any reason. Under no circumstances will any Agent be obligated to purchase any
Notes for its own account other than pursuant to, and subject to the conditions
set forth in, any Terms Agreement.
8. Termination. This Agreement may be terminated at any time either
------------
(a) by the Company as to any Agent or (b) by any Agent, insofar as this
Agreement relates to such Agent, upon the giving of written notice of such
termination to the other parties hereto. In the event of such termination with
respect to any Agent, this Agreement shall remain in full force and effect with
respect to any Agent as to which such termination has not occurred. Any Terms
Agreement may be terminated, immediately upon notice to the Company, at any time
-21-
<PAGE>
prior to the Settlement Date relating to a Terms Agreement (i) if there has
been, since the respective dates as of which information is given in the
Registration Statement, as amended to the date of such Terms Agreement, any
material adverse change in the condition of the Company and its consolidated
subsidiaries, taken as a whole, or (ii) if there has occurred any material
outbreak or escalation of hostilities or any material adverse change in
financial markets or any calamity or crisis the effect of which is such as to
make it, in the reasonable judgment of the Agent which is a party to such
Agreement, impracticable to market the Notes, or (iii) if trading in securities
generally on the New York Stock Exchange or the American Stock Exchange has been
suspended or materially limited or if a general moratorium on commercial banking
activities has been declared by either federal or New York State authorities.
In the event of termination of this Agreement or any Terms Agreement, no party
shall have any liability to the other parties hereto, except (1) as provided in
the first two sentences of the third paragraph of Section 2(a) (with respect to
any commissions earned by the Agents but not yet paid by the Company at the time
of such termination), Section 3(f), Section 5 and Section 9 and (2) if, at the
time of termination, an Agent shall own any Notes purchased pursuant to a Terms
Agreement entered into prior to the termination of this Agreement with the
intention of reselling them or an offer to purchase any Notes has been accepted
by the Company but the time of delivery to the purchaser or its agent of such
Notes has not occurred, as provided in Sections 3(b) through 3(d), 3(h) through
3(k), and 3(o); provided that the exception set forth in clause (2) of this
sentence shall be of no further force or effect immediately after the earlier of
(i) resale or delivery, as the case may be, of the Notes referred to in such
clause and (ii) in the case of Notes purchased pursuant to a Terms Agreement
entered into prior to the termination of this Agreement, a date 270 calendar
days from the date of such termination. The provisions of Section 3(e), 3(g),
3(n), 3(o), 5 and 9 hereof shall survive the termination or cancellation of any
Terms Agreement.
9. Representations and Indemnities to Survive. The respective
-------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and each Agent set forth in or made pursuant to this
Agreement or any Terms Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Agent or the Company
or any of the officers, directors or controlling persons referred to in Section
5 hereof, and will survive delivery of and payment for the Notes.
10. Notices. All communications hereunder will be in writing and
--------
effective only on receipt, and shall be mailed, delivered or sent by facsimile
transmission and confirmed as follows:
(i) if to Merrill Lynch International Limited, at Ropemaker Place,
25 Ropemaker Street, London, England EC2Y 9LY, Facsimile:
_________________, Attention: EMTN Sales and Distribution Desk;
(ii) if to Goldman Sachs International, at Peterborough Court, 133
Fleet Street, London, England EC4A 2BB, Facsimile:
______________, Attention: _______________;
-22-
<PAGE>
(iii) if to Morgan Stanley & Co. International Limited, at 25 Cabot
Square, Canary Wharf, London, England E14 4QA, Facsimile:
44-171-425-7999, Attention: Short- and Medium-Term Finance Desk;
(iv) if to J.P. Morgan Securities Ltd., at 60 Victoria Embankment,
London, England EC4Y OJP, Facsimile: 44-171-325-8225, Attention:
Euro Medium Term Note Desk;
(v) if to Salomon Brothers International Limited, at Victoria Plaza,
111 Buckingham Palace Road, London, England SW1W OSB, Facsimile:
44-171-721-2828, Attention: Rachel Pickering; and
(vi) if to the Company, at One McDonald's Plaza, Oak Brook, Illinois
60521, Facsimile: (708) 575-5211, Attention: Treasurer, with a
copy to the Controller;
or at such other address as any party may notify to the other parties hereto
from time to time.
11. Successors. This Agreement and any Terms Agreement will inure to
----------
the benefit of and be binding upon the parties hereto and thereto and their
respective successors and the officers and directors and controlling persons
referred to in Section 5 hereof, and no other person will have any right or
obligation hereunder.
12. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
---------------
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and you.
Very truly yours,
McDONALD'S CORPORATION
By: ______________________________________
Vice President and Treasurer
-23-
<PAGE>
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above.
MERRILL LYNCH INTERNATIONAL LIMITED
By:
------------------------------
Title:
GOLDMAN SACHS INTERNATIONAL
By:
------------------------------
Title:
J. P. MORGAN SECURITIES LTD.
By:
------------------------------
Title:
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
By:
------------------------------
Title:
SALOMON BROTHERS INTERNATIONAL LIMITED
By:
------------------------------
Title:
-24-
<PAGE>
Exhibit A
McDonald's Corporation
MEDIUM-TERM NOTES, SERIES E
TERMS AGREEMENT
___________________, 19__
McDonald's Corporation
One McDonald's Plaza
Oak Brook, Illinois 60521
Attention: Treasurer
Re: Euro Distribution Agreement dated ____________, 1995
The undersigned agrees to purchase the following principal amount of your
Medium-Term Notes, Series E: [Currency/Amount]
Initial Public Offering Price:
Stated Maturity Date:
Purchase Price:
Purchase Date and Time:
Settlement Date and Time:
Place of Delivery:
Listing on Luxembourg Stock Exchange not requested: _____ (Notes will
be listed unless checked)
Redeemable by Company: ______ Yes ______ No
Redemption Price Schedule:
Date Price
---- -----
Repayable at option of
Holder: _____ Yes _____ No
Repayment Price Schedule:
Date Price
---- -----
For Fixed Rate Notes:
Interest Rate:
Interest Payment Dates:
(if other than February 15 and August 15)
Regular Record Dates:
(if other than February 1 and August 1)
A-1
<PAGE>
For Floating Rate Notes:
Base Rate:
Initial Interest Rate:
Spread:
Spread Multiplier:
Index Maturity:
Interest Reset Period:
Interest Reset Dates:
Interest Payment Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
For Indexed Notes:
[specify appropriate terms]
For Original Issue Discount Notes:
[specify appropriate terms]
For Amortizing Notes:
[specify amortization schedule]
(Other terms)
The provisions of Sections 1, 2(b), 2(c), 2(d), 3 through 6, and 8 through
13 of the Euro Distribution Agreement and the related definitions are
incorporated by reference herein and shall be deemed to have the same force and
effect as if set forth in full herein.
[The certificates referred to in Section 3(i) of the Euro Distribution
Agreement, the opinion referred to in Section 3(j) of the Euro Distribution
Agreement and the accountants' letter referred to in Section 3(k) of the Euro
Distribution Agreement will be required.]
[The following opinions, letters, information, certificates and documents
referred to in Section 4 of the Euro Distribution Agreement will be required:
_____________________.]
A-2
<PAGE>
[The lockup period referred to in Section 3(1) shall extend to a date _____
calendar days after the Settlement Date.]
[NAME OF PURCHASER]
By: ______________________________________
Title:
Accepted as of the date written above:
McDONALD'S CORPORATION
By: ______________________________________
Title:
A-3
<PAGE>
Exhibit B
Medium-Term Note Administrative Procedures
------------------------------------------
The Medium-Term Notes, Series E (the "Notes") are to be offered on a
continuing basis by McDonald's Corporation (the "Company"). Each of Merrill
Lynch International Limited, Goldman Sachs International, J.P. Morgan Securities
Ltd., Morgan Stanley & Co. International Limited, and Salomon Brothers
International Limited, as agent (each an "Agent"), has agreed to solicit offers
to purchase the Notes in bearer form (the "Bearer Notes"), which initially will
be represented by Temporary Global Notes and subsequently by Permanent Global
Notes and individual definitive Bearer Notes. The Bearer Notes are being sold
pursuant to a Euro Distribution Agreement between the Company and the Agents
dated ___________, 1995 ( the "Agreement"). The Bearer Notes will be issued
under an Indenture dated as of March 1, 1987, as supplemented (the "Indenture"),
between the Company and First Fidelity Bank, National Association, as trustee
(the "Trustee"). If any provision of these Administrative Procedures limits or
conflicts with any provision of the Bearer Notes, the Indenture or the Agreement
the relevant provisions of the Bearer Notes, the Indenture or the Agreement
shall be controlling. The Bearer Notes have been registered with the United
States Securities and Exchange Commission (the "Commission") and will, except as
otherwise indicated in the applicable Pricing Supplement, be listed on the
Luxembourg Stock Exchange. The offering of the Bearer Notes will be subject to
the restrictions set forth in Section 6 of the Agreement. Capitalized terms
used herein without definition shall have the meanings assigned to such terms in
the Indenture or the Prospectus (as defined in the Agreement).
The Company has initially appointed the principal office of Morgan Guaranty
Trust Company of New York in London as principal paying agent for the payment of
principal of and interest on and as authenticating agent for, the Bearer Notes
(the "Principal Paying Agent"), and Banque Generale du Luxembourg S.A. in
Luxembourg as an additional paying agent (a "Paying Agent"; the Principal Paying
Agent and the Paying Agent are collectively referred to as the "Paying Agents")
and as listing agent (the "Listing Agent"). The Listing Agent will coordinate
with the Principal Paying Agent and the Agents on a regular basis for the
purpose of providing the Luxembourg Stock Exchange with such information
regarding listed Bearer Notes issued and outstanding as such Exchange may
require.
Administrative procedures and specific terms of the offering are explained
below:
B-1
<PAGE>
Maturities: Each Bearer Note will have a maturity from date of issue
- - ----------- of not less than 184 days and not more than 60 years. A
Floating Rate Bearer Note will mature only on an
Interest Payment Date for such Note.
Any Bearer Note denominated in Japanese yen will mature
on a date not less than one year after the Original
Issue Date for such Note and will not be subject to
optional redemption or prepayment prior to such time.
Denominations: Unless otherwise specified in the applicable Pricing
- - ------------- Supplement, the denomination of any Bearer Note
denominated in U.S. dollars will be a minimum of $25,000
and any larger amount that is an integral multiple of
$5,000. In the case of a Bearer Note having a Specified
Currency other than U.S. dollars, the minimum
denomination and other authorized denominations shall be
as set forth in the applicable Pricing Supplement,
provided that the minimum denomination of a Bearer Note
denominated in Japanese yen shall be at least
1,000,000,000 yen.
Bearer Form: The Bearer Notes will be issuable only in bearer form.
- - -----------
Date of Issuance: Each Bearer Note will be dated and issued as of the date
- - ----------------- of its delivery by the Principal Paying Agent. Each
Bearer Note will bear an Original Issue Date, which will
be (i) with respect to a Temporary Global Note (or any
portion thereof), the date of its original issue as
specified in such Temporary Global Note and (ii) with
respect to any Permanent Global Note or Individual
Bearer Note (or portion thereof) issued subsequently
upon transfer or exchange of a Bearer Note or in lieu of
a destroyed, lost or stolen Bearer Note, the Original
Issue Date of the predecessor Bearer Note, regardless of
the date of authentication of such subsequently issued
Bearer Note.
B-2
<PAGE>
Temporary Global Notes; Until the 40th Day following the date of issuance of a
- - ----------------------- Bearer Note (the "Exchange Date") and until Final
Permanent Global Notes; Certification (as defined below) with respect to such
- - ----------------------- Bearer Note has occurred, such Bearer Note, together
and Individual Bearer with all other Bearer Notes that have the same (i)
- - --------------------- Original Issue Date, currency of denomination, non-tax
Notes: related redemption provisions, if any, Stated Maturity,
- - ------ (ii) either fixed interest rate (in the case of Fixed
Rate Notes) or Base Rate, Initial Interest Rate, Index
Maturity, Interest Reset Period, Interest Payment Dates,
Minimum Interest Rate (if any), Maximum Interest Rate
(if any) and Spread or Spread Multiplier (in the case of
Floating Rate Notes), and (iii) index formula and
related provisions, as such terms are identified in the
Pricing Supplement relating to such Notes (in the case
of Indexed Notes) (all such Bearer Notes herein referred
to collectively as a "Tranche"), will be represented by
a single Temporary Global Note in bearer form without
interest coupons. The Company shall execute, and upon
Company instructions the Principal Paying Agent shall
complete and authenticate, such Temporary Global Note
upon the same conditions and in substantially the same
manner, and with the same effect, as an individual
definitive Bearer Note. On or prior to the settlement
date (which should also be the Original Issue Date),
with respect to such Bearer Notes, the Principal Paying
Agent shall deposit the Temporary Global Note with a
common depositary located outside the United States (the
"Depositary") for Morgan Guaranty Trust Company of New
York, Brussels office, as operator of the Euroclear
System ("Euroclear") and Cedel Bank, societe anonyme
("Cedel") in the manner specified below under "Details
for Settlement". The interest of each beneficial owner
of such Temporary Global Note will be credited to the
appropriate account with Cedel or Euroclear, as
specified below under "Interest Payments".
B-3
<PAGE>
On or after the Exchange Date and provided that Final
Certification (as described below) has occurred, the
interest of the beneficial owner of such Bearer Note in
the Temporary Global Note shall be canceled and such
Bearer Note, together with all other Bearer Notes of the
Tranche as to which Final Certification has occurred,
shall thereafter be represented by a Permanent Global
Note in bearer form without interest coupons held in
London by the Depositary. The interest of the beneficial
owner of such Bearer Note in such Permanent Global Note
will be credited to the appropriate account with Cedel
or Euroclear.
The beneficial owner of an interest in a Permanent
Global Note may, at any time, upon 30 days' written
notice to the Principal Paying Agent given by such
beneficial owner through either Cedel or Euroclear, as
the case may be, exchange its beneficial interest in
such Permanent Global Note for one or more individual
Bearer Notes with coupons attached, if appropriate,
equal in aggregate principal amount to such beneficial
interest. To effect such exchange, the interest of the
beneficial owner of such Bearer Note in such Permanent
Global Note shall be canceled and one or more individual
Bearer Notes shall be issued to such beneficial owner,
through Euroclear or Cedel, as the case may be.
In all events, Bearer Notes will be delivered by the
Principal Paying Agent only outside the United States.
Transfer of interests in a Temporary or Permanent Global
Note will be made by Euroclear or Cedel in accordance
with their customary operating procedures. Title to
individual Bearer Notes and coupons will pass by
physical delivery. The bearer of each coupon, whether or
not the coupon is attached to an individual Bearer Note,
shall be subject to and bound by all the provisions
contained in the individual Bearer Note to which such
coupon relates. The bearer of any individual Bearer Note
and any coupon may, to the fullest extent permitted by
applicable law, be treated at all times, by all Persons
and for all purposes as the absolute owner of such
Bearer Note or coupon, as the case may be, regardless of
any notice of ownership, theft or loss or of any writing
thereon.
B-4
<PAGE>
Final Certification: Final Certification with respect to a Temporary Global
- - -------------------- Note shall mean the delivery by Euroclear or Cedel, as
the case may be, to the Principal Paying Agent of a
signed certificate (a "Clearance System Certificate") in
the form set forth in Appendix 1 hereto with respect to
the Bearer Notes being exchanged, dated no earlier than
the Exchange Date for such Bearer Notes, or, if an
interest payment on the Bearer Notes shall be due prior
to the Exchange Date, dated no earlier than the related
Interest Payment Date, to the effect that Euroclear or
Cedel, as the case may be, has received certificates
("Certificates of Non-U.S. Beneficial Ownership") in the
form set forth in Appendix 2 hereto with respect to each
of such Bearer Notes, which Certificates of Non-U.S.
Beneficial Ownership shall be dated no earlier than
fifteen days before the date of the related Clearance
System Certificate provided by Euroclear or Cedel, as
the case may be, signed by the account holders appearing
on its records as entitled to such Bearer Notes, to the
effect that such Bearer Notes (i) are not beneficially
owned by United States persons; or (ii) are owned by
United States persons that are (a) foreign branches of
United States financial institutions purchasing for
their own account or for resale or (b) United States
persons who acquired the Notes through foreign branches
of U.S. financial institutions and who hold the Notes
through such U.S. financial institutions (and in either
case (a) or (b), each such financial institution has
agreed that it will comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue
Code of 1986 and the regulations thereunder), or (iii)
are owned by United States or foreign financial
institutions for purposes of resale during the
restricted period, in which event such financial
institutions (whether or not also described in clause
(i) or (ii)) shall have certified that they have not
acquired the Notes for purposes of resale directly or
indirectly to a United States person or to a person
within the United States or its possessions.
Currency: The currency denomination with respect to any Bearer
- - --------- Note and the payment of interest and the repayment of
principal with respect to any such Bearer Note, shall be
as set forth therein and in the applicable Pricing
Supplement.
B-5
<PAGE>
Interest Payments: Interest (if any) on each Bearer Note will accrue from
- - ------------------ the Original Issue Date of such Bearer Note and will be
paid in the manner described in such Bearer Note and in
the Prospectus, as defined in the Agreement, as
supplemented by the applicable Pricing Supplement;
provided, however, that interest in respect of any
portion of a Temporary Global Note for which Final
Certification has not been made shall not be paid until
Final Certification is received in respect of that
portion.
Except as specified above, interest on a Temporary
Global Note or Permanent Global Note shall be payable to
the beneficial owner thereof through credit to the
account of such owner or of the custodian bank of such
owner with Cedel or Euroclear. Interest on an individual
Bearer Note shall be payable to the Holder of the
appropriate coupon appertaining thereto upon
presentation and surrender of such coupon at the office
of the Principal Paying Agent or any other Paying Agent
outside the United States.
Principal Payments: Principal payments and the final installment of interest
- - ------------------- at Maturity with respect to individual Bearer Notes will
be made in immediately available funds upon presentation
and surrender of such Bearer Notes to any paying agent
outside the United States. Principal payments with
respect to interests in a Permanent Global Note
representing Bearer Notes will be made at Maturity or
upon earlier redemption in the same manner as interest
payments with respect to interests in a Permanent Global
Note, as described under "Interest Payments".
Redemption: The applicable Pricing Supplement will set forth all
- - ----------- terms relating to the redemption of Bearer Notes prior
to Stated Maturity other than for tax reasons.
Payments of Principal Upon receipt of Bearer Notes to be repaid as set forth
- - --------------------- in such Notes, the Trustee or Principal Paying Agent for
and Interest Upon such Notes shall give notice to the Company not less
- - ----------------- than 20 calendar days prior to each optional repayment
Exercise of Optional date of such optional repayment date and of the
- - -------------------- principal amount of Bearer Notes to be repaid on such
Repayment: optional repayment date.
- - ----------
B-6
<PAGE>
On or prior to any optional repayment date, the Company
shall deposit with such Trustee or such Principal Paying
Agent an amount of money sufficient to pay the optional
repayment price, and accrued interest thereon to such
date, of all the Notes or portions thereof which are to
be repaid on such date. Such Trustee or such Principal
Paying Agent will use such money to repay such Notes
pursuant to the terms set forth in such Notes.
Procedure for Rate The Company and the Agents will discuss from time to
- - ------------------ time the rates to be borne by Bearer Notes that may be
Changes; Preparation sold as a result of the solicitation of offers by any
- - -------------------- Agent. If any offer to purchase a Bearer Note is
of Pricing Supplements: accepted by the Company, the Company will prepare a
- - ----------------------- Pricing Supplement reflecting the terms of such Bearer
Note and will arrange to have the Pricing Supplement
filed with the Commission in accordance with the
applicable paragraph of Rule 424(b) under the Securities
Act of 1933, as amended, and will supply by facsimile or
by overnight express one copy thereof (or additional
copies if requested) to each Agent which presented the
order (each, a "Presenting Agent") at the address listed
below and one copy to the Principal Paying Agent, each
additional paying agent outside the United States and,
in the case of listed Bearer Notes, the Listing Agent
for delivery to the Luxembourg Stock Exchange. Copies of
the Pricing Supplements shall be sent to:
if Merrill Lynch International Limited is the
Presenting Agent:
Merrill Lynch International Limited
EMPN Sales and Distribution Desk
Ropemaker Place
25 Ropemaker Street
London, England EC2Y 9LY
Telephone: 011-44-171-867-3995
Facsimile: 011-44-171-867-2292
if Goldman Sachs International is the Presenting Agent:
B-7
<PAGE>
if J.P. Morgan Securities Ltd. is the Presenting Agent:
J.P. Morgan Securities Limited
60 Victoria Embankment
London, England EC4Y OJP
ATTN.: Head of Medium-Term Notes
Telephone: 011-44-171-325-2468
Facsimile: 011-44-171-325-8225
if Morgan Stanley & Co. International Limited is the
Presenting Agent:
Morgan Stanley & Co. International Limited
Short- and Medium-Term Finance Desk
Colegrave House
70 Berners Street
London, England WIP 3AE
ATTN.: Michael J. Lytle
Telephone: 011-44-171-425-7715
Facsimile: 011-44-171-425-4999
if Salomon Brothers International Limited is the
Presenting Agent:
Salomon Brothers International Limited
Victoria Plaza
111 Buckingham Palace Road
London, England SW1W 0SB
ATTN.: Rachel Pickering
Telephone: 011-44-171-721-3999
Facsimile: 011-44-171-736-2828
Suspension of The Company may instruct the Agents to suspend
- - ------------- solicitation of purchases at any time. Upon receipt of
Solicitation; notice from the Company, the Agent will forthwith
- - ------------- suspend solicitation until such time as the Company has
Amendment or advised it that solicitation of purchases may be
- - ------------ resumed.
Supplement:
- - -----------
B-8
<PAGE>
In the event that at the time the Company suspends
solicitation of purchases there shall be any orders
outstanding for settlement, the Company will promptly
advise the relevant Agent and the Principal Paying Agent
whether such orders may be settled and whether copies of
the Prospectus as in effect at the time of the
suspension may be delivered in connection with the
settlement of such orders. The Company will have the
sole responsibility for such decision and for any
arrangements which may be made in the event that the
Company determines that such orders may not be settled
or that copies of such Prospectus may not be so
delivered.
If the Company decides to amend or supplement the
Registration Statement or the Prospectus, it will
promptly advise the Agents and the Principal Paying
Agent and will furnish each Agent and the Paying Agents
with the proposed amendment or supplement in accordance
with the terms of the Agreement. The Company will mail
to the Commission for filing therewith any supplement to
the Prospectus (including any Pricing Supplement),
provide each Agent with copies of any supplement (or, in
the case of a Pricing Supplement, provide each relevant
Agent with copies of such Pricing Supplement), confirm
(in the case of listed Bearer Notes) the listing on the
Luxembourg Stock Exchange of the supplement to the
Prospectus and confirm to each Agent that such
supplement has been mailed for filing with the
Commission (or, in the case of a Pricing Supplement,
confirm such information with each relevant Agent)..
Delivery of Prospectus: Each Agent shall, for each Bearer Note order received by
- - ----------------------- it, deliver a copy of the Prospectus as most recently
amended or supplemented, together with the applicable
Pricing Supplement affixed thereto, with the earlier of
the delivery of (i) the confirmation of sale of the
Bearer Note to a purchaser or such purchaser's agent or
(ii) the Bearer Note purchased by such purchaser. The
Principal Paying Agent will make such delivery if such
Bearer Note is sold directly by the Company to a
purchaser.
B-9
<PAGE>
Acceptance of Offers: The Company will have the sole right to accept offers to
- - --------------------- purchase Bearer Notes. Each Agent will communicate
orally or in writing each offer to purchase Bearer Notes
received by such Agent which in such Agent's judgment
should be considered by the Company. The Company may
reject any offer in whole or in part. Each Agent may
reject any offer received by it in whole or in part in
its discretion.
Confirmation: Each Agent shall, for each Bearer Note offer received by
- - ------------- it and accepted by the Company, issue a confirmation to
the purchaser, setting forth such of the details set
forth below as it deems appropriate, delivery and
payment instructions.
Settlement: All offers accepted by the Company (unless otherwise
- - ----------- agreed by the Company and the purchaser) will be settled
not later than the seventh day following the date on
which any such offer is accepted, or if such day is not
a Business Day, then on the next succeeding Business
Day, unless otherwise agreed by any purchaser and the
Company.
Details for Settlement; The Company, Agents, Depositary and Principal Paying
- - ----------------------- Agent will follow the following timetable in order to
Bearer Note Deliveries complete settlement with respect to each Tranche of
- - ---------------------- Bearer Notes:
and Cash Payment:
- - ----------------
LATEST
DAY TIME ACTION
- - --- ------ ------
Settlement 12:00 Noon The Relevant Agent will, for each offer to purchase
Date Minus (New York Bearer Notes received by it and accepted by the
3 City Time) Company, provide by telephone or facsimile
transmission the following information to the Vice
President and Treasurer of the Company or his
designee.
1. Principal amount of Bearer Note.
2. Price.
3. In the case of a Fixed Rate Note, the interest
rate and redemption or repayment provisions (if
any), or, in the case of a Floating Rate Note, the
Base Rate, Initial Interest Rate (if known at such
time), Index Maturity, Interest Reset Dates,
Interest Reset Period, Spread or Spread Multiplier
(if any), Minimum Interest Rate (if any), Maximum
Interest Rate (if any) and redemption or repayment
provisions (if any).
B-10
<PAGE>
4. In the case of an Indexed Note, the terms of such
Note as specified in the Pricing Supplement
relating to such Note.
5. Issue Date of Bearer Note.
6. Settlement date.
7. Stated Maturity.
8. The Agent's commission to be paid in the form of
a discount upon settlement.
9. Agent's account number at Cedel or Euroclear.
10. Amount of Proceeds.
11. Terms relating to redemption (other than tax), if
any.
12. Denominations.
13. Currency of Bearer Note.
14. OID Information (Total Amount of OID, Original
Yield to Maturity, Initial Accrual Period OID),
if applicable.
15. Other terms.
16. If applicable, wire transfer instructions,
including name of banking institution where
transfer is to be made and account number.
Settlement 9:00 a.m. The Company shall instruct the Principal Paying Agent
Date Minus (London (to be confirmed by facsimile (substantially in the
2 time) form set out in Appendix 3)) to prepare a Temporary
Global Note for each Tranche which the Company has
agreed to sell. The Company will send a copy of such
facsimile to the relevant Agent or Agents.
The Principal Paying Agent shall telephone each of
Euroclear or Cedel with a request for a security code
for each Tranche agreed to be issued, which security
code or codes will be notified by the Principal
Paying Agent to the Company and the relevant Agent or
Agents.
B-11
<PAGE>
3:45 p.m. In accordance with instructions received by the
(London Company, the Principal Paying Agent shall prepare and
time) authenticate a Temporary Global Note for each Tranche
which the Company has agreed to sell, the settlement
for which Tranche is to occur on the settlement date.
All such Temporary Global Notes will then be
delivered to the Depositary. The Principal Paying
Agent will also give instructions to Euroclear or
Cedel to credit the Bearer Notes represented by such
Temporary Global Notes delivered to such Depositary
to the Principal Paying Agent's distribution account
at Euroclear or Cedel, as the case may be. The
Principal Paying Agent will instruct Euroclear or
Cedel to debit, on the settlement date, from the
distribution account of the Principal Paying Agent
the number of Bearer Notes of each Tranche with
respect to which the relevant Agent has solicited an
offer to purchase and to credit, on the settlement
date, such Bearer Notes to the account of such Agent
with Euroclear or Cedel against payment of the issue
price, less the applicable commission, of such Bearer
Notes. Each relevant Agent shall give corresponding
instructions to Euroclear or Cedel.
Settlement Euroclear and Cedel shall debit and credit accounts
- - ---------- in accordance with instructions received by them.
Date
- - ----
5:00 p.m. The Principal Paying Agent shall pay the Company the
(New York aggregate net proceeds received by it in immediately
City time) available funds via a transfer of funds to the dollar
account of the Company with a bank in New York City
(or, with respect to Bearer Notes payable other than
in U.S. dollars, to a bank selected by the Company,
which bank is located outside the United States)
notified to the Principal Paying Agent from time to
time.
B-12
<PAGE>
Failure to If any Agent shall have advanced its own funds for
- - ---------- payment against subsequent receipt of funds from the
Settle: purchaser and if a purchaser shall fail to make
- - ------ payment for a Bearer Note, such Agent will promptly
notify the Company, the Principal Paying Agent, the
Trustee, the Depositary and Euroclear and Cedel by
telephone, promptly confirmed in writing (but no
later than the next Business Day). In such event, the
Company shall promptly instruct the Principal Paying
Agent to cancel the purchaser's interest in the
appropriate Temporary Global Note representing such
Bearer Note. Upon (i) confirmation from the Principal
Paying Agent in writing (which may be given by
facsimile) that the Principal Paying Agent has
canceled such purchaser's interest in such Temporary
Global Note and upon (ii) confirmation from such
Agent in writing (which may be given by facsimile)
that such Agent has not received payment from the
purchaser, the Company will promptly pay to such
Agent an amount in immediately available funds equal
to the amount previously paid by such Agent in
respect of such Bearer Note. Such payment will be
made on the settlement date, if possible, and in any
event not later than 12:00 Noon (New York City time)
on the Business Day following the settlement date.
The Principal Paying Agent and the Depositary will
make or cause to be made such revisions to the
Temporary Global Note representing such Bearer Note
as are necessary to reflect the cancellation of such
portion of such Temporary Global Note.
If a purchaser shall fail to make payment for the
Bearer Note for any reason other than the failure of
such Agent to provide the necessary information to
the Company as described above for settlement or to
provide a confirmation to the purchaser within a
reasonable period of time as described above, and if
such Agent shall have otherwise complied with its
obligations hereunder and in the Agreement, the
Company will reimburse such Agent for such Agent's
actual loss, as determined by the Agent, of the use
of funds during the period when they were credited to
the account of the Company or the Trustee.
Immediately upon such cancellation, the Principal
Paying Agent will make appropriate entries in its
records to reflect the fact that a settlement did not
occur with respect to such Bearer Note.
B-13
<PAGE>
Notice of The Listing Agent will provide information with
- - --------- respect to each listed Bearer Note to be issued to
Issuance to the Luxembourg Stock Exchange and will give notice by
- - ----------- facsimile transmission to the Company and the
Luxembourg relevant Agent as to the effectiveness of the listing
- - ---------- of such Bearer Notes by the close of business on the
Stock related settlement date. To the extent required by
- - ----- the Luxembourg Stock Exchange, the Agents will
Exchange: provide the Listing Agent with secondary market
- - -------- information regarding Bearer Notes and the Listing
Agent will provide such information to the Luxembourg
Stock Exchange.
Listing: The Listing Agent will, on a regular basis, provide
- - -------- the Luxembourg Stock Exchange with such information
regarding listed Bearer Notes issued and outstanding
as such Exchange may require.
Authenticity The Company will cause the Principal Paying Agent to
- - ------------ furnish each Agent from time to time with the
of specimen signatures of each of the officers,
- - -- employees or agents of the Principal Paying Agent who
Signatures: have been authorized by the Principal Paying Agent to
- - ----------- authenticate Bearer Notes (including Temporary and
Permanent Global Notes representing individual Bearer
Notes), but no Agent will have any obligation or
liability to the Company or the Principal Paying
Agent in respect of the authenticity of the signature
of any officer, employee or agent of the Company or
the Principal Paying Agent on any Bearer Note.
Paying of The Company agrees to pay each Agent a commission as
- - --------- set forth in the Agreement in the form of a discount
Selling equal to the percentage of the principal amount of
- - ------- each Bearer Note sold by the Company as a result of a
Commissions solicitation made by such Agent.
- - -----------
and
- - ---
Expenses:
- - --------
B-14
<PAGE>
APPENDIX 1
FORM OF CERTIFICATION TO BE GIVEN
BY THE EUROCLEAR OPERATOR OR CEDEL
CERTIFICATION
McDonald's Corporation
Medium-Term Notes, Series E
(the "Securities")
This is to certify that, based solely on certifications we have
received in writing, by tested telex or by electronic transmission from member
organizations appearing in our records as persons being entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
to the effect set forth in the Euro Distribution Agreement, as of the date
hereof, $__________ principal amount of the above-captioned Securities (i) is
owned by persons that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States Federal income taxation regardless of its
source ("United States persons"), (ii) is owned by United States persons that
are (a) foreign branches of United States financial institutions (as defined in
U.S. Treasury Regulations Section 1.165-12(c)(i)(v)) ("financial institutions")
purchasing for their own account or for resale, or (b) United States persons who
acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such United
States financial institution has agreed, on its own behalf or through its agent,
that we may advise the Issuer or the Issuer's agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986, as amended, and the regulations thereunder), or (iii) is owned by United
States or foreign financial institutions for purposes of resale during the
restricted period (as defined in U.S. Treasury Regulations Section 1.163-
5(c)(2)(i)(D)(7)), and to the further effect that United States or foreign
financial institutions described in clause (iii) above (whether or not also
described in clause (i) or (ii)) have certified that they have not acquired the
Securities for purposes of resale directly or indirectly to a United States
person or to a person within the United States or its possessions.
We further certify (i) that we are not making available herewith for
exchange (or, if relevant, exercise of any rights or collection of any interest)
any portion of the temporary global Security excepted in such certifications and
(ii) that as of the date hereof we have not received any notification from any
of our Member Organizations to the effect that the statements made by such
Member Organizations with respect to any portion of the part
Appendix 1
1
<PAGE>
submitted herewith for exchange (or, if relevant, exercise of any rights or
collection of any interest) are no longer true and cannot be relied upon as of
the date hereof.
We understand that this certification is required in connection with
certain tax laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certification is or would be relevant, we irrevocably authorize
you to produce this certification to any interested party in such proceedings.
Dated:____________, 199_*
Yours faithfully,
[MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, Brussels office,
as operator of the Euroclear System]
OR
[CEDEL BANK, SOCIETE ANONYME]
By:________________________________
__________
* [Not earlier than the Certification Date as defined in the Operating
Procedures.]
Appendix 1
2
<PAGE>
APPENDIX 2
FORM OF PARTICIPANT CERTIFICATION INCORPORATED
BY REFERENCE TO A CERTIFICATION INSTRUCTION
CERTIFICATE
McDonald's Corporation
Medium-Term Notes, Series E
(the "Securities")
This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States Federal income taxation regardless of its source
("United States person(s)"), (ii) are owned by United States person(s) that are
(a) foreign branches of United States financial institutions (as defined in U.S.
Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial institutions")
purchasing for their own account or for resale, or (b) United States person(s)
who acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such United
States financial institution hereby agrees, on its own behalf or through its
agent, that you may advise the Issuer or the Issuer's agent that it will comply
with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) are
owned by United States or foreign financial institution(s) for purposes of
resale during the restricted period (as defined in U.S. Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the Securities
is a United States or foreign financial institution described in clause (iii)
above (whether or not also described in clause (i) or (ii)) this is to further
certify that such financial institution has not acquired the Securities for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the Securities
held by your for our account in accordance with your Operating Procedures if any
applicable statement herein is not correct on such date, and in the absence of
any such notification it may be assumed that this certification applies as of
such date.
Appendix 2
1
<PAGE>
This certification excepts and does not relate to $__________ of such
interest in the above Securities in respect of which we are not able to certify
and as to which we understand exchange and delivery of permanent Securities (or,
if relevant, exercise of any rights or collection of any interest) cannot be
made until we do so certify.
We understand that this certification is required in connection with
certain tax laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certification is or would be relevant, we irrevocably authorize
you to produce this certification to any interested party in such proceedings.
Dated:_______________, 199_*
Name of Person Making Certification
By:
------------------------------
* To be dated no earlier than the fifteenth day preceding the Certification Date
as defined in the Operating Procedures.
Appendix 2
2
<PAGE>
APPENDIX 3
Appendix 3
1
<PAGE>
FORM OF COMPANY'S FACSIMILE TO PRINCIPAL PAYING AGENT
-----------------------------------------------------
To: Morgan Guaranty Trust Company of New York
London Office
Attention: -----
-----------------------
Euro Distribution
Agreement dated , 1995
-----------------------------
Terms defined in the Administrative Procedures relating to the above
Distribution Agreement have the same meanings herein.
We hereby confirm our telephone instruction to prepare, complete, authenticate
and issue Temporary Global Notes (in accordance with the terms of the [Terms
Agreement dated ______,] Administrative Procedures and Distribution Agreement)
and give instructions to Euroclear and/or Cedel in order for you to: -
* Credit account of [Name of Agent] with
[Euroclear/Cedel]** with the following
Bearer Notes:
(a) Principal amount:
(b) Settlement date:
(c) Issue date:
__________
* A separate facsimile is to be sent in respect of each offer accepted by the
Company. Repeat this information (numbering consecutively) if Bearer Notes of
more than one Tranche are to be issued to an Agent.
** Delete as appropriate.
Appendix 3
1
<PAGE>
(d) For Fixed Rate Notes:
Interest Rate:
For Floating Rate Notes:
Base Rate:
Initial Interest Rate:
Spread:
Spread Multiplier:
Index Maturity:
Interest Reset Period:
Interest Reset Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
(e) For Indexed Notes:
[specify appropriate terms]
(f) For Original Issue Discount Notes:
[specify appropriate terms]
(g) For Amortizing Notes:
[specify amortization schedule]
(h) Stated Maturity date:
(i) Redemption terms:
(j) Denominations:
(k) Currency:
(l) OID Information (Total Amount of
OID, Original Yield to Maturity,
Initial Accrual Period OID), if
applicable:
Appendix 3
2
<PAGE>
(m) Whether the Notes will be listed:
(n) Other terms:
against payment of [__________].
Date:
MCDONALD'S CORPORATION
By:
--------------------------------
Appendix 3
3
<PAGE>
Exhibit 4(b)
- - --------------------------------------------------------------------------------
SUPPLEMENTAL INDENTURE NO. 22
BETWEEN
McDONALD'S CORPORATION
AND
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
Trustee
------------------------------------
Dated as of __________, 1995
------------------------------------
SUPPLEMENTAL TO INDENTURE
DATED AS OF MARCH 1, 1987
- - --------------------------------------------------------------------------------
<PAGE>
MCDONALD'S CORPORATION
SUPPLEMENTAL INDENTURE NO. 22
DATED AS OF ____________, 1995
SERIES OF
MEDIUM-TERM NOTES, SERIES E
$584,662,000
Supplemental Indenture No. 22, dated as of ____________, 1995, between
McDONALD'S CORPORATION, a corporation organized and existing under the laws of
the State of Delaware (hereinafter sometimes referred to as the "Company"), and
FIRST FIDELITY BANK, NATIONAL ASSOCIATION, a national banking association,
authorized to accept and execute trusts (hereinafter sometimes referred to as
the "Trustee"),
W I T N E S S E T H :
WHEREAS, The Company and the Trustee have executed and delivered an
Indenture dated as of March 1, 1987 (the "Indenture").
WHEREAS, Section 10.01 of the Indenture provides for the Company, when
authorized by its Board of Directors, and the Trustee to enter into an indenture
supplemental to the Indenture to establish the form or terms of Debt Securities
as permitted by Sections 2.01 and 2.02 of the Indenture.
WHEREAS, Sections 2.01 and 2.02 of the Indenture provide for Debt Securities
of any series to be established pursuant to an indenture supplemental to the
Indenture.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the series of
Debt Securities provided for herein, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of such series of Debt
Securities, as follows:
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS.
SECTION 1.01. This Supplemental Indenture No. 22 constitutes an integral
part of the Indenture.
SECTION 1.02. For all purposes of this Supplemental Indenture:
<PAGE>
(1) Capitalized terms used herein without definition shall have the
meanings specified in the Indenture or in Exhibits A-H (as described below)
attached hereto.
(2) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. 22; and
(3) The terms "hereof," "herein," "hereto," "hereunder" and "herewith"
refer to this Supplemental Indenture.
ARTICLE TWO
THE SERIES OF DEBT SECURITIES
SECTION 2.01. (1) There shall be a series of Debt Securities issuable as
Fully Registered Debt Securities or Unregistered Debt Securities (the "Notes")
limited to an aggregate initial public offering price or purchase price of
$584,983,000, or the equivalent thereof in one or more foreign or composite
currencies, including the European Currency Units as designated by the Company
(the "Specified Currency"). The Notes issuable as Fully Registered Debt
Securities (the "Registered Notes") shall be designated the "Medium-Term Notes,
Series E Due from Nine Months to 60 Years from Date of Issue" and the Notes
issuable as Unregistered Debt Securities (the "Unregistered Notes") shall be
designated the "Medium-Term Notes, Series E Due from 184 Days to 60 Years from
Date of Issue."
(2) $84,662,000 of the $584,662,000 established hereunder shall replace the
$84,662,000 remaining of the Company's Medium-Term Notes, Series D Due from Nine
Months to Sixty Years from Date of Issue and Medium-Term Notes, Series D Due
from 184 days to Thirty Years from Date of Issue which were established under
Supplemental Indenture No. 18.
(3) Each Note will bear interest either at a fixed rate (a "Fixed Rate
Note"), which may be zero in the case of Original Issue Discount Notes (as
defined below), or at a floating rate (a "Floating Rate Note") or at a rate
determined by reference to an Index (as defined below).
SECTION 2.02. Fixed Rate Notes and Floating Rate Notes which are
Registered Notes shall contain substantially the terms and provisions set forth
in either the form of Series E Fixed Rate Registered Note or the form of Series
E Floating Rate Registered Note attached hereto as Exhibits A and B,
respectively, or such other forms of Registered Notes specified in an Officer's
Certificate pursuant to duly adopted resolutions of the Board of Directors of
the Company. All of the terms and provisions of such Registered Notes are
hereby incorporated by reference herein.
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<PAGE>
SECTION 2.03. (1) Fixed Rate Notes and Floating Rate Notes which are
Unregistered Notes shall contain substantially the terms and provisions set
forth in one or more of the following forms: (i) Fixed Rate Temporary Global
Note representing Medium-Term Notes, Series E, attached hereto as Exhibit C;
(ii) Floating Rate Temporary Global Note representing Medium-Term Notes, Series
E, attached hereto as Exhibit D; (iii) Fixed Rate Permanent Global Note
representing Medium-Term Notes, Series E, attached hereto as Exhibit E; (iv)
Floating Rate Permanent Global Note, representing Medium-Term Notes, Series E,
attached hereto as Exhibit F; (v) Series E Fixed Rate Bearer Note attached
hereto as Exhibit G; (vi) Series E Floating Rate Bearer Note attached hereto as
Exhibit H or (vii) such other forms of Unregistered Notes specified in an
Officer's Certificate pursuant to duly adopted resolutions of the Board of
Directors of the Company. All of the terms and provisions of such Unregistered
Notes are hereby incorporated by reference herein.
SECTION 2.04. If any provision of the Indenture or this Supplemental
Indenture No. 22 limits, qualifies, or conflicts with another provision of a
Note, such provision in such Note shall control.
SECTION 2.05. In addition to the terms described in Sections 2.02 and
2.03, herein, respectively, a Registered Note or an Unregistered Note, as the
case may be, shall contain the following terms to be specified in an Officer's
Certificate:
(1) the principal amount and Specified Currency for such Note (and, if
the Specified Currency is other than U.S. dollars, certain other terms
relating to such Note and such Specified Currency, including the authorized
denominations of such Note); (2) whether such Note is a Fixed Rate Note,
Floating Rate Note or an Indexed Note (as defined below) as to which
interest is determined by reference to an Index (as defined below); (3) the
price (expressed as a percentage of the aggregate principal amount thereof)
at which such Note will be issued (the "Issue Price"); (4) the date on
which such Note will be issued (the "Original Issue Date"); (5) the date on
which such Note will mature (the "Stated Maturity"); (6) if such Note is a
Fixed Rate Note, the rate per annum at which such Note will bear interest,
if any, and the dates on which interest will be payable if other than
February 15 and August 15 in the case of a Registered Note, or February 15
and August 15 in the case of an Unregistered Note; (7) if such Note is a
Floating Rate Note, the Base Rate, the Initial Interest Rate, the Interest
Reset Period, the Interest Payment Dates, the Index Maturity, the Maximum
Interest Rate, if any, the Minimum Interest Rate, if any, the Spread or
Spread Multiplier, if any (all as defined in Sections 2.02 and 2.08
herein), and any other terms relating to the particular method of
calculating the interest rate for such Note; (8) whether such Note is an
Original Issue Discount Note (as defined below); (9) if such Note is an
Indexed Note (as defined below), the manner in which the principal amount
of the Note payable at Stated Maturity and/or the interest amount payable
will be determined (other than as described in Section 2.08 hereof); (10)
whether such Note may be redeemed at the option of the Company, or repaid
at the option of the Holder, prior to Stated Maturity and, if so, the
provisions (other than the redemption and prepayment provisions specified
in Sections 2.02 and
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<PAGE>
2.03 herein) relating to such redemption or repayment, including, in the
case of an Original Issue Discount Note, Index Note or Amortizing Note
(each as defined below), the information necessary to determine the amount
due upon redemption or repayment; (11) if such Note is an Amortizing Note,
information necessary to determine the repayment schedule, including the
manner in which payments thereon will be applied to interest and the
reduction of unpaid principal; and (12) any other terms of such Note not
inconsistent with the provisions of the Indenture.
SECTION 2.06. (1) The First National Bank of Chicago, ________________ is
hereby initially appointed as Authenticating Agent, Registrar, Paying Agent and
Calculation Agent with respect to the Registered Notes.
(2) Morgan Guaranty Trust Company of New York, London Office, 60 Victoria
Embankment, London, is hereby initially appointed as Authenticating Agent,
Principal Paying Agent and Calculation Agent with respect to the Unregistered
Notes.
SECTION 2.07. With respect to any Notes issued hereunder,
(1) the term "Original Issue Discount Note" shall mean (a) a Note,
including any such Note whose interest rate is zero, that has a stated
redemption price at maturity that exceeds its Issue Price by at least
0.25% of its aggregate principal amount, multiplied by the number of
full years from the Original Issue Date to the Stated Maturity for
such Note and (b) any other Note designated by the Company as issued
with original issue discount for United States federal income tax
purposes; and
(2) the term "Yield to Stated Maturity" shall mean the yield to Stated
Maturity, calculated at the time of issuance of the Notes or, if
applicable, at the most recent redetermination of interest on such
Notes and calculated in accordance with accepted financial practice.
SECTION 2.08. (1) With respect to any Notes hereunder, the term "Indexed
Note" shall mean a Note, the principal amount payable at Stated Maturity of
which (the "Indexed Principal Amount") and/or the interest amount payable on
which is determined by reference to a measure (the "Index") which will be
related to (i) the rate of exchange between the Specified Currency for such Note
and the other currency or composite currency (the "Indexed Currency") specified
in such Indexed Note (such Indexed Note, "Currency Indexed Note"); (ii) the
difference in the price of a specified commodity (the "Indexed Commodity") on
specified dates (such Indexed Note, "Commodity Indexed Note"), (iii) the
difference in the level of a specified stock index (the "Stock Index"), which
may be based on U.S. or foreign stocks, on specified dates (such Indexed Note,
"Stock Indexed Note") or (iv) such other objective price or economic measures as
are described in such Indexed Note.
(2) Unless otherwise specified in an Indexed Note, interest on such Indexed
Note will be payable by the Company based on the amount designated therein as
the "Face Amount" of such Indexed Note. Such Indexed Note will describe whether
the principal
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<PAGE>
amount of such Indexed Note that would be payable upon redemption
or repayment prior to Stated Maturity will be the Face Amount of such Indexed
Note, the Indexed Principal Amount of such Indexed Note at the time of
redemption or repayment, or another amount described in such Indexed Note.
SECTION 2.09. With respect to any Notes hereunder, the term "Amortizing
Note" shall mean any Note, payments in respect of which represent interest due
and the reduction of unpaid principal as provided in such Amortizing Note.
SECTION 2.10. Any interest on any Registered Note which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
Registered Holder on the relevant Regular Record Date by virtue of having been
such Holder; and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) and Clause (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Registered Notes are registered at the close
of business on a special record date ("Special Record Date") for the
payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee (and any paying agent
designated by the Company) in writing of the amount of Defaulted Interest
proposed to be paid on each Registered Note and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee or
any paying agent designated by the Company an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee or with any paying
agent designated by the Company for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
SECTION 2.09 provided. Thereupon the Trustee or a paying agent designated
by the Company shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 nor less than 10 days
prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee or a paying agent designated by the Company of
the notice of the proposed payment. The Trustee or a paying agent
designated by the Company shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first class postage prepaid, to each
Holder of Registered Notes at his address as it appears in the Debt
Security Register, not less than 10 days prior to such Special Record Date.
The Trustee or a paying agent designated by the Company may, in its
discretion, in the name and at the expense of the Company, cause a similar
notice to be published at least once in an Authorized Newspaper in each
Place of Payment, but such publication shall not be a condition precedent
to the establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to
the Persons in whose names the Registered Notes are registered on such
Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
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<PAGE>
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Registered Notes may be listed, and upon
such notice as may be required by such exchange, if, after notice given by
the Company to the Trustee or any paying agent designated by the Company of
the proposed payment pursuant to this Clause, such payment shall be deemed
practicable by the Trustee or any paying agent designated by the Company.
Subject to the foregoing provisions of this Section, each Registered Note
delivered under this Supplemental Indenture No. 22 upon transfer of or in
exchange for or in lieu of any other Registered Note shall carry the rights
to interest accrued and unpaid, and to accrue, which were carried by such
other Registered Note.
SECTION 2.11. (1) Any interest on any Unregistered Note which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
for such Unregistered Note, shall be payable pursuant to such procedures as may
be satisfactory to the Trustee or any paying agent designated by the Company in
such manner that there is no discrimination between the Holders of Registered
Notes and Unregistered Notes and notice of the payment date therefor shall be
given by the Trustee or any paying agent, in the name and at the expense of the
Company in the manner provided in Section 14.05 of the Indenture not more than
25 days and not less than 20 days prior to the date of the proposed payment.
(2) Subject to the foregoing, each Unregistered Note delivered under this
Supplemental Indenture No. 22 in exchange for or in lieu of any other
Unregistered Note shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Unregistered Note.
ARTICLE THREE
MISCELLANEOUS
SECTION 3.01. The recitals of fact herein and in the Notes shall be taken
as statements of the Company and shall not be construed as made by the Trustee.
SECTION 3.02. This Supplemental Indenture No. 22 shall be construed in
connection with and as a part of the Indenture.
SECTION 3.03. (1) If any provision of this Supplemental Indenture No. 22
limits, qualifies, or conflicts with another provision of the Indenture required
to be included in indentures qualified under the Trust Indenture Act of 1939 (as
in effect on the date of this Supplemental Indenture No. 22) by any of the
provisions of Section 310 to 317, inclusive, of the said Trust Indenture Act,
such required provisions shall control.
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<PAGE>
(2) In case any one or more of the provisions contained in this Supplemental
Indenture No. 22 or in the Notes issued hereunder should be invalid, illegal, or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected, impaired, prejudiced or disturbed thereby.
SECTION 3.04. Whenever in this Supplemental Indenture No. 22 either of the
parties hereto is named or referred to, this shall be deemed to include the
successors or assigns of such party, and all the covenants and agreements in
this Supplemental Indenture No. 22 contained by or on behalf of the Company or
by or on behalf of the Trustee shall bind and inure to the benefit of the
respective successors and assigns of such parties, whether so expressed or not.
SECTION 3.05. (1) This Supplemental Indenture No. 22 may be simultaneously
executed in several counterparts, and all said counterparts executed and
delivered, each as an original, shall constitute but one and the same
instrument.
(2) The descriptive headings of the several Articles of this Supplemental
Indenture No. 22 were formulated, used and inserted herein for convenience only
and shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, McDONALD'S CORPORATION has caused this Supplemental
Indenture No. 22 to be signed, acknowledged and delivered by its President, Vice
Chairman and Chief Financial Officer or Vice President and Treasurer and its
corporate seal to be affixed hereunto and the same to be attested by its
Secretary or Assistant Secretary, and FIRST FIDELITY BANK, NATIONAL ASSOCIATION,
as Trustee, has caused this Supplemental Indenture No. 22 to be signed,
acknowledged and delivered by one of its Assistant Vice Presidents, and its seal
to be affixed hereunto and the same to be attested by one of its Authorized
Officers, all as of the day and year first written above.
McDONALD'S CORPORATION
[CORPORATE SEAL]
By:
-----------------------------
Carleton D. Pearl
Vice President and Treasurer
Attest:
- - -----------------------------
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<PAGE>
Assistant Secretary
FIRST FIDELITY BANK, NATIONAL
ASSOCIATION, as Trustee
[CORPORATE SEAL]
By:
-----------------------------
Assistant Vice President
Attest:
- - -----------------------------
Authorized Officer
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<PAGE>
STATE OF ILLINOIS
SS:
COUNTY OF DuPAGE
On the ______ day of ________________________, in the year one
thousand nine hundred ninety-five, before me appeared Carleton Day Pearl to me
personally known, who, being by me duly sworn, did say that he resides in
Chicago, Illinois, that he is a Vice President and Treasurer of McDONALD'S
CORPORATION, one of the corporations described in and which executed the above
instrument; that he knows the seal of said corporation, that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation; and that he signed his name thereto
by like authority.
- - -----------------------------
Notary Public
STATE OF PENNSYLVANIA
SS:
COUNTY OF
On the ______ day of __________________________, in the year one
thousand nine hundred ninety-five, before me appeared ____________________ to be
personally known, who, being by me duly sworn, did say that he resides at
___________________________________________, that he is an Assistant Vice
President of FIDELITY BANK, NATIONAL ASSOCIATION, one of the corporations
described in and which executed the above instrument; that he knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.
- - -----------------------------
Notary Public
-9-
<PAGE>
BRA\MISC\MTN\SERIES-E\SUPP22.DOC
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<PAGE>
Exhibit 4(c)
SERIES E FIXED RATE NOTE
REGISTERED PRINCIPAL AMOUNT
MCDONALD'S CORPORATION
No. MEDIUM-TERM NOTE, SERIES E
(FIXED RATE) CUSIP
Due from Nine Months to 60 Years from Date of Issue
If the registered owner of this Note (as indicated below) is The Depository
Trust Company or a nominee of The Depository Trust Company, this Note is a
Global Security and the following legend is applicable: Unless this certificate
is presented by an authorized representative of The Depository Trust Company (55
Water Street, New York, New York) to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of CEDE & CO., or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL since the registered owner hereof, CEDE & CO., has an
interest herein. UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE SECURITIES
REPRESENTED HEREBY IN DEFINITIVE FORM, THIS GLOBAL SECURITY MAY BE TRANSFERRED
IN WHOLE, BUT NOT IN PART, AND ONLY BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "YIELD TO STATED MATURITY" AND
"INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) BELOW WILL
BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL
ISSUE DISCOUNT ("OID") RULES
Issue Price: Original Issue Date:
Interest Rate: Stated Maturity:
Specified Currency:
(Applicable only if other than U.S. dollars)
Option to Receive Payments in Specified Currency: [_] Yes [_] No
(Applicable only if Specified Currency is
other than U.S. dollars)
Authorized Denominations:
(Applicable only if other than U.S.$100,000
and increments of U.S.$1,000 or if Specified
Currency is other than U.S. dollars)
Method of Payment of Principal:
(Applicable only if other than immediately available funds)
Interest Payment Dates:
(Applicable only if other than February 15 and August 15 of each year)
Regular Record Dates:
(Applicable only if other than February 1 and August 1 of each year)
Optional Redemption:
Optional Redemption Dates:
Redemption Prices:
[_] The Redemption Price shall initially be % of the principal amount of
the Note to be redeemed and shall decline at each anniversary of the
initial Optional Redemption Date by % of the principal amount to be
redeemed until the Redemption Price is 100% of such principal amount;
provided, however, that if this Note is an Original Issue Discount Note,
-------- -------
the Redemption Price shall be the Amortized Face Amount of the principal
amount to be redeemed.
[_] Other:
Sinking Fund:
Sinking Fund Dates:
Sinking Fund Amounts:
Amortizing Note: [_] Yes [_] No
Amortization Schedule:
Optional Repayment:
Optional Repayment Dates:
Optional Repayment Prices:
Original Issue Discount Note:
Total Amount of OID:
Yield to Stated Maturity:
Initial Accrual Period OID:
F-1
<PAGE>
MCDONALD'S CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (herein referred to as the
"Company"), for value received hereby promises to pay
or registered assigns, the principal amount specified above of
_____________________ (Specified Currency) on the Stated Maturity shown above
and to pay accrued interest on said principal amount at the Interest Rate
shown above from and including the Original Issue Date shown above or from
and including the most recent date to which interest has been paid or duly
provided for, semiannually in arrears unless otherwise specified on the face
hereof on but excluding February 15 and August 15 of each year and at but
excluding Maturity (each such day being an "Interest Payment Date"), until
said principal amount is paid or duly provided for in accordance with the
terms hereof. Interest on this Note, if any, will be computed on the basis
of a 360-day year of twelve 30-day months. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture referred to on the reverse hereof, be paid to the
Person in whose name this Note is registered at the close of business on the
Regular Record Date for such interest, which, in the case of interest payable
on a February 15, or August 15 (other than interest payable at Maturity)
shall be the February 1 or August 1 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date and, in the case of
interest payable at Maturity, shall be the Maturity (as defined below) of
this Note and, in all other cases, shall be as specified on the face hereof.
Notwithstanding the foregoing, if this Note is issued between a Regular
Record Date and the related Interest Payment Date, the interest so payable
for the period from the Original Issue Date to such Interest Payment Date
shall be paid on the next succeeding Interest Payment Date to the Registered
Holder hereof on the related Regular Record Date. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to
the Registered Holder hereof on such Regular Record Date, and may be paid to
the Person in whose name this Note is registered at the close of business on
a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Notes not less
than ten days prior to such Special Record Date, or may be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Registered Notes may be listed, and upon
such notice as may be required by such exchange, all as more fully provided
in said Indenture. For purposes of this Note, "Business Day" means any day,
other than a Saturday or Sunday, that is (i) neither a legal holiday nor a
day on which banking institutions are authorized or required by law,
regulation or executive order to close in (a) The City of
F-2
<PAGE>
New York, (b) the City of Chicago or (c) if the Specified Currency for this
Note is other than U.S. dollars, the principal financial center of the
country issuing such Specified Currency (which, in the case of ECU, shall be
Luxembourg) and (ii) if the Specified Currency for this Note is ECU, not a
day designated as an ECU Non-Settlement Day by the ECU Banking Association
(or otherwise generally regarded in the ECU interbank market as a day on
which payments in ECU shall not be made).
The principal hereof and any premium and interest hereon are
payable by the Company in the Specified Currency shown above. If the
Specified Currency shown above is other than U.S. dollars, the Company or the
Paying Agent will arrange to convert all payments in respect hereof into U.S.
dollars in the manner described on the reverse hereof. The Holder hereof
may, if so indicated above, elect to receive all payments in respect hereof
in the Specified Currency by delivery of a written notice to the Paying Agent
not later than fifteen calendar days prior to the applicable payment date.
Such election will remain in effect until revoked by written notice to the
Paying Agent received not later than fifteen calendar days prior to the
applicable payment date. If the Company determines that the Specified
Currency is not available to the Company for making payments in respect
hereof due to the imposition of exchange controls or other circumstances
beyond the Company's control, then the Holder hereof may not so elect to
receive payments in the Specified Currency, and any such outstanding election
shall be automatically suspended, and payments shall be in U.S. dollars,
until the Company determines that the Specified Currency is again available
to the Company for making such payments.
If this Note is a Certificated Note, payments of interest in U.S.
dollars (other than interest payable at Maturity) will be made by check
mailed to the address of the Person entitled thereto as such address shall
appear on the Debt Security Register on the applicable Regular Record Date,
provided that, if the Holder hereof is the Holder of U.S.$10,000,000 (or the
--------
equivalent thereof in a Specified Currency other than U.S. dollars determined
as provided on the reverse hereof) or more in aggregate principal amount of
Registered Notes of like tenor and term, such U.S. dollar interest payments
will be made by wire transfer of immediately available funds, but only if
appropriate wire transfer instructions have been received in writing by the
Paying Agent not less than fifteen calendar days prior to the applicable
Interest Payment Date. Simultaneously with any election by the Holder hereof
to receive payments in respect hereof in the Specified Currency (if other
than U.S. dollars), such Holder shall provide appropriate wire transfer
instructions to the
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<PAGE>
Paying Agent and all such payments will be made by wire transfer of
immediately available funds to an account maintained by the payee with a bank
located outside the United States. Unless otherwise specified on the face
hereof, the principal hereof and any premium and interest hereon payable at
Maturity will be paid in immediately available funds upon surrender of this
Note at the corporate trust office or agency of the Paying Agent located in
the City of Chicago. If this Note is a Global Security, beneficial owners of
interest herein will be paid in accordance with the Depositary's and its
participants' procedures in effect from time to time.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, AND SUCH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.
This Note shall not become valid or obligatory for any purpose
unless and until this Note has been authenticated by First Fidelity Bank,
National Association, or its successor, as Trustee.
IN WITNESS WHEREOF, the Company has caused this Note to be executed
under its corporate seal.
Dated:
MCDONALD'S CORPORATION
By____________________________________
Vice President and Treasurer
Attest________________________________
[Assistant] Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Registered Notes issued under the within-
mentioned Indenture.
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
as Trustee
THE FIRST NATIONAL BANK OF CHICAGO, as
Authenticating Agent
By____________________________________
Authorized Signatory
F-4
<PAGE>
MCDONALD'S CORPORATION
MEDIUM-TERM NOTE, SERIES E
(FIXED RATE)
This Note is one of a series of duly authorized debt securities of
the Company (the "Debt Securities") issued or to be issued in one or more
series under an indenture dated as of March 1, 1987 (the "Indenture") between
the Company and First Fidelity Bank, National Association (formerly Fidelity
Bank, National Association), as trustee (the "Trustee", which term includes
any successor Trustee under the Indenture) to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Debt Securities
and of the terms upon which the Debt Securities are, and are to be,
authenticated and delivered. This Debt Security is one of the series
designated on the face hereof limited to an aggregate initial public offering
price or purchase price of up to U.S.$584,662,000 or the equivalent thereof
in one or more foreign or composite currencies, subject to reduction as a
result of the sale of other Debt Securities. The U.S. dollar equivalent of
the public offering price or purchase price of Notes denominated in
currencies other than U.S. dollars will be determined by an agent designated
by the Company, which initially shall be The First National Bank of Chicago,
[ ] (the "Paying Agent"), on the basis of the noon buying rate in The
City of New York for cable transfers in foreign currencies as certified for
customs purposes by the Federal Reserve Bank of New York (the "Market
Exchange Rate") for such currencies on the applicable trade dates; provided,
--------
however, that in the case of ECU, the Market Exchange Rate shall be the rate
-------
of exchange determined by the Commission of the European Communities, or any
successor publication, on the applicable trade dates.
"Maturity," when used with respect to this Note, means the date on
which the principal of this Note or an installment of principal becomes due
and payable as provided herein or in the Indenture, whether at Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
Unless otherwise specified on the face hereof in the case of Notes
represented by a Global Security, the authorized denominations of Registered
Notes denominated in U.S. dollars will be U.S.$100,000 and any larger amount
that is an integral multiple of U.S.$1,000. The authorized denominations of
Registered Notes denominated in a currency other than U.S. dollars will be as
set forth on the respective faces thereof.
R-1
<PAGE>
Each Registered Note will be issued initially as either a Book-
Entry Note or a Certificated Note. Only Registered Notes denominated and
payable in U.S. dollars may be issued as Book-Entry Notes, and such Notes
will not be exchangeable for Certificated Notes and, except as otherwise
provided in the Indenture, will not otherwise be issuable as Certificated
Notes.
If the Specified Currency is other than U.S. dollars, the amount of
any U.S. dollar payment to be made in respect hereof will be determined by
the Paying Agent based on the highest firm bid quotation expressed in U.S.
dollars received by the Paying Agent at approximately 11:00 a.m., New York
City time, on the second Business Day preceding the applicable payment date
(or, if no such rate is quoted on such date, the last preceding date on which
such rate was quoted), from three (or, if three are not available, then two)
recognized foreign exchange dealers in The City of New York selected by the
Paying Agent for the purchase by the quoting dealer, for settlement on such
payment date, of the aggregate amount of the Specified Currency payable on
such payment date in respect of all Registered Notes denominated in such
Specified Currency. All currency exchange costs will be borne by the Holders
of such Registered Notes by deductions from such U.S. dollar payments. If no
such bid quotations are available, then such payments will be made in the
Specified Currency, unless the Specified Currency is unavailable to the
Company due to the imposition of exchange controls or to other circumstances
beyond the Company's control, in which case payment will be made as described
in the next paragraph.
Except as set forth below with respect to payments in ECU, if any
payment in respect hereof is required to be made in a Specified Currency
other than U.S. dollars and such currency is unavailable to the Company due
to the imposition of exchange controls or other circumstances beyond the
Company's control or is no longer used by the government of the country
issuing such currency or for the settlement of transactions by public
institutions of or within the international banking community, then such
payment shall be made in U.S. dollars until such currency is again available
to the Company or so used. The amount so payable in such foreign currency
shall be converted into U.S. dollars on the basis of the most recently
available Market Exchange Rate for such currency or as otherwise indicated on
the face hereof. Any payment made under such circumstances in U.S. dollars
will not constitute an Event of Default under the Indenture. Notwithstanding
the foregoing, if a Specified Currency is unavailable to the Company solely
because such currency no longer constitutes legal tender because it has been
replaced by the ECU or the new single currency of the European Union once
monetary union takes effect pursuant to Article 109l of the Treaty
establishing the European Community, the amounts so payable in respect of
such Note shall, beginning with the date such replacement becomes effective,
be made in the relevant new single currency of the European Union; the
amounts so payable on any date shall be converted into such single currency
on the basis of the conversion officially in effect in the European Union on
the effective date of such replacement. If any payment in respect hereof is
required to be made in European Currency Units ("ECU") and ECU are
unavailable to the Company due to the imposition of exchange controls or
other circumstances beyond the Company's control or are no longer used in the
European Monetary System, then such payment shall
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be made in U.S. dollars until ECU are again available to the Company or so
used. The amount of such payment in U.S. dollars shall be computed on the
basis of the equivalent of the ECU in U.S. dollars as of the second Business
Day prior to the date on which such payment is due. The equivalent of the
ECU in U.S. dollars as of any date shall be determined by the Paying Agent on
the following basis: the component currencies of the ECU for this purpose
(the "Components") shall be the currency amounts that were components of the
ECU as of the last date on which the ECU was used in the European Monetary
System. The equivalent of the ECU in U.S. dollars shall be calculated by
aggregating the U.S. dollar equivalents of the Components. The U.S. dollar
equivalent of each of the Components shall be determined by the Paying Agent
on the basis of the most recently available Market Exchange Rates for such
Components or as otherwise indicated on the face hereof. If the official
unit of any component currency is altered by way of combination or
subdivision, the number of units of that currency as a Component shall be
divided or multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as Components shall be replaced by an amount in such single
currency equal to the sum of the amounts of the consolidated component
currencies expressed in such single currency. If any component currency is
divided into two or more currencies, the amount of that currency as a
Component shall be replaced by amounts of such two or more currencies, each
of which shall be equal to the amount of the former component currency
divided by the number of currencies into which that currency was divided.
All determinations referred to above made by the Paying Agent shall
be at its respective sole discretion and shall, in the absence of manifest
error, be conclusive for all purposes and binding on the Holder hereof.
The interest payable hereon on each Interest Payment Date shall
equal the amount of interest accrued from and including the immediately
preceding Interest Payment Date in respect of which interest has been paid or
duly made available for payment (or from and including the date of issue, if
no interest has been paid hereon) to but excluding the related Interest
Payment Date or Maturity, as the case may be.
If so specified on the face hereof, the Company may, at its option,
redeem this Note in whole, or from time to time in part in accordance with
the procedures set forth in the Indenture, on the date or dates designated as
the Optional Redemption Date(s) on the face hereof, at the Redemption
Price(s) specified on the face hereof declining from a specified premium, if
any, to par, together with accrued interest to the date of redemption. The
Company may exercise such option by causing the Trustee or the Paying Agent
to mail a notice of such redemption at least 30 but not more than 60 days
prior to the applicable Optional Redemption Date. In the event of redemption
of this Note in part only, a new Note or
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Notes for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
If so specified on the face hereof, this Note will be repayable
prior to its Stated Maturity at the option of the Holder on the Optional
Repayment Date(s) shown on the face hereof at the Optional Repayment Price(s)
shown on the face hereof, together with accrued interest to the date of
repayment. In order for this Note to be repaid, the Paying Agent must
receive at least 30 but not more than 45 days prior to an Optional Repayment
Date (i) this Note with the form below entitled "Option to Elect Repayment"
duly completed; or (ii) a telegram, telex, facsimile transmission or letter
from a member of a national securities exchange or the National Association
of Securities Dealers, Inc. or a commercial bank or trust company in the
United States of America setting forth the name of the Holder of this Note,
the principal amount of the Note to be repaid, the certificate number or a
description of the tenor and terms of this Note, a statement that the option
to elect repayment is being exercised thereby and a guarantee that this Note
with the form below entitled "Option to Elect Repayment" duly completed will
be received by the Paying Agent not later than five Business Days after the
date of such telegram, telex, facsimile transmission or letter. If the
procedure described in clause (ii) of the preceding sentence is followed,
this Note with the form duly completed must be received by the Paying Agent
by such fifth Business Day. Any tender of this Note for Repayment shall be
irrevocable. The repayment option may be exercised by the Holder of this
Note for less than the entire principal amount of the Note, provided that the
--------
principal amount of this Note remaining outstanding after repayment is an
authorized denomination. Upon such partial repayment, this Note shall be
cancelled and a new Note or Notes for the remaining principal amount hereof
shall be issued in the name of the Holder of this Note.
Unless otherwise specified on the face hereof, this Note will not
be subject to any sinking fund. Any such sinking fund shall be administered
in accordance with the terms specified on the face hereof and otherwise as
set forth in the Indenture.
Notwithstanding anything herein to the contrary, if this Note is an
Original Issue Discount Note, the amount payable in the event of redemption
or repayment prior to the Stated Maturity hereof, in lieu of the principal
amount due at the Stated Maturity hereof, shall be the Amortized Face Amount
of this Note as of the redemption date or the date of repayment, as the case
may be. The "Amortized Face Amount" of this Note shall be the amount equal
to (a) the Issue Price (as set forth on the face hereof) plus (b) that
portion of the
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difference between the Issue Price and the principal amount hereof that has
accrued at the Yield to Stated Maturity (as set forth on the face hereof)
(computed in accordance with generally accepted United States bond yield
computation principles) at the date as of which the Amortized Face Amount is
calculated, but in no event shall the Amortized Face Amount of this Note, if
it is an Original Issue Discount Note, exceed its principal amount.
If this Note is a Global Security, ownership of beneficial
interests herein will be limited to participants in the Depositary or persons
that hold interests through such participants, and the transfer of beneficial
interests herein will be effected only through records maintained by the
Depositary (and with respect to interests of participants in the Depositary)
and by participants in the Depositary or persons that may hold interests
through such participants (with respect to persons other than participants in
the Depositary).
As provided in the Indenture and subject to certain limitations
therein set forth, this Note is exchangeable for a like aggregate principal
amount of Registered Notes of different authorized denominations, as
requested by the Person surrendering the same.
If this Note is a Global Security, this Note is exchangeable only
if (x) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for this Note or if at any time the Depositary ceases
to be in good standing under the Securities Exchange Act of 1934, as amended,
and the Company does not appoint a successor Depositary within 90 days after
the Company receives such notice or becomes aware that such Depositary is no
longer in good standing, or (y) the Company in its sole discretion determines
that this Note shall be exchanged for Certificated Notes in definitive form,
provided that the definitive Notes so issued in exchange for this Note shall
be in authorized denominations and be of like aggregate principal amount and
tenor and terms as the portion of this Note to be exchanged. Except as
provided above, owners of beneficial interests in this Note (if a Global
Security) will not be entitled to have this Note or Notes represented by this
Note registered in their names or receive physical delivery of Notes in
definitive form and will not be considered the Holders hereof for any purpose
under the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable on the Debt
Security Register of the Company, upon surrender of this Note for
registration of transfer at the office or agency of the registrar (the
"Registrar") which
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<PAGE>
initially shall be The First National Bank of Chicago, [ ], as registrar
(the "Registrar") duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company, the Registrar and the Paying
Agent duly executed by the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Registered Notes of this series, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferee.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection
therewith.
Prior to due presentment of this Note for registration of transfer,
the Company, the Trustee and any agent of the Company or of the Trustee may
treat the person in whose name this Note is registered as the Holder hereof
for all purposes, whether or not this Note be overdue, and neither the
Company, the Trustee nor such agent shall be affected by notice to the
contrary.
If an Event of Default with respect to the Debt Securities of this
series shall have occurred and be continuing, the principal of all the Debt
Securities of this series may be declared due and payable in the manner and
with the effect provided in the Indenture.
In case this Note shall at any time become mutilated, destroyed,
stolen or lost and this Note or evidence of the loss, theft or destruction
hereof (together with such indemnity and such other documents or proof as may
be required by the Company or the Registrar) shall be delivered to the
Registrar, a new Registered Note of like tenor and principal amount will be
issued by the Company in exchange for, or in lieu of, this Note. All
expenses and reasonable charges associated with procuring such indemnity and
with the preparation, authentication and delivery of a new Registered Note
shall be borne by the Holder of this Note.
The Indenture permits, with certain exceptions as therein provided,
the modification or amendment thereof and the modification of the rights of
the Holders of the Debt Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than 66-2/3% in aggregate principal amount of the Debt
Securities at the time Outstanding of all series to be affected (voting as
one class). The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Debt
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<PAGE>
Securities of any series at the time Outstanding, on behalf of the Holders of
all the Debt Securities of such Series, to waive certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the
Holder of this Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note issued in exchange or
substitution for this Note whether or not notation in regard thereto is made
upon such Note.
Holders of Debt Securities may not enforce their rights pursuant to
the Indenture or the Debt Securities except as provided in the Indenture. No
reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place and rate, and in the coin or
currency, herein prescribed.
This Note shall be deemed to be a contract made and to be performed
solely in the State of New York, and for all purposes shall be governed by,
and construed in accordance with, the laws of said State without regard to
the conflicts of law rules of said State.
All terms used in this Note that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM-as tenants in common UNIF GIFT MIN ACT-________Custodian________
TEN ENT-as tenants by the entireties (Cust) (Minor)
JT ENT -as joint tenants with right Under Uniform Gifts
of survivorship and not as to Minors Act
tenants in common
_________________________
(State)
Additional abbreviations may also be used though not in the above list
- - --------------------------------------------------------------------------------
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company to
repay $__________ principal amount of the within Note, pursuant to its terms,
on the "Optional Repayment Date" first occurring after the date of receipt of
the within Note as specified below, together with interest thereon accrued to
the date or repayment, to the undersigned at:
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
(Please Print or Type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Indenture, a
new Note or Notes representing the remaining principal amount of this Note.
For this Option to Elect Repayment to be effective, this Note with the
Option to Elect Repayment duly completed must be received by the Company
within the relevant time period set forth above at its office or agency in
the Borough of Manhattan, the City and State of New York, located initially
at the office of the Registrar at The First National Bank of Chicago,
[ ], Attention: Corporate Trust Operations.
Dated: ____________________________________________
Note: The signature to this Option to Elect
Repayment must correspond with the name as
written upon the face of the within Note in
every particular without alteration or
enlargement or any change whatsoever.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please insert Social Security or Other
Identifying Number of Assignee
[______________________________________]
-----------------------------------------------------------------------------
Please Print or Type Name and Address Including Zip Code of Assignee
-----------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting
and appointing
_____________________________________________________________________attorney
to transfer such Note on the books of McDonald's Corporation with full power
of substitution in the premises.
Dated: ___________________________ ________________________________________
Signature
----------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the Note in
every particular, without alteration or
enlargement or any change whatsoever
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<PAGE>
Exhibit 4(d)
SERIES E FLOATING RATE NOTE
REGISTERED PRINCIPAL AMOUNT
NO. MCDONALD'S CORPORATION
MEDIUM-TERM NOTE, SERIES E
(FLOATING RATE) CUSIP
Due from Nine Months to 60 Years from Date of Issue
If the registered owner of this Note (as indicated below) is The
Depository Trust Company or a nominee of The Depository Trust Company, this Note
is a Global Security and the following legend is applicable: Unless this
Certificate is presented by an authorized representative of The Depository Trust
Company (55 Water Street, New York, New York) to the issuer or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of CEDE & CO., or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
CEDE & CO., has an interest herein. UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR THE SECURITIES REPRESENTED HEREBY IN DEFINITIVE FORM, THIS GLOBAL SECURITY
MAY BE TRANSFERRED IN WHOLE, BUT NOT IN PART, AND ONLY BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "YIELD TO STATED MATURITY"
AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) SET
FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL
INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
Issue Price: Original Issue Date:
Initial Interest Rate: Stated Maturity:
Specified Currency:
(Applicable only if other than U.S. dollars)
Option to Receive Payments in Specified Currency: [ ] Yes [ ] No
(Applicable only if Specified Currency is other than U.S. dollars)
Method of Payment of Principal:
(Applicable only if other than immediately available funds)
Authorized Denominations:
(Applicable only if other than U.S. $100,000 and increments of $1,000 or if
Specified Currency is other than U.S. dollars)
Base Rate: [ ] CD Rate [ ] CMT Rate [ ] Commercial Paper [ ] Federal Funds Rate
[ ] LIBOR [ ] Treasury Rate [ ] Prime Rate [ ] Other (see attached)
If Base Rate is CMT Rate, specify Designated CMT Telerate Page:
If Base Rate is LIBOR, specify: LIBOR Reuters: Designated LIBOR Page:
LIBOR Telerate:
Interest Reset Period: Index Currency:
Index Maturity: Interest Reset Dates:
(Applicable only if other than as described on the reverse hereof)
Interest Payment Dates:
Interest Accrual:
(Applicable only if other than as described on the reverse hereof)
Spread Multiplier: Spread (+/-):
Maximum Interest Rate: Minimum Interest Rate:
Optional Redemption:
Optional Redemption Dates:
Redemption Prices:
[ ] The Redemption Price shall initially be % of the principal amount
of the Note to be redeemed and shall decline at each anniversary of
the initial Optional Redemption Date by % of the principal amount
to be redeemed until the Redemption Price is 100% of such principal
amount; provided, however, that if this Note is an Original Issue
-------- -------
Discount Note, the Redemption Price shall be the Amortized Face
Amount of the principal amount to be redeemed.
[ ] Other:
Sinking Fund: Amortizing Note:
Sinking Fund Dates: Amortization Schedule:
Sinking Fund Amounts:
Optional Repayment: Original Issue Discount Note:
Optional Repayment Dates: Total Amount of OID:
Optional Repayment Prices: Yield to Stated Maturity:
Initial Accrual Period OID:
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<PAGE>
MCDONALD'S CORPORATION, a corporation duly organized and existing under the
laws of the State of Delaware (the "Company"), for value received, hereby
promises to pay
or
registered assigns, the principal amount specified above of
_____________________ (Specified Currency) on the Stated Maturity shown above
and to pay accrued interest on said principal amount at the Initial Interest
Rate shown above from and including the Original Issue Date shown above until
but excluding the first Interest Reset Date shown above following the Original
Issue Date and thereafter at the Base Rate shown above, adjusted by the Spread
and/or Spread Multiplier, if any, shown above, determined in accordance with the
provisions on the reverse hereof, until said principal amount is paid or duly
provided for in accordance with the terms hereof. The interest so payable, and
punctually paid or duly provided for, on each Interest Payment Date specified
above will, as provided in the Indenture referred to on the reverse hereof, be
paid to the person in whose name this Note is registered at the close of
business on the Regular Record Date for such interest, which, in the case of any
Interest Payment Date shall be the date (whether or not a Business Day), fifteen
calendar days immediately preceding such Interest Payment Date and, in the case
of interest payable at Maturity (as defined below) shall be the Maturity of this
Note. Notwithstanding the foregoing, if this Note is issued between a Regular
Record Date and the related Interest Payment Date, the interest so payable for
the period from the Original Issue Date to such Interest Payment Date shall be
paid on the next succeeding Interest Payment Date to the Registered Holder
hereof on the related Regular Record Date. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the Registered
Holder hereof on such Regular Record Date and may be paid to the Person in whose
name this Note is registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Notes not less than ten days prior to such
Special Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Registered Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. For purposes of this
Note, "Business Day" means any day, other than a Saturday or Sunday, that is (i)
neither a legal holiday nor a day on which banking institutions are authorized
or required by law, regulation or executive order to close in (a) The City of
New York, (b) the City of Chicago or (c) if the Specified Currency for this Note
is other than U.S. dollars, the principal financial center of the country
issuing such Specified Currency (which, in the case of ECU, shall be
Luxembourg); (ii) if the Specified Currency for this Note is ECU, not a day
designated as an ECU Non-Settlement Day by the ECU Banking Association (or
otherwise generally
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<PAGE>
regarded in the ECU interbank market as a day on which payments in ECU shall not
be made) and (iii) if this Note is a LIBOR Note, a London Business Day (as
defined below). "London Business Day" means any day (i) if the Index Currency
(as defined on the face hereof) is other than ECU, on which dealings in such
Index Currency are transacted in the London interbank market or (ii) if the
Index Currency is ECU, that is not designated as an ECU Non-Settlement Day by
the ECU Banking Association (or otherwise generally regarded in the ECU
interbank market as a day on which payments in ECU shall not be made).
The principal hereof and any premium and interest hereon are payable by the
Company in the Specified Currency shown above. If the Specified Currency shown
above is other than U.S. dollars, the Company or the Paying Agent will (unless
otherwise specified on the face hereof) arrange to convert all payments in
respect hereof into U.S. dollars in the manner described on the reverse hereof.
The Holder hereof may, if so indicated above, elect to receive all payments in
respect hereof in the Specified Currency by delivery of a written notice to the
Paying Agent not later than fifteen calendar days prior to the applicable
payment date. Such election will remain in effect until revoked by written
notice to the Paying Agent received not later than fifteen calendar days prior
to the applicable payment date. If the Company determines that the Specified
Currency is not available to the Company for making payments in respect hereof
due to the imposition of exchange controls or other circumstances beyond the
Company's control, then the Holder hereof may not so elect to receive payments
in the Specified Currency, and any such outstanding election shall be
automatically suspended, and payments shall be in U.S. dollars, until the
Company determines that the Specified Currency is again available to the Company
for making such payments.
If this Note is a Certificated Note, payments of interest in U.S. dollars
(other than interest payable at Maturity) will be made by check mailed to the
address of the Person entitled thereto as such address shall appear on the Debt
Security Register on the applicable Regular Record Date, provided that, if the
--------
Holder hereof is the Holder of U.S.$10,000,000 (or the equivalent thereof in a
Specified Currency other than U.S. dollars determined as provided on the reverse
hereof) or more in aggregate principal amount of Registered Notes of like tenor
and term, such U.S. dollar interest payments will be made by wire transfer of
immediately available funds, but only if appropriate wire transfer instructions
have been received in writing by the Paying Agent not less than fifteen calendar
days prior to the applicable Interest Payment Date. Simultaneously with any
election by the Holder hereof to receive payments in respect hereof in the
Specified Currency (if other than U.S. dollars), such Holder shall provide
appropriate wire transfer instructions to the Paying Agent and all such payments
will be made by wire
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<PAGE>
transfer of immediately available funds to an account maintained by the payee
with a bank located outside the United States. Unless otherwise specified on
the face hereof, the principal hereof and any premium and interest hereon
payable at Maturity will be paid in immediately available funds upon surrender
of this Note at the corporate trust office or agency of the Paying Agent located
in the City of Chicago. If this Note is a Global Security, beneficial owners of
interest herein will be paid in accordance with the Depositary's and its
participants' procedures in effect from time to time.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH
ON THE REVERSE HEREOF, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE
THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.
This Note shall not become valid or obligatory for any purpose unless and
until this Note has been authenticated by First Fidelity Bank, National
Association, or its successor, as Trustee.
IN WITNESS WHEREOF, the Company has caused this Note to be executed under
its corporate seal.
Dated:
MCDONALD'S CORPORATION
By ______________________________________
Vice President and Treasurer
Attest __________________________________
[Assistant] Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Notes issued under the within-mentioned Indenture.
FIRST FIDELITY BANK, NATIONAL ASSOCIATION,
as Trustee
THE FIRST NATIONAL BANK OF CHICAGO,
as Authenticating Agent
By ______________________________________
Authorized Signatory
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<PAGE>
MCDONALD'S CORPORATION
MEDIUM-TERM NOTE, SERIES E
(FLOATING RATE)
This Note is one of a series of duly authorized debt securities of the
Company (the "Debt Securities") issued or to be issued in one or more series
under an indenture, dated as of March 1, 1987 (the "Indenture") between the
Company and First Fidelity Bank, National Association (formerly Fidelity Bank,
National Association), as trustee (the "Trustee", which term includes any
successor Trustee under the Indenture) to which indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Debt Securities and of the terms upon which
the Debt Securities are, and are to be, authenticated and delivered. This Debt
Security is one of the series designated on the face hereof limited to an
aggregate initial public offering price or purchase price of up to
U.S.$584,662,000 or the equivalent thereof in one or more foreign or composite
currencies, subject to reduction as a result of the sale of other Debt
Securities. The U.S. dollar equivalent of the public offering price or purchase
price of Notes denominated in currencies other than U.S. dollars will be
determined by an agent designated by the Company, which initially shall be The
First National Bank of Chicago, [ ] (the "Paying Agent"), on the basis of
the noon buying rate in New York City for cable transfers in foreign currencies
as certified for customs purposes by the Federal Reserve Bank of New York (the
"Market Exchange Rate") for such currencies on the applicable trade dates.
"Maturity," when used with respect to this Note, means the date on
which the principal of this Note or an installment of principal becomes due and
payable as provided herein or in the Indenture, whether at Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
Unless otherwise specified on the face hereof in the case of Notes
represented by a Global Security, the authorized denominations of Registered
Notes denominated in U.S. dollars will be U.S.$100,000 and any larger amount
that is an integral multiple of U.S.$1,000. The authorized denominations of
Registered Notes denominated in a currency other than U.S. dollars will be as
set forth on the respective faces thereof.
Each Registered Note will be issued initially as either a Book-Entry
Note or a Certificated Note. Only Registered Notes denominated and payable in
U.S. dollars may be issued as Book-Entry Notes and such Notes will not be
exchangeable for Certificated Notes and, except as otherwise provided in the
Indenture, will not otherwise be issuable as Certificated Notes.
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<PAGE>
If the Specified Currency is other than U.S. dollars, the amount of
any U.S. dollar payment to be made in respect hereof will be determined by the
Paying Agent based on the highest firm bid quotation expressed in U.S. dollars
received by the Paying Agent at approximately 11:00 a.m., New York City time, on
the second Business Day preceding the applicable payment date (or, if no such
rate is quoted on such date, the last preceding date on which such rate was
quoted) from three (or, if three are not available, then two) recognized foreign
exchange dealers in The City of New York selected by the Paying Agent for the
purchase by the quoting dealer, for settlement on such payment date, of the
aggregate amount of the Specified Currency payable on such payment date in
respect of all Registered Notes denominated in such Specified Currency. All
currency exchange costs will be borne by the Holders of such Registered Notes by
deductions from such U.S. dollar payments. If no such bid quotations are
available, then such payments will be made in the Specified Currency, unless the
Specified Currency is unavailable to the Company due to the imposition of
exchange controls or to other circumstances beyond the Company's control, in
which case payment will be made as described in the next paragraph.
Except as set forth below with respect to payments in ECU, if any
payment in respect hereof is required to be made in a Specified Currency other
than U.S. dollars and such currency is unavailable to the Company due to the
imposition of exchange controls or other circumstances beyond the Company's
control or is no longer used by the government of the country issuing such
currency or for the settlement of transactions by public institutions of or
within the international banking community, then such payment shall be made in
U.S. dollars until such currency is again available to the Company or so used.
The amount so payable in such foreign currency shall be converted into U.S.
dollars on the basis of the most recently available Market Exchange Rate for
such currency or as otherwise indicated on the face hereof. Any payment made
under such circumstances in U.S. dollars will not constitute an Event of Default
under the Indenture. If any payment in respect hereof is required to be made in
European Currency Units ("ECU") and ECU are unavailable to the Company due to
the imposition of exchange controls or other circumstances beyond the Company's
control or are no longer used in the European Monetary System, then such payment
shall be made in U.S. dollars until ECU are again available to the Company or so
used. The amount of such payment in U.S. dollars shall be computed on the basis
of the equivalent of the ECU in U.S. dollars as of the second Business Day prior
to the date on which such payment is due. The equivalent of the ECU in U.S.
dollars as of any date shall be determined by the Paying Agent on the following
basis: the component currencies of the ECU for this purpose (the "Components")
shall be the currency amounts that were components of the ECU as of the last
date on which the ECU was used in the European Monetary System. The equivalent
of the
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ECU in U.S. dollars shall be calculated by aggregating the U.S. dollar
equivalents of the Components. The U.S. dollar equivalent of each of the
Components shall be determined by the Paying Agent on the basis of the most
recently available Market Exchange Rates for such Components or as otherwise
indicated on the face hereof. If the official unit of any component currency is
altered by way of combination or subdivision, the number of units of that
currency as a Component shall be divided or multiplied in the same proportion.
If two or more component currencies are consolidated into a single currency, the
amounts of those currencies as Components shall be replaced by an amount of such
single currency equal to the sum of the amounts of the consolidated component
currencies expressed in such single currency. If any component currency is
divided into two or more currencies, the amount of that currency as a Component
shall be replaced by amounts of such two or more currencies, each of which shall
be equal to the amount of the former component currency divided by the number of
currencies into which such currency was divided.
All determinations referred to above made by the Paying Agent shall be
at its respective sole discretion and shall, in the absence of manifest error,
be conclusive for all purposes and binding on the Holder hereof.
If so specified on the face hereof, the Company may, at its option,
redeem this Note in whole, or from time to time in part in accordance with the
procedures set forth in the Indenture, on the date or dates designated as the
Optional Redemption Date(s) on the face hereof, at the Redemption Price(s)
specified on the face hereof declining from a specified premium, if any, to par,
together with accrued interest to the date of redemption. The Company may
exercise such option by causing the Trustee or the Paying Agent to mail a notice
of such redemption at least 30 but not more than 60 days prior to the applicable
Optional Redemption Date. In the event of redemption of this Note in part only,
a new Note or Notes for the unredeemed portion hereof shall be issued in the
name of the Holder hereof upon the cancellation hereof.
If so specified on the face hereof, this Note will be repayable prior
to its Stated Maturity at the option of the Holder on the Optional Repayment
Date(s) shown on the face hereof at the Optional Repayment Price(s) shown on the
face hereof, together with accrued interest to the date of repayment. In order
for this Note to be repaid, the Paying Agent must receive at least 30 but not
more than 45 days prior to an Optional Repayment Date (i) this Note with the
form below entitled "Option to Elect Repayment" duly completed; or (ii) a
telegram, telex, facsimile transmission or letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company in the United
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States of America setting forth the name of the Holder of this Note, the
principal amount of the Note to be repaid, the certificate number or a
description of the tenor and terms of this Note, a statement that the option to
elect repayment is being exercised thereby and a guarantee that this Note with
the form below entitled "Option to Elect Repayment" duly completed will be
received by the Paying Agent not later than five Business Days after the date of
such telegram, telex, facsimile transmission or letter. If the procedure
described in clause (ii) of the preceding sentence is followed, this Note with
the form duly completed must be received by the Paying Agent by such fifth
Business Day. Any tender of this Note for repayment shall be irrevocable. The
repayment option may be exercised by the Holder of this Note for less than the
entire principal amount of the Note, provided that the principal amount of this
--------
Note remaining outstanding after repayment is an authorized denomination. Upon
such partial repayment, this Note shall be cancelled and a new Note or Notes for
the remaining principal amount hereof shall be issued in the name of the Holder
of this Note.
Unless otherwise specified on the face hereof, this Note will not be
subject to any sinking fund. Any such sinking fund shall be administered in
accordance with the terms specified on the face hereof and otherwise as set
forth in the Indenture.
Notwithstanding anything herein to the contrary, if this Note is an
Original Issue Discount Note, the amount payable in the event of redemption or
repayment prior to the Stated Maturity hereof, in lieu of the principal amount
due at the Stated Maturity hereof, shall be the Amortized Face Amount of this
Note as of the redemption date or the date of repayment, as the case may be.
The "Amortized Face Amount" of this Note shall be the amount equal to (a) the
Issue Price (as set forth on the face hereof) plus (b) that portion of the
difference between the Issue Price and the principal amount hereof that has
accrued at the Yield to Stated Maturity (as set forth on the face hereof)
(computed in accordance with generally accepted United States bond yield
computation principles) at the date as of which the Amortized Face Amount is
calculated, but in no event shall the Amortized Face Amount of this Note, if it
is an Original Issue Discount Note, exceed its principal amount.
This Note will bear interest from its Original Issue Date to the first
Interest Reset Date (as defined below) at the Initial Interest Rate set forth on
the face hereof. Thereafter, the interest rate hereon for each Interest Reset
Period (as defined below) will be determined by reference to the Base Rate or
Rates specified on the face hereof, plus or minus the Spread, if any, and/or
multiplied by the Spread Multiplier, if any, specified on the face hereof. The
Base Rates that may be specified on the face hereof are the CD Rate, the CMT
Rate, the
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Commercial Paper Rate, the Federal Funds Rate, LIBOR, the Treasury Rate, the
Prime Rate or any other Base Rate or formula specified on the face hereof.
"H.15(519)" means the publication entitled "Statistical Release H.15(519),
Selected Interest Rates" or any successor publication, published by the Board of
Governors of the Federal Reserve System. "Composite Quotations" means the daily
statistical release entitled "Composite 3:30 p.m. Quotations for U.S. Government
Securities" published by the Federal Reserve Bank of New York.
As specified on the face hereof, this Note may also have either or
both of the following (in each case expressed as a rate per annum on a simple
interest basis): (i) a maximum limitation, or ceiling, on the rate at which
interest may accrue during any interest period ("Maximum Interest Rate") and
(ii) a minimum limitation, or floor, on the rate at which interest may accrue
during any interest period ("Minimum Interest Rate"). In addition to any
Maximum Interest Rate that may be specified on the face hereof, the interest
rate will in no event be higher than the maximum rate permitted by applicable
law, as the same may be modified by United States law of general application.
The interest rate hereon will be reset daily, weekly, monthly,
quarterly, semiannually or annually (such period being the "Interest Reset
Period" specified on the face hereof, and the first day of each Interest Reset
Period being an "Interest Reset Date"). Unless otherwise specified on the face
hereof, the Interest Reset Dates will be, if this Note resets daily, each
Business Day; if this Note (unless this Note is a Treasury Rate Note) resets
weekly, Wednesday of each week; if this Note is a Treasury Rate Note that resets
weekly, Tuesday of each week (except as provided below under "Determination of
Treasury Rate"); if this Note resets monthly, the third Wednesday of each month;
if this Note resets quarterly, the third Wednesday of March, June, September and
December of each year; if this Note resets semiannually, the third Wednesday of
each of the two months of each year specified on the face hereof; and if this
Note resets annually, the third Wednesday of one month of each year specified on
the face hereof. If an Interest Reset Date would otherwise be a day that is not
a Business Day, such Interest Reset Date shall be postponed to the next
succeeding Business Day, except that, if the Base Rate specified on the face
hereof is LIBOR and such Business Day is in the next succeeding calendar month,
such Interest Reset Date shall be the immediately preceding Business Day.
Unless otherwise specified on the face hereof, the interest payable
hereon on each Interest Payment Date shall be the accrued interest from and
including the Original Issue Date or the last date to which interest has been
paid or duly provided for, as the case may be, to but excluding such Interest
Payment Date or Maturity, as the case may be. Unless otherwise specified
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on the face hereof, accrued interest shall be calculated by multiplying the
principal amount hereof by an accrued interest factor. Such accrued interest
factor will be computed by adding the interest factors calculated for each day
in the period for which accrued interest is being calculated. Unless otherwise
specified on the face hereof, the interest factor (expressed as a decimal
calculated to seven decimal places without rounding) for each such day shall be
computed by dividing the interest rate in effect on such day by 360 if the Base
Rate specified on the face hereof is the CD Rate, the Commercial Paper Rate, the
Federal Funds Rate, LIBOR or the Prime Rate, or by the actual number of days in
the year, if the Base Rate specified on the face hereof is the Treasury Rate or
the CMT Rate. For purposes of making the foregoing calculation, the interest
rate in effect on any Interest Reset Date will be the applicable rate as reset
on such date. Unless otherwise specified on the face hereof, all percentages
resulting from any calculation of the rate of interest hereof will be rounded,
if necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-
millionths of a percentage point rounded upward, and all currency amounts used
in or resulting from such calculation will be rounded to the nearest one-
hundredth of a unit (with .005 of a unit being rounded upward).
Unless otherwise specified on the face hereof and except as provided
below, interest will be payable, if this Note resets daily, weekly or monthly,
on the third Wednesday of each month or on the third Wednesday of March, June,
September and December of each year, as specified on the face hereof; if this
Note resets quarterly, on the third Wednesday of March, June, September and
December of each year; if this Note resets semiannually, on the third Wednesday
of each of the two months of each year specified on the face hereof; and if this
Note resets annually, on the third Wednesday of one month of each year specified
on the face hereof (each such day being an "Interest Payment Date") and, in each
case, at Maturity. If an Interest Payment Date (other than at Maturity) would
otherwise fall on a day that is not a Business Day, such Interest Payment Date
shall be postponed to the next succeeding Business Day, except that, if the Base
Rate specified on the face hereof is LIBOR and such Business Day would fall in
the next succeeding calendar month, such Interest Payment Date shall be the
immediately preceding Business Day.
If the Maturity of this Note falls on a day that is not a Business
Day, the required payment of principal, premium (if any) and/or interest will be
made on the next succeeding Business Day as if made on the date such payment was
due, and no interest shall accrue on such payment for the period from and after
Maturity to the date of such payment on the next succeeding Business Day.
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The Company has appointed and entered into an agreement with an agent
(a "Calculation Agent") to calculate the interest rates on Floating Rate Notes.
Unless otherwise specified on the face hereof, The First National Bank of
Chicago shall be the Calculation Agent. At the request of the Holder hereof,
the Calculation Agent will provide to such Holder the interest rate then in
effect, and, if determined, the interest rate that will become effective on the
next Interest Reset Date. All determinations of interest rates by the
Calculation Agent shall, in the absence of manifest error, be conclusive for all
purposes and binding on the Holder hereof.
Subject to applicable provisions of law and except as specified
herein, on each Interest Reset Date the rate of interest shall be the rate
determined in accordance with the provisions of the applicable heading below.
DETERMINATION OF CD RATE
If the Base Rate specified on the face hereof is the CD Rate, this
Note will bear interest for each Interest Reset Period at the interest rate
calculated with reference to the CD Rate and the Spread and/or Spread
Multiplier, if any, specified on the face hereof. The "CD Rate" for each
Interest Reset Period shall be the rate as of the second Business Day prior to
the Interest Reset Date for such Interest Reset Period (a "CD Rate Determination
Date") for negotiable certificates of deposit having the Index Maturity
specified on the face hereof, as published in H.15(519) under the heading "CDs
(Secondary Market)". In the event that such rate is not published prior to 3:00
p.m., New York City time, on the Calculation Date (as defined below) pertaining
to such CD Rate Determination Date, then the "CD Rate" for such Interest Reset
Period will be the rate on such CD Rate Determination Date for negotiable
certificates of deposit of the Index Maturity specified on the face hereof as
published by the Federal Reserve Bank of New York in its daily statistical
release "Composite 3:30 p.m. Quotations for U.S. Government Securities"
("Composite Quotations") under the heading "Certificates of Deposit". If by
3:00 p.m., New York City time, on such Calculation Date such rate is not yet
published in either H.15(519) or Composite Quotations, then the "CD Rate" for
such Interest Reset Period will be calculated by the Calculation Agent and will
be the arithmetic mean of the secondary market offered rates as of 10:00 a.m.,
New York City time, on such CD Rate Determination Date, of three leading nonbank
dealers in negotiable U.S. dollar certificates of deposit in The City of New
York selected by the Calculation Agent for negotiable certificates of deposit of
major money market banks (in the market for negotiable certificates of deposit)
with a remaining maturity closest to the Index Maturity on the face hereof in a
denomination of $5,000,000; provided, however, that if the three dealers
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selected as aforesaid by the Calculation
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Agent are not quoting offered rates as mentioned in this sentence, the CD Rate
for such Interest Reset Period will be the CD Rate in effect on such CD Rate
Determination Date, or if none, the Initial Interest Rate.
The "Calculation Date" pertaining to any CD Rate Determination Date
shall be the earlier of (i) the tenth calendar day after such CD Rate
Determination Date or, if such day is not a Business Day, the next succeeding
Business Day or (ii) the Business Day immediately preceding the applicable
Interest Payment Date or Maturity, as the case may be.
DETERMINATION OF COMMERCIAL PAPER RATE
If the Base Rate shown on the face hereof is the Commercial Paper
Rate, this Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the Commercial Paper Rate and the
Spread and/or Spread Multiplier, if any, specified on the face hereof. The
"Commercial Paper Rate" for each Interest Reset Period will be determined by the
Calculation Agent as of the second Business Day prior to the Interest Reset Date
for such Interest Reset Period (a "Commercial Paper Rate Determination Date")
and shall be the Money Market Yield (as defined below) on such Commercial Paper
Rate Determination Date of the rate for commercial paper having the Index
Maturity specified on the face hereof, as such rate shall be published in
H.15(519) under the heading "Commercial Paper". In the event that such rate is
not published prior to 3:00 p.m., New York City time, on the Calculation Date
(as defined below) then the Commercial Paper Rate for such Interest Reset Period
shall be the Money Market Yield on such Commercial Paper Rate Determination Date
of the rate for commercial paper of the Index Maturity specified on the face
hereof as published in Composite Quotations under the heading "Commercial
Paper". If by 3:00 p.m., New York City time, on such Calculation Date such rate
is not yet published in either H.15(519) or Composite Quotations, then the
"Commercial Paper Rate" for such Interest Reset Period shall be the Money Market
Yield of the arithmetic mean of the offered rates as of 11:00 a.m., New York
City time, on such Commercial Paper Rate Determination Date of three leading
dealers of commercial paper in The City of New York selected by the Calculation
Agent for commercial paper of the Index Maturity specified on the face hereof
placed for an industrial issuer whose bonds are rated "AA" or the equivalent by
a nationally recognized statistical rating agency; provided, however, that if
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the three dealers selected as aforesaid by the Calculation Agent are not quoting
offered rates as mentioned in this sentence, the "Commercial Paper Rate" for
such Interest Reset Period will be the Commercial Paper Rate in effect on such
Commercial Paper Rate Determination Date, or, if none, the Initial Interest
Rate.
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"Money Market Yield" shall be the yield calculated in accordance
with the following formula:
Money Market Yield = D x 360 X 100
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360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the period for which accrued interest is being calculated.
The "Calculation Date" pertaining to any Commercial Paper Rate
Determination Date shall be the earlier of (i) the tenth calendar day after such
Commercial Paper Rate Determination Date or, if such day is not a Business Day,
the next succeeding Business Day or (ii) the Business Day immediately preceding
the applicable Interest Payment Date or Maturity, as the case may be.
DETERMINATION OF FEDERAL FUNDS RATE
If the Base Rate specified on the face hereof is the Federal Funds
Rate, this Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the Federal Funds Rate and Spread
and/or Spread Multiplier, if any, specified on the face hereof. The "Federal
Funds Rate" for each Interest Reset Period shall be the effective rate on the
second Business Day immediately prior to the Interest Reset Date for such
Interest Reset Period (a "Federal Funds Rate Determination Date") for Federal
Funds as published in H.15(519) under the heading "Federal Funds (Effective)".
In the event that such rate is not published prior to 3:00 p.m., New York City
time, on the Calculation Date (as defined below) pertaining to such Federal
Funds Rate Determination Date, the "Federal Funds Rate" for such Interest Reset
Period shall be the rate on such Federal Funds Rate Determination Date as
published in Composite Quotations under the heading "Federal Funds/Effective
Rate". If by 3:00 p.m., New York City time, on such Calculation Date, such rate
is not yet published in either H.15(519) or Composite Quotations, then the
"Federal Funds Rate" for such Interest Reset Period shall be the arithmetic mean
of the rate, as of 9:00 a.m., New York City time, on the Federal Funds Rate
Determination Date for the last transaction of not less than $5,000,000 in
overnight federal funds arranged by each of three leading brokers of federal
funds transactions in The City of New York selected by the Calculation Agent;
provided, however, that if the brokers selected as aforesaid by the Calculation
- - -------- -------
Agent are not quoting as set forth above, the "Federal Funds Rate" for such
Interest Reset Period will be the Federal Funds Rate in effect on such Federal
Funds Rate Determination Date, or, if none, the Initial Interest Rate.
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The "Calculation Date" pertaining to any Federal Funds Rate
Determination Date shall be the earlier of (i) the tenth calendar day after such
Federal Funds Rate Determination Date or, if such day is not a Business Day, the
next succeeding Business Day or (ii) the Business Day immediately preceding the
applicable Interest Payment Date or Maturity, as the case may be.
DETERMINATION OF LIBOR
If the Base Rate specified on the face hereof is LIBOR, this Note will
bear interest for each Interest Reset Period at the interest rate calculated
with reference to LIBOR and the Spread and/or Spread Multiplier, if any,
specified on the face hereof. If LIBOR is indexed to the offered rates for
deposits in a currency other than U.S. dollars, the method for determining such
rate will be specified on the face hereof. If LIBOR is indexed to the offered
rate for U.S. dollar deposits, "LIBOR" for each Interest Reset Period shall be
determined by the Calculation Agent as follows:
(i) On the second London Business Day prior to the Interest Reset Date
for such Interest Reset Period (a "LIBOR Interest Determination Date"),
the Calculation Agent will determine (a) if "LIBOR Reuters" is specified
on the face hereof, the arithmetic mean of the offered rates (unless the
specified Designated LIBOR Page by its terms provides only for a single
rate, in which case such single rate shall be used) for deposits in the
Index Currency having the Index Maturity designated on the face hereof,
commencing on the second London Business Day immediately following such
LIBOR Interest Determination Date, that appear on the Designated LIBOR
Page specified on the face hereof as of 11:00 a.m., London time, on such
LIBOR Interest Determination Date, if at least two such offered rates
appear (unless, as aforesaid, only a single rate is required) on such
Designated LIBOR Page, or (b) if "LIBOR Telerate" is specified on the
face hereof or if neither "LIBOR Reuters" nor "LIBOR Telerate" is
specified as the method for calculating LIBOR, the rate for deposits in
the Index Currency having the Index Maturity designated on the face
hereof commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date that appears on the
Designated LIBOR Page specified on the face hereof as of 11:00 a.m.,
London time, on such LIBOR Interest Determination Date. If fewer than
two such offered rates appear, or if no such rate appears, as
applicable, LIBOR in respect of the related LIBOR Interest Determination
Date will be determined in accordance with the provisions described in
clause (ii) below.
(ii) With respect to this LIBOR Note and an Interest Reset Period to
which this clause (ii) applies, the
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Calculation Agent will request the principal London offices of each of
four major reference banks in the London interbank market, as selected
by the Calculation Agent, to provide the Calculation Agent with its
offered quotation for deposits in the Index Currency for the period of
the Index Maturity designated on the face hereof, commencing on the
second London Business Day immediately following such LIBOR Interest
Determination Date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on such LIBOR Interest
Determination Date and in a principal amount that is representative for
a single transaction in such Index Currency in such market at such time.
If at least two such quotations are provided, LIBOR determined on such
LIBOR Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR determined
on such LIBOR Interest Determination Date will be the arithmetic mean of
the rates quoted at approximately 11:00 a.m., in the applicable
Principal Financial Center, on such LIBOR Interest Determination Date by
three major banks in such Principal Financial Center selected by the
Calculation Agent for loans in the Index Currency to leading European
banks, having the Index Maturity designated on the face hereof
commencing on the second London Business Day immediately following such
LIBOR Interest Determination Date and in a principal amount that is
representative for a single transaction in such Index Currency in such
market at such time; provided, however, that if the banks so selected by
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the Calculation Agent are not quoting as mentioned in this sentence,
LIBOR determined as of such LIBOR Interest Determination Date will be
LIBOR in effect on such LIBOR Interest Determination Date.
"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is specified
on the face hereof, the display on the Reuters Monitor Money Rates
Service for the purpose of displaying the London interbank rates of
major banks for the applicable Index Currency, or (b) if "LIBOR
Telerate" is specified on the face hereof or neither "LIBOR Reuters" nor
"LIBOR Telerate" is specified as the method for calculating LIBOR, the
display on the Dow Jones Telerate Service for the purpose of displaying
the London interbank rates of major banks for the applicable Index
Currency.
"Index Currency" means the currency (including composite currencies)
specified on the face hereof as the currency for which LIBOR shall be
calculated. If no such currency is specified on the face hereof, the
Index Currency shall be U.S. dollars.
"Principal Financial Center" will generally be the capital city of the
country of the specified Index
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Currency, except that with respect to U.S. dollars, Italian lire and
ECU, the Principal Financial Center shall be The City of New York, Milan
and Luxembourg, respectively.
DETERMINATION OF TREASURY RATE
If the Base Rate specified on the face hereof is the Treasury Rate, this
Note will bear interest for each Interest Reset Period at the interest rate
calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any, specified on the face hereof. The "Treasury Rate" for each
Interest Reset Period will be the rate for the auction held on the Treasury Rate
Determination Date (as defined below) for such Interest Reset Period of direct
obligations of the United States ("Treasury bills") having the Index Maturity
specified on the face hereof, as published in H.15(519) under the heading "U.S.
Government Securities-Treasury bills-auction average (investment)" or, if not so
published by 3:00 p.m., New York City time, on the Calculation Date (as defined
below) pertaining to such Treasury Rate Determination Date, the auction average
rate (expressed as a bond equivalent on the basis of a year of 365 or 366 days,
as applicable, and applied on a daily basis) on such Treasury Rate Determination
Date as otherwise announced by the United States Department of the Treasury. In
the event that the results of the auction of Treasury bills having the Index
Maturity specified on the face hereof are not published or reported as provided
above by 3:00 p.m., New York City time, on such Calculation Date, or if no such
auction is held on such Treasury Rate Determination Date, then the "Treasury
Rate" for such Interest Reset Period shall be calculated by the Calculation
Agent and shall be a yield to maturity (expressed as a bond equivalent on the
basis of a year of 365 or 366 days, as applicable, and applied on a daily basis)
of the arithmetic mean of the secondary market bid rates as of approximately
3:30 p.m., New York City time, on such Treasury Rate Determination Date, of
three leading primary United States government securities dealers selected by
the Calculation Agent for the issue of Treasury bills with a remaining maturity
closest to the Index Maturity specified on the face hereof, provided, however,
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that if the dealers selected as aforesaid by the Calculation Agent are not
quoting bid rates as mentioned in this sentence, then the "Treasury Rate" for
such Interest Reset Period will be the Treasury Rate in effect on such Treasury
Rate Determination Date, or, if none, the Initial Interest Rate.
The "Treasury Rate Determination Date" for each Interest Reset Period
will be the day of the week in which the Interest Reset Date for such Interest
Reset Period falls on which Treasury bills would normally be auctioned.
Treasury bills are normally sold at auction on Monday of each week, unless that
day is a legal holiday, in which case the auction is normally held on the
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following Tuesday, except that such auction may be held on the preceding Friday.
If, as the result of a legal holiday, an auction is so held on the preceding
Friday, such Friday will be the Treasury Rate Determination Date pertaining to
the Interest Reset Period commencing in the next succeeding week. If an auction
date shall fall on any day that would otherwise be an Interest Reset Date for a
Note whose Base Rate is the Treasury Rate, then such Interest Reset Date shall
instead be the Business Day immediately following such auction date.
The "Calculation Date" pertaining to any Treasury Rate Determination
Date shall be the earlier of (i) the tenth calendar day after such Treasury Rate
Determination Date, or if such day is not a Business Day, the next succeeding
Business Day or (ii) the Business Day immediately preceding the applicable
Interest Payment Date or Maturity, as the case may be.
DETERMINATION OF PRIME RATE
If the Base Rate specified on the face hereof is the Prime Rate, this
Note will bear interest for each Interest Reset Period at the interest rate
calculated with reference to the Prime Rate and the Spread and/or Spread
Multiplier, if any, specified on the face hereof. The "Prime Rate" for each
Interest Reset Period will be determined by the Calculation Agent as of the
second Business Day prior to the Interest Reset Date for such Interest Reset
Period (a "Prime Rate Determination Date") and shall be the rate published in
H.15(519) under the heading "Bank Prime Loan". In the event that such rate is
not published prior to 9:00 a.m., New York City time, on the Calculation Date
(as defined below), then the "Prime Rate" for such Interest Reset Period shall
be determined by the Calculation Agent and shall be the arithmetic mean of the
rates of interest publicly announced by each bank that appears on the Reuters
Screen NYMF Page (as defined below) as such bank's prime rate or base lending
rate as in effect for that Prime Rate Determination Date. If fewer than four
such rates but more than one such rate appear on the Reuters Screen NYMF Page
for the Prime Rate Determination Date, the "Prime Rate" will be determined by
the Calculation Agent and will be the arithmetic mean of the prime rates quoted
on the basis of the actual number of days in the year divided by a 360-day year
as of the close of business on such Prime Rate Determination Date by four major
money center banks in The City of New York selected by the Calculation Agent.
If fewer than two such rates appear on the Reuters Screen NYMF Page, the Prime
Rate will be determined by the Calculation Agent on the basis of the rates
furnished in The City of New York by the appropriate number of substitute banks
or trust companies organized and doing business under the laws of the United
States, or any State thereof, having total equity capital of at least U.S.
$500,000,000 and being subject to supervision or examination by Federal or State
authority, selected by the Calculation Agent to provide such rate or rates;
R-13
<PAGE>
provided, however, that if the banks selected as aforesaid are not quoting as
- - -------- -------
mentioned in this sentence, the Prime Rate for such Interest Reset Period will
be the Prime Rate in effect on such Prime Rate Determination Date, or, if none,
the Initial Interest Rate. "Reuters Screen NYMF Page" means the display
designated as page "NYMF" on the Reuters Monitor Money Rates Service (or such
other page as may replace the NYMF page on that service for the purpose of
displaying prime rates or base lending rates of major United States banks).
The "Calculation Date" pertaining to a Prime Rate Determination Date
shall be the earlier of (i) the tenth calendar day after such Prime Rate
Determination Date or, if such day is not a Business Day, the next succeeding
Business Day or (ii) the Business Day immediately preceding the applicable
Interest Payment Date or Maturity, as the case may be.
DETERMINATION OF CMT RATE
If the Base Rate specified on the face hereof is the CMT Rate, this Note
will bear interest for each Interest Reset Period at the interest rate
calculated with reference to the CMT Rate and the Spread and/or Spread
Multiplier, if any, specified on the face hereof.
Unless otherwise specified on the face hereof, the "CMT Rate" for each
Interest Reset Period will be determined by the Calculation Agent and shall be
the rate (i) in the case where the Designated CMT Telerate Page (as defined
below) is 7055, as of the second Business Day prior to the Interest Reset Date
for such Interest Reset Period (a "CMT Determination Date") or (ii) in the case
where the Designated CMT Telerate Page is 7052, for the week or the month, as
specified on the face hereof, ended immediately preceding the week in which the
CMT Determination Date occurs, in either case, for the Index Maturity specified
on the face hereof as displayed on the Designated CMT Telerate Page under the
caption ". . . Treasury Constant Maturities . . . Federal Reserve Board Release
H.15 . . . Mondays Approximately 3:45 P.M." If such rate is no longer displayed
on the relevant page, or if not displayed by 3:00 p.m., New York City time, on
the Calculation Date (as defined below) pertaining to such CMT Determination
Date, then the "CMT Rate" for such Interest Reset Period shall be such treasury
constant maturity rate for the Index Maturity specified on the face hereof as
published in the relevant H.15(519) opposite the caption "U.S. Government
Securities, Treasury Constant Maturities". If such rate is no longer published,
or if not published by 3:00 p.m., New York City time, on the Calculation Date
relating to such CMT Determination Date, then the "CMT Rate" for such Interest
Reset Period shall be such treasury constant maturity rate for the Index
Maturity specified on the face hereof (or other United States Treasury rate for
such Index Maturity) as may then be published by either the Board of
R-14
<PAGE>
Governors of the Federal Reserve System or the United States Department of
Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519). If such information is not provided by 3:00 p.m., New York
City time, on the Calculation Date relating to such CMT Determination Date, then
the "CMT Rate" for the Interest Reset Period shall be calculated by the
Calculation Agent and will be a yield to maturity, based on the arithmetic mean
of the secondary market closing offer side prices as of approximately 3:30 p.m.,
New York City time, on the CMT Determination Date reported, according to their
written records, by three leading primary United States government securities
dealers (each, a "Reference Dealer") in The City of New York selected by the
Calculation Agent (from five such Reference Dealers selected by the Calculation
Agent and eliminating the higher quotation (or, in the event of equality, one
of the highest) and the lowest quotation (or, in the event of equality, one of
the lowest)), for the most recently issued direct noncallable fixed rate
obligations of the United States ("Treasury Notes") with an original maturity of
approximately the Index Maturity specified on the face hereof and a remaining
term to maturity of not less than such Index Maturity minus one year. If the
Calculation Agent cannot obtain three such Treasury Note quotations, the "CMT
Rate" for such Interest Reset Period shall be calculated by the Calculation
Agent and will be a yield to maturity based on the arithmetic mean of the
secondary market offer side prices as of approximately 3:30 p.m., New York City
time, on the CMT Determination Date of three Reference Dealers in The City of
New York (from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for The Treasury Notes with an original maturity of the number of
years that is the next highest to the Index Maturity specified on the face
hereof and a remaining term to maturity closest to the Index Maturity specified
on the face hereof and in an amount of at least $100 million. If three or four
(and not five) of such Reference Dealers are quoting as described above, then
the CMT Rate will be based on the arithmetic mean of the offer prices obtained
and neither the highest nor the lowest of such quotes will be eliminated;
provided, however, that if fewer than three Reference Dealers selected by the
- - -------- -------
Calculation Agent are quoting as described herein, the "CMT Rate" will be the
CMT Rate in effect on such CMT Determination Date, or, if none, the Initial
Interest Rate. If two Treasury Notes with an original maturity as described in
the second preceding sentence have remaining terms to maturity equally close to
the Index Maturity specified on the face hereof, the quotes for the Treasury
Note with the shorter remaining term to maturity will be used.
R-15
<PAGE>
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service on the page designated on the face hereof (or any other page as
may replace such page on that service for the purpose of displaying Treasury
Constant Maturities as reported in H.15(519)), for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no such page is
specified on the face hereof, the Designated CMT Telerate Page shall be 7052,
for the most recent week.
The "Calculation Date" pertaining to any CMT Determination Date shall be
the earlier of (i) the tenth calendar day after such CMT Determination Date or,
if such day is not a Business Day, the next succeeding Business Day or (ii) the
Business Day immediately preceding the applicable Interest Payment Date or
Maturity, as the case may be.
If this Note is a Global Security, ownership of beneficial interests
herein will be limited to participants in the Depositary or persons that hold
interests through such participants, and the transfer of beneficial interests
herein will be effected only through records maintained by the Depositary (and
with respect to interests of participants in the Depositary) and by participants
in the Depositary or persons that may hold interests through such participants
(with respect to persons other than participants in the Depositary).
As provided in the Indenture and subject to certain limitations therein
set forth, this Note is exchangeable for a like aggregate principal amount of
Registered Notes of different authorized denominations, as requested by the
Person surrendering the same.
If this Note is a Global Security, this Note is exchangeable only if (x)
the Depositary notifies the Company that it is unwilling or unable to continue
as Depositary for this Note or if at any time the Depositary ceases to be in
good standing under the Securities Exchange Act of 1934, as amended, and the
Company does not appoint a successor Depositary within 90 days after the Company
receives such notice or becomes aware that such Depositary is no longer in good
standing, or (y) the Company in its sole discretion determines that this Note
shall be exchanged for Certificated Notes in definitive form, provided that the
definitive Notes so issued in exchange for this Note shall be in authorized
denominations and be of like aggregate principal amount and tenor and terms as
the portion of this Note to be exchanged. Except as provided above, owners of
beneficial interests in this Note (if a Global Security) will not be entitled to
have this Note or Notes represented by this Note registered in their names or
receive physical delivery of Notes in definitive form and will not be considered
the Holders hereof for any purpose under the Indenture.
R-16
<PAGE>
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable on the Debt Security
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the registrar (the "Registrar") which
initially shall be The First National Bank of Chicago, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company, the Registrar and the Paying Agent duly executed by the Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new
Registered Notes of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the Holder hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
If an Event of Default with respect to the Debt Securities of this
series shall have occurred and be continuing, the principal of all the Debt
Securities of this series may be declared due and payable in this manner and
with the effect provided in the Indenture.
In case this Note shall at any time become mutilated, destroyed, stolen
or lost and this Note or evidence of the loss, theft, or destruction hereof
(together with such indemnity and such other documents or proof as may be
required by the Company or the Registrar) shall be delivered to the Registrar, a
new Registered Note of like tenor and principal amount will be issued by the
Company in exchange for, or in lieu of, this Note. All expenses and reasonable
charges associated with procuring such indemnity and with the preparation,
authentication and delivery of a new Registered Note shall be borne by the
Holder of this Note.
The Indenture permits, with certain exceptions as therein provided, the
modification or amendment thereof and the modification of the rights of the
Holders of the Debt Securities of each series to be affected under the Indenture
at any time by the Company and the Trustee with the consent of the Holders of
not less than 66-2/3% in aggregate principal amount of the Debt Securities at
the time Outstanding of all series to be affected
R-17
<PAGE>
(voting as one class). The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the Debt
Securities of any series at the time Outstanding, on behalf of the Holders of
all the Debt Securities of such series, to waive certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued in exchange or substitution for this
Note whether or not notation in regard thereto is made upon such Note.
Holders of Debt Securities may not enforce their rights pursuant to the
Indenture or the Note except as provided in the Indenture. No reference herein
to the Indenture and no provision of this Note or of the Indenture shall alter
or impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of (and premium, if any) and interest on this Note at the
times, place and rate, and the coin or currency, herein prescribed.
This Note shall be deemed to be a contract made and to be performed
solely in the State of New York and for all purposes be governed by, and
construed in accordance with, the laws of said State without regard to the
conflicts of law rules of said State.
All terms used in this Note that are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
R-18
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______Custodian________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of
survivorship and not as tenants Under Uniform Gifts to
in common Minors Act
_______________________
(State)
Additional abbreviations may also be used though not in the above list
________________________________________________
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company to
repay $________ principal amount of the within Note, pursuant to its terms, on
the "Optional Repayment Date" first occurring after the date of receipt of the
within Note as specified below, together with interest thereon accrued to the
date of repayment, to the undersigned at:
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address of the Undersigned)
and to issue to the Undersigned, pursuant to the terms of the Indenture, a new
Note or Notes representing the remaining principal amount of this Note.
For this Option to Elect Repayment to be effective, this Note with the
Option to Elect Repayment duly completed must be received by the Company within
the relevant time period set forth above at its office or agency in the Borough
of Manhattan, the City and State of New York, located initially at the office
of the Paying Agent at The First National Bank of Chicago, [ ], Attention:
Corporate Trust Operations.
Dated:
___________________________________________________
NOTE: THE SIGNATURE TO THIS OPTION TO ELECT
REPAYMENT MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE WITHIN NOTE IN EVERY
PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY
CHANGE WHATSOEVER.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please insert Social Security or Other
Identifying Number of Assignee
[_____________________________________]
_______________________________________________________________________________
Please Print or Type Name and Address Including Zip Code of Assignee
_______________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
______________________________________________________________________ attorney
to transfer such Note on the books of McDonald's Corporation with full power of
substitution in the premises.
Dated: ______________________ ________________________________________
Signature
________________________________________
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the Note in
every particular, without alteration or
enlargement or any change whatsoever.
R-19
<PAGE>
Exhibit 4(e)
SERIES E TEMPORARY GLOBAL FIXED RATE NOTE
MCDONALD'S CORPORATION
TEMPORARY GLOBAL NOTE
BEARER FIXED RATE PRINCIPAL AMOUNT
No.
TRANCHE NO.
representing
MEDIUM-TERM NOTES, SERIES E
Due From 184 Days to 60 Years from Date of Issue
THIS SECURITY IS A TEMPORARY GLOBAL NOTE, WITHOUT COUPONS,
EXCHANGEABLE FOR AN INTEREST IN A PERMANENT GLOBAL NOTE, WITHOUT COUPONS,
REPRESENTING (AND EXCHANGEABLE FOR) INDIVIDUAL BEARER NOTES. THE RIGHTS
ATTACHING TO THIS NOTE AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE
FOR A PERMANENT GLOBAL NOTE ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED
HEREIN).
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE
INDIVIDUAL BEARER NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "YIELD TO STATED MATURITY"
AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) SET
FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL
INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
Issue Price: Original Issue Date:
Interest Rate: Stated Maturity:
Interest Payment Dates:
(Applicable only if other than February 15 and August
15 of each year)
Specified Currency:
(If other than U.S. dollars)
Authorized Denominations:
(Applicable only if other than U.S. $25,000 and
increments of U.S. $5,000 or if Specified Currency is
other than U.S. dollars)
Optional Redemption: [ ] Yes [ ] No
Optional Redemption Dates:
Redemption Prices:
[ ] The Redemption Price shall initially be % of the
principal amount of the Note to be redeemed and shall decline at each
anniversary of the initial Optional Redemption Date by % of the
principal amount to be redeemed until the Redemption Price is 100% of
such principal amount; provided, however, that if this Note is an
-------- -------
Original Issue Discount Note, the Redemption Price shall be the
Amortized Face Amount of the principal amount to be redeemed.
[ ] Other:
Sinking Fund: [ ] Yes [ ] No
Sinking Fund Dates:
Sinking Fund Amounts:
Amortizing Note: [ ] Yes [ ] No
Amortization Schedule:
Optional Repayment: [ ] Yes [ ] No
Optional Repayment Dates:
Optional Repayment Prices:
Original Issue Discount Note: [ ] Yes [ ] No
Total Amount of OID:
Yield to Stated Maturity:
Initial Accrual Period OID:
Calculation Agent (if other than
Principal Paying Agent):
<PAGE>
MCDONALD'S CORPORATION, a corporation duly organized and existing under the
laws of the State of Delaware (the "Company"), for value received, hereby
promises to pay to bearer upon presentation and surrender hereof the principal
amount set forth on the Schedule of Exchanges hereto on the Stated Maturity
shown above and to pay accrued interest on said principal amount at the Interest
Rate specified above from the Original Issue Date shown above (the "Original
Issue Date") or from the most recent date to which interest has been paid or
duly provided for, semiannually in arrears (unless otherwise specified on the
face hereof) on February 15 and August 15 of each year (each an "Interest
Payment Date") and on the Stated Maturity shown above, or upon earlier
redemption or repayment, until said principal amount is paid or duly provided
for in accordance with the terms hereof; but, in the case of principal, only
after exchange of this Note for interests in a Permanent Global Note (as defined
below), as provided herein and in the Indenture (as defined on the reverse
hereof) and, in the case of interest due on or before the exchange of this Note
for interests in a Permanent Global Note, any interest payable will be paid to
each of Euroclear and Cedel (each as defined below) with respect to that portion
of this Note held for its account, but only upon receipt in each case, as of the
relevant Interest Payment Date, of a Certificate of Non-U.S. Beneficial
Ownership (as defined on the reverse hereof). Each of Euroclear and Cedel will
undertake in such circumstances to credit such interest received by it in
respect of this Note to the respective accounts having an interest therein.
For purposes of this Note, "Business Day" means any day, other than a
Saturday or Sunday, that is (i) neither a legal holiday nor a day on which
banking institutions are authorized or required by law, regulation or executive
order to close in (a) The City of New York, (b) the City of Chicago or (c) if
the Specified Currency for this Note is other than U.S. dollars, the principal
financial center of the country issuing such Specified Currency (which, in the
case of ECU, shall be Luxembourg) and (ii) if the Specified Currency for this
Note is ECU, not a day designated as an ECU Non-Settlement Day by the ECU
Banking Association (or otherwise generally regarded in the ECU interbank market
as a day on which payments in ECU shall not be made).
This Note will be deposited with a common depositary in London (the
"Depositary") for Morgan Guaranty Trust Company of New York, Brussels office, as
operator of the Euroclear System ("Euroclear") and Cedel Bank, societe anonyme
("Cedel"), for credit to the accounts designated by or on behalf of the
purchasers hereof. On or after the 40th day following the issuance of this
Note, beneficial interests in this Note will be exchangeable for interests in a
definitive Global Security in bearer form, without Coupons attached (a
"Permanent Global Note"), in a denomination
F-2
<PAGE>
equal to the aggregate principal amount of all interests in this Note so
exchanged, only upon receipt (at such time or in connection with an Interest
Payment Date prior to such day) of a Certificate of Non-U.S. Beneficial
Ownership. Each Permanent Global Note will be deposited with the Depositary for
credit to the account or accounts designated by or on behalf of the beneficial
owner or owners thereof. If the beneficial owner of a Bearer Note represented by
an interest in a Permanent Global Note gives 30 days' notice to the Principal
Paying Agent through either Euroclear or Cedel, such Permanent Global Note shall
be exchanged in its entirety, at no expense to the beneficial owners of
interests therein, for definitive individual Bearer Notes, with appropriate
Coupons attached, in any authorized denomination or denominations. References
herein to "Bearer Notes" shall, except where otherwise indicated, include
interests in a Permanent Global Note as well as individual Bearer Notes and any
appurtenant Coupons. Upon any exchange of any portion of this Note for an
interest in a Permanent Global Note, the portion of the principal amount hereof
so exchanged shall be endorsed by the Principal Paying Agent on the Schedule of
Exchanges hereto, and the principal amount hereof shall be reduced for all
purposes by the amount so exchanged.
Except as otherwise provided herein or in the Indenture, until
exchanged in whole for an interest in a Permanent Global Note, this Note shall
in all respects be entitled to the same benefits and be subject to the same
terms and conditions of and the Company shall be subject to the same
restrictions as those contained on the Permanent Global Note and in the
Indenture.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.
This Note shall not become valid or obligatory for any purpose unless
and until this Note has been authenticated by First Fidelity Bank, National
Association, or its successor as Trustee.
F-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be executed
under its corporate seal.
Dated:
MCDONALD'S CORPORATION
By___________________________________
Vice President and Treasurer
[Seal]
Attest_______________________________
[Assistant] Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Notes issued under the Indenture mentioned within.
FIRST FIDELITY BANK, NATIONAL
ASSOCIATION
as Trustee
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
LONDON OFFICE, as
Authenticating Agent
By__________________________________
Authorized Officer
F-4
<PAGE>
MCDONALD'S CORPORATION
MEDIUM-TERM NOTE, SERIES E
(FIXED RATE)
This Note represents one or more Bearer Notes having the same Original
Issue Date and otherwise identical in terms of a series of a duly authorized
issue of securities of the Company designated as specified in the title hereof
limited in aggregate initial public offering price or purchase price of up to
U.S.$584,662,000 (subject to reduction as a result of the sale of other Debt
Securities by the Company), and issued and to be issued in either registered or
bearer form under an indenture, dated as of March 1, 1987 (the "Indenture"),
between the Company and First Fidelity Bank, National Association (formerly
Fidelity Bank, National Association), as Trustee (the "Trustee"). This Note is
governed by the terms and conditions of the Permanent Global Note to be issued
in exchange for this Note, which terms and conditions are incorporated herein by
reference mutatis mutandis and, except as otherwise provided herein, shall be
------- --------
binding on the Company, the Holder hereof and the Holders of the Bearer Notes
represented hereby as if fully set forth herein. Capitalized terms used in this
Note that are defined in the Indenture or the Permanent Global Note and are not
otherwise defined herein shall have the meanings assigned to them therein.
"Maturity," when used with respect to this Note, means the date on
which principal of this Note or an installment of principal becomes due and
payable as provided herein or in the Indenture, whether at Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
Any payment of principal, premium or interest required to be made in
respect hereof on a date that is not a Business Day need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on such date, and no additional interest shall accrue as a
result of such delayed payment.
Except as set forth on the Permanent Global Note regarding payments
made in currencies other than the Specified Currency when the Specified Currency
is unavailable to the Company, the principal hereof and any premium and interest
hereon will be paid by the Company in such coin or currency as specified above
as at the time of payment shall be legal tender for the payment of public and
private debts (the "Specified Currency"), at the office of any paying agent
located outside the United States as the Company may appoint from time to time
(the "Paying Agents"). The Company has initially appointed Morgan Guaranty
Trust Company of New York, 60 Victoria Embankment, London EC4Y OJP as Principal
Paying Agent.
R-1
<PAGE>
As used herein, a "Certificate of Non-U.S. Beneficial Ownership" is a
certificate, in the form adopted by the Company, as to beneficial ownership by
persons other than United States persons or as to other qualifying ownership by
or through financial institutions in compliance with applicable U.S. Treasury
regulations.
This Note shall be deemed to be a contract made and to be performed
solely in the State of New York, and for all purposes shall be governed by, and
construed in accordance with, the laws of said State without regard to the
conflicts of law rules of said State.
R-2
<PAGE>
SCHEDULE OF EXCHANGES
The following exchanges of a portion of this Note for interests in a
Permanent Global Note and the following payments of interest in respect of this
Note have been made.
Principal
Amount
Date of Exchanged for Remaining Notation made
Exchange or an Interest in Principal on behalf of
Interest Interest a Permanent Amount of the Principal
Payment Paid Global Note this Note Paying Agent
- - ------------- -------- -------------- --------- -------------
- - ------------- -------- -------------- --------- -------------
- - ------------- -------- -------------- --------- -------------
- - ------------- -------- -------------- --------- -------------
- - ------------- -------- -------------- --------- -------------
- - ------------- -------- -------------- --------- -------------
- - ------------- -------- -------------- --------- -------------
- - ------------- -------- -------------- --------- -------------
- - ------------- -------- -------------- --------- -------------
- - ------------- -------- -------------- --------- -------------
- - ------------- -------- -------------- --------- -------------
- - ------------- -------- -------------- --------- -------------
- - ------------- -------- -------------- --------- -------------
- - ------------- -------- -------------- --------- -------------
- - ------------- -------- -------------- --------- -------------
- - ------------- -------- -------------- --------- -------------
R-3
<PAGE>
Exhibit 4(f)
SERIES E TEMPORARY GLOBAL FLOATING RATE NOTE
McDONALD'S CORPORATION
BEARER TEMPORARY GLOBAL NOTE
No. (FLOATING RATE) PRINCIPAL AMOUNT
representing TRANCHE NO. ____
MEDIUM-TERM NOTES, SERIES E
Due From 184 days to 60 Years from Date of Issue
THIS SECURITY IS A TEMPORARY GLOBAL NOTE, WITHOUT COUPONS, EXCHANGEABLE
FOR AN INTEREST IN A PERMANENT GLOBAL NOTE, WITHOUT COUPONS, REPRESENTING (AND
EXCHANGEABLE FOR) INDIVIDUAL BEARER NOTES. THE RIGHTS ATTACHING TO THIS NOTE
AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR A PERMANENT GLOBAL
NOTE ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
BEARER NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID", "YIELD TO STATED MATURITY" AND
"INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) SET FORTH
BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME
TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
Issue Price: Original Issue Date:
Initial Interest Rate: Stated Maturity:
Specified Currency:
(If other than U.S. dollars)
Authorized Denominations:
(Applicable only if other than U.S.$25,000 and increments of $5,000 or if
Specified Currency is other than U.S. dollars)
<TABLE>
<S> <C> <C> <C> <C>
Base Rate: [_] CD Rate [_] CMT Rate [_] Commercial Paper [_] Federal Funds Rate
[_] LIBOR [_] Treasury Rate [_] Prime Rate [_] Other (see attached)
</TABLE>
If Base Rate is LIBOR, specify:
LIBOR Reuters:
Designated LIBOR Page:
LIBOR Telerate:
Interest Reset Period: Index Currency: Index Maturity:
Interest Payment Dates:
Spread Multiplier: Spread (+/-):
Maximum Interest Rate: Minimum Interest Rate:
Optional Redemption: [_] Yes [_] No
Optional Redemption Dates:
Redemption Prices:
[_] The Redemption Price shall initially be % of the principal amount of
the Note to be redeemed and shall decline at each anniversary of the
initial Optional Redemption Date by % of the principal amount to be
redeemed until the Redemption Price is 100% of such principal amount;
provided, however, that if this Note is an Original Issue Discount Note,
-------- -------
the Redemption Price shall be the Amortized Face Amount of the principal
amount to be redeemed.
[_] Other:
Sinking Fund: [_] Yes [_] No
Sinking Fund Dates:
Sinking Fund Amounts:
Amortizing Note: [_] Yes [_] No
Amortization Schedule:
Optional Repayment: [_] Yes [_] No
Optional Repayment Dates:
Optional Repayment Prices:
Original Issue Discount Note: [_] Yes [_] No
Total Amount of OID:
Yield to Stated Maturity:
Initial Accural Period OID:
Calculation Agent (if other than
Principal Paying Agent):
<PAGE>
McDONALD'S CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), for value
received, hereby promises to pay to bearer upon presentation and surrender
hereof the principal amount set forth on the Schedule of Exchanges hereto
on the Stated Maturity shown above and to pay accrued interest on said
principal amount at the Initial Interest Rate shown above from the Original
Issue Date shown above until the first Interest Reset Date shown above
following the Original Issue Date and thereafter at the Base Rate shown
above, adjusted by the Spread and/or Spread Multiplier, if any, shown
above, determined in accordance with the provisions on the reverse of the
Permanent Global Note (as defined below) to be exchanged for this Note,
until said principal amount is paid or duly provided for in accordance with
the terms hereof; but, in the case of principal, only after exchange of
this Note for interests in a Permanent Global Note, as provided herein and
in the Indenture (as defined on the reverse hereof) and, in the case of
interest due on or before the exchange of this Note for interests in a
Permanent Global Note, any interest payable will be paid to each of
Euroclear and Cedel (each as defined below) with respect to that portion of
this Note held for its account, but only upon receipt in each case, as of
the relevant Interest Payment Date, of a Certificate of Non-U.S. Beneficial
Ownership (as defined on the reverse hereof). Each of Euroclear and Cedel
will undertake in such circumstances to credit such interest received by it
in respect of this Note to the respective accounts having an interest
therein.
For purposes of this Note, "Business Day" means any day, other than a
Saturday or Sunday, that is (i) neither a legal holiday nor a day on which
banking institutions are authorized or required by law, regulation or
executive order to close in (a) The City of New York, (b) the City of
Chicago or (c) if the Specified Currency for this Note is other than U.S.
dollars, the principal financial center of the country issuing such
Specified Currency (which, in the case of ECU, shall be Luxembourg); (ii)
if the Specified Currency for this Note is ECU, not a day designated as an
ECU Non-Settlement Day by the ECU Banking Association (or otherwise
generally regarded in the ECU interbank market as a day on which payments
in ECU shall not be made) and (iii) if this Note is a LIBOR Note, a London
Business Day (as defined below). "London Business Day" means any day (i) if
the Index Currency (as defined on the face hereof) is other than ECU, on
which dealings in such Index Currency are transacted in the London
interbank market or (ii) if the Index Currency is ECU, that is not
designated as an ECU Non-Settlement Day by the ECU Banking Association (or
otherwise generally regarded in the ECU interbank market as a day on which
payments in ECU shall not be made).
This Note will be deposited with a common depositary in London (the
"Depositary") for Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System
F-2
<PAGE>
("Euroclear") and Cedel Bank, societe anonyme ("Cedel"), for credit to the
accounts designated by or on behalf of the purchasers hereof. On or after
the 40th day following the issuance of this Note, beneficial interests in
this Note will be exchangeable for interests in a definitive Global
Security in bearer form, without Coupons attached (a "Permanent Global
Note"), in a denomination equal to the aggregate principal amount of all
interests in this Note so exchanged, only upon receipt (at such time or in
connection with an Interest Payment Date prior to such day) of a
Certificate of Non-U.S. Beneficial Ownership. Each Permanent Global Note
will be deposited with the Depositary for credit to the account or accounts
designated by or on behalf of the beneficial owner or owners thereof. If
the beneficial owner of a Bearer Note represented by an interest in a
Permanent Global Note gives 30 days' notice to the Principal Paying Agent
through either Euroclear or Cedel, such Permanent Global Note shall be
exchanged in its entirety, at no expense to the beneficial owners of
interests therein, for definitive individual Bearer Notes, with appropriate
Coupons attached, in any authorized denomination or denominations.
References herein to "Bearer Notes" shall, except where otherwise
indicated, include interests in a Permanent Global Note as well as
individual Bearer Notes and any appurtenant Coupons. Upon any exchange of
any portion of this Note for an interest in a Permanent Global Note, the
portion of the principal amount hereof so exchanged shall be endorsed by
the Principal Paying Agent on the Schedule of Exchanges hereto, and the
principal amount hereof shall be reduced for all purposes by the amount so
exchanged.
Except as otherwise provided herein or in the Indenture, until
exchanged in whole for an interest in a Permanent Global Note, this Note
shall in all respects be entitled to the same benefits and be subject to
the same terms and conditions of and the Company shall be subject to the
same restrictions as those contained on the Permanent Global Note and in
the Indenture.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, AND SUCH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.
This Note shall not become valid or obligatory for any purpose unless
and until this Note has been authenticated by First Fidelity Bank, National
Association, or its successor as Trustee.
F-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be executed
under its corporate seal.
Dated:
McDONALD'S CORPORATION
By___________________________________
Vice President and Treasurer
[Seal]
Attest_______________________________
[Assistant] Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Notes issued under the Indenture mentioned
within.
FIRST FIDELITY BANK, NATIONAL
ASSOCIATION, as Trustee
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
LONDON OFFICE, as Authenticating Agent
By__________________________________
Authorized Officer
F-4
<PAGE>
McDONALD'S CORPORATION
MEDIUM-TERM NOTE, SERIES E
(FLOATING RATE)
This Note represents one or more Bearer Notes having the same
Original Issue Date and otherwise identical in terms of a series of a duly
authorized issue of securities of the Company designated as specified in
the title hereof limited in aggregate initial public offering price or
purchase price of up to U.S.$584,662,000 reduction as a result of the sale
of other Debt securities by the Company), and issued and to be issued in
either registered or bearer form under an indenture, dated as of March 1,
1987 (the "Indenture"), between the Company and First Fidelity Bank,
National Association (formerly Fidelity Bank, National Association), as
Trustee (the "Trustee"). This Note is governed by the terms and conditions
of the Permanent Global Note to be issued in exchange for this Note, which
terms and conditions are incorporated herein by reference mutatis mutandis
------- --------
and, except as otherwise provided herein, shall be binding on the Company,
the Holder hereof and the Holders of the Bearer Notes represented hereby as
if fully set forth herein. Capitalized terms used in this Note that are
defined in the Indenture or the Permanent Global Note and are not otherwise
defined herein shall have the meanings assigned to them therein.
"Maturity," when used with respect to this Note, means the date
on which the principal of this Note or an installment of principal becomes
due and payable as provided herein or in the Indenture, whether at Stated
Maturity or by declaration of acceleration, call for redemption or
otherwise.
Any payment of principal, premium or interest required to be made
in respect hereof on a date that is not a Business Day need not be made on
such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on such date, except that if the Base Rate
specified on the face hereof is LIBOR, if such Business Day would fall in
the next succeeding calendar month, such payment shall be made on the
immediately preceding Business Day.
Except as set forth on the Permanent Global Note regarding
payments made in currencies other than the Specified Currency when the
Specified Currency is unavailable to the Company, the principal hereof and
any premium and interest hereon will be paid by the Company in such coin or
currency as specified above as at the time of payment shall be legal tender
for the payment of public and private debts (the "Specified Currency"), at
the office of any paying agent located outside the United States as the
Company may appoint from time to time (the "Paying Agents"). The Company
has initially appointed Morgan Guaranty
R-1
<PAGE>
Trust Company of New York, 60 Victoria Embankment, London EC4Y OJP as
Principal Paying Agent.
As used herein, a "Certificate of Non-U.S. Beneficial Ownership"
is a certificate, in the form adopted by the Company, as to beneficial
ownership by persons other than United States persons or as to other
qualifying ownership by or through financial institutions in compliance
with applicable U.S. Treasury regulations.
This Note shall be deemed to be a contract made and to be
performed solely in the State of New York, and for all purposes shall be
governed by, and construed in accordance with, the laws of said State
without regard to the conflicts of law rules of said State.
R-2
<PAGE>
SCHEDULE OF EXCHANGES
The following exchanges of a portion of this Note for interests
in a Permanent Global Note and the following payments of interest in
respect of this Note have been made.
<TABLE>
<CAPTION>
Principal
Amount
Date of Exchanged for Remaining Notation made
Exchange or an Interest in Principal on behalf of
Interest Interest a Permanent Amount of the Principal
Payment Paid Global Note this Note Paying Agent
----------- -------- -------------- --------- -------------
<S> <C> <C> <C> <C>
----------- -------- -------------- --------- -------------
----------- -------- -------------- --------- -------------
----------- -------- -------------- --------- -------------
----------- -------- -------------- --------- -------------
----------- -------- -------------- --------- -------------
----------- -------- -------------- --------- -------------
----------- -------- -------------- --------- -------------
----------- -------- -------------- --------- -------------
----------- -------- -------------- --------- -------------
----------- -------- -------------- --------- -------------
----------- -------- -------------- --------- -------------
----------- -------- -------------- --------- -------------
----------- -------- -------------- --------- -------------
</TABLE>
R-3
<PAGE>
Exhibit 4(g)
SERIES E PERMANENT GLOBAL FIXED RATE NOTE
BEARER PRINCIPAL AMOUNT
No. -
MCDONALD'S CORPORATION
PERMANENT GLOBAL NOTE
(FIXED RATE)
representing
MEDIUM-TERM NOTE, SERIES E
Due from 184 days to 60 Years from Date of Issue
THIS SECURITY IS A PERMANENT GLOBAL NOTE, WITHOUT COUPONS, EXCHANGEABLE FOR
INDIVIDUAL BEARER NOTES, WITH COUPONS, IF ANY, IN THE DENOMINATION OF U.S. $
25,000 OR ANY LARGER AMOUNT THAT IS AN INTEGRAL MULTIPLE OF U.S. $5,000 (OR SUCH
OTHER DENOMINATIONS AS ARE SPECIFIED BELOW). THE RIGHTS ATTACHING TO THIS NOTE
AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR INDIVIDUAL BEARER
NOTES ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
BEARER NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY.
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNIED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "YIELD TO STATED MATURITY" AND
"INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) SET FORTH
BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME
TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
Issue Price: Original Issue Date:
Interest Rate: Stated Maturity:
Interest Payment Dates:
(Applicable only if other than February 15 and August 15 of each year)
Regular Record Dates:
(Applicable only if other than February 1 and August 1 of each year)
Specified Currency:
(applicable only if other than U.S. dollars)
Option to Receive Payments in Specified Currency: [ ] Yes [ ] No
(Applicable only if Specified Currency is
other than U.S. dollars)
Authorized Denominations:
(Applicable only if other than U.S. $25,000 and
increments of U.S. $5,000 or if Specified Currency is
other than U.S. dollars)
Optional Redemption: [ ] Yes [ ] No
Optional Redemption Dates:
Redemption Prices:
[ ] The Redemption Price shall initially be % of the principal
amount of the Note to be redeemed and shall decline at each
anniversary of the initial Optional Redemption Date by % of the
principal amount to be redeemed until the Redemption Price is
100% of such principal amount; provided, however, that if this
-------- -------
Note is an Original Issue Discount Note, the Redemption Price
shall be the Amortized Face Amount of the principal amount to be
redeemed.
[ ] Other:
Sinking Fund: [ ] Yes [ ] No Amortizing Note: [ ] Yes [ ] No
Sinking Fund Dates: Amortization Schedule:
Sinking Fund Amounts:
Optional Repayment: [ ] Yes [ ] No Original Issue Discount Note: [ ] Yes [ ] No
Optional Repayment Dates:
Optional Repayment Prices:
<PAGE>
McDONALD'S CORPORATION, a corporation duly organized and
existing under the laws of the State of Delaware (the "Company"), for
value received, hereby promises to pay to bearer upon presentation and
surrender hereof the principal amount endorsed on the Schedule of
Issuances, Exchanges and Aggregate Principal Amount hereto on the Stated
Maturity shown above and to pay accrued interest on said principal sum at
the Interest Rate specified above from the Original Issue Date specified
above (the "Original Issue Date"), or from the most recent date to which
interest has been paid or duly provided for, semiannually in arrears
(unless otherwise specified on the face hereof) on February 15 and August
15 of each year (each an "Interest Payment Date") and on the Stated
Maturity shown above, or upon earlier redemption or repayment, until said
principal amount is paid or duly provided for in accordance with the
terms hereof. Interest on this Note, if any, will be computed on the
basis of a 360-day year of twelve 30-day months. Any payment of
principal, premium or interest required to be made in respect hereof on a
date that is not a Business Day (as defined below) need not be made on
such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on such date, and no additional interest
shall accrue as a result of such delayed payment. For purposes of this
Note, "Business Day" means any day, other than a Saturday or Sunday, that
is (i) neither a legal holiday nor a day on which banking institutions
are authorized or required by law, regulation or executive order to close
in (a) The City of New York, (b) the City of Chicago or (c) if the
Specified Currency for this Note is other than U.S. dollars, the
principal financial center of the country issuing such Specified Currency
(which, in the case of ECU, shall be Luxembourg) and (ii) if the
Specified Currency for this Note is ECU, not a day designated as an ECU
Non-Settlement Day by the ECU Banking Association (or otherwise generally
regarded in the ECU interbank market as a day on which payments in ECU
shall not be made).
This Note is exchangeable in whole or from time to time in part
without charge for individual Bearer Notes, with appropriate Coupons
attached, in the denomination of U.S.$25,000 or any larger amount that is
an integral multiple of U.S.$5,000 (or such other denominations as are
specified above), upon 30 days' notice to the Trustee given through
either Euroclear or Cedel. Upon any exchange of any portion of this Note
for individual Bearer Notes, the portion of the principal amount hereof
so exchanged shall be endorsed by the Paying Agent in the Schedule of
Issuances, Exchanges and Aggregate Principal Amount hereto, and the
principal amount hereof shall be reduced for all purposes by the amount
so exchanged.
F-2
<PAGE>
Except as otherwise provided herein or in the Indenture, until
exchanged in full for individual Bearer Notes, this Note shall in all
respects be entitled to the same benefits and subject to the same terms
and conditions of, and the Company shall be subject to the same
restrictions as those contained on the individual Bearer Notes and in the
Indenture.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE
SET FORTH ON THE REVERSE HEREOF, AND SUCH FURTHER PROVISIONS SHALL FOR
ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS
PLACE.
This Note shall not become valid or obligatory for any purpose
unless and until this Note has been authenticated by First Fidelity Bank,
National Association, or its successor, as Trustee.
IN WITNESS WHEREOF, the Company has caused this Note to be
executed under its corporate seal.
Dated:
McDONALD'S CORPORATION
By_____________________________________
Vice President and Treasurer
[seal]
Attest_________________________________
[Assistant] Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Notes issued under the within-mentioned
Indenture.
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
as Trustee
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, LONDON OFFICE, as
Authenticating Agent
By____________________________________
Authorized Officer
F-3
<PAGE>
McDONALDS CORPORATION
MEDIUM-TERM NOTE, SERIES E
(FIXED RATE)
General
-------
This Note is one of a series of duly authorized debt securities
of the Company (the "Debt Securities") issued or to be issued in one or
more series under an indenture dated as of March 1, 1987 (the
"Indenture") between the Company and First Fidelity Bank, National
Association (formerly Fidelity Bank, National Association), as trustee
(the "Trustee," which term includes any successor Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Debt Securities and of the terms upon
which the Debt Securities are, and are to be, authenticated and
delivered. This Debt Security is one of a series designated on the face
hereof limited to an aggregate initial public offering price or purchase
price of up to U.S.$584,662,000 or the equivalent thereof in one or more
foreign or composite currencies, subject to reduction as a result of the
sale of other Debt Securities. The U.S. dollar equivalent of the public
offering price or purchase price of Notes denominated in currencies other
than U.S. dollars will be determined by the Paying Agent (as defined
below), on the basis of the noon buying rate in New York City for cable
transfers in foreign currencies as certified for customs purposes by the
Federal Reserve Bank of New York (the "Market Exchange Rate") for such
currencies on the applicable trade dates; provided, however, that in the
-------- -------
case of ECU, the Market Exchange Rate shall be the rate of exchange
determined by the Commission of the European Communities, or any
successor publication on the applicable trade dates.
"Maturity," when used with respect to this Note, means the date
on which the principal of this Note or an installment of principal
becomes due and payable as provided herein or in the Indenture whether at
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.
The authorized denominations of Bearer Notes denominated in
U.S. dollars will be U.S.$25,000 and any larger amount that is an
integral multiple of U.S.$5,000, unless otherwise specified on the face
hereof. The authorized denominations of Bearer Notes denominated in
currencies other
R-1
<PAGE>
than U.S. dollars will be as set forth on the respective faces thereof.
If so specified on the face hereof, this Note will be
redeemable at the option of the Company in whole or from time to time in
part, on the dates designated as the Optional Redemption Dates on the
face hereof, upon the Company's giving the Trustee at least 45 days'
notice, at the Redemption Prices determined as provided on the face
hereof. Notice of any such redemption will be given to record Holders of
Notes as set forth below at least 30 but not more than 60 days prior to
any Optional Redemption Date. Unless otherwise specified on the face
hereof, the Bearer Notes will not be subject to any sinking fund. Any
such sinking fund shall be administered in accordance with the terms
specified on the face hereof and otherwise as set forth in the Indenture.
If the Company has or will become obligated to pay additional
amounts on the Bearer Notes as described below as a result of any change
in, or amendment to, the laws (or any regulations or rulings promulgated
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, or any change in
official position regarding the application or interpretation of such
laws, regulations or rulings, which change or amendment is enacted or
becomes effective (regardless of when announced) on or after the Original
Issue Date, and such obligation cannot be avoided by the Company taking
reasonable measures available to it, then the Company may, at its option,
redeem the Bearer Notes in whole, but not in part, at any time on giving
at least 30 but not more than 60 days' notice as set forth below, which
notice shall be irrevocable, calculated without premium, at 100% of the
principal amount, plus accrued interest to the redemption date; provided,
--------
however, that if this Bearer Note is an Original Issue Discount Note, the
-------
redemption price shall be limited to the sum of (i) the aggregate
principal amount hereof multiplied by the Issue Price hereof (expressed
as a percentage of the aggregate principal amount) and (ii) the original
issue discount accrued hereon from the Original Issue Date to the date
fixed for redemption, which amortization shall be calculated using the
"interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of notice of redemption). No
such notice of redemption shall be given earlier than 90 days prior to
the earliest date on which the Company would be obligated to pay such
additional amounts were a payment in respect of the Bearer Notes then
due. Prior to the publication of any notice of redemption pursuant to
this paragraph, the Company shall deliver to the Trustee a certificate
stating that the Company is entitled to effect such redemption and
setting forth a statement of facts showing that the conditions precedent
to the right of the
R-2
<PAGE>
Company so to redeem have occurred, and an opinion of counsel to the
effect that the Company has or will become obligated to pay such
additional amounts as a result of such change or amendment.
If so specified on the face hereof, this Note will be repayable
prior to its Stated Maturity at the option of the Holder on the Optional
Repayment Dates shown on the face hereof at the Optional Repayment Prices
shown on the face hereof, together with accrued interest to the date of
repayment. In order for this Note to be repaid, the Principal Paying
Agent (as specified below) must receive the Note at least 30 but not more
than 45 days prior to an Optional Repayment Date. Any tender of this
Note for repayment shall be irrevocable. The repayment option may be
exercised by the Holder hereof for less than the entire principal amount
hereof, provided that the principal amount of the Note remaining
--------
outstanding after repayment is an authorized denomination. Upon such
partial repayment, this Note shall be cancelled and a new Note or Notes
for the remaining principal amount hereof shall be issued to the Holder
of this Note.
Payment of Additional Amounts
-----------------------------
The Company will, subject to the exceptions and limitations set
forth below, pay such additional amounts to the Holder of this Note that
is a United States Alien (as defined below) such amounts as may be
necessary so that every net payment on this Note, after deduction or
withholding for or on account of any present or future tax, assessment or
other governmental charge imposed by the United States (or any political
subdivision or taxing authority thereof or therein) upon or as a result
of such payment, will not be less than the amount provided in this Note
to be then due and payable. However, the Company will not be required to
make any such payment of additional interest to such Holder for or on
account of:
(a) any tax, assessment or other governmental charge that
would not have been imposed but for (i) the existence of any present
or former connection between such Holder (or between a fiduciary,
settlor or beneficiary, member or shareholder of, or possessor of a
power over, such Holder, if such Holder is an estate, a trust, a
partnership or a corporation) and the United States, including,
without limitation, such Holder (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) being or having been
a citizen or resident thereof or being or having been engaged in
trade or business or present therein or having or having had a
permanent establishment therein or (ii) such Holder's
R-3
<PAGE>
past or present status as a personal holding company, foreign
personal holding company or private foundation or other tax-exempt
organization with respect to the United States or as a corporation
that accumulates earnings to avoid United States federal income tax;
(b) any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax, assessment or other governmental
charge;
(c) any tax, assessment or other governmental charge imposed
by reason of the presentation by the Holder of this Note for payment
on a date more than 10 days after the date on which such payment
became due and payable or the date on which payment thereof is duly
provided for, whichever occurs later;
(d) any tax, assessment or other governmental charge that is
payable otherwise than by withholding from a payment on this Note;
(e) any tax, assessment or other governmental charge required
to be withheld by any Paying Agent from any payment of principal or
interest on this Note, if such payment can be made without such
withholding by any other Paying Agent in Western Europe;
(f) any tax, assessment or other governmental charge that
would not have been imposed but for the failure to comply with any
applicable certification, identification, documentation, information
or other reporting requirement concerning the nationality,
residence, identity or connection with the United States of the
Holder or beneficial owner of this Note if, without regard to any
tax treaty, such compliance is required by statute or by regulation
of the United States or of any political subdivision or taxing
authority thereof or therein as a pre-condition to relief or
exemption from such tax, assessment or other governmental charge; or
(g) any tax, assessment or other governmental charge imposed
by reason of such Holder's past or present status as (i) a
controlled foreign corporation that is related to the Company
through stock ownership or (ii) the actual or constructive owner of
10% or more of the total combined voting power of all classes of
stock of the Company entitled to vote; or
(h) any combination of items (a), (b), (c), (d), (e), (f) or
(g).
R-4
<PAGE>
nor shall such additional amounts be paid with respect to a payment on
this Note to a United States Alien that is a fiduciary or partnership or
other than the sole beneficial owner of this Note or such Coupon to the
extent a beneficiary or settlor with respect to such fiduciary or a
member of such partnership or a beneficial owner would not have been
entitled to the additional amounts had such beneficiary, settlor, member
or beneficial owner been the Holder of this Note.
The term "United States Alien" means any Person that, for
United States federal income tax purposes, is a foreign corporation, a
non-resident alien individual, a non-resident alien fiduciary of a
foreign estate or trust, or foreign partnership one or more of the
members of which is, for United States federal income tax purposes, a
foreign corporation, a non-resident alien individual or a non-resident
alien fiduciary of a foreign estate or trust.
If the Company shall determine that any payment made outside
the United States by the Company or any of its Paying Agents in respect
of this Note or any Coupon (an "Affected Security") would, under any
present or future laws or regulations of the United States, be subject to
any certification, identification, documentation, information or other
reporting requirement of any kind, the effect of which requirement is the
disclosure to the Company, any Paying Agent or any governmental authority
of the nationality, residence or identity of a beneficial owner of such
Affected Security that is a United States Alien (other than such a
requirement (a) that would not be applicable to a payment made by the
Company or any of its Paying Agents (i) directly to the beneficial owner
or (ii) to a custodian, nominee or other agent of the beneficial owner or
(b) that can be satisfied by such custodian, nominee or other agent
certifying to the effect that the beneficial owner is a United States
Alien; provided that, in any case referred to in clause (a)(ii) or (b),
--------
payment by the custodian, nominee or agent to the beneficial owner is not
otherwise subject to any such requirement), then the Company shall elect
either (x) to redeem such Affected Securities in whole, but not in part,
at their Redemption Price, or (y) if the conditions described in the next
succeeding paragraph are satisfied, to pay the additional amounts
specified in such paragraph. The Company shall make such determination
as soon as practicable and publish prompt notice thereof (the
"Determination Notice") stating the effective date of such certification,
documentation, identification, information or other reporting
requirement, whether the Company elects to redeem the Affected Securities
or to pay the additional amounts specified in the next succeeding
paragraph and (if applicable) the last date by which the redemption of
the Affected Securities must take
R-5
<PAGE>
place, as provided in the next succeeding sentence. If any Affected
Securities are to be redeemed pursuant to this paragraph, the redemption
shall take place on such date, not later than one year after the
publication of the Determination Notice, as the Company shall specify by
notice given to the Principal Paying Agent at least 60 days before the
redemption date. Notice of such redemption shall be given to the Holders
of the Affected Securities at least 30 but not more than 60 days prior to
the Redemption Date. Notwithstanding the foregoing, the Company shall
not so redeem the Affected Securities if the Company shall subsequently
determine not less than 30 days prior to the redemption date, that
subsequent payments on the Affected Securities would not be subject to
any such certification, identification, documentation, information or
other reporting requirement, in which case the Company shall publish
prompt notice of such subsequent determination and any earlier redemption
notice given pursuant to this paragraph shall be revoked and of no
further effect. Prior to the publication of any Determination Notice
pursuant to this paragraph, the Company shall deliver to the Trustee a
certificate stating that the Company is obligated to make such
determination and setting forth a statement of facts showing that the
conditions precedent to the obligation of the Company to redeem the
Affected Securities or to pay the additional amounts specified in the
next succeeding paragraph have occurred, and an opinion of counsel to the
effect that such conditions have occurred.
If and so long as the certification, identification,
documentation, information or other reporting requirement referred to in
the preceding paragraph would be fully satisfied by payment of a backup
withholding tax or similar charge, the Company may elect to pay such
additional amounts as may be necessary so that every net payment made
outside the United States following the effective date of such
requirement by the Company or any of its Paying Agents in respect of any
Affected Security of which the beneficial owner is a United States Alien
(but without any requirement that the nationality, residence or identity
of such beneficial owner be disclosed to the Company, any Paying Agent or
any governmental authority), after deduction or withholding for or on
account of such backup withholding tax or similar charge will not be less
than the amount provided in such Affected Security to be then due and
payable. However, the Company may elect not to pay such Additional
Amounts in respect of any backup withholding tax or similar charge, which
(a) would not be applicable to a payment of principal of or interest on
any Affected Security made by the Company or any one of its paying agents
(i) directly to the beneficial owner or to a custodian, nominee or other
agent of the beneficial owner of such Affected Security or (ii) if such
custodian, nominee or other
R-6
<PAGE>
agent were to certify to the effect that such beneficial owner is a
United States Alien or (b) is imposed as a result of presentation of such
Affected Security for payment more than 10 days after the date on which
such payment became due and payable or on which payment thereof is duly
provided for, whichever occurred later. If the Company elects to pay the
additional amounts pursuant to this paragraph, then the Company shall
have the right to redeem the Affected Securities at any time in whole,
but not in part, at their Redemption Prices, without reducing such
Redemption Prices for applicable withholding taxes subject to the
provisions of the last three sentences of the immediately preceding
paragraph. If the Company elects to pay the additional amounts pursuant
to this paragraph and the condition specified in the first sentence of
this paragraph should no longer be satisfied, then the Company shall
redeem the Affected Securities pursuant to the applicable provisions of
the preceding paragraph. Any redemption payments made by the Company
pursuant to the two immediately preceding sentences shall be subject to
the continuing obligation of the Company to pay the additional amounts
pursuant to this paragraph.
Except as set forth below, the principal hereof and any premium
and interest hereon will be paid by the Company (unless otherwise
specified above) in such coin or currency specified above as at the time
of payment shall be legal tender for the payment of public and private
debts (the "Specified Currency"). Payment of principal shall be made
only against presentation and surrender of this Note, subject to any
applicable laws or regulations, at the specified offices outside the
United States of the Paying Agents listed below, and interest payable in
respect of an Interest Payment Date will be paid to each of Euroclear and
Cedel with respect to that portion of this Note held for its account. No
payment in respect of this Note will be made upon presentation of this
Note at any office or agency of the Trustee or any other paying agency
maintained by the Company in the United States, nor will any such payment
be made by transfer to an account, or by mail to an address, in the
United States.
The interest payable hereon on each Interest Payment Date will
equal the amount of interest accrued from and including the immediately
preceding Interest Payment Date in respect of which interest has been
paid or duly made available for payment (or from and including the date
of issue, if no interest has been paid hereon) to but excluding the
related Interest Payment Date or Maturity, as the case may be.
The Company has initially appointed as its Paying Agents for
Bearer Notes of this series the offices listed below:
R-7
<PAGE>
Principal Paying Agent:
Morgan Guaranty Trust
Company of New York
60 Victoria Embankment
London EC4Y OJP
Paying Agent:
Banque Generale du
Luxembourg S.A.
14 Rue Aldringen
L-2951 Luxembourg
Luxembourg
The Company reserves the right at any time to vary or terminate
the appointment of any Paying Agent and to appoint additional or other
Paying Agents and to approve any change in the office through which any
Paying Agent acts, provided that there will at all times be a Paying
--------
Agent (which may be the Trustee) in at least one city in Europe which, so
long as Bearer Notes are listed on the Luxembourg Stock Exchange and the
rules of the exchange shall so require, shall include (or be) Luxembourg.
Notice of any such termination or appointment and of any changes in the
specified offices of the Trustee or any Paying Agent will be given to the
Holder hereof as described below.
Payment in Currencies Other Than the Specified Currency
-------------------------------------------------------
Except as set forth below with respect to payments in ECU, if
payment in respect of this Note is required to be made in a specified
currency other than U.S. dollars (a "Specified Currency") and such
currency is unavailable to the Company due to the imposition of exchange
controls or other circumstances beyond the Company's control or is no
longer used by the government of the country issuing such currency or for
the settlement of transactions by public institutions of or within the
international banking community, then all payments shall be made in U.S.
dollars until such currency is again available to the Company or so used.
The amounts so payable on any date in such currency shall be converted
into U.S. dollars on the basis of the most recently available Market
Exchange Rate for such currency or as otherwise indicated on the face
hereof. Any payment made under such circumstances in U.S. dollars will
not constitute an Event of Default under the Indenture. Notwithstanding
the foregoing, if a Specified Currency is unavailable to the Company
solely because such currency no longer constitutes legal tender because
it has been replaced by the ECU or the new single currency of the
European Union once monetary union takes effect pursuant to Article 1091
of the Treaty establishing the European Community, the amounts so payable
in respect of such Note shall, beginning with the date such replacement
becomes effective, be made in the relevant new single currency of the
European Union; the amounts so payable on any date shall be converted
into such single currency on the basis of the conversion officially in
effect in the European Union on the effective date of such replacement.
If payment in respect of this Note is required to be made in
ECU and the ECU are not then used in the European Monetary System (the
"EMS"), then the Paying Agent shall, without liability on its part,
choose a component currency
R-8
<PAGE>
(the "Payment Currency") of the ECU in which all payments in respect
hereof shall be made until the ECU are again so used. The amount of each
payment in such Payment Currency shall be computed on the basis of the
equivalent of the ECU in that currency, determined as described below, as
of the fourth Luxembourg business day prior to the date on which such
payment is due. Notice of the Payment Currency selected by the Trustee
shall be given as described below. Any payment made under such
circumstances in the Payment Currency will not constitute an Event of
Default under the Indenture.
Notwithstanding the foregoing, on the first Luxembourg business
day on which the ECU are no longer used in the EMS, the Trustee shall,
without liability on its part, choose a Payment Currency in which all
payments with respect to Bearer Notes and Coupons denominated in ECU
having a due date prior thereto but not yet presented for payment are to
be made. The amount of each payment in such Payment Currency shall be
computed on the basis of the equivalent of the ECU in that currency,
determined as described below, as of such first Luxembourg business day.
Any payment made under such circumstances in the Payment Currency will
not constitute an Event of Default under the Indenture.
The equivalent of the ECU in the relevant Payment Currency as
of any date (the "Day of Valuation") shall be determined by the
Luxembourg Stock Exchange on the following basis. The component
currencies of the ECU for this purpose (the "Components") shall be the
currency amounts that were components of the ECU when the ECU was most
recently used in the EMS or for the settlement of transactions by public
institutions of or within the European Community. The equivalent of the
ECU in the Payment Currency shall be calculated by, first, aggregating
the U.S. dollar equivalents of the Components, and then, using the rate
used for determining the U.S. dollar equivalents of the Components in the
Payment Currency as set forth below, calculating the equivalent in the
Payment Currency of such aggregate amount in U.S. dollars.
The U.S. dollar equivalent of each of the Components shall be
determined by the Luxembourg Stock Exchange on the basis of the middle
spot delivery quotations prevailing at 2:30 p.m. Luxembourg time on the
Day of Valuation, as obtained by the Luxembourg Stock Exchange from one
or more major banks, selected by the Trustee (with the approval of the
Company), in the country of issue of the Component in question.
If the official unit of any component currency of the ECU is
altered by way of combination or subdivision, the number of units of that
currency as a Component shall be
R-9
<PAGE>
divided or multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as Components shall be replaced by an amount in such single
currency equal to the sum of the amounts of the consolidated component
currencies expressed in such single currency. If any component currency
is divided into two or more currencies, the amount of that currency as a
Component shall be replaced by amounts of such two or more currencies,
each of which shall be equal to the amount of the former component
currency divided by the number of currencies into which that currency was
divided.
If no direct quotations are available for a Component on a Day
of Valuation from any of the banks selected by the Trustee (with the
approval of the Company) for this purpose, because foreign exchange
markets are closed in the country of issue of that Component, or for any
other reason, in computing the U.S. dollar equivalent of such Component
the Luxembourg Stock Exchange shall (except as provided below) use the
most recent direct quotations for such Component obtained by it, provided
--------
that such most recent quotations may be used only if they were prevailing
in the country of issue not more than two Luxembourg business days before
such Day of Valuation. Beyond such period of two Luxembourg business
days, the Luxembourg Stock Exchange shall determine the U.S. dollar
equivalent of such Component on the basis of cross rates derived from the
middle spot delivery quotations for such Component and for the U.S.
dollar prevailing at 2:30 p.m. Luxembourg time on such Day of Valuation,
as obtained by the Luxembourg Stock Exchange from one or more major
banks, selected by the Trustee (with the approval of the Company), in a
country other than the country of issue of such Component.
Notwithstanding the foregoing, within such period of two Luxembourg
business days, the Luxembourg Stock Exchange shall determine the U.S.
dollar equivalent of such Component on the basis of such cross rates if
the Trustee and the Company judge that the equivalent so calculated is
more representative than the U.S. dollar equivalent calculated on the
basis of such most recent direct quotations. Unless otherwise specified
by the Trustee, if there is more than one market for dealing in any
component currency by reason of foreign exchange regulations or for any
other reason, the market to be referred to in respect of such currency
shall be that upon which a nonresident issuer of securities denominated
in such currency would purchase such currency in order to make payments
in respect of such securities.
All determinations referred to above made by the Trustee or the
Luxembourg Stock Exchange shall be at their respective sole discretion
(except to the extent expressly provided herein that any determination
made by the Trustee is
R-10
<PAGE>
subject to the approval of the Company) and shall, in the absence of
manifest error, be conclusive for all purposes and binding on Holders of
the Bearer Notes and any Coupons, and the Trustee shall have no liability
therefor.
If an Event of Default with respect to the Notes shall have
occurred and be continuing, the principal of all Notes may be declared
due and payable in the manner and with the effect provided in the
Indenture.
If this Note is an Original Issue Discount Note, the amount
payable in the event of redemption or repayment prior to its Stated
Maturity shall be the Amortized Face Amount of this Note as of the date
of redemption or the date of repayment, as the case may be. The
"Amortized Face Amount" of this Note shall be the amount equal to (a) the
Issue Price (set forth on the face hereof) plus (b) that portion of the
difference between the Issue Price and the principal amount hereof that
has accrued at the Yield to Stated Maturity (set forth on the face
hereof) (computed in accordance with generally accepted United States
bond yield computation principles) by such date of redemption or
repayment, but in no event shall the Amortized Face Amount of this Note
exceed its principal amount.
As provided in the Indenture and subject to certain limitations
therein set forth, this Note is exchangeable for up to a like aggregate
principal amount of Bearer Notes of different authorized denominations,
as requested by the Person surrendering the same.
No service charge shall be made for any such exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Replacement of Permanent Global Notes
-------------------------------------
In case this Note shall at any time become mutilated,
destroyed, stolen or lost, it may be replaced at the specified office of
the Principal Paying Agent in London; or, so long as the Bearer Notes are
listed on the Luxembourg Stock Exchange, at the specified office of the
Paying Agent in Luxembourg, upon payment by the claimant of such expenses
as may be incurred in connection therewith and, in the case of
destruction, theft or loss, on such terms as to evidence thereof and
indemnity as the Company or the Trustee may reasonably require.
Mutilated or defaced Bearer Notes must be surrendered before replacements
will be issued.
R-11
<PAGE>
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Debt
Securities of each series to be affected under the Indenture at any time
by the Company and the Trustee with the consent of the Holders of not
less than 66-2/3% in aggregate principal amount of the Debt Securities at
the time Outstanding of each series to be affected. The Indenture also
contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Debt Securities of any series at the
time Outstanding, on behalf of the Holders of all the Debt Securities of
such series, to waive compliance by the Company with certain provisions
of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Note
shall be conclusive and binding upon such Holder and upon all future
Holders hereof and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Debt Security.
Holders of Debt Securities of this series may not enforce their
rights pursuant to the Indenture or such Debt Securities except as
provided in the Indenture. No reference herein to the Indenture and no
provision of this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay
the principal of (and premium, if any) and interest on this Note at the
times, place and rate, and in the coin or currency, herein prescribed.
The Company may, without the consent of the Holders of the
Notes, consolidate with, merge into, or transfer substantially all of its
assets to, a corporation that is a U.S. Person, provided that the
successor corporation assumes all obligations of the Company under the
Notes and certain other conditions are met.
Except as provided above, the obligation to pay the principal
hereof (and premium, if any) and interest hereon in the designated
currency of payment is of the essence. To the fullest extent possible
under applicable law, judgments in respect of this Note shall be given in
such currency. The obligation of the Company to make such payments in
the designated currency of payment shall, notwithstanding any payment in
any other currency (whether pursuant to a judgment or otherwise), be
discharged only to the extent of the amount in the designated currency of
payment that the Holder of this Note may, in accordance with normal
banking procedures, purchase with the sum paid in such other currency
(after any
R-12
<PAGE>
premium and cost of exchange) on the business day in the country of issue
of the designated currency of payment or in the international banking
community (in the case of a composite currency) immediately following the
day on which such Holder receives such payment. If the amount in the
designated currency of payment that may be so purchased is for any reason
less than the amount originally due, the Company shall, as a separate and
independent obligation, pay such additional amounts in the designated
currency of payment as may be necessary to compensate for any such
shortfall.
All notices to Holders of this Note will be deemed to have been
duly given if published on two Business Days in a leading London daily
newspaper (which is expected to be the Financial Times) and, so long as
---------------
the Bearer Notes are listed on the Luxembourg Stock Exchange and the
rules of such exchange so require, in Luxembourg in a newspaper of
general circulation in Luxembourg (which is expected to be the
Luxemburger Wort). Such notices shall be deemed to have been given on
----------------
the date of the first such publication.
This Note shall be deemed to be a contract made and to be
performed solely in the State of New York, and for all purposes shall be
governed by, and construed in accordance with, the laws of said State
without regard to the conflicts of law rules of said State.
All terms used in this Note that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
R-13
<PAGE>
SCHEDULE OF ISSUANCES, EXCHANGES AND AGGREGATE PRINCIPAL AMOUNT
The following issuances and exchanges of a part of this Note
have been made, and the aggregate principal amount of Bearer Notes
represented by this Note at any time is as shown in the last entry of
Column III hereof unless one or more entries have been made in Column IV
hereof reflecting exchanges for individual Bearer Notes, in which event
such aggregate principal amount is as shown in the last entry of Column V
hereof.
I. II. III. IV. V. VI.
Principal Notation
Amount Aggregate made on
Aggregate Exchanged Principal behalf
Settlement Principal Principal for Indivi- Amount of the
Date or Date Amount Amount dual Bearer Remaining Principal
of Exchange Issued Issued Notes After Exchange Paying Agent
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R-14
<PAGE>
SCHEDULE OF INTEREST PAYMENTS
The following payments of interest in respect of this Note
have been made.
Date of Notation made
Interest Interest on behalf of the
Payment Paid Principal Paying Agent
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R-15
<PAGE>
Exhibit 4(h)
SERIES E PERMANENT GLOBAL FLOATING RATE NOTE
BEARER McDONALD'S CORPORATION BEARER PRINCIPAL AMOUNT
No. PERMANENT GLOBAL NOTE
(Floating Rate)
representing
MEDIUM-TERM NOTES, SERIES E
Due From 184 Days to 60 Years from Date of Issue
THIS SECURITY IS A PERMANENT GLOBAL NOTE, WITHOUT COUPONS,
EXCHANGEABLE FOR INDIVIDUAL BEARER NOTES, WITH COUPONS, IF ANY, IN THE
DENOMINATION OF U.S.$25,000 OR ANY LARGER AMOUNT THAT IS AN INTEGRAL MULTIPLE OF
U.S.$5,000 (OR SUCH OTHER DENOMINATIONS AS ARE SPECIFIED BELOW). THE RIGHTS
ATTACHING TO THIS NOTE AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE
FOR INDIVIDUAL BEARER NOTES ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED
HEREIN).
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE
INDIVIDUAL BEARER NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTION 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "YIELD TO STATED MATURITY"
AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED TO UNDER THE APPROXIMATE METHOD) SET
FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL
INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
Issue Price: Original Issue Date:
Initial Interest Rate: Stated Maturity:
Specified Currency:
(Applicable only if other than U.S. dollars)
Authorized Denominations:
(Applicable only if other than U.S.$25,000 and increments of U.S.$5,000 or
if Specified Currency is other than U.S. dollars)
Base Rate: [_] CD Rate [_] Commercial Paper [_] CMT Rate
[_] Federal Funds Rate [_] LIBOR
[_] Treasury Rate [_] Prime Rate [_] Other (see attached)
If Base Rate is CMT Rate, specify Designated CMT Telerate Page:
If Base Rate is LIBOR, specify:
LIBOR Reuters:
Designated LIBOR Page:
LIBOR Telerate:
Interest Reset Period: Index Currency: Index Maturity:
Interest Reset Dates:
(Applicable only if other than as
described on the reverse hereof)
Interest Payment Dates:
Interest Accrual:
(Applicable only if other than as
described on the reverse hereof)
Spread Multiplier: Spread (+/-):
Maximum Interest Rate: Minimum Interest Rate:
Optional Redemption: [_] Yes [_] No
Optional Redemption Dates:
Redemption Prices:
[_] The Redemption Price shall initially be % of the principal amount of
the Note to be redeemed and shall decline at each anniversary of the
initial Redemption Date by % of the principal amount to be redeemed
until the Redemption Price is 100% of such principal amount; provided,
however, that if this Note is an Original Issue Discount Note, the
Redemption Price shall be the Amortized Face Amount of the principal
amount to be redeemed.
[_] Other:
Sinking Fund: [_] Yes [_] No Amortizing Note: [_] Yes [_] No
Sinking Fund Dates: Amortization Schedule:
Sinking Fund Amounts:
Optional Repayment: [_] Yes [_] No Original Issue Discount Note:
Optional Repayment Dates: Total Amount of OID:
Optional Repayment Prices: Yield to Stated Maturity:
Initial Accural Period OID:
Calculation Agent (if other than Principal Paying Agent):
F-1
<PAGE>
McDONALD'S CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), for value
received, hereby promises to pay to bearer upon presentation and
surrender hereof the principal amount endorsed on the Schedule of
Issuances, Exchanges and Aggregate Principal Amount hereto on the Stated
Maturity shown above and to pay accrued interest on said principal amount
at the Initial Interest Rate shown above from the Original Issue Date
shown above until the first Interest Reset Date shown above following the
Original Issue Date and thereafter at the Base Rate shown above, adjusted
by the Spread and/or Spread Multiplier, if any, shown above, determined
as described on the reverse hereof, until said principal amount is paid
or duly provided for in accordance with the terms hereof. For purposes of
this Note, "Business Day" means any day, other than a Saturday or Sunday,
that is (i) neither a legal holiday nor a day on which banking
institutions are authorized or required by law, regulation or executive
order to close in (a) The City of New York, (b) the City of Chicago or
(c) if the Specified Currency for this Note is other than U.S. dollars,
the principal financial center of the country issuing such Specified
Currency (which, in the case of ECU, shall be Luxembourg); (ii) if the
Specified Currency for this Note is ECU, not a day designated as an ECU
Non-Settlement Day by the ECU Banking Association (or otherwise generally
regarded in the ECU interbank market as a day on which payments in ECU
shall not be made) and (iii) if this Note is a LIBOR Note, a London
Business Day (as defined below). "London Business Day" means any day (i)
if the Index Currency (as defined on the face hereof) is other than ECU,
on which dealings in such Index Currency are transacted in the London
interbank market or (ii) if the Index Currency is ECU, that is not
designated as an ECU Non-Settlement Day by the ECU Banking Association
(or otherwise generally regarded in the ECU interbank market as a day on
which payments in ECU shall not be made).
This Note is exchangeable in whole or from time to time in part
without charge for individual Bearer Notes, with appropriate Coupons
attached, if any, in the denomination of U.S.$25,000 or any larger amount
that is an integral multiple of U.S.$5,000 (or such other denominations
as are specified above), upon 30 days' notice to the Trustee given
through either Euroclear or Cedel. Upon any exchange of any portion of
this Note for individual Bearer Notes, the portion of the principal
amount hereof so exchanged shall be endorsed by the Trustee in the
Schedule of Issuances, Exchanges and Aggregate Principal Amount hereto,
and the principal amount hereof shall be reduced for all purposes by the
amount so exchanged.
Except as otherwise provided herein or in the Indenture, until
exchanged in full for individual Bearer Notes, this Note shall in all
respects be entitled to the same benefits and subject to the same terms
and conditions of, and the Company
F-2
<PAGE>
shall be subject to the same restrictions as those contained on the
individual Bearer Notes and in the Indenture.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, AND SUCH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.
This Note shall not become valid or obligatory for any purpose
unless and until this Note has been authenticated by First Fidelity Bank,
National Association, or its successor, as Trustee.
IN WITNESS WHEREOF, the Company has caused this Note to be executed
under its corporate seal.
Dated:
McDONALD'S CORPORATION
By_____________________________________
Vice President and Treasurer
[seal]
Attest________________________________
[Assistant] Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Notes issued under the within-mentioned Indenture.
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
as Trustee
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, LONDON OFFICE,
as Authenticating Agent
By__________________________________
Authorized Signatory
F-3
<PAGE>
McDONALD'S CORPORATION
MEDIUM-TERM NOTE, SERIES E
(FLOATING RATE)
General
-------
This Note is one of a series of duly authorized debt securities of
the Company (the "Debt Securities") issued or to be issued in one or more
series under an indenture dated as of March 1, 1987 (the "Indenture")
between the Company and First Fidelity Bank, National Association
(formerly Fidelity Bank, National Association), as trustee (the
"Trustee", which term includes any successor Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights,
limitations of rights, dues and immunities thereunder of the Company, the
Trustee and the Holders of the Debt Securities and of the terms upon
which the Debt Securities are, and are to be, authenticated and
delivered. This Debt Security is one of a series designated on the face
hereof limited to an aggregate initial public offering price or purchase
price of up to U.S.$584,662,000 or the equivalent thereof in one or more
foreign or composite currencies, subject to reduction as a result of the
sale of other Debt Securities. The U.S. dollar equivalent of the public
offering price or purchase price of Notes denominated in currencies other
than U.S. dollars will be determined by an agent designated by the
Company, which initially shall be Morgan Guaranty Trust Company of New
York, 60 Wall Street, New York, New York (the "Paying Agent"), on the
basis of the noon buying rate in New York City for cable transfers in
foreign currencies as certified for customs purposes by the Federal
Reserve Bank of New York (the "Market Exchange Rate") for such currencies
on the applicable trade dates; provided, however, that in the case of
-------- -------
ECU, the Market Exchange Rate shall be the rate of exchange determined by
the Commission of the European Communities (or any successor thereof) as
published in the Official Journal of the European Communities, or any
successor publication, on the applicable trade dates.
"Maturity," when used with respect to this Note, means the date on
which the principal of this Note or an installment of principal becomes
due and payable as provided herein or in the Indenture, whether at Stated
Maturity or by declaration of acceleration, call for redemption or
otherwise.
The authorized denominations of Bearer Notes denominated in U.S.
dollars will be U.S.$25,000 and any larger amount that is an integral
multiple of U.S.$5,000, unless otherwise specified on the face hereof.
The authorized denominations of Bearer Notes
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denominated in currencies other than U.S. dollars will be as set forth on
the respective faces thereof.
If so specified on the face hereof, this Note will be redeemable at
the option of the Company in whole or from time to time in part, on the
dates designated as the Optional Redemption Dates on the face hereof,
upon the Company's giving the Trustee and the Principal Paying Agent at
least 45 days' notice, at the Redemption Price determined as provided on
the face hereof. Notice of any such redemption will be given to record
Holders of Notes, as set forth below, upon at least 30 but not more than
60 days prior to any Optional Redemption Date. Unless otherwise specifed
on the face hereof, the Bearer Notes will not be subject to any sinking
fund. Any such sinking fund shall be administered in accordance with the
terms specified on the face hereof and otherwise as set forth in the
Indenture.
If the Company has or will become obligated to pay additional
amounts on the Bearer Notes as described below as a result of any change
in, or amendment to, the laws (or any regulations or rulings promulgated
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, or any change in
official position regarding the application or interpretation of such
laws, regulations or rulings, which change or amendment is enacted or
becomes effective (regardless of when announced) on or after Original
Issue Date and such obligation cannot be avoided by the Company taking
reasonable measures available to it, then the Company may, at its option,
redeem the Bearer Notes in whole, but not in part, at any time on giving
at least 30 but not more than 60 days' notice as set forth below, which
notice shall be irrevocable, calculated without premium, at 100% of their
principal amount, plus accrued interest to the redemption date; provided,
--------
however, that if this Note is an Original Issue Discount Note, the
-------
redemption price hereof shall be limited to the sum of (i) the aggregate
principal amount hereof multiplied by the Issue Price hereof (expressed
as a percentage of the aggregate principal amount) and (ii) the original
issue discount accrued hereon from the Original Issue Date to the date
fixed for redemption, which amortization shall be calculated using the
"interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of notice or redemption). No
such notice of redemption shall be given earlier than 90 days prior to
the earliest date on which the Company would be obligated to pay such
additional amounts were a payment in respect of the Bearer Notes then
due. Prior to the publication of any notice of redemption pursuant to
this paragraph, the Company shall deliver to the Trustee a certificate
stating that the Company is entitled to effect such redemption and
setting forth a statement of facts showing that the conditions precedent
to the right of the Company so to redeem have occurred, and an opinion of
counsel to the effect that the
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Company has or will become obligated to pay such additional amounts as a
result of such change or amendment.
If so specified on the face hereof, this Note will be repayable
prior to its Stated Maturity at the option of the Holder on the Optional
Repayment Dates shown on the face hereof at the Optional Repayment Prices
shown on the face hereof, together with accrued interest to the date of
repayment. In order for this Note to be repaid, the Principal Paying
Agent (as specified below) must receive the Note at least 30 but not more
than 45 days prior to an Optional Repayment Date. Any tender of this
Note for repayment shall be irrevocable. The repayment option may be
exercised by the Holder hereof for less than the entire principal amount
hereof, provided that the principal amount of the Note remaining
--------
outstanding after repayment is an authorized denomination. Upon such
partial repayment, this Note shall be cancelled and a new Note or Notes
for the remaining principal amount hereof shall be issued to the Holder
of this Note.
Payment of Additional Amounts
-----------------------------
The Company will, subject to the exceptions and limitations set
forth below, pay such additional amounts to the Holder of this Note that
is a United States Alien (as defined below) such amounts as may be
necessary so that every net payment on this Note, after deduction or
withholding for or on account of any present or future tax, assessment or
other governmental charge imposed by the United States (or any political
subdivision or taxing authority thereof or therein) upon or as a result
of such payment, will not be less than the amount provided in this Note
to be then due and payable. However, the Company will not be required to
make any such payment of additional interest to such Holder for or on
account of:
(a) any tax, assessment or other governmental charge that would not
have been imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of, or possessor of a power over,
such Holder, if such Holder is an estate, a trust, a partnership or a
corporation) and the United States, including, without limitation,
such Holder (or such fiduciary, settlor, beneficiary, member,
shareholder or possessor) being or having been a citizen or resident
thereof or being or having been engaged in trade or business or
present therein or having or having had a permanent establishment
therein or (ii) such Holder's past or present status as a personal
holding company, foreign personal holding company or private
foundation or other tax-exempt organization with respect to the United
States or as a corporation that accumulates earnings to avoid United
States federal income tax;
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(b) any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax, assessment or other governmental
charge;
(c) any tax, assessment or other governmental charge imposed by
reason of the presentation by the Holder of this Note for payment on a
date more than 10 days after the date on which such payment became due
and payable or the date on which payment thereof is duly provided for,
whichever occurrs later;
(d) any tax, assessment or other governmental charge that is
payable otherwise than by withholding from a payment on this Note;
(e) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of principal or interest
on this Note, if such payment can be made without such withholding by
any other Paying Agent in Western Europe;
(f) any tax, assessment or other governmental charge that would not
have been imposed but for the failure to comply with any applicable
certification, identification, documentation, information or other
reporting requirement concerning the nationality, residence, identity
or connection with the United States of the Holder or beneficial owner
of this Note if, without regard to any tax treaty, such compliance is
required by statute or regulation of the United States or of any
political subdivision or taxing authority thereof or therein as a pre-
condition to relief or exemption from such tax, assessment or other
governmental charge;
(g) any tax, assessment or other governmental charge imposed by
reason of such Holder's past or present status as (i) a controlled
foreign corporation that is related to the Company through stock
ownership or (ii) the actual or constructive owner of 10% or more of
the total combined voting power of all classes of stock of the Company
entitled to vote; or
(h) any combination of items (a), (b), (c), (d), (e), (f) or (g);
nor shall such additional amounts be paid with respect to a payment on
this Note to a United States Alien that is a fiduciary or partnership or
other than the sole beneficial owner of this Note or such Coupon to the
extent a beneficiary or settlor with respect to such fiduciary or a
member of such partnership or a beneficial owner would not have been
entitled to the additional amounts had such beneficiary, settlor, member
or beneficial owner been the Holder of this Note.
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The term "United States Alien" means any person that, for United
States federal income tax purposes, is a foreign corporation, a non-
resident alien individual, a non-resident alien fiduciary of a foreign
estate or trust, or a foreign partnership one or more of the members of
which is, for United States federal income tax purposes, a foreign
corporation, a non-resident alien individual or a non-resident alien
fiduciary of a foreign estate or trust.
Except as set forth below, the principal hereof and any premium and
interest hereon will be paid by the Company (unless otherwise specified
above) in such coin or currency specified above as at the time of payment
shall be legal tender for the payment of public and private debts (the
"Specified Currency"). Payments of principal shall be made only against
presentation and surrender of this Note, subject to any applicable laws
or regulations, at the specified offices outside the United States of the
Paying Agents listed below, and interest payable in respect of an
Interest Payment Date will be paid to each of Euroclear and Cedel with
respect to that portion of this Note held for its account. No payment in
respect of this Note will be made upon presentation of this Note at any
office or agency of the Trustee or any other paying agency maintained by
the Company in the United States, nor will any such payment be made by
transfer to an account, or by mail to an address, in the United States.
The Company has initially appointed as its Paying Agents for Bearer
Notes of this Series the offices listed below:
Principal Paying Agent:
Morgan Guaranty Trust
Company of New York
60 Victoria Embankment
London EC4Y 0JP
Paying Agent:
Banque Generale du Luxembourg S.A.
14 Rue Aldringen
L-2951 Luxembourg
Luxembourg
The Company reserves the right at any time to vary or terminate the
appointment of any Paying Agent and to appoint additional or other Paying
Agents and to approve any change in the office through which any Paying
Agent acts, provided that there will at all times be a Paying Agent
(which may be the Trustee) in at least one city in Europe, which, so long
as Bearer Notes are listed on the Luxembourg Stock Exchange and the rules
of the exchange shall so require, shall include (or be)
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Luxembourg. Notice of any such termination or appointment and of any
changes in the specified offices of the Trustee or any Paying Agent will
be given to the Holders hereof as described below.
This Note will bear interest from its Original Issue Date to the
first Interest Reset Date (as defined below) at the Initial Interest Rate
set forth on the face hereof. Thereafter, the interest rate hereon for
each Interest Reset Period (as defined below) will be determined by
reference to an interest rate basis (the "Base Rate"), plus or minus the
Spread, if any, and/or multiplied by the Spread Multiplier, if any. The
"Spread" is the number of basis points (one basis point equals one one-
hundredth of a percentage point) that may be specified on the face
hereof, and the "Spread Multiplier" is the percentage that may be
specified on the face hereof. The face of this Note will designate one
or more of the following Base Rates as applicable hereto: (i) the CD
Rate (a "CD Rate Note"), (ii) the CMT Rate (a "CMT Rate Note"), (iii) the
Commercial Paper Rate (a "Commercial Paper Rate Note"), (iv) the Federal
Funds Rate (a "Federal Funds Rate Note"), (v) LIBOR (a "LIBOR Note"),
(vi) the Treasury Rate (a "Treasury Rate Note"), (vii) the Prime Rate (a
"Prime Rate Note") or (viii) such other Base Rate or formula as is set
forth on the face hereof. The "Index Maturity" is the period of maturity
of the instrument, obligation or index from which the Base Rate is
calculated. "H.15(519)" means the publication entitled "Statistical
Release H.15(519), Selected Interest Rates", or any successor
publication, published by the Board of Governors of the Federal Reserve
System. "Composite Quotations" means the daily statistical release
entitled "Composite 3:30 p.m. Quotations for U.S. Government Securities"
published by the Federal Reserve Bank of New York.
Unless otherwise specified on the face hereof, the interest payable
hereon shall be the accrued interest from and including the Original
Issue Date or the last date to which interest has been paid or duly
provided for, as the case may be, to but excluding the applicable
Interest Payment Date or Maturity, as the case may be. Unless otherwise
specified on the face hereof, accrued interest will be calculated by
multiplying the principal amount hereof by an accrued interest factor.
Such accrued interest factor shall be computed by adding the interest
factors calculated for each day in the period for which accrued interest
is being calculated. Unless otherwise specified on the face hereof, the
interest factor (expressed as a decimal calculated to seven decimal
places without rounding) for each such day shall be computed by dividing
the interest rate in effect on such day by 360 if the Base Rate specified
on the face hereof is the CD Rate, the Commercial Paper Rate, the Federal
Funds Rate, LIBOR or the Prime Rate, or by the actual number of days in
the year if the Base Rate specified on the face hereof is the Treasury
Rate or the CMT Rate. For purposes of making the foregoing calculation,
the interest rate in effect on any Interest Reset Date will be
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the applicable rate as reset on such date. Unless otherwise specified on
the face hereof, all percentages resulting from any calculation of the
rate of interest hereon will be rounded, if necessary, to the nearest
1/100,000 of 1% (.0000001), with five one-millionths of a percentage
point rounded upward, and all currency amounts used in or resulting from
such calculation will be rounded to the nearest one-hundredth of a unit
(with .005 of a unit being rounded upward).
As specified on the face hereof, the interest rate hereon will be
reset daily, weekly, monthly, quarterly, semiannually or annually (such
period being the "Interest Reset Period" and the first day of each
Interest Reset Period being an "Interest Reset Date"). Unless otherwise
specified on the face hereof, the Interest Reset Date will be, if this
Note resets daily, each Business Day; if this Note is not a Treasury Rate
Note and it resets weekly, Wednesday of each week; if this Note is a
Treasury Rate Note that resets weekly, Tuesday of each week (except as
provided below under "Determination of Treasury Rate"); if this Note
resets monthly, the third Wednesday of each month; if this Note resets
quarterly, the third Wednesday of March, June, September and December of
each year; if this Note resets semiannually, the third Wednesday of each
of the two months of each year specified on the face hereof; and if this
Note resets annually, the third Wednesday of one month of each year
specified on the face hereof. If an Interest Reset Date for this Note
would otherwise be a day that is not a Business Day, such Interest Reset
Date shall be postponed to the next succeeding Business Day, except that
if this Note is a LIBOR Note and such Business Day is in the next
succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day. Notwithstanding the foregoing, the
interest rate hereon during any interest period shall not be greater than
the Maximum Interest Rate, if any, or less than the Minimum Interest
Rate, if any, shown on the face hereof. In addition to any Maximum
Interest Rate that may be applicable hereto, the interest rate hereon
during any interest period will in no event be higher than the maximum
rate permitted by applicable law as the same may be modified by United
States law of general application. This Note will be governed by the law
of the State of New York and, under such law, the maximum rate of
interest, with certain exceptions, is currently 25% per annum on a simple
interest basis.
Unless otherwise indicated on the face hereof and except as provided
below, interest will be payable, if this Note resets daily, weekly or
monthly, on the third Wednesday of each month or on the third Wednesday
of March, June, September and December of each year, as specified on the
face hereof; if this Note resets quarterly, on the third Wednesday of
March, June, September and December of each year; if this Note resets
semiannually, on the third Wednesday of each of the two months of each
year specified on the face hereof; and if this Note resets annually, on
the
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third Wednesday of one month of each year specified on the face hereof
(each such day being an "Interest Payment Date") and, in each case, at
Maturity. If any Interest Payment Date (other than at Maturity) would
otherwise be a day that is not a Business Day, such Interest Payment Date
shall be postponed to the next succeeding Business Day, except that, if
the Base Rate specified on the face hereof is LIBOR and such Business Day
would fall in the next succeeding calendar month, such Interest Payment
Date shall be the immediately preceding Business Day.
If the Maturity of this Note falls on a day that is not a Business
Day, the required payment of principal, premium (if any) and/or interest
will be made on the next succeeding Business Day as if made on the date
such payment was due, and no interest shall accrue on such payment for
the period from and after Maturity to the date of such payment on the
next succeeding Business Day.
The Company will appoint, and enter into an agreement with, an agent
("Calculation Agent") to calculate interest rates on this Note. All
determinations of interest rates by the Calculation Agent shall, in the
absence of manifest error, be conclusive for all purposes and binding on
the Holder hereof. Unless otherwise specified on the face hereof, Morgan
Guaranty Trust Company of New York shall be the Calculation Agent for
this Note. At the request of the Holder hereof, the Calculation Agent
will provide to such Holder the interest rate then in effect, and, if
determined, the interest rate that will become effective on the next
Interest Reset Date. In addition, such information will be communicated
to the Luxembourg Stock Exchange and will be made available at the
offices of the Paying Agent in Luxembourg and at the Luxembourg Stock
Exchange.
Subject to applicable provisions of law and except as specified
herein, on each Interest Reset Date the rate of interest hereon shall be
the rate determined in accordance with the provisions under the
applicable heading below.
Determination of CD Rate
------------------------
If the Base Rate specified on the face hereof is the CD Rate, this
Note will bear interest for each Interest Reset Period at the interest
rate calculated with reference to the CD Rate and the Spread and/or
Spread Multiplier, if any, specified on the face hereof. The "CD Rate"
for each Interest Reset Period shall be the rate as of the second
Business Day prior to the Interest Reset Date for such Interest Reset
Period (a "CD Rate Determination Date") for negotiable certificates of
deposit having the Index Maturity specified on the face hereof, as
published in H.15(519) under the heading "CDs (Secondary Market)". In
the event that such rate is not published prior to 3:00 p.m., New York
City time, on the Calculation Date (as
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defined below) pertaining to such CD Rate Determination Date, then the
"CD Rate" for such Interest Reset Period will be the rate on such CD Rate
Determination Date for negotiable certificates of deposit of the Index
Maturity specified on the face hereof as published in Composite
Quotations under the heading "Certificates of Deposit". If by 3:00 p.m.,
New York City time, on such Calculation Date such rate is not yet
published in either H.15(519) or Composite Quotations, then the "CD Rate"
for such Interest Reset Period will be calculated by the Calculation
Agent and will be the arithmetic mean of the secondary market offered
rates as of 10:00 a.m., New York City time, on such CD Rate Determination
Date, of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major money
market banks of the highest credit standing (in the market for negotiable
certificates of deposit) with a remaining maturity closest to the Index
Maturity specified on the face hereof in a denomination of $5,000,000;
provided, however, that if the three dealers selected as aforesaid by the
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Calculation Agent are not quoting offered rates as mentioned in this
sentence, the "CD Rate" for such Interest Reset Period will be the CD
Rate in effect on such CD Rate Determination Date, or, if none, the
Initial Interest Rate.
The "Calculation Date" pertaining to any CD Rate Determination Date
shall be the earlier of (i) the tenth calendar day after such CD Rate
Determination Date or,if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding
the applicable Interest Payment Date or Maturity, as the case may be.
Determination of Commercial Paper Rate
--------------------------------------
If the Base Rate specified on the face hereof is the Commercial
Paper Rate, this Note will bear interest for each Interest Reset Period
at the interest rate calculated with reference to the Commercial Paper
Rate and the Spread and/or Spread Multiplier, if any, specified on the
face hereof. The "Commercial Paper Rate" for each Interest Reset Period
will be determined by the Calculation Agent as of the second Business Day
prior to the Interest Reset Date for such Interest Reset Period (a
"Commercial Paper Rate Determination Date") and shall be the Money Market
Yield (as defined below) on such Commercial Paper Rate Determination Date
of the rate for commercial paper having the Index Maturity specified on
the face hereof, as such rate shall be published in H.15(519) under the
heading "Commercial Paper". In the event that such rate is not published
prior to 3:00 p.m., New York City time, on the Calculation Date (as
defined below) pertaining to such Commercial Paper Rate Determination
Date, then the "Commercial Paper Rate" for such Interest Reset Period
shall be the Money Market Yield on such Commercial Paper Rate
Determination Date of the rate for
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commercial paper of the Index Maturity specified on the face hereof as
published in Composite Quotations under the heading "Commercial Paper".
If by 3:00 p.m., New York City time, on such Calculation Date such rate
is not yet published in either H.15(519) or Composite Quotations, then
the "Commercial Paper Rate" for such Interest Reset Period shall be the
Money Market Yield of the arithmetic mean of the offered rates, as of
11:00 a.m., New York City time, on such Commercial Paper Rate
Determination Date of three leading dealers of commercial paper in The
City of New York selected by the Calculation Agent for commercial paper
of the Index Maturity specified on the face hereof placed for an
industrial issuer whose bonds are rated "AA" or the equivalent thereof by
a nationally recognized statistical rating agency; provided, however,
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that if the three dealers selected as aforesaid by the Calculation Agent
are not quoting offered rates as mentioned in this sentence, the
"Commercial Paper Rate" for such Interest Reset Period will be the
Commercial Paper Rate in effect on such Commercial Paper Rate
Determination Date, or, if none, the Initial Interest Rate.
"Money Market Yield" shall be a yield calculated in accordance with
the following formula:
D x 360
Money Market Yield = ----------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper
quoted on a bank discount basis and expressed as a decimal, and "M"
refers to the actual number of days in the period for which accrued
interest is being calculated.
The "Calculation Date" pertaining to any Commercial Paper Rate
Determination Date shall be the earlier of (i) the tenth calendar day
after such Commercial Paper Rate Determination Date or, if such day is
not a Business Day, the next succeeding Business Day or (ii) the Business
Day immediately preceding the applicable Interest Payment Date or
Maturity, as the case may be.
Determination of Federal Funds Rate
-----------------------------------
If the Base Rate specified on the face hereof is the Federal Funds
Rate, this Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the Federal Funds Rate and the
Spread and/or Spread Multiplier, if any, specified on the face hereof.
The "Federal Funds Rate" for each Interest Rate Period shall be the
effective rate on the second Business Day immediately prior to the
Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate
Determination Date") for Federal Funds as published in H.15(519) under
the heading "Federal Funds (Effective)". In the event that such rate is
not published prior to 3:00 p.m., New York City
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time, on the Calculation Date (as defined below) pertaining to such
Federal Funds Rate Determination Date, the "Federal Funds Rate" for such
Interest Reset Period shall be the rate on such Federal Funds Rate
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate". If by 3:00 p.m., New York City time, on
such Calculation Date such rate is not yet published in either H.15(519)
or Composite Quotations, then the "Federal Funds Rate" for such Interest
Reset Period shall be the arithmetic mean of the rate, as of 9:00 a.m.,
New York City time, on the Federal Funds Rate Determination Date for the
last transaction of not less than $5,000,000 in overnight federal funds
arranged by each of three leading brokers of federal funds transactions
in The City of New York selected by the Calculation Agent for such
Federal Funds Rate Note; provided, however, that if the brokers selected
-------- -------
as aforesaid by the Calculation Agent are not quoting as set forth above,
the "Federal Funds Rate" for such Interest Reset Period will be the
Federal Funds Rate in effect on such Federal Funds Rate Determination
Date, or, if none, the Initial Interest Rate.
The "Calculation Date" pertaining to any Federal Funds Rate
Determination Date shall be the earlier of (i) the tenth calendar day
after such Federal Funds Rate Determination Date or, if such day is not a
Business Day, the next succeeding Business Day or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or Maturity,
as the case may be.
Determination of LIBOR
----------------------
If the Base Rate specified on the face hereof is LIBOR, this Note
will bear interest for each Interest Reset Period at the interest rate
calculated with reference to LIBOR and the Spread and/or Spread
Multiplier, if any, specified on the face hereof. If LIBOR is indexed to
the offered rates for deposits in a currency other than U.S. dollars the
method for determining such rate will be specified on the face hereof.
If LIBOR is indexed to the offered rates for U.S. dollar deposits,
"LIBOR" for each Interest Reset Period will be determined by the
Calculation Agent as follows:
(i) On the second London Business Day prior to the
Interest Reset Date for such Interest Reset Period (a "LIBOR
Interest Determination Date"), the Calculation Agent will
determine (a) if "LIBOR Reuters" is specified on the face hereof,
the arithmetic mean of the offered rates (unless the specified
Designated LIBOR Page by its terms provides only for a single
rate, in which case such single rate shall be used) for deposits
in the Index Currency having the Index Maturity designated on the
face hereof, commencing on the second London Business Day
immediately following such LIBOR Interest Determination Date,
that appear on the Designated LIBOR Page specified on the face
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hereof as of 11:00 a.m., London time, on such LIBOR Interest
Determination Date, if at least two such offered rates appear
(unless, as aforesaid, only a single rate is required) on such
Designated LIBOR Page, or (b) if "LIBOR Telerate" is specified on
the face hereof or if neither "LIBOR Reuters" nor "LIBOR
Telerate" is specified as the method for calculating LIBOR, the
rate for deposits in the Index Currency having the Index Maturity
designated on the face hereof, commencing on the second London
Business Day immediately following such LIBOR Interest
Determination Date that appears on the Designated LIBOR Page
specified on the face hereof as of 11:00 a.m., London time, on
such LIBOR Interest Determination Date. If fewer than two such
offered rates appear, or if no such rate appears, as applicable,
LIBOR in respect of the related LIBOR Interest Determination Date
will be determined in accordance with the provisions described in
clause (ii) below.
(ii) With respect to a LIBOR Note and an Interest Reset
Period to which this clause (ii) applies, the Calculation Agent
will request the principal London offices of each of four major
reference banks in the London interbank market, as selected by
the Calculation Agent, to provide the Calculation Agent with its
offered quotation for deposits in the Index Currency for the
period of the Index Maturity designated on the face hereof,
commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date, to prime banks
in the London interbank market at approximately 11:00 a.m.,
London time, on such LIBOR Interest Determination Date and in a
principal amount that is representative for a single transaction
in such Index Currency in such market at such time. If at least
two such quotations are provided, LIBOR determined on such LIBOR
Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR
determined on such LIBOR Interest Determination Date will be the
arithmetic mean of the rates quoted at approximately 11:00 a.m.,
in the applicable Principal Financial Center, on such LIBOR
Interest Determination Date by three major banks in such
Principal Financial Center selected by the Calculation Agent for
loans in the Index Currency to leading European banks, having the
Index Maturity designated on the face hereof commencing on the
second London Business Day immediately following such LIBOR
Interest Determination Date and in a principal amount that is
representative for a single transaction in such Index Currency in
such market at such time; provided, however, that if the banks so
-------- -------
selected by the Calculation Agent are not quoting as mentioned in
this sentence, LIBOR determined as of such LIBOR Interest
Determination Date will be LIBOR in effect on such LIBOR Interest
Determination Date.
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"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is
specified on the face hereof, the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London interbank rates of
major banks for the applicable Index Currency, or (b) if "LIBOR Telerate"
is specified on the face hereof or neither "LIBOR Reuters" nor "LIBOR
Telerate" is specified as the method for calculating LIBOR, the display
on the Dow Jones Telerate Service for the purpose of displaying the
London interbank rates of major banks for the applicable Index Currency.
"Index Currency" means the currency (including composite
currencies) specified on the face hereof as the currency for which LIBOR
shall be calculated. If no such currency is specified on the face
hereof, the Index Currency shall be U.S. dollars.
"Principal Financial Center" will generally be the capital city of
the country of the specified Index Currency, except that with respect to
U.S. dollars, Italian lire and ECU, the Principal Financial Center shall
be The City of New York, Milan and Luxembourg, respectively.
Determination of Treasury Rate
------------------------------
If the Base Rate specified on the face hereof is the Treasury Rate,
this Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the Treasury Rate and the
Spread and/or Spread Multiplier, if any, specified on the face hereof.
The "Treasury Rate" for each Interest Reset Period will be the rate for
the auction held on the Treasury Rate Determination Date (as defined
below) for such Interest Reset Period of direct obligations of the United
States ("Treasury bills") having the Index Maturity specified on the face
hereof as such rate shall be published in H.15(519) under the heading
"U.S. Government Securities-Treasury bills-auction average (investment)"
or, in the event that such rate is not published prior to 3:00 p.m., New
York City time, on the Calculation Date (as defined below) pertaining to
such Treasury Rate Determination Date, the auction average rate
(expressed as a bond equivalent on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) on such Treasury Rate
Determination Date as otherwise announced by the United States Department
of the Treasury. In the event that the results of the auction of
Treasury bills having the Index Maturity specified on the face hereof are
not published or reported as provided above by 3:00 p.m., New York City
time, on such Calculation Date, or if no such auction is held on such
Treasury Rate Determination Date, then the "Treasury Rate" for such
Interest Reset Period shall be calculated by the Calculation Agent and
shall be a yield to maturity (expressed as a bond equivalent on the basis
of a year of 365 or 366 days, as applicable, and applied on a daily
basis)
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<PAGE>
of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 p.m., New York City time, on such Treasury Rate
Determination Date, of three leading primary United States government
securities dealers selected by the Calculation Agent for the issue of
Treasury bills with a remaining maturity closest to the Index Maturity
specified on the face hereof; provided, however, that if the dealers
-------- -------
selected as aforesaid by the Calculation Agent are not quoting bid rates
as mentioned in this sentence, then the "Treasury Rate" for such Interest
Reset Period will be the Treasury Rate in effect on such Treasury Rate
Determination Date, or, if none, the Initial Interest Rate.
The "Treasury Rate Determination Date" for each Interest Reset
Period will be the day of the week in which the Interest Reset Date for
such Interest Reset Period falls on which Treasury bills would normally
be auctioned. Treasury bills are normally sold at auction on Monday of
each week, unless that day is a legal holiday, in which case the auction
is normally held on the following Tuesday, except that such auction may
be held on the preceding Friday. If, as the result of a legal holiday,
an auction is so held on the preceding Friday, such Friday will be the
Treasury Rate Determination Date pertaining to the Interest Reset Period
commencing in the next succeeding week. If an auction date shall fall on
any day that would otherwise be an Interest Reset Date for a Treasury
Rate Note, then such Interest Reset Date shall instead be the Business
Day immediately following such auction date.
The "Calculation Date" pertaining to any Treasury Rate
Determination Date shall be the earlier of (i) the tenth calendar day
after such Treasury Rate Determination Date or, if such day is not a
Business Day, the next succeeding Business Day or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or Maturity,
as the case may be.
Determination of Prime Rate
---------------------------
If the Base Rate specified on the face hereof is the Prime Rate,
this Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the Prime Rate and the Spread
and/or Spread Multiplier, if any, specified on the face hereof.
The "Prime Rate" for each Interest Reset Period will be determined
by the Calculation Agent as of the second Business Day prior to the
Interest Reset Date for such Interest Reset Period (a "Prime Rate
Determination Date") and shall be the rate published in H.15(519) under
the heading "Bank Prime Loan". In the event that such rate is not
published prior to 9 a.m., New York City time, on the Calculation Date
(as defined below), then the "Prime Rate" for such Interest Reset Period
shall be determined by the Calculation Agent and shall be the arithmetic
R-14
<PAGE>
mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen NYMF Page (as defined below) as such bank's
prime rate or base lending rate as in effect for that Prime Rate
Determination Date. If fewer than four such rates but more than one such
rate appear on the Reuters Screen NYMF Page for the Prime Rate
Determination Date, the "Prime Rate" will be determined by the
Calculation Agent and will be the arithmetic mean of the prime rates
quoted on the basis of the actual number of days in the year divided by a
360-day year as of the close of business on such Prime Rate Determination
Date by four major money center banks in The City of New York selected by
the Calculation Agent. If fewer than two such rates appear on the
Reuters Screen NYMF Page, the Prime Rate will be determined by the
Calculation Agent on the basis of the rates furnished in The City of New
York by the appropriate number of substitute banks or trust companies
organized and doing business under the laws of the United States, or any
State thereof, having total equity capital of at least U.S.$500,000,000
and being subject to supervision or examination by Federal or State
authority, selected by the Calculation Agent to provide such rate or
rates; provided, however, that if the banks selected as aforesaid are not
-------- -------
quoting as mentioned in this sentence, the Prime Rate for such Interest
Reset Period will be the Prime Rate in effect on such Prime Rate
Determination Date, or, if none, the Initial Interest Rate. "Reuters
Screen NYMF Page" means the display designated as page "NYMF" on the
Reuters Monitor Money Rates Service (or such other page as may replace
the NYMF page on that service for the purpose of displaying prime rates
or base lending rates of major United States banks).
The "Calculation Date" pertaining to a Prime Rate Determination
Date will be the earlier of (i) the tenth calendar day after such Prime
Rate Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding
the applicable Interest Payment Date or Maturity, as the case may be.
Determination of CMT Rate
-------------------------
If the Base Rate specified on the face hereof is the CMT Rate,
this Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the CMT Rate and the Spread
and/or Spread Multiplier, if any, specified on the face hereof.
Unless otherwise specified herein, the "CMT Rate" for each
Interest Reset Period will be determined by the Calculation Agent and
shall be the rate (i) in the case where the Designated CMT Telerate Page
(as defined below) is 7055, as of the second Business Day prior to the
Interest Reset Date for such Interest Reset Period (a "CMT Determination
Date") or (ii) in the case where the Designated CMT Telerate Page is
7052, for the week or
R-15
<PAGE>
the month, as specified on the face hereof, ended immediately preceding
the week in which the CMT Determination Date occurs, in either case, for
the Index Maturity as displayed on the Designated CMT Telerate page under
the caption ". . . Treasury Constant Maturities . . . Federal Reserve
Board Release H.15 . . . Mondays Approximately 3:45 P.M." If such rate
is no longer displayed on the relevant page, or if not dispalyed by 3:00
p.m., New York City time, on the Calculation Date (as defined below)
pertaining to such CMT Determination Date, then the "CMT Rate" for such
Interest Reset Period shall be such treasury constant maturity rate for
the Index Maturity specified on the face hereof as published in the
relevant H.15(519) opposite the caption "U.S. Government Securities,
Treasury Constant Maturities". If such rate is no longer published, or
if not published by 3:00 p.m., New York City time, on the Calculation
Date relating to such CMT Determination Date, then the "CMT Rate" for
such Interest Reset Period shall be such treasury constant maturity rate
for the Index Maturity specified on the face hereof (or other United
States Treasury rate for such Index Maturity) as may then be published by
either the Board of Governors of the Federal Reserve System or the United
States Department of Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate
Page and published in the relevant H.15(519). If such information is not
provided by 3:00 p.m., New York City time, on the Calculation Date
relating to such CMT Determination Date, then the "CMT Rate" for the
Interest Reset Period shall be calculated by the Calculation Agent and
will be a yield to maturity, based on the arithmetic mean of the
secondary market closing offer side prices as of approximately 3:30 p.m.,
New York City time, on the CMT Determination Date reported, according to
their written records, by three leading primary United States government
securities dealers (each, a "Reference Dealer") in The City of New York
selected by the Calculation Agent (from five such Reference Dealers
selected by the Calculation Agent and eliminating the higher quotation
(or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest)), for the
most recently issued direct noncallable fixed rate obligations of the
United States ("Treasury Notes") with an original maturity of
approximately the Index Maturity specified on the face hereof and a
remaining term to maturity of not less than such Index Maturity minus one
year. If the Calculation Agent cannot obtain three such Treasury Note
quotations, the "CMT Rate" for such Interest Reset Period shall be
calculated by the Calculation Agent and will be a yield to maturity based
on the arithmetic mean of the secondary market offer side prices as of
approximately 3:30 p.m., New York City time, on the CMT Determination
Date of three Reference Dealers in The City of New York (from five such
Reference Dealers selected by the Calculation Agent and eliminating the
highest quotation (or, in the event of equality, one of the highest) and
the lowest
R-16
<PAGE>
quotation (or, in the event of equality, one of the lowest)), for the
Treasury Notes with an original maturity of the number of years that is
the next highest to the Index Maturity specified on the face hereof and a
remaining term to maturity closest to the Index Maturity specified on the
face hereof and in an amount of at least $100 million. If three or four
(and not five) of such Reference Dealers are quoting as described above,
then the CMT Rate will be based on the arithmetic mean of the offer
prices obtained and neither the highest nor the lowest of such quotes
will be eliminated; provided, however, that if fewer than three Reference
-------- -------
Dealers selected by the Calculation Agent are quoting as described
herein, the "CMT Rate" will be the CMT Rate in effect on such CMT
Determination Date, or, if none, the Initial Interest Rate. If two
Treasury Notes with an original maturity as described in the second
preceding sentence have remaining terms to maturity equally close to the
Index Maturity specified on the face hereof, the quotes for the Treasury
Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service on the page designated on the face hereof (or any other
page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)), for
the purpose of displaying Treasury Constant Maturities as reported in
H.15(519). If no such page is specified on the face hereof, the
Designated CMT Telerate Page shall be 7052, for the most recent week.
The "Calculation Date" pertaining to any CMT Determination Date
shall be the earlier of (i) the tenth calendar day after such CMT
Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding
the applicable Interest Payment Date or Maturity, as the case may be.
Payment in Currencies other than the Specified Currency
-------------------------------------------------------
Except as set forth below with respect to payments in ECU, if
payment in respect of this Note is required to be made in a specified
currency other than U.S. dollars (a "Specified Currency") and such
currency is unavailable to the Company due to the imposition of exchange
controls or other circumstances beyond the Company's control or is no
longer used by the government of the country issuing such currency or for
the settlement of transactions by public institutions of or within the
international banking community, then all payments shall be made in U.S.
dollars until such currency is again available to the Company or so used.
The amounts so payable on any date in such currency shall be converted
into U.S. dollars on the basis of the most recently available Market
Exchange Rate for such currency or as otherwise indicated on the face
hereof. Any payment made
R-17
<PAGE>
under such circumstances in U.S. dollars will not constitute an Event of
Default under the Indenture. Notwithstanding the foregoing, if a
Specified Currency is unavailable to the Company solely because such
currency no longer constitutes legal tender because it has been replaced
by the ECU or the new single currency of the European Union once monetary
union takes effect pursuant to Article 109l of the Treaty establishing
the European Community, the amounts so payable in respect of such Note
shall, beginning with the date such replacement becomes effective, be
made in the relevant new single currency of the European Union; the
amounts so payable on any date shall be converted into such single
currency on the basis of the conversion officially in effect in the
European Union on the effective date of such replacement.
If payment in respect of this Note is required to be made in ECU
and the ECU are not then used in the European Monetary System (the
"EMS"), then the Trustee shall, without liability on its part, choose a
component currency (the "Payment Currency") of the ECU in which all
payments in respect hereof shall be made until the ECU are again so used.
The amount of each payment in such Payment Currency shall be computed on
the basis of the equivalent of the ECU in that currency, determined as
described below, as of the fourth Luxembourg business day prior to the
date on which such payment is due. Notice of the Payment Currency
selected by the Trustee shall be given as described below. Any payment
made under such circumstances in the Payment Currency will not constitute
an Event of Default under the Indenture.
Notwithstanding the foregoing, on the first Luxembourg business
day on which the ECU are no longer used in the EMS, the Trustee shall,
without liability on its part, choose a Payment Currency in which all
payments with respect to Bearer Notes and Coupons denominated in ECU
having a due date prior thereto but not yet presented for payment are to
be made. The amount of each payment in such Payment Currency shall be
computed on the basis of the equivalent of the ECU in that currency,
determined as described below, as of such first Luxembourg business day.
Any payment made under such circumstances in the Payment Currency will
not constitute an Event of Default under the Indenture.
The equivalent of the ECU in the relevant Payment Currency as of
any date (the "Day of Valuation") shall be determined by the Luxembourg
Stock Exchange on the following basis. The component currencies of the
ECU for this purpose (the "Components") shall be the currency amounts
that were components of the ECU when the ECU was most recently used in
the EMS or for the settlement of transactions by public institutions of
or within the European Community. The equivalent of the ECU in the
Payment Currency shall be calculated by, first, aggregating the U.S.
dollar equivalents of the Components, and then, using the rate used for
determining the U.S. dollar equivalents of the Components in the Payment
Currency as set forth below, calculating the equivalent in the Payment
Currency of such aggregate amount in U.S. dollars.
The U.S. dollar equivalent of each of the Components shall be
determined by the Luxembourg Stock Exchange on the basis of the middle
spot delivery quotations prevailing at 2:30 p.m. Luxembourg time on the
Day of Valuation, as obtained by the Luxembourg Stock Exchange from one
or more major banks, selected by the Trustee (with the approval of the
Company), in the country of issue of the Component in question.
R-18
<PAGE>
If the official unit of any component currency of the ECU is
altered by way of combination or subdivision, the number of units of that
currency as a Component shall be divided or multiplied in the same
proportion. If two or more component currencies are consolidated into a
single currency, the amounts of those currencies as Components shall be
replaced by an amount in such single currency equal to the sum of the
amounts of the consolidated component currencies expressed in such single
currency. If any component currency is divided into two or more
currencies, the amount of that currency as a Component shall be replaced
by amounts of such two or more currencies, each of which shall be equal
to the amount of the former component currency divided by the number of
currencies into which that currency was divided.
If no direct quotations are available for a Component on a Day of
Valuation from any of the banks selected by the Trustee (with the
approval of the Company) for this purpose, because foreign exchange
markets are closed in the country of issue of that Component, or for any
other reason, in computing the U.S. dollar equivalent of such Component
the Luxembourg Stock Exchange shall (except as provided below) use the
most recent direct quotations for such Component obtained by it, provided
--------
that such most recent quotations may be used only if they were prevailing
in the country of issue not more than two Luxembourg business days before
such Day of Valuation. Beyond such period of two Luxembourg business
days, the Luxembourg Stock Exchange shall determine the U.S. dollar
equivalent of such Component on the basis of cross rates derived from the
middle spot delivery quotations for such Component and for the U.S.
dollar prevailing at 2:30 p.m. Luxembourg time on such Day of Valuation,
as obtained by the Luxembourg Stock Exchange from one or more major
banks, selected by the Trustee (with the approval of the Company), in a
country other than the country of issue of such Component.
Notwithstanding the foregoing, within such period of two Luxembourg
business days, the Luxembourg Stock Exchange shall determine the U.S.
dollar equivalent of such Component on the basis of such cross rates if
the Trustee and the Company judge that the equivalent so calculated is
more representative than the U.S. dollar equivalent calculated on the
basis of such most recent direct quotations. Unless otherwise specified
by the Trustee, if there is more than one market for dealing in any
component currency by reason of foreign exchange regulations or for any
other reason, the market to be referred to in respect of such currency
shall be that upon which a nonresident issuer of securities denominated
in such currency would purchase such currency in order to make payments
in respect of such securities.
All determinations referred to above made by the Trustee or the
Luxembourg Stock Exchange shall be at their respective sole discretion
(except to the extent expressly provided herein that any determination
made by the Trustee is subject to the
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<PAGE>
approval of the Company) and shall, in the absence of manifest error, be
conclusive for all purposes and binding on Holders of the Bearer Notes
and any Coupons, and the Trustee shall have no liability therefor.
If an Event of Default with respect to the Notes shall have
occurred and be continuing, the principal of all Notes may be declared
due and payable in the manner and with the effect provided in the
Indenture.
If this Note is an Original Issue Discount Note, the amount
payable in the event of redemption or repayment prior to its Stated
Maturity shall be the Amortized Face Amount of this Note as of the date
of redemption or the date of repayment, as the case may be. The
"Amortized Face Amount" of this Note shall be the amount equal to (a) the
Issue Price (set forth on the face hereof) plus (b) that portion of the
difference between the Issue Price and the principal amount hereof that
has accrued at the Yield to Stated Maturity (set forth on the face
hereof) (computed in accordance with generally accepted United States
bond yield computation principles) by such date of redemption or
repayment, but in no event shall the Amortized Face Amount of this Note
exceed its principal amount.
As provided in the Indenture and subject to certain limitations
therein set forth, this Note is exchangeable for up to a like aggregate
principal amount of Bearer Notes of different authorized denominations,
as requested by the Person surrendering the same.
No service charge shall be made for any such exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Replacement of Permanent Global Notes
-------------------------------------
In case this Note shall at any time become mutilated, destroyed,
stolen or lost, it may be replaced at the specified office of the
Principal Paying Agent in London; or, so long as the Bearer Notes are
listed on the Luxembourg Stock Exchange, at the specified office of the
Paying Agent in Luxembourg, upon payment by the claimant of such expenses
as may be incurred in connection therewith and, in the case of
destruction, theft or loss, on such terms as to evidence thereof and
indemnity as the Company or the Trustee may reasonably require.
Mutilated or defaced Bearer Notes must be surrendered before replacements
will be issued.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Debt
Securities of each series to be affected
R-20
<PAGE>
under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than 66-2/3% in aggregate principal
amount of the Debt Securities at the time Outstanding of each series to
be affected. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the
Debt Securities of any series at the time Outstanding, on behalf of the
Holders of all the Debt Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon
such Holder and upon all future Holders hereof and of any Note issued
upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made
upon this Note.
Holders of Debt Securities of this series may not enforce their
rights pursuant to the Indenture or such Debt Securities except as
provided in the Indenture. No reference herein to the Indenture and no
provision of this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay
the principal of (and premium, if any) and interest on this Note at the
times, place and rate, and in the coin or currency, herein prescribed.
The Company may, without the consent of the Holders of the Notes,
consolidate with, merge into, or transfer substantially all of its assets
to, a corporation that is a U.S. Person, provided that the successor
corporation assumes all obligations of the Company under the Notes and
certain other conditions are met.
Except as provided above, the obligation to pay the principal
hereof (and premium, if any) and interest hereon in the designated
currency of payment is of the essence. To the fullest extent possible
under applicable law, judgments in respect of this Note shall be given in
such currency. The obligation of the Company to make such payments in
the designated currency of payment shall, notwithstanding any payment in
any other currency (whether pursuant to a judgment or otherwise), be
discharged only to the extent of the amount in the designated currency of
payment that the Holder of this Note may, in accordance with normal
banking procedures, purchase with the sum paid in such other currency
(after any premium and cost of exchange) on the business day in the
country of issue of the designated currency of payment or in the
international banking community (in the case of a composite currency)
immediately following the day on which such Holder receives such payment.
If the amount in the designated currency of payment that may be so
purchased is for any reason less than the amount originally due, the
Company shall, as a separate and independent obligation, pay such
additional amounts
R-21
<PAGE>
in the designated currency of payment as may be necessary to compensate
for any such shortfall.
All notices to Holders of this Note will be deemed to have been
duly given if published on two Business Days in a leading London daily
newspaper (which is expected to be the Financial Times) and, so long as
---------------
the Bearer Notes are listed on the Luxembourg Stock Exchange and the
rules of such exchange so require, in Luxembourg in a newspaper of
general circulation in Luxembourg (which is expected to be the
Luxemburger Wort). Such notices shall be deemed to have been given on
----------------
the date of the first such publication.
This Note shall be deemed to be a contract made and to be
performed solely in the State of New York, and for all purposes shall be
governed by, and construed in accordance with, the laws of said State
without regard to the conflicts of law rules of said State.
All terms used in this Note that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
R-22
<PAGE>
SCHEDULE OF ISSUANCES, EXCHANGES AND AGGREGATE PRINCIPAL AMOUNT
The following issuances and exchanges of a part of this Note have been
made, and the aggregate principal amount of Bearer Notes represented by this
Note at any time is as shown in the last entry of Column III hereof unless one
or more entries have been made in Column IV hereof reflecting exchanges for
individual Bearer Notes, in which event such aggregate principal amount is as
shown in the last entry of Column V hereof.
I. II. III. IV. V. VI.
Notation
Principal made
Amount Aggregate on behalf
Aggregate Exchanged Principal of the
Settlement Principal Principal for Indivi- Amount Principal
Date of Date Amount Amount dual Bearer Remaining Paying
of Exchange Issued Issued Notes After Exchange Agent
- - ------------ ------------ ------------ ------------ -------------- --------
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<PAGE>
SCHEDULE OF INTEREST PAYMENTS
-----------------------------
The following payments of interest in respect of this
Note have been made.
Notation made
Date of on behalf of
Interest Interest the Principal
Payment Paid Paying Agent
-------- -------- -------------
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R-24
<PAGE>
Exhibit 4(i)
SERIES E FIXED RATE BEARER NOTE
MCDONALD'S CORPORATION
MEDIUM-TERM NOTE, SERIES E
BEARER PRINCIPAL AMOUNT PRINCIPAL AMOUNT
No.
(FIXED RATE)
Due from 184 Days to 60 Years from Date of Issue
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "YIELD TO STATED MATURITY"
AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) SET
FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL
INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
Issue Price: Original Issue Date:
Interest Rate: Stated Maturity:
Interest Payment Dates:
(Applicable only if other than February 15 and August 15 of each year)
Specified Currency:
(Applicable only if other than U.S. dollars)
Authorized Denominations:
(Applicable only if other than U.S.$25,000 and
investments of U.S.$5,000 or if Specified Currency is
other than U.S. dollars)
Original Redemption: [_] Yes [_] No
Optional Redemption Dates:
Redemption Prices:
[_] The Redemption Price shall initially be % of the principal
amount of the Note to be redeemed and shall decline at each
anniversary of the initial Optional Redemption Date by % of
the principal amount to be redeemed until the Redemption Price is
100% of such principal amount; provided, however, that if this
-------- -------
Note is an Original Issue Discount Note, the Redemption Price
shall be the Amortized Face Amount of the principal amount to be
redeemed.
[_] Other:
Sinking Fund: [_] Yes [_] No
Sinking Fund Dates:
Sinking Fund Amounts:
Amortizing Note: [_] Yes [_] No
Amortization Schedule:
Optional Repayment: [_] Yes [_] No
Optional Repayment Dates:
Optional Repayment Prices:
Original Issue
Discount Note: [_] Yes [_] No
Total Amount of OID:
Yield to Stated Maturity:
Initial Accrual Period OID:
Calculation Agent (if other than
Principal Paying Agent):
<PAGE>
McDONALD'S CORPORATION, a corporation duly organized and existing under the
laws of the State of Delaware (the "Company"), for value received, hereby
promises to pay to bearer, upon presentation and surrender hereof, the principal
amount of _________________________________ (Specified Currency) on the Stated
Maturity shown above and to pay accrued interest thereon to the bearer of the
interest coupons attached hereto (the "Coupons") at the Interest Rate shown
above, semiannually in arrears (unless otherwise specified on this face hereof)
on February 15 and August 15 of each year (each an "Interest Payment Date"),
commencing with the February 15 or August 15 following the Original Issue Date
shown above upon presentation and surrender of the Coupons as they shall
severally mature, and on the Stated Maturity shown above, or upon earlier
redemption or repayment, until said principal amount is paid or duly provided
for in accordance with the terms hereof. Interest on this Note, if any, will be
computed on the basis of a 360-day year of twelve 30-day months. Any payment of
principal, premium or interest required to be made in respect hereof on a date
that is not a Business Day (as defined below) need not be made on such date, but
may be made on the next succeeding Business Day with the same force and effect
as if made on such date, and no additional interest shall accrue as a result of
such delayed payment. For purposes of this Note, "Business Day" means any day,
other than a Saturday or Sunday, that is (i) neither a legal holiday nor a day
on which banking institutions are authorized or required by law, regulation or
executive order to close in (a) The City of New York, (b) the City of Chicago or
(c) if the Specified Currency for this Note is other than U.S. dollars, the
principal financial center of the country issuing such Specified Currency
(which, in the case of ECU, shall be Luxembourg) and (ii) if the Specified
Currency for this Note is ECU, not a day designated as an ECU Non-Settlement Day
by the ECU Banking Association (or otherwise generally regarded in the ECU
interbank market as a day on which payments in ECU shall not be made).
Except under certain circumstances for Notes having Specified Currencies
other than U.S. dollars, payments of the principal hereof and any premium and
interest hereon will be made only in the Specified Currency. Payments in
respect of this Note and any Coupon will be made only against surrender of this
Note or such Coupon at the offices of the Paying Agents outside the United
States listed on the reverse hereof. At the direction of the Holder of this
Note or any Coupon, and subject to applicable laws and regulations, such
payments will be made by check drawn on a bank in The City of New York mailed to
an address outside the United States furnished by the Holder hereof or, at the
option of the Holder hereof, by wire transfer (pursuant to written instructions
supplied by the Holder hereof) to an account
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<PAGE>
maintained by the payee with a bank located outside the United States. No
payment in respect of this Note or any Coupon will be made upon presentation of
this Note or such Coupon at any office or agency of the Trustee or any other
paying agency maintained by the Company in the United States, nor will any such
payment be made by transfer to an account, or by mail to an address, in the
United States. Notwithstanding the foregoing, if U.S. dollar payments in
respect of this Note or any Coupons at the offices of all Paying Agents outside
the United States become illegal or are effectively precluded because of the
imposition of exchange controls or similar restrictions on the full payment or
receipt of such amounts in U.S. dollars, the Company will appoint an office or
agency (which may be the Trustee) in the United States at which such payments
may be made.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH
ON THE REVERSE HEREOF, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE
THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.
This Note shall not become valid or obligatory for any purpose unless and
until this Note has been authenticated by First Fidelity Bank, National
Association, or its successor, as Trustee.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be executed under
its corporate seal.
Dated:
McDONALD'S CORPORATION
By______________________________________
Vice President and Treasurer
[Seal]
Attest:_______________________________
[Assistant] Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Bearer Notes issued under the within-mentioned
Indenture.
FIRST FIDELITY BANK, NATIONAL ASSOCIATION,
as Trustee
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, LONDON OFFICE,
as Authenticating Agent
By_____________________________________
Authorized Signatory
F-4
<PAGE>
MCDONALD'S CORPORATION
MEDIUM-TERM NOTE, SERIES E
(FIXED RATE)
General
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This Note is one of a series of duly authorized debt securities of
the Company (the "Debt Securities") issued or to be issued in one or more
series under an indenture dated as of March 1, 1987 (the "Indenture") between
the Company and First Fidelity Bank, National Association (formerly Fidelity
Bank, National Association), as trustee (the "Trustee", which term includes
any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Debt Securities
and of the terms upon which the Debt Securities are, and are to be,
authenticated and delivered. This Debt Security is one of a series
designated on the face hereof limited to an aggregate initial public offering
price or purchase price of up to U.S.$584,662,000 or the equivalent thereof
in one or more foreign or composite currencies, subject to reduction as a
result of the sale of other Debt Securities. The U.S. dollar equivalent of
the public offering price or purchase price of Notes denominated in
currencies other than U.S. dollars will be determined by an agent designated
by the Company, which initially shall be Morgan Guaranty Trust Company of New
York, 60 Wall Street, New York, New York (the "Paying Agent") on the basis of
the noon buying rate in New York City for cable transfers in foreign
currencies as certified for customs purposes by the Federal Reserve Bank of
New York (the "Market Exchange Rate") for such currencies on the applicable
trade dates; provided, however, that in the case of ECU, the Market Exchange
-------- -------
Rate shall be the rate of exchange determined by the Commission of the
European Communities, or any successor publication, on the applicable trade
dates.
"Maturity", when used with respect to this Note, means the date on
which the principal of this Note or an installment of principal becomes due
and payable as provided herein or in the Indenture, whether at Stated
Maturity or by declaration of acceleration, call for redemption of otherwise.
The authorized denominations of Bearer Notes denominated in U.S.
dollars will be U.S.$25,000 and any larger amount that is an integral
multiple of U.S.$5,000, unless otherwise specified on the face hereof. The
authorized denominations of Bearer Notes denominated in currencies other than
U.S. dollars will be as set forth on the respective faces thereof.
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<PAGE>
If so specified on the face hereof, this Note will be redeemable at
the option of the Company in whole or from time to time in part, on any date
on or after the date designated as the Initial Redemption Date on the face
hereof, upon the Company's giving the Trustee at least 45 days' notice, at
the Redemption Price determined as provided on the face hereof. If redeemed
prior to its Stated Maturity, this Note must be presented for payment
together with all unmatured Coupons, if any, appertaining hereto, failing
which the amount of any missing unmatured Coupon will be deducted from the
sum due for payment. The Bearer Notes will not be subject to any sinking
fund. Any such sinking fund shall be administered in accordance with the
terms specified on the face hereof and otherwise as set forth in the
Indenture.
If the Company has or will become obligated to pay additional
amounts on the Bearer Notes as described below as a result of any change in,
or amendment to, the laws (or any regulations or rulings promulgated
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, or any change in official
position regarding the application or interpretation of such laws,
regulations or rulings, which change or amendment is enacted or becomes
effective (regardless of when announced) on or after the Original Issue Date,
and such obligation cannot be avoided by the Company taking reasonable
measures available to it, then the Company may, at its option, redeem the
Bearer Notes in whole, but not in part, at any time on giving at least 30 but
not more than 60 days' notice as set forth below, which notice shall be
irrevocable, calculated without premium, at 100% of their principal amount,
plus accrued interest to the redemption date; provided, however, that if this
-------- -------
Note is an Original Issue Discount Note, the redemption price hereof shall be
limited to the sum of (i) the aggregate principal amount hereof multiplied by
the Issue Price hereof (expressed as a percentage of the aggregate principal
amount) and (ii) the original issue discount accrued hereon from the Original
Issue Date to the date fixed for redemption, which amortization shall be
calculated using the "interest method" (computed in accordance with generally
accepted accounting principles in effect on the date of notice of
redemption). No such notice of redemption shall be given earlier than 90 days
prior to the earliest date on which the Company would be obligated to pay
such additional amounts were a payment in respect of the Bearer Notes then
due. Prior to the publication of any notice of redemption pursuant to this
paragraph, the Company shall deliver to the Trustee a certificate stating
that the Company is entitled to effect such redemption and setting forth a
statement of facts showing that the conditions precedent to the right of the
Company so to redeem have occurred, and an opinion of counsel to the effect
that the Company has or will become obligated to pay such additional amounts
as a result of such change or amendment.
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<PAGE>
If so specified on the face hereof, this Note will be repayable
prior to its Stated Maturity at the option of the Holder on the Optional
Repayment Dates shown on the face hereof at the Optional Repayment Prices
shown on the face hereof, together with accrued interest to the date of
repayment. In order for this Note to be repaid, the Principal Paying Agent
(as specified below) must receive the Note at least 30 but not more than 45
days prior to an Optional Repayment Date. Any tender of this Note for
repayment shall be irrevocable. The repayment option may be exercised by the
Holder hereof for less than the entire principal amount hereof, provided that
--------
the principal amount of the Note remaining outstanding after repayment is an
authorized denomination. Upon such partial repayment, this Note shall be
cancelled and a new Note or Notes for the remaining principal amount hereof
shall be issued to the Holder of this Note.
Payment of Additional Amounts
-----------------------------
The Company will, subject to the exceptions and limitations set
forth below, pay such additional amounts to the Holder of this Note or any
Coupon that is a United States Alien (as defined below) such amounts as may
be necessary so that every net payment on this Note or such Coupon, after
deduction or withholding for or on account of any present or future tax,
assessment or other governmental charge imposed by the United States (or any
political subdivision or taxing authority thereof or therein) upon or as a
result of such payment, will not be less than the amount provided in this
Note or such Coupon to be then due and payable. However, the Company will
not be required to make any such payment of additional interest to such
Holder for or on account of:
(a) any tax, assessment or other governmental charge that would
not have been imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of, or a possessor of a power over,
such Holder, if such Holder is an estate or a trust, or such Holder, if
such Holder is an estate, a trust, a partnership or a corporation) and
the United States, including, without limitation, such Holder (or such
fiduciary, settlor, beneficiary, member, shareholder or possessor) being
or having been a citizen or resident thereof or being or having been
engaged in trade or business or present therein or having or having had
a permanent establishment therein or (ii) such Holder's past or present
status as a personal holding company, foreign personal holding company
or private foundation or other tax-exempt organization with respect to
the United States or as a corporation that accumulates earnings to avoid
United States federal income tax;
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<PAGE>
(b) any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax, assessment or other governmental
charge;
(c) any tax, assessment or other governmental charge imposed by
reason of the presentation by the Holder of this Note or such Coupon for
payment on a date more than 10 days after the date on which such payment
became due and payable or the date on which payment thereof is duly
provided for, whichever occurs later;
(d) any tax, assessment or other governmental charge that is
payable otherwise than by withholding from a payment on this Note or
such Coupon;
(e) any tax, assessment or other governmental charge required to
be withheld by any Paying Agent from any payment of principal or
interest on this Note or such Coupon, if such payment can be made
without such withholding by any other Paying Agent in Western Europe;
(f) any tax, assessment or other governmental charge that would
not have been imposed but for the failure to comply with any applicable
certification, identification, documentation, information or other
reporting requirement concerning the nationality, residence, identity or
connection with the United States of the Holder or beneficial owner of
this Note or such Coupon if, without regard to any tax treaty, such
compliance is required by statute or by regulation of the United States
or of any political subdivision or taxing authority thereof or therein
as a pre-condition to relief or exemption from such tax, assessment or
other governmental charge; or
(g) any tax, assessment or other governmental charge imposed by
reason of such Holder's past or present status as (i) a controlled
foreign corporation that is related to the Company through stock
ownership or (ii) the actual or constructive owner of 10% or more of the
total combined voting power of all classes of stock of the Company
entitled to vote; or
(h) any combination of items (a), (b), (c), (d), (e), (f) or (g);
nor shall such additional amounts be paid with respect to a payment on this
Note or such Coupon to a United States Alien that is a fiduciary or
partnership or other than the sole beneficial owner of this Note or such
Coupon to the extent a beneficiary or settlor with respect to such fiduciary
or a member of such partnership or a beneficial owner would not have been
entitled to
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<PAGE>
the additional amounts had such beneficiary, settlor, member or beneficial
owner been the Holder of this Note or such Coupon.
The term "United States Alien" means any person that, for United
States federal income tax purposes, is a foreign corporation, a non-resident
alien individual, a non-resident alien fiduciary of a foreign estate or
trust, or a foreign partnership one or more of the members of which is, for
United States federal income tax purposes, a foreign corporation, a non-
resident alien individual or a non-resident alien fiduciary of a foreign
estate or trust.
If the Company shall determine that any payment made outside the
United States by the Company or any of its Paying Agents in respect of this
Note or any Coupon (an "Affected Security") would, under any present or
future laws or regulations of the United States, be subject to any
certification, identification, documentation, information or other reporting
requirement of any kind, the effect of which requirement is the disclosure to
the Company, any Paying Agent or any governmental authority of the
nationality, residence or identity of a beneficial owner of such Affected
Security that is a United States Alien (other than such a requirement (a)
that would not be applicable to a payment made by the Company or any of its
Paying Agents (i) directly to the beneficial owner or (ii) to a custodian,
nominee or other agent of the beneficial owner or (b) that can be satisfied
by such custodian, nominee or other agent certifying to the effect that the
beneficial owner is a United States Alien, provided, that, in any case
--------
referred to in clause (a)(ii) or (b), payment by the custodian, nominee or
agent to the beneficial owner is not otherwise subject to any such
requirement), then the Company shall elect either (x) to redeem such Affected
Securities in whole, but not in part, at their Redemption Price, or (y) if
the conditions described in the next succeeding paragraph are satisfied, to
pay the additional amounts specified in such paragraph. The Company shall
make such determination as soon as practicable and publish prompt notice
thereof (the "Determination Notice") stating the effective date of such
certification, identification, documentation, information or other reporting
requirement, whether the Company elects to redeem the Affected Securities or
to pay the additional amounts specified in the next succeeding paragraph and
(if applicable) the last date by which the redemption of the Affected
Securities must take place, as provided in the next succeeding sentence. If
any Affected Securities are to be redeemed pursuant to this paragraph, the
redemption shall take place on such date, not later than one year after the
publication of the Determination Notice, as the Company shall specify by
notice given to the Principal Paying Agent at least 60 days before the
redemption date. Notice of such redemption shall be given to the Holders of
the Affected Securities at least 30 but not more than 60 days prior to the
redemption date. Notwithstanding the foregoing, the
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<PAGE>
Company shall not so redeem the Affected Securities if the Company shall
subsequently determine, not less than 30 days prior to the redemption date,
that subsequent payments on the Affected Securities would not be subject to
any such certification, identification, documentation, information or other
reporting requirement, in which case the Company shall publish prompt notice
of such subsequent determination and any earlier redemption notice given
pursuant to this paragraph shall be revoked and of no further effect. Prior
to the publication of any Determination Notice pursuant to this paragraph,
the Company shall deliver to the Trustee a certificate stating that the
Company is obligated to make such determination and setting forth a statement
of facts showing that the conditions precedent to the obligation of the
Company to redeem the Affected Securities or to pay the additional amounts
specified in the next succeeding paragraph have occurred, and an opinion of
counsel to the effect that such conditions have occurred.
If and so long as the certification, identification, documentation,
information or other reporting requirement referred to in the preceding
paragraph would be fully satisfied by payment of a backup withholding tax or
similar charge, the Company may elect to pay such additional amounts as may
be necessary so that every net payment made outside the United States
following the effective date of such requirement by the Company or any of its
Paying Agents in respect of any Affected Security of which the beneficial
owner is a United States Alien (but without any requirement that the
nationality, residence or identity of such beneficial owner be disclosed to
the Company, any Paying Agent or any governmental authority), after deduction
or withholding for or on account of such backup withholding tax or similar
charge will not be less than the amount provided for in such Affected
Security to be then due and payable. However, the Company may elect not to
pay such additional amounts in respect of any backup withholding tax or
similar charge, which (a) would not be applicable to a payment of principal
of or interest on any Affected Security made by the Company or any one of its
paying agents (i) directly to the beneficial owner or to a custodian, nominee
or other agent of the beneficial owner of such Affected Security or (ii) if
such custodian nominee or other agent were to certify to the effect that such
beneficial owner is a United States Alien or (b) is imposed as a result of
presentation of such Affected Security for payment more than 10 days after
the date on which such payment became due and payable or on which payment
thereof is duly provided for, whichever occurred later. If the Company
elects to pay the additional amounts pursuant to this paragraph, then the
Company shall have the right to redeem the Affected Securities at any time in
whole, but not in part, at their Redemption Prices, without reducing such
Redemption Prices for applicable withholding taxes, subject to the provisions
of the last three sentences of the immediately preceding paragraph. If the
Company elects to pay additional
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<PAGE>
amounts pursuant to this paragraph and the condition specified in the first
sentence of this paragraph should no longer be satisfied, then the Company
shall redeem the Affected Securities pursuant to the applicable provisions of
the preceding paragraph. Any redemption payments made by the Company
pursuant to the two immediately preceding sentences shall be subject to the
continuing obligation of the Company to pay the additional amounts pursuant
to this paragraph.
The interest payable hereon on each Interest Payment Date will
equal the amount of interest accrued from and including the immediately
preceding Interest Payment Date in respect of which interest has been paid or
duly made available for payment (or from and including the date of issue, if
no interest has been paid hereon) to but excluding the related Interest
Payment Date or Maturity, as the case may be.
The Company has initially appointed as its Paying Agent for Bearer
Notes of this Series the office listed below:
Principal Paying Agent:
Morgan Guaranty Trust Company of New York
60 Victoria Embankment
London EC4Y 0JP
Paying Agent:
Banque General du Luxembourg S.A.
14 Rue Aldringen
L-2951 Luxembourg
Luxembourg
The Company reserves the right at any time to vary or terminate the
appointment of any Paying Agent and to appoint additional or other Paying
Agents and to approve any change in the office through which any Paying Agent
acts, provided that there will at all times be a Paying Agent (which may be
the Trustee) in at least one city in Europe which, so long as Bearer Notes
are listed on the Luxembourg Stock Exchange and the rules of the exchange
shall so require, shall include (or be) Luxembourg. Notice of any such
termination or appointment and of any changes in the specified offices of the
Trustee or any Paying Agent will be given to the Holder hereof as described
below.
Payment in Currencies Other Than the Specified Currency
-------------------------------------------------------
Except as set forth below with respect to payments in ECU, if
payment in respect of this Note or any Coupon is required to be made in a
specified currency other than U.S. dollars (a "Specified Currency") and such
currency is unavailable to the Company due to the imposition of exchange
controls or other
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<PAGE>
circumstances beyond the Company's control or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions of or within the international banking
community, then all payments shall be made in U.S. dollars until such
currency is again available to the Company or so used. The amounts so
payable on any date in such currency shall be converted into U.S. dollars on
the basis of the most recently available Market Exchange Rate for such
currency or as otherwise indicated on the face hereof. Any payment made
under such circumstances in U.S. dollars will not constitute an Event of
Default under the Indenture.
If payment in respect of this Note or any Coupon is required to be
made in ECU and the ECU are not then used in the European Monetary System
(the "EMS"), then the Trustee shall, without liability on its part, choose a
component currency (the "Payment Currency") of the ECU in which all payments
in respect hereof shall be made until the ECU are again so used. The amount
of each payment in such Payment Currency shall be computed on the basis of
the equivalent of the ECU in that currency, determined as described below, as
of the fourth Luxembourg business day prior to the date on which such payment
is due. Notice of the Payment Currency selected by the Trustee shall be
given as described below. Any payment made under such circumstances in the
Payment Currency will not constitute an Event of Default under the Indenture.
Notwithstanding the foregoing, on the first Luxembourg business day
on which the ECU is no longer used in the EMS, the Trustee shall, without
liability on its part, choose a Payment Currency in which all payments with
respect to Bearer Notes and Coupons denominated in ECU having a due date
prior thereto but not yet presented for payment are to be made. The amount
of each payment in such Payment Currency shall be computed on the basis of
the equivalent of the ECU in that currency, determined as described below, as
of such first Luxembourg business day. Any payment made under such
circumstances in the Payment Currency will not constitute an Event of Default
under the Indenture.
The equivalent of the ECU in the relevant Payment Currency as of
any date (the "Day of Valuation") shall be determined by the Luxembourg Stock
Exchange on the following basis. The component currencies of the ECU for
this purpose (the "Components") shall be the currency amounts that were
components of the ECU when the ECU was most recently used in the EMS or for
the settlement of transactions by public institutions of or within the
European Community. The equivalent of the ECU in the Payment Currency shall
be calculated by, first, aggregating the U.S. dollar equivalents of the
Components, and then, using the rate used for determining the U.S. dollar
equivalents of the Components in the Payment Currency as set forth below,
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<PAGE>
calculating the equivalent in the Payment Currency of such aggregate amount
in U.S. dollars.
The U.S. dollar equivalent of each of the Components shall be
determined by the Luxembourg Stock Exchange on the basis of the middle spot
delivery quotations prevailing at 2:30 p.m. Luxembourg time on the Day of
Valuation, as obtained by the Luxembourg Stock Exchange from one or more
major banks, selected by the Trustee (with the approval of the Company), in
the country of issue of the Component in question.
If the official unit of any component currency of the ECU is
altered by way of combination or subdivision, the number of units of that
currency as a Component shall be divided or multiplied in the same
proportion. If two or more component currencies are consolidated into a
single currency, the amounts of those currencies as Components shall be
replaced by an amount in such single currency equal to the sum of the amounts
of the consolidated component currencies expressed in such single currency.
If any component currency is divided into two or more currencies, the amount
of that currency as a Component shall be replaced by amounts of such two or
more currencies, each of which shall be equal to the amount of the former
component currency divided by the number of currencies into which that
currency was divided.
If no direct quotations are available for a Component on a Day of
Valuation from any of the banks selected by the Trustee (with the approval of
the Company) for this purpose, because foreign exchange markets are closed in
the country of issue of that Component, or for any other reason, in computing
the U.S. dollar equivalent of such Component the Luxembourg Stock Exchange
shall (except as provided below) use the most recent direct quotations for
such Component obtained by it, provided that such most recent quotations may
--------
be used only if they were prevailing in the country of issue not more than
two Luxembourg business days before such Day of Valuation. Beyond such
period of two Luxembourg business days, the Luxembourg Stock Exchange shall
determine the U.S. dollar equivalent of such Component on the basis of cross
rates derived from the middle spot delivery quotations for such Component and
for the U.S. dollar prevailing at 2:30 p.m. Luxembourg time on such Day of
Valuation, as obtained by the Luxembourg Stock Exchange from one or more
major banks, selected by the Trustee (with the approval of the Company), in a
country other than the country of issue of such Component. Notwithstanding
the foregoing, within such period of two Luxembourg business days, the
Luxembourg Stock Exchange shall determine the U.S. dollar equivalent of such
Component on the basis of such cross rates if the Trustee and the Company
judge that the equivalent so calculated is more representative than the U.S.
dollar equivalent calculated on the basis of such most recent direct
quotations. Unless otherwise specified by the
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<PAGE>
Trustee, if there is more than one market for dealing in any component
currency by reason of foreign exchange regulations or for any other reason,
the market to be referred to in respect of such currency shall be that upon
which a nonresident issuer of securities denominated in such currency would
purchase such currency in order to make payments in respect of such
securities.
All determinations referred to above made by the Trustee or the
Luxembourg Stock Exchange shall be at their respective sole discretion
(except to the extent expressly provided herein that any determination made
by the Trustee is subject to the approval of the Company) and shall, in the
absence of manifest error, be conclusive for all purposes and binding on
Holders of the Bearer Notes and any Coupons, and the Trustee shall have no
liability therefor.
If an Event of Default with respect to the Notes shall have
occurred and be continuing, the principal of all Notes may be declared due
and payable in the manner and with the effect provided in the Indenture.
If this Note is an Original Issue Discount Note, the amount payable
in the event of redemption or repayment prior to its Stated Maturity shall be
the Amortized Face Amount of this Note as of the date of redemption or the
date of repayment, as the case may be. The "Amortized Face Amount" of this
Note shall be the amount equal to (a) the Issue Price (set forth on the face
hereof) plus (b) that portion of the difference between the Issue Price and
the principal amount hereof that has accrued at the Yield to Stated Maturity
(set forth on the face hereof) (computed in accordance with generally
accepted United States bond yield computation principles) by such date of
redemption or repayment, but in no event shall the Amortized Face Amount of
this Note exceed its principal amount.
As provided in the Indenture and subject to certain limitations
therein set forth, this Note is exchangeable for a like aggregate principal
amount of Bearer Notes of different authorized denominations, as requested by
the Person surrendering the same.
No service charge shall be made for any such exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
In case this Note or any Coupon shall at any time become mutilated,
destroyed, stolen or lost, it may be replaced at the specified office of the
Principal Paying Agent in London; or, so long as the Bearer Notes are listed
on the Luxembourg Stock Exchange, at the specified office of the Paying Agent
in Luxembourg, upon payment by the claimant of such expenses as may
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be incurred in connection therewith and, in the case of destruction, theft or
loss, on such terms as to evidence thereof and indemnity as the Company or
the Trustee may reasonably require. Mutilated or defaced Bearer Notes or
Coupons must be surrendered before replacements will be issued.
The Indenture permits with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Debt Securities of each
series to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of not less than 66-2/3% in aggregate
principal amount of the Debt Securities at the time Outstanding of each
series to be affected. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the Debt
Securities of any series at the time Outstanding, on behalf of the Holders of
all the Debt Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all
future Holders hereof and of any Note issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
Holders of Debt Securities of this series may not enforce their
rights pursuant to the Indenture or such Debt Securities except as provided
in the Indenture. No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Note at the times, place and rate, and
in the coin or currency, herein prescribed.
The Company may, without the consent of the Holders of the Notes,
consolidate with, merge into, or transfer substantially all of its assets to,
a corporation that is a U.S. Person, provided that the successor corporation
assumes all obligations of the Company under the Notes and certain other
conditions are met.
Except as provided above, the obligation to pay the principal
hereof (and premium if any) and interest hereon in the designated currency of
payment is of the essence. To the fullest extent possible under applicable
law, judgments in respect of this Note shall be given in such currency. The
obligation of the Company to make such payments in the designated currency of
payment shall, notwithstanding any payment in any other currency (whether
pursuant to a judgment or otherwise), be discharged only to the extent of the
amount in the designated currency of payment that the Holder of this Note
may, in accordance with normal
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banking procedures, purchase with the sum paid in such other currency (after
any premium and cost of exchange) on the business day in the country of issue
of the designated currency of payment or in the international banking
community (in the case of a composite currency) immediately following the day
on which such Holder receives such payment. If the amount in the designated
currency of payment that may be so purchased is for any reason less than the
amount originally due, the Company shall, as a separate and independent
obligation, pay such additional amounts in the designated currency of payment
as may be necessary to compensate for any such shortfall.
All notices to Holders of this Note will be deemed to have been
duly given if published on two Business Days in a leading London daily
newspaper (which is expected to be the Financial Times) and, so long as the
---------------
Bearer Notes are listed on the Luxembourg Stock Exchange and the rules of
such exchange so require, in Luxembourg in a newspaper of general circulation
in Luxembourg (which is expected to be the Luxemburger Wort). Such notices
----------- ----
shall be deemed to have been given on the date of the first such publication.
This Note shall be deemed to be a contract made and to be performed
solely in the State of New York, and for all purposes shall be governed by,
and construed in accordance with, the laws of said State without regard to
the conflicts of law rules of said State.
All terms used in this Note that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
R-12
<PAGE>
Exhibit 4(j)
SERIES E FLOATING RATE BEARER NOTE
McDONALD'S CORPORATION
BEARER PRINCIPAL AMOUNT
No.
MEDIUM-TERM NOTE, SERIES E
(Floating Rate)
Due from 184 Days to 60 Years from Date of Issue
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTION 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "YIELD TO STATED MATURITY"
AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) SET
FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL
INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
Issue Price: Original Issue Date:
Initial Interest Rate: Stated Maturity:
Specified Currency:
(Applicable only if other than U.S. dollars)
Authorized Denominations:
(Applicable only if other than U.S. $25,000 and increments of U.S. $5,000
Specified Currency is other than U.S. dollars)
Base Rate: [ ] CD Rate [ ] Commercial Paper [ ] CMT Rate [ ] Federal Funds Rate
[ ] LIBOR [ ] Treasury Rate [ ] Prime Rate
[ ] Other (see attached)
If Base Rate is CMT Rate, specify Designated CMT Telerate Page:
If Base Rate is LIBOR, specify:
LIBOR Reuters:
Designated LIBOR Page:
LIBOR Telerate:
Interest Reset Period: Index Currency: Index Maturity:
Interest Payment Dates:
Spread Multiplier: Spread (+/-):
Maximum Interest Rate: Minimum Interest Rate:
Optional Redemption: [ ] Yes [ ] No
Optional Redemption Dates:
Redemption Prices:
[ ] The Redemption Price shall initially be % of the principal amount of
the Note to be redeemed and shall decline at each anniversary of the
initial Optional Redemption Date by % of the principal amount to be
redeemed until the Redemption Price is 100% of such principal amount;
provided, however, that if this Note is an Original Issue Discount
-------- -------
Note, the Redemption Price shall be the Amortized Face Amount of the
principal amount to be redeemed.
[ ] Other:
Sinking Fund: Amortizing Note:
Sinking Fund Dates: Amortization Schedule:
Sinking Fund Amounts:
Optional Repayment: Original Issue Discount Note:
Optional Repayment Dates: Total Amount of OID:
Optional Repayment Prices: Yield to Stated Maturity:
Initial Accural Period OID:
Calculation Agent (if other than
Principal Paying Agent):
F-1
<PAGE>
McDONALD'S CORPORATION, a corporation duly organized and
existing under the laws of the State of Delaware (the "Company"), for
value received, hereby promises to pay to bearer, upon presentation and
surrender hereof, the principal amount of ______________________________
(Specified Currency) on the Stated Maturity shown above, and to pay
accrued interest thereon in arrears to the bearer of the interest coupons
attached hereto (the "Coupons") upon surrender thereof as they shall
severally mature at the rates per annum and on the dates, determined as
described on the reverse hereof, until said principal amount is paid or
duly provided for in accordance with the terms hereof. For purposes of
this Note, "Business Day" means any day, other than a Saturday or Sunday,
that is (i) neither a legal holiday nor a day on which banking
institutions are authorized or required by law, regulation or executive
order to close in (a) The City of New York, (b) the City of Chicago or
(c) if the Specified Currency for this Note is other than U.S. dollars,
the principal financial center of the country issuing such Specified
Currency (which, in the case of ECU, shall be Luxembourg); (ii) if the
Specified Currency for this Note is ECU, not a day designated as an ECU
Non-Settlement Day by the ECU Banking Association (or otherwise generally
regarded in the ECU interbank market as day on which payments in ECU
shall not be made); and (iii) if this Note is a LIBOR Note, a London
Business Day (as defined below). "London Business Day" means any day (i)
if the Index Currency (as defined below) is other than ECU, on which
dealings in such Index Currency are transacted in the London interbank
market or (ii) if the Index Currency is ECU, that is not designated as an
ECU Non-Settlement Day by the ECU Banking Association (or otherwise
generally regarded in the ECU interbank market as a day on which payments
in ECU shall not be made).
Except under certain circumstances for Notes having Specified
Currencies other than U.S. dollars, payments of the principal hereof and
any premium and interest hereon will be made only in the Specified
Currency. Payments in respect of this Note and any Coupon will be made
only against surrender of this Note or such Coupon, at the offices of the
Paying Agents outside the United States listed on the reverse hereof. At
the direction of the Holder of this Note or any Coupon, and subject to
applicable laws and regulations, such payments will be made by check
drawn on a bank in The City of New York mailed to an address outside the
United States furnished by the Holder hereof or, at the option of the
Holder hereof, by wire transfer (pursuant to written instructions
supplied by the Holder hereof) to an account maintained by the payee with
a bank located outside the United States. No payment in respect of this
Note or any Coupon will be made upon presentation of this Note or such
Coupon at any office or agency of the Trustee or any other
F-2
<PAGE>
paying agency maintained by the Company in the United States, nor will
any such payment be made by transfer to an account, or by mail to an
address, in the United States. Notwithstanding the foregoing, if U.S.
dollar payments in respect of this Note or any Coupons at the offices of
all Paying Agents outside the United States become illegal or are
effectively precluded because of the imposition of exchange controls or
similar restrictions on the full payment or receipt of such amounts in
U.S. dollars, the Company will appoint an office or agency (which may be
the Trustee) in the United States at which such payments may be made.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE
SET FORTH ON THE REVERSE HEREOF, AND SUCH FURTHER PROVISIONS SHALL FOR
ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS
PLACE.
This Note shall not become valid or obligatory for any purpose
unless and until this Note has been authenticated by First Fidelity Bank,
National Association, or its successor, as Trustee.
F-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be
executed under its corporate seal.
Dated:
McDONALD'S CORPORATION
By_____________________________________
Vice President and Treasurer
[Seal]
Attest:________________________________
[Assistant] Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Bearer Notes issued under the Indenture
mentioned within.
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
as Trustee
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, LONDON OFFICE,
as Authenticating Agent
By_____________________________________
Authorized Signatory
F-4
<PAGE>
McDONALD'S CORPORATION
MEDIUM-TERM NOTE, SERIES E
(FLOATING RATE)
General
-------
This Note is one of a series of duly authorized debt securities
of the Company (the "Debt Securities") issued or to be issued in one or
more series under an indenture dated as of March 1, 1987 (the
"Indenture") between the Company and First Fidelity Bank, National
Association (formerly Fidelity Bank, National Association), as trustee
(the "Trustee", which term includes any successor Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Debt Securities and of the terms upon
which the Debt Securities are, and are to be, authenticated and
delivered. This Debt Security is one of a series designated on the face
hereof limited to an aggregate initial public offering price or purchase
price of up to U.S.$584,662,000 or the equivalent thereof in one or more
foreign or composite currencies, subject to reduction as a result of the
sale of other Debt Securities. The U.S. dollar equivalent of the public
offering price or purchase price of Notes denominated in currencies other
than U.S. dollars will be determined by an agent designated by the
Company, which initially shall be Morgan Guaranty Trust Company of New
York, 60 Wall Street, New York, New York (the "Paying Agent"), on the
basis of the noon buying rate in The City of New York for cable transfers
in foreign currencies as certified for customs purposes by the Federal
Reserve Bank of New York (the "Market Exchange Rate") for such currencies
on the applicable trade dates; provided, however, that in the case of
-------- -------
ECU, the Market Exchange Rate shall be the rate of exchange determined by
the Commission of the European Communities (or any successor thereof) as
published in the Official Journal of the European Communities, or any
successor publication, on the applicable issue dates.
"Maturity," when used with respect to this Note, means the date
on which the principal of this Note or an installment of principal
becomes due and payable as provided herein or in the Indenture, whether
at Stated Maturity or by
R-1
<PAGE>
declaration of acceleration, call for redemption or otherwise.
The authorized denominations of Bearer Notes denominated in
U.S. dollars will be U.S.$25,000 and any larger amount that is an
integral multiple of U.S.$5,000, unless otherwise specified on the face
hereof. The authorized denominations of Bearer Notes denominated in
currencies other than U.S. dollars will be as set forth on the respective
faces thereof.
If so specified on the face hereof, this Note will be
redeemable at the option of the Company in whole or from time to time in
part, on the dates designated as the Optional Redemption Dates on the
face hereof, upon the Company's giving the Trustee and the Principal
Paying Agent at least 45 days' notice, at the Redemption Price determined
as provided on the face hereof. Notice of any such redemption will be
given to record Holders of Notes, as set forth below, upon at least 30
but not more than 60 days prior to any Optional Redemption Date. If
redeemed prior to its Stated Maturity, this Note must be presented for
payment together with all unmatured Coupons, if any, appertaining hereto,
failing which the amount of any missing unmatured Coupon will be deducted
from the sum due for payment. Unless otherwise specified on the face
hereof, the Bearer Notes will not be subject to any sinking fund. Any
such sinking fund shall be administered in accordance with the terms
specified on the face hereof and otherwise as set forth in the Indenture.
If the Company has or will become obligated to pay additional
amounts on the Bearer Notes as described below as a result of any change
in, or amendment to, the laws (or any regulations or rulings promulgated
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, or any change in
official position regarding the application or interpretation of such
laws, regulations or rulings, which change or amendment is enacted or
becomes effective (regardless of when announced) on or after the Original
Issue Date, and such obligation cannot be avoided by the Company taking
reasonable measures available to it, then the Company may, at its option,
redeem the Bearer Notes in whole, but not in part, at any time on giving
at least 30 but not more than 60 days' notice as set forth below, which
notice shall be irrevocable, calculated without premium, at 100% of their
principal amount, plus accrued interest to the redemption date; provided,
--------
however, that if this Note is an Original Issue Discount Note, the
-------
redemption price hereof shall be limited to the sum of (i) the aggregate
principal amount hereof multiplied by the Issue Price hereof (expressed
as a percentage of the aggregate principal amount) and (ii) the original
issue discount accrued hereon from the Original Issue
R-2
<PAGE>
Date to the date fixed for redemption, which amortization shall be
calculated using the "interest method" (computed in accordance with
generally accepted accounting principles in effect on the date of notice
of redemption). No such notice of redemption shall be given earlier than
90 days prior to the earliest date on which the Company would be
obligated to pay such additional amounts were a payment in respect of the
Bearer Notes then due. Prior to the publication of any notice of
redemption pursuant to this paragraph, the Company shall deliver to the
Trustee a certificate stating that the Company is entitled to effect such
redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Company so to redeem have
occurred, and an opinion of counsel to the effect that the Company has or
will become obligated to pay such additional amounts as a result of such
change or amendment.
If so specified on the face hereof, this Note will be repayable
prior to its Stated Maturity at the option of the Holder on the Optional
Repayment Dates shown on the face hereof at the Optional Repayment Prices
shown on the face hereof, together with accrued interest to the date of
repayment. In order for this Note to be repaid, the Principal Paying
Agent (as specified below) must receive the Note at least 30 but not more
than 45 days prior to an Optional Repayment Date. Any tender of this
Note for repayment shall be irrevocable. The repayment option may be
exercised by the Holder hereof for less than the entire principal amount
hereof, provided that the principal amount of the Note remaining
--------
outstanding after repayment is an authorized denomination. Upon such
partial repayment, this Note shall be cancelled and a new Note or Notes
for the remaining principal amount hereof shall be issued to the Holder
of this Note.
Payment of Additional Amounts
-----------------------------
The Company will, subject to the exceptions and limitations set
forth below, pay such additional amounts to the Holder of this Note or
any Coupon that is a United States Alien (as defined below) such amounts
as may be necessary so that every net payment on this Note or such
Coupon, after deduction or withholding for or on account of any present
or future tax, assessment or other governmental charge imposed by the
United States (or any political subdivision or taxing authority thereof
or therein) upon or as a result of such payment, will not be less than
the amount provided in this Note or such Coupon to be then due and
payable. However, the Company will not be required to make any such
payment of additional interest to such Holder for or an account of:
R-3
<PAGE>
(a) any tax, assessment or other governmental charge that
would not have been imposed but for (i) the existence of any present
or former connection between such Holder (or between a fiduciary,
settlor, beneficiary, member or shareholder of, or possessor of a
power over, such Holder, if such Holder is an estate, a trust, a
partnership or a corporation) and the United States, including,
without limitation, such Holder (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) being or having been
a citizen or resident thereof or being or having been engaged in
trade or business or present therein or having or having had a
permanent establishment therein or (ii) such Holder's past or
present status as a personal holding company, foreign personal
holding company or private foundation or other tax-exempt
organization with respect to the United States or as a corporation
that accumulates earnings to avoid United States federal income tax;
(b) any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax, assessment or other governmental
charge;
(c) any tax, assessment or other governmental charge imposed
by reason of the presentation by the Holder of this Note or such
Coupon for payment on a date more than 10 days after the date on
which such payment became due and payable or the date on which
payment thereof is duly provided for, whichever occurs later;
(d) any tax, assessment or other governmental charge that is
payable otherwise than by withholding from a payment on this Note or
such Coupon;
(e) any tax, assessment or other governmental charge required
to be withheld by any Paying Agent from any payment of principal or
interest on this Note or such Coupon, if such payment can be made
without such withholding by any other Paying Agent in Western
Europe;
(f) any tax, assessment or other governmental charge that
would not have been imposed but for the failure to comply with any
applicable certification, identification, documentation, information
or other reporting requirement concerning the nationality,
residence, identity or connection with the United States of the
Holder or beneficial owner of this Note or such Coupon if, without
regard to any tax treaty, such compliance is required by statute or
by regulation of the United States or of any political subdivision
or taxing authority thereof or therein as a pre-condition
R-4
<PAGE>
to relief or exemption from such tax, assessment or other
governmental charge; or
(g) any tax, assessment or other governmental charge imposed
by reason of such Holder's past or present status as (i) a
controlled foreign corporation that is related to the Company
through stock ownership or (ii) the actual or constructive owner of
10% or more of the total combined voting power of all classes of
stock of the Company entitled to vote; or
(h) any combination of items (a), (b), (c), (d), (e), (f) or
(g);
nor shall such additional amounts be paid with respect to a payment on
this Note or such Coupon to a United States Alien that is a fiduciary or
partnership or other than the sole beneficial owner of this Note or such
Coupon to the extent a beneficiary or settlor with respect to such
fiduciary or a member of such partnership or a beneficial owner would not
have been entitled to the additional amounts had such beneficiary,
settlor, member or beneficial owner been the Holder of this Note or such
Coupon.
The term "United States Alien" means any Person that, for
United States federal income tax purposes, is a foreign corporation, a
non-resident alien individual, a non-resident alien fiduciary of a
foreign estate or trust or foreign partnership one or more of the members
of which is, for United States federal income tax purposes, a foreign
corporation, a non-resident alien individual or a non-resident alien
fiduciary of a foreign estate or trust.
The Company has initially appointed as its Paying Agents for
Bearer Notes of this Series the offices listed below:
Principal Paying Agent:
Morgan Guaranty Trust Company of New York
60 Victoria Embankment
London EC4Y 0JP
Paying Agent:
Banque Generale du Luxembourg S.A.
14 Rue Aldringen
L-2951 Luxembourg
Luxembourg
The Company reserves the right at any time to vary or terminate
the appointment of any Paying Agent and to
R-5
<PAGE>
appoint additional or other Paying Agents and to approve any change in
the office through which any Paying Agent acts, provided that there will
--------
at all times be a Paying Agent (which may be the Trustee) in at least one
city in Europe, which, so long as Bearer Notes are listed on the
Luxembourg Stock Exchange and the rules of the exchange shall so require,
shall include (or be) Luxembourg. Notice of any such termination or
appointment and of any changes in the specified offices of the Trustee or
any Paying Agent will be given to the Holder hereof as described below.
This Note will bear interest from its Original Issue Date to
the first Interest Reset Date (as defined below) at the Initial Interest
Rate set forth on the face hereof. Thereafter, the interest rate hereon
for each Interest Reset Period (as defined below) will be determined by
reference to an interest rate basis (the "Base Rate"), plus or minus the
Spread, if any, and/or multiplied by the Spread Multiplier, if any. The
"Spread" is the number of basis points (one basis point equals one one-
hundredth of a percentage point) that may be specified on the face
hereof, and the "Spread Multiplier" is the percentage that may be
specified on the face hereof. The face of this Note will designate one
or more of the following Base Rates as applicable hereto: (i) the CD
Rate (a "CD Rate Note"), (ii) the CMT Rate (a "CMT Rate Note") (iii) the
Commercial Paper Rate (a "Commercial Paper Rate Note"), (iv) the Federal
Funds Rate (a "Federal Funds Rate Note"), (v) LIBOR (a "LIBOR Note"),
(vi) the Treasury Rate (a "Treasury Rate Note"), (vii) the Prime Rate (a
"Prime Rate Note") or (viii) such other Base Rate or formula as is set
forth on the face hereof. The "Index Maturity" is the period of maturity
of the instrument, obligation or index from which the Base Rate is
calculated. "H.15(519)" means the publication entitled "Statistical
Release H.15(519), Selected Interest Rates", or any successor
publication, published by the Board of Governors of the Federal Reserve
System. "Composite Quotations" means the daily statistical release
entitled "Composite 3:30 p.m. Quotations for U.S. Government Securities"
published by the Federal Reserve Bank of New York.
Unless otherwise specified on the face hereof, the interest
payable hereon shall be the accrued interest from and including the
Original Issue Date or the last date to which interest has been paid or
duly provided for, as the case may be, to but excluding the applicable
Interest Payment Date or Maturity, as the case may be. Unless otherwise
specified on the face hereof, accrued interest will be calculated by
multiplying the principal amount hereof by an accrued interest factor.
Such accrued interest factor shall be computed by adding the interest
factors calculated for
R-6
<PAGE>
each day in the period for which accrued interest is being calculated.
Unless otherwise specified on the face hereof, the interest factor
(expressed as a decimal calculated to seven decimal places without
rounding) for each such day shall be computed by dividing the interest
rate in effect on such day by 360 if the Base Rate specified on the face
hereof is the CD Rate, the Commercial Paper Rate, the Federal Funds Rate
LIBOR or the Prime Rate, or by the actual number of days in the year if
the Base Rate specified on the face hereof is the Treasury Rate or the
CMT Rate. For purposes of making the foregoing calculation, the interest
rate in effect on any Interest Reset Date will be the applicable rate as
reset on such date. Unless otherwise specified on the face hereof, all
percentages resulting from any calculation of the rate of interest hereon
will be rounded, if necessary, to the nearest 1/100,000 of 1% (.0000001),
with five one-millionths of a percentage point rounded upward, and all
currency amounts used in or resulting from such calculation will be
rounded to the nearest one-hundredth of a unit (with .005 of a unit being
rounded upward).
As specified on the face hereof, the interest rate hereon will
be reset daily, weekly, monthly, quarterly, semiannually or annually
(such period being the "Interest Reset Period", and the first day of each
Interest Reset Period being an "Interest Reset Date"). Unless otherwise
specified on the face hereof, the Interest Reset Date will be, if this
Note resets daily, each Business Day; if this Note is not a Treasury Rate
Note and it resets weekly, Wednesday of each week; if this Note is a
Treasury Rate Note that resets weekly, Tuesday of each week (except as
provided below under "Determination of Treasury Rate"); if this Note
resets monthly, the third Wednesday of each month; if this Note resets
quarterly, the third Wednesday of March, June, September and December of
each year; if this Note resets semiannually, the third Wednesday of each
of two months of each year specified on the face hereof; and if this Note
resets annually, the third Wednesday of one month of each year specified
on the face hereof. If an Interest Reset Date for this Note would
otherwise be a day that is not a Business Day, such Interest Reset Date
shall be postponed to the next succeeding Business Day, except that if
this Note is a LIBOR Note and such Business Day is in the next succeeding
calendar month, such Interest Reset Date shall be the immediately
preceding Business Day. Notwithstanding the foregoing, the interest rate
hereon during any interest period shall not be greater than the Maximum
Interest Rate, if any, or less than the Minimum Interest Rate, if any,
shown on the face hereof. In addition to any Maximum Interest Rate that
may be applicable hereto, the interest rate hereon during any interest
period will in no event be higher than the maximum rate permitted by
applicable law as the same may be modified
R-7
<PAGE>
by United States law of general application. This Note will be governed
by the law of the State of New York and, under such law, the maximum rate
of interest, with certain exceptions, is currently 25% per annum on a
simple interest basis.
Unless otherwise indicated on the face hereof and except as
provided below, interest will be payable, if this Note resets daily,
weekly or monthly, on the third Wednesday of each month or on the third
Wednesday of March, June, September and December of each year, as
specified on the face hereof; if this Note resets quarterly, on the third
Wednesday of March, June, September and December of each year; if this
Note resets semiannually, on the third Wednesday of each of the two
months of each year specified on the face hereof; and if this Note resets
annually, on the third Wednesday of one month of each year specified on
the face hereof (each such day being an "Interest Payment Date") and, in
each case, at Maturity. If any Interest Payment Date (other than at
Maturity) would otherwise be a day that is not a Business Day, such
Interest Payment Date shall be postponed to the next succeeding Business
Day, except that, if the Base Rate specified on the face hereof is LIBOR
and such Business Day would fall in the next succeeding calendar month,
such Interest Payment Date shall be the immediately preceding Business
Day.
If the Maturity of this Note falls on a day that is not a
Business Day, the required payment of principal, premium (if any) and/or
interest will be made on the next succeeding Business Day as if made on
the date such payment was due, and no interest shall accrue on such
payment for the period from and after Maturity to the date of such
payment on the next succeeding Business Day.
The Company will appoint, and enter into an agreement with, an
agent ("Calculation Agent") to calculate interest rates on this Note.
All determinations of interest rates by the Calculation Agent shall, in
the absence of manifest error, be conclusive for all purposes and binding
on the Holder hereof. Unless otherwise specified on the face hereof,
Morgan Guaranty Trust Company of New York shall be the Calculation Agent
for this Note. At the request of the Holder hereof, the Calculation
Agent will provide to such Holder the interest rate then in effect, and,
if determined, the interest rate that will become effective on the next
Interest Reset Date. In addition, such information will be communicated
to the Luxembourg Stock Exchange and will be made available at the
offices of the Paying Agent in Luxembourg and at the Luxembourg Stock
Exchange.
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<PAGE>
Subject to applicable provisions of law and except as specified
herein, on each Interest Reset Date the rate of interest hereon shall be
the rate determined in accordance with the provisions under the
applicable heading below.
Determination of CD Rate
------------------------
If the Base Rate specified on the face hereof is the CD Rate,
this Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the CD Rate and the Spread
and/or Spread Multiplier, if any, specified on the face hereof. The "CD
Rate" for each Interest Reset Period shall be the rate as of the second
Business Day prior to the Interest Reset Date for such Interest Reset
Period (a "CD Rate Determination Date") for negotiable certificates of
deposit having the Index Maturity specified on the face hereof, as
published in H.15(519) under the heading "CDs (Secondary Market)". In the
event that such rate is not published prior to 3:00 p.m., New York City
time, on the Calculation Date (as defined below) pertaining to such CD
Rate Determination Date, then the "CD Rate" for such Interest Reset
Period will be the rate on such CD Rate Determination Date for negotiable
certificates of deposit of the Index Maturity specified on the face
hereof as published in Composite Quotations under the heading
"Certificates of Deposit". If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not yet published in either H.15(519) or
Composite Quotations, then the "CD Rate" for such Interest Reset Period
will be calculated by the Calculation Agent and will be the arithmetic
mean of the secondary market offered rates as of 10:00 a.m., New York
City time, on such CD Rate Determination Date, of three leading nonbank
dealers in negotiable U.S. dollar certificates of deposit in The City of
New York selected by the Calculation Agent for negotiable certificates of
deposit of major money market banks (in the market for negotiable
certificates of deposit) with a remaining maturity closest to the Index
Maturity specified on the face hereof in a denomination of $5,000,000;
provided, however, that if the three dealers selected as aforesaid by the
-------- -------
Calculation Agent are not quoting offered rates as mentioned in this
sentence, the "CD Rate" for such Interest Reset Period will be the CD
Rate in effect on such CD Rate Determination Date, or, if none, the
Initial Interest Rate.
The "Calculation Date" pertaining to any CD Rate Determination
Date shall be the earlier of (i) the tenth calendar day after such CD
Rate Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding
the applicable Interest Payment Date or Maturity, as the case may be.
R-9
<PAGE>
Determination of Commercial Paper Rate
--------------------------------------
If the Base Rate specified on the face hereof is the Commercial
Paper Rate, this Note will bear interest for each Interest Reset Period
at the interest rate calculated with reference to the Commercial Paper
Rate and the Spread and/or Spread Multiplier, if any, specified on the
face hereof. The "Commercial Paper Rate" for each Interest Reset Period
will be determined by the Calculation Agent as of the second Business Day
prior to the Interest Reset Date for such Interest Reset Period (a
"Commercial Paper Rate Determination Date") and shall be the Money Market
Yield (as defined below) on such Commercial Paper Rate Determination Date
of the rate for commercial paper having the Index Maturity specified on
the face hereof, as such rate shall be published in H.15(519) under the
heading "Commercial Paper". In the event that such rate is not published
prior to 3:00 p.m., New York City time, on the Calculation Date (as
defined below) pertaining to such Commercial Paper Rate Determination
Date, then the "Commercial Paper Rate" for such Interest Reset Period
shall be the Money Market Yield on such Commercial Paper Rate
Determination Date of the rate for commercial paper of the Index Maturity
specified on the face hereof as published in Composite Quotations under
the heading "Commercial Paper". If by 3:00 p.m., New York City time, on
such Calculation Date such rate is not yet published in either H.15(519)
or Composite Quotations, then the "Commercial Paper Rate" for such
Interest Reset Period shall be the Money Market Yield of the arithmetic
mean of the offered rates, as of 11:00 a.m., New York City time, on such
Commercial Paper Rate Determination Date of three leading dealers of
commercial paper in The City of New York selected by the Calculation
Agent for commercial paper of the Index Maturity specified on the face
hereof placed for an industrial issuer whose bonds are rated "AA" or the
equivalent thereof by a nationally recognized statistical rating agency;
provided, however, that if the three dealers selected as aforesaid by the
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Calculation Agent are not quoting offered rates as mentioned in this
sentence, the "Commercial Paper Rate" for such Interest Reset Period will
be the Commercial Paper Rate in effect on such Commercial Paper Rate
Determination Date, or, if none, the Initial Interest Rate.
"Money Market Yield" shall be a yield calculated in accordance
with the following formula:
Money Market Yield = D x 360 x 100
---------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper
quoted on a bank discount basis and expressed as a decimal, and "M"
refers to the actual number
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<PAGE>
of days in the period for which accrued interest is being calculated.
The "Calculation Date" pertaining to any Commercial Paper Rate
Determination Date shall be the earlier of (i) the tenth calendar day
after such Commercial Paper Rate Determination Date or, if such day is
not a Business Day, the next succeeding Business Day or (ii) the Business
Day immediately preceding the applicable Interest Payment Date or
Maturity, as the case may be.
Determination of Federal Funds Rate
-----------------------------------
If the Base Rate specified on the face hereof is the Federal
Funds Rate, this Note will bear interest for each Interest Reset Period
at the interest rate calculated with reference to the Federal Funds Rate
and the Spread and/or Spread Multiplier, if any, specified on the face
hereof. The "Federal Funds Rate" for each Interest Reset Period shall be
the effective rate on the second Business Day immediately prior to the
Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate
Determination Date") for Federal Funds as published in H.15(519) under
the heading "Federal Funds (Effective)". In the event that such rate is
not published prior to 3:00 p.m., New York City time, on the Calculation
Date (as defined below) pertaining to such Federal Funds Rate
Determination Date, the "Federal Funds Rate" for such Interest Reset
Period shall be the rate on such Federal Funds Rate Determination Date as
published in Composite Quotations under the heading "Federal
Funds/Effective Rate". If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not yet published in either H.15(519) or
Composite Quotations, then the "Federal Funds Rate" for such Interest
Reset Period shall be the arithmetic mean of the rate, as of 9:00 a.m.,
New York City time, on the Federal Funds Rate Determination Date for the
last transaction of not less than $5,000,000 in overnight federal funds
arranged by each of three leading brokers of federal funds transactions
in The City of New York selected by the Calculation Agent for such
Federal Funds Rate Note; provided, however, that if the brokers selected
-------- -------
as aforesaid by the Calculation Agent are not quoting as set forth above,
the "Federal Funds Rate" for such Interest Reset Period will be the
Federal Funds Rate in effect on such Federal Funds Rate Determination
Date, or, if none, the Initial Interest Rate.
The "Calculation Date" pertaining to any Federal Funds Rate
Determination Date shall be the earlier of (i) the tenth calendar day
after such Federal Funds Rate Determination Date or, if such day is not a
Business Day, the next succeeding Business Day or (ii) the Business Day
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immediately preceding the applicable Interest Payment Date or Maturity,
as the case may be.
Determination of LIBOR
----------------------
If the Base Rate specified on the face hereof is LIBOR, this
Note will bear interest for each Interest Reset Period at the interest
rate calculated with reference to LIBOR and the Spread and/or Spread
Multiplier, if any, specified on the face hereof. If LIBOR is indexed to
the offered rates for deposits in a currency other than U.S. dollars the
method for determining such rate will be specified on the face hereof.
If LIBOR is indexed to the offered rates for U.S. dollar deposits,
"LIBOR" for each Interest Reset Period will be determined by the
Calculation Agent as follows:
(i) On the second London Business Day prior to the Interest
Reset Date for such Interest Reset Period (a "LIBOR Interest
Determination Date"), the Calculation Agent will determine (a) if
"LIBOR Reuters" is specified on the face hereof, the arithmetic mean
of the offered rates (unless the specified Designated LIBOR Page by
its terms provides only for a single rate, in which case such single
rate shall be used) for deposits in the Index Currency having the
Index Maturity designated on the face hereof, commencing on the
second London Business Day immediately following such LIBOR Interest
Determination Date, that appear on the Designated LIBOR Page
specified on the face hereof as of 11:00 a.m., London time, on such
LIBOR Interest Determination Date, if at least two such offered
rates appear (unless, as aforesaid, only a single rate is required)
on such Designated LIBOR Rate, or (b) if "LIBOR Telerate" is
specified on the face hereof or if neither "LIBOR Reuters" nor
"LIBOR Telerate" is specified as the method for calculating LIBOR,
the rate for deposits in the Index Currency having the Index
Maturity designated on the face hereof, commencing on the second
London Business Day immediately following such LIBOR Interest
Determination Date that appears on the Designated LIBOR Page
specified on the face hereof as of 11:00 a.m., London time, on such
LIBOR Interest Determination Date. If fewer than two such offered
rates appear, or if no such rate appears, as applicable, LIBOR in
respect of the related LIBOR Interest Determination Date will be
determined in accordance with the provisions described in clause
(ii) below.
(ii) With respect to this LIBOR Note and an Interest Reset
Period to which this clause (ii) applies, the Calculation Agent will
request the principal London offices of each of four major reference
banks in the London interbank market, as selected by the Calculation
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Agent, to provide the Calculation Agent with its offered quotation
for deposits in the Index Currency for the period of the Index
Maturity designated on the face hereof commencing on the second
London Business Day immediately following such LIBOR Interest
Determination Date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on such LIBOR Interest
Determination Date and in a principal amount that is representative
for a single transaction in such Index Currency in such market at
such time. If at least two such quotations are provided, LIBOR
determined on such LIBOR Interest Determination Date will be the
arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBOR determined on such LIBOR Interest Determination Date
will be the arithmetic mean of the rates quoted at approximately
11:00 a.m., in the applicable Principal Financial Center, on such
LIBOR Interest Determination Date by three major banks in such
Principal Financial Center selected by the Calculation Agent for
loans in the Index Currency to leading European banks, having the
Index Maturity designated on the face hereof commencing on the
second London Business Day immediately following such LIBOR Interest
Determination Date and in a principal amount that is representative
for a single transaction in such Index Currency in such market at
such time; provided, however, that if the banks so selected by the
-------- -------
Calculation Agent are not quoting as mentioned in this sentence,
LIBOR determined as of such LIBOR Interest Determination Date will
be LIBOR in effect on such LIBOR Interest Determination Date.
"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is
specified on the face hereof, the display on the Reuters Monitor
Money Rates Service for the purpose of displaying the London
interbank rates of major banks for the applicable Index Currency, or
(b) if "LIBOR Telerate" is specified on the face hereof or neither
"LIBOR Reuters" nor "LIBOR Telerate" is specified as the method for
calculating LIBOR, the display on the Dow Jones Telerate Service for
the purpose of displaying the London interbank rates of major banks
for the applicable Index Currency.
"Index Currency" means the currency (including composite
currencies) specified on the face hereof as the currency for which
LIBOR shall be calculated. If no such currency is specified on the
face hereof, the Index Currency shall be U.S. dollars.
"Principal Financial Center" will generally be the capital city
of the country of the specified Index Currency, except that with
respect to U.S. dollars, Italian lire and ECU, the Principal
Financial Center
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shall be The City of New York, Milan and Luxembourg, respectively.
Determination of Treasury Rate
------------------------------
If the Base Rate specified on the face hereof is the Treasury
Rate, this Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the Treasury Rate and the
Spread or Spread Multiplier, if any, specified on the face hereof. The
"Treasury Rate" for each Interest Reset Period will be the rate for the
auction held on the Treasury Rate Determination Date (as defined below)
for such Interest Reset Period of direct obligations of the United States
("Treasury bills") having the Index Maturity specified on the face
hereof, as such rate shall be published in H.15(519) under the heading
"U.S. Government Securities-Treasury bills-auction average (investment)"
or, in the event that such rate is not published prior to 3:00 p.m., New
York City time, on the Calculation Date (as defined below) pertaining to
such Treasury Rate Determination Date, the auction average rate
(expressed as a bond equivalent on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) on such Treasury Rate
Determination Date as otherwise announced by the United States Department
of the Treasury. In the event that the results of the auction of
Treasury bills having the Index Maturity specified on the face hereof are
not published or reported as provided above by 3:00 p.m., New York City
time, on such Calculation Date, or if no such auction is held on such
Treasury Rate Determination Date, then the "Treasury Rate" for such
Interest Reset Period shall be calculated by the Calculation Agent and
shall be a yield to maturity (expressed as a bond equivalent on the basis
of a year of 365 or 366 days, as applicable, and applied on a daily
basis) of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 p.m., New York City time, on such Treasury Rate
Determination Date, of three leading primary United States government
securities dealers selected by the Calculation Agent for the issue of
Treasury bills with a remaining maturity closest to the Index Maturity
specified on the face hereof; provided, however, that if the dealers
-------- -------
selected as aforesaid by the Calculation Agent are not quoting bid rates
as mentioned in this sentence, then the "Treasury Rate" for such Interest
Reset Period will be the Treasury Rate in effect on such Treasury Rate
Determination Date, or, if none, the Initial Interest Rate.
The "Treasury Rate Determination Date" for each Interest Reset
Period will be the day of the week in which the Interest Reset Date for
such Interest Reset Period falls on which Treasury bills would normally
be auctioned. Treasury bills are normally sold at auction on Monday of
each
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<PAGE>
week, unless that day is a legal holiday, in which case the auction is
normally held on the following Tuesday, except that such auction may be
held on the preceding Friday. If, as the result of a legal holiday, an
auction is so held on the preceding Friday, such Friday will be the
Treasury Rate Determination Date pertaining to the Interest Reset Period
commencing in the next succeeding week. If an auction date shall fall on
any day that would otherwise be an Interest Reset Date for a Treasury
Rate Note, then such Interest Reset Date shall instead be the Business
Day immediately following such auction date.
The "Calculation Date" pertaining to any Treasury Rate
Determination Date shall be the earlier of (i) the tenth calendar day
after such Treasury Rate Determination Date or, if such day is not a
Business Day, the next succeeding Business Day or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or Maturity,
as the case may be.
Determination of Prime Rate
---------------------------
If the Base Rate specified on the face hereof is the Prime
Rate, this Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the Prime Rate and the Spread
and/or Spread Multiplier, if any, specified on the face hereof. The
"Prime Rate" for each Interest Reset Period will be determined by the
Calculation Agent as of the second Business Day prior to the Interest
Reset Date for such Interest Reset Period (a "Prime Rate Determination
Date") and shall be the rate published in H.15(519) under the heading
"Bank Prime Loan." In the event that such rate is not published prior to
9:00 a.m., New York City time, on the Calculation Date (as defined
below), then the "Prime Rate" for such Interest Reset Period shall be
determined by the Calculation Agent and shall be the arithmetic mean of
the rates of interest publicly announced by each bank that appears on the
Reuters Screen NYMF Page (as defined below) as such bank's prime rate or
base lending rate as in effect for that Prime Rate Determination Date.
If fewer than four such rates but more than one such rate appear on the
Reuters Screen NYMF Page for the Prime Rate Determination Date, the
"Prime Rate" will be determined by the Calculation Agent and will be the
arithmetic mean of the prime rates quoted on the basis of the actual
number of days in the year divided by a 360-day year as of the close of
business on such Prime Rate Determination Date by four major money center
banks in The City of New York selected by the Calculation Agent. If
fewer than two such rates appear on the Reuters Screen NYMF Page, the
Prime Rate will be determined by the Calculation Agent on the basis of
the rates furnished in The City of New York by the appropriate number
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<PAGE>
of substitute banks or trust companies organized and doing business under
the laws of the United States, or any State thereof, having total equity
capital of at least U.S. $500,000,000 and being subject to supervision of
examination by Federal or State authority, selected by the Calculation
Agent to provide such rate or rates; provided, however, that if the banks
-------- -------
selected as aforesaid are not quoting as mentioned in this sentence, the
Prime Rate for such Interest Reset Period will be the Prime Rate in
effect on such Prime Rate Determination Date, or, if none, the Initial
Interest Rate. "Reuters Screen NYMF Page" means the display designated
as page "NYMF" on the Reuters Monitor Money Rates Service (or such other
page as may replace the NYMF page on that service for the purpose of
displaying prime rates or base lending rates of major United States
banks).
The "Calculation Date" pertaining to a Prime Rate Determination
Date shall be the earlier of (i) the tenth calendar day after such Prime
Rate Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding
the applicable Interest Payment Date or Maturity, as the case may be.
DETERMINATION OF CMT RATE
-------------------------
If the Base Rate specified on the face hereof is the CMT Rate,
this Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the CMT Rate and the Spread
and/or Spread Multiplier, if any, specified on the face hereof.
Unless otherwise specified on the face hereof, the "CMT Rate"
for each Interest Reset Period will be determined by the Calculation
Agent and shall be the rate (i) in the case where the Designated CMT
Telerate Page (as defined on the face hereof) is 7055, as of the second
Business Day prior to the Interest Reset Date for such Interest Reset
Period (a "CMT Determination Date") or (ii) in the case where the
Designated CMT Telerate Page is 7052, for the week or the month, as
specified on the face hereof, ended immediately preceding the week in
which the CMT Determination Date occurs, in either case, for the Index
Maturity as displayed on the Designated CMT Telerate Page under the
caption."...Treasury Constant Maturities ... Federal Reserve Board
Release H.15 ... Mondays Approximately 3:45 P.M." If such rate is no
longer displayed on the relevant page, or if not displayed by 3:00 p.m.,
New York City time, on the Calculation Date (as defined below) pertaining
to such CMT Determination Date, then the "CMT Rate" for such Interest
Reset Period shall be such treasury constant maturity rate for the Index
Maturity specified on the face hereof as
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<PAGE>
published in the relevant H.15(519) opposite the caption "U.S. Government
Securities, Treasury Constant Maturities". If such rate is no longer
published, or if not published by 3:00 p.m., New York City time, on the
Calculation Date relating to such CMT Determination Date, then the "CMT
Rate" for such Interest Reset Period shall be such treasury constant
maturity rate for the Index Maturity specified on the face hereof (or
other United States Treasury rate for such Index Maturity) as may then be
published by either the Board of Governors of the Federal Reserve System
or the United States Department of Treasury that the Calculation Agent
determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in the relevant H.15(519). If
such information is not provided by 3:00 p.m., New York City time, on the
Calculation Date relating to such CMT Determination Date, then the "CMT
Rate" for the Interest Reset Period shall be calculated by the
Calculation Agent and will be a yield to maturity, based on the
arithmetic mean of the secondary market closing offer side prices as of
approximately 3:30 p.m., New York City time, on the CMT Determination
Date reported, according to their written records, by three leading
primary United States government securities dealers (each, a "Reference
Dealer") in The City of New York selected by the Calculation Agent (from
five such Reference Dealers selected by the Calculation Agent and
eliminating the higher quotation (or, in the event of equality, one of
the highest) and the lowest quotation (or, in the event of equality, one
of the lowest)), for the most recently issued direct noncallable fixed
rate obligations of the United States ("Treasury Notes") with an original
maturity of approximately the Index Maturity specified on the face hereof
and a remaining term to maturity of not less than such Index Maturity
minus one year. If the Calculation Agent cannot obtain three such
Treasury Note quotations, the "CMT Rate" for such Interest Reset Period
shall be calculated by the Calculation Agent and will be a yield to
maturity based on the arithmetic mean of the secondary market offer side
prices as of approximately 3:30 p.m., New York City time, on the CMT
Determination Date of three Reference Dealers in The City of New York
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of
the highest) and the lowest quotation (or, in the event of equality, one
of the lowest)), for the Treasury Notes with an original maturity of the
number of years that is the next highest to the Index Maturity specified
on the face hereof and a remaining term to maturity closest to the Index
Maturity specified on the face hereof and in an amount of at least $100
million. If three or four (and not five) of such reference Dealers are
quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offer
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<PAGE>
prices obtained and neither the highest nor the lowest of such quotes
will be eliminated; provided, however, that if fewer than three Reference
-------- -------
Dealers selected by the Calculation Agent are quoting as described
herein, the "CMT Rate" will be the CMT Rate in effect on such CMT
Determination Date, or, if none, the Initial Interest Rate. If two
Treasury Notes with an original maturity as described in the second
preceding sentence have remaining terms to maturity equally close to the
Index Maturity specified, the quotes for the Treasury Note with the
shorter remaining term to maturity will be used.
"Designated CMT Telerate Rate" means the display on the Dow
Jones Telerate Service on the page designated on the face hereof (or any
other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)), for
the purpose of displaying Treasury Constant Maturities as reported in
H.15(519). If no such page is specified on the face hereof, the
Designated CMT Telerate Page shall be 7052, for the most recent week.
The "Calculation Date" pertaining to any CMT Determination Date
shall be the earlier of (i) the tenth calendar day after such CMT
Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding
the applicable Interest Payment Date or Maturity, as the case may be.
Payment in Currencies Other Than the Specified Currency
-------------------------------------------------------
Except as set forth below with respect to payments in ECU, if
payment in respect of this Note or any Coupon is required to be made in a
specified currency other than U.S. dollars (a "Specified Currency") and
such currency is unavailable to the Company due to the imposition of
exchange controls or other circumstances beyond the Company's control or
is no longer used by the government of the country issuing such currency
or for the settlement of transactions by public institutions of or within
the international banking community, then all payments shall be made in
U.S. dollars until such currency is again available to the Company or so
used. The amounts so payable on any date in such currency shall be
converted into U.S. dollars on the basis of the most recently available
Market Exchange Rate for such currency or as otherwise indicated on the
face hereof. Any payment made under such circumstances in U.S. dollars
will not constitute an Event of Default under the Indenture.
Notwithstanding the foregoing, if a Specified Currency is unavailable to
the Company solely because such currency no longer constitutes legal
tender because it has been replaced by the ECU or the new single currency
of the European Union once monetary union takes effect pursuant to
Article 1091 of the Treaty establishing the European Community, the
amounts so payable in respect of such Note shall, beginning with the date
such replacement becomes effective, be made in the relevant new single
currency of the European Union; the amounts so payable on any date shall
be converted into such single currency on the basis of the conversion
officially in effect in the European Union on the effective date of such
replacement.
If payment in respect of this Note or any Coupon is required to
be made in ECU and the ECU are not then used in the European Monetary
System (the "EMS"), then the Trustee
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<PAGE>
shall, without liability on its part, choose a component currency (the
"Payment Currency") of the ECU in which all payments in respect hereof
shall be made until the ECU are again so used. The amount of each
payment in such Payment Currency shall be computed on the basis of the
equivalent of the ECU in that currency, determined as described below, as
of the fourth Luxembourg business day prior to the date on which such
payment is due. Notice of the Payment Currency selected by the Trustee
shall be given as described below. Any payment made under such
circumstances in the Payment Currency will not constitute an Event of
Default under the Indenture.
Notwithstanding the foregoing, on the first Luxembourg business
day on which the ECU are no longer used in the EMS, the Trustee shall,
without liability on its part, choose a Payment Currency in which all
payments with respect to Bearer Notes and Coupons denominated in ECU
having a due date prior thereto but not yet presented for payment are to
be made. The amount of each payment in such Payment Currency shall be
computed on the basis of the equivalent of the ECU in that currency,
determined as described below, as of such first Luxembourg business day.
Any payment made under such circumstances in the Payment Currency will
not constitute an Event of Default under the Indenture.
The equivalent of the ECU in the relevant Payment Currency as
of any date (the "Day of Valuation") shall be determined by the
Luxembourg Stock Exchange on the following basis. The component
currencies of the ECU for this purpose (the "Components") shall be the
currency amounts that were components of the ECU when the ECU was most
recently used in the EMS or for the settlement of transactions by public
institutions of or within the European Community. The equivalent of the
ECU in the Payment Currency shall be calculated by, first, aggregating
the U.S. dollar equivalents of the Components, and then, using the rate
used for determining the U.S. dollar equivalents of the Components in the
Payment Currency as set forth below, calculating the equivalent in the
Payment Currency of such aggregate amount in U.S. dollars.
The U.S. dollar equivalent of each of the Components shall be
determined by the Luxembourg Stock Exchange on the basis of the middle
spot delivery quotations prevailing at 2:30 p.m. Luxembourg time on the
Day of Valuation, as obtained by the Luxembourg Stock Exchange from one
or more major banks, selected by the Trustee (with the approval of the
Company) in the country of issue of the Component in question.
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If the official unit of any component currency of the ECU is
altered by way of combination or subdivision, the number of units of that
currency as a Component shall be divided or multiplied in the same
proportion. If two or more component currencies are consolidated into a
single currency, the amounts of those currencies as Components shall be
replaced by an amount in such single currency equal to the sum of the
amounts of the consolidated component currencies expressed in such single
currency. If any component currency is divided into two or more
currencies, the amount of that currency as a Component shall be replaced
by amounts of such two or more currencies, each of which shall be equal
to the amount of the former component currency divided by the number of
currencies into which that currency was divided.
If no direct quotations are available for a Component on a Day
of Valuation from any of the banks selected by the Trustee (with the
approval of the Company) for this purpose, because foreign exchange
markets are closed in the country of issue of that Component, or for any
other reason, in computing the U.S. dollar equivalent of such Component
the Luxembourg Stock Exchange shall (except as provided below) use the
most recent direct quotations for such Component obtained by it, provided
--------
that such most recent quotations may be used only if they were prevailing
in the country of issue not more than two Luxembourg business days before
such Day of Valuation. Beyond such period of two Luxembourg business
days, the Luxembourg Stock Exchange shall determine the U.S. dollar
equivalent of such Component on the basis of cross rates derived from the
middle spot delivery quotations for such Component and for the U.S.
dollar prevailing at 2:30 p.m. Luxembourg time on such Day of Valuation,
as obtained by the Luxembourg Stock Exchange from one or more major
banks, selected by the Trustee (with the approval of the Company) in a
country other than the country of issue of such Component.
Notwithstanding the foregoing, within such period of two Luxembourg
business days, the Luxembourg Stock Exchange shall determine the U.S.
dollar equivalent of such Component on the basis of such cross rates if
the Trustee and the Company judge that the equivalent so calculated is
more representative than the U.S. dollar equivalent calculated on the
basis of such most recent direct quotations. Unless otherwise specified
by the Trustee, if there is more than one market for dealing in any
component currency by reason of foreign exchange regulations or for any
other reason, the market to be referred to in respect of such currency
shall be that upon which a nonresident issuer of securities denominated
in such currency would purchase such currency in order to make payments
in respect of such securities.
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All determinations referred to above made by the Trustee or the
Luxembourg Stock Exchange shall be at their respective sole discretion
(except to the extent expressly provided herein that any determination
made by the Trustee is subject to the approval of the Company) and shall,
in the absence of manifest error, be conclusive for all purposes and
binding on Holders of the Bearer Notes and any Coupons, and the Trustee
shall have no liability therefor.
If an Event of Default with respect to the Notes shall have
occurred and be continuing, the principal of all Notes may be declared
due and payable in the manner and with the effect provided in the
Indenture.
If this Note is an Original Issue Discount Note, the amount
payable in the event of redemption or repayment prior to its Stated
Maturity, shall be the Amortized Face Amount of this Note as of the date
of redemption or the date of repayment, as the case may be. The
"Amortized Face Amount" of this Note shall be the amount equal to (a) the
Issue Price (set forth on the face hereof) plus (b) that portion of the
difference between the Issue Price and the principal amount hereof that
has accrued at the Yield to Stated Maturity (set forth on the face
hereof) (computed in accordance with generally accepted United States
bond yield computation principles) by such date of redemption or
repayment, but in no event shall the Amortized Face Amount of this Note
exceed its principal amount.
As provided in the Indenture and subject to certain limitations
therein set forth, this Note is exchangeable for a like aggregate
principal amount of Bearer Notes of different authorized denominations,
as requested by the Person surrendering the same.
No service charge shall be made for any such exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
In case this Note or any Coupon shall at any time become
mutilated, destroyed, stolen or lost, it may be replaced at the specified
office of the Principal Paying Agent in London; or, so long as the Bearer
Notes are listed on the Luxembourg Stock Exchange, at the specified
office of the Paying Agent in Luxembourg, upon payment by the claimant of
such expenses as may be incurred in connection therewith and, in the case
of destruction, theft or loss, on such terms as to evidence thereof and
indemnity as the Company or the Trustee may reasonably require.
Mutilated or defaced Bearer Notes or Coupons must be surrendered before
replacements will be issued.
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The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Debt
Securities of each series to be affected under the Indenture at any time
by the Company and the Trustee with the consent of the Holders of not
less than 66-2/3% in aggregate principal amount of the Debt Securities at
the time Outstanding of each series to be affected. The Indenture also
contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Debt Securities of any series at the
time Outstanding, on behalf of the Holders of all the Debt Securities of
such series, to waive compliance by the Company with certain provisions
of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Note
shall be conclusive and binding upon such Holder and upon all future
Holders hereof and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Note.
Holders of Debt Securities of this series may not enforce their
rights pursuant to the Indenture or such Debt Securities except as
provided in the Indenture. No reference herein to the Indenture and no
provision of this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay
the principal of (and premium, if any) and interest on this Note at the
times, place and rate, and in the coin or currency, herein prescribed.
The Company may, without the consent of the Holders of the
Notes, consolidate with, merge into, or transfer substantially all of its
assets to, a corporation that is a U.S. Person, provided that the
successor corporation assumes all obligations of the Company under the
Notes and certain other conditions are met.
Except as provided above, the obligation to pay the principal
hereof (and premium, if any) and interest hereon in the designated
currency of payment is of the essence. To the fullest extent possible
under applicable law, judgments in respect of this Note shall be given in
such currency. The obligation of the Company to make such payments in
the designated currency of payment shall, notwithstanding any payment in
any other currency (whether pursuant to a judgment or otherwise), be
discharged only to the extent of the amount in the designated currency of
payment that the Holder of this Note may, in accordance with normal
banking procedures, purchase with the sum paid in such other currency
(after any premium and cost of exchange) on the business day in the
R-22
<PAGE>
country of issue of the designated currency of payment or in the
international banking community (in the case of a composite currency)
immediately following the day on which such Holder receives such payment.
If the amount in the designated currency of payment that may be so
purchased is for any reason less than the amount originally due, the
Company shall, as a separate and independent obligation, pay such
additional amounts in the designated currency of payment as may be
necessary to compensate for any such shortfall.
All notices to Holders of this Note will be deemed to have been
duly given if published on two Business Days in a leading London daily
newspaper (which is expected to be the Financial Times) and, so long as
---------------
the Bearer Notes are listed on the Luxembourg Stock Exchange and the
rules of such exchange so require, in Luxembourg in a newspaper of
general circulation in Luxembourg (which is expected to be the
Luxemburger Wort). Such notices shall be deemed to have been given on
----------------
the date of the first such publication.
This Note shall be deemed to be a contract made and to be
performed solely in the State of New York, and for all purposes shall be
governed by, and construed in accordance with, the laws of said State
without regard to the conflicts of law rules of said State.
All terms used in this Note that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
R-23
<PAGE>
TRANCHE NO. ___
MEDIUM TERM NOTE SERIES E NO. ___
Form of Coupon
--------------
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING
THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL
REVENUE CODE.
MCDONALD'S CORPORATION
MEDIUM-TERM NOTE, SERIES E
[Coupon Number]/1/
Specified Currency ___
Due __________________
Unless the Bearer Note mentioned below shall have been
previously called for redemption or tendered for repayment and the monies
therefor shall have been duly provided for, on the date set forth hereon,
MCDONALD'S CORPORATION (the "Company") will pay to bearer, upon surrender
hereof at such agencies in such place outside the United States of
America as the Company may determine from time to time (the "Paying
Agents"), interest on the principal amount of such Bearer Note at the
applicable interest rate, as provided in such Bearer Note (together with
any additional amounts in respect thereof which the Company may be
required to pay according to the terms of such Note), in such coin or
currency as specified above as at the time of payment shall be legal
tender for the payment of public and private debts. Payment on this
coupon shall be made, at the option of the bearer hereof and subject to
any applicable laws and regulations, by a check mailed to an address
outside the United States furnished by such bearer or by wire transfer to
an account maintained by the payee with a bank outside the United States.
[Such amount constitutes one semiannual installment of interest then
payable by the Company on its Medium-Term Note, Series E No. __________.]
MCDONALD'S CORPORATION
By___________________________________
Chairman of the Board of Directors,
President and Chief Executive Officer
- - ------------------
/1/ The coupon number, specified currency and due date should appear in the
right-hand section of the face of the coupon.
<PAGE>
[Form of Reverse of Coupon]
Principal Paying Agent:
----------------------
Morgan Guaranty Trust Company of New York
60 Victoria Embankment
London EC4Y 0JP
Paying Agent:
------------
Banque Generale du Luxembourg S.A.
14 Rue Aldringen
L-2951 Luxembourg
Luxembourg
2
<PAGE>
Exhibit 5
[LETTERHEAD OF MCDONALD'S CORPORATION]
July 7, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Ladies and Gentlemen:
Re: McDonald's Corporation
Registration Statement on Form S-3
In my capacity as Senior Vice President, General Counsel and Secretary
of McDonald's Corporation (the "Company"), a Delaware corporation, I have
supervised and participated in the legal proceedings and matters relating to the
proposed registration of $500,000,000 in initial public offering price of Debt
Securities of the Company to be issued under an indenture, dated as of March 1,
1987, as supplemented to the date hereof and as it will be supplemented by
Supplemental Indenture No. 22 as contemplated in the Registration Statement (the
"Supplemental Indenture" and, together witch such Indenture as supplemented to
the date hereof, the "Indenture"), between the Company and First Fidelity Bank,
National Association (formerly Fidelity Bank, National Association), as trustee
(the "Trustee").
I advise you that in my opinion:
1. The Company is a corporation duly organized and existing under
and by virtue of the laws of the State of Delaware and has adequate corporate
powers to own and operate its property and to transact the business in which it
is engaged.
2. The indenture (exclusive of the Supplemental Indenture) has been
duly authorized by all necessary corporate action of the Company and has been
duly executed and delivered by the Company.
3. The execution and delivery by the Company of the Supplemental
Indenture and the issuance of the Debt Securities in the manner and on the terms
set forth in the Registration Statement and in accordance with the terms of the
Indenture have been duly authorized by all necessary corporate action of the
Company.
4. The Indenture, upon the execution and delivery of the
Supplemental Indenture, will constitute the legal, valid, binding and
enforceable obligations of the
<PAGE>
Company, subject to applicable bankruptcy, insolvency and other laws affecting
the enforceability of creditors' rights.
5. The Debt Securities, upon the execution and delivery of the
Supplemental Indenture and when delivered and paid for as contemplated in the
Registration Statement, will constitute legal, valid, binding and enforceable
obligations of the Company entitled to all of the benefits of the Indenture,
subject to the applicable bankruptcy, insolvency and other laws affecting the
enforceability of creditors' rights.
I am aware that I am named in the Registration Statement as counsel for
the Company and hereby consent to such use of my name and the filing of this
opinion with the Commission as an exhibit to the Registration Statement.
Very truly yours,
/s/ Shelby Yastrow
Shelby Yastrow
WAG/lb
<PAGE>
EXHIBIT 23(A)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of McDonald's
Corporation for the registration of $500,000,000 Debt Securities and to the
incorporation by reference therein of our report dated January 26, 1995, with
respect to the consolidated financial statements of McDonald's Corporation
included in its Annual Report (Form 10-K) for the year ended December 31, 1994,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young
Chicago, Illinois
July 7, 1995
<PAGE>
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) ___
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
(Exact Name of Trustee as Specified in its Charter)
22-1147033
(I.R.S. Employer Identification No.)
202A SOUTH BRIDGE STREET, ELKTON, MARYLAND
(Address of Principal Executive Offices)
21921
(Zip Code)
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
123 SOUTH BROAD STREET
PHILADELPHIA, PA 19109
ATTENTION: CORPORATE TRUST ADMINISTRATION
(215) 985-6000
(Name, address and telephone number of Agent for Service)
McDONALD'S CORPORATION
(Exact Name of Obligor as Specified in its Charter)
DELAWARE
(State or other jurisdiction of Incorporation or Organization)
36-2361282
(I.R.S. Employer Identification No.)
ONE McDONALD'S PLAZA, OAK BROOK, ILLINOIS
(Address of Principal Executive Offices)
60521
(Zip Code)
MEDIUM TERM NOTES, DUE FROM NINE MONTHS TO 60 YEARS
APPLICATION RELATES TO ALL SECURITIES REGISTERED PURSUANT
TO THE DELAYED OFFERING REGISTRATION STATEMENT
(TITLE OF INDENTURE SECURITIES)
<PAGE>
1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO
WHICH IT IS SUBJECT:
Comptroller of the Currency
United States Department of the Treasury
Washington, D.C. 20219
Federal Reserve Bank (3rd District)
Philadelphia, Pennsylvania 19106
Federal Deposit Insurance Corporation
Washington, D.C. 20429
b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
3. VOTING SECURITIES OF THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING
SECURITIES OF THE TRUSTEE:
Not applicable - see answer to Item 13.
4. TRUSTEESHIPS UNDER OTHER INDENTURES.
IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH
ANY OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION
IN ANY OTHER SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE
FOLLOWING INFORMATION:
Not applicable - see answer to Item 13.
5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE
OBLIGOR OR UNDERWRITERS.
IF THE TRUSTEE OR ANY OF THE DIRECTORS OR EXECUTIVE OFFICERS OF
THE TRUSTEE IS A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE, OR
REPRESENTATIVE OF THE OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR,
IDENTIFY EACH SUCH PERSON HAVING ANY SUCH CONNECTION AND STATE THE
NATURE OF EACH SUCH CONNECTION.
Not applicable - see answer to Item 13.
6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF
THE
<PAGE>
TRUSTEE OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR,
PARTNER, AND EXECUTIVE OFFICER OF THE OBLIGOR:
Not applicable - see answer to Item 13.
7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF
THE TRUSTEE OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR
AND EACH DIRECTOR, PARTNER, AND EXECUTIVE OFFICER OF EACH SUCH
UNDERWRITER:
Not applicable - see answer to Item 13.
8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO SECURITIES OF THE OBLIGOR
OWNED BENEFICIALLY OR HELD AS COLLATERAL SECURITY FOR OBLIGATIONS IN
DEFAULT BY THE TRUSTEE:
Not applicable - see answer to Item 13.
9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY
FOR OBLIGATIONS IN DEFAULT ANY SECURITIES OF AN UNDERWRITER FOR THE
OBLIGOR, FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF
SECURITIES OF SUCH UNDERWRITER ANY OF WHICH ARE SO OWNED OR HELD BY
THE TRUSTEE:
Not applicable - see answer to Item 13.
10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF
CERTAIN AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY
FOR OBLIGATIONS IN DEFAULT VOTING SECURITIES OF A PERSON WHO, TO THE
KNOWLEDGE OF THE TRUSTEE (1) OWNS 10 PERCENT OR MORE OF THE VOTING
STOCK OF THE OBLIGOR OR (2) IS AN AFFILIATE, OTHER THAN A
SUBSIDIARY, OF THE OBLIGOR, FURNISH THE FOLLOWING INFORMATION AS TO
THE VOTING SECURITIES OF SUCH PERSON:
Not applicable - see answer to Item 13.
11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A
PERSON OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE
OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY
FOR OBLIGATIONS IN DEFAULT ANY SECURITIES OF A PERSON WHO, TO THE
KNOWLEDGE OF THE TRUSTEE, OWNS 50 PERCENT OR MORE OF THE VOTING
SECURITIES OF THE OBLIGOR, FURNISH THE FOLLOWING INFORMATION AS TO
EACH CLASS OF SECURITIES OF SUCH PERSON ANY OF WHICH ARE SO OWNED OR
HELD BY THE TRUSTEE:
Not applicable - see answer to Item 13.
12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
EXCEPT AS NOTED IN THE INSTRUCTIONS, IF THE OBLIGOR IS INDEBTED
TO THE TRUSTEE, FURNISH THE FOLLOWING INFORMATION:
<PAGE>
Not applicable - see answer to Item 13.
13. DEFAULTS BY THE OBLIGOR.
(a) STATE WHETHER THERE IS OR HAS BEEN A DEFAULT WITH RESPECT TO
THE SECURITIES UNDER THIS INDENTURE. EXPLAIN THE NATURE OF ANY SUCH
DEFAULT.
None.
(b) IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER
WHICH ANY OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR
PARTICIPATION IN ANY OTHER SECURITIES, OF THE OBLIGOR ARE
OUTSTANDING, OR IS TRUSTEE FOR MORE THAN ONE OUTSTANDING SERIES OF
SECURITIES UNDER THE INDENTURE, STATE WHETHER THERE HAS BEEN A
DEFAULT UNDER ANY SUCH INDENTURE OR SERIES, IDENTIFY THE INDENTURE
OR SERIES AFFECTED, AND EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
None.
14. AFFILIATIONS WITH THE UNDERWRITERS.
IF ANY UNDERWRITER IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE
EACH SUCH AFFILIATION.
Not applicable - see answer to Item 13.
15. Foreign trustee.
IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE TRUSTEE IS
AUTHORIZED TO ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO
BE QUALIFIED UNDER THE ACT.
Not applicable - trustee is a national banking association
organized under the laws of the United States.
16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
__ 1. Copy of Articles of Association of the trustee as now in
effect.**
__ 2. Copy of the Certificate of the Comptroller of the Currency
date dated January 11, 1994, evidencing the authority of
the trustee to transact business.*
__ 3. Copy of the Certification of Fiduciary Powers of the
trustee by the Office of the Comptroller of the Currency
dated July 24, 1992.*
__ 4. Copy of existing by-laws of the trustee.**
__ 5. Copy of each indenture referred to in Item 4, if the
obligor is in default.
-Not Applicable.
X 6. Consent of the trustee required by Section 321(b) of the
-- Act.
X 7. Copy of report of condition of the trustee at the close of
-- business on March 31, 1995, published pursuant to the
requirements of its supervising authority.
<PAGE>
__ 8. Copy of any order pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures
qualified or to be qualified under the Act.
- Not Applicable
__ 9. Consent to service of process required of foreign trustees
pursuant to Rule 10a-4 under the Act.
- Not Applicable
_____________________
*Previously filed with the Securities Exchange Commission on
February 11, 1994 as an Exhibit to Form T-1 in connection with
Registration Statement Number 22-73340 and ** previously filed with
the Securities Exchange Commission on April 4,1995 with Registration
Statement Number 33-58625 and incorporated herein by reference
NOTE
The trustee disclaims responsibility for the accuracy or
completeness of information contained in this Statement of
Eligibility and Qualification not known to the trustee and not
obtainable by it through reasonable investigation and as to which
information it has obtained from the obligor and has had to rely or
will obtain from the principal underwriters and will have to rely.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, the trustee, First Fidelity Bank, National Association, a
national banking association organized and existing under the laws
of the United States of America, has duly caused this Statement of
Eligibility and Qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of
Philadelphia and Commonwealth of Pennsylvania, on the 28th day of
June, 1995.
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
By: s/John H. Clapham
John H. Clapham
---------------
Asst. Vice President
<PAGE>
EXHIBIT
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, and in connection with the proposed issue of McDonald`s Corporation,
Medium-Term Notes Notes, Due from Nine Months to 60 Years, First Fidelity Bank,
National Association, hereby consents that reports of examinations by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
By: /s/ John H. Clapham
--------------------------
John H. Clapham
Asst. Vice President
Philadelphia, Pennsylvania
June 28, 1995
<PAGE>
REPORT OF CONDITION EXHIBIT 7
Consolidating domestic and foreign subsidiaries of the First Fidelity
Bank, National Association of Elkton in the state of Maryland, at the
close of business on March 31,1995, published in response to call made by
Comptroller of the Currency, under title 12, United States Code, Section
161. Charter Number 33869 Comptroller of the Currency Northeastern
District.
<TABLE>
<CAPTION>
STATEMENT OF RESOURCES AND LIABILITIES
ASSETS
Thousand of
Dollars
-----------
<S> <C>
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin.............. 1,599,546
Interest-bearing balances....................................... 131,786
Securities........................................................ /////////
Hold-to-maturity securities..................................... 3,154,827
Available-for-sale securities................................... 3,271,974
Federal funds sold and securities purchased under agreements...... //////////
to resell in domestic offices of the bank and of it............... //////////
Edge and Agreement subsidiaries, and in IBFs:..................... //////////
Federal funds sold................................................ 10,000
Securities purchased under agreements to resell................... 207,267
Loans and lease financing receivables:
Loan and leases, net of unearned income......22,371,585
LESS: Allowance for loan and lease losses.......517,965
LESS: Allocated transfer risk reserve.................0
Loans and leases, net of unearned income, allowance, and
reserve........................................................... 21,853,620
Assets held in trading accounts................................... 70,275
Premises and fixed assets (including capitalized leases).......... 390,023
Other real estate owned........................................... 135,803
Investment in unconsolidated subsidiaries and associated.......... //////////
companies......................................................... 13,434
Customer's liability to this bank on acceptances outstanding...... 180,053
Intangible assets................................................. 721,391
Other assets...................................................... 890,755
Total assets...................................................... 32,630,754
LIABILITIES
Deposits:
In domestic offices.......................................... 25,014,990
Noninterest-bearing......................4,531,531
Interest-bearing........................20,483,459
In foreign offices, Edge and Agreement subsidiaries,
and IBFs..................................................... 1,106,660
Noninterest-bearing.........................11,811
Interest-bearing.........................1,094,849
Federal funds purchased and securities sold under agreements to
repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and IBFs
Federal fund purchased....................................... 1,044,014
Securities sold under agreements to repurchase............... 1,421,199
Demand notes issued to the U.S. Treasury.......................... 0
Trading liabilities............................................... 0
Other borrowed money:............................................. /////////
With original maturity of one year or less........................ 16,956
With original maturity of more than one year.................. 635
Mortgage indebtedness and obligations under capitalized leases.... 16,899
Bank's liability on acceptances executed and outstanding.......... 180,795
Subordinated notes and debentures................................. 175,000
Other liabilities................................................. 620,629
Total liabilities................................................. 29,597,777
Limited-life preferred stock and related surplus.................. 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus..................... 160,540
Common Stock...................................................... 452,156
Surplus........................................................... 1,300,080
Undivided profits and capital reserves............................ 1,167,757
Net unrealized holding gains (losses) on available-for-sale /////////
securities....................................................... (47,556)
Cumulative foreign currency translation adjustments............... 0
Total equity capital.............................................. 3,032,977
Total liabilities, limited-life preferred stock and equity /////////
capital......................................................... 32,630,754
</TABLE>
