<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 11, 1996
McDONALD'S CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware 1-5231 36-2361282
(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
One McDonald's Plaza
Oak Brook, Illinois 60521
(630) 623-3000
(Address and Phone Number of Principal Executive Offices)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibit
- --------------------------------------------------------------------------
(c) Exhibit
-------
The Exhibit listed below and attached hereto is hereby filed in connection
with the Registrant's Registration Statement on Form S-3 (File No. 33-
00001).
(99.5) MCD Direct Shares Brochure with Prospectus.
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
McDONALD'S CORPORATION
(Registrant)
By: /s/ Gloria Santona
------------------
Gloria Santona
Vice President, Associate General Counsel
and Secretary
<PAGE>
Exhibit 99.5
(Illustration of street corner, office buildings, pedestrians, and cars. Street
signs labeled, "McDonald's" and "Wall Street.")
McDonald's Corporation Stock Purchase Plan
(This is printed vertically in a border on the right side of the page.) MCDirect
Shares (Illustration of MCDirect Shares logo appears in bottom right corner.)
<PAGE>
Dear Investor:
McDonald's is the largest and best-known global foodservice retailer, with over
20,000 locations in 99 countries. Yet on any given day, even as the market
leader, McDonald's serves less than one-half of one percent of the world's
population. To capitalize on this enormous opportunity, we continue to challenge
ourselves to reach even higher levels of excellence in understanding and meeting
the needs and expectations of our customers.
Our vision is to dominate the global foodservice marketplace by being the
customers' first choice for food service. Our goals to achieve this vision are
to improve customer satisfaction, increase market share by accelerating
expansion and growing sales at existing restaurants, and enhance profitability
and returns.
MCDirect Shares is a direct stock purchase plan through which investors can
begin and build their McDonald's shareownership and reinvest dividends.
I look forward to sharing ownership of McDonald's and our future with you.
Sincerely,
/s/ Michael R. Quinlan
Michael R. Quinlan
Chairman and Chief Executive Officer
Shareholder
December 1996
<PAGE>
About McDonald's
Stock trading symbol
MCD
Compound annual total return to investors
for the ten-year period ended December 31, 1995
a bar chart depicting compound annual total return to investors for the ten year
period ending December 31, 1995 for the following:
McDonald's Common Stock 18.4%
Dow Jones Industrial Average 16.4
Standard & Poor's 500 14.9
Wilshire 5000 14.2
Lehman Brothers Government/Corporate Bond Index 9.6
Donoghue Money Fund 5.7
Market price per common share
in dollars
a line graph depicting McDonald's quarterly stock price range and price at
quarter end for:
<TABLE>
<CAPTION>
High Low End
<S> <C> <C> <C>
1991, First Quarter 17.688 13.063 17.375
Second Quarter 18 15.625 16.438
Third Quarter 17.938 15 17.5
Fourth Quarter 19.9375 16.438 19
1992, First Quarter 22.5 19.188 19.938
Second Quarter 23.75 19.688 23
Third Quarter 23.625 20.563 22.188
Fourth Quarter 25.188 20.438 24.375
1993, First Quarter 27.125 23.375 26.375
Second Quarter 26.75 22.75 24.5
Third Quarter 27.75 24.125 25.875
Fourth Quarter 29.5 25.625 28.5
1994, First Quarter 31.25 27.25 28.375
Second Quarter 31.375 27.625 28.875
Third Quarter 29.75 25.625 26.375
Fourth Quarter 29.875 25.875 29.25
1995, First Quarter 35.75 28.625 34.125
Second Quarter 39.25 33.75 39.125
Third Quarter 41.5 35.875 38.25
Fourth Quarter 48 37.75 45.125
</TABLE>
<PAGE>
Compound annual growth rates
for the ten-year period ended December 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Systemwide sales 10.5%
U.S. 6.0
Outside of the U.S. 20.6
Total revenues 10.2
Operating income 11.1
U.S. 5.2
Outside of the U.S. 23.8
Net income 12.7
Net income per common share 13.6
Cash provided by operations 10.9
Total assets 11.8
Total shareholders' equity 13.4
Total return to investors on common stock 18.4
</TABLE>
These results are not indicative of future performance, which is dependent upon
a variety of factors.
McDonald's many strengths have made us the leading foodservice organization in
the global consumer marketplace:
- - One of the strongest brands in the world; our marketing and promotional
activities are designed to nurture our brand by focusing on value, taste, and
customer satisfaction.
- - Our commitment to franchising awards restaurants to full-time, on-premise
owner/operators with an equity interest in their McDonald's restaurant
business. They contribute to McDonald's revenues by paying rents and service
fees based on sales.
- - Our advanced operational systems combine stringent product standards, strict
operating procedures, and close working relationships among thousands of
dedicated employees, franchisees and suppliers, and are designed to produce a
100 percent McDonald's experience: hot and tasty food, fast and friendly
service, and accurate orders.
- - Our supply network seeks to optimize supply sources in markets around the
world. The result is a global, lower-cost, high-quality, flexible supply
infrastructure. We maintain a sense of loyalty and fairness toward our
suppliers, many of whom have responded to our needs by investing capital in
manufacturing and processing facilities, and by advancing new technology and
ideas.
McDonald's current global leadership position reflects the hard work of the men
and women of the McDonald's System--our employees, franchisees, joint-venture
partners and suppliers. Together we are striving to improve our market share and
competitive position, achieve 100 percent customer satisfaction and improve
profitability.
<PAGE>
Financial summary
<TABLE>
<CAPTION>
(Dollars rounded to millions, except per common
share data and average restaurant sales) 1995 1994 1993 1992 1991
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Systemwide sales $29,914 25,987 23,587 21,885 19,928
U.S. $15,905 14,941 14,186 13,243 12,519
Outside of the U.S. $14,009 11,046 9,401 8,642 7,409
- ------------------------------------------------------------------------------------------
Systemwide sales by type
Operated by franchisees $19,123 17,146 15,756 14,474 12,959
Operated by the Company $ 6,863 5,793 5,157 5,103 4,908
Operated by affiliates $ 3,928 3,048 2,674 2,308 2,061
- ------------------------------------------------------------------------------------------
Average sales by Systemwide restaurants
open at least one year, in thousands $ 1,844 1,800 1,768 1,733 1,658
Revenues from franchised restaurants $ 2,931 2,528 2,251 2,031 1,787
Total revenues $ 9,795 8,321 7,408 7,133 6,695
Operating income $ 2,601 2,241 1,984 1,862 1,679
Income before provision for income taxes $ 2,169 1,887 1,676 1,448 1,299
Net income $ 1,427 1,224 1,083 959 860
Cash provided by operations $ 2,296 1,926 1,680 1,426 1,423
- ------------------------------------------------------------------------------------------
Financial position at year end
Net property and equipment $12,811 11,328 10,081 9,597 9,559
Total assets $15,415 13,592 12,035 11,681 11,349
Long-term debt $ 4,258 2,935 3,489 3,176 4,267
Total shareholders' equity $ 7,861 6,885 6,274 5,892 4,835
- ------------------------------------------------------------------------------------------
Per common share
Net income $1.97 1.68 1.45 1.30 1.17
Dividends declared $.26 .23 .21 .20 .18
Total shareholders' equity at year end $10.72 9.20 8.12 7.39 6.73
Market price at year end $45 1/8 29 1/4 28 1/2 24 3/8 19
- ------------------------------------------------------------------------------------------
Restaurants at year end
Systemwide restaurants 18,380 15,950 14,163 13,093 12,418
U.S. 11,368 10,238 9,397 8,959 8,764
Outside of the U.S. 7,012 5,712 4,766 4,134 3,654
Traditional restaurants 16,809 15,205 13,993 13,093 12,418
Operated by franchisees 11,240 10,458 9,832 9,237 8,735
Operated by the Company 3,513 3,083 2,699 2,551 2,547
Operated by affiliates 2,056 1,664 1,462 1,305 1,136
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
U.S. 10,341 9,744 9,283 8,959 8,764
Outside of the U.S. 6,468 5,461 4,710 4,134 3,654
- ------------------------------------------------------------------------------------------
Number of countries at year end 89 79 70 65 59
- ------------------------------------------------------------------------------------------
</TABLE>
The information contained in this Summary highlights some aspects of the
Company's business, but is not a complete description of the Company, its
activities or its prospects. This Summary should be read in conjunction with the
accompanying Prospectus and the documents incorporated by reference
therein.
Key competitive strategies
<TABLE>
<CAPTION>
1995 Highlights
- - $29.9 billion in Systemwide sales
- - $2.6 billion in operating income
- - over $1.4 billion in net income
- - an asset base over $15.4 billion
Pie charts depicting
1990 1995
Outside Outside
Total U.S. the U.S. Total U.S. the U.S.
<S> <C> <C> <C> <C> <C> <C>
Systemwide sales $ 18.8 $ 12.3 $ 6.5 $ 29.9 $ 15.9 $ 14.0
in billions of dollars
Operating income* $ 1.6 $ 1.0 $ .6 $ 2.6 $ 1.2 $ 1.4
in billions of dollars
Assets** $ 10.7 $ 5.9 $ 4.6 $ 15.4 $ 7.0 $ 8.2
in billions of dollars
Restaurants 11,803 8,576 3,227 18,380 11,368 7,012
</TABLE>
*Graph excludes Corporate G&A expense of $48 and $26 million in 1995 and 1990,
respectively.
**Graph excludes Corporate assets of $169 and $176 million in 1995 and 1990,
respectively.
Our key competitive strategies
Despite today's global leadership position, we are not satisfied. We want to
create or increase the gaps between us and our competitors so that we dominate
in every market around the world. In our effort to achieve this vision, we will
focus intensely on customer satisfaction, market share and profitability.
Supporting this focus are three competitive strategies: Convenience, Value and
Execution.
<PAGE>
- - Convenience . . . Making McDonald's easy to visit by profitably adding
restaurants worldwide, wherever people live, work, shop, play or gather.
- - Value . . . Supporting value pricing for customers by using McDonald's
economies of scale to lower development and operating costs.
- - Execution . . . Satisfying customers by understanding and anticipating their
changing needs and providing a 100 percent McDonald's experience: hot and
tasty food, fast and friendly service, and accurate orders.
These strategies have supported McDonald's growth by satisfying millions of
customers around the world each day. Likewise, McDonald's seeks to apply these
same strategies to our direct stock purchase plan, MCDirect Shares.
About MCDirect Shares
(Illustration of female holding a ladder for male who is climbing to drop a
coint into a Ronald McDonald bank while a third person looks on. Caption:
"MCDirect Shares makes investing in McDonald's convenient.")
Convenience
Initial Stock Purchases
It's convenient to make your initial purchase of McDonald's stock. First, read
the accompanying prospectus and the instructions on the enclosed enrollment
form. Then, send the completed form with a check or money order for $1,000 or
more to First Chicago Trust Company, the Plan Administrator, or sign up for the
automatic investment option described below. A $5 enrollment fee will be
deducted from initial investments. Shares are generally purchased weekly, and
daily when practical.
Additional Stock Purchases
After you are enrolled in MCDirect Shares, you may buy additional shares
through:
Investment by check or money order. You may send a check or money order for at
least $100 and the detachable transaction form on the bottom of your account
statement or transaction advice to First Chicago Trust Company. They do the
investing for you. Your investment, less applicable fees, will buy full and
fractional shares of McDonald's common stock.
Automatic investments. You may authorize automated monthly withdrawals for as
little as $100 from your account at a U.S. financial institution. After the
authorization, your money, less applicable fees, is automatically invested.
Note: McDonald's System members may be eligible to invest through automatic
payroll deductions. Please see your employer for details.
<PAGE>
Total Investments
Investments, whether by check, money order and/or automated withdrawal, cannot
exceed $250,000 per year.
Dividend Reinvestment
Dividends on shares held in MCDirect Shares will be reinvested, less applicable
fees. Under U.S. Federal tax law, dividends are subject to tax, whether paid in
cash or reinvested.
Value
Purchases
MCDirect Shares makes buying McDonald's stock more cost-effective when compared
to traditional means. The trading fee is 10c per share (with a $5 maximum), plus
an investment fee of $5 if paid by check or money order, or $1 if paid by
automated withdrawal.
Sales
Under MCDirect Shares, you may sell some or all of your whole shares of
McDonald's stock. As with purchases, First Chicago Trust Company will handle
stock sales, at a lower cost than more traditional means. You will be charged
10c per share (with a $5 maximum) plus a $10 sales fee. Shares will generally be
sold weekly, and daily when practical.
Administration
A $5 enrollment fee will be deducted from your initial investment and a $3
annual account fee will be deducted in quarterly installments from cash
dividends to be reinvested.
(Illustration of street corner, office buildings, pedestrians, and cars. Street
signs labeled, "McDonald's" and "Wall Street." Caption: "MCDirect Shares makes
investing in McDonald's more affordable.")
Safekeeping
By using MCDirect Shares safekeeping feature, you do not have to worry about
loss, theft or damage of your McDonald's stock certificates. Shares purchased
for you through MCDirect Shares will be held in an account in your name. You may
also deposit McDonald's stock certificates you hold in your account for
safekeeping. If you want a certificate sent to you, we'll do so promptly at no
cost. You may sell shares held in safekeeping and will be charged applicable
fees.
Execution
Recordkeeping
To simplify financial recordkeeping, you will receive quarterly statements
detailing activity for that quarter. Each statement will include a tear-off form
for making additional purchases and requesting other transactions. You will also
receive a transaction advice after each investment or transaction.
<PAGE>
IRA
You can establish an Individual Retirement Account (IRA) which invests in
McDonald's stock through MCDirect Shares. To do this, you can either roll over
funds from an existing IRA (or other qualified plan distribution) valued at
$1,000 or more, or you can make an initial IRA investment of $1,000 or more.
Because special tax consequences may apply if you participate in the Plan
through an IRA, consult your tax advisor regarding participation.
Gifts and Transfers
MCDirect Shares allows you to transfer shares of McDonald's stock from your Plan
account, without charge. Recipients owning 25 shares or more may enroll in
MCDirect Shares.
(Illustration of bear and bull facing each other, nose to nose, with a road
leading to the Golden Arches. Caption: "MCDirect Shares provides customized
services for long-term investors.")
Enrollment
MCDirect Shares makes investing more convenient and cost-effective. If you want
these benefits, join the Plan and invest in McDonald's.
1 - If you are not a McDonald's shareholder, complete the enclosed enrollment
form and either make an initial investment of $1,000 or more, or sign up for
automatic monthly investments of $100 or more.
2 - If you are a McDonald's shareholder, and hold 25 or more shares directly in
your name, complete and return the enclosed enrollment form. If you own less
than 25 shares, you must also make an initial investment of $1,000 or more,
or sign up for automatic monthly investments of $100 or more.
3 - If you are a member of the McDonald's System, you may be eligible to enroll
through automatic payroll deductions. Please see your employer for details.
Note: This Plan may not be available in some countries outside of the U.S.
because of local laws.
<PAGE>
MCDirect Shares Prospectus
11,500,000 Shares of Common Stock ($.01 Par Value)
McDonald's Corporation ("McDonald's" or the "Company") hereby offers MCDirect
Shares (the "Plan"), a direct stock purchase plan through which investors can
begin and build their McDonald's shareownership and reinvest dividends. Under
the Plan,
- - Persons who are not shareholders may enroll either by investing at least
$1,000 or by authorizing automatic monthly withdrawals ("Automatic
Investments") of at least $100.
- - Shareholders who hold at least 25 shares of McDonald's common stock, $.01 par
value ("Common Stock") in their name may enroll. Shareholders who hold less
than 25 shares in their name may enroll either by investing at least $1,000
or by authorizing monthly Automatic Investments of at least $100.
- - McDonald's System members may also join the Plan and invest in Common Stock by
authorizing payroll deduction contributions to the Plan of at least $20, if
offered by their employers.
- - Cash dividends will automatically be reinvested in additional shares of Common
Stock.
- - Once enrolled, participants may make additional investments of $100 or more.
- - Shareholders may deposit their Common Stock certificates with the
Administrator for safekeeping, whether or not they participate in the Plan.
- - Participants may establish an Individual Retirement Account ("IRA") which
invests in McDonald's stock through the Plan.
- - Participants will be required to pay certain fees in connection with the Plan.
First Chicago Trust Company of New York has been appointed Administrator for the
Plan ("Administrator"). All Plan purchases will be made by the Administrator at
100% of the then current market price of the Common Stock, calculated as
described herein, either in the open market or from the Company.
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 December 1, 1996.
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given or
made, such information or representations
<PAGE>
must not be relied upon as having been authorized. This Prospectus does 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 or solicitation in such jurisdiction. Neither the
delivery of this 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 that the information herein is
correct as of any time subsequent to its date.
Table of Contents
2 Available Information; Information Incorporated By Reference
3 McDonald's Corporation
3 MCDirect Shares
8 U.S. Federal Income Taxation
8 Use of Proceeds
8 Plan of Distribution
8 Legal Matters
8 Experts
8 Inquiries
Available Information; Information Incorporated By Reference
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and in accordance therewith files
reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "Commission"), which may be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, and at the following regional
offices of the Commission: 7 World Trade Center, New York, New York 10048 and
500 W. Madison St., Suite 1400, Chicago, Illinois 60661. Copies of such
materials also 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 and Chicago Stock Exchanges.
The McDonald's Annual Report on Form 10-K for the latest fiscal year, all
Quarterly Reports on Form 10-Q and/or Current Reports on Form 8-K filed by
McDonald's pursuant to Section 13 or 15(d) of the Exchange Act since the end of
such fiscal year, and the description of Common Stock which is contained in a
Registration Statement on the Company's Form 8 Amendment to Registration
Statement on Form 10, as filed with the Commission on April 23, 1991, including
any amendment or report filed for the purpose of updating such description, have
been filed with the Commission and are incorporated herein by reference.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act prior to the termination of the offering
made hereby shall be deemed to be incorporated by reference herein and to be a
part hereof from the date of the 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 or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any
<PAGE>
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute part of this Prospectus.
McDonald's will provide without charge to each person to whom this Prospectus is
delivered, upon request, a copy of any of the documents incorporated herein by
reference (other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference in such documents). Requests should be
directed to Investor Relations Service Center, McDonald's Corporation, Kroc
Drive, Oak Brook, Illinois 60521, telephone: 1-630-623-7428.
A McDonald's franchisee provides food services exclusively to U.S. government
personnel stationed at the U.S. 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 the Prospectus. Investors may obtain current
information by contacting the Florida Department of Banking and Finance, The
Capitol, Tallahassee, Florida 32399-0350, telephone: 1-904-488-9805.
McDonald's Corporation
The Company's principal executive offices are located at One McDonald's Plaza,
Oak Brook, IL 60521, telephone: 1-630-623-3000. 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 business people. Uniform standards for
quality of product, cleanliness and efficiency, speed and service have been
established. The McDonald's System includes over 20,000 restaurants worldwide
which are located in 99 countries.
MCDirect Shares
Purpose
MCDirect Shares is a direct stock purchase plan through which investors can
begin and build their McDonald's shareownership and reinvest dividends.
Administration
First Chicago Trust Company of New York has been appointed to administer the
Plan, purchase and hold shares of stock acquired under the Plan, maintain
records, send statements of account to participants, and perform other duties
related to the Plan.
Eligibility
Any person or entity is eligible to participate in the Plan provided that (i)
such person or entity fulfills the requirements described below under
"Enrollment Procedures" and (ii) in the case of foreign investors, participation
is limited to shareholders and McDonald's System members whose participation
would not violate local laws and regulations. McDonald's franchisees and
suppliers, their employees and employee benefit plans, as well as employees of
McDonald's, its subsidiaries and affiliates are collectively referred to herein
as the "McDonald's System."
<PAGE>
Regulations in certain countries may limit or prohibit participation in this
type of Plan. Therefore, persons residing outside the U.S. who wish to
participate in the Plan should first determine whether they are subject to any
governmental regulations prohibiting their participation.
Enrollment Procedures
Shareholders
Shareholders who hold at least 25 shares of Common Stock registered directly in
their name may join the Plan by completing the Enrollment Form. Shareholders who
hold less than 25 shares registered directly in their name may enroll either by
investing at least $1,000 or by authorizing monthly Automatic Investments of at
least $100. See "Methods of Investment--Automatic Investment" on page 11.
Non-shareholders
Eligible investors may join the Plan by returning a completed Enrollment Form to
the Administrator. To enroll, investors must make an initial investment of at
least $1,000 or authorize Automatic Investments of at least $100 per month. See
"Methods of Investment--Automatic Investment" on page 11.
McDonald's System Members
If offered by their employers, McDonald's System members may also join the Plan
by returning a completed Enrollment Form to the Administrator and authorizing
payroll deduction contributions to the Plan of at least $20 per investment. See
"Methods of Investment--Payroll Deductions" on page 11.
"Street Name" Holders
Owners of shares of Common Stock held on their behalf by a bank, broker, or
trustee may join the Plan by registering at least 25 shares of Common Stock
directly in their name and by returning a completed Enrollment Form to the
Administrator. See "Transfer of Shares from Street Name" on page 11.
IRAs
Individuals may establish an IRA which invests in Common Stock through the Plan
by returning a completed IRA Enrollment Form and making an initial investment to
the IRA of at least $1,000 or by transferring at least 25 shares of Common Stock
or $1,000 or more from an existing IRA, and by completing an IRA Enrollment Form
and an IRA Funds Transfer Form. These forms and a disclosure statement are
available from the Administrator.
Participants will be charged fees for participating in the Plan, including an
enrollment fee, an annual account fee and, if applicable, an annual IRA fee. See
"Service Fees" on page 13.
Methods of Investment
A participant's total annual investment cannot exceed $250,000 per calendar year
and must be made in U.S. dollars. For the purpose of applying this limit, all
investments during any calendar year (including initial and ongoing investments,
but excluding dividend reinvestments and share
<PAGE>
deposits) are aggregated. No interest will be paid on amounts held by the
Administrator pending investment.
Check Investment
Participants may invest through the Plan by mailing a check or money order for
at least $100, payable to "First Chicago Trust Company of New York", to the
Administrator with the detachable transaction form ("Transaction Form") from an
account statement or transaction advice. Any individual or entity (including,
but not limited to, McDonald's, its subsidiaries and affiliates) may make
additional cash investments on behalf of any participant or eligible investor as
a gift, award or as an incentive for future performance.
Automatic Investment
Participants may make automatic monthly investments through electronic
withdrawals of at least $100 from a predesignated account with a U.S. financial
institution. To initiate Automatic Investments, participants must complete and
return the Automatic Investment section of the Enrollment Form. Automatic
Investments will be initiated as promptly as practicable and, after initiated,
funds will be drawn on either the 15th of each month or the last day of each
month (whichever date the participant has designated), or if the date falls on a
bank holiday, the next business day. Participants should allow up to four weeks
for the first Automatic Investment to be initiated.
Participants may change or terminate Automatic Investments by notifying the
Administrator in writing at least six business days prior to the next Automatic
Investment date.
Payroll Deductions
If offered by their employers, McDonald's System members may authorize payroll
deduction contributions to the Plan of at least $20 per investment. McDonald's
System members should contact their personnel department or human resources
representative to determine if payroll deductions are available to them and what
the procedures are for initiating, changing and terminating payroll deductions.
Dividends
Dividends on all shares of Common Stock, including fractional shares, held in
the Plan by participants will be automatically reinvested, less applicable fees,
in additional shares of Common Stock.
Participants will be charged fees to purchase shares of Common Stock under the
Plan.
See "Service Fees" on page 13.
Transfer of Shares from Street Name
Beneficial owners whose shares are registered in the name of a bank, a broker, a
trustee or other agent may transfer these shares to a Plan account by directing
their agent to register these shares directly in their name and deliver a
certificate to them.
<PAGE>
Purchases of Common Stock
At McDonald's discretion, Plan shares will be purchased by the Administrator
either on the open market or directly from McDonald's. Shares purchased by the
Administrator on the open market may be made on any stock exchange in the U.S.
where the Common Stock is traded, in the over-the-counter market, or by
negotiated transactions on such terms as the Administrator may reasonably
determine at the time of purchase. Any shares purchased by the Administrator
from McDonald's will be made in accordance with applicable requirements. Neither
McDonald's nor any participant shall have any authority or power to direct the
time or price at which shares may be purchased, or the selection of the broker
or dealer through or from whom purchases are to be made.
Purchases will be made weekly, but may be made daily when practicable. If any
such date is a day when the New York Stock Exchange is not open, purchases will
be made the next day. The price to participants of shares purchased under the
Plan will be 100% of the average price. When Common Stock is purchased on the
open market, the average price will be the weighted average purchase price of
shares purchased on that date. In the case of purchases from McDonald's, the
average price is determined by averaging the high and low sales prices of Common
Stock as reported on the New York Stock Exchange Composite Tape on that date.
Participants will be charged fees to purchase shares of Common Stock under the
Plan. See "Service Fees" on page 13.
Sales of Common Stock
Participants (or non-Plan participants who hold shares in safekeeping) may sell
some or all of the whole shares held in their account by calling 1-800-Mc1-STCK
and selecting the appropriate automated option or by completing and returning
the appropriate section of a transaction form to the Administrator. The
Administrator, at its discretion, will sell those shares, along with shares to
be sold for other accounts, as promptly as practicable at 100% of the then
current market price of the Common Stock and will send the participant a check
or wire the sales proceeds, less applicable fees.
Participants will be charged fees to sell shares of Common Stock under the Plan.
See "Service Fees" on page 13.
Withdrawal from the Plan
Participants may withdraw from the Plan by giving written notice to the
Administrator or by completing and returning the appropriate section of the
transaction form to the Administrator. Upon withdrawal, the Administrator will
transfer all shares of Common Stock held in the participant's Plan account to a
book-entry account maintained by the Administrator ("Book-Entry"), unless the
participant requests that the Administrator either (i) send the participant a
certificate for the number of whole shares held in the Plan account and a check
for the value of any fractional shares (based on 100% of the then current market
price of the Common Stock, less applicable fees); or (ii) sell all shares in the
Plan account as described under "Sales of Common Stock."
<PAGE>
Certificates issued upon withdrawal will be issued in the name or names in which
the account is maintained, unless otherwise instructed. If the certificate is to
be issued in a name other than that on the participant's Plan account, the
signature(s) on the instructions or stock power must be Medallion Guaranteed by
a financial institution participating in the Medallion Guarantee program.
No certificates will be issued for fractional shares.
Notices of withdrawal will be duly processed by the Administrator and uninvested
funds will be returned to the withdrawing participant as soon as practicable,
without interest. If a notice of withdrawal is received on or after an ex-
dividend date but before the related dividend payment date, the withdrawal will
be processed as described above and a separate dividend check will be mailed to
the participant as soon as practicable following the payment date. Thereafter,
dividends will be paid in cash unless and until the shareholder rejoins the
Plan.
Safekeeping
Both participants and non-participants may deposit some or all of their
certificates with the Administrator for safekeeping. Shares deposited will be
credited to the individual's account as maintained by the Administrator. By
using the Plan's safekeeping service, shareholders no longer bear the risk and
cost associated with the loss, theft, or destruction of stock certificates.
Shareholders using this service who are not Plan participants will receive
dividends in cash until they enroll in the Plan. Shares held in safekeeping may
be sold or transferred as described in "Sales of Common Stock" on page 12 and
"Gift/Transfer of Shares" below.
To deposit certificates in the Plan's safekeeping service, shareholders should
send their certificates by registered and insured mail to the Administrator with
written instructions to deposit such shares. The certificates should not be
endorsed and the assignment section should not be completed.
Gift/Transfer of Shares
Shareholders may transfer the ownership of some or all of their Plan shares or
shares held in safekeeping by sending the Administrator written, signed transfer
instructions. Signatures must be Medallion Guaranteed by a financial institution
participating in the Medallion Guarantee program.
Shares may be transferred to new or existing shareholders; however, a new Plan
account will not be opened as a result of a transfer of less than 25 shares. If
opening a new Plan account, a completed enrollment form must accompany the
gift/transfer instructions.
<TABLE>
<CAPTION>
Service Fees
- ----------------------------------------------------------------------------
<S> <C>
Annual Account Fee (charged in quarterly installments of $.75) $ 3.00
- ----------------------------------------------------------------------------
Enrollment Fee $ 5.00
- ----------------------------------------------------------------------------
Investment Fees*
via check or wire $ 5.00
</TABLE>
<PAGE>
<TABLE>
<S> <C>
via Automatic Investment $ 1.00
via payroll deduction** $ .50
- ----------------------------------------------------------------------------
Sales Fee* $10.00
proceeds via wire* add $25.00
- ----------------------------------------------------------------------------
Fee for Bounced Checks or Rejected Automatic Investments $20.00
- ----------------------------------------------------------------------------
Annual IRA Fee $35.00
- ----------------------------------------------------------------------------
</TABLE>
*Plus a $.10 per share trading fee which is capped at $5.00 per trade.
**Fee waived from May 1, 1996 through April 30, 1997.
The Administrator will deduct the applicable fees from proceeds due from a sale,
funds received for investment or the payment of dividends. The Administrator
will charge applicable fees for IRA accounts as described in the disclosure
statement. If not paid separately, the annual IRA fee will be deducted from the
participant's initial investment. Thereafter, if not paid separately, the annual
IRA fee will be deducted from the participant's Plan account by selling
sufficient shares to cover the fee.
Because of the structure of the service fees, the cost of participation in the
Plan on a per share basis decreases as the number of shares held by a
participant in the Plan increases. Accordingly, shareholders are urged to
carefully consider the impact of the costs of participation in the Plan on
investment returns.
Communication
The Administrator will establish and maintain a separate account under the Plan
for each participant. Participants will receive transaction advices or
statements for account activity (except reinvested dividends and payroll
deductions) and quarterly statements listing all transactions in the
participant's account for that quarter.
Stock Splits; Stock Dividends; Other Distributions
In the event dividends are paid in Common Stock, or if Common Stock is
distributed in connection with any stock split or similar transaction, each
account shall be adjusted to reflect the receipt of the Common Stock so paid or
distributed.
Rights of Participants
All Common Stock purchased and/or held pursuant to the Plan will be held by the
Administrator, registered in a nominee name, as custodian. Participants will
receive all reports distributed to McDonald's shareholders, as well as proxy
materials, including a proxy for shares of Common Stock held in a participant's
Plan account, relating to any annual or special meeting of McDonald's common
shareholders. Plan shares will be voted as and to the extent specified thereon
by a participant. If a participant fails to vote Plan shares prior to the fifth
day before a shareholder meeting, the Administrator will vote them in accordance
with the majority of Plan shares voted by participants.
<PAGE>
Responsibility of the Administrator and McDonald's
Neither McDonald's nor the Administrator will be liable for any act done in good
faith or for any good faith omission to act, including without limitation, the
failure to terminate a participant's account upon such participant's death prior
to receipt of notice in writing of such death, or any act or omission to act
with respect to the prices at which shares are purchased or sold for a
participant's account or the times at which such purchases or sales are made.
Each participant should recognize that neither McDonald's nor the Administrator
can assure a profit or protect against a loss on shares purchased under the
Plan. The establishment and maintenance of the Plan by McDonald's does not
constitute an assurance with respect to either the value of Common Stock or
whether the Company will continue to pay dividends on Common Stock or at what
rate.
Modification or Termination of the Plan
McDonald's may modify or terminate the Plan at any time and, in such event,
participants will be so notified. No modification or termination will affect
previously executed transactions. The Administrator also reserves the right to
change any administrative procedures of the Plan.
Interpretation of the Plan
McDonald's may in its absolute discretion interpret and regulate the Plan as
deemed necessary or desirable in connection with the operation of the Plan and
resolve questions or ambiguities concerning the various provisions of the Plan.
Governing Law
The Plan shall be governed by and construed in accordance with the laws of the
State of Illinois.
Change of Eligibility; Termination
The Administrator will from time to time review the status of participants to
determine whether they continue to be eligible to participate in the Plan. If
the Administrator determines that a participant no longer qualifies in any of
the categories listed above under "Eligibility," or if the Plan is terminated
for any reason whatsoever, the Administrator will so notify the participant in
writing. Not later than 30 days following such notice, the Administrator will
transfer all shares of Common Stock in the participant's Plan account to Book-
Entry, unless the participant requests that the Administrator (i) send the
participant a certificate for the number of whole shares held in the Plan
account and a check for the value of any fractional shares (based on the then
current market price, less applicable fees); or (ii) sell all shares in the Plan
account in the manner described on page 12 under "Sales of Common Stock." If a
participant's account is inactive over a long period of time and consists of
only a fractional share, the Administrator may close such account by notifying
this participant in writing and sending a check for the value of the fractional
share based on the last sale price for any whole shares sold.
U.S. Federal Income Taxation
Cash dividends reinvested under the Plan will be taxable as having been received
by a participant, even though the participant has not actually received them in
cash. A participant will receive an
<PAGE>
annual statement from the Administrator indicating the amount of reinvested
dividends reported to the U.S. Internal Revenue Service ("Service") as dividend
income.
A participant will not realize gain or loss for U.S. Federal income tax purposes
upon the transfer of shares to the Plan or the withdrawal of whole shares from
the Plan. Participants will, however, generally realize gain or loss upon the
sale of shares (including the receipt of cash for fractional shares) held in the
Plan.
Plan participants who are non-resident aliens or non-U.S. corporations,
partnerships or other entities generally are subject to a withholding tax on
dividends paid on shares held in the Plan. The Administrator is required to
withhold from dividends paid the appropriate amount determined in accordance
with Service regulations. Where applicable, this withholding tax is determined
by treaty between the U.S. and the country in which such participant resides.
Accordingly, the amount of any dividends, net of the applicable withholding tax,
will be credited to participant Plan accounts for investment in additional
shares of Common Stock.
The foregoing does not purport to be a comprehensive summary of all of the tax
considerations that may be relevant to a participant in the Plan. In addition,
special tax considerations may apply to certain participants, such as those
participating through an IRA. Therefore, participants are urged to consult their
tax advisors regarding the consequences of participation in the Plan.
Use of Proceeds
McDonald's will receive proceeds from the purchase of Common Stock pursuant to
the Plan only to the extent that such purchases are made directly from
McDonald's, and not from open market purchases by the Administrator. Proceeds
received by McDonald's from such purchases shall be used for general corporate
purposes.
Plan of Distribution
Common Stock offered pursuant to the Plan will be purchased in the open market
or, at McDonald's option, directly from McDonald's. Participants will be charged
fees for participating in the Plan. See "Service Fees" on page 6 for a complete
description. All other costs related to the administration of the Plan will be
paid by McDonald's.
Legal Matters
The legality of the Common Stock covered hereby has been passed upon for
McDonald's by Shelby Yastrow, Esq., Executive Vice President of McDonald's. Mr.
Yastrow owns shares of Common Stock, both directly and as a participant in
various employee benefit plans, and he is eligible to participate in the Plan.
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, 1995, 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
<PAGE>
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
Inquiries
Telephone inquiries regarding Plan accounts may be directed to the Administrator
at 1-800-Mc1-STCK (U.S. and Canada) or 1-201-222-4990 (other countries call
collect) or 1-201-222-4945 (TDD# for hearing impaired). Written inquiries should
be directed to McDonald's Shareholder Services, c/o First Chicago Trust Company
of New York, P.O. Box 2591, Jersey City, New Jersey 07303-2591, and should
include the transaction form, found at the bottom of each account statement, or
a letter which includes the participant's account number and refers to MCDirect
Shares and a daytime telephone number.
<PAGE>
McDonald's Corporation Bulk Rate
McDonald's Plaza U.S. Postage PAID
Oak Brook IL 60521 Permit No. 78
Deer Park NY
Questions regarding MCDirect Shares should be directed to McDonald's Shareholder
Services at 1-800-Mc1-STCK (U.S. and Canada) or 1-201-222-4990 (other countries
call collect).
The information contained in this brochure is as of December 1996 and highlights
some of the aspects of the Company's business, but is not a complete description
of the Company, its activities or its prospects. This brochure should be read in
conjunction with the accompanying prospectus and the documents incorporated by
reference therein. Unless read in conjunction with the accompanying prospectus,
this brochure does not constitute an offer to sell or the solicitation of an
offer to buy. There shall be no sale of these securities in any state or country
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state or
country.
The following trademarks used herein are owned by McDonald's Corporation:
McDonald's, The Golden Arches Logo, MCDirect Shares, The Design of Ronald
McDonald, 1-800-Mc1-STCK.
(C) 1996 McDonald's Corporation McD 5-2908
Printed in the United States of America
Printed on recycled paper with
50% recycled fiber; 10% post-consumer fiber
