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): September 19, 1997
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 60523
(630) 623-3000
(Address and Phone Number of Principal Executive Offices)
<PAGE>
Item 5. Other Events
On September 24, 1997, McDonald's Corporation issued $150,000,000 7.31%
Subordinated Deferrable Interest Debentures due 2027.
(c) Exhibits
1 Underwriting Agreement dated September 19, 1997, by and among
McDonald's Corporation, Morgan Stanley & Co., Incorporated,
J.P. Morgan Securities Inc., Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Salomon Brothers
Inc
4(a) Supplemental Indenture No. 3, dated as of September 24, 1997,
supplemental to the Subordinated Debt Securities Indenture
dated as of October 18, 1996, between McDonald's Corporation
and First Union National Bank, as Trustee
4(b) Specimen Debenture
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, Deputy General Counsel
and Secretary<PAGE>
<PAGE>
Exhibit Index
Exhibit
No. Description of Exhibit Page
1 Underwriting Agreement dated September 19, 1997, by and among 4
McDonald's Corporation, Morgan Stanley & Co., Incorporated,
J.P. Morgan Securities Inc., Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Salomon Brothers
Inc
4(a) Supplemental Indenture No. 3, dated as of September 24, 1997, 23
supplemental to the Subordinated Debt Securities Indenture
dated as of October 18, 1996, between McDonald's Corporation
and First Union National Bank, as Trustee
4(b) Specimen Debenture 33
EXHIBIT 1
McDONALD'S CORPORATION
UNDERWRITING AGREEMENT
----------------------
To the Representatives named in Schedule I hereto of
the Underwriters named in Schedule II hereto
Dear Sirs:
1. Introductory. McDonald's Corporation (the "Company"), a Delaware
corporation, proposes to sell to the underwriters named in Schedule II
hereto (the "Underwriters"), for whom you are acting as representatives
(the "Representatives", which term may refer to a single Representative
if so indicated on Schedule I hereto), the principal amount of its
securities identified in Schedule I hereto (the ``Securities''), to be
issued under an Indenture, dated as of October 18, 1996 as supplemented
by Supplemental Indenture No. 3 to be dated as of September 24, 1997
(collectively, the ``Indenture''), between the Company and First Union
National Bank, as trustee (the `` Trustee''). (If the firm or firms listed
in Schedule II hereto include only the firm or firms listed in Schedule I
hereto, then the terms ``Underwriters'' and ``Representatives,'' as used
herein, shall each be deemed to refer to such firm or firms.)
2. Representations and Warranties of the Company. The Company
represents and warrants to each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the ``Commission'') a registration statement on Form S-3
under the Securities Act of 1933, as amended (the ``Securities Act'')
(File No. 333-14141), which has become effective, for the registration
under the Securities Act of the Securities. Such registration
statement meets the requirements set forth in Rule 415(a)(1)(i) under
the Securities Act and complies in all other material respects with
said Rule. The Company proposes to file with the Commission pursuant
to Rule 424(b)(2) or (b)(5) under the Securities Act a supplement to
the form of prospectus included in registration statement File No.
333-14141 relating to the Securities and the plan of distribution
thereof or, if the Company elects to rely on Rule 434 under the
Securities Act, a Term Sheet (as such term is hereinafter defined)
relating to the Securities that shall contain such information as is
required or permitted by Rules 434 and 424(b) under the Securities
Act. The registration statement File No. 333-14141, including the
exhibits thereto, is hereinafter called the ``Registration
Statement;'' the prospectus in the form in which it appears in
registration statement File No. 333-14141, is hereinafter called the
``Basic Prospectus;'' and such supplemented form of prospectus, in the
form in which it shall be filed with the Commission pursuant to Rule
424(b)(2) or (b)(5) (including the Basic Prospectus as so
supplemented) or, if the Company elects to rely on Rule 434 under the
Securities Act, in the form of the Term Sheet as first filed with the
Commission pursuant to Rule 424(b)(7) (together with the Basic
Prospectus), is hereinafter called the ``Final Prospectus.'' Any
preliminary form of the Final Prospectus which has heretofore been
filed pursuant to Rule 424(b) is hereinafter called the ``Preliminary
Final Prospectus. '' Any abbreviated term sheet that satisfies the
requirements of Rule 434 under the Securities Act is hereinafter
called the ``Term Sheet.'' Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or
the Final Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934,
as amended (the ``Exchange Act '') on or before the date of this
Agreement, or the issue date of the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus, as the case may be; and any
reference herein to the terms ``amend,'' ``amendment'' or
``supplement'' with respect to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the filing of any document
under the Exchange Act after the date of this Agreement, or the issue
date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be, and deemed to be incorporated
therein by reference.
(b) As of the date hereof, when the Final Prospectus is first filed
pursuant to Rule 424(b) under the Securities Act, when, prior to the
Closing Date (as hereinafter defined), any amendment to the
Registration Statement becomes effective (including the filing of any
document incorporated by reference in the Registration Statement),
when any supplement to the Final Prospectus is filed with the
Commission and at the Closing Date (as hereinafter defined), (i) the
Registration Statement, as amended as of any such time, the Final
Prospectus, as amended or supplemented as of any such time, and the
Indenture will comply in all material respects with the applicable
requirements of the Securities Act, the Trust Indenture Act of 1939,
as amended (the ``Trust Indenture Act '') and the Exchange Act and the
respective rules and regulations thereunder and (ii) neither the
Registration Statement, as amended as of any such time, nor the Final
Prospectus, as amended or supplemented as of any such time, will
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading; provided, however, that
the Company makes no representations or warranties as to (i) that part
of the Registration Statement which shall constitute the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of the Trustee,
(ii) information, if any, contained in the Registration Statement or
Final Prospectus relating to the Depository Trust Company ("DTC")
and its book-entry system, or (iii) the information contained in or
omitted from the Registration Statement or the Final Prospectus or any
amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of any Underwriter through the Representatives specifically
for use in connection with the preparation of the Registration
Statement and the Final Prospectus.
(c) The financial statements of the Company and its consolidated
subsidiaries included in the Registration Statement fairly present the
financial condition of the Company and its consolidated subsidiaries
as of the dates indicated and the results of operations and cash flow
for the periods therein specified; and said financial statements have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved, except as otherwise stated therein. As used herein,
``consolidated subsidiaries '' means each subsidiary of the Company
which is included in the consolidated financial statements of the
Company contained in its annual report to shareholders for 1996 in
accordance with the consolidation policies set forth therein or which
would have been so included if it had been a subsidiary of the Company
as of the date of such consolidated financial statements, and each
other subsidiary of the Company which is included in consolidated
financial statements of the Company prepared from time to time
thereafter.
(d) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Final Prospectus and prior
to the Closing Date hereinafter mentioned, except as set forth or
contemplated in the Final Prospectus, (1) neither the Company nor any
of its consolidated subsidiaries has entered into any transaction not
in the ordinary course of business which is material to the Company
and its consolidated subsidiaries, considered as a whole, (2) there
has been no material adverse change in the properties, business,
financial condition or results of operations of the Company and its
consolidated subsidiaries, considered as a whole, and (3) no legal or
governmental proceeding, which has or will have materially affected
the Company or any of its consolidated subsidiaries, considered as a
whole, or the transactions contemplated by this Agreement, has been or
will have been instituted or threatened.
(e) The Company and each of its Significant Subsidiaries (herein
defined to mean the list of the Company's domestic and foreign
subsidiaries appearing in Exhibit 21 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1996) have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective states or jurisdictions of
incorporation, with corporate power and authority to own their
properties and to conduct their business as described in the Basic
Prospectus and Final Prospectus. The Company and each of its
Significant Subsidiaries are duly qualified to do business as foreign
corporations and are in good standing in all states or jurisdictions
in which the ownership or lease of real property or the conduct of
business requires such qualifications, except where failure to be so
qualified cannot be reasonably expected to have a material adverse
effect on the financial condition of the Company and its consolidated
subsidiaries, considered as a whole. The Company owns all of the
issued and outstanding shares of capital stock of each of the
Significant Subsidiaries, directly or indirectly through one or more
Significant Subsidiaries (except McDonald's Development Italy, Inc.,
McDonald's Properties (Australia) Pty., Ltd., McDonald's Development
Italia S.p.A, McDonald's Restaurants (Swisse) S.A. and McDonald's
Australia Limited, of which the Company directly or indirectly owns a
majority of the capital stock), and all of such shares of the
Significant Subsidiaries are owned free and clear of any liens,
charges and encumbrances.
(f) The consummation of the transactions herein contemplated and
the fulfillment of the terms hereof will not (i) conflict with or
result in a breach of any of the terms and provisions of, or
constitute a default under, the Restated Certificate of Incorporation
or By-Laws of the Company as presently in effect or (ii) conflict with
or result in a breach of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is a party, or any
order, rule or regulation applicable to the Company of any court or of
any federal or state regulatory body or administrative agency or other
governmental body having jurisdiction over the Company or any of its
properties, except such conflicts, breaches or defaults referred to in
this subclause (ii) which would not materially and adversely affect
the Company and its consolidated subsidiaries considered as a whole.
(g) The Securities have been duly and validly authorized and, when
issued, authenticated and delivered against payment therefor in
accordance with the terms of the Indenture and this Agreement, will
constitute valid and legally binding obligations of the Company
entitled to the benefits of the Indenture, except as enforcement
thereof may be limited by applicable bankruptcy, insolvency,
moratorium and other laws affecting the enforceability of creditors'
rights and general principles of equity, and will conform to the
description thereof contained in the Final Prospectus. The Indenture
has been duly authorized by the Company and will be a valid and legal
instrument enforceable in accordance with its terms, except as
enforcement thereof may be limited by applicable bankruptcy,
insolvency, moratorium and other laws affecting the enforceability of
creditors' rights and general principles of equity. The Indenture is
duly qualified under the Trust Indenture Act.
3. Sale, Purchase and Delivery of Securities. On the basis of the
representations and warranties herein contained, but subject to the terms
and conditions herein set forth, the Company hereby agrees to sell to the
Underwriters, severally and not jointly, and each Underwriter, severally
and not jointly (unless otherwise indicated on Schedule I hereto), agrees
to purchase from the Company, at the purchase price set forth in Schedule
I hereto, the principal amount of the Securities set forth opposite such
Underwriter's name in Schedule II hereto, except that, if Schedule I
hereto provides for the sale of Securities pursuant to delayed delivery
arrangements, the respective principal amounts of Securities to be
purchased by the Underwriters shall be as set forth in Schedule II
hereto, less the respective amounts of Contract Securities determined as
provided below. Securities to be purchased by the Underwriters are herein
sometimes called the ``Underwriters' Securities'' and Securities to be
purchased pursuant to Delayed Delivery Contracts as hereinafter provided
are herein called ``Contract Securities''.
If so provided in Schedule I hereto, the Underwriters are authorized
to solicit offers to purchase Securities from the Company pursuant to
delayed delivery contracts (``Delayed Delivery Contracts ''),
substantially in the form of Schedule III hereto but with such changes
therein as the Company may authorize or approve. The Underwriters will
endeavor to make such arrangements and, as compensation therefor, the
Company will pay to the Representatives, for the account of the
Underwriters, on the Closing Date, the percentage set forth in Schedule I
hereto of the principal amount of the Securities for which Delayed
Delivery Contracts are made. Delayed Delivery Contracts are to be with
institutional investors, including commercial and savings banks,
insurance companies, pension funds, investment companies and educational
and charitable institutions. The Company will make Delayed Delivery
Contracts in all cases where sales of Contract Securities arranged by the
Underwriters have been approved by the Company but, except as the Company
may otherwise agree, each such Delayed Delivery Contract must be for not
less than the minimum principal amount set forth in Schedule I hereto and
the aggregate principal amount of Contract Securities may not exceed the
maximum aggregate principal amount set forth in Schedule I hereto. The
Underwriters will not have any responsibility in respect of the validity
or performance of Delayed Delivery Contracts. The principal amount of
Securities to be purchased by each Underwriter as set forth in Schedule
II hereto shall be reduced by an amount which shall bear the same
proportion to the total principal amount of Contract Securities as the
principal amount of Securities set forth opposite the name of such
Underwriter bears to the aggregate principal amount set forth in Schedule
II hereto, except to the extent that you determine that such reduction
shall be otherwise than in such proportion and so advise the Company in
writing; provided, however, that the total principal amount of Securities
to be purchased by all Underwriters shall be the aggregate principal
amount set forth in Schedule II hereto, less the aggregate principal
amount of Contract Securities.
Delivery of and payment for the Underwriters' Securities shall be made
at the office, on the date and at the time specified in Schedule I
hereto, which date and time may be postponed by agreement between the
Representatives and the Company or as provided in Section 9 hereof (such
date and time of delivery and payment for the Underwriters' Securities
being herein called the ``Closing Date''). Delivery of the Underwriters'
Securities shall be made to the Representatives for the respective
accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof to
or upon the order of the Company in Federal (same day) funds, or, if so
indicated on Schedule I hereto, in New York Clearinghouse (next day)
funds. Certificates for the Underwriters' Securities shall be registered
in such names and in such denominations as the Representatives may
request not less than two full business days in advance of the Closing
Date.
The Company agrees to have the Underwriters' Securities available for
inspection, checking and packaging by the Representatives in New York,
New York, not later than 1:00 PM on the business day prior to the Closing
Date.
If so provided in Schedule I hereto, Underwriters' Securities will be
represented by one or more definitive global Securities in book-entry
form which will be deposited by or on behalf of the Company with DTC or
DTC's designated custodian. In such case, (a) delivery of the
Underwriters' Securities shall be made to the Representatives for the
respective accounts of the several Underwriters by causing DTC to credit
the Underwriters' Securities to the account of the Representatives at
DTC, and (b) the Company will cause the certificates representing the
Underwriters' Securities to be made available to the Representatives for
inspection not later than 1:00 p.m., New York City time, on the business
day prior to the Closing Date at the office of DTC or its designated
custodian.
4. Covenants of the Company. The Company covenants and agrees with the
Underwriters that:
(a) Prior to the termination of the offering of the Securities, the
Company will not file any amendment to the Registration Statement or
supplement (including the Final Prospectus) to the Basic Prospectus
unless the Company has furnished you a copy for your review prior to
filing, and the Company will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the foregoing
sentence, the Company will cause the Final Prospectus to be filed with
the Commission pursuant to Rule 424 and/or Rule 434 under the
Securities Act. The Company will promptly advise the Representatives
(i) when the Final Prospectus shall have been filed with the
Commission pursuant to Rule 424 and/or Rule 434 under the Securities
Act, (ii) when any amendment to the Registration Statement relating to
the Securities shall have become effective, (iii) of any request by
the Commission for any amendment of the Registration Statement or
amendment of or supplement to the Final 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 Securities 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.
(b) The Company will prepare and file with the Commission, promptly
upon the request of the Representatives, any amendments or supplements
to the Registration Statement or Final Prospectus which, in the
opinion of counsel for the Underwriters, may be necessary to enable
the several Underwriters to continue the sale of the Securities, and
the Company will use its best efforts to cause any such amendments to
become effective and any such supplements to be filed with the
Commission and approved for use by the Underwriters as promptly as
possible. If at any time when a prospectus relating to the Securities
is required to be delivered under the Securities Act, any event
relating to or affecting the Company occurs as a result of which the
Final 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 statement therein not misleading, or if it
is necessary at any time to amend or supplement the Final Prospectus
to comply with the Securities Act or the Exchange Act or the
respective rules thereunder, the Company promptly will prepare and
file with the Commission, subject to the first sentence of paragraph
(a) of this Section 4, an amendment or supplement which will correct
such statement or omission or which will effect such compliance. For
the purposes of this paragraph (b), the Company will furnish such
information with respect to itself as the Representatives may from
time to time reasonably request.
(c) As soon as practicable, but not later than 90 days after the
end of the 12-month period beginning at the end of the current fiscal
quarter of the Company, the Company will make generally available to
its security holders and you an earnings statement covering a period
of at least twelve months beginning not earlier than said effective
date which shall satisfy the provisions of Section 11(a) of the
Securities Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, copies of the Registration Statement
(including exhibits thereto and documents incorporated by reference
therein) and each amendment thereto which shall become effective on or
prior to the Closing Date and, so long as delivery of a prospectus by
an Underwriter or dealer may be required by the Securities Act, as
many copies of any Preliminary Final Prospectus and the Final
Prospectus and any amendments thereof and supplements thereto as the
Representatives may reasonably request. The Company will pay the
expenses of printing all documents relating to the offering.
(e) The Company will furnish such information and execute such
instruments as may be required to qualify the Securities for sale
under the securities or blue sky laws of such jurisdictions within the
United States as you designate, will continue such qualifications in
effect so long as required for distribution and will arrange for the
determination of the legality of the Securities for purchase by
institutional investors. The Company shall not be required to register
or qualify as a foreign corporation nor, except as to matters and
transactions relating to the offer and sale of the Securities, consent
to service of process in any jurisdiction.
(f) So long as the Securities shall be outstanding, the Company
will deliver to you (i) as soon as practicable after the end of each
fiscal year, consolidated balance sheets, statements of income,
retained earnings and cash flows of the Company and its consolidated
subsidiaries, as at the end of and for such year and the last
preceding year, all in reasonable detail and audited by independent
public accountants, (ii) as soon as practicable after the end of each
of the first three quarterly periods in each fiscal year, unaudited
consolidated balance sheets, statements of income, retained earnings
and cash flows of the Company and its consolidated subsidiaries, as at
the end of and for such period and for the comparable period of the
preceding year, all in reasonable detail, (iii) as soon as available,
all such proxy statements, financial statements and reports as the
Company shall send or make available to its stockholders generally,
and (iv) copies of all such annual, periodic and current reports as
the Company or any subsidiary shall file with the Commission or any
securities exchange.
(g) The Company will apply for the listing of the Securities on the
New York Stock Exchange, Inc. if requested to do so by you.
(h) The Company will pay all costs and expenses in connection with
the transactions herein contemplated, including, but not limited to,
the fees and disbursements of its counsel; the fees, costs and
expenses of preparing, printing and delivering the Indenture and the
Securities; the fees, costs and expenses of the Trustee; accounting
fees and disbursements; the costs and expenses in connection with the
qualification or exemption of the Securities under state securities or
blue sky laws, including filing fees and reasonable fees and
disbursements of counsel for the Underwriters in connection therewith
and in connection with any Blue Sky Memorandum; the costs and expenses
in connection with the preparation, printing and filing of the
Registration Statement (including exhibits thereto) and the Basic,
Preliminary Final, and Final Prospectus, the preparation and printing
of this Agreement and the furnishing to the Underwriters of such
copies of each prospectus as the Underwriters may reasonably require;
and the fees of rating agencies. It is understood, however, that,
except as provided in this Section and in Sections 7 and 8 hereof, the
Underwriters will pay all of their own costs and expenses, including
the fees of their counsel and any advertising expenses connected with
any offers they may make.
(i) Until the business day following the Closing Date, the Company
will not, without the consent of the Representatives, offer or sell,
or announce the offering of, any debt securities (other than up to
$150,000,000 principal amount of the Company's medium term notes to be
issued pursuant to the Company's Registration Statements on Form S-3
(File Nos. 33-42642 and 33-60939)) covered by the Registration
Statement or any other registration statement filed under the
Securities Act.
5. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Securities shall
be subject to the accuracy of the representations and warranties on the
part of the Company contained herein as of the date hereof, as of the
date of the effectiveness of any amendment to the Registration Statement
filed prior to the Closing Date (including the filing of any document
incorporated by reference therein) and as of the Closing Date, to the
accuracy of the written statements of Company officers made pursuant to
the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted or shall be
pending, or, to the knowledge of the Company, shall be contemplated by
the Commission.
(b) No event, nor any material adverse change in the condition of
the Company, financial or otherwise, shall have occurred, nor shall
any event exist which makes untrue or incorrect any material statement
or information contained in the Registration Statement or the Final
Prospectus or which is not reflected in the Registration Statement or
the Final Prospectus, but should be reflected therein in order to make
the statements or information contained therein not misleading.
(c) You shall not have advised the Company that the Registration
Statement or any prospectus, or any amendment or supplement thereto,
contains an untrue statement of fact which, in the opinion of counsel
for the Underwriters, is material, or omits to state a fact which, in
the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(d) You shall have received at the Closing Date (or prior thereto
as indicated) the following:
(i) An opinion from Gloria Santona, Vice President, Deputy
General Counsel and Secretary, or a Vice President and Assistant
General Counsel of the Company, dated the Closing Date, to the
effect that:
(A) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware with corporate power and authority to own its
properties and conduct its business as described in the Final
Prospectus.
(B) The Indenture has been duly authorized, executed and
delivered by the Company and the Trustee, is duly qualified
under the Trust Indenture Act, and is a valid and legally
binding obligation of the Company enforceable in accordance with
its terms, except as enforcement thereof may be limited by
applicable bankruptcy, insolvency, moratorium and other laws
affecting the enforceability of creditors' rights and general
principles of equity.
(C) The Securities have been duly and validly authorized by
all necessary corporate action and, when duly executed on behalf
of the Company, duly authenticated by the Trustee or the
Trustee's authenticating agent, and duly delivered to the
several Underwriters against payment therefor in accordance with
the provisions of this Agreement, in the case of the
Underwriters' Securities, or to the purchasers thereof pursuant
to Delayed Delivery Contracts, in the case of Contract
Securities, will constitute legal, valid and binding obligations
of the Company enforceable in accordance with their terms and
entitled to all the benefits of the Indenture, except as
enforcement thereof may be limited by applicable bankruptcy,
insolvency, moratorium and other laws affecting the
enforceability of creditors' rights and general principles of
equity.
(D) The Indenture and the Securities conform as to legal
matters with the statements concerning them made in the Final
Prospectus, and such statements accurately set forth the
provisions thereof required to be set forth in the Final
Prospectus.
(E) This Agreement and any Delayed Delivery Contracts have
been validly authorized, executed and delivered on behalf of the
Company.
(F) The Registration Statement and any amendments thereto
have become effective under the Securities Act, and, to the best
of the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement, as amended, has
been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities
Act, and the Registration Statement, the Final Prospectus, and
each amendment thereof or supplement thereto (except for the
financial statements and other financial data included therein,
as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the
Securities Act and the Exchange Act and the respective rules
thereunder; such counsel has no reason to believe that either
the Registration Statement or the Final Prospectus, or any such
amendment or supplement, contains any untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; the descriptions in the Registration Statement and
Final Prospectus of statutes, legal and governmental proceedings
and contracts and other documents are accurate and fairly
present the information required to be shown; and such counsel
does not know of any legal or governmental proceedings required
to be described in the Final Prospectus which are not described
as required, nor of any contracts or documents of a character
required to be described in the Registration Statement or Final
Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required.
(G) The consummation of the transactions herein contemplated
and the fulfillment of the terms hereof or of any Delayed
Delivery Contracts will not result in a breach of any of the
terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or other agreement or
instrument to which, to the knowledge of such counsel, the
Company is a party, or the Restated Certificate of Incorporation
or By-Laws of the Company as presently in effect or, to the
knowledge of such counsel, any order, rule or regulation
applicable to the Company of any court or of any federal or
state regulatory body or administrative agency or other
governmental body having jurisdiction over the Company or its
properties.
(H) No authorization, approval, consent or other action of
any governmental authority or agency is required in connection
with the sale of the Securities as contemplated by this
Agreement or in any Delayed Delivery Contracts except such as
may be required under the Securities Act or under state
securities or blue sky laws.
(ii) Such opinion or opinions of counsel for the Underwriters,
dated the Closing Date, with respect to the sufficiency of all
corporate proceedings and other legal matters relating to this
Agreement, any Delayed Delivery Contracts, the validity of the
Securities, the Registration Statement, the Final Prospectus and
other related matters as you may reasonably request. The Company
shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to render their
opinions. In connection with such opinions, such counsel may rely
on representations or certificates of officers of the Company.
(iii) A certificate of the President or a Vice President, and
the Chief Financial Officer of the Company or its Treasurer, dated
the Closing Date, to the effect that:
(A) The representations and warranties of the Company in
Section 2 of this Agreement are true and correct as of the
Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date.
(B) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or, to the
knowledge of the respective signers of the certificate, are
contemplated under the Securities Act.
(C) The signers of the certificate have carefully examined
the Registration Statement and the Final Prospectus; neither the
Registration Statement, the Final Prospectus nor any amendment
or supplement thereto includes, as of the Closing Date, any
untrue statement of a material fact or omits, as of the Closing
Date, to state any material fact required to be stated therein
or necessary to make the statements therein not misleading;
since the latest respective dates as of which information is
given in the Registration Statement, there has been no material
adverse change in the financial position, business or results of
operations of the Company and its consolidated subsidiaries,
considered as a whole, except as set forth in or contemplated by
the Final Prospectus; and since the effective date of the
Registration Statement, as amended, no event has occurred which
is required to be set forth in the Final Prospectus which has
not been so set forth.
(iv) A letter from Ernst & Young LLP, dated the Closing Date,
addressed to you substantially in the form heretofore approved by
you.
(e) Prior to the Closing Date, the Compan y shall have furnished to
you such further certificates and documents as you may reasonably
request.
(f) The Company shall have accepted Delayed Delivery Contracts in
any case where sales of Contract Securities arranged by the
Underwriters have been approved by the Company.
If any condition of the Underwriters' obligations hereunder required
to be satisfied prior to the Closing Date is not so satisfied, this
Agreement may be terminated by you by notice in writing or by facsimile
transmission to the Company.
In rendering the opinions described in Sections 5(d)(i) and (ii)
above, Ms. Gloria Santona, other counsel for the Company, and counsel for
the Underwriters may, as to matters involving the laws of any state other
than Illinois, rely upon the opinion or opinions of local counsel
satisfactory to you, but in such case a signed copy of each such opinion
shall be furnished to you.
All such opinions (including opinions, if any, of local counsel),
certificates, letters and documents will be in compliance with the
provisions hereof only if they are in all material respects satisfactory
to you and to counsel for the Underwriters, as to which both you and such
counsel shall act reasonably. The Company will furnish you with such
conformed copies of such opinions, certificates, letters and documents as
you request.
You, on behalf of the Underwriters, may waive in writing the
compliance by the Company of any one or more of the foregoing conditions
or extend the time for their performance.
6. Representat ion of the Underwriters. Each of the Underwriters
severally represents and warrants to the Company that the information
furnished to the Company in writing by such Underwriter or by you
expressly for use in the preparation of the Registration Statement or the
Final Prospectus does not, and any amendments thereof or supplements
thereto thus furnished will not, contain an 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.
7. Termination of Agreement. This Agreement may be terminated by you
on behalf of the Underwriters by notice in writing delivered to the
Company prior to the Closing Date if prior to such time (i) trading in
the Company's common stock shall have been suspended by the Commission on
the New York Stock Exchange for a period of twenty-four hours or more or
trading in securities generally on the New York Stock Exchange shall have
been suspended or materially limited, in either case to such a degree as
would in your judgment materially adversely affect the market for the
Securities; (ii) a general moratorium on commercial banking activities in
the State of New York or the United States shall have been declared by
Federal authorities; or (iii) there has occurred any material outbreak,
or material escalation, of hostilities involving the United States or
other national or international calamity or crisis, of such magnitude and
severity in its effect on the financial markets of the United States, in
your reasonable judgment, as to prevent or materially impair the
marketing, or enforcement of contracts for sale, of the Securities.
If this Agreement shall be terminated by you because of any failure on
the part of the Company to comply with any of the terms or to fulfill any
of the conditions of this Agreement, or if for any reason the Company
shall be unable to perform its obligations under this Agreement, the
Company shall pay, in addition to the costs and expenses referred to in
Section 4(h), all reasonable out-of-pocket expenses incurred by the
Underwriters in contemplation of the performance by them of their
obligations hereunder, including but not limited to the reasonable fees
and disbursements of counsel for the Underwriters, the Underwriters'
reasonable printing and traveling expenses, and postage and telephone
charges relating directly to the offering contemplated by the Final
Prospectus, and also including advertising expenses incurred after the
effective date of the Registration Statement, it being understood that
such out-of-pocket expenses shall not include any compensation, salaries
or wages of the officers, partners or employees of any of the
Underwriters.
The Company shall not in any event be liable to the several
Underwriters for damages on account of loss of anticipated profits
arising out of the transactions contemplated by this Agreement.
8. Indemnification and Contribution. (a) The Company will indemnify
and hold harmless each Underwriter and each person, if any, who controls
any Underwriter within the meaning of the Securities Act or the Exchange
Act against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter or such controlling person may become subject,
under the Securities Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or
any amendment thereof, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will
reimburse each Underwriter and each such controlling person for any legal
or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives specifically for use in the preparation thereof; and
provided, further, that the foregoing indemnification with respect to the
Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) from whom the person asserting any
such loss, claim, damage or liability purchased the Securities, if such
Underwriter failed to send or give copies of the Final Prospectus, as
amended or supplemented, excluding documents incorporated therein by
reference, to such person at or prior to the written confirmation of the
sale of such Securities to such person in any case where such delivery is
required by the Securities Act and the untrue statement or omission of a
material fact contained in the Basic Prospectus or any Preliminary Final
Prospectus was corrected in the Final Prospectus (or the Final Prospectus
as amended or supplemented). This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each person, if any, who controls the Company either within
the meaning of the Securities Act or the Exchange Act, each of its
directors and each of its officers who has signed the Registration
Statement, against any losses, claims, damages or liabilities to which
the Company, any such controlling person or any such director or officer
may become subject, under the Securities Act, the Exchange Act, or
otherwise, to the same extent as the foregoing indemnity from the Company
to each Underwriter, but only with reference to written information
relating to such Underwriter furnished to the Company by or on behalf of
such Underwriter through you specifically for use in the preparation of
the documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which any Underwriter may
otherwise have. The Company acknowledges that the statements set forth in
the last paragraph of the cover page of the Final Prospectus and under
the heading ``Underwriting'' or ``Plan of Distribution'' and, if Schedule
I hereto provides for sale of Securities pursuant to delayed delivery
arrangements, in the last sentence under the heading ``Delayed Delivery
Arrangements'' in the Final Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for
inclusion in the Final Prospectus, and you confirm that such statements
are correct. This indemnity agreement will be in addition to any
liability which each such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying
party under this Section, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate in and, to the extent that it may elect
by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different from
or in addition to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties.
Upon receipt by such indemnified party of notice from the indemnifying
party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any
legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof unless (i) the indemnified party
shall have employed such counsel in connection with the assumption of
legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall
not be liable for the expenses of more than one separate counsel,
approved by the Representatives of the Underwriters in the case of
subparagraph (a), representing the indemnified parties under subparagraph
(a) or (b), as the case may be, who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party
at the expense of the indemnifying party; provided, further, that, with
respect to legal and other expenses incurred by an indemnified party for
which an indemnifying party shall be liable hereunder, all such legal
fees and expenses shall be reimbursed by the indemnifying party as they
are incurred.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a)
of this Section 8 is due in accordance with its terms but is for any
reason held by a court to be unavailable from the Company on grounds of
policy or otherwise, the Company and the Underwriters shall contribute to
the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or
defending same) to which the Company and one or more of the Underwriters
may be subject in such proportion so that the Underwriters are
responsible for that portion represented by the percentage that the
underwriting discount bears to the sum of such discount and the purchase
price of the Securities set forth in Schedule I hereto and the Company is
responsible for the balance; provided, however, that (i) in no case shall
any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible
for any amount in excess of the underwriting discount applicable to the
Securities purchased by such Underwriter hereunder and (ii) 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. For
purposes of this Section 8, each person who controls an Underwriter
within the meaning of the Securities Act shall have the same rights to
contribution as such Underwriter, and each person who controls the
Company within the meaning of either the Securities Act or the Exchange
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clause (i) of this
paragraph (d). Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be
made against another party or parties under this paragraph (d), notify
such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party
or parties from whom contribution may be sought from any other obligation
it or they may have hereunder or otherwise than under this paragraph (d).
9. Default by an Underwriter. If the Underwriters' obligations to
purchase Securities pursuant to Section 3 hereof are several and not
joint and if any one or more Underwriters shall fail to purchase and pay
for any of the Securities agreed to be purchased by such Underwriter or
Underwriters hereunder and such failure to purchase shall constitute a
default in the performance of its or their obligations under this
Agreement and unless otherwise provided in Schedule I hereto, the
remaining Underwriters shall be obligated severally to take up and pay
for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bear to the aggregate
amount of Securities set opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in
the event that the aggregate amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed
10% of the aggregate amount of Securities set forth in Schedule II
hereto, the remaining Underwriters shall have the right to purchase all,
but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any
nondefaulting Underwriter or the Company. In the event of a default by
any Underwriter as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding seven days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Final Prospectus or in any other documents
or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations and warranties of the
Company and the several Underwriters, set forth in or made pursuant to
this Agreement, will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter, the Company or any
of its officers or directors or any controlling person, and will survive
delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this
Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or sent by facsimile transmission and confirmed to
them, at the address specified in Schedule I hereto; or, if sent to the
Company, will be mailed, delivered or sent by facsimile transmission and
confirmed to the Company at One McDonald's Plaza, Oak Brook, Illinois
60521, Attention of the Treasurer, with a copy to the Controller.
12. Successors; Governing Law. This Agreement will inure to the
benefit of and be binding upon the parties hereto and the officers and
directors and controlling persons referred to in Section 8 hereof and
their respective successors, assigns, heirs, executors and
administrators, and no other persons will have any right or obligation
hereunder. The terms ``successors'' and ``assigns'' as used herein shall
not include a purchaser as such from any Underwriter. This Agreement
shall be governed by and construed and enforced in accordance with, the
internal laws of the State of Illinois.
13. Business Day. For purposes of this Ag reement, ``business day ''
means any day on which the New York Stock Exchange is open for trading.
If the foregoing is in accordance with your understanding of our
agreement, sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement between the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
McDONALD'S CORPORATION
By: /s/ Carleton D. Pearl
----------------------------
The foregoing Underwriting Agreement is hereby confirmed and accepted by
us in Chicago, Illinois, acting on behalf of ourselves, the other
Representatives (if any), and the several Underwriters (if any) named in
Schedule II annexed hereto, as of the date first above written.
Morgan Stanley & Co. Incorporated
By: /s/ Harold J. Hendershot, III
-----------------------------
Date: September 19, 1997
<PAGE>
SCHEDULE I
Underwriting Agreement dated September 19, 1997
Registration Statement No. 333-14141
Representatives:
Morgan Stanley & Co. Incorporated
Title, Purchase Price and Description of Securities:
Title: 7.31% Subordinated Deferrable Interest
Debentures due 2027
Aggregate Principal Amount: $150,000,000
Price to Public: 100%
Purchase Price by Underwriter
(include accrued interest or
amortization if applicable): 99.125% plus accrued interest, if any,
from September 24, 1997
Maturity: September 15, 2027
Interest Rate: 7.31%
Interest Payment Dates: March 15 and September 15
Regular Record Dates: March 1 and September 1, except as
otherwise described in the
Prospectus Supplement
Redemption Provisions: At the option of the Company (i) in
whole or from time to time in part, on
at least 30 days' and not more than 60
days' notice, at any time on or after
September 15, 2007, at a redemption
price equal to 100% of the principal
amount together with accrued interest,
or (ii) in whole, but not in part, at
any time upon the occurrence of a Tax
Event, as described in the Prospectus
Statement, for the Make-Whole Amount,
as described in the Prospectus Supplement,
together with accrued interest
Sinking Fund Provisions: None
Other Provisions: Interest may be deferrable at the option
of the Company under circumstances
described in the Prospectus Supplement
for up to 10 consecutive semi-annual
interest payment periods
Sale and Delivery Provisions under Section 3:
Obligation to Purchase is: several and not joint / /
several and not joint; provided, however
that, notwithstanding the provisions of
Section 9 of the Underwriting Agreement,
the Representative(s) listed above will,
subject to the terms and conditions
hereof, purchase or cause to be
purchased any Securities which any
defaulting Underwriter or Underwriters
have agreed but failed or refused to
purchase pursuant to Section 3
hereof /X/
joint and several / /
Payment to Be Made in: New York Clearinghouse (next day) funds / /
or Federal (same day) funds / /
Delivery of Securities: Physical delivery to Underwriters through
Representatives / /
or delivery to Underwriters through
facilities of DTC by delivery to DTC
of one or more definitive global
securities in book-entry form /X/
Closing Date, Time and Location: September 24, 1997, 9:00 a.m.,
Gardner, Carton & Douglas,
321 N. Clark Street, Chicago, IL 60610
Address for Notice to Representatives:
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
Second Floor
New York, New York 10036
Attn: Debt Syndicate Department
<PAGE>
SCHEDULE II
Underwriters Principal Amount
------------ ----------------
Morgan Stanley & co. Incorporated $ 30,000,000
J.P. Morgan Securities Inc. 30,000,000
Goldman, Sachs & Co 30,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 30,000,000
Salomon Brothers Inc. 30,000,000
$150,000,000
------------
------------
<PAGE>
SCHEDULE III
Delayed Delivery Contract
, 19
[Insert name and address
of lead Representative]
Dear Sirs:
The undersigned hereby agrees to purchase from McDonald's Corporation
(the "Company"), and the Company agrees to sell to the undersigned, on
, 19 , (the "Delivery Date"),
$
principal amount of the Company's
(the "Securities") offered by the Company's Final Prospectus dated
, 19 , receipt of a copy of which is hereby acknowledged, at a purchase
price of % of the principal amount thereof, plus accrued interest, if
any, thereon from , 19 , to the date of payment and delivery,
and on the further terms and conditions set forth in this contract.
Payment for the Securities to be purchased by the undersigned shall be
made on or before 11:00 AM on the Delivery Date to or upon the order of
the Company in New York Clearinghouse (next day) funds or Federal (same
day) funds, as specified in Schedule I to the Underwriting Agreement
referred to in the Final Prospectus mentioned above, at your office or at
such other places as shall be agreed between the Company and the
undersigned upon delivery to the undersigned of the Securities in
definitive fully registered form and in such authorized denominations and
registered in such names as the undersigned may request by written
communication addressed to the Company not less than five full business
days prior to the Delivery Date. If no request is received, the
Securities will be registered in the name of the undersigned and issued
in a denomination equal to the aggregate principal amount of Securities
to be purchased by the undersigned on the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for Securities on the Delivery Date, and the obligation of the Company to
sell and deliver Securities on the Delivery Date, shall be subject to the
conditions (and neither party shall incur any liability by reason of the
failure thereof) and (1) the purchase of Securities to be made by the
undersigned, which purchase the undersigned represents is not prohibited
on the date hereof, shall not on the Delivery Date be prohibited under
the laws of the jurisdiction to which the undersigned is subject, and (2)
the Company, on or before the Delivery Date, shall have sold to certain
underwriters (the ``Underwriters'') such principal amount of the
Securities as is to be sold to them pursuant to the Underwriting
Agreement referred to in the Final Prospectus mentioned above. Promptly
after completion of such sale to the Underwriters, the Company will mail
or deliver to the undersigned at its address set forth below notice to
such effect, accompanied by a copy of the opinion of counsel for the
Company delivered to the Underwriters in connection therewith. The
obligation of the undersigned to take delivery of and make payment for
the Securities, and the obligation of the Company to cause the Securities
to be sold and delivered, shall not be affected by the failure of any
purchaser to take delivery of and make payment for the Securities
pursuant to other contracts similar to this contract.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be
assignable by either party hereto without the written consent of the
other.
It is understood that acceptance of this contract and other similar
contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first come, first served basis. If this
contract is acceptable to the Company, it is required that the Company
sign the form of acceptance below and mail or deliver one of the
counterparts hereof to the undersigned at its address set forth below.
This will become a binding contract between the Company and the
undersigned, as of the date first above written, when such counterpart is
so mailed or delivered.
This agreement shall be governed by and construed and enforced in
accordance with, the internal laws of the State of Illinois.
Very truly yours,
(Name of Purchaser)
By ----------------------------------
(Signature and Title of Officer)
(Address)
Accepted:
McDONALD'S CORPORATION
By ------------------------------
(Authorized Signature)
EXHIBIT 4(a)
--------------------------------------
SUPPLEMENTAL INDENTURE NO. 3
BETWEEN
McDONALD'S CORPORATION
AND
FIRST UNION NATIONAL BANK
Trustee
------------------
Dated as of September 24, 1997
------------------
SUPPLEMENTAL TO SUBORDINATED DEBT SECURITIES INDENTURE
DATED AS OF OCTOBER 18, 1996
--------------------------------------
<PAGE>
McDONALD'S CORPORATION
SUPPLEMENTAL INDENTURE NO. 3
Dated as of September 24, 1997
Series of 7.31% Subordinated Deferrable Interest Debentures due 2027
$150,000,000
Supplemental Indenture No. 3, dated as of September 24, 1997,
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 UNION NATIONAL BANK, 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 a
Subordinated Debt Securities Indenture dated as of October 18, 1996 (the
"Indenture").
WHEREAS, Section 10.01 of the Indenture provides for the Company,
when authorized by the Board of Directors, and the Trustee to enter into
an indenture supplemental to the Indenture to establish the form or
terms of any series 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. 3 constitutes an
integral part of the Indenture.
SECTION 1.02. For all purposes of this Supplemental Indenture:
(1) Capitalized terms used herein without definition shall have
the meanings specified in the Indenture;
(2) All references herein to Articles and Sections, unless
otherwise specified, refer to the corresponding Articles and Sections of
this Supplemental Indenture No. 3; 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. There shall be a series of Debt Securities
designated the "7.31% Subordinated Deferrable Interest Debentures due
2027" (the "Debentures"). The Debentures shall be limited to
$150,000,000 aggregate principal amount.
SECTION 2.02. The principal amount of the Debentures shall be
payable on September 15, 2027.
SECTION 2.03. The Debentures will be represented by a global
security (the "Global Security"). The Global Security will be
executed by the Company, authenticated by the Trustee and deposited
with, or on behalf of, The Depository Trust Company (the "Depositary")
and registered in the name of a nominee of the Depositary. Except under
circumstances described below, the Debentures will not be issuable in
definitive form.
Ownership of beneficial interests in the Global Security will be
limited to persons that have accounts with the Depositary or its nominee
("participants") or persons that may hold interests through participants.
Ownership of a beneficial interest in the Global Security will be shown
on, and the transfer of that beneficial interest will only be effected
through, records maintained by the Depositary or its nominee (with
respect to interests of participants) and on the records of participants
(with respect to interests of persons other than participants).
So long as the Depositary or its nominee is the registered owner of
the Global Security, the Depositary or such nominee, as the case may be,
will be considered the sole owner or Holder of the Debentures
represented by the Global Security for all purposes under the Indenture.
Except as provided below, owners of beneficial interests in the Global
Security will not be entitled to have Debentures represented by the
Global Security registered in their names, will not receive or be
entitled to receive physical delivery of Debentures in definitive form
and will not be considered the owners or Holders thereof under the
Indenture.
Principal and interest payments on Debentures represented by the
Global Security registered in the name of the Depositary or its nominee
will be made to the Depositary or its nominee, as the case may be, as
the registered owner of the Global Security.
If the Depositary notifies the Company that it is at any time
unwilling or unable to continue as Depositary or if at any time the
Depositary shall no longer be eligible to continue as Depositary, the
Company shall appoint a successor Depositary with respect to the
Debentures. If a successor Depositary for the Debentures is not
appointed by the Company within 90 days from the date the Company
receives such notice or becomes aware of such ineligibility, the Company
will execute, and the Trustee will authenticate and deliver, Debentures
in definitive form in exchange for the entire Global Security. In
addition, the Company may at any time and in its sole discretion
determine not to have the Debentures represented by the Global Security
and, in such event, the Company will execute, and the Trustee will
authenticate and deliver, Debentures in definitive form in exchange for
the entire Global Security. In any such instance, an owner of a
beneficial interest in the Global Security will be entitled to physical
delivery in definitive form of Debentures represented by the Global
Security equal in principal amount to such beneficial interest and to
have such Debentures registered in its name. Debentures so issued in
definitive form will be issued as registered Debentures in denominations
of $1,000 and integral multiples thereof, unless otherwise specified by
the Company.
Upon the exchange of a Global Security for individual Debentures,
such Global Security shall be cancelled by the Trustee. Individual
Debentures issued in exchange for a Global Security shall be registered
in such names and in such authorized denominations as the Depositary for
such Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The
Trustee shall deliver such Debentures to, or in accordance with the
instructions of the persons in whose name such Debentures are so
registered.
Unless and until it is exchanged in whole or in part for the
individual Debentures represented thereby, a Global Security
representing all or a portion of the Debentures may not be transferred
except as a whole by the Depositary for the Debentures to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by the Depositary or any such
nominee to a successor Depositary for the Debentures or a nominee of
such successor Depositary.
SECTION 2.04. The Debentures shall bear interest at the rate of
7.31% per annum, payable semi-annually, in arrears, on March 15 and
September 15 of each year, commencing March 15, 1998 (each, an
"Interest Payment Date"). The Debentures shall be dated the date of
authentication and interest shall be payable on the principal
represented thereby from the later of September 24, 1997, or the most
recent Interest Payment Date to which interest has been paid or duly
provided for. If any date on which interest is payable is not a
business day, the payment of interest due on such date may be made on
the next succeeding business day (and without any interest or other
payment in respect of such delay).
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the Holder in whose name
any Debenture is registered in the Debt Security register at the close
of business on the March 1 or September 1 (whether or not a business
day) next preceding such Interest Payment Date (each, a "Regular Record
Date"). Interest payable on redemption or maturity will be payable to
the person to whom the principal is paid.
The Company shall have the right at any time during the term of the
Debentures, prior to an Interest Payment Date, so long as the Company is
not in default in the payment of interest on the Debentures, to extend
the interest payment period for an Extension Period (as defined below).
Except as provided in the next succeeding sentence, no interest shall be
due and payable during an Extension Period, but on the Interest Payment
Date occurring at the end of each Extension Period the Company shall pay
to the Holders of record on the Record Date for such Interest Payment
Date (regardless of who the Holders of record may have been on other
dates during the Extension Period) all interest then accrued but unpaid
on the Debentures, together with interest thereon, compounded semi-
annually, at the rate of 7.31% per annum, to the extent permitted by
law; provided that during any such Extension Period, the Company shall
not declare or pay any dividend on, or repurchase, redeem or otherwise
acquire any of its capital stock, as set forth in this Section 2.04.
Prior to the termination of any Extension Period, the Company may (a) on
any Interest Payment Date pay all or any portion of the interest accrued
on the Debentures as provided herein to Holders of record on the Regular
Record Date for such Interest Payment Date or (b) from time to time
further extend the interest payment period as provided in the last
sentence of this paragraph, provided that any such Extension Period,
together with all such previous and further extensions thereof, may not
exceed 10 consecutive semi-annual interest payment periods from the last
date to which interest on the Debentures was paid in full. If the
Company shall elect to pay all of the interest accrued on the Debentures
on an Interest Payment Date during an Extension Period, such Extension
Period shall automatically terminate on such Interest Payment Date.
Upon the termination of any Extension Period and the payment of all
amounts of interest then due, the Company may commence a new Extension
Period, subject to the above requirements. The Company shall cause the
Trustee to give prior notice, by public announcement given in accordance
with New York Stock Exchange rules (or the rules of any other applicable
self-regulatory organization) and by mail, first class postage prepaid,
to each Holder of Debentures at his address as it appears in the Debt
Security register, of
(x) the Company's election to initiate an Extension Period and the
duration thereof,
(y) the Company's election to extend any Extension Period beyond
the Interest Payment Date on which such Extension Period is then
scheduled to terminate, and the duration of such extension, and
(z) the Company's election to make a full or partial payment of
interest accrued on the Debentures of any Interest Payment Date during
any Extension Period and the amount of such payment.
In no event shall notice be given less than five Business Days prior to
the March 1 or September 1 next preceding the applicable Interest
Payment Date.
The term "Extension Period" means the period from and including
the Interest Payment Date next following the date of any notice of
extension of the interest payment period on the Debentures given
pursuant to the last sentence of the preceding paragraph (or, in the
case of any further extension of the interest payment period pursuant to
the third sentence of the preceding paragraph before the payment in full
of all accrued but unpaid interest on the Debentures, the Interest
Payment Date to which interest was paid in full) to but excluding the
Interest Payment Date to which payment of interest on the Debentures is
so extended, after giving affect to any further extensions of the
interest payment period on the Debentures pursuant to the third sentence
of the preceding paragraph; provided that no Extension Period shall
exceed 10 consecutive semi-annual interest payment periods from the last
date to which interest on the Debentures was paid in full; and provided,
further, that any Extension Period shall end on an Interest Payment
Date. Notwithstanding the foregoing, in no event shall any Extension
Period exceed September 15, 2027.
Any interest on any Debenture 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 Debentures are registered at
the close of business on a Special Record Date (as defined below) for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Debenture
and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee 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 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 provided. Thereupon the Trustee
shall fix a Special Record Date ("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 of the notice of the
proposed payment. The Trustee 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 therefore to be mailed, first class postage
prepaid, to each Holder of Debentures at his address as it appears in
the Debt Security register, not less than 10 days prior to such Special
Record Date. The Trustee 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 Debentures are registered on such Special
Record Date and shall no longer be payable pursuant to the following
Clause (2).
(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 Debentures may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this
Clause, such payment shall be deemed practicable by the Trustee.
The Company covenants and agrees that, if at any time it has failed
to make any payment of interest or principal on the Debentures when due
(after giving effect to any grace period for payment thereof as provided
in Section 6.01 of the Indenture), or the Company exercises its option to
extend the interest payment period as provided for above, the Company
will not, until all Defaulted Interest or accrued but unpaid interest, if
the Company exercises its option to extend the interest payment period on
the Debentures and all principal, if any, then due and payable on the
Debentures shall have been paid in full, (a) declare, set aside, or pay
any dividend or distribution on any capital stock of the Company (except
for dividends or distributions in shares of its capital stock or rights
to acquire shares of its capital stock); or (b) repurchase, redeem, or
otherwise acquire any shares of its capital stock (except: (i) by
conversion into or exchange for shares of its capital stock; or (ii) for
a redemption, purchase or other acquisition of shares of its capital
stock made for the purpose of any employee incentive plan or benefit plan
of the Company or any of its affiliates).
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Supplemental Indenture No. 3 upon transfer of or in
exchange for or in lieu of any other Debenture shall carry the rights to
interest accrued but unpaid, and to accrue, which were carried by such
other Debenture.
SECTION 2.05. The Place of Payment for the Debentures shall be
both the City of New York, New York, and the City of Charlotte, North
Carolina. The Trustee shall be the paying agent for the Debentures.
SECTION 2.06. The Debentures may, at the option of the Company, be
redeemed (i) in whole or from time to time in part, on at least 30 days'
and not more than 60 days' notice, at any time on or after September 15,
2007, at a redemption price equal to 100% of the principal amount of the
Debentures redeemed, together with accrued but unpaid interest to the
date of redemption or (ii) in whole but not in part, on at least 30 days'
and not more than 60 days' notice at any time upon the occurrence of a
Tax Event, at a redemption price equal to the Make-Whole Amount for the
Debentures together with accrued but unpaid interest to the date of
redemption.
The "Make-Whole Amount" will be equal to the greater of (i) 100%
of the principal amount of the Debentures and (ii) the sum of the present
value of the principal amount of the Debentures discounted from September
15, 2007 to the date of redemption, together with the present values of
scheduled payments of interest for the period from the date of redemption
to September 15, 2007 (the "Remaining Life"), discounted from September
15, 2007 to the date of redemption. Discounting in each case shall be on
a semi-annual basis (assuming a 360-day year consisting of 30-day months)
at the Treasury Rate plus 62.5 basis points.
"Treasury Rate", as of any date it is calculated, means (i) the
yield, under the heading which represents the average for the week
immediately prior to the calculation date, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant
Maturities", for the maturity corresponding to the Remaining Life
(provided that if all such maturities are either more than three months
greater than or more than three months less than the Remaining Life,
yields for the two published maturities most closely corresponding to the
Remaining Life shall be determined and the Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date
or does not contain such yields, the rate per annum equal to the semi-
annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury
Price for such date of redemption.
"Comparable Treasury Issue" means with respect to any date of
redemption the United States Treasury security selected by a Reference
Treasury Dealer as having a maturity comparable to the Remaining Life
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of maturity comparable to the Remaining Life. If no United
States Treasury security has a maturity which is within a period from
three months before to three months after September 15, 2007, the two
most closely corresponding United States Treasury securities shall be
used as the Comparable Treasury Issue, and the Treasury Rate shall be
interpolated or extrapolated on a straight-line basis, rounding to the
nearest month, using such securities.
"Reference Treasury Dealer" means a primary U.S. Government
securities dealer in New York City selected by the Trustee after
consultation with the Company.
"Comparable Treasury Price" means (i) the average of five
Reference Treasury Dealer Quotations for such date of redemption, after
excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (ii) if the Trustee obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third business day
preceding such date of redemption.
The term "Tax Event" means that the Company shall have received an
opinion of independent tax counsel (a ``Tax Opinion") to the effect
that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein or (b) any amendment to or change in an
interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any
judicial decision or regulatory determination on or after September 19,
1997), in either case after September 19, 1997, there is more than an
insubstantial risk that interest payable on the Debentures would not be
deductible, in whole or in part, by the Company for United States federal
income tax purposes.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures for the unredeemed portion thereof will be issued
in the name of the Holder thereof upon the cancellation hereof.
SECTION 2.07. The Debentures may be issued in denominations of
$1,000 and any integral multiples thereof.
SECTION 2.08. The Debentures shall be in the form attached as
Exhibit A hereto.
ARTICLE THREE
MISCELLANEOUS.
SECTION 3.01. The recitals of fact herein and in the Debentures
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. 3 shall be construed
in connection with and as a part of the Indenture.
SECTION 3.03. (a) If any provision of this Supplemental Indenture
No. 3 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. 3) by any of the provisions of Sections 310
to 317, inclusive, of said Trust Indenture Act, such required provisions
shall control.
(b) In case any one or more of the provisions contained in this
Supplemental Indenture No. 3 or in the Debentures 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. 3 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. 3 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. (a) This Supplemental Indenture No. 3 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.
(b) The descriptive headings of the several Articles of this
Supplemental Indenture No. 3 were formulated, used and inserted in this
Supplemental Indenture No. 3 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. 3 to be signed, acknowledged and delivered by
its President, Executive Vice President and Chief Financial Officer or
Senior 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 UNION NATIONAL BANK, as Trustee, has caused this
Supplemental Indenture No. 3 to be signed, acknowledged and delivered by
one of its 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: /s/ Carleton D. Pearl
-----------------------------------
Senior Vice President and Treasurer
Attest:
/s/ Gloria Santona
------------------------
Secretary
FIRST UNION NATIONAL BANK, as Trustee
[CORPORATE SEAL]
By: /s/ John H. Clapham
-----------------------------------
Vice President
Attest:
/s/ Ralph E. Jones
-----------------------
Authorized Officer
<PAGE>
STATE OF ILLINOIS
SS:
COUNTY OF DuPAGE
On the 24th day of September, in the year one thousand nine hundred
ninety seven, before me appeared Carleton D. Pearl to me personally
known, who being by me duly sworn, did say that he resides at McDonald's
Corporation, that he is Senior 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.
/s/ Mary O. Velazquez
-------------------------------
Notary Public
COMMONWEALTH OF PENNSYLVANIA
SS:
COUNTY OF PHILADELPHIA
On the 23rd day of September, in the year one thousand nine hundred
ninety seven, before me appeared John H. Clapham to me personally known,
who, being by me duly sworn, did say that he resides at 1052 Signal
Hill, Berwyn, PA, that he is Vice President of FIRST UNION NATIONAL
BANK, 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.
/s/ Aida B. Dales
-------------------------------
Notary Public
EXHIBIT 4(b)
THIS DEBENTURE IS A REGISTERED GLOBAL DEBENTURE AND IS REGISTERED IN THE
NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"). UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC, TO ISSUER OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN. UNLESS AND
UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR DEBENTURES IN DEFINITIVE
REGISTERED FORM, THIS REGISTERED GLOBAL DEBENTURE MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC, OR BY A NOMINEE OF DTC TO
DTC OR ANOTHER NOMINEE OF DTC, OR BY DTC OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
REGISTERED McDonald's Corporation REGISTERED
Number 7.31% SUBORDINATED DEFERRABLE INTEREST DEBENTURE DUE 2027
RU $150,000,000
SEE REVERSE FOR
CERTAIN DEFINITIONS CUSIP 580 135 BX8
McDonald's Corporation, a corporation organized and existing under
the laws of the State of Delaware (hereinafter called the "Company,"
which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
Cede & Co. or registered assigns, the principal sum of One Hundred Fifty
Million Dollars ($150,000,000) on September 15, 2027 and to pay interest
thereon to the registered Holder hereof from September 24, 1997, or from
the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually in arrears on March 15 and September 15
in each year, commencing March 15, 1998 at the rate of 7.31% per annum
until the principal hereof is paid or such payment is duly provided for.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in said Indenture, be paid to the
Person in whose name this Debenture is registered at the close of
business on the Regular Record Date for such interest, which shall be the
March 1 or September 1 (whether or not a business day) next preceding an
Interest Payment Date. Interest payable on redemption or maturity will
be payable to the person to whom the principal is paid. Payment of the
principal of and interest on this Debenture will be made at the
designated office or agency of the Company maintained for such purpose in
the City of New York, New York, and the City of Charlotte, North
Carolina, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private
debts or, at the option of the Company, interest so payable may be paid
by check to the order of said Holder mailed to said Holder's address
appearing on the Debenture register or by wire transfer payable to an
account specified by said Holder. Any interest not so punctually paid or
duly provided for shall be payable as provided in the Indenture.
Reference is hereby made to the further provisions of this Debenture
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth in this place.
Unless the Certificate of Authentication hereon has been executed by
the Trustee referred to on the reverse hereof (or by an Authenticating
Agent, as provided in the Indenture) by manual signature, this Debenture
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
In Witness Whereof, McDonald's Corporation has caused this Instrument to
be signed in its corporate name by the Chairman of the Board or its
President or one of its Vice Presidents manually or in facsimile and a
facsimile of its corporate seal to be imprinted hereon and attested by
the manual or facsimile signature of its Secretary or one of its
Assistant Secretaries.
Dated: September 24, 1997
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated herein
provided for in the withinmentioned Indenture.
FIRST UNION NATIONAL BANK
as Trustee
By: /s/ John H. Clapham
------------------------------
Authorized Officer
Attest: /s/ Gloria Santona
---------------------------
Secretary
McDONALD'S CORPORATION
By: /s/ Carleton D. Pearl
------------------------------
Senior Vice President and Treasurer
<PAGE>
McDONALD'S CORPORATION
7.31% Subordinated Deferrable Interest Debenture due 2027
Indenture. This Debenture is one of a duly authorized issue of Debt
Securities of the Company designated as its 7.31% Subordinated Deferrable
Interest Debentures due 2027 (herein called the ``Debentures''), limited
in aggregate principal amount to $150,000,000, issued and to be issued
under a Subordinated Debt Securities Indenture, dated as of October 18,
1996 (herein called the ``Indenture'') between the Company and First
Union National Bank, as Trustee (herein called 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, the holders
of Senior Indebtedness and the Holders of the Debentures and of the terms
upon which the Debentures are, and are to be, authenticated and
delivered. The Debt Securities may be issued in one or more series,
which different series may be issued in various currencies, various
aggregate principal amounts, may mature at different times, may bear
interest (if any) at different rates, may be subject to different
sinking, purchase or analogous funds (if any), may be subject to
different covenants and Events of Default and may otherwise vary as in
the Indenture provided.
Interest. The Company promises to pay interest on said principal
sum from September 24, 1997 or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, semi-annually in
arrears on March 15 and September 15 in each year commencing March 15,
1998 at the rate of 7.31% per annum until maturity or earlier redemption.
If any date on which interest is payable on this Debenture is not a
business day, the payment of interest due on such date may be made on the
next succeeding business day (and without any interest or other payment
in respect of such delay). The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date (other than interest
payable on redemption or maturity) will, as provided in such Indenture,
be paid to the Person in whose name this Debenture (or one or more
predecessor Debt Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be the March 1 or
September 1 (whether or not a business day), as the case may be, next
preceding such Interest Payment Date. Interest payable on redemption or
maturity will be payable to the Person to whom the principal is paid.
Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Debenture (or one
or more predecessor Debt Securities) 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 Debentures not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which Debentures may
be listed, and upon such notice as may be required by such exchange, all
as more fully provided in said Indenture.
Extension of Interest Payment Period. Notwithstanding anything
contained in the Indenture to the contrary, the Company shall have the
right upon prior notice as provided in the last sentence of this
paragraph at any time during the term of the Debentures prior to an
Interest Payment Date, so long as the Company is not in default in the
payment of interest on the Debentures, to extend the interest payment
period for an Extension Period (as defined below). Except as provided in
the next succeeding sentence, no interest shall be due and payable during
an Extension Period, but on the Interest Payment Date occurring at the
end of each Extension Period the Company shall pay to the Holders of
record on the Regular Record Date for such Interest Payment Date
(regardless of who the Holders of record may have been on other dates
during the Extension Period) all interest then accrued but unpaid on the
Debentures, together with interest thereon, compounded semi-annually, at
the rate of 7.31% per annum, to the extent permitted by law; provided
that during any such Extension Period, the Company shall not declare or
pay any dividend on (except for dividends or distributions in shares of
its capital stock or rights to acquire shares of its capital stock), or
repurchase, redeem or otherwise acquire any of its capital stock (except
by conversion into or exchange for shares of its capital stock or for
redemption, purchase or other acquisition of shares of its capital stock
made for the purpose of any employee incentive plan or benefit plan of
the Company or any of its affiliates). Prior to the termination of any
Extension Period, the Company may (a) on any Interest Payment Date pay
all or any portion of the interest accrued on the Debentures as provided
on the face hereof to Holders of record on the Regular Record Date for
such Interest Payment Date or (b) from time to time further extend the
interest payment period as provided in the last sentence of this
paragraph, provided that any such Extension Period, together with all
such previous and further extensions thereof, may not exceed 10
consecutive semi-annual interest payment periods from the last date to
which interest on the Debentures was paid in full. If the Company shall
elect to pay all of the interest accrued on the Debentures on an Interest
Payment Date during an Extension Period, such Extension Period shall
automatically terminate on such Interest Payment Date. Upon the
termination of any Extension Period and the payment of all amounts of
interest then due, the Company may commence a new Extension Period,
subject to the above requirements. The Company shall cause the Trustee
to give prior notice, by public announcement given in accordance with New
York Stock Exchange rules (or the rules of any other applicable self-
regulatory organization) and by mail to all such holders, of
(x) the Company's election to initiate an Extension Period and the
duration thereof,
(y) the Company's election to extend any Extension Period beyond the
Interest Payment Date on which such Extension Period is then scheduled to
terminate, and the duration of such extension, and
(z) the Company's election to make a full or partial payment of
interest accrued on the Debentures of any Interest Payment Date during
any Extension Period and the amount of such payment.
In no event shall notice be given less than five Business Days prior to
the March 1 or September 1 next preceding the applicable Interest Payment
Date.
The term ``Extension Period'' means the period from and including the
Interest Payment Date next following the date of any notice of extension
of the interest payment period on the Debentures given pursuant to the
last sentence of the preceding paragraph (or, in the case of any further
extension of the interest payment period pursuant to the third sentence
of the preceding paragraph before the payment in full of all accrued but
unpaid interest on the Debentures, the Interest Payment Date to which
interest was paid in full) to but excluding the Interest Payment Date to
which payment of interest on the Debentures is so extended, after giving
affect to any further extensions of the interest payment period on the
Debentures pursuant to the third sentence of the preceding paragraph;
provided that no Extension Period shall exceed 10 consecutive semi-annual
interest payment periods from the last date to which interest on the
Debentures was paid in full; and provided, further, that any Extension
Period shall end on an Interest Payment Date. Notwithstanding the
foregoing, in no event shall any Extension Period exceed September 15,
2027.
Method of Payment. Payment of the principal of and interest on this
Debenture will be made at the office or agency of the Company in the City
of New York, New York and Charlotte, North Carolina, or at any other
office or agency maintained by the Company for such purpose, in such coin
or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts; provided, however,
that at the option of the Company, payment of interest may be made by
check mailed to the address of the Person entitled thereto as such<PAGE>
address shall appear in the Debenture register or by wire transfer
payable to an account specified by such Person.
Paying Agent and Debt Security Registrar. Initially, the Trustee
will act as Debt Security registrar through its office at 123 South Broad
Street, Philadelphia, Pennsylvania 19109, and the Company has appointed
the Trustee to act as Paying Agent through its office or agency in New
York, New York, and Charlotte, North Carolina.
Redemption. The Debentures may, at the option of the Company, be
redeemed (i) in whole or from time to time in part, on at least 30 days'
and not more than 60 days' notice, at any time on or after September 15,
2007, at a redemption price equal to 100% of the principal amount of the
Debentures redeemed, together with accrued but unpaid interest to the
date of redemption or (ii) in whole but not in part, on at least 30 days'
and not more than 60 days' notice at any time upon the occurrence of a
Tax Event, at a redemption price equal to the Make-Whole Amount for the
Debentures together with accrued but unpaid interest to the date of
redemption.
The ``Make-Whole Amount'' will be equal to the greater of (i) 100%
of the principal amount of the Debentures and (ii) the sum of the present
value of the principal amount of the Debentures discounted from September
15, 2007 to the date of redemption, together with the present values of
scheduled payments of interest for the period from the date of redemption
to September 15, 2007 (the ``Remaining Life''), discounted from September
15, 2007 to the date of redemption. Discounting in each case shall be on
a semi-annual basis (assuming a 360-day year consisting of 30-day months)
at the Treasury Rate plus 62.5 basis points.
"Treasury Rate'', as of any date it is calculated, means (i) the
yield, under the heading which represents the average for the week
immediately prior to the calculation date, appearing in the most recently
published statistical release designated ``H.15(519)'' or any successor
publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption ``Treasury Constant
Maturities", for the maturity corresponding to the Remaining Life
(provided that if all such maturities are either more than three months
greater than or more than three months less than the Remaining Life,
yields for the two published maturities most closely corresponding to the
Remaining Life shall be determined and the Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date
or does not contain such yields, the rate per annum equal to the semi-
annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury
Price for such date of redemption.
``Comparable Treasury Issue'' means with respect to any date of
redemption the United States Treasury security selected by a Reference
Treasury Dealer as having a maturity comparable to the Remaining Life
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of maturity comparable to the Remaining Life. If no United
States Treasury security has a maturity which is within a period from
three months before to three months after September 15, 2007, the two
most closely corresponding United States Treasury securities shall be
used as the Comparable Treasury Issue, and the Treasury Rate shall be
interpolated or extrapolated on a straight-line basis, rounding to the
nearest month, using such securities.
``Reference Treasury Dealer'' means a primary U.S. Government
securities dealer in New York City selected by the Trustee after
consultation with the Company.
``Comparable Treasury Price'' means (i) the average of five
Reference Treasury Dealer Quotations for such date of redemption, after
excluding the highest and lowest such Reference Treasury Dealer<PAGE>
Quotations, or (ii) if the Trustee obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such quotations.
``Reference Treasury Dealer Quotations'' means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third business day
preceding such date of redemption.
The term ``Tax Event'' means that the Company shall have received an
opinion of independent tax counsel (a ``Tax Opinion'') to the effect
that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein or (b) any amendment to or change in an
interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any
judicial decision or regulatory determination on or after September 19,
1997), in either case after September 19, 1997, there is more than an
insubstantial risk that interest payable on the Debentures would not be
deductible, in whole or in part, by the Company for United States federal
income tax purposes.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures for the unredeemed portion thereof will be issued
in the name of the Holder thereof upon the cancellation hereof.
Subordination. The Company and each Holder, by acceptance hereof,
agree that the payment of the principal of and interest on the Debentures
is subordinated, to the extent and in the manner provided in the
Indenture, to the prior payment in full of all Senior Indebtedness, and
this Debenture is issued subject to the provisions of the Indenture with
respect thereto. Each Holder of this Debenture, by accepting the same,
authorizes and expressly directs the Trustee on his behalf to take such
action as may be necessary or appropriate in the discretion of the
Trustee to effectuate the subordination so provided and appoints the
Trustee his attorney-in-fact for such purpose.
Indebtedness. The Company and, by its acceptance of this Debenture
or a beneficial interest herein, the Holder of, and any Person that
acquires a beneficial interest in, this Debenture agree that for United
States federal, state and local tax purposes it is intended that this
Debenture constitute indebtedness.
Defaults and Remedies. If an Event of Default shall occur and be
continuing, the principal of all the Debentures may be declared due and
payable in the manner and with the effect provided in the Indenture.
Amendments and Waivers. The Indenture contains provisions
permitting the Company and the Trustee, with the consent of the Holders
of not less than 66-2/3% in aggregate principal amount of each series of
Debt Securities at the time outstanding (as defined in the Indenture) to
be affected (each series voting as a class), evidenced as in the
Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or modifying
in any manner the rights of the Holders of the Debt Securities of all
such series; provided, however, that no such supplemental indenture
shall, among other things, (i) extend the fixed maturity of any Debt
Security, or reduce the rate or extend the time of payment of interest
thereon, or reduce the principal amount or premium, if any, thereon or
make the principal thereof, or premium, if any, or interest, if any,
thereon payable in any coin or currency other than that hereinabove
provided, without the consent of the Holder of each Debt Security so
affected or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon acceleration of maturity
thereof, or (ii) reduce the aforesaid percentage of Debt Securities the
Holders of which are required to consent to any such supplemental<PAGE>
indenture, without the consent of the Holders of each Debt Security so
affected. The Indenture also contains provisions permitting the Holders
of a majority in aggregate principal amount of the Debentures at the time
Outstanding, as defined in the Indenture, on behalf of the Holders of all
the Debentures, 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
Debenture shall be conclusive and binding upon such Holder and upon all
future Holders of this Debenture and of any Debenture issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent or waiver is made upon this Debenture or upon
any Debenture issued upon the transfer hereof or in exchange therefor or
in lieu hereof.
Obligation Absolute. No reference herein to the Indenture and no
provision of this Debenture or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay
the principal of and interest on this Debenture at the times, place and
rate, and in the coin or currency, herein prescribed.
Denominations. The Debentures are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Debentures are exchangeable for a like aggregate
principal amount of Debentures of a different authorized denomination, as
requested by the Holder surrendering the same and upon surrender of the
Debenture for registration of transfer at the office or agency of the
Company in New York, New York, or Charlotte, North Carolina, the Company
will execute, and the Trustee will authenticate and deliver, in the name
of the designated transferee or transferees, one or more new Debentures,
of authorized denominations and of a like aggregate principal amount and
tenor. Every Debenture surrendered for registration of transfer or
exchange will, if required by the Company, the Debt Security registrar or
the Trustee, be duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company, the Debt Security
registrar and the Trustee duly executed by, the Holder hereof or his
attorney duly authorized in writing. No service charge shall be made for
any 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.
Persons Deemed Owners. Prior to due presentment of this Debenture
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
Debenture is registered in the Debt Security register as the owner hereof
for all purposes, whether or not this Debenture is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
No Recourse Against Others. No recourse for the payment of the
principal of or interest on this Debenture, or for any claim based hereon
or on the Indenture and no recourse under or upon any obligation,
covenant or agreement of the Company in the Indenture or any indenture
supplemental thereto or in any Debenture, or because of the creation of
any indebtedness represented hereby, shall be had against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, either directly
or through the Company or any successor corporation, whether by virtue of
any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
Governing Law. This Debenture will be governed by and construed and
enforced in accordance with, the internal laws of the State of Illinois.
Terms. All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.<PAGE>
The following abbreviations, when used in the inscription on the
face of this Debenture, shall be construed as though they were written
out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
UNIF GIFT MIN ACT - Custodian
----------------- -----------------
(Cust) (Minor)
under Uniform Gifts to Minors
Act
----------------
(State)
Additional abbreviations may also be used though not in the above list.
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FOR VALUE RECEIVED the undersigned hereby sell(s),
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
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PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
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the within Instrument of McDONALD'S CORPORATION and hereby does
irrevocably constitute and appoint
---------------------------------------------------------------- Attorney
to transfer the said Instrument on the books of the within-named Company,
with full power of substitution in the premises.
Dated:
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NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within Instrument in every
particular, without alteration or enlargement or any change whatever.
