SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
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McDonald's Corporation
(Name of Registrant as Specified in Its Charter)
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[FRONT COVER OF PROXY STATEMENT -- McDonald's Corporation Proxy Statement and
Notice of 1997 Annual Meeting of Shareholders -- Picture of Golden Arches
along with the word Proxy]
YOUR VOTE IS IMPORTANT
If you are a registered shareholder, you can ensure that your shares are
represented at the Annual Meeting in one of three ways: 1) by
completing, signing, dating and mailing your proxy card in the enclosed
postage-paid envelope; 2) calling the toll-free number indicated on your
proxy to vote by phone; 3) by accessing the World Wide Website indicated
on your proxy card to vote via the internet. First Chicago Trust Company
of New York (First Chicago) is the independent inspector of election and
will receive and tabulate your vote. If your shares are held in the name
of a broker, bank or other holder of record, you may attend the Annual
Meeting, but may not vote at the meeting unless you have first obtained a
proxy, executed in your favor, from the holder of record.
IF YOU PLAN TO ATTEND
We anticipate that a large number of shareholders will attend the
meeting. Please note that space limitations make it necessary to limit
attendance to shareholders of McDonald's as of the record date. If you
are a registered shareholder and plan to attend the Annual Meeting,
please bring the admission form on the top of your proxy card. If your
shares are held by a bank or broker, please bring your bank or broker
statement evidencing your beneficial ownership of McDonald's stock.
HIGHLIGHTS
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These highlights are a summary. Please read this Proxy Statement
completely for all the information needed to vote your proxy.
McDonald's Corporation's 1997 Annual Meeting of Shareholders will be held
at 2:30 p.m. on Thursday, May 22, 1997, in Oak Brook, Illinois. See page
1.
Shareholders will be asked to elect five Directors to serve until the
2000 Annual Meeting of Shareholders. The nominees for Director are:
James R. Cantalupo, Enrique Hernandez, Jr., Donald R. Keough, Michael R.
Quinlan and B. Blair Vedder, Jr. The Board recommends a vote FOR all
nominees. Information about the nominees is on the color insert in the
middle of the Proxy Statement.
The Board's corporate governance guidelines are described on page 7.
Information about the pay of McDonald's executive management, as well as
a report on executive compensation prepared by the Board's Compensation
Committee, are on pages 11 through 13 and 5 through 6.
The Company's cumulative total return to common shareholders for five-
and ten-year periods ended December 31, 1996 is compared with returns for<PAGE>
the Standard & Poor's 500 Stock Index (S&P 500) and DJIA companies on
page 14.
A description of the Company's confidential voting policy is found on
page 16.
A glossary of capitalized terms is found on the inside back cover.
Directions to the Annual Meeting are on the inside back cover.
CHAIRMAN'S MESSAGE TO SHAREHOLDERS AND ANNUAL MEETING NOTICE AND AGENDA
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DEAR FELLOW SHAREHOLDERS:
It is our pleasure to invite you to McDonald's 1997 Annual Meeting. At
the Annual Meeting, we will report on McDonald's past year and our
prospects for the future. Also, you will be asked to elect five Directors
to serve until the 2000 Annual Meeting of Shareholders.
Your vote is important. I urge you to consider the issues and to vote
your shares as promptly as possible.
Cordially,
/s/ Michael R. Quinlan
------------------------------------
Michael R. Quinlan
Chairman and Chief Executive Officer
TO THE SHAREHOLDERS OF MCDONALD'S CORPORATION:
The 1997 McDonald's Corporation Annual Meeting of Shareholders will be
held on Thursday, May 22, 1997, at 2:30 p.m. local time, in the Prairie
Room at The Lodge at McDonald's Office Campus, corner of Kroc Drive and
Ronald Lane, Oak Brook, Illinois. The meeting will consider the following
items of business:
1. The election of five Directors to serve until the 2000 Annual
Meeting of Shareholders or until their successors are elected and
qualified; and
2. Such other business as may properly come before the meeting or any
adjournment thereof.
By order of the Board of Directors,
/s/ Gloria Santona
---------------------------------
Gloria Santona
Secretary
April 7, 1997
BOARD OF DIRECTORS
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COMMITTEES OF THE BOARD
The audit committee is comprised entirely of outside Directors and
recommends to the Board independent auditors to audit the Company's
financial statements; reviews the audit with the auditors and management;
reviews the Company's dealings with Directors and their affiliates;
reviews financial reporting issues and practices; reviews the Company's<PAGE>
legal affairs; consults with the auditors and management regarding risk
management and the adequacy of financial and accounting controls; and
reports the results of the annual audit to the Board. In carrying out its
responsibilities, the Committee regularly meets with the independent
auditors without members of management present.
The compensation committee is comprised entirely of outside Directors and
is responsible for developing compensation policies consistent with and
linked to the Company's performance. In addition, the Committee
evaluates, in consultation with all outside Directors, the performance of
the Company's Chief Executive Officer and recommends his compensation and
that of all senior management to the Board annually; reviews and approves
all other officers' compensation; and recommends to the Board the fees of
outside Directors. The Committee administers the 1975 Option Plan, the
Incentive Plan and the Deferred Income Plan. The Committee's report on
executive compensation can be found on pages 5 through 6.
The nominating and corporate governance committee is comprised entirely
of outside Directors and establishes criteria for Board membership;
searches for and screens candidates to fill vacancies on the Board;
recommends an appropriate slate of candidates for election each year and,
in this regard, evaluates the performance of individual Directors;
assesses the overall performance of the Board; considers issues regarding
the composition and size of the Board; and evaluates the Company's
corporate governance process. Shareholders wishing to nominate Director
candidates for consideration may do so by writing to the Secretary at
McDonald's Plaza, Oak Brook IL 60521 and providing the candidate's name,
biographical data and qualifications.
In addition, the Board of Directors has an executive committee which may
exercise the broad powers and authority granted to it under the Company's
By-Laws.
The chart below sets forth the composition of the Board's committees as
of March 1, 1997, as well as the number of meetings each committee held
in 1996.
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Number of meetings
Committee Member in 1996
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Audit Gordon C. Gray 5
Enrique Hernandez, Jr.
Robert N. Thurston
B. Blair Vedder, Jr.
Donald G. Lubin, non-voting Secretary
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Compensation Donald R. Keough 4
Terry L. Savage
Ballard F. Smith
Robert N. Thurston
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Executive Donald G. Lubin 0
Michael R. Quinlan
Fred L. Turner
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Nominating Hall Adams, Jr. 4
and Corporate Donald G. Lubin
Governance Andrew J. McKenna
Roger W. Stone
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In 1996, the Board met eight times. During 1996, all the Directors
attended all the meetings of the Board of Directors and of the committees
of which they were members except that one Director was absent from one
Board meeting and one Director was absent from one committee meeting.
COMPENSATION OF THE BOARD
In 1996, each outside Director earned an annual retainer of $35,000 plus
a fee of $2,000 for each Board meeting and $1,000 for each committee
meeting attended. The Company offers non-employee Directors the
alternative of receiving such fees on a deferred basis under the
Company's Stock Plan. The Stock Plan provides a vehicle for outside
Directors to align their interests with those of shareholders since
deferred fees are credited to an account which is adjusted to reflect
dividends as well as gains or losses as if invested in Common Stock.
Pursuant to the Stock Plan, each outside Director also receives a credit
of $17,500 to his or her Stock Plan account at the end of each full year
of service, up to a maximum of ten years of service. Distributions under
the Stock Plan are payable to participants or their beneficiaries in cash
or shares of Common Stock upon retirement or death. Payments may be made
in a lump sum or in annual installments over a period not exceeding
fifteen years.
Outside Directors receive stock options pursuant to the Option Plan which
was approved by shareholders in 1995. Under the Option Plan, each newly
appointed outside Director receives an option to purchase 1,000 shares of
Common Stock. Each outside Director, except Mr. Hernandez, received a
grant of 1,000 options on May 23, 1996, the date of last year's annual
meeting. Mr. Hernandez received an option to purchase 1,000 shares of
Common Stock on July 9, 1996, the date of his appointment to the Board.
The option exercise price in each case was the fair market value of the
Common Stock on the date of grant.
The Company reimburses its Directors and in certain limited
circumstances, spouses who accompany Directors, for travel, lodging and
related expenses they incur in attending Board and Committee meetings.
Mr. Lubin and Mr. Thurston also received the use of corporate vehicles
with values of $11,100 and $3,075, respectively, in 1996.
Directors who are Company employees are not paid for their services as
Directors and are not eligible to participate in the Stock Plan or the
Option Plan. As with its employees, including executives, the Company
does not offer a pension plan to its outside Directors.
DIVERSITY
Diversity remains an important criteria when evaluating candidates for
the Board. Presently, one female and two minority males serve on the
Board, and 36 minority men and women are officers. Also, more than 54%
of middle management employees and over 28% of franchisees are female and
minorities.
ADVISORY DIRECTORS
Advisory Directors are appointed by the Board of Directors each year to
serve in a non-voting capacity. They present management's perspective on
matters of interest to the Board. Advisory Directors for the past year
are (left to right): Claire H. Babrowski, Henry E. Gonzalez, Jr.,
Carleton D. Pearl, and Thomas M. Whaley.
[Picture of Advisory Directors]
SECURITY OWNERSHIP INFORMATION
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Management believes that the Company's Directors and Executive Officers
more effectively represent McDonald's shareholders, whose interests they
are charged with protecting, if they are shareholders themselves. To
ensure officers retain significant stockholdings in the Company, officers
are required to acquire and maintain specified levels of stock ownership
under the officer stock ownership program instituted earlier this year.
Our Executive Officer group beneficially owned (directly and through
employee benefit plans) approximately 7.7 million shares of Common Stock
on February 1, 1997. Directors and Executive Officers have sole voting
and investment power over shares held directly, except for 429,057 shares
held in joint accounts, over which they have shared voting and investment
power. They also have sole voting and dispositive power over the shares
credited or allocated to their accounts under the various benefit plans.
No Director or Executive Officer owns more than 1.0% of any class of
stock. Directors and Executive Officers as a group owned (directly and
through benefit plans) approximately 1.1% of the Common Stock as of
February 1, 1997.
Pursuant to plan provisions, participants in the Profit Sharing Program
and related equalization plans may direct the voting of unallocated and
unvoted plan shares. In addition, outside Directors may vote shares
credited to their accounts pursuant to the Stock Plan. All such shares
over which Directors and Executive Officers have voting power are shown
as beneficially owned, except for unvoted plan shares, which are not
shown because the number cannot be determined at this time.
The following table details the stock ownership of the named individuals
and group as of February 1, 1997.
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Beneficial ownership
of Common Stock
Beneficial owner (a,b,c,d,e,f)
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Hall Adams, Jr. 3,924
Robert M. Beavers, Jr. 438,030
James R. Cantalupo 841,553
Gordon C. Gray 13,802
Jack M. Greenberg 515,454
Enrique Hernandez, Jr. 4,200
Donald R. Keough 10,306
Donald G. Lubin 43,337
Andrew J. McKenna 24,006
Michael R. Quinlan 1,422,327
Edward H. Rensi 601,880
Terry L. Savage 16,636
Paul D. Schrage 479,751
Ballard F. Smith 50,391
Roger W. Stone 23,434
Robert N. Thurston 69,849
Fred L. Turner 1,340,859
B. Blair Vedder, Jr. 28,534
Directors and Executive Officers
as a group (the Group) (27 persons) 7,970,672
(a)To the Company's knowledge, no shareholder beneficially owned more
than 5% of the Company's Common Stock as of February 1, 1997.
(b)Included are shares of Common Stock as to which beneficial ownership
is disclaimed, as follows: Messrs. Gray, 2,500; Keough, 400; McKenna,
320; Rensi, 39,101; Schrage, 18,000; and the Group, 82,416. The<PAGE>
disclaimed shares are owned by spouses or in a custodial capacity for
children.
(c)Excluded are 24,000 shares held of record by Mr. McKenna in his
capacity as Trustee of the Schwarz Paper Company Profit Sharing
Trust.
(d)Included are shares of Common Stock over which the following have
voting power pursuant to employee benefit plan provisions, as
follows: Messrs. Beavers, 27,441; Cantalupo, 3,445; Greenberg, 1,670;
Quinlan, 2,985; Rensi, 3,000; Schrage, 2,479; Turner, 17,645; and the
Group, 106,367.
(e)Included are shares of Common Stock which could be acquired within 60
days after February 1, 1997, pursuant to stock options in the
following amounts: Messrs. Adams, 1,001; Beavers, 128,700;
Cantalupo, 641,375; Gray, 1,001; Greenberg, 427,750; Keough, 1,001;
Lubin, 1,001; McKenna, 1,001; Quinlan, 997,500; Rensi, 475,500;
Schrage, 282,700; Smith, 1,001; Stone, 1,001; Thurston, 1,001;
Turner, 329,750; Vedder, 1,001; Ms. Savage, 1,001; and the Group,
4,695,935.
(f)Included are shares of Common Stock over which the following have
voting power pursuant to provisions of the Stock Plan and related
trust: Messrs. Adams, 1,523; Gray, 6,165; Keough, 5,905; Lubin,
13,459; McKenna, 12,685; Smith, 22,342; Stone, 18,433; Thurston
20,920; Vedder, 22,663; and Ms. Savage, 14,135.
ELECTION OF DIRECTORS
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At the 1997 Annual Meeting, in accordance with the Company's Restated
Certificate of Incorporation and By-Laws, five Directors are to be
elected, each to serve a three-year term until the 2000 Annual Meeting of
Shareholders or until a successor is elected and qualified.
The Company's Restated Certificate of Incorporation currently provides
that the Board of Directors shall consist of not less than 11 nor more
than 24 members, with the exact number fixed by resolution of the Board.
Currently, the number of Directors is 18, and there is one class of six
Directors, one class of seven Directors and one class of five Directors.
Effective at this year's Annual Meeting, the number of Directors has been
decreased from 18 to 16. Accordingly, after that time there will be two
classes of five Directors and one class of six Directors.
NOMINEES
The five persons nominated by the Board of Directors for election at the
1997 Annual Meeting are: James R. Cantalupo, Enrique Hernandez, Jr.,
Donald R. Keough, Michael R. Quinlan, B. Blair Vedder, Jr.
A proxy cannot be voted for more than five persons. If any nominee
becomes unable to serve for any reason (which is not anticipated), the
shares represented by the enclosed proxy may be voted for such
substituted nominee as may be designated by the Board of Directors,
unless before the meeting the directorship has been eliminated by a
reduction in the size of the Board.
Unless otherwise directed, the shares represented by the enclosed proxy,
when signed and returned or voted via telephone or the internet, will be
voted FOR the election of the five nominees.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR ALL FIVE
NOMINEES.
VOTING INFORMATION
Elections for Directors are decided by a plurality of the votes of the
shares of Common Stock and Series D Preferred Stock represented in person
or by proxy, and entitled to vote on the election of Directors at the
1997 Annual Meeting.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
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DEAR FELLOW SHAREHOLDERS:
Our Committee is responsible for approving officers' compensation,
recommending senior management compensation to the Board of Directors,
and administering the Company's stock option and incentive plans. Our
decisions are based on our understanding of McDonald's business and its
long-term strategies, as well as our knowledge of the capabilities and
performance of the Company and its executives.
PHILOSOPHY
We believe that the Company and its shareholders are best served by
running the business with a long-term perspective while striving to
deliver consistently good annual results. Therefore, the Company's
executive compensation program has been designed to attract, energize,
reward and retain superior talent that will produce strong results and
enhance McDonald's position in a highly competitive global business.
Toward that end, in the past year we have implemented changes to this
program which will increase the risk-reward element of our executives'
compensation, both through changes to our Target Incentive Plan (TIP) and
the adoption of a new Long Term Incentive Plan (LTIP), which will provide
a benefit only if specified performance targets are met over a three-year
period.
We have always believed that the Company's executives will more
effectively represent McDonald's shareholders, whose interests they are
charged with protecting, if they are shareholders themselves.
Accordingly, we focus our executives' attention on managing McDonald's as
owners of the business by encouraging our officers to have significant
stock ownership in the Company. Our profit sharing program and stock
option plans are designed to facilitate share ownership by our
executives. To ensure that officers retain significant stockholdings in
the Company, in 1997 we instituted minimum ownership requirements
applicable to all officers.
SENIOR MANAGEMENT COMPENSATION
Our Committee conducts an overall review of compensation annually because
we believe that compensation for our executives should be competitive
with other high-performing companies and alternative careers within the
McDonald's System (i.e., careers as a franchisee or supplier) in order to
motivate and retain the talent needed to produce superior results.
The process we use to establish compensation is not purely a mechanical
one. We review information supplied by independent consultants to
determine the competitiveness of McDonald's total compensation package
with that of a peer group. The peer group, which we use solely for
compensation comparison purposes, consists of the 26 companies comprising
the DJIA on which our consultants have data. In addition to reviewing
competitive pay information, we also review five- and ten-year
shareholder returns for the Company and its peer group as illustrated in
the graphs set forth on page 14 of this Proxy Statement.
Moreover, because the Committee believes that special management talents
and sensitivities are required to balance the unique relationships
between and among the Company, its employees, franchisees and suppliers,
we go beyond a simple evaluation of competitive salary information and
Company financial results in making compensation decisions. We include
in our consideration qualitative factors which we believe contribute
significantly to building McDonald's global brand, thereby optimizing
shareholder value over the long term. The Company has always believed
that in order for it to prosper, its franchisees must prosper as well.
We are now linking that belief to executive compensation; beginning in
1997, we will also measure performance against certain financial targets
related to U.S. franchisee cash flow and profitability.
We do not seek to position compensation within any particular range as
compared to the peer group. At this point in time, each element of cash
compensation for the Named Officers approximates the middle of the peer
group's range, while stock options are well above the median, consistent
with our philosophy that a significant portion of compensation should be
at risk.
ANNUAL CASH COMPENSATION
Annual cash compensation for senior management, as for all employees,
consists of base salary and a variable, at risk incentive under TIP
(Target Incentive Plan). Throughout this report, references to salaries
for 1996 relate to salaries established on April 1, 1996 based on
performance in 1995, while references to TIP payments for 1996 relate to
TIP payments made on April 1, 1997 based on performance during 1996.
Our Committee annually establishes an executive's base salary based on
our evaluation of the executive's level of responsibility and individual
performance, considered in light of competitive pay practices. We gauge
individual performance in many areas, including: the development and
execution of strategies, leadership, people development, ability to
balance the many relationships which together form the McDonald's System,
and contributions in the previous year to programs which affected the
performance of the Company and the McDonald's System. Base salaries for
senior management increased in 1996 based on our assessment of individual
performance as evidenced by 1995's financial achievements (strong
worldwide operating income, improved return on assets, and growth in both
earnings per share and net income) and progress on strategic initiatives
during the year.
Consistent with our view that there should be a significant risk-reward
element to executive cash compensation, in 1996 the Committee increased
the proportionate amount of executive compensation under the TIP. Under
that program, each employee is assigned a target incentive at the
beginning of the year (the greater the individual's responsibility, the
higher the percentage of target incentive to salary). In order to
determine the annual incentive to be awarded, an individual's target
incentive is initially adjusted by an overall Company performance factor;
then a team performance factor, reflecting the overall results of the
organizational unit for which the executive is responsible, and an
individual performance factor are applied.
In determining annual target incentive awards for 1996 performance, our
Committee reviewed overall corporate and System performance during 1996
as measured by the following factors: financial results (operating
income, net income and earnings per share, and return on assets),
customer satisfaction, market share and progress on key strategic
initiatives.
As discussed in this year's Annual Report to Shareholders, although 1996
was another record-breaking year for McDonald's, the Company's financial
performance was not up to our standards. Consequently, no base salary
merit increases were granted to any of the Company's officers for 1997,
and 1996 target incentive awards were significantly decreased from 1995
awards.
STOCK OPTIONS
Options have proven to be an effective means of linking executive pay
with the creation of shareholder wealth, since an optionee will benefit
only if McDonald's stock price increases. Options granted to executives
have a life of ten years, vest over seven years and have an exercise
price equal to the fair market value of the Common Stock on the grant
date. In establishing guidelines for the size of stock option awards, we
consider the following criteria (in order of importance): level of
responsibility, achievement of plan objectives and the implementation of
key strategies. Individual awards to members of senior management are
made within these guidelines, dependent primarily upon current individual
performance and, to a lesser extent, on the potential for positively
influencing future results. In granting options early in 1996, we
considered the corporate and strategic achievements during 1995 described
under Annual Cash Compensation as well as the number of options granted
to individuals in previous years.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Quinlan participates in the compensation program described throughout
this report and, consistent with our compensation philosophy, at-risk
compensation represents the predominant portion of Mr. Quinlan's total
compensation package. Based on his outstanding performance in 1995, Mr.
Quinlan's salary was increased on April 1, 1996 from $1,068,400 to
$1,132,500 and in early 1996 he also received options to purchase 331,000
shares of Common Stock. Consistent with all other officers, Mr. Quinlan
will not receive a merit increase in 1997. On April 1, 1997, Mr. Quinlan
was awarded an incentive payment under TIP of $932,000 (compared with
$1,050,000 for the previous year) based on the Committee's assessment of
the Company's performance in 1996 as well as Mr. Quinlan's leadership in
a difficult competitive environment.
POLICY WITH RESPECT TO THE $1 MILLION DEDUCTION LIMIT
Section 162(m) of the Code generally limits the tax deductibility of
annual compensation paid to certain officers to $1 million. Our
Committee is obligated to recognize and reward performance which
increases shareholder value and will exercise its discretion in
determining whether or not to conform the Company's executive
compensation plans to the approach provided for in the code. Assuming
continued deferral of compensation by certain officers, we expect that
most, if not all, compensation will qualify as a tax deductible expense.
Respectfully submitted,
The Compensation Committee
/s/ Robert N. Thurston /s/ Donald R. Keough
----------------------- ---------------------
Robert N. Thurston Donald R. Keough
Chairman
/s/ Terry L. Savage /s/ Ballard F. Smith
----------------------- ---------------------
Terry L. Savage Ballard F. Smith
BOARD OF DIRECTORS
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RESPONSIBILITIES
The Board's primary responsibilities are:
Evaluating the performance of the Company and its executive management;
Reviewing and, where appropriate, approving fundamental operating,
financial and other corporate strategies, as well as major plans and
objectives;
Providing advice and counsel to the Chief Executive Officer and executive
management;
Overseeing management to ensure that the Company's assets are safeguarded
and business is conducted in compliance with laws and regulations; and
Evaluating the overall effectiveness of the Board, as well as selecting
and recommending to shareholders for election an appropriate slate of
candidates.
CORPORATE GOVERNANCE
THE BOARD'S CORPORATE GOVERNANCE GUIDELINES INCORPORATE PRINCIPLES BY
WHICH THE BOARD HAS BEEN OPERATING FOR MANY YEARS. AMONG OTHER THINGS,
THE GUIDELINES PROVIDE THAT:
A majority of Directors should consist of outside Directors and
independence is important in the selection of new candidates. The Board
itself is responsible for selecting candidates for membership and for
extending invitations to join the Board.
Outside Directors shall have primary responsibility for matters relating
to the selection and succession of the Chief Executive Officer and the
compensation of the Chief Executive Officer and executive management. The
Chief Executive Officer receives a performance review conducted annually
by the Chairman of the Compensation Committee.
Outside Directors meet alone with the Chief Executive Officer generally
at each Board meeting and, at least once each year, evaluate the
performance of executive management and discuss matters of succession
planning and management development with the Chief Executive Officer.
Outside Directors meet without members of management at least twice each
year.
The Board meets on a bi-monthly basis. The agenda is set by the Chairman
and Chief Executive Officer, and Directors may suggest items for
inclusion. Information about the Company's business, performance and
prospects, as well as information regarding recommendations for action by
the Board is made available to the Board a reasonable period before each
meeting.
At least once each year, Directors review the Company's strategic plans
and evaluate the impact of such plans on the Company's performance and on
the value of shareholders' interests.
The Nominating and Corporate Governance Committee annually evaluates the
performance of the Board. The Chairman of the Nominating and Corporate
Governance Committee reports the Committee's conclusions to the entire
Board and recommends to the Chairman appropriate changes for
consideration by the entire Board.
The Board may either combine or separate the offices of Chairman and
Chief Executive Officer.
Only outside Directors serve on the Audit, Compensation and Nominating
and Corporate Governance Committees.
Directors have access to the System's management around the world.
BIOGRAPHICAL INFORMATION
Biographical information as of March 1, 1997 regarding each Director
including each Director nominated for election and each Director whose
term of office will continue after the Annual Meeting is set forth on the
following pages.
[PICTURES OF BOARD OF DIRECTORS AND NOMINEES]
Hall Adams, Jr. Retired Chief Executive Officer of Leo Burnett & Co.,
Inc. Director of The Dun & Bradstreet Corporation and Sears, Roebuck and
Co. Class of 1999. Age: 63. Director since 1993.
Robert M. Beavers, Jr. Senior Vice President. Director of NICOR Inc.
Class of 1999. Age: 53. Director since 1984.
James R. Cantalupo. Nominee. President and Chief Executive Officer - -
International. Director of Morton International Inc. Class of 1997. Age:
53. Director since 1987.
Gordon C. Gray. Chairman and Chief Executive Officer of Rio Algom
Limited, a Canadian mining company and metals distributor. Director of
Rogers Communications Inc. and Stone-Consolidated Corporation. Class of
1999. Age: 69. Director since 1982.
Jack M. Greenberg. Vice Chairman, Chairman - U.S.A. since 1996.
Previously, Vice Chairman and Chief Financial Officer. Director of Arthur
J. Gallagher & Co., Harcourt General, Inc. and Stone Container
Corporation. Class of 1998. Age: 54. Director since 1982.
Enrique Hernandez, Jr. Nominee. President and Chief Executive Officer of
Inter-Con Security Systems, Inc., a provider of comprehensive security
services for commercial, industrial and government customers. Director
of Great Western Financial Corporation. Class of 1997. Age: 41.
Director since 1996.
Donald R. Keough. Nominee. Chairman of Allen & Company, Incorporated,
investment bankers, and advisor to the Board of Directors of The
Coca-Cola Company since 1993. Previously, President, Chief Operating
Officer and a Director of The Coca-Cola Company. Director of Excalibur
Technologies Corporation, H.J. Heinz Company, The Home Depot, Inc. and
The Washington Post Company. Class of 1997. Age: 70. Director since
1993.
Donald G. Lubin. Partner of the law firm of Sonnenschein Nath &
Rosenthal, which provides legal services to the Company on a regular
basis. Director of Molex Incorporated. Class of 1998. Age: 63. Director
since 1967.
Andrew J. McKenna. Chairman and Chief Executive Officer of Schwarz Paper
Company, a printer, converter, producer and distributor of packaging and
promotional materials. Director of Aon Corporation, Dean Foods Company,
First Chicago NBD Corporation, Skyline Corporation and Tribune Company.
Class of 1998. Age: 67. Director since 1991.
Michael R. Quinlan. Nominee. Chairman and Chief Executive Officer.
Director of The Dun & Bradstreet Corporation and The May Department
Stores Company. Class of 1997. Age: 52. Director since 1979.
Edward H. Rensi. President and Chief Executive Officer - U.S.A. Director
of International Speedway Corporation and Snap-on Incorporated. Class of
1998. Age: 52. Director since 1982.
Terry L. Savage. Financial journalist, author and President of Terry
Savage Productions, Ltd., which provides speeches, columns and videos on
personal finance for corporate and association meetings, publications and
national television programs. Previously, commentator for CBS News
(WBBM-TV) in Chicago. Class of 1999. Age: 52. Director since 1990.
Roger W. Stone. Chairman, President and Chief Executive Officer of Stone
Container Corporation, a multinational paper company primarily producing
and selling pulp, paper and packaging products. Director of Morton
International Inc., Option Care, Inc., Stone Container Corporation and
Stone-Consolidated Corporation. Class of 1998. Age: 62. Director since
1989.
Robert N. Thurston. Business consultant. Director of ACNielson
Corporation and Ag-Bag International Limited. Class of 1998. Age: 64.
Director since 1974.
Fred L. Turner. Senior Chairman since 1990. Previously, Chairman.
Director of Aon Corporation, Baxter International Inc. and W.W. Grainger,
Inc. Class of 1999. Age: 64. Director since 1968.
B. Blair Vedder, Jr. Nominee. Retired Chief Operating Officer of Needham
Harper Worldwide, Inc. Class of 1997. Age: 72. Director since 1988.
RETIRING DIRECTORS
Mr. Schrage and Mr. Smith have chosen not to seek reelection at this
year's Annual Meeting. We thank them for their many contributions over
the years.
Paul D. Schrage. Senior Executive Vice President, Chief Marketing
Officer. Director since 1988.
Ballard F. Smith. Former Chairman of Premier Food Services, Inc.
Director since 1983.
SUMMARY COMPENSATION TABLE
-------------------------------------------------------------------------
The following table summarizes total compensation earned by or paid for
services rendered in all capacities to the named executive officers
(Named Officers), during each of the years ended December 31, 1996, 1995
and 1994.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
Annual compensation Long-term compensation
-----------------------------------------
Awards Payouts
--------------------------- -----------
Restricted Securities All other
Name and stock underlying LTIP* compensation
principal position Year Salary($) Bonus($) awards($) options(#)(a) payouts($) ($)(b)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael R. Quinlan 1996 $1,116,475 $ 932,000 0 331,000 0 $384,703
Chairman of the Board and 1995 1,050,925 1,050,000 0 529,000 0 362,937
Chief Executive Officer 1994 998,875 950,000 0 350,000 0 167,055
Edward H. Rensi 1996 783,525 415,000 0 175,000 0 228,750
President and 1995 752,375 495,422 0 181,000 0 225,675
Chief Executive Officer- 1994 711,375 485,462 0 176,000 0 129,056
U.S.A.
James R. Cantalupo 1996 776,250 477,500 0 200,000 0 236,314
President and 1995 732,675 547,934 0 181,000 0 224,468
Chief Executive Officer- 1994 684,025 499,194 0 176,500 0 124,100
International
Jack M. Greenberg 1996 752,601 462,000 0 190,000 0 227,457
Vice Chairman, 1995 714,250 520,792 0 181,000 0 216,516
Chairman-U.S.A. 1994 668,875 473,478 0 176,000 0 121,337
Paul D. Schrage 1996 538,900 236,300 0 62,000 0 156,619
Senior Executive 1995 519,150 283,672 0 63,000 0 151,510
Vice President and 1994 493,725 262,147 0 72,600 0 99,401
Chief Marketing Officer
-----------------------------------------------------------------------------------------------------------
*Long-Term Incentive Plan
</TABLE>
(a) The securities underlying the options are shares of Common Stock.
(b) These amounts represent Company contributions and allocations to:
(i) the Profit Sharing Program and related equalization plans; (ii)
the Deferred Income Plan; and (iii) premiums on group term life
insurance. For 1996, the amounts in each category were as follows:
Messrs. Quinlan, $25,254, $346,255 and $13,194; Rensi, $121,055,
$98,391 and $9,304; Cantalupo, $66,558, $160,515 and $9,241;
Greenberg, $155,979, $62,514 and $8,964; and Schrage, $116,865,
$24,322 and $15,432. Amounts which have been included with respect
to the equalization plans and Deferred Income Plan represent the
Company's obligation to pay such amounts to participants. The
amount of All other compensation reported for Mr. Cantalupo in 1995
has been corrected from the 1996 Proxy Statement.
STOCK OPTION GRANTS IN 1996
Options granted to the Named Officers were about 6% of the total number
of options granted in 1996. All options granted will expire on the tenth
anniversary of their respective grant dates and become exercisable over a
seven-year period. Option exercise prices were in all cases equal to the
fair market value of a share of Common Stock on the date the option was
granted. The options have no value unless the Company's stock price
appreciates and the recipient satisfies the applicable vesting
requirements.
The following table shows the stock options granted to the Named Officers
during 1996 and the potential realizable value of those grants (on a
pre-tax basis) determined in accordance with SEC rules. The information
in this table shows how much the Named Officers may eventually realize in
future dollars under two hypothetical situations: if the stock gains 5%
or 10% in value per year, compounded over the ten-year life of the
options. These are assumed rates of appreciation and are not intended to
forecast future appreciation of the Company's Common Stock. Also included
in this table is the increase in value to all common shareholders using
the same assumed rates of appreciation.
For a perspective, in ten years one share of Common Stock valued at
$49.25 on April 1, 1996 would be worth $80.22, assuming the hypothetical
5% compounded growth rate, or $127.76, assuming the hypothetical 10%
compounded growth rate.
Another way to look at this is to express these amounts in today's
dollars by applying a present value approach to the hypothetical
appreciation rates. These results are shown in the last two columns of
the table.
-------------------------------------------------------------------------
Individual grants
---------------------------------------------------------
Number of % of
securities total
underlying options
options granted to Exercise
granted employees price Expiration
Name (#)(a) in 1996(b) ($/Sh) date
-------------------------------------------------------------------------
Michael R. Quinlan 300,000 2.0% $49.250 4/01/06
31,000 .2 52.125 3/18/06
Edward H. Rensi 175,000 1.2 49.250 4/01/06
James R. Cantalupo 200,000 1.3 49.250 4/01/06
Jack M. Greenberg 190,000 1.3 49.250 4/01/06
Paul D. Schrage 62,000 .4 49.250 4/01/06
Potential realizable Present value at assumed
value at assumed rates of rates of stock price
stock price appreciation appreciation(c,d)
for option term(c)
-------------------------- --------------------------
5% 10% 5% 10%
-------------------------------------------------------------------------
Michael R. Quinlan $9,291,918 $23,547,545 $4,903,806 $12,427,209
1,016,215 2,575,289 529,810 1,342,644
Edward H. Rensi 5,420,286 13,736,068 2,860,554 7,249,205
James R. Cantalupo 6,194,612 15,698,363 3,269,204 8,284,806
Jack M. Greenberg 5,884,881 14,913,445 3,105,744 7,870,565
Paul D. Schrage 1,920,330 4,866,493 1,013,453 2,568,290
-------------------------------------------------------------------------
INCREASE IN VALUE
TO ALL COMMON
SHAREHOLDERS(e) $21.6 billion $54.8 billion $11.4 billion $28.9 billion
(a) The securities underlying the options are shares of Common Stock.
(b) Based on the total number of options granted to employees under the
1975 Option Plan and the Incentive Plan.
(c) Calculated over a ten-year period, representing the life of the
options.
(d) Calculated assuming an investment in a ten-year, zero coupon U.S.
Treasury note made at the time the options were granted (6.73% on
March 18, 1996 and 6.60% on April 1, 1996).
(e) Calculated using a Common Stock price of $49.250, the closing market
price on April 1, 1996, which is the exercise price of substantially
all of the options granted in 1996, and the total weighted average
number of common shares outstanding for 1996.
AGGREGATED OPTION EXERCISES IN 1996 AND FISCAL YEAR-END OPTION VALUES
TABLE
The following table shows information concerning the exercise of stock
options by each of the Named Officers during 1996, and the value of all
remaining exercisable and unexercisable options at December 31, 1996, on
a pre-tax basis.
-------------------------------------------------------------------------
Number of
securities Value of
underlying unexercised
unexercised in-the-money
Shares options at options at
acquired 12/31/96 12/31/96
on Value (#)(b) ($)(c)
exercise realized Exercisable/ Exercisable/
Name (#) ($)(a) unexercisable unexercisable
-------------------------------------------------------------------------
Michael R. Quinlan 135,000 $5,444,415 1,065,250/ $26,626,591/
1,369,750 17,625,891
Edward H. Rensi 60,750 2,550,811 431,750/ 10,192,100/
643,750 8,324,015
James R. Cantalupo 40,800 1,565,739 666,375/ 17,723,523/
695,125 9,039,947
Jack M. Greenberg 20,000 723,230 395,250/ 8,914,243/
673,750 8,704,960
Paul D. Schrage 8,000 323,184 267,200/ 7,050,091/
259,000 3,652,825
-------------------------------------------------------------------------
(a) Calculated by subtracting the exercise price from the market value
of the Common Stock as of the exercise date.
(b) The securities underlying the options are shares of Common Stock.
(c) Calculated using the market value of the Common Stock at December
31, 1996 ($45.375 per share) less the per share option exercise
price multiplied by the number of exercisable or unexercisable
options, as the case may be.
COMPARISON OF TOTAL SHAREHOLDER RETURNS
-------------------------------------------------------------------------
At least annually, we consider which companies comprise a readily
identifiable investment peer group. Given the unique nature of our
business, we have consistently concluded that no one group of companies
stands out.
For instance, McDonald's is included in published restaurant indices.
However, unlike most other companies included in these indices, which
have no or limited international operations, McDonald's does business in
more than 100 countries and nearly 60 percent of our operating income
comes from outside the U.S. In addition, by virtue of our size,
McDonald's inclusion in those indices tends to skew the results. Hence,
we believe such a comparison would not be meaningful.
This view is shared by many who evaluate our Company, as they often
consider:
-------------------------------------------------------------------------
Our operating characteristics and marketing of branded products around
the world, which place McDonald's among global food and beverage
companies;
Our recognizable brand and the retail nature of our business, which place
McDonald's among global consumer products companies;
Our strong financial position, growing cash flow, solid international
presence and global brand power which place McDonald's among global
branded growth companies; and
Our capitalization, trading volume and importance in an industry that is
vital to the U.S. economy, which have resulted in McDonald's inclusion in
the DJIA since 1985.
-------------------------------------------------------------------------
Thus, in the absence of any readily identifiable peer group for
McDonald's, we believe use of the companies comprising the DJIA as the
group for comparison is appropriate. Like McDonald's, many DJIA companies
generate meaningful sales and revenues outside the U.S. and some manage
global brands. Also, investors who are looking for an investment in blue
chip stocks often look at the DJIA as a benchmark.
The two performance graphs which follow depict McDonald's cumulative
total shareholder returns (i.e., price appreciation and reinvestment of
dividends) relative to the S&P 500 and the companies comprising the DJIA
(including McDonald's) for the five- and ten-year periods ended December
31, 1996. Returns shown are for years ended December 31, and for the DJIA
companies, returns are weighted for market capitalization as of the
beginning of each year.
FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURNS
[GRAPH]
91 92 93 94 95 96
-------------------------------------------------------------------------
McDonald's $100 129 153 158 245 248
S&P 500 $100 108 118 120 165 203
DJIA companies $100 105 116 122 172 222
-------------------------------------------------------------------------
Source: S&P Compustat
TEN-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURNS
[GRAPH]
86 87 88 89 90 91 92 93 94 95 96
-------------------------------------------------------------------------
McDonald's $100 109 121 176 150 198 256 302 312 485 490
S&P 500 $100 105 123 162 157 204 220 242 245 337 415
DJIA companies $100 106 122 158 161 204 213 237 249 351 452
-------------------------------------------------------------------------
Source: S&P Compustat
OTHER INFORMATION
-------------------------------------------------------------------------
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Executive Officers and Directors to file reports of ownership
and changes in ownership with the SEC and the New York Stock Exchange.
The Company believes that during the period from January 1, 1996 through
December 31, 1996, its Executive Officers and Directors complied with all
applicable Section 16(a) filing requirements except that Mr. Keough filed
one late report covering one transaction and Mr. Beavers filed four late
reports covering four quarterly acquisitions of Common Stock pursuant to
the reinvestment of dividends. This conclusion is based solely on a
review of copies of such forms furnished to the Company in accordance
with SEC regulations and certain written representations received by the
Company.
RELATED PARTY TRANSACTIONS
In 1996, the Company and its subsidiaries purchased approximately $7.1
million worth of products (principally premiums and gift items) from
Group II Communications, Inc., comprising more than 5% of Group II's
gross revenues for its last fiscal year. Mr. McKenna, a Director of the
Company, is the holder of 51% of the stock of Group II. The Company
believes that such purchases were made on terms at least as favorable as
would have been available from other parties and expects to continue its
dealings with Group II in 1997 on similar terms.
In 1996, as part of its ongoing share repurchase program, the Company
purchased shares of Common Stock from Mr. Greenberg, a Director and
Executive Officer of the Company, for $442,605 (the New York Stock
Exchange composite closing price on the date of purchase). Mr. Greenberg
acquired these shares through the exercise of stock options.
1998 ANNUAL MEETING - RECEIPT OF SHAREHOLDER PROPOSALS
Any shareholder proposal must be submitted in writing to the Secretary of
the Company at McDonald's Plaza, Oak Brook, IL 60521 and received by
December 8, 1997, if it is to be considered for inclusion in the
Company's 1998 proxy materials.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
The Company will provide, without charge, a copy of McDonald's
Corporation's Annual Report on Form 10-K for the year ended December 31,
1996, (including any financial statements, and a list describing any
exhibits not contained therein) upon written request addressed to:
Investor Relations Service Center, McDonald's Corporation, McDonald's
Plaza, Oak Brook IL 60521. The exhibits to the 10-K are available upon
payment of charges which approximate the Company's cost of reproduction.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
-------------------------------------------------------------------------
PROXY SOLICITATION
This Proxy Statement and the accompanying proxy and voting instruction
card are being furnished to shareholders of the Company beginning on or
about April 7, 1997 in connection with the solicitation of proxies by the
Board of Directors to be used in voting at the Annual Meeting of
Shareholders on May 22, 1997, and any adjournment thereof.
The Company will bear the cost of soliciting proxies, including the
charges and expenses of brokerage firms and others for forwarding
solicitation materials to beneficial owners. The Company has retained
D.F. King & Co., Inc. to solicit proxies on behalf of the Board at a fee
estimated to be $17,000 plus reasonable out-of-pocket expenses. Proxies
may also be solicited by certain employees and Directors of the Company
by mail, by telephone, or personally, without compensation apart from
their normal salaries.
RECORD DATE AND VOTING AT THE ANNUAL MEETING
Shareholders owning Common Stock or Series D Preferred Stock outstanding
at the close of business on March 24, 1997, are entitled to vote at the
1997 Annual Meeting. On that date there were 689,725,084 shares of Common
Stock and 181,868 shares of Series D Preferred Stock outstanding and
entitled to vote at the Annual Meeting. Each share of Common Stock and
each share of Series D Preferred Stock is entitled to one vote upon each
matter presented at the Annual Meeting. Proxies may be revoked by voting
in person at the Annual Meeting, by written notice to the Company's
Secretary, or by delivery of a later-dated proxy, in each case prior to
the closing of the polls for voting at the Annual Meeting. A proxy card
which is properly executed, returned and not revoked will be voted in
accordance with the instructions indicated. A proxy voted by telephone
or via the internet and not revoked will be voted in accordance with the
shareholder's instructions. If no instructions are given, proxies which
are signed and returned or voted via telephone or the internet will be
voted FOR the slate of five Directors proposed by the Board. The
enclosed proxy gives discretionary authority as to any matters not
specifically referred to therein. Management is not aware of any other
matters to be presented for action by shareholders before the Annual
Meeting. If any such matter or matters properly come before the Annual
Meeting, it is understood that the designated proxy holders have
discretionary authority to vote thereon.
All votes cast by proxy or in person at the Annual Meeting will be
tabulated by First Chicago, which has been appointed independent
inspector of election for the 1997 Annual Meeting. First Chicago will
determine whether or not a quorum is present. With respect to the
election of Directors, First Chicago will treat votes withheld as shares
that are present for purposes of determining a quorum. Directors are
elected by a plurality vote, so the five persons receiving the greatest
number of votes will be elected. Withheld votes will not affect the
outcome of the election.
With respect to any other matter properly brought before the meeting,
First Chicago will treat abstentions as shares that are present and
entitled to vote for purposes of determining a quorum. Since a majority
of the shares represented at the meeting and entitled to vote is required
for adoption, abstentions will have the effect of a vote against
adoption. If a broker indicates on a proxy that it does not have<PAGE>
discretionary authority as to certain shares to vote on a particular
matter, those shares will be considered as present for quorum purposes
but not as shares entitled to vote with respect to that matter.
Accordingly, broker non-votes will have no effect such matters.
Registered shareholders can vote their shares via (1) a toll-free
telephone call from the U.S. and Canada, (2) the internet or (3) by
mailing their signed proxy card. The telephone and internet voting
procedures are designed to authenticate shareholders' identities, to
allow shareholders to vote their shares and to confirm that their
instructions have been properly recorded. McDonald's has been advised by
counsel that the procedures which have been put in place are consistent
with the requirements of applicable law. Specific instructions to be
followed by any registered shareholder interested in voting via telephone
or the internet are set forth on the enclosed proxy card.
A list of registered shareholders entitled to vote at the Annual Meeting
will be available for inspection by any shareholder for any purpose
germane to the meeting during ordinary business hours for a period of 10
days prior to the meeting at the Company's office at McDonald's Plaza,
Oak Brook, IL 60521.
CONFIDENTIAL VOTING
It is the Company's policy to protect the confidentiality of shareholder
votes throughout the voting process. In this regard, the vote of any
shareholder will not be disclosed to the Company, its Directors, officers
or employees, except to meet legal requirements or to assert or defend
claims for or against the Company or except in those limited
circumstances where (1) a proxy solicitation is contested; (2) a
shareholder writes comments on a proxy card; or (3) a shareholder
authorizes disclosure. Both the tabulators and inspectors of election
have been and will remain independent of the Company.
Nothing in this policy prohibits shareholders from disclosing the nature
of their votes to the Company, its Directors, officers or employees, or
impairs voluntary communication between the Company and its shareholders,
nor does this policy prevent the Company from ascertaining which
shareholders have voted or from making efforts to encourage shareholders
to vote.
AUDITORS
The Board of Directors has appointed Ernst & Young LLP as independent
auditors to audit the consolidated financial statements of the Company
for the year ending December 31, 1997. Ernst & Young LLP audited such
statements for the year ended December 31, 1996, and a representative of
that firm will be present at the Annual Meeting and will have the
opportunity to make a statement, if the firm elects to do so, and to
respond to appropriate questions from shareholders.
Glossary
As used in this Proxy Statement the following terms have the following
meanings:
COMMON STOCK:
McDonald's Corporation Common Stock
DEFERRED INCOME PLAN:
McDonald's Corporation Deferred Income Plan
DJIA:
Dow Jones Industrial Average companies as constituted on December 31,
1996
INCENTIVE PLAN:
McDonald's Corporation 1992 Stock Ownership Incentive Plan
CODE:
Internal Revenue Code of 1986, as amended and the regulations thereunder
1975 OPTION PLAN:
McDonald's Corporation 1975 Stock Ownership Option Plan
OPTION PLAN:
McDonald's Corporation Non-Employee Director Stock Option Plan
PROFIT SHARING PROGRAM:
McDonald's Corporation Profit Sharing Program
SEC:
Securities and Exchange Commission
STOCK PLAN:
McDonald's Corporation Directors' Stock Plan
The following trademarks used herein are owned by McDonald's Corporation:
McDonald's, the McDonald's Golden Arches logo and Hamburger University.
[copyright] 1997 McDonald's Corporation
McD7-3399
DIRECTIONS TO THE LODGE AND HAMBURGER UNIVERSITY
[Map]
FROM O'HARE AIRPORT
I-294 south to I-88 west (to Aurora). Exit I-88 at Cermak Road (1st exit
immediately after York Road toll booth). At 22nd Street (stoplight),
turn right. Go two stoplights to Jorie Boulevard, turn right. Go two
stoplights to Kroc Drive, turn left. At stop sign, Ronald Lane, turn
left. The Lodge is on left, parking is on right.
FROM DOWNTOWN CHICAGO
I-290 west (Eisenhower Expressway) to I-88 west (to Aurora). Exit I-88
at Cermak Road (1st exit immediately after York Road toll booth). At
22nd Street (stoplight), turn right. Go two stoplights to Jorie
Boulevard, turn right. Go two stoplights to Kroc Drive, turn left. At
stop sign, Ronald Lane, turn left. The Lodge is on left, parking is on
right.
FROM I-294 SOUTH
I-294 north to I-88 west (to Aurora). Exit I-88 at Cermak Road (1st exit
immediately after York Road toll booth). At 22nd Street (stoplight),
turn right. Go two stoplights to Jorie Boulevard, turn right. Go two
stoplights to Kroc Drive, turn left. At stop sign, Ronald Lane, turn
left. The Lodge is on left, parking is on right.
FROM I-355 FROM NORTH OR SOUTH OR I-88 WEST
From either direction, take I-88 exit (east to Chicago) to Midwest Road.
Exit at Midwest Road (stoplight), turn left. Take Midwest Road to 31st
Street (next stoplight), turn left. Take 31st Street to Jorie Boulevard,
turn left. Take Jorie Boulevard to Kroc Drive (stoplight), turn right.
At stop sign, Ronald Lane, turn left. The Lodge is on left, parking is
on right.
[BACK COVER OF PROXY STATEMENT -- Picture of Golden Arches]
HOME OFFICE
McDonald's Corporation
McDonald's Plaza
Oak Brook IL 60521
630-623-3000
[FRONT SIDE OF PROXY AND VOTING INSTRUCTION CARD FOR NON-EMPLOYEE
SHAREHOLDERS]
PROXY VOTING INSTRUCTION CARD ANNUAL MEETING TICKET
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF McDONALD'S
CORPORATION.
McDONALD'S 1997 ANNUAL SHAREHOLDERS' MEETING WILL BE HELD AT 2:30 P.M.
(CENTRAL TIME) ON THURSDAY, MAY 22, 1997 AT THE LODGE ON McDONALD'S
OFFICE CAMPUS, KROC DRIVE, OAK BROOK, ILLINOIS. If you plan to attend
the Annual Shareholders' Meeting, please tear-off and keep the upper
portion of this form as your ticket for admission to the meeting.
YOUR VOTE IS IMPORTANT. The proxy voting instruction card below covers
the voting of all shares of Common and Preferred Stock of McDonald's
Corporation which you are entitled to vote or to direct the voting of.
Please consider the issues discussed in the Proxy statement and cast your
vote by:
- completing, dating, signing and mailing the proxy card in the enclosed
postage-paid envelope.
- calling 1-800-652-8683 toll-free from the U.S. and Canada between 6
a.m. and 8 p.m. (Central Time) Monday through Saturday to vote by
phone.
- accessing the World Wide Web site http://www.vote-by-net.com to vote
via the internet.
If voting by phone or via the internet, the sequence of numbers appearing
on your proxy card below will be necessary to verify your vote. A phone
or internet vote authorizes the named proxies in the same manner as if
you marked, signed and returned the proxy card.
YOUR VOTE COUNTS
[LOGO] McDonald's Corporation
McDonald's Plaza
Oak Brook IL 60521
Detach Here
-------------------------------------------------------------------------
9826
PROXY CARD
THE BOARD RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR DIRECTOR.
The undersigned, revoking any proxy previously given, appoint(s) Michael
R. Quinlan and Gloria Santona, or either of them, as proxies with full
powers of substitution to vote as directed all shares the undersigned is
entitled to vote at McDonald's Corporation's 1997 Annual Shareholders'
Meeting and authorizes each to vote at his or her discretion on any other
matter that may properly come before the meeting, or any adjournment
thereof. IF THIS SIGNED CARD CONTAINS NO SPECIFIC VOTING INSTRUCTION, MY
(OUR) SHARES WILL BE VOTED "FOR" ALL NOMINEES FOR DIRECTOR.
BOARD NOMINEES: 1. James R. Cantalupo, 2. Enrique Hernandez, Jr., 3.
Donald R. Keough, 4. Michael R. Quinlan and 5. B. Blair Vedder, Jr.
FOR ALL NOMINEES
EXCEPT AS NOTED
BELOW WITHHOLD
Election of Directors / / / /
/ / Do not mail me future Annual Reports. Another household member
receives one.
/ / Waive confidential voting.
/ / Comments are on reverse side.
PLEASE SIGN AS YOUR NAME(S) APPEAR(S) ABOVE AND RETURN THIS PROXY
PROMPTLY. If signing for a corporation or partnership, or as agent,
attorney or fiduciary, indicate the capacity in which you are signing.
If you attend the meeting and decide to vote by ballot, such vote will
supersede this proxy.
X
--------------------------
X Date , 1997 [LOGO]
-------------------------- ---------
[REVERSE SIDE OF PROXY AND VOTING INSTRUCTION CARD FOR NON-EMPLOYEE
SHAREHOLDERS]
COMMENTS:
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
[LOGO]
[FRONT SIDE OF PROXY AND VOTING INSTRUCTION CARD FOR EMPLOYEE
SHAREHOLDERS]
PROXY VOTING INSTRUCTION CARD ANNUAL MEETING TICKET
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF McDONALD'S
CORPORATION.
McDONALD'S 1997 ANNUAL SHAREHOLDERS' MEETING WILL BE HELD AT 2:30 P.M.
(CENTRAL TIME) ON THURSDAY, MAY 22, 1997 AT THE LODGE ON McDONALD'S
OFFICE CAMPUS, KROC DRIVE, OAK BROOK, ILLINOIS. If you plan to attend
the Annual Shareholders' Meeting, please tear-off and keep the upper
portion of this form as your ticket for admission to the meeting.
YOUR VOTE IS IMPORTANT. The proxy voting instruction card below covers
the voting of all shares of Common Stock of McDonald's Corporation which
you are entitled to vote or to direct the voting of, including those
shares in McDonald's employee benefit plans. If you wish to provide
different voting instructions for the benefit plan shares, complete the
reverse side of this card.
Please consider the issues discussed in the Proxy statement and cast your
vote by:
- completing, dating, signing and mailing the proxy card in the enclosed
postage-paid envelope.
- calling 1-800-652-8683 toll-free from the U.S. and Canada between 6
a.m. and 8 p.m. (Central Time) Monday through Saturday to vote by
phone.
- accessing the World Wide Web site http://www.vote-by-net.com to vote
via the internet.
If voting by phone or via the internet, the sequence of numbers appearing
on your proxy card below will be necessary to verify your vote. A phone
or internet vote authorizes the named proxies in the same manner as if
you marked, signed and returned the proxy card. Employees may vote by
phone or via the internet unless they wish to provide different voting
instructions for the benefit plan shares.
YOUR VOTE COUNTS
[LOGO] McDonald's Corporation
McDonald's Plaza
Oak Brook IL 60521
Detach Here
-------------------------------------------------------------------------
9826
PROXY CARD
THE BOARD RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR DIRECTOR.
The undersigned, revoking any proxy previously given, appoint(s) Michael
R. Quinlan and Gloria Santona, or either of them, as proxies with full
powers of substitution to vote as directed all shares the undersigned is
entitled to vote at McDonald's Corporation's 1997 Annual Shareholders'
Meeting and authorizes each to vote at his or her discretion on any other
matter than may properly come before the meeting, or any adjournment
thereof. IF THIS SIGNED CARD CONTAINS NO SPECIFIC VOTING INSTRUCTION, MY
(OUR) SHARES WILL BE VOTED "FOR" ALL NOMINEES FOR DIRECTOR.
EMPLOYEES: Please see message on reverse.
BOARD NOMINEES: 1. James R. Cantalupo, 2. Enrique Hernandez, Jr., 3.
Donald R. Keough, 4. Michael R. Quinlan and 5. B. Blair Vedder, Jr.
FOR ALL NOMINEES
EXCEPT AS NOTED
BELOW WITHHOLD
Election of Directors / / / /
/ / Do not mail me future Annual Reports. Another household member
receives one.
/ / Waive confidential voting.
/ / Comments are on reverse side.
PLEASE SIGN AS YOUR NAME(S) APPEAR(S) ABOVE AND RETURN THIS PROXY
PROMPTLY. If signing for a corporation or partnership, or as agent,
attorney or fiduciary, indicate the capacity in which you are signing.
If you attend the meeting and decide to vote by ballot, such vote will
supersede this proxy.
X
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X Date , 1997 [LOGO]
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[REVERSE SIDE OF PROXY AND VOTING INSTRUCTION CARD FOR EMPLOYEE
SHAREHOLDERS]
INFORMATION FOR McDONALD'S EMPLOYEES ONLY
Your vote on the front of this card directs the trustees of the Profit
Sharing Program and various Equalization Plans (collectively referred to
as the "Plans") to vote the shares credited to your accounts under the
Plans. When you vote these shares, you should consider your long-term
best interests as a Plan participant.
In addition, you are also directing the trustees to vote shares held in
the Plans that have not been voted and shares that have not been credited
to participants' accounts. When you direct the vote of these shares, you
have a special responsibility to consider the long-term best interests of
other participants.
If you want to vote the Plan shares you own or the shares you are voting
for other Plan participants differently from the way you voted on the
front, please check the "comment" box on the front and mark your
direction below.
Your directions to vote shares held in the Plans will be kept
confidential by First Chicago Trust Company of New York, the independent
inspectors of election, even if you waive confidential voting on the
front of this card.
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IF YOU WISH TO VOTE ALL SHARES IN THE SAME WAY, YOU DO NOT NEED TO
COMPLETE THE SECTION BELOW. SIMPLY FOLLOW THE VOTING INSTRUCTIONS ON THE
FRONT OF THIS CARD.
THE BOARD RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR DIRECTOR.
PLAN SHARES NOT YET
PLAN SHARES OWNED CREDITED OR UNVOTED
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FOR ALL FOR ALL
NOMINEES NOMINEES
EXCEPT AS EXCEPT AS
NOTED BELOW WITHHOLD NOTED BELOW WITHHOLD
Election of Directors ----------- -------- ------------ --------
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COMMENTS:
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