<PAGE>
As filed with the Securities and Exchange Commission on April 25, 1997
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-------------------
MCDONALD'S CORPORATION
(Exact name of issuer as specified in its charter)
DELAWARE 36-2361282
(State of incorporation) (I.R.S. Employer Identification No.)
One McDonald's Plaza, Oak Brook, Illinois 60521
(630) 623-3000
(Address including zip code, and telephone number including area code,
of principal executive offices)
-------------------
GLORIA SANTONA
Vice President, Deputy General Counsel and Secretary
One McDonald's Plaza
Oak Brook, Illinois 60521
(630) 623-3373
(Name, address and telephone number of agent for service)
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [ ]
<PAGE>
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. __________
If this Form is post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================
TITLE OF SECURITIES AMOUNT OF PROPOSED PROPOSED AMOUNT OF
TO BE REGISTERED SHARES TO MAXIMUM MAXIMUM REGISTRATION
BE OFFERING AGGREGATE FEE
REGISTERED PRICE PER OFFERING
SHARE PRICE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par 1,000,000 $50.375 $50,375,000 $15,266
value per share, with
associated preferred
stock purchase rights....
===============================================================================
(1) Estimated pursuant to Rule 457(c) based on the average high and low prices
for the Common Stock as quoted on the New York Stock Exchange on April 21,
1997.
================================================================================
</TABLE>
2
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION - DATED APRIL 25, 1997
PROSPECTUS
MCDONALD'S CORPORATION
1,000,000 SHARES OF COMMON STOCK ($.01 PAR VALUE PER SHARE)
[MCDONALD'S LOGO APPEARS HERE]
This Prospectus relates to up to 1,000,000 shares of Common Stock, $.01 par
value per share (the "Common Stock"), of McDonald's Corporation (the "Company"),
which may be offered and sold to permissible transferees pursuant to
nonqualified stock options granted to participants under the Company's 1992
Stock Ownership Incentive Plan (the "Plan"), some or all of which may be
transferred by participants for no consideration in accordance with the Plan and
the grant documents specifying the terms and conditions of such stock options.
This Prospectus also relates to the offer and sale of Common Stock pursuant to
such stock options to the beneficiaries of such permissible transferees, or the
executors, administrators or beneficiaries of their estates, or other persons
duly authorized by law to administer the estate or assets of such persons.
Shares of Common Stock are traded on the New York Stock Exchange ("NYSE") under
the symbol "MCD." On April __, 1997, the closing sale price of the Common
Shares on the NYSE was $_____ per share.
-------------------------
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering made hereby, and if given or made, such other information or
representations must not be relied upon as having been authorized by the
Company. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof. This Prospectus
does not constitute an offer to sell securities in any jurisdiction to any
person to whom it would be unlawful to make such an offer in such jurisdiction.
-----------------------
3
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS APRIL __, 1997.
4
<PAGE>
TABLE OF CONTENTS
Available Information
Documents Incorporated by Reference
The Company
Description of the Plan and the Stock Options
Use of Proceeds
Plan of Distribution
Legal Matters
Experts
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports, proxy and information statements and other
information, with the Securities and Exchange Commission (the "SEC") pursuant to
the Exchange Act, relating to its business, financial statements and other
matters. Such reports, proxy and information statements and other information
can be inspected and copied at the public reference facilities maintained by the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional
offices at 75 Park Place, New York, NY 10007 and 500 West Madison, Suite 1400,
Chicago, Illinois 60621, and copies of such material can also be obtained from
the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. The Commission maintains a Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The address
of such site is http:\\www.sec.gov.
This Prospectus does not contain all the information set forth in the
Registration Statement on Form S-3 (the "Registration Statement") filed by the
Company with the SEC with respect to the securities to which the Prospectus
relates, certain parts of which are omitted in accordance with the rules and
regulations of the SEC. For further information with respect to the Company and
the Common Stock, reference is made to the Registration Statement including the
exhibits thereto, which may be inspected at the above referenced public
reference facilities of the SEC. Statements contained herein concerning the
provisions of any document are not necessarily complete and in each instance
reference is made to the copy of the document filed as an exhibit or schedule to
the Registration Statement. Each such statement is qualified in its entirety by
reference to the copy of the applicable documents filed with the SEC.
The Common Stock is traded on the New York Stock Exchange (the "NYSE") and
reports and proxy statements and other information concerning the company also
can be inspected at the offices of the NYSE, 20 Broad Street, New York, New York
10005.
DOCUMENTS INCORPORATED BY REFERENCE
The McDonald's Annual Report on Form 10-K for the latest fiscal year, all
quarterly reports on Form 10-Q and/or Current Reports on Form 8-K filed by
McDonald's pursuant to Section 13 or 15(d) of the Exchange Act since the end of
such fiscal year, and the description of Common Stock which is contained in the
Registration Statement on the Company's Form 8 Amendment to Registration
Statement on Form 10, as filed with the Commission on April 23, 1991, including
any amendment or report filed for the purpose of updating such description, have
been filed with the Commission and are incorporated herein by reference.
5
<PAGE>
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act prior to the termination of the offering
made hereby shall be deemed to be incorporated by reference herein and to be a
part hereof from the date of the filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute part of this
Prospectus.
The Company will deliver without charge to each person to whom this Prospectus
is delivered upon the written or oral request of such person, a copy of any and
all of the most recent reports, proxy statements and other communications
distributed to the Company's stockholders generally, together with any or all of
the information that is incorporated by reference in this Prospectus (other than
exhibits to such information unless such exhibits are specifically incorporated
by reference into the information that this Prospectus incorporates).
Requests for any of the documents described under this caption or additional
information regarding the Plan or the administrators should be directed in
writing to McDonald's Corporation, c/o Benefits and Compensation Department,
Kroc Drive, Campus Office Building, Oak Brook, Illinois 60521 or by calling
(630) 623-3313.
THE COMPANY
McDonald's Corporation and its subsidiaries develop, operate, franchise and
service a worldwide system of restaurants which prepare, assemble, package and
sell a limited menu of value-priced foods. These restaurants are operated by
the Company and its subsidiaries or, under the terms of franchise arrangements,
by franchisees who are independent third parties, or by affiliates operating
under joint-venture agreements between the Company or its subsidiaries and local
businesspeople.
McDonald's restaurants offer a substantially uniform menu consisting of
hamburgers and cheeseburgers, including the Big Mac, Quarter Pounder with Cheese
and Arch Deluxe sandwiches, the Filet Deluxe, Grilled Chicken Deluxe and Crispy
Chicken Deluxe sandwiches, french fries, Chicken McNuggets, salads, milk shakes,
sundaes and cones, pies, cookies and a limited number of soft drinks and other
beverages. In addition, the restaurants sell a variety of products during
limited promotional time periods. McDonald's restaurants operating in the
United States are open during breakfast hours and offer a full breakfast menu
including the Egg McMuffin and the Sausage McMuffin with Egg sandwiches,
hotcakes and sausage; three varieties of biscuit sandwiches; Apple Bran muffins;
and cereals. McDonald's restaurants in several countries around the world offer
many of these same products as well as other products and limited breakfast
menus. The Company tests new products on an ongoing basis.
The Company's principal executive offices are located at One McDonald's Plaza,
Oak Brook, Illinois 60521, telephone: (630) 623-3000.
6
<PAGE>
DESCRIPTION OF THE PLAN AND THE STOCK OPTIONS
GENERAL INFORMATION
This description summarizes certain material provisions of the Plan, and as
such, it does not purport to be complete and is qualified in its entirety by
reference to the Plan. Terms used herein and not otherwise defined shall have
the respective meanings set forth in the Plan.
INTRODUCTION
The Plan is a program under which the Company can, among other things, grant
selected employees an option to buy specified numbers of shares of the Common
Stock at a fixed price (the "Option Exercise Price") during a fixed period
measured from the date of grant (the "Grant Date") of the option.
An option gives the optionee the opportunity to benefit from possible
appreciation in the market price of the Common Stock after the Grant Date, with
no capital investment required until the option is exercised. The Compensation
Committee of the Board of Directors (the "Committee"), in its sole discretion,
selects the participants in the Plan and determines the number of shares of
Common Stock granted to each participant as options, and the other principal
terms of the options.
As of December 31, 1996, 22,316,890 shares of Common Stock were available for
future grants under the Plan. As of that date, 43,347,215 shares of Common
Stock were subject to existing options that had been granted under the Plan.
The Plan will terminate on June 1, 2002, but the Board can terminate it
effective as of an earlier date. However, a termination of the Plan would not
affect outstanding options.
The Company believes that the Plan is not subject to any provisions of the
Employee Retirement Income Security Act of 1974. The Plan is not qualified
under Section 401(a) of the Internal Revenue Code of 1986 (the "Internal Revenue
Code").
PURPOSE
The successful conduct of the Company's operations is largely dependent upon
the efforts and judgment of a broad group of employees. The Company believes its
interests are served by encouraging and enabling those employees to acquire a
larger personal financial interest in the Company. An additional purpose is to
provide a means by which employees of the Company and its subsidiaries can
acquire and maintain stock ownership, thereby strengthening their commitment to
the success of the Company and their desire to remain employed by the Company
and its subsidiaries. It is anticipated that the opportunity to obtain such a
financial interest will assist the Company in retaining and rewarding these
employees, as well as encouraging shareholder and entrepreneurial perspectives
through employee stock ownership. It is also anticipated that the opportunity to
obtain such financial interest and stock ownership will prove attractive to
promising new employees and will assist the Company in attracting such
employees.
ELIGIBILITY
Options may be granted under the Plan to employees under the Plan at the
discretion of the Committee. (See "Administration.") In selecting the
individuals to whom options are granted, as well as in determining the number of
shares subject to each option, the Committee takes into consideration such
factors as it deems relevant to accomplish the purpose of the Plan. (See
"Purpose.")
7
<PAGE>
All officers and full-time employees of the Company and its domestic and
foreign subsidiaries and non-employee directors of foreign subsidiaries are
eligible to receive options. (For purposes of the Plan, a subsidiary is any
entity in which the Company directly or through intervening subsidiaries owns
25% or more of the total combined voting power or value of all classes of stock
or, in cases of an unincorporated entity, a 25% or more interest in the capital
and profits.)
STOCK OPTIONS
Option Exercise Price. The award agreement ("Golden M Certificate") specifies
the Option Exercise Price for options awarded under the Plan. The Committee
determines each Option Exercise Price in its sole discretion except that the
Option Exercise Price cannot be less than the fair market value of a share of
the Common Stock on the Grant Date. (For this purpose, the fair market value of
the Common Stock on a particular date is the closing price of the stock on the
New York Stock Exchange Composite Tape on that date or, if no sales are made on
that date, on the next preceding date on which there are sales.)
Exercisability. Options granted under the Plan become exercisable in one or
more installments as determined by the Committee in its discretion. The
exercisability schedule is stated in the applicable Golden M Certificate.
However, no portion of an option can be exercised before the first anniversary
of the Grant Date.
Earlier Exercisability at Committee Discretion. The Committee can, but is not
required to, cause an option granted under the Plan to become exercisable at an
earlier date chosen by the Committee in its sole discretion.
Deadline for Exercising Option. The Committee can extend the period of time
during which an option can be exercised. However, no option granted under the
Plan can be exercised more than 15 years after the Grant Date.
Exercise of Options. Options can be exercised by delivering written notice of
exercise to the Company's Benefits and Compensation Department at Campus Office
Building, Oak Brook, Illinois 60521. The exercise notice can be delivered in
person, by mail or by telecopier (fax). The Option Exercise Price must be paid
at the time of exercise (as described in the next section).
Transferability. Except as described below, no option granted pursuant to the
Plan may be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of, except by will or the laws of descent and distribution and, during
the lifetime of the optionee, may be exercised only by such optionee. The
optionee may designate a beneficiary of the option in the event of his death by
filing a written designation with the Company c/o Benefits and Compensation
Department, Kroc Drive, Campus Office Building, Oak Brook, Illinois 60521. The
Committee may grant options pursuant to the Plan that are transferable, or amend
outstanding options granted under the Plan to make them transferable, by the
optionee to any of the following permissible transferees (each a "Permissible
Transferee"): to one or more members of the optionee's immediate family, to a
partnership of which the partners are members of the optionee's immediate
family, to a trust established by the optionee for the benefit of one or more
members of the optionee's immediate family or to Ronald McDonald House Charities
or any Ronald McDonald House. Options that may be so transferred are referred
to in this Prospectus as "Stock Options". For this purpose the term "immediate
family" means the optionee's spouse, children, grandchildren, stepchildren,
parents, stepparents, grandparents, siblings, nieces, nephews and in-laws. No
consideration may be paid for the transfer of a Stock Option. All transfers are
subject to prior written approval by the Committee in its sole discretion. Upon
approval of such transfer, a stock option will be deemed transferred on the date
the
8
<PAGE>
Company has received (by mail or facsimile transmission) a copy of a completed
Stock Option Transfer Form.
This Prospectus relates to up to 1,000,000 shares of Common Stock of the
Company which may be offered and sold to Permissible Transferees pursuant to
Stock Options that may be transferred to such Permissible Transferees as
described in the immediately preceding paragraph. As used herein, "Participant
Transferor" refers to the Plan participant who has transferred Stock Options
held by a particular Permissible Transferee.
Upon its transfer to a Permissible Transferee, a Stock Option continues to be
governed by and subject to the terms and limitations of the Plan and the
relevant grant, and the Permissible Transferee is entitled to the same rights as
the Participant Transferor thereunder, as if no transfer had taken place.
Accordingly, the rights of the Permissible Transferee are subject to the terms
and limitations of the original grant to the Participant Transferor, including
provisions related to expiration date, exercisability, exercise price and
forfeiture. For information regarding the terms of a particular Stock Option
grant, Permissible Transferees may contact the Company's Benefits and
Compensation Department, Kroc Drive, Campus Office Building, Oak Brook, Illinois
60521 (telephone no. (630) 623-3313).
Once a Stock Option has been transferred to a Permissible Transferee, it may
not be subsequently transferred by the Permissible Transferee except by will or
the laws of descent and distribution. A Permissible Transferee may designate in
writing to the Company before his or her death one or more beneficiaries to
receive, in the event of his or her death, any rights to which the Permissible
Transferee would be entitled under the Plan. A beneficiary designation may be
changed or revoked in writing by the Permissible Transferee at any time. Changes
in beneficiary designation should be sent to the attention of the Company's
Benefits and Compensation Department, Kroc Drive, Campus Office Building, Oak
Brook, Illinois 60521.
Exercise Of Stock Options By Permissible Transferees. A Stock Option may be
exercised by a Permissible Transferee at any time from the time first set by the
Committee in the original grant to the Participant Transferor until the close of
business on the expiration date of the Stock Option (which may be effected by
the Participant Transferor's employment status as described below).
The Option Exercise Price of the shares as to which Stock Options are exercised
shall be paid to the Company at the time of exercise (i) in cash, cashier's
check, certified check or wire transfer, (ii) by delivering freely transferable
Common Stock already owned by the Permissible Transferee valued at fair market
value on the day the option is exercised and held for at least six months, (iii)
a combination of cash and Common Stock equal in value to the purchase price, or
(iv) through simultaneous sale through a broker of shares acquired through
exercise, or permitted under Regulation T of the Federal Reserve Board.
Tax Withholding. Upon exercise of a Stock Option by a Permissible Transferee,
any federal, state or local withholding taxes arising from the exercise are the
obligation of the Participant Transferor. The Company may require a Participant
Transferor to pledge shares of Common Stock or other collateral approved by the
Committee to secure this tax withholding obligation.
A Stock Option will be deemed exercised on the date the Company has received a
copy of the Stock Option Exercise Form (by mail or facsimile transmission),
completed in all respects and signed by the Permissible Transferee (accompanied
by a check and/or Common Stock, where applicable, for payment of the Option
Exercise Price). The Stock Option shares will generally be transferred to the
Stock Option Transferee as of the day following the date that (i) the above
conditions have been met and (ii) the funds
9
<PAGE>
and/or Common Stock paid by the Permissible Transferee in satisfaction of the
exercise price have been received by the Company free and clear of all
restrictions.
Once the exercise is completed as described above, stock certificates for the
appropriate number of shares will be delivered to the Permissible Transferee or
his or her estate or beneficiaries, or otherwise delivered in such manner as the
person(s) entitled thereto may direct.
Termination. Because Stock Options transferred to Permissible Transferees
continue to be governed by the terms of the Plan and the original Golden M
Certificate, their exercisability continues to be affected by the Participant
Transferor's employment status. In addition to terminating upon exercise and
upon expiration of the stated term of the option, all options shall terminate
after a participant's employment ends at the times as set forth below. Options
may provide for different termination dates or other related provisions for the
option depending on the cause of termination of employment.
Retirement After Age 60 With 20 Years or More of Service. If the Participant
Transferor retires from the Company after reaching age 60 with at least 20 years
of Company service, any unexercised options which are then exercisable, or which
would become exercisable during the three years after the date of the
Participant Transferor's retirement, can be exercised immediately or any time
within three years after such retirement (but not after the fifteenth
anniversary of the Grant Date).
Retirement After Age 60 With Less Than 20 Years of Service. If the Participant
Transferor retires from the Company after reaching age 60, but before completing
20 years of Company service, any unexercised options which are then exercisable
can be exercised within one year after such retirement (but not after the
fifteenth anniversary of the Grant Date).
Disability. If the Participant Transferor's employment ends because of a
permanent disability, any unexercised options (whether or not otherwise then
exercisable) can be exercised within three years after such termination. Any
option which would otherwise expire during this three-year period will be
extended to permit its exercise at any time during the three-year period.
(However, an option granted cannot be exercised under any circumstances after
the fifteenth anniversary of its Grant Date.) For this purpose, a "permanent
disability" means a mental or physical condition which, in the opinion of the
Committee, renders an employee unable or incompetent to carry out applicable job
responsibilities or assigned tasks, in either case at the time the disability is
incurred, and which condition is expected to be permanent or for an indefinite
duration exceeding one year.
Death. If a Participant Transferor's employment ends because of death, any
unexercised options (whether or not otherwise then exercisable) can, as a
general rule, be exercised by designated beneficiaries within three years after
death. Any option which would otherwise expire within the three-year period
after Participant Transferor's death will be extended so as to permit its
exercise at any time within such three-year period. (However, an option cannot
be exercised under any circumstances after the fifteenth anniversary of its
Grant Date.)
Other Reasons. If the Participant Transferor terminates employment with the
Company for any reason other than retirement after reaching age 60, disability,
death or cause (see below), any unexercised options which are then exercisable
can be exercised within 30 days after termination of employment (but not after
the fifteenth anniversary of the Grant Date).
10
<PAGE>
For Cause. If Participant Transferor's employment with the Company is
terminated for cause (generally, any termination based on an act or acts
involving dishonesty, fraud, illegality or moral turpitude), any unexercised
options will be terminated immediately and cannot be exercised.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion describes the rules applicable to the federal INCOME
taxation of nonqualified options which have been transferred to a Permissible
Transferee as described above. The discussion states the general principles
which apply to the federal income taxation of transferred options for persons
who are both residents and citizens of the United States. The tax laws of other
countries may provide for different tax consequences. Participant Transferors
and Permissible Transferees who receive gifts of options are urged to consult
with their tax advisors to determine how the general principles apply to their
individual circumstances, how state and local tax laws apply, and how transfers
affect GIFT AND ESTATE taxes.
Taxation of Participant Transferor. Generally, the grant of a nonqualified
option will not result in taxable income to the Participant Transferor. Neither
is income recognized by a Participant Transferor or the Permissible Transferee
upon the gift of an option. Rather, the Participant Transferor of the option
has taxable compensation income on the date of option exercise. The taxable
income is attributed to the Participant Transferor whether he or she holds the
option or has transferred it to a Permissible Transferee.
If the option price is paid in cash, the Participant Transferor's taxable
income will be the difference between the fair market value of the stock
received by the Permissible Transferee on the date of option exercise less the
option exercise price paid. Thus, it is important to recognize that if the stock
appreciation is substantial, the Participant Transferor could have substantial
income tax liability resulting from the exercise of the option by the
Permissible Transferee.
Taxation of Stock Option Transferee. Upon the disposition of the shares
received as a result of the exercise of the option, the Permissible Transferee
will generally realize capital gain or loss equal to the excess or deficiency of
the sales price over the Permissible Transferee's basis in the shares. The
Permissible Transferee's basis in such shares is equal to the amount paid for
the shares upon option exercise plus the income realized for income tax purposes
on exercise.
Withholding and Deduction. The income realized by the Participant Transferor
upon option exercise is subject to income tax withholding and FICA withholding.
Normally, the Participant Transferor may satisfy this withholding obligation by
writing a check to the Company or by another method permitted by the Company.
The Company is entitled to a deduction at the same time and in the same amount
as the taxable income realized by the Participant Transferor upon option
exercise.
Special Issues. Participant Transferors and Permissible Tranferees who receive
gifts of options should consult their tax advisors regarding the tax treatment
of option exercises involving the use of previously-acquired stock to pay all or
part of the option exercise price. Tax advisors should also be consulted
regarding the income taxation of option exercises which take place after the
death of the Participant Transferor.
RESALE RESTRICTIONS
Generally Freely Transferable. In general, shares acquired upon exercise of an
option under the Plan can be resold without restrictions.
11
<PAGE>
Certain Exceptions. The Committee may provide that shares of stock acquired by
exercise of the option will be subject to certain restrictions. If applicable,
the restrictions would be specified in the Golden M Certificate. Purchases and
sales by directors and executive officers of McDonald's Corporation may, under
certain circumstances, subject such persons to possible liability under the
"short swing" trading provisions of Section 16(b) of the Securities Exchange Act
of 1934.
CHANGES IN CAPITAL
In general, a stock split would have no economic effect on options granted
under the Plan because there would be a proportionate reduction of the option
price and an increase in the number of shares subject to options in case of a
stock split or stock dividend and a proportionate increase in the option price
and a reduction of the number of shares subject to options in the case of a
stock combination or reverse stock split.
In case of a merger, consolidation or similar corporate action resulting in a
reclassification or change in the Company's stock, an appropriate adjustment
would be made by the Committee in the number, kind or price of the shares
subject to option. Upon the complete liquidation of the Company, any
unexercisable options granted under the Plan would become exercisable upon the
approval of the plan of liquidation by the Company's shareholders.
ADMINISTRATION
The Plan is administered by the Committee, which is located at the Company's
principal executive office. The Committee is composed of not less than two non-
employee directors of the Company. The members of the Committee are appointed
by the Board and serve at the pleasure of the Board.
Subject to the express terms of the Plan, the Committee has full and final
authority, in its discretion, to:
. Determine the exercise price of each option, the individuals to whom, and
the time or times at which options are granted and the number of shares
to be covered by each option;
. Interpret the Plan;
. Make, amend, and cancel rules and regulations relating to the Plan;
. Determine the terms, provisions, and any restrictions or conditions of
each Golden M Certificate and, with the optionee's consent, to modify
such terms, provisions, restrictions or conditions;
. Authorize non-United States subsidiaries to adopt plans for granting
options to purchase shares of common stock of the Company and to delegate
to such individuals or committees as the Committee in its sole discretion
may approve its duties and responsibilities under the Plan with respect
to such foreign subsidiary plans; and
. Make all other determinations for the administration of the Plan.
12
<PAGE>
Neither the Committee's nor the Board's determinations under the Plan need be
uniform and may be made by the Committee or the Board selectively among persons
who receive, or are eligible to receive, awards (whether or not such persons are
similarly situated). Without limiting the generality of the foregoing, the
Committee shall be entitled, among other things, to make non-uniform and
selective determinations, to enter into non-uniform and selective award
agreements as to (a) the identity of the Grantees, (b) the terms and provisions
of awards, and (c) the treatment of terminations of employment. Notwithstanding
the foregoing, the Committee's interpretation of Plan provisions shall be
uniform as to similarly situated Grantees.
The Board can, in its discretion, assume any of the administrative
responsibilities of the Committee (other than with respect to "Section 16
Grantees") and the Board can appoint another committee to administer portions of
the Plan.
AMENDMENT OF THE PLAN
The Board can modify the Plan as it deems advisable, without approval of the
Company's stockholders, except as such stockholder approval may be required
under Rule 16b-3 under the Securities Exchange Act of 1934 or under the listing
requirements of any stock exchange on which are listed any of the Company's
equity securities.
USE OF PROCEEDS
McDonald's intends to use any proceeds received from the exercise of stock
options for general corporate purposes.
PLAN OF DISTRIBUTION
As described elsewhere in this Prospectus, the shares of Common Stock offered
hereby shall be issued by the Company in accordance with the terms of the Plan.
See "Use of Proceeds".
LEGAL MATTERS
The legality of the Common Stock covered hereby has been passed upon for
McDonald's Corporation by Gloria Santona, Secretary, Vice President and Deputy
General Counsel of McDonald's. Ms. Santona owns shares of Common Stock, both
directly and as a participant in various employee benefit plans. Sonnenschein
Nath & Rosenthal has advised the Company concerning certain federal income tax
consequences related to Stock Options under the Plan and the transfer and
exercise thereof. Donald G. Lubin, a partner of Sonnenschein Nath & Rosenthal,
is a director of the Company and owns, and holds options to purchase, shares of
the Company's Common Stock.
EXPERTS
The consolidated financial statements of the Company appearing in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein, and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
13
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
An itemized statement of the amount of all expenses incurred by the Company in
connection with the issuance and distribution of the Common Stock registered
hereunder. All of the amounts are estimated, except the Securities and Exchange
Commission registration fee.
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission Registration Fee.. $15,266
Accounting Fees...................................... $ 3,000
Legal Fees and Expenses.............................. $ 5,000
-------
Total........................................... $23,266
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "GCL") provides for
indemnification of directors and officers against any legal liability (other
than liability arising from derivative suits) if the director or officer acted
in good faith and in a manner that he or she reasonably believed to be in or not
opposed to the best interests of the corporation. In criminal actions, the
director or officer must also have had no reasonable cause to believe that his
or her conduct was unlawful. A corporation may indemnify a director or officer
in a derivative suit if the director or officer acted in good faith and in a
manner that he or she reasonably believed to be in or not opposed to the best
interests of the corporation unless the director or officer is found liable to
the corporation (in which case a court may permit indemnity for such director or
officer to the extent it deems proper).
Article V of the Company's By-Laws provides that the Company shall indemnify
and hold harmless each director and officer to the fullest extent permitted
under the GCL, provided that the person seeking indemnification has met the
applicable standard of conduct set forth in the By-Laws. Such indemnification
could cover all expenses as well as liabilities and losses incurred by directors
and officers. The Board of Directors has the authority by resolution to provide
for other indemnification of directors and officers as it deems appropriate.
The By-Laws further provide that the Company may maintain insurance at its
expense to protect any director or officer against any expenses, liabilities or
losses, whether or not the Company would have the power to indemnify such
director or officer against such expenses, liabilities or losses under the GCL.
Pursuant to this provision, the Company maintains insurance against any
liability incurred by its directors and officers in defense of any action in
which they are made parties by reason of their positions as directors and
officers.
ITEM 16. EXHIBITS.
Exhibit No. Description of Document
- ----------- -----------------------
(4) Instruments defining the rights of security holders, including indentures
(A):
14
<PAGE>
(a) Debt Securities. Indenture dated as of March 1, 1987 incorporated herein
by reference from Exhibit 4(a) of Form S-3 Registration Statement, SEC file
no. 33-12364.
(i) Medium-Term Notes, Series B, due from nine months to 30 years
from Date of Issue. Supplemental Indenture No. 12 incorporated
herein by reference from Exhibit (4) of Form 8-K dated August 18,
1989 and Forms of Medium-Term Notes, Series B, incorporated
herein by reference from Exhibit (4)(b) of Form 8-K dated
September 14, 1989.
(ii) Medium-Term Notes, Series C, due from nine months to 30 years
from Date of Issue. Form of Supplemental Indenture No. 15
incorporated herein by reference from Exhibit 4(b) of Form S-3
Registration Statement, SEC file no. 33-34762 dated May 14, 1990.
(iii) Medium-Term Notes, Series C, due from nine months (U.S.
issue)/184 days (Euro issue) to 30 years from Date of Issue.
Amended and restated Supplemental Indenture No. 16 incorporated
herein by reference from Exhibit (4) of Form 10-Q for the period
ended June 30, 1991.
(iv) 8-7/8% Debentures due 2011. Supplemental Indenture No. 17
incorporated herein by reference from Exhibit (4) of Form 8-K
dated April 22, 1991.
(v) Medium-Term Notes, Series D, due from nine months (U.S. issue)/
184 days (Euro issue) to 60 years from Date of Issue.
Supplemental Indenture No. 18 incorporated herein by reference
from Exhibit 4(b) of Form S-3 Registration Statement, SEC file
no. 33-42642 dated September 10, 1991.
(vi) 7-3/8% Notes due July 15, 2002. Form of Supplemental Indenture
No. 19 incorporated herein by reference from Exhibit (4) of Form
8-K dated July 10, 1992.
(vii) 6-3/4% Notes due February 15, 2003. Form of Supplemental
Indenture No. 20 incorporated herein by reference from Exhibit
(4) of Form 8-K dated March 1, 1993.
(viii) 7-3/8% Debentures due July 15, 2033. Form of Supplemental
Indenture No. 21 incorporated herein by reference from Exhibit
(4)(a) of Form 8-K dated July 15, 1993.
(ix) Medium-Term Notes, Series E, due from nine months to 60 years
from date of issue. Form of Supplemental Indenture No. 22,
incorporated herein by reference from Exhibit (4) of Form 10-Q
for the period ended June 30, 1995.
(x) 6-5/8% Notes due September 1, 2005. Form of Supplemental
Indenture No. 23 incorporated herein by reference from Exhibit
4(a) of Form 8-K dated September 5, 1995.
15
<PAGE>
(xi) 7.05% Debentures due November 15, 2025. Form of Supplemental
Indenture No. 24, incorporated by reference from Exhibit 4(a) of
Form 8-K dated November 13, 1995.
(b) Form of Deposit Agreement dated as of November 25, 1992 by and between
McDonald's Corporation, First Chicago Trust Company of New York, as
Depositary, and the Holders from time to time of the Depositary
Receipts.
(c) Rights Agreement dated as of December 13, 1988 between McDonald's
Corporation and The First National Bank of Chicago, incorporated
herein by reference from Exhibit 1 of Form 8-K dated December 23,
1988.
(i) Amendment No. 1 to Rights Agreement incorporated herein by
reference from Exhibit 1 of Form 8-K dated May 25, 1989.
(ii) Amendment No. 2 to Rights Agreement incorporated herein by
reference from Exhibit 1 of Form 8-K dated July 25, 1990.
(d) Indenture and Supplemental Indenture No. 1 dated as of September 8,
1989, between McDonald's Matching and Deferred Stock Ownership Trust,
McDonald's Corporation and Pittsburgh National Bank in connection with
SEC Registration Statement Nos. 33-28684 and 33-28684-01, incorporated
herein by reference from Exhibit (4)(a) of Form 8-K dated September
14, 1989.
(e) Form of Supplemental Indenture No. 2 dated as of April 1, 1991,
supplemental to the Indenture between McDonald's Matching and Deferred
Stock Ownership Trust, McDonald's Corporation and Pittsburgh National
Bank in connection with SEC Registration Statement Nos. 33-28684 and
33-28684-01, incorporated herein by reference from Exhibit (4)(c) of
Form 8-K dated March 22, 1991.
(f) 8.35% Subordinated Deferrable Interest Debentures due 2025. Indenture
incorporated herein by reference from Exhibit 99.1 of Schedule 13E-4/A
Amendment No. 2 dated July 14, 1995.
(g) Senior Debt Securities Indenture dated as of October 19, 1996
incorporated by reference from Exhibit 4(a) of Form S-3 Registration
Statement, File No. 33-14141.
(h) Subordinated Debt Securities Indenture dated as of October 18, 1996
incorporated by reference from Form 8-K dated October 18, 1996.
(i) 7.5% Subordinated Deferrable Interest Debentures due 2036.
Supplemental Indenture No. 1, dated as of November 5, 1996
incorporated herein by reference from Form 8-K dated October 18, 1996.
(ii) 7.5% Subordinated Deferrable Interest Debentures due 2037.
Supplemental Indenture No. 2, dated as of November 5, 1996
incorporated herein by reference from Form 8-K dated January 9, 1997.
16
<PAGE>
5.1 Opinion and Consent of Gloria Santona, Vice President, Deputy
General Counsel and Secretary of the Company
8.1 Opinion and Consent of Sonnenschein Nath & Rosenthal.
23.1 Consent of Ernst & Young LLP, independent auditors
23.2 Consent of Gloria Santona, Vice President, Deputy General
Counsel and Secretary of the Company, included in Exhibit 5.1
23.3 Consent of Sonnenschein Nath & Rosenthal, included in Exhibit
8.1
24 Power of Attorney (included on the signature page)
- -----------------
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
and of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b), if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(l)(i) and (a)(l)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
17
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registration
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3, and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Oak Brook, and State of Illinois, on the 25th day
of April, 1997.
McDONALD'S CORPORATION
By: /s/ Michael L. Conley
------------------------------------
Michael L. Conley
Executive Vice President and
Chief Financial Officer
Each person whose signature appears below constitutes and appoints Jack M.
Greenberg, Michael L. Conley, Gloria Santona and Carleton D. Pearl, and each of
them, his or her true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto and all other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or his or her substitute or substitutes, may lawfully do
or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated and on the 25th day of April, 1997.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Hall Adams, Jr. Director
- ---------------------------------------
Hall Adams, Jr.
/s/ Robert M. Beavers, Jr. Senior Vice President and Director
- ---------------------------------------
Robert M. Beavers, Jr.
/s/ James R. Cantalupo President and Chief Executive Officer-
- --------------------------------------- McDonald's International and Director
James R. Cantalupo
/s/ Gordon C. Gray Director
- ---------------------------------------
Gordon C. Gray
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Jack M. Greenberg Vice Chairman, Chairman - U.S.A. and Director
- ------------------------------
Jack M. Greenberg
/s/ Enrique Hernandez, Jr. Director
- ------------------------------
Enrique Hernandez, Jr.
/s/ Donald R. Keough Director
- ------------------------------
Donald R. Keough
Director
- ------------------------------
Donald G. Lubin
/s/ Andrew J. McKenna Director
- ------------------------------
Andrew J. McKenna
/s/ Michael R. Quinlan Chairman, Chief Executive Officer and Director
- ------------------------------
Michael R. Quinlan
/s/ Edward H. Rensi President and Chief Executive Officer - U.S.A.
- ------------------------------ and Director
Edward H. Rensi
/s/ Terry L. Savage Director
- ------------------------------
Terry L. Savage
/s/ Paul D. Schrage Senior Executive Vice President, Chief
- ------------------------------ Marketing Officer and Director
Paul D. Schrage
/s/ Ballard F. Smith Director
- ------------------------------
Ballard F. Smith
Director
- ------------------------------
Roger W. Stone
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Robert N. Thurston Director
- ----------------------------------
Robert N. Thurston
/s/ Fred L. Turner Senior Chairman and Director
- ----------------------------------
Fred L. Turner
/s/ B. Blair Vedder, Jr. Director
- ----------------------------------
B. Blair Vedder, Jr.
/s/ Michael L. Conley Executive Vice President and Chief
- ---------------------------------- Financial Officer
Michael L. Conley
/s/ Christopher Pieszko Vice President and Corporate Controller
- ----------------------------------
Christopher Pieszko
</TABLE>
21
<PAGE>
Exhibit 5
[MCDONALD'S LETTERHEAD APPEARS HERE]
April 17, 1997
McDonald's Corporation
One McDonald's Plaza
Oak Brook, Illinois 60521
Gentlemen:
A Registration Statement on Form S-3 is being filed on or about the date of this
letter with the Securities and Exchange Commission covering the registration of
shares of common stock, par value $.01 per share, together with associated
preferred stock purchase rights (collectively the "Securities"), of McDonald's
Corporation (the "Company") to be offered in connection with the Company's 1992
Stock Ownership Incentive Plan (the "Plan").
In my capacity as Vice President, Deputy General Counsel and Secretary, I have
examined and am familiar with the corporate records of the Company, including
its Certificate of Incorporation, as amended, its By-Laws, and minutes of all
directors' and stockholders' meetings, and other documents (including the Plan
and any amendments thereto), which I have deemed relevant or necessary as the
basis for my opinion as hereinafter set forth.
Based on the foregoing, it is my opinion that:
1. The Company is duly incorporated and validly existing in good standing under
the laws of the State of Delaware.
2. The Securities have been duly authorized and, when issued pursuant to the
Plan, will be legally issued, fully paid and non-assessable.
I consent to the inclusion of this opinion as an exhibit to the Registration
Statement referred to above and to the reference to me in such Registration
Statement.
Very truly yours,
/s/ Gloria Santona
Gloria Santona
<PAGE>
Exhibit 8
April 25, 1997
McDonald's Corporation
One McDonald's Plaza
Oak Brook, Illinois 60521
Ladies and Gentlemen:
We have acted as counsel for McDonald's Corporation, a Delaware corporation (the
"Company"), in connection with certain federal income tax issues relating to
transferable options ("Options") to acquire shares of Common Stock (par value
$.01 per share) (the "Common Stock") of the Company, which Options have been or
may be granted in accordance with the terms of the McDonald's 1992 Stock
Ownership Incentive Plan (the "Plan"). It is expected that an aggregate of
1,000,000 shares of Common Stock which may be acquired by transferees upon
exercise of the Options will be registered with the Securities and Exchange
Commission on April 25, 1997, pursuant to a filing under the Securities Act of
1933 of a Registration Statement on Form S-3 (the "Registration Statement"). In
connection with this opinion, we have examined the Plan, the "Federal Income Tax
Consequences" section of the prospectus (the "Prospectus") relating to the
Registration Statement, and such other documents as we have deemed necessary or
appropriate.
Based on the foregoing, we are of the opinion that under current law, the
discussion set forth under the heading "Federal Income Tax Consequences" in the
Prospectus, although general in nature, is an accurate summary of the material
federal income tax consequences related to Options granted under the Plan which
have been transferred by the participant as permitted thereunder.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of our name wherever appearing in the Registration
Statement.
Sincerely,
SONNENSCHEIN NATH & ROSENTHAL
By: /s/ Phyllis A. Ewer
-------------------
Phyllis A. Ewer
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of McDonald's
Corporation for the registration of 1,000,000 shares of its common stock and to
the incorporation by reference therein of our report dated January 23, 1997,
with respect to the consolidated financial statements of McDonald's Corporation
included in its Annual Report on Form 10-K for the year ended December 31,
1996, filed with the Securities and Exchange Commission.
/s/ Ernst & Young
Chicago, Illinois
April 21, 1997
