SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 17, 1997
McDONALD'S CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware 1-5231 36-2361282
(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
One McDonald's Plaza
Oak Brook, Illinois 60521
(630) 623-3000
(Address and Phone Number of Principal Executive Offices)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibit
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(c) Exhibits
--------
The Exhibit listed below and attached hereto is hereby filed in
connection with the Registrant's Registration Statement on Form S-3
(File No. 33-00001).
(99.6) MCD Direct Shares Brochure with Prospectus.
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
McDONALD'S CORPORATION
(Registrant)
By: /s/ Gloria Santona
---------------------------------------
Gloria Santona
Vice President, Deputy General Counsel
and Secretary
EXHIBIT 99.6
[FRONT COVER]
(Illustration of street corner, office buildings, pedestrians, and cars.
Street signs labeled, "McDonald's" and "Wall Street")
McDonald's Corporation Direct Stock Purchase Plan
(This is printed vertically in a border on the right side of the page.)
McDirect Shares
(Illustration of McDirect Shares logo appears in bottom right corner.)
<PAGE>
DEAR INVESTOR:
McDonald's is the largest and best-known global foodservice retailer, with
over 21,000 restaurants in 101 countries. Yet on any given day, even as
the market leader, McDonald's serves less than one percent of the world's
population. To capitalize on this enormous opportunity, we continue to
challenge ourselves to reach even higher levels of excellence in
understanding and meeting the needs and expectations of our customers.
Our vision is to dominate the global foodservice industry. Global
dominance means setting the performance standard for customer satisfaction
and increasing market share and profitability through successfully
implementing our Convenience, Value and Execution Strategies.
MCDirect Shares is a direct stock purchase plan through which investors
can begin and build their McDonald's shareownership and reinvest
dividends.
I look forward to sharing ownership of McDonald's and our future with you.
Sincerely,
/s/ Michael R. Quinlan
-------------------------------------
Michael R. Quinlan
Chairman and Chief Executive Officer
Shareholder
April 1997
<PAGE>
ABOUT MCDONALD'S
STOCK TRADING SYMBOL: MCD
COMPOUND ANNUAL TOTAL RETURN
TO INVESTORS
for the 10-year period ended December 31, 1996
[Line Chart]
McDonald's Common Stock 17.2%
Dow Jones Industrial Average 16.5
Standard & Poor's 500 15.3
Wilshire 5000 14.7
Lehman Brothers 8.4
Government/Corporate Bond Index
Lipper 5.6
Money Fund
MARKET PRICE PER COMMON SHARE
in dollars
a line graph depicting McDonald's quarterly stock price range and price at
quarter end for:
High Low End
1992, First Quarter 22.5 19.188 19.938
Second Quarter 23.75 19.688 23
Third Quarter 23.625 20.563 22.188
Fourth Quarter 25.188 20.438 24.375
1993, First Quarter 27.125 23.375 26.375
Second Quarter 26.75 22.75 24.5
Third Quarter 27.75 24.125 25.875
Fourth Quarter 29.5 25.625 28.5
1994, First Quarter 31.25 27.25 28.375
Second Quarter 31.375 27.625 28.875
Third Quarter 29.75 25.625 26.375
Fourth Quarter 29.875 25.875 29.25
1995, First Quarter 35.75 28.625 34.125
Second Quarter 39.25 33.75 39.125
Third Quarter 41.5 35.875 38.25
Fourth Quarter 48 37.75 45.125
1996, First Quarter 54.25 42.50 48
Second Quarter 50.375 45.375 46.75
Third Quarter 49 41 47.375
Fourth Quarter 49.375 43.75 45.375
Quarterly stock price range
Price at quarter end
COMPOUND ANNUAL GROWTH RATES
for the 10-year period ended December 31, 1996
----------------------------------------------------
Systemwide sales 9.9%
U.S. 5.6
Outside the U.S. 18.2
Total revenues 9.9
Operating income 10.4
U.S. 3.5
Outside the U.S. 23.3
Net income 12.6
Net income per common share 13.6
Cash provided by operations 11.2
Total assets 11.3
Total shareholders' equity 13.3
Total return to investors on common stock 17.2
----------------------------------------------------
These results are not indicative of future performance,
which is dependent upon a variety of factors.
McDonald's many strengths have made us the leading foodservice
organization in the global consumer marketplace:
- As the world's greatest brand, our marketing and promotional
activities are designed to nurture our brand by focusing on value,
taste and customer satisfaction.
- Our commitment to franchising awards restaurants to full-time, on-
premise owner/operators with an equity interest in their McDonald's
restaurant business. They contribute to McDonald's revenues by paying
rents and service fees based on sales.
- Our advanced operational systems combine stringent product standards,
strict operating procedures, and close working relationships among
thousands of dedicated employees, franchisees and suppliers, and are
designed to produce a 100 percent McDonald's experience: hot and
tasty food, fast and friendly service, and accurate orders.
- Our supply network seeks to optimize supply sources in markets around
the world. The result is a global, lower-cost, high-quality, flexible
supply infrastructure. We maintain a sense of loyalty and fairness
toward our suppliers, many of whom have responded to our needs by
investing capital in manufacturing and processing facilities, and by
advancing new technology and ideas.
McDonald's current global leadership position reflects the hard work of
the men and women of the McDonald's System-our employees, franchisees,
joint-venture partners and suppliers. Together we are striving to improve
our market share and competitive position, achieve 100 percent customer
satisfaction and improve profitability.
<PAGE>
FINANCIAL SUMMARY
(Dollars rounded to millions, except per common
share data and average restaurant sales)
1996 1995 1994 1993 1992
--------------------------------------------------------------------------
Systemwide Sales $31,812 29,914 25,987 23,587 21,885
U.S. $16,370 15,905 14,941 14,186 13,243
Outside the U.S. $15,442 14,009 11,046 9,401 8,642
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Systemwide sales by type
Operated by franchisees $19,969 19,123 17,146 15,756 14,474
Operated by the Company $ 7,571 6,863 5,793 5,157 5,103
Operated by affiliates $ 4,272 3,928 3,048 2,674 2,308
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Average sales by Systemwide
restaurants in operation
during the entire preceding
13 month period, in thousands $ 1,708 1,844 1,800 1,768 1,733
Total revenues $10,687 9,795 8,321 7,408 7,133
Revenues from franchised and
affiliated restaurants $ 3,116 2,931 2,528 2,251 2,031
Operating income $ 2,633 2,601 2,241 1,984 1,862
Income before provision for
income taxes $ 2,251 2,169 1,887 1,676 1,448
Net income $ 1,573 1,427 1,224 1,083 959
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Cash provided by operations $ 2,461 2,296 1,926 1,680 1,426
Capital expenditures $ 2,375 2,064 1,539 1,317 1,087
Treasury stock purchases $ 605 321 500 628 92
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Financial position at year end
Net property and equipment $14,352 12,811 11,328 10,081 9,597
Total assets $17,386 15,415 13,592 12,035 11,681
Total debt $ 5,523 4,836 4,351 3,713 3,857
Total shareholders' equity $ 8,718 7,861 6,885 6,274 5,892
--------------------------------------------------------------------------
Per common share
Net income $ 2.21 1.97 1.68 1.45 1.30
Dividends declared $ .29 .26 .23 .21 .20
Market price at year end $45 3/8 45 1/8 29 1/4 28 1/2 24 3/8
--------------------------------------------------------------------------
Systemwide restaurants at
year end 21,022 18,380 15,950 14,163 13,093
U.S. 12,094 11,368 10,238 9,397 8,959
Outside the U.S. 8,928 7,012 5,712 4,766 4,134
Systemwide restaurants by type
Operated by franchisees 13,428 12,217 10,965 9,933 9,237
Operated by the Company 4,357 3,816 3,238 2,746 2,551
Operated by affiliates 3,237 2,347 1,747 1,484 1,305
--------------------------------------------------------------------------
Number of countries at year end 101 89 79 70 65
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The information contained in this Summary highlights some aspects of the
Company's business, but is not a complete description of the Company, its
activities or its prospects. This Summary should be read in conjunction
with the accompanying Prospectus and the documents incorporated by
reference therein.
<PAGE>
KEY COMPETITIVE STRATEGIES
1996 HIGHLIGHTS
- $31.8 billion in Systemwide sales
- $2.6 billion in operating income
- over $1.5 billion in net income
- an asset base of $17.4 billion
[PIE CHARTS depicting U.S. and Outside the U.S.]
Systemwide sales
in billions of dollars
1996 $31.8
1991 $19.9
Operating income*
in billions of dollars
1996 $2.6
1991 $1.7
Assets**
in billions of dollars
1996 $17.4
1991 $11.3
Restaurants
1996 21,022
1991 12,418
*Graph excludes Corporate G&A expense of $52 and
$27 million in 1996 and 1991, respectively.
**Graph excludes Corporate assets of $272 and
$233 million in 1996 and 1991, respectively
OUR KEY COMPETITIVE STRATEGIES
Despite today's global leadership position, we are not satisfied. We want
to create or increase the gaps between us and our competitors so that we
dominate in every market around the world. In our effort to achieve this
vision, we will focus intensely on customer satisfaction, market share and
profitability. Supporting this focus are three competitive strategies:
Convenience, Value and Execution
- Convenience...Making McDonald's easy to visit by profitably adding
restaurants worldwide, wherever people live, work, shop, play or
gather.
- Value...Supporting value pricing for customers by using McDonald's
economies of scale to lower development and operating costs.
- Execution...Satisfying customers by understanding and anticipating
their changing needs and providing a 100 percent McDonald's
experience: hot and tasty food, fast and friendly service, and
accurate orders.
These strategies have supported McDonald's growth by satisfying millions
of customers around the world each day. Likewise, McDonald's seeks to
apply these same strategies to our direct stock purchase plan, MCDirect
shares.
<PAGE>
ABOUT MCDIRECT SHARES
(Illustration of female holding a ladder for male who is climbing to drop
a coin into a Ronald McDonald bank while a third person looks on.
Caption: "McDirect Shares makes investing in McDonald's convenient.")
CONVENIENCE
Initial Stock Purchases
It's convenient to make your initial purchase of McDonald's stock. First,
read the accompanying prospectus and the instructions on the enclosed
enrollment form. Then, send the completed form with a check or money order
for $1,000 or more to First Chicago Trust Company, the Plan Administrator,
or sign up for the automatic investment option described below. A $5
enrollment fee will be deducted from initial investments. Shares are
generally purchased weekly, and daily when practical.
Additional Stock Purchases After you are enrolled in McDirect Shares, you
may buy additional shares through:
Investment by check or money order. You may send a check or money order
for at least $100 and the detachable transaction form on the bottom of
your account statement or transaction advice to First Chicago Trust
Company. They do the investing for you. Your investment, less applicable
fees, will buy full and fractional shares of McDonald's common stock.
Automatic investments. You may authorize automated monthly withdrawals for
as little as $100 from your account at a U.S. financial institution. After
the authorization, your money, less applicable fees, is automatically
invested. Note: McDonald's System members may be eligible to invest
through automatic payroll deductions. Please see your employer for
details.
Total Investments
Investments, whether by check, money order and/or automated withdrawal,
cannot exceed $250,000 per year.
Dividend Reinvestment
Dividends on shares held in MCDirect Shares will be reinvested, less
applicable fees. Under U.S. Federal tax law, dividends are subject to tax,
whether paid in cash or reinvested.
VALUE
Purchases
MCDirect Shares makes buying McDonald's stock more cost-effective when
compared to traditional means. The trading fee is 10c per share (with a $5
maximum), plus an investment fee of $5 if paid by check or money order, or
$1 if paid by automated withdrawal.
Sales
Under McDirect Shares, you may sell some or all of your whole shares of
McDonald's stock. As with purchases, First Chicago Trust Company will
handle stock sales, at a lower cost than more traditional means. You will
be charged 10c per share (with a $5 maximum) plus a $10 sales fee. Shares
will generally be sold weekly, and daily when practical.
Administration
A $5 enrollment fee will be deducted from your initial investment and a $3
annual account fee will be deducted in quarterly installments from cash
dividends to be reinvested.
<PAGE>
(Illustration of street corner, office buildings, pedestrians, and cars.
Street signs labeled, "McDonald's" and "Wall Street." Caption:
"McDirect Shares makes investing in McDonald's more affordable.")
Safekeeping
By using McDirect Shares safekeeping feature, you do not have to worry
about loss, theft or damage of your McDonald's stock certificates. Shares
purchased for you through McDirect Shares will be held in an account in
your name. You may also deposit McDonald's stock certificates you hold in
your account for safekeeping. If you want a certificate sent to you, we'll
do so promptly at no cost. You may sell shares held in safekeeping and
will be charged applicable fees.
EXECUTION
Recordkeeping
To simplify financial recordkeeping, you will receive quarterly statements
detailing activity for that quarter. Each statement will include a tear-
off form for making additional purchases and requesting other
transactions. You will also receive a transaction advice after each
investment or transaction.
IRA
You can establish an Individual Retirement Account (IRA) which invests in
McDonald's stock through MCDirect Shares. To do this, you can either roll
over funds from an existing IRA (or other qualified plan distribution)
valued at $1,000 or more, or you can make an initial IRA investment of
$1,000 or more. Because special tax consequences may apply if you
participate in the Plan through an IRA, consult your tax advisor regarding
participation.
Gifts and Transfers
McDirect Shares allows you to transfer shares of McDonald's stock from
your Plan account, without charge. Recipients owning 25 shares
or more may enroll in McDirect Shares.
(Illustration of bear and bull facing each other, nose to nose, with a
road leading to the Golden Arches. Caption: "McDirect Shares provides
customized services for long-term investors.")
ENROLLMENT
McDirect Shares makes investing more convenient and cost-effective. If you
want these benefits, join the Plan and invest in McDonald's.
- If you are not a McDonald's shareholder, complete the enclosed
enrollment form and either make an initial investment of $1,000 or
more, or sign up for automatic monthly investments of $100 or more.
- If you are a McDonald's shareholder, and hold 25 or more shares
directly in your name, complete and return the enclosed enrollment
form. If you own less than 25 shares, you must also make an initial
investment of $1,000 or more, or sign up for automatic monthly
investments of $100 or more.
- If you are a member of the McDonald's System, you may be eligible to
enroll through automatic payroll deductions. Please see your employer
for details.
Note: This Plan may not be available in some countries outside of the U.S.
because of local laws.
<PAGE>
MCDIRECT SHARES PROSPECTUS
11,500,000 Shares of Common Stock ($.01 Par Value)
McDonald's Corporation ("McDonald's" or the "Company") hereby offers
McDirect Shares (the "Plan"), a direct stock purchase plan through
which investors can begin and build their McDonald's shareownership
and reinvest dividends. Under the Plan,q
- Persons who are not shareholders may enroll either by investing at
least $1,000 or by authorizing automatic monthly withdrawals
("Automatic Investments") of at least $100.
- Shareholders who hold at least 25 shares of McDonald's common stock,
$.01 par value ("Common Stock") in their name may enroll.
Shareholders who hold less than 25 shares in their name may enroll
either by investing at least $1,000 or by authorizing monthly
Automatic Investments of at least $100.
- McDonald's System members may also join the Plan and invest in Common
Stock by authorizing payroll deduction contributions to the Plan of
at least $20, if offered by their employers.
- Cash dividends will automatically be reinvested in additional shares
of Common Stock.
- Once enrolled, participants may make additional investments of $100
or more.
- Shareholders may deposit their Common Stock certificates with the
Administrator for safekeeping, whether or not they participate in the
Plan.
- Participants may establish an Individual Retirement Account ("IRA")
which invests in McDonald's stock through the Plan.
- Participants will be required to pay certain fees in connection with
the Plan.
First Chicago Trust Company of New York has been appointed Administrator
for the Plan ("Administrator"). All Plan purchases will be made by the
Administrator at 100% of the then current market price of the Common
Stock, calculated as described herein, either in the open market or from
the Company.
These securities have not been approved or disapproved by the Securities
and Exchange Commission or any state securities commission nor has the
Securities and Exchange Commission or any state securities commission
passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
The date of this Prospectus is April 1, 1997.
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if
given or made, such information or representations must not be relied upon
as having been authorized. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful to make
such offer or solicitation in such jurisdiction. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the<PAGE>
affairs of the Company since the date hereof or that the information
herein is correct as of any time subsequent to its date.
<PAGE>
TABLE OF CONTENTS
9 Available Information; Information Incorporated By Reference
10 McDonald's Corporation
10 MCDirect Shares
15 U.S. Federal Income Taxation
15 Use of Proceeds
15 Plan of Distribution
15 Legal Matters
15 Experts
15 Inquiries
AVAILABLE INFORMATION; INFORMATION INCORPORATED BY REFERENCE
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and in accordance therewith
files reports, proxy and information statements and other information with
the Securities and Exchange Commission (the "Commission"), which may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following regional offices of the Commission: 7 world Trade Center, New
York, New York 10048 and 500 W. Madison St., Suite 1400, Chicago, Illinois
60661. Copies of such materials also can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. Such reports, proxy statements and other
information can also be inspected at the offices of the New York and
Chicago Stock Exchange.
The McDonald's Annual Report on Form 10-K for the latest fiscal year, all
Quarterly Reports on Form 1-Q and/or Current Reports on Form 8-K filed by
McDonald's pursuant to Section 13 or 15(d) of the Exchange Act since the
end of such fiscal year, and the description of Common Stock which is
contained in a Registration Statement on the Company's Form 8 Amendment to
Registration Statement on Form 10, as filed with the Commission on April 23,
1991, including any amendment or report filed for the purpose of
updating such description, have been filed with the Commission and are
incorporated herein by reference.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), and 14 and 15(d) of the Exchange Act prior to the termination of
the offering made hereby shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of the filing of such
documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute part of this
Prospectus.
McDonald's will provide without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any of the documents
incorporated herein by reference (other than exhibits to such documents,
unless such exhibits are specifically incorporated by reference in such
documents). Requests should be directed to Investor Relations Service
Center, McDonald's Corporation, Kroc Drive, Oak Brook, Illinois 60521,
telephone 1-630-623-7428.
A McDonald's franchise provides food services exclusively to U.S.
government personnel stationed at the U.S. naval station in Guantanamo
Bay, Cubs. This statement is made pursuant to the disclosure requirements
of Florida law and is accurate as of the date of the Prospectus.
Investors may obtain current information by contacting the Florida<PAGE>
Department of Banking and Finance, The Capitol, Tallahassee, Florida
32399-0350, telephone: 1-904-488-9805.
<PAGE>
MCDONALD'S CORPORATION
The Company's principal executive offices are located at One McDonald's
Plaza, Oak Brook, IL 60521, telephone: 1-630-623-3000. McDonald's
Corporation and its subsidiaries develop, operate, franchise and service a
worldwide system of restaurants which prepare, assemble, package and sell
a limited menu of value-priced foods. These restaurants are operated by
the Company and its subsidiaries or, under the terms of franchise
agreements, by franchisees who are independent third parties, or by
affiliates operating under joint-venture agreements between the Company or
its subsidiaries and local business people. Uniform standards for quality
of product, cleanliness and efficiency, speed and service have been
established. The McDonald's System includes over 21,000 restaurants
worldwide which are located in 101 countries.
McDIRECT SHARES
Purpose
MCDirect shares is a direct purchase plan through which investors can
begin and build their McDonald's shareownership and reinvest dividends.
Administration
First Chicago Trust Company of New York has been appointed to administer
the Plan, purchase and hold shares of stock acquired under the Plan,
maintain records, send statements of account to participants, and perform
other duties related to the Plan.
Eligibility
Any person or entity is eligible to participate in the Plan provided that
(i) such person or entity fulfills the requirements described below under
"Enrollment Procedures" and (ii) in the case of foreign investors,
participation is limited to shareholders and McDonald's System members
whose participation would not violate local laws and regulations.
McDonald's franchisees and suppliers, their employees and employee benefit
plans, as well as employees of McDonald's, its subsidiaries and affiliates
are collectively referred to herein as the "McDonald's System."
Regulations in certain countries may limit or prohibit participation in
this type of Plan. Therefore, persons residing outside the U.S. who wish
to participate in the Plan should first determine whether they are subject
to any governmental regulations prohibiting their participation.
Enrollment Procedures
Shareholders
Shareholders who hold at least 25 shares of Common Stock registered
directly in their name may join the Plan by completing the Enrollment
Form. Shareholders who hold less than 25 shares registered directly in
their name may enroll either by investing at least $1,000 or by
authorizing monthly Automatic Investments of at least $100. See "Methods
of Investment - Automatic Investment" on page 11.
McDonald's System Members
If offered by their employers, McDonald's System members may also join the
Plan by returning a completed Enrollment Form to the Administrator and
authorizing payroll deduction contributions to the Plan of at least $20
per investment. See "Methods of Investment - Payroll Deductions" on page
11.
"Street Name" Holders
Owners of shares of Common Stock held on their behalf by a bank, broker,
or trustee may join the Plan by registering at least 25 shares of Common
Stock directly in their name and by returning a completed Enrollment Form
to the Administrator. See "Transfer of Shares from Street Name" on page
11.
<PAGE>
IRAs
Individuals may establish an IRA which invests in Common Stock through the
Plan by returning a completed IRA Enrollment Form and making an initial
investment to the IRA of at least $1,000 or by transferring at least 25
shares of Common Stock or $1,000 or more from an existing IRA, and by
completing an IRA Enrollment Form and an IRA Funds Transfer Form. These
forms and a disclosure statement are available from the Administrator.
Participants will be charged fees for participating in the Plan, including
an enrollment fee, an annual account fee and, if applicable, an annual IRA
fee. See "Service Fees" on page 13.
Methods of Investment
A participant's total annual investment cannot exceed $250,000 per
calendar year and must be made in U.S. dollars. For the purpose of
applying this limit, all investments during any calendar year (including
initial and ongoing investments, but excluding dividend reinvestments and
share deposits) are aggregated. No interest will be paid on amounts held
by the Administrator pending investment.
Check Investment
Participants may invest through the Plan by mailing a check or money order
for at least $100, payable to "First Chicago Trust Company of New York,"
to the Administrator with the detachable transaction form ("Transaction
Form") from an account statement or transaction advice. Any individual or
entity (including, but not limited to, McDonald's, its subsidiaries and
affiliates) may make additional cash investments on behalf of any
participant or eligible investor as a gift, award or as an incentive for
future performance.
Automatic Investment
Participants may make automatic monthly investments through electronic
withdrawals of at least $100 from a predesignated account with a U.S.
financial institution. To initiate Automatic Investments, participants
must complete and return the Automatic Investment section of the
Enrollment Form. Automatic Investments will be initiated as promptly as
practicable and, after initiated, funds will be drawn on either the 15th
of each month or the last day of each month (whichever date the
participant has designated), or if the date falls on a bank holiday, the
next business day. Participants should allow up to four weeks for the
first Automatic Investment to be initiated.
Participants may change or terminate Automatic Investments by notifying
the Administrator in writing at least six business days prior to the next
Automatic Investment date.
Payroll Deductions
If offered by their employers, McDonald's System members may authorize
payroll deduction contributions to the Plan of at least $20 per
investment. McDonald's System members should contact their personnel
department or human resources representative to determine if payroll
deductions are available to them and what the procedures are for
initiating, changing and terminating payroll deductions.
Dividends
Dividends on all shares of Common Stock, including fractional shares, held
in the Plan by participants will be automatically reinvested, less
applicable fees, in additional shares of Common Stock.
Participants will be charged fees to purchase shares of Common Stock under
the Plan. See "Service Fees" on page 13.
Transfer of Shares from Street Name
Beneficial owners whose shares are registered in the name of a bank, a
broker, a trustee or other agent may transfer these shares to a Plan
account by directing their agent to register these shares directly in
their name and deliver a certificate to them.
<PAGE>
Purchases of Common Stock
At McDonald's discretion, Plan shares will be purchased by the
Administrator either on the open market or directly from McDonald's.
Shares purchased by the Administrator on the open market may be made on
any stock exchange in the U.S. where the Common Stock is traded, in the
over-the-counter market, or by negotiated transactions on such terms as
the Administrator may reasonably determine at the time of purchase. Any
shares purchased by the Administrator from McDonald's will be made in
accordance with applicable requirements. Neither McDonald's nor any
participant shall have any authority or power to direct the time or price
at which shares may be purchased, or the selection of the broker or dealer
through or from whom purchases are to be made.
Purchases will be made weekly, but may be made daily when practicable. If
any such date is a day when the New York Stock Exchange is not open,
purchases will be made the next day. The price to participants of shares
purchased under the Plan will be 100% of the average price. When Common
Stock is purchased on the open market, the average price will be the
weighted average purchase price of shares purchased on that date. In the
case of purchases from McDonald's, the average price is determined by
averaging the high and low sales prices of Common Stock as reported on the
New York Stock Exchange Composite Tape on that date.
Participants will be charged fees to purchase shares of Common Stock under
the Plan. See "Service Fees" on page 13.
Sales of Common Stock
Participants (or non-Plan participants who hold shares in safekeeping) may
sell some or all of the whole shares held in their account by calling 1-
800-Mc1-STCK and selecting the appropriate automated option or by
completing and returning the appropriate section of a transaction form to
the Administrator. The Administrator, at its discretion, will sell those
shares, along with shares to be sold for other accounts, as promptly as
practicable at 100% of the then current market price of the Common Stock
and will send the participant a check or wire the sales proceeds, less
applicable fees.
Participants will be charged fees to sell shares of Common Stock under the
Plan. See "Service Fees" on page 13.
Withdrawal from the Plan
Participants may withdraw from the Plan by giving written notice to the
Administrator or by completing and returning the appropriate section of
the transaction form to the Administrator. Upon withdrawal, the
Administrator will transfer all shares of Common Stock held in the
participant's Plan account to a book-entry account maintained by the
Administrator ("Book-Entry"), unless the participant requests that the
Administrator either (i) send the participant a certificate for the number
of whole shares held in the Plan account and a check for the value of any
fractional shares (based on 100% of the then current market price of the
Common Stock, less applicable fees); or (ii) sell all shares in the Plan
account as described under "Sales of Common Stock."
Certificates issued upon withdrawal will be issued in the name or names in
which the account is maintained, unless otherwise instructed. If the
certificate is to be issued in a name other than that on the participant's
Plan account, the signature(s) on the instructions or stock power must be
Medallion Guaranteed by a financial institution participating in the
Medallion Guarantee program. No certificates will be issued for fractional
shares.
Notices of withdrawal will be duly processed by the Administrator and
uninvested funds will be returned to the withdrawing participant as soon
as practicable, without interest. If a notice of withdrawal is received on
or after an ex-dividend date but before the related dividend payment date,
the withdrawal will be processed as described above and a separate
dividend check will be mailed to the participant as soon as practicable
following the payment date. Thereafter, dividends will be paid in cash
unless and until the shareholder rejoins the Plan.
<PAGE>
Safekeeping
Both participants and non-participants may deposit some or all of their
certificates with the Administrator for safekeeping. Shares deposited will
be credited to the individual's account as maintained by the
Administrator. By using the Plan's safekeeping service, shareholders no
longer bear the risk and cost associated with the loss, theft, or
destruction of stock certificates. Shareholders using this service who are
not Plan participants will receive dividends in cash until they enroll in
the Plan. Shares held in safekeeping may be sold or transferred as
described in "Sales of Common Stock" on page 12 and "Gift/Transfer of
Shares" below.
To deposit certificates in the Plan's safekeeping service, shareholders
should send their certificates by registered and insured mail to the
Administrator with written instructions to deposit such shares. The
certificates should not be endorsed and the assignment section should not
be completed.
Gift/Transfer of Shares
Shareholders may transfer the ownership of some or all of their Plan
shares or shares held in safekeeping by sending the Administrator written,
signed transfer instructions. Signatures must be Medallion Guaranteed by a
financial institution participating in the Medallion Guarantee program.
Shares may be transferred to new or existing shareholders; however, a new
Plan account will not be opened as a result of a transfer of less than 25
shares. If opening a new Plan account, a completed enrollment form must
accompany the gift/transfer instructions.
Service Fees
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Annual Account Fee (charged in quarterly installments of $.75) $3.00
--------------------------------------------------------------------------
Enrollment Fee $5.00
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Investment Fees*
via check or wire $5.00
via Automatic Investment $1.00
via payroll deduction $.25
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Sales Fee* $10.00
proceeds via wire add $25.00
--------------------------------------------------------------------------
Fee for Bounced Checks or Rejected Automatic Investments $20.00
--------------------------------------------------------------------------
Annual IRA Fee $35.00
--------------------------------------------------------------------------
*Plus a $.10 per share trading fee which is capped at $5.00 per trade.
The Administrator will deduct the applicable fees from proceeds due from a
sale, funds received for investment or the payment of dividends. The
Administrator will charge applicable fees for IRA accounts as described in
the disclosure statement. If not paid separately, the annual IRA fee will
be deducted from the participant's initial investment. Thereafter, if not
paid separately, the annual IRA fee will be deducted from the
participant's Plan account by selling sufficient shares to cover the fee.
Because of the structure of the service fees, the cost of participation in
the Plan on a per share basis decreases as the number of shares held by a
participant in the Plan increases. Accordingly, shareholders are urged to
carefully consider the impact of the costs of participation in the Plan on
investment returns.
Communication
The Administrator will establish and maintain a separate account under the
Plan for each participant. Participants will receive transaction advices
or statements for account activity (except reinvested dividends and
payroll deductions) and quarterly statements listing all transactions in
the participant's account for that quarter.
Stock Splits; Stock Dividends; Other Distributions
In the event dividends are paid in Common Stock, or if Common Stock is
distributed in connection with any stock split or similar transaction,
each account shall be adjusted to reflect the receipt of the Common Stock
so paid or distributed.
<PAGE>
Rights of Participants
All Common Stock purchased and/or held pursuant to the Plan will be held
by the Administrator, registered in a nominee name, as custodian.
Participants will receive all reports distributed to McDonald's
shareholders, as well as proxy materials, including a proxy for shares of
Common Stock held in a Participant's Plan account, relating to any annual
or special meeting of McDonald's common shareholders. Plan shares will be
voted as and to the extent specified thereon by a participant. If a
participant fails to vote Plan shares prior to the fifth day before a
shareholder meeting, the Administrator will vote them in accordance with
the majority of Plan shares voted by participants.
Responsibility of the Administrator and McDonald's
Neither McDonald's nor the Administrator will be liable for any act done
in good faith or for any good faith omission to act, including without
limitation, the failure to terminate a Participant's account upon such
Participant's death prior to receipt of notice in writing of such death,
or any act or omission to act with respect to the prices at which shares
are purchased or sold for a Participant's account or the times at which
such purchases or sales are made.
Each participant should recognize that neither McDonald's nor the
Administrator can assure a profit or protect against a loss on shares
purchased under the Plan. The establishment and maintenance of the Plan by
McDonald's does not constitute an assurance with respect to either the
value of Common Stock or whether the Company will continue to pay
dividends on Common Stock or at what rate.
Modification or Termination of the Plan
McDonald's may modify or terminate the Plan at any time and, in such
event, participants will be so notified. No modification or termination
will affect previously executed transactions. The Administrator also
reserves the right to change any administrative procedures of the Plan.
Interpretation of the Plan
McDonald's may in its absolute discretion interpret and regulate the Plan
as deemed necessary or desirable in connection with the operation of the
Plan and resolve questions or ambiguities concerning the various
provisions of the Plan.
Governing Law
The Plan shall be governed by and construed in accordance with the laws of
the State of Illinois.
Change of Eligibility; Termination
The Administrator will from time to time review the status of participants
to determine whether they continue to be eligible to participate in the
Plan. If the Administrator determines that a participant no longer
qualifies in any of the categories listed above under "Eligibility," or if
the Plan is terminated for any reason whatsoever, the Administrator will
so notify the participant in writing. Not later than 30 days following
such notice, the Administrator will transfer all shares of Common Stock in
the participant's Plan account to Book-Entry, unless the participant
requests that the Administrator (i) send the participant a certificate for
the number of whole shares held in the Plan account and a check for the
value of any fractional shares (based on the then current market price,
less applicable fees); or (ii) sell all shares in the Plan account in the
manner described on page 12 under "Sales of Common Stock." If a
participant's account is inactive over a long period of time and consists
of only a fractional share, the Administrator may close such account by
notifying this participant in writing and sending a check for the value of<PAGE>
the fractional share based on the last sale price for any whole shares
sold.
U.S. FEDERAL INCOME TAXATION
Cash dividends reinvested under the Plan will be taxable as having been
received by a participant, even though the participant has not actually
received them in cash. A participant will receive an annual statement from
the Administrator indicating the amount of reinvested dividends reported
to the U.S. Internal Revenue Service ("Service") as dividend income.
<PAGE>
A participant will not realize gain or loss for U.S. Federal income tax
purposes upon the transfer of shares to the Plan or the withdrawal of
whole shares from the Plan. Participants will, however, generally realize
gain or loss upon the sale of shares (including the receipt of cash for
fractional shares) held in the Plan.
Plan participants who are non-resident aliens or non-U.S. corporations,
partnerships or other entities generally are subject to a withholding tax
on dividends paid on shares held in the Plan. The Administrator is
required to withhold from dividends paid the appropriate amount determined
in accordance with Service regulations. Where applicable, this withholding
tax is determined by treaty between the U.S. and the country in which such
participant resides. Accordingly, the amount of any dividends, net of the
applicable withholding tax, will be credited to participant Plan accounts
for investment in additional shares of Common Stock.
The foregoing does not purport to be a comprehensive summary of all of the
tax considerations that may be relevant to a participant in the Plan. In
addition, special tax considerations may apply to certain participants,
such as those participating through an IRA. Therefore, participants are
urged to consult their tax advisors regarding the consequences of
participation in the Plan.
USE OF PROCEEDS
McDonald's will receive proceeds from the purchase of Common Stock
pursuant to the Plan only to the extent that such purchases are made
directly from McDonald's, and not from open market purchases by the
Administrator. Proceeds received by McDonald's from such purchases shall
be used for general corporate purposes.
PLAN OF DISTRIBUTION
Common Stock offered pursuant to the Plan will be purchased in the open
market or, at McDonald's option, directly from McDonald's. Participants
will be charged fees for participating in the Plan. See "Service Fees" on
page 13 for a complete description. All other costs related to the
administration of the Plan will be paid by McDonald's.
LEGAL MATTERS
The legality of the Common Stock covered hereby has been passed upon for
McDonald's by Shelby Yastrow, Esq., Executive Vice President of
McDonald's. Mr. Yastrow owns shares of Common Stock, both directly and as
a participant in various employee benefit plans, and he is eligible to
participate in the Plan.
EXPERTS
The consolidated financial statements of the Company included in the
Company's Annual Report on Form 10-K for the year ended December 31, 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.
INQUIRIES
Telephone inquiries regarding Plan accounts may be directed to the
Administrator at 1-800-Mc1-STCK (U.S. and Canada) or 1-201-222-4990 (other
countries call collect) or 1-201-222-4945 (TDD# for hearing impaired).
Written inquiries should be directed to McDonald's Shareholder Services,
c/o First Chicago Trust Company of New York, P.O. Box 2591, Jersey City,
New Jersey 07303-2591, and should include the transaction form, found at
the bottom of each account statement, or a letter which includes the
participant's account number and refers to McDirect Shares and a daytime
telephone number.
<PAGE>
McDonald's Corporation Bulk Rate
McDonald's Plaza U.S. Postage PAID
Oak Brook IL 60521 Permit No. 341
Bellmawr, NJ
Questions regarding MCDirect Shares should be directed to McDonald's
Shareholder Services at 1-800-Mc1-STCK (U.S. and Canada) or 1-201-222-4990
(other countries call collect).
The information contained in this brochure is as of December 1996 and
highlights some of the aspects of the Company's business, but is not a
complete description of the Company, its activities or its prospects. This
brochure should be read in conjunction with the accompanying prospectus
and the documents incorporated by reference therein. Unless read in
conjunction with the accompanying prospectus, this brochure does not
constitute an offer to sell or the solicitation of an offer to buy.
There shall be no sale of these securities in any state or country in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or country.
The following trademarks used herein are owned by McDonald's Corporation:
McDonald's, The Golden Arches Logo, MCDirect Shares, The Design of Ronald
McDonald, 1-800-Mc1-STCK.
(c) 1997 McDonald's Corporation McD 5-2908 rev. 4/97
Printed in the United States of America
Printed on recycled paper with
50% recycled fiber; 10% post-consumer fiber
