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): June 18, 1998
McDONALD'S CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware 1-5231 36-2361282
(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
One McDonald's Plaza
Oak Brook, Illinois 60523
(630) 623-3000
(Address and Phone Number of Principal Executive Offices)
<PAGE>
Item 5. Other Events.
-----------------------
On June 18, 1998 McDonald's Corporation issued $300,000,000 6% Reset Put
Securities due 2012.
(c) Exhibits
--------
1 Underwriting Agreement dated June 18, 1998, by and among
McDonald's Corporation, Morgan Stanley & Co. Incorporated,
Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc. and Salomon Brothers
Inc.
4(a) Supplemental Indenture No. 3 dated as of June 23, 1998,
supplemental to the Senior Debt Securities Indenture dated as
of October 19, 1996, between McDonald's Corporation and First
Union National Bank, as Trustee
4(b) Specimen Debt Security
8 Tax Opinion
23 Consent of Cleary, Gottlieb, Steen & Hamilton, special United
States tax counsel to McDonald's Corporation, is included in
Exhibit 8.
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/ Joseph R. Thomas
---------------------------------
Joseph R. Thomas
Vice President, Associate General
Counsel and Assistant Secretary
<PAGE>
Exhibit
No.
-------
1 Underwriting Agreement dated June 18, 1998, by and among McDonald's
Corporation, Morgan Stanley & Co. Incorporated, Goldman, Sachs &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan
Securities Inc. and Salomon Brothers Inc.
4(a) Supplemental Indenture No. 3 dated as of June 23, 1998, supplemental
to the Senior Debt Securities Indenture dated as of October 19,
1996, between McDonald's Corporation and First Union National Bank,
as Trustee
4(b) Specimen Debt Security
8 Tax Opinion
23 Consent of Cleary, Gottlieb, Steen & Hamilton, special United States
tax counsel to McDonald's Corporation, is included in Exhibit 8.
EXHIBIT 1
McDONALD'S CORPORATION
UNDERWRITING AGREEMENT
To the Representatives named in Schedule I hereto of
the Underwriters named in Schedule II hereto
Dear Sirs:
1. Introductory. McDonald's Corporation (the ''Company''), a Delaware
corporation, proposes to sell to the underwriters named in Schedule II
hereto (the ''Underwriters''), for whom you are acting as representatives
(the ''Representatives'', which term may refer to a single Representative
if so indicated on Schedule I hereto), the principal amount of its
securities identified in Schedule I hereto (the ''Securities''), to be
issued under an Indenture, dated as of October 19, 1996 as supplemented
by Supplemental Indenture No. 3 to be dated as of June 23, 1998
(collectively, the ''Indenture''), between the Company and First Union
National Bank, as trustee (the ''Trustee''). (If the firm or firms listed
in Schedule II hereto include only the firm or firms listed in Schedule I
hereto, then the terms ''Underwriters'' and ''Representatives,'' as used
herein, shall each be deemed to refer to such firm or firms.)
2. Representations and Warranties of the Company. The Company
represents and warrants to each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the ''Commission'') a registration statement on Form S-3
under the Securities Act of 1933, as amended (the ''Securities Act'')
(File No. 333-14141), which has become effective, for the registration
under the Securities Act of the Securities. Such registration
statement meets the requirements set forth in Rule 415(a)(1)(i) under
the Securities Act and complies in all other material respects with
said Rule. The Company proposes to file with the Commission pursuant
to Rule 424(b)(2) or (b)(5) under the Securities Act a supplement to
the form of prospectus included in registration statement File No.
333-14141 relating to the Securities and the plan of distribution
thereof or, if the Company elects to rely on Rule 434 under the
Securities Act, a Term Sheet (as such term is hereinafter defined)
relating to the Securities that shall contain such information as is
required or permitted by Rules 434 and 424(b) under the Securities
Act. The registration statement File No. 333-14141, including the
exhibits thereto, is hereinafter called the ''Registration
Statement;'' the prospectus in the form in which it appears in
registration statement File No. 333-14141, is hereinafter called the
''Basic Prospectus;'' and such supplemented form of prospectus, in the
form in which it shall be filed with the Commission pursuant to Rule
424(b)(2) or (b)(5) (including the Basic Prospectus as so
supplemented) or, if the Company elects to rely on Rule 434 under the
Securities Act, in the form of the Term Sheet as first filed with the
Commission pursuant to Rule 424(b)(7) (together with the Basic
Prospectus), is hereinafter called the ''Final Prospectus.'' Any
preliminary form of the Final Prospectus which has heretofore been
filed pursuant to Rule 424(b) is hereinafter called the ''Preliminary
Final Prospectus.'' Any abbreviated term sheet that satisfies the
requirements of Rule 434 under the Securities Act is hereinafter
called the ''Term Sheet.'' Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or
the Final Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934,
as amended (the ''Exchange Act'') on or before the date of this
Agreement, or the issue date of the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus, as the case may be; and any
reference herein to the terms ''amend,'' ''amendment'' or
''supplement'' with respect to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the filing of any document
under the Exchange Act after the date of this Agreement, or the issue
date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be, and deemed to be incorporated
therein by reference.
(b) As of the date hereof, when the Final Prospectus is first filed
pursuant to Rule 424(b) under the Securities Act, when, prior to the
Closing Date (as hereinafter defined), any amendment to the
Registration Statement becomes effective (including the filing of any
document incorporated by reference in the Registration Statement),
when any supplement to the Final Prospectus is filed with the
Commission and at the Closing Date (as hereinafter defined), (i) the
Registration Statement, as amended as of any such time, the Final
Prospectus, as amended or supplemented as of any such time, and the
Indenture will comply in all material respects with the applicable
requirements of the Securities Act, the Trust Indenture Act of 1939,
as amended (the ''Trust Indenture Act'') and the Exchange Act and the
respective rules and regulations thereunder and (ii) neither the
Registration Statement, as amended as of any such time, nor the Final
Prospectus, as amended or supplemented as of any such time, will
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading; provided, however, that
the Company makes no representations or warranties as to (i) that part
of the Registration Statement which shall constitute the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of the Trustee,
(ii) information, if any, contained in the Registration Statement or
Final Prospectus relating to the Depository Trust Company (''DTC'')
and its book-entry system, or (iii) the information contained in or
omitted from the Registration Statement or the Final Prospectus or any
amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of any Underwriter through the Representatives specifically
for use in connection with the preparation of the Registration
Statement and the Final Prospectus.
(c) The financial statements of the Company and its consolidated
subsidiaries included in the Registration Statement fairly present the
financial condition of the Company and its consolidated subsidiaries
as of the dates indicated and the results of operations and cash flow
for the periods therein specified; and said financial statements have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved, except as otherwise stated therein. As used herein,
''consolidated subsidiaries'' means each subsidiary of the Company
which is included in the consolidated financial statements of the
Company contained in its annual report to shareholders for 1997 in
accordance with the consolidation policies set forth therein or which
would have been so included if it had been a subsidiary of the Company
as of the date of such consolidated financial statements, and each
other subsidiary of the Company which is included in consolidated
financial statements of the Company prepared from time to time
thereafter.
(d) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Final Prospectus and prior
to the Closing Date hereinafter mentioned, except as set forth or
contemplated in the Final Prospectus, (1) neither the Company nor any
of its consolidated subsidiaries has entered into any transaction not
in the ordinary course of business which is material to the Company
and its consolidated subsidiaries, considered as a whole, (2) there
has been no material adverse change in the properties, business,
financial condition or results of operations of the Company and its
consolidated subsidiaries, considered as a whole, and (3) no legal or
governmental proceeding, which has or will have materially affected
the Company or any of its consolidated subsidiaries, considered as a
whole, or the transactions contemplated by this Agreement, has been or
will have been instituted or threatened.
(e) The Company and each of its Significant Subsidiaries (herein
defined to mean the list of the Company's domestic and foreign
subsidiaries appearing in Exhibit 21 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1997) have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective states or jurisdictions of
incorporation, with corporate power and authority to own their
properties and to conduct their business as described in the Basic
Prospectus and Final Prospectus. The Company and each of its
Significant Subsidiaries are duly qualified to do business as foreign
corporations and are in good standing in all states or jurisdictions
in which the ownership or lease of real property or the conduct of
business requires such qualifications, except where failure to be so
qualified cannot be reasonably expected to have a material adverse
effect on the financial condition of the Company and its consolidated
subsidiaries, considered as a whole. The Company owns all of the
issued and outstanding shares of capital stock of each of the
Significant Subsidiaries, directly or indirectly through one or more
Significant Subsidiaries (except McDonald's Development Italy, Inc.,
McDonald's Properties (Australia) Pty., Ltd., McDonald's Restaurants
(Suisse) S.A. and McDonald's Australia Limited, of which the Company
directly or indirectly owns a majority of the capital stock), and all
of such shares of the Significant Subsidiaries are owned free and
clear of any liens, charges and encumbrances.
(f) The consummation of the transactions herein contemplated and
the fulfillment of the terms hereof will not (i) conflict with or
result in a breach of any of the terms and provisions of, or
constitute a default under, the Restated Certificate of Incorporation
or By-Laws of the Company as presently in effect or (ii) conflict with
or result in a breach of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is a party, or any
order, rule or regulation applicable to the Company of any court or of
any federal or state regulatory body or administrative agency or other
governmental body having jurisdiction over the Company or any of its
properties, except such conflicts, breaches or defaults referred to in
this subclause (ii) which would not materially and adversely affect
the Company and its consolidated subsidiaries considered as a whole.
(g) The Securities have been duly and validly authorized and, when
issued, authenticated and delivered against payment therefor in
accordance with the terms of the Indenture and this Agreement, will
constitute valid and legally binding obligations of the Company
entitled to the benefits of the Indenture, except as enforcement
thereof may be limited by applicable bankruptcy, insolvency,
moratorium and other laws affecting the enforceability of creditors'
rights and general principles of equity, and will conform to the
description thereof contained in the Final Prospectus. The Indenture
has been duly authorized by the Company and will be a valid and legal
instrument enforceable in accordance with its terms, except as
enforcement thereof may be limited by applicable bankruptcy,
insolvency, moratorium and other laws affecting the enforceability of
creditors' rights and general principles of equity. The Indenture is
duly qualified under the Trust Indenture Act.
3. Sale, Purchase and Delivery of Securities. On the basis of the
representations and warranties herein contained, but subject to the terms
and conditions herein set forth, the Company hereby agrees to sell to the
Underwriters, severally and not jointly, and each Underwriter, severally
and not jointly (unless otherwise indicated on Schedule I hereto), agrees
to purchase from the Company, at the purchase price set forth in Schedule
I hereto, the principal amount of the Securities set forth opposite such
Underwriter's name in Schedule II hereto, except that, if Schedule I
hereto provides for the sale of Securities pursuant to delayed delivery
arrangements, the respective principal amounts of Securities to be
purchased by the Underwriters shall be as set forth in Schedule II
hereto, less the respective amounts of Contract Securities determined as
provided below. Securities to be purchased by the Underwriters are herein
sometimes called the ''Underwriters' Securities'' and Securities to be
purchased pursuant to Delayed Delivery Contracts as hereinafter provided
are herein called ''Contract Securities''.
If so provided in Schedule I hereto, the Underwriters are authorized
to solicit offers to purchase Securities from the Company pursuant to
delayed delivery contracts (''Delayed Delivery Contracts''),
substantially in the form of Schedule III hereto but with such changes
therein as the Company may authorize or approve. The Underwriters will
endeavor to make such arrangements and, as compensation therefor, the
Company will pay to the Representatives, for the account of the
Underwriters, on the Closing Date, the percentage set forth in Schedule I
hereto of the principal amount of the Securities for which Delayed
Delivery Contracts are made. Delayed Delivery Contracts are to be with
institutional investors, including commercial and savings banks,
insurance companies, pension funds, investment companies and educational
and charitable institutions. The Company will make Delayed Delivery
Contracts in all cases where sales of Contract Securities arranged by the
Underwriters have been approved by the Company but, except as the Company
may otherwise agree, each such Delayed Delivery Contract must be for not
less than the minimum principal amount set forth in Schedule I hereto and
the aggregate principal amount of Contract Securities may not exceed the
maximum aggregate principal amount set forth in Schedule I hereto. The
Underwriters will not have any responsibility in respect of the validity
or performance of Delayed Delivery Contracts. The principal amount of
Securities to be purchased by each Underwriter as set forth in Schedule
II hereto shall be reduced by an amount which shall bear the same
proportion to the total principal amount of Contract Securities as the
principal amount of Securities set forth opposite the name of such
Underwriter bears to the aggregate principal amount set forth in Schedule
II hereto, except to the extent that you determine that such reduction
shall be otherwise than in such proportion and so advise the Company in
writing; provided, however, that the total principal amount of Securities
to be purchased by all Underwriters shall be the aggregate principal
amount set forth in Schedule II hereto, less the aggregate principal
amount of Contract Securities.
Delivery of and payment for the Underwriters' Securities shall be made
at the office, on the date and at the time specified in Schedule I
hereto, which date and time may be postponed by agreement between the
Representatives and the Company or as provided in Section 9 hereof (such
date and time of delivery and payment for the Underwriters' Securities
being herein called the ''Closing Date''). Delivery of the Underwriters'
Securities shall be made to the Representatives for the respective
accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof to
or upon the order of the Company in Federal (same day) funds, or, if so
indicated on Schedule I hereto, in New York Clearinghouse (next day)
funds. Certificates for the Underwriters' Securities shall be registered
in such names and in such denominations as the Representatives may
request not less than two full business days in advance of the Closing
Date.
The Company agrees to have the Underwriters' Securities available for
inspection, checking and packaging by the Representatives in New York,
New York, not later than 1:00 PM on the business day prior to the Closing
Date.
If so provided in Schedule I hereto, Underwriters' Securities will be
represented by one or more definitive global Securities in book-entry
form which will be deposited by or on behalf of the Company with DTC or
DTC's designated custodian. In such case, (a) delivery of the
Underwriters' Securities shall be made to the Representatives for the
respective accounts of the several Underwriters by causing DTC to credit
the Underwriters' Securities to the account of the Representatives at
DTC, and (b) the Company will cause the certificates representing the
Underwriters' Securities to be made available to the Representatives for
inspection not later than 1:00 p.m., New York City time, on the business
day prior to the Closing Date at the office of DTC or its designated
custodian.
4. Covenants of the Company. The Company covenants and agrees with the
Underwriters that:
(a) Prior to the termination of the offering of the Securities, the
Company will not file any amendment to the Registration Statement or
supplement (including the Final Prospectus) to the Basic Prospectus
unless the Company has furnished you a copy for your review prior to
filing, and the Company will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the foregoing
sentence, the Company will cause the Final Prospectus to be filed with
the Commission pursuant to Rule 424 and/or Rule 434 under the
Securities Act. The Company will promptly advise the Representatives
(i) when the Final Prospectus shall have been filed with the
Commission pursuant to Rule 424 and/or Rule 434 under the Securities
Act, (ii) when any amendment to the Registration Statement relating to
the Securities shall have become effective, (iii) of any request by
the Commission for any amendment of the Registration Statement or
amendment of or supplement to the Final Prospectus or for any
additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose
and (v) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding
for such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) The Company will prepare and file with the Commission, promptly
upon the request of the Representatives, any amendments or supplements
to the Registration Statement or Final Prospectus which, in the
opinion of counsel for the Underwriters, may be necessary to enable
the several Underwriters to continue the sale of the Securities, and
the Company will use its best efforts to cause any such amendments to
become effective and any such supplements to be filed with the
Commission and approved for use by the Underwriters as promptly as
possible. If at any time when a prospectus relating to the Securities
is required to be delivered under the Securities Act, any event
relating to or affecting the Company occurs as a result of which the
Final Prospectus as then amended or supplemented would include an
untrue statement of a material fact, or omit to state any material
fact necessary to make the statement therein not misleading, or if it
is necessary at any time to amend or supplement the Final Prospectus
to comply with the Securities Act or the Exchange Act or the
respective rules thereunder, the Company promptly will prepare and
file with the Commission, subject to the first sentence of paragraph
(a) of this Section 4, an amendment or supplement which will correct
such statement or omission or which will effect such compliance. For
the purposes of this paragraph (b), the Company will furnish such
information with respect to itself as the Representatives may from
time to time reasonably request.
(c) As soon as practicable, but not later than 90 days after the
end of the 12-month period beginning at the end of the current fiscal
quarter of the Company, the Company will make generally available to
its security holders and you an earnings statement covering a period
of at least twelve months beginning not earlier than said effective
date which shall satisfy the provisions of Section 11(a) of the
Securities Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, copies of the Registration Statement
(including exhibits thereto and documents incorporated by reference
therein) and each amendment thereto which shall become effective on or
prior to the Closing Date and, so long as delivery of a prospectus by
an Underwriter or dealer may be required by the Securities Act, as
many copies of any Preliminary Final Prospectus and the Final
Prospectus and any amendments thereof and supplements thereto as the
Representatives may reasonably request. The Company will pay the
expenses of printing all documents relating to the offering.
(e) The Company will furnish such information and execute such
instruments as may be required to qualify the Securities for sale
under the securities or blue sky laws of such jurisdictions within the
United States as you designate, will continue such qualifications in
effect so long as required for distribution and will arrange for the
determination of the legality of the Securities for purchase by
institutional investors. The Company shall not be required to register
or qualify as a foreign corporation nor, except as to matters and
transactions relating to the offer and sale of the Securities, consent
to service of process in any jurisdiction.
(f) So long as the Securities shall be outstanding, the Company
will deliver to you (i) as soon as practicable after the end of each
fiscal year, consolidated balance sheets, statements of income,
retained earnings and cash flows of the Company and its consolidated
subsidiaries, as at the end of and for such year and the last
preceding year, all in reasonable detail and audited by independent
public accountants, (ii) as soon as practicable after the end of each
of the first three quarterly periods in each fiscal year, unaudited
consolidated balance sheets, statements of income, retained earnings
and cash flows of the Company and its consolidated subsidiaries, as at
the end of and for such period and for the comparable period of the
preceding year, all in reasonable detail, (iii) as soon as available,
all such proxy statements, financial statements and reports as the
Company shall send or make available to its stockholders generally,
and (iv) copies of all such annual, periodic and current reports as
the Company or any subsidiary shall file with the Commission or any
securities exchange.
(g) The Company will not apply for the listing of the Securities.
(h) The Company will pay all costs and expenses in connection with
the transactions herein contemplated, including, but not limited to,
the fees and disbursements of its counsel; the fees, costs and
expenses of preparing, printing and delivering the Indenture and the
Securities; the fees, costs and expenses of the Trustee; accounting
fees and disbursements; the costs and expenses in connection with the
qualification or exemption of the Securities under state securities or
blue sky laws, including filing fees and reasonable fees and
disbursements of counsel for the Underwriters in connection therewith
and in connection with any Blue Sky Memorandum; the costs and expenses
in connection with the preparation, printing and filing of the
Registration Statement (including exhibits thereto) and the Basic,
Preliminary Final, and Final Prospectus, the preparation and printing
of this Agreement and the furnishing to the Underwriters of such
copies of each prospectus as the Underwriters may reasonably require;
and the fees of rating agencies. It is understood, however, that,
except as provided in this Section and in Sections 7 and 8 hereof, the
Underwriters will pay all of their own costs and expenses, including
the fees of their counsel and any advertising expenses connected with
any offers they may make.
(i) Until the business day following the Closing Date, the Company
will not, without the consent of the Representatives, offer or sell,
or announce the offering of, any debt securities (other than up to
$200,000,000 principal amount of the Company's medium term notes to be
issued pursuant to the Company's Registration Statement on Form S-3
(File No. 33-60939)) covered by the Registration Statement or any
other registration statement filed under the Securities Act.
5. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Securities shall
be subject to the accuracy of the representations and warranties on the
part of the Company contained herein as of the date hereof, as of the
date of the effectiveness of any amendment to the Registration Statement
filed prior to the Closing Date (including the filing of any document
incorporated by reference therein) and as of the Closing Date, to the
accuracy of the written statements of Company officers made pursuant to
the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted or shall be
pending, or, to the knowledge of the Company, shall be contemplated by
the Commission.
(b) No event, nor any material adverse change in the condition of
the Company, financial or otherwise, shall have occurred, nor shall
any event exist which makes untrue or incorrect any material statement
or information contained in the Registration Statement or the Final
Prospectus or which is not reflected in the Registration Statement or
the Final Prospectus, but should be reflected therein in order to make
the statements or information contained therein not misleading.
(c) You shall not have advised the Company that the Registration
Statement or any prospectus, or any amendment or supplement thereto,
contains an untrue statement of fact which, in the opinion of counsel
for the Underwriters, is material, or omits to state a fact which, in
the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(d) You shall have received at the Closing Date (or prior thereto
as indicated) the following:
(i) An opinion from Gloria Santona, Vice President, Deputy
General Counsel and Secretary, or a Vice President and Assistant
General Counsel of the Company, dated the Closing Date, to the
effect that:
(A) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware with corporate power and authority to own its
properties and conduct its business as described in the Final
Prospectus.
(B) The Indenture has been duly authorized, executed and
delivered by the Company and the Trustee, is duly qualified
under the Trust Indenture Act, and is a valid and legally
binding obligation of the Company enforceable in accordance with
its terms, except as enforcement thereof may be limited by
applicable bankruptcy, insolvency, moratorium and other laws
affecting the enforceability of creditors' rights and general
principles of equity.
(C) The Securities have been duly and validly authorized by
all necessary corporate action and, when duly executed on behalf
of the Company, duly authenticated by the Trustee or the
Trustee's authenticating agent, and duly delivered to the
several Underwriters against payment therefor in accordance with
the provisions of this Agreement, in the case of the
Underwriters' Securities, or to the purchasers thereof pursuant
to Delayed Delivery Contracts, in the case of Contract
Securities, will constitute legal, valid and binding obligations
of the Company enforceable in accordance with their terms and
entitled to all the benefits of the Indenture, except as
enforcement thereof may be limited by applicable bankruptcy,
insolvency, moratorium and other laws affecting the
enforceability of creditors' rights and general principles of
equity.
(D) The Indenture and the Securities conform as to legal
matters with the statements concerning them made in the Final
Prospectus, and such statements accurately set forth the
provisions thereof required to be set forth in the Final
Prospectus.
(E) This Agreement and any Delayed Delivery Contracts have
been validly authorized, executed and delivered on behalf of the
Company.
(F) The Registration Statement and any amendments thereto
have become effective under the Securities Act, and, to the best
of the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement, as amended, has
been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities
Act, and the Registration Statement, the Final Prospectus, and
each amendment thereof or supplement thereto (except for the
financial statements and other financial data included therein,
as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the
Securities Act and the Exchange Act and the respective rules
thereunder; such counsel has no reason to believe that either
the Registration Statement or the Final Prospectus, or any such
amendment or supplement, contains any untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; the descriptions in the Registration Statement and
Final Prospectus of statutes, legal and governmental proceedings
and contracts and other documents are accurate and fairly
present the information required to be shown; and such counsel
does not know of any legal or governmental proceedings required
to be described in the Final Prospectus which are not described
as required, nor of any contracts or documents of a character
required to be described in the Registration Statement or Final
Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required.
(G) The consummation of the transactions herein contemplated
and the fulfillment of the terms hereof or of any Delayed
Delivery Contracts will not result in a breach of any of the
terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or other agreement or
instrument to which, to the knowledge of such counsel, the
Company is a party, or the Restated Certificate of Incorporation
or By-Laws of the Company as presently in effect or, to the
knowledge of such counsel, any order, rule or regulation
applicable to the Company of any court or of any federal or
state regulatory body or administrative agency or other
governmental body having jurisdiction over the Company or its
properties.
(H) No authorization, approval, consent or other action of
any governmental authority or agency is required in connection
with the sale of the Securities as contemplated by this
Agreement or in any Delayed Delivery Contracts except such as
may be required under the Securities Act or under state
securities or blue sky laws.
(ii) Such opinion or opinions of counsel for the Underwriters,
dated the Closing Date, with respect to the sufficiency of all
corporate proceedings and other legal matters relating to this
Agreement, any Delayed Delivery Contracts, the validity of the
Securities, the Registration Statement, the Final Prospectus and
other related matters as you may reasonably request. The Company
shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to render their
opinions. In connection with such opinions, such counsel may rely
on representations or certificates of officers of the Company.
(iii) A certificate of the President or a Vice President, and
the Chief Financial Officer of the Company or its Treasurer, dated
the Closing Date, to the effect that:
(A) The representations and warranties of the Company in
Section 2 of this Agreement are true and correct as of the
Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date.
(B) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or, to the
knowledge of the respective signers of the certificate, are
contemplated under the Securities Act.
(C) The signers of the certificate have carefully examined
the Registration Statement and the Final Prospectus; neither the
Registration Statement, the Final Prospectus nor any amendment
or supplement thereto includes, as of the Closing Date, any
untrue statement of a material fact or omits, as of the Closing
Date, to state any material fact required to be stated therein
or necessary to make the statements therein not misleading;
since the latest respective dates as of which information is
given in the Registration Statement, there has been no material
adverse change in the financial position, business or results of
operations of the Company and its consolidated subsidiaries,
considered as a whole, except as set forth in or contemplated by
the Final Prospectus; and since the effective date of the
Registration Statement, as amended, no event has occurred which
is required to be set forth in the Final Prospectus which has
not been so set forth.
(iv) A letter from Ernst & Young LLP, dated the Closing Date,
addressed to you substantially in the form heretofore approved by
you.
(v) An opinion of Cleary, Gottlieb, Steen & Hamilton, as special
United States tax counsel to the Company, as to certain United
States federal income tax considerations in the form reasonably
agreed upon.
(e) Prior to the Closing Date, the Company shall have furnished to
you such further certificates and documents as you may reasonably
request.
(f) The Company shall have accepted Delayed Delivery Contracts in
any case where sales of Contract Securities arranged by the
Underwriters have been approved by the Company.
If any condition of the Underwriters' obligations hereunder required
to be satisfied prior to the Closing Date is not so satisfied, this
Agreement may be terminated by you by notice in writing or by facsimile
transmission to the Company.
In rendering the opinions described in Sections 5(d)(i) and (ii)
above, Ms. Gloria Santona, other counsel for the Company, and counsel for
the Underwriters may, as to matters involving the laws of any state other
than Illinois, rely upon the opinion or opinions of local counsel
satisfactory to you, but in such case a signed copy of each such opinion
shall be furnished to you.
All such opinions (including opinions, if any, of local counsel),
certificates, letters and documents will be in compliance with the
provisions hereof only if they are in all material respects satisfactory
to you and to counsel for the Underwriters, as to which both you and such
counsel shall act reasonably. The Company will furnish you with such
conformed copies of such opinions, certificates, letters and documents as
you request.
You, on behalf of the Underwriters, may waive in writing the
compliance by the Company of any one or more of the foregoing conditions
or extend the time for their performance.
6. Representation of the Underwriters. Each of the Underwriters
severally represents and warrants to the Company that the information
furnished to the Company in writing by such Underwriter or by you
expressly for use in the preparation of the Registration Statement or the
Final Prospectus does not, and any amendments thereof or supplements
thereto thus furnished will not, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
7. Termination of Agreement. This Agreement may be terminated by you
on behalf of the Underwriters by notice in writing delivered to the
Company prior to the Closing Date if prior to such time (i) trading in
the Company's common stock shall have been suspended by the Commission on
the New York Stock Exchange for a period of twenty-four hours or more or
trading in securities generally on the New York Stock Exchange shall have
been suspended or materially limited, in either case to such a degree as
would in your judgment materially adversely affect the market for the
Securities; (ii) a general moratorium on commercial banking activities in
the State of New York or the United States shall have been declared by
Federal authorities; or (iii) there has occurred any material outbreak,
or material escalation, of hostilities involving the United States or
other national or international calamity or crisis, of such magnitude and
severity in its effect on the financial markets of the United States, in
your reasonable judgment, as to prevent or materially impair the
marketing, or enforcement of contracts for sale, of the Securities.
If this Agreement shall be terminated by you because of any failure on
the part of the Company to comply with any of the terms or to fulfill any
of the conditions of this Agreement, or if for any reason the Company
shall be unable to perform its obligations under this Agreement, the
Company shall pay, in addition to the costs and expenses referred to in
Section 4(h), all reasonable out-of-pocket expenses incurred by the
Underwriters in contemplation of the performance by them of their
obligations hereunder, including but not limited to the reasonable fees
and disbursements of counsel for the Underwriters, the Underwriters'
reasonable printing and traveling expenses, and postage and telephone
charges relating directly to the offering contemplated by the Final
Prospectus, and also including advertising expenses incurred after the
effective date of the Registration Statement, it being understood that
such out-of-pocket expenses shall not include any compensation, salaries
or wages of the officers, partners or employees of any of the
Underwriters.
The Company shall not in any event be liable to the several
Underwriters for damages on account of loss of anticipated profits
arising out of the transactions contemplated by this Agreement.
8. Indemnification and Contribution. (a) The Company will indemnify
and hold harmless each Underwriter and each person, if any, who controls
any Underwriter within the meaning of the Securities Act or the Exchange
Act against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter or such controlling person may become subject,
under the Securities Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or
any amendment thereof, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will
reimburse each Underwriter and each such controlling person for any legal
or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives specifically for use in the preparation thereof; and
provided, further, that the foregoing indemnification with respect to the
Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) from whom the person asserting any
such loss, claim, damage or liability purchased the Securities, if such
Underwriter failed to send or give copies of the Final Prospectus, as
amended or supplemented, excluding documents incorporated therein by
reference, to such person at or prior to the written confirmation of the
sale of such Securities to such person in any case where such delivery is
required by the Securities Act and the untrue statement or omission of a
material fact contained in the Basic Prospectus or any Preliminary Final
Prospectus was corrected in the Final Prospectus (or the Final Prospectus
as amended or supplemented). This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each person, if any, who controls the Company either within
the meaning of the Securities Act or the Exchange Act, each of its
directors and each of its officers who has signed the Registration
Statement, against any losses, claims, damages or liabilities to which
the Company, any such controlling person or any such director or officer
may become subject, under the Securities Act, the Exchange Act, or
otherwise, to the same extent as the foregoing indemnity from the Company
to each Underwriter, but only with reference to written information
relating to such Underwriter furnished to the Company by or on behalf of
such Underwriter through you specifically for use in the preparation of
the documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which any Underwriter may
otherwise have. The Company acknowledges that the statements set forth in
the last paragraph of the cover page of the Final Prospectus and under
the heading ''Underwriting'' or ''Plan of Distribution'' and, if Schedule
I hereto provides for sale of Securities pursuant to delayed delivery
arrangements, in the last sentence under the heading ''Delayed Delivery
Arrangements'' in the Final Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for
inclusion in the Final Prospectus, and you confirm that such statements
are correct. This indemnity agreement will be in addition to any
liability which each such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying
party under this Section, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate in and, to the extent that it may elect
by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different from
or in addition to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties.
Upon receipt by such indemnified party of notice from the indemnifying
party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any
legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof unless (i) the indemnified party
shall have employed such counsel in connection with the assumption of
legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall
not be liable for the expenses of more than one separate counsel,
approved by the Representatives of the Underwriters in the case of
subparagraph (a), representing the indemnified parties under subparagraph
(a) or (b), as the case may be, who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party
at the expense of the indemnifying party; provided, further, that, with
respect to legal and other expenses incurred by an indemnified party for
which an indemnifying party shall be liable hereunder, all such legal
fees and expenses shall be reimbursed by the indemnifying party as they
are incurred.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a)
of this Section 8 is due in accordance with its terms but is for any
reason held by a court to be unavailable from the Company on grounds of
policy or otherwise, the Company and the Underwriters shall contribute to
the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or
defending same) to which the Company and one or more of the Underwriters
may be subject in such proportion so that the Underwriters are
responsible for that portion represented by the percentage that the
underwriting discount bears to the sum of such discount and the purchase
price of the Securities set forth in Schedule I hereto and the Company is
responsible for the balance; provided, however, that (i) in no case shall
any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible
for any amount in excess of the underwriting discount applicable to the
Securities purchased by such Underwriter hereunder and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 8, each person who controls an Underwriter
within the meaning of the Securities Act shall have the same rights to
contribution as such Underwriter, and each person who controls the
Company within the meaning of either the Securities Act or the Exchange
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clause (i) of this
paragraph (d). Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be
made against another party or parties under this paragraph (d), notify
such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party
or parties from whom contribution may be sought from any other obligation
it or they may have hereunder or otherwise than under this paragraph (d).
9. Default by an Underwriter. If the Underwriters' obligations to
purchase Securities pursuant to Section 3 hereof are several and not
joint and if any one or more Underwriters shall fail to purchase and pay
for any of the Securities agreed to be purchased by such Underwriter or
Underwriters hereunder and such failure to purchase shall constitute a
default in the performance of its or their obligations under this
Agreement and unless otherwise provided in Schedule I hereto, the
remaining Underwriters shall be obligated severally to take up and pay
for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bear to the aggregate
amount of Securities set opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in
the event that the aggregate amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed
10% of the aggregate amount of Securities set forth in Schedule II
hereto, the remaining Underwriters shall have the right to purchase all,
but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any
nondefaulting Underwriter or the Company. In the event of a default by
any Underwriter as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding seven days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Final Prospectus or in any other documents
or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations and warranties of the
Company and the several Underwriters, set forth in or made pursuant to
this Agreement, will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter, the Company or any
of its officers or directors or any controlling person, and will survive
delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this
Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or sent by facsimile transmission and confirmed to
them, at the address specified in Schedule I hereto; or, if sent to the
Company, will be mailed, delivered or sent by facsimile transmission and
confirmed to the Company at One McDonald's Plaza, Oak Brook, Illinois
60523, Attention of the Treasurer, with a copy to the Controller.
12. Successors; Governing Law. This Agreement will inure to the
benefit of and be binding upon the parties hereto and the officers and
directors and controlling persons referred to in Section 8 hereof and
their respective successors, assigns, heirs, executors and
administrators, and no other persons will have any right or obligation
hereunder. The terms ''successors'' and ''assigns'' as used herein shall
not include a purchaser as such from any Underwriter. This Agreement
shall be governed by and construed and enforced in accordance with, the
internal laws of the State of Illinois.
13. Business Day. For purposes of this Agreement, ''business day''
means any day on which the New York Stock Exchange is open for trading.
If the foregoing is in accordance with your understanding of our
agreement, sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement between the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
McDONALD'S CORPORATION
By: /s/ Jerry G. Langley
-------------------------
Jerry G. Langley
The foregoing Underwriting Agreement is hereby confirmed and accepted by
us in Chicago, Illinois, acting on behalf of ourselves, the other
Representatives (if any), and the several Underwriters (if any) named in
Schedule II annexed hereto, as of the date first above written.
Morgan Stanley & Co. Incorporated
By: /s/ Harold J. Hendershot III
--------------------------------
Harold J. Hendershot III
Date: June 18, 1998
<PAGE>
SCHEDULE I
Underwriting Agreement dated June 18, 1998
Registration Statement No. 333-14141
Representatives:
Morgan Stanley & Co. Incorporated
Title, Purchase Price and Description of Securities:
Title: 6% REPS due 2012
Aggregate Principal Amount: $300,000,000
Price to Public: 100%
Purchase Price by Underwriter
(include accrued interest
or amortization if
applicable): 99.550% plus accrued interest, if any, from
June 23, 1998
Maturity: June 23, 2012
Interest Rate: 6%
Interest Payment Date: June 23 and December 23
Regular Record Dates: June 15 and December 15, except as
otherwise described in the Prospectus
Supplement
Call Option; Mandatory Put: On June 23, 2002 holders of the Securities
will be entitled to receive 100% of the
principal amount thereof either (i) through
the exercise of a call option, as provided
for in the Supplemental Indenture or (ii)
in the event the call option is not
exercised or the call price is not paid,
the automatic exercise of a mandatory put
to the Company by the Trustee on behalf of
the holders of the Securities, as provided
for in the Supplemental Indenture.
Sinking Fund Provisions: None
Resale by Callholder: If, in the reasonable opinion of counsel
(which may be internal counsel) for either
of Morgan Stanley & Co. International
Limited (the ''Callholder''), or the
Company, a Prospectus is required by the
Securities Act to be delivered in
connection with any sale of the Securities
by the Callholder, any Dealer or any of
their respective affiliates following the
exercise of the Call Option (as defined in
the Indenture), the Company shall prepare
and file with the Commission (a) a
supplement to a prospectus or (b) a
registration statement (which may be in the
form of a post-effective amendment to an
existing registration statement), in each
case so as to provide to the Callholder and
any such Dealer such prospectus as may be
necessary for such purpose.
In connection with the Callholder's resale
of the REPS, the Company shall, no later
than the Coupon Reset Date, furnish (a) to
the Callholder and any such Dealer such
number of copies of such Prospectus or
offering memorandum as it may reasonably
request; and (b) to the Callholder, (i) an
officers' certificate to the effect set
forth in Section 5(d)(iii) of the
Underwriting Agreement; (ii) an opinion of
internal counsel for the Company covering
the matters set forth in Sections 5(d)(i)
of the Underwriting Agreement; and a
''comfort'' letter from the independent
accountants for the Company substantially
to the effect set forth in Section 5(d)(iv)
of the Underwriting Agreement. The Company
and the Callholder shall each provide
indemnification in substantially the form
set forth in Section 8 of the Underwriting
Agreement.
Assignment of Call Option:
In consideration for the sum of $8,595,000,
the Company hereby irrevocably assigns to
the Callholder all of the Company's right,
title and interest in, to and under the
Call Option (as defined in the Indenture).
The Callholder may at any time assign its
rights and obligations under its Call
Option to an affiliate; provided that (i)
such rights and obligations are assigned in
whole and not in part and (ii) it provides
the Trustee and the Company with notice of
such assignment contemporaneously with such
assignment. Upon receipt of notice of
assignment, the Trustee shall treat the
assignee as the Callholder for such Call
Option for all purposes. The Callholder may
assign its rights under its Call Option
without notice to, or consent of, the
holders of the Notes to which the Call
Option corresponds.
The Company agrees that it will not take
any action that is inconsistent with such
assignment and that it will, from time to
time upon the request of the Trustee,
execute all instruments of further
assurance and all such supplemental
instruments with respect to such assignment
as the Trustee may specify.
Sale and Delivery Provisions under Section 3:
Obligation to Purchase is:-
several and not joint / /
several and not joint; provided, however
that, notwithstanding the provisions of
Section 9 of the Underwriting Agreement,
the Representative(s) listed above will,
subject to the terms and conditions hereof,
purchase or cause to be purchased any
Securities which any defaulting Underwriter
or Underwriters have agreed but failed or
refused to purchase pursuant to Section 3
hereof /x/
joint and several / /
Payment to Be Made in:
New York Clearinghouse (next day) funds / /
or Federal (same day) funds /x/
Delivery of Securities:
Physical delivery to Underwriters through
Representatives / /
or delivery to Underwriters through
facilities of DTC by delivery to DTC of one
or more definitive global securities in
book-entry form /x/
Closing Date, Time and Location:
June 23, 1998, 9:00 a.m.,
Gardner, Carton & Douglas,
321 N. Clark Street, Chicago, IL 60610
Address for Notice to Representatives:
c/o Morgan Stanley & Co. Incorporated
1585 Broadway, 3rd Floor
New York, New York 10036
Attention: Derivative Products Group---
Legal & Documentation
<PAGE>
SCHEDULE II
Underwriters Principal Amount
------------ ----------------
Morgan Stanley & Co. Incorporated $ 60,000,000
Goldman, Sachs & Co. 60,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 60,000,000
J.P. Morgan Securities Inc. 60,000,000
Salomon Brothers Inc 60,000,000
------------
Total $300,000,000
============
<PAGE>
SCHEDULE III
Delayed Delivery Contract
, 19
[Insert name and address
of lead Representative]
Dear Sirs:
The undersigned hereby agrees to purchase from McDonald's Corporation
(the ''Company''), and the Company agrees to sell to the undersigned, on
, 19 , (the ''Delivery Date''), $
principal amount of the Company's (the ''Securities'') offered by the
Company's Final Prospectus dated , 19 , receipt of a copy of
which is hereby acknowledged, at a purchase price of % of the
principal amount thereof, plus accrued interest, if any, thereon from
, 19 , to the date of payment and delivery, and on the further
terms and conditions set forth in this contract.
Payment for the Securities to be purchased by the undersigned shall be
made on or before 11:00 AM on the Delivery Date to or upon the order of
the Company in New York Clearinghouse (next day) funds or Federal (same
day) funds, as specified in Schedule I to the Underwriting Agreement
referred to in the Final Prospectus mentioned above, at your office or at
such other places as shall be agreed between the Company and the
undersigned upon delivery to the undersigned of the Securities in
definitive fully registered form and in such authorized denominations and
registered in such names as the undersigned may request by written
communication addressed to the Company not less than five full business
days prior to the Delivery Date. If no request is received, the
Securities will be registered in the name of the undersigned and issued
in a denomination equal to the aggregate principal amount of Securities
to be purchased by the undersigned on the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for Securities on the Delivery Date, and the obligation of the Company to
sell and deliver Securities on the Delivery Date, shall be subject to the
conditions (and neither party shall incur any liability by reason of the
failure thereof) and (1) the purchase of Securities to be made by the
undersigned, which purchase the undersigned represents is not prohibited
on the date hereof, shall not on the Delivery Date be prohibited under
the laws of the jurisdiction to which the undersigned is subject, and (2)
the Company, on or before the Delivery Date, shall have sold to certain
underwriters (the ''Underwriters'') such principal amount of the
Securities as is to be sold to them pursuant to the Underwriting
Agreement referred to in the Final Prospectus mentioned above. Promptly
after completion of such sale to the Underwriters, the Company will mail
or deliver to the undersigned at its address set forth below notice to
such effect, accompanied by a copy of the opinion of counsel for the
Company delivered to the Underwriters in connection therewith. The
obligation of the undersigned to take delivery of and make payment for
the Securities, and the obligation of the Company to cause the Securities
to be sold and delivered, shall not be affected by the failure of any
purchaser to take delivery of and make payment for the Securities
pursuant to other contracts similar to this contract.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be
assignable by either party hereto without the written consent of the
other.
It is understood that acceptance of this contract and other similar
contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first come, first served basis. If this
contract is acceptable to the Company, it is required that the Company
sign the form of acceptance below and mail or deliver one of the
counterparts hereof to the undersigned at its address set forth below.
This will become a binding contract between the Company and the
undersigned, as of the date first above written, when such counterpart is
so mailed or delivered.
This agreement shall be governed by and construed and enforced in
accordance with, the internal laws of the State of Illinois.
Very truly yours,
(Name of Purchaser)
By
---------------------------------
(Signature and Title of Officer)
(Address)
Accepted:
McDONALD'S CORPORATION
By
------------------------------------
(Authorized Signature)
Exhibit 4(a)
=========================================================================
SUPPLEMENTAL INDENTURE NO. 3
BETWEEN
McDONALD'S CORPORATION
AND
FIRST UNION NATIONAL BANK
Trustee
------------------------------
Dated as of June 23, 1998
------------------------------
SUPPLEMENTAL TO SENIOR DEBT SECURITIES INDENTURE
DATED AS OF OCTOBER 19, 1996
=========================================================================
McDONALD'S CORPORATION
SUPPLEMENTAL INDENTURE NO. 3
Dated as of June 23, 1998
6% REset Put Securities (REPS[SM]) due 2012
$300,000,000
Supplemental Indenture No. 3, dated as of June 23, 1998,
between McDONALD'S CORPORATION, a corporation organized and existing
under the laws of the State of Delaware (hereinafter sometimes referred
to as the ``Company''), and FIRST UNION NATIONAL BANK, a national banking
association, authorized to accept and execute trusts (hereinafter
sometimes referred to as the ``Trustee''),
W I T N E S S E T H :
WHEREAS, The Company and the Trustee have executed and
delivered a Senior Debt Securities Indenture dated as of October 19, 1996
(as amended or supplemented from time to time, the ``Indenture'');
WHEREAS, Section 10.01 of the Indenture provides for the
Company, when authorized by its Board of Directors, and the Trustee to
enter into an indenture supplemental to the Indenture to establish the
form or terms of Debt Securities as permitted by Sections 2.01 and 2.02
of the Indenture; and
WHEREAS, Sections 2.01 and 2.02 of the Indenture provide for
Debt Securities of any series to be established pursuant to an indenture
supplemental to the Indenture;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the series of Debt Securities provided for herein, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all
Holders of such series of Debt Securities, as follows:
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS.
SECTION 1.01. This Supplemental Indenture No. 3 constitutes an
integral part of the Indenture.
SECTION 1.02. (a) For all purposes of this Supplemental
Indenture No. 3, except as otherwise expressly provided or unless the
context otherwise requires, all capitalized terms used and not defined
herein that are defined in the Indenture shall have the meanings assigned
to them in the Indenture.
(b) The following terms are defined in the following Sections:
Bid Date 2.02(c)(i)
Business Day 2.02(a)
Calculation Agent 2.02(c)(iv)
Calculation Agency Agreement 2.02(c)(iv)
Call Notice 2.02(c)
Call Option 2.02(a)
Call Price 2.02(a)
Callholder 2.02(a)
Coupon Reset Date 2.01(b)
Defaulted Interest 2.01(c)
Depositary 2.01(e)
Final Maturity Date 2.01(d)
Global Security 2.01(e)
Interest Payment Date 2.01(c)
Mandatory Put 2.03(a)
Market Disruption Event 2.02(c)
Put Price 2.03(a)
Regular Record Date 2.01(c)
Special Record Date 2.01(c)
2012 REPS 2.01(a)
(c) All references herein to Articles and Sections, unless
otherwise specified, refer to the corresponding Articles and Sections of
this Supplemental Indenture No. 3.
(d) The terms ``hereof'', ``herein'', ``hereto'', ``hereunder''
and ``herewith'' refer to this Supplemental Indenture No. 3.
ARTICLE TWO
THE SERIES OF DEBT SECURITIES.
SECTION 2.01. (a) There shall be a series of Debt
Securities designated the ``6% REPS due 2012'' (the ``2012 REPS''). The
2012 REPS shall be limited to $300,000,000.
(b) The aggregate principal amount of the 2012 REPS shall be
$300,000,000. The 2012 REPS shall bear interest at the rate of 6% from
June 23, 1998 to but excluding June 23, 2002 (the ``Coupon Reset Date'')
whereupon (x) if all of the 2012 REPS are purchased on such date by the
Callholder pursuant to the Call Option, the 2012 REPS shall bear interest
from and including the Coupon Reset Date to but excluding the Final
Maturity Date at the interest rate determined by the Calculation Agent
pursuant to the procedures set forth in the Calculation Agency Agreement;
or (y) the 2012 REPS shall be purchased by the Company pursuant to the
exercise of the Mandatory Put by the Trustee on behalf of the Holders of
the 2012 REPS.
(c) The 2012 REPS shall bear interest at the rate of 6% per
annum, payable semi-annually, in arrears, on June 23 and December 23 of
each year, commencing December 23, 1998 (each, an ``Interest Payment
Date''). The 2012 REPS shall be dated the date of authentication and
interest shall be payable on the principal represented thereby from the
later of June 23, 1998, or the most recent Interest Payment Date to which
interest has been paid or duly provided for. If any date on which
interest is payable is not a Business Day, the payment of interest due on
such date may be made on the next succeeding Business Day (and without
any interest or other payment in respect of such delay).
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date shall be paid to the Holder in whose
name any 2012 REPS is registered in the Debt Security register at the
close of business on the June 15 or December 15 (whether or not a
Business Day) next preceding such Interest Payment Date (each, a
`` Regular Record Date''). Interest payable on redemption or maturity
shall be payable to the person to whom the principal is paid.
Any interest on any 2012 REPS which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date
(herein called ``Defaulted Interest'') shall forthwith cease to be
payable to the registered Holder on the relevant Regular Record Date by
virtue of having been such Holder; and such Defaulted Interest may be
paid by the Company, at its election in each case, as provided in clause
(i) and clause (ii) below:
(i) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the 2012 REPS are
registered at the close of business on a Special Record Date (as
defined below) for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify
the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each 2012 REPS and the date of the proposed payment,
and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest
as in this Section provided. Thereupon the Trustee shall fix a
Special Record Date (``Special Record Date'') for the payment of
such Defaulted Interest which shall be not more than 15 nor less
than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefore to be
mailed, first class postage prepaid, to each Holder of 2012 REPS at
his address as it appears in the Debt Security register, not less
than 10 days prior to such Special Record Date. The Trustee, may,
in its discretion, in the name and at the expense of the Company,
cause a similar notice to be published at least once in an
authorized newspaper in each Place of Payment, but such publication
shall not be a condition precedent to the establishment of such
Special Record Date. Notice of the proposed payment of such
Defaulted Interest and Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the 2012 REPS are registered on such Special
Record Date and shall no longer be payable pursuant to the following
clause (ii).
(ii) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the 2012 REPS may
be listed, and upon such notice as may be required by such exchange;
if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each 2012
REPS delivered under this Supplemental Indenture No. 3 upon transfer of
or in exchange for or in lieu of any other 2012 REPS shall carry the
rights to interest accrued but unpaid, and to accrue, which were carried
by such other 2012 REPS.
(d) The 2012 REPS shall mature on June 23, 2012 (the ``Final
Maturity Date''). On the Coupon Reset Date, Holders of the 2012 REPS
shall be entitled to receive 100% of the principal amount thereof (i)
from the Callholder if it purchases the 2012 REPS, in whole but not in
part, pursuant to the Call Option and the interest rate of the 2012 REPS
shall be reset pursuant to the procedures set forth in the Calculation
Agency Agreement; or (ii) in the event the Callholder does not exercise
the Call Option or the Call Option otherwise terminates, from the Company
following the purchase by it of the 2012 REPS, in whole but not in part,
following the exercise by the Trustee of the Mandatory Put.
(e) The 2012 REPS shall be represented by a global security
(the ''Global Security''). The Global Security shall be executed by the
Company, authenticated by the Trustee and deposited with, or on behalf
of, The Depositary Trust Company (the ``Depositary'') and registered in
the name of a nominee of the Depositary. Except under circumstances
described below, the 2012 REPS shall not be issuable in definitive form.
Ownership of beneficial interests in the Global Security shall
be limited to persons that have accounts with the Depositary or its
nominee (``participants'') or persons that may hold interest through
participants. Ownership of a beneficial interest in the Global Security
shall be shown on, and the transfer of that beneficial interest shall
only be effected through, records maintained by the Depositary or its
nominee (with respect to interests of participants) and on the records of
participants (with respect to interest of persons other than
participants).
So long as the Depositary or its nominee is the registered
owner of the Global Security, the Depositary or such nominee, as the case
may be, shall be considered the sole owner or Holder of the 2012 REPS
represented by the Global Security for all purposes under the Indenture.
Except as provided below, owners of beneficial interests in the Global
Security shall not be entitled to have 2012 REPS represented by the
Global Security registered in their names, shall not receive or be
entitled to receive physical delivery of 2012 REPS in definitive form and
shall not be considered the owners or Holders thereof under the
Indenture.
Principal and interest payments on the 2012 REPS represented by
the Global Security registered in the name of the Depositary or its
nominee shall be made to the Depositary or its nominee, as the case may
be, as the registered owner of the Global Security.
If the Depositary notifies the Company that it is at any time
unwilling or unable to continue as Depositary or if at any time the
Depositary shall no longer be eligible to continue as Depositary, the
Company shall appoint a successor Depositary with respect to the 2012
REPS. If a successor Depositary for the 2012 REPS is not appointed by
the Company within 90 days from the date the Company receives such notice
or becomes aware of such ineligibility, the Company shall execute and the
Trustee shall authenticate and deliver, 2012 REPS in definitive from in
exchange for the entire Global Security. In addition, the Company may at
any time and in its sole discretion determine not to have the 2012 REPS
represented by the Global Security and, in such event, the Company shall
execute, and the Trustee shall authenticate and deliver, 2012 REPS in
definitive form in exchange for the entire Global Security. In any such
instance, an owner of a beneficial interest in the Global Security shall
be entitled to physical delivery in definitive form of 2012 REPS
represented by the Global Security equal in principal amount to such
beneficial interest and to have such 2012 REPS registered in its name.
2012 REPS so issued in definitive form shall be issued as registered 2012
REPS in denominations of $1,000 and integral multiples thereof, unless
otherwise specified by the Company.
Upon the exchange of a Global Security for individual 2012
REPS, such Global Security shall be canceled by the Trustee. Individual
2012 REPS issued in exchange for a Global Security shall be registered in
such names and in such authorized denominations as the Depositary for
such Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The
Trustee shall deliver such 2012 REPS to, or in accordance with the
instructions of, the persons in whose name such 2012 REPS are so
registered.
Unless and until it is exchanged in whole or in part for the
individual 2012 REPS represented thereby, a Global Security representing
all or a portion of the 2012 REPS may not be transferred except as a
whole by the Depositary for the 2012 REPS to a nominee of such Depositary
or by the Depositary or any such nominee to a successor Depositary for
the 2012 REPS or a nominee of such successor Depositary.
If the Depositary is not the Holder of the 2012 REPS on the
Coupon Reset Date, payment and delivery shall be made through the
facilities of its successor or assign, if any. If the 2012 REPS are
issued in certificated form under the circumstances described herein,
payment shall be made at the Principal Office of the Trustee against
surrender of the applicable 2012 REPS.
SECTION 2.02. (a) The Company shall have the right to
purchase the 2012 REPS, in whole but not in part (the ``Call Option''),
on the Coupon Reset Date, at a price equal to 100% of the principal
amount thereof (the ``Call Price'') (interest accrued to, but excluding
the Coupon Reset Date shall be paid by the Company on such date to the
Holder of the 2012 REPS on the most recent Regular Record Date) by giving
notice to the Trustee in accordance with Section 2.02(b). The Company,
as holder of the Call Option, or any Person to which the Call Option is
assigned in accordance with Section 2.02(e), is referred to herein as the
``Callholder''.
If the Callholder exercises its rights under the Call Option in
accordance with Section 2.02(b), then, unless terminated in accordance
with Section 2.02(c):
(i) not later than 2:00 p.m., New York City time, on the
Business Day prior to the Coupon Reset Date, the Callholder shall
deliver the Call Price in immediately available funds to the Trustee
for payment thereof to the Holders of the 2012 REPS on the Coupon
Reset Date; and
(ii) the Holders of the 2012 REPS shall be required to deliver
the 2012 REPS to the Callholder against payment therefor on the
Coupon Reset Date through the facilities of the Depositary. In the
event that the 2012 REPS shall have been issued in certificated
form, and any Holder shall fail to surrender as aforesaid its 2012
REPS at or prior to 3:00 p.m., New York City time on the Coupon
Reset Date, the Trustee shall return the Call Price in respect of
such 2012 REPS to the Callholder, whereupon the Trustee shall
exercise the Mandatory Put to the extent of such 2012 REPS and the
Put Price therefor shall be payable upon surrender of such 2012 REPS
as aforesaid.
The Callholder is not required to exercise the Call Option,
and no Holder of the 2012 REPS or any interest therein shall have any
right or claim against the Callholder as a result of the Callholder's
decision whether or not to exercise the Call Option or performance or
non-performance of its obligations with respect thereof. As used herein,
`` Business Day'' means any day other than a Saturday, a Sunday, a legal
holiday or a day on which banking institutions in the cities of New York
or Chicago are authorized or obligated by law, executive order or
governmental decree to be closed.
(b) With respect to the 2012 REPS and the Call Option, the
Callholder must deliver irrevocable, written notice (the ``Call Notice'')
to the Trustee of its exercise of the Call Option prior to 4:00 p.m., New
York City time, no later than 15 calendar days prior to the Coupon Reset
Date. The Call Notice shall contain the requisite delivery details,
including the identification of the Callholder's account with the
Depositary. The Trustee shall send a copy of the Call Notice to the
Holders of the 2012 REPS no later than the immediately succeeding
Business Day.
(c) Except as otherwise specified in clause (i) of this
subsection (c), the Call Option shall be immediately revoked, and the
Trustee shall exercise the Mandatory Put on behalf of the Holders of the
2012 REPS, if the Calculation Agent determines that:
(i) at any time prior to the sale of the 2012 REPS on the
third Business Day immediately preceding the Coupon Reset Date
(the ``Bid Date''), an Event of Default has occurred and is
continuing under Section 61(a), (b), (d), (e) or (f) of the
Indenture (in such event, termination is at the Callholder's
option) or under Section 61(g) or (h) of the Indenture (in such
event, termination is automatic);
(ii) a Market Disruption Event has occurred following the
exercise of the Call Option and, as a result thereof, the
Callholder fails to pay the Call Price by 2:00 p.m., New York
City time, on the Business Day immediately preceding the Coupon
Reset Date;
(iii) if the Call Option has been assigned by the Company to
a third party, the Company reacquires all rights under such
Call Option pursuant to its rights as set forth in the
securities purchase option agreement, dated June 23, 1998,
entered into by the Company, Morgan Stanley & Co. International
Limited and Morgan Stanley & Co. Incorporated; or
(iv) if, following the Call Notice, fewer than two of the
dealers named on a list of dealers provided by the Company to
Morgan Stanley & Co. Incorporated, as calculation agent (the
``Calculation Agent'') shall have provided an irrevocable
written offer given by a dealer for the purchase of the 2012
REPS, settling on the Coupon Reset Date, in a timely manner
substantially as provided in the calculation agency agreement,
dated as of June 23, 1998 (the ``Calculation Agency
Agreement''), between the Company and the Calculation Agent.
``Market Disruption Event'' shall mean any of the following
events, if such events occur and are continuing on any day from and
including the date of the Call Notice to, and including, the Bid Date in
the judgment of the Calculation Agent: (a) a suspension or material
limitation in trading in securities generally on the New York Stock
Exchange, Inc. or the establishment of minimum prices on such exchange;
(b) a general moratorium on commercial banking activities declared by
either federal or New York State authorities; (c) any material adverse
change in the existing financial, political or economic conditions in the
United States of America; (d) an outbreak or escalation of major
hostilities involving the United States of America or the declaration of
a national emergency or war by the United States of America; or (e) any
material disruption of the United States government securities market,
United States corporate bond market or United States federal wire system;
provided, in each case, that in the judgment of the Calculation Agent the
effect of the foregoing makes it impractical to conduct the Coupon Reset
Process.
(d) (i) The Company and, if different, the Callholder shall
promptly notify the Trustee in writing of the termination of the Call
Option. The Trustee shall promptly thereafter notify the Holders of the
2012 REPS that the Trustee, on behalf of such Holders, has exercised the
Mandatory Put.
(ii) In anticipation of the exercise of the Call Option or
the Mandatory Put on the Coupon Reset Date, the Trustee shall notify the
Holders of the 2012 REPS, not less than 30 days nor more than 60 days
prior to the Coupon Reset Date, that all 2012 REPS shall be delivered on
the Coupon Reset Date through the facilities of the Depositary against
payment of the Call Price by the Callholder under the Call Option or
payment of the Put Price by the Company under the Mandatory Put. The
Trustee shall notify the Holders of the 2012 REPS once it is determined
whether the Call Price or the Put Price shall be delivered in accordance
with the provisions hereof.
(e) A Callholder may at any time assign its rights and
obligations under its Call Option; provided that (i) such rights and
obligations are assigned in whole or in part; and (ii) such assigning
Callholder provides the Trustee and the Company with notice of such
assignment contemporaneously with such assignment. Upon receipt of
notice of assignment, the Trustee shall treat the assignee as a
Callholder for all purposes hereunder. A Callholder may assign its
rights under its Call Option without notice to, or consent of, the
Holders of the 2012 REPS.
SECTION 2.03. (a) By its purchase of the 2012 REPS, each
Holder thereof irrevocably agrees that, if the Call Option is not
exercised or the Callholder fails for any reason to purchase the 2012
REPS on the Coupon Reset Date pursuant to its exercise of the Call
Option, the Trustee shall be obligated to exercise on behalf of the
Holders of the 2012 REPS the right (the ``Mandatory Put'') to require the
Company to purchase the 2012 REPS, in whole not in part, on the Coupon
Reset Date at a price equal to 100% of the aggregate principal amount
thereof (the ``Put Price''), plus accrued but unpaid interest to but
excluding the Coupon Reset Date.
(b) If the Trustee exercises the Mandatory Put, the Company
shall deliver the Put Price in immediately available funds to the Trustee
by no later than 12:00 noon, New York City time, on the Coupon Reset Date
and the Holders of the 2012 REPS shall be required to deliver the 2012
REPS to the Company against payment therefor on the Coupon Reset Date
through the facilities of the Depositary so long as the 2012 REPS are in
global form. No Holder of the 2012 REPS or any interest therein has the
right to consent or object to the exercise by the Trustee of the
Mandatory Put. The provisions of this Section may not be amended or
waived without the consent of the Company, and all of the Holders of the
2012 REPS.
SECTION 2.04. If the Calculation Agent is removed or resigns
pursuant to Section 7 of the Calculation Agency Agreement and within 30
days of notice of such removal or resignation no new Calculation Agent
shall have been appointed by the Company, and shall have accepted such
appointment, the Trustee may, on behalf of the Holders of the 2012 REPS,
appeal to a court to appoint a new Calculation Agent.
SECTION 2.05. The 2012 REPS may be issued in denominations of
$1,000 and any integral multiples thereof.
SECTION 2.06. The 2012 REPS shall be in the form attached as
Exhibit A hereto.
SECTION 2.07. The Place of Payment for the 2012 REPS shall be
both The City of New York, New York, and the City of Philadelphia,
Pennsylvania. The Trustee shall be the paying agent for the 2012 REPS.
SECTION 2.08. The terms and provisions contained in the form
of 2012 REPS attached as Exhibit A hereto shall constitute, and are
hereby expressly made, a part of the Indenture and, to the extent
applicable, the Company and the Trustee, by their execution and delivery
hereof, expressly agree to such terms and provisions and to be bound
thereby.
ARTICLE THREE
MISCELLANEOUS.
SECTION 3.01. The recitals of fact herein and in the 2012 REPS
shall be taken as statements of the Company and shall not be construed as
made by the Trustee.
SECTION 3.02. This Supplemental Indenture No. 3 shall be
construed in connection with and as a part of the Indenture.
SECTION 3.03. (a) If any provision of this Supplemental
Indenture No. 3 limits, qualifies, or conflicts with another provision of
the Indenture required to be included in indentures qualified under the
Trust Indenture Act of 1939 (as in effect on the date of this
Supplemental Indenture No. 3) by any of the provisions of Section 310 to
317, inclusive, of the Trust Indenture Act of 1939, such required
provisions shall control.
(b) In case any one or more of the provisions contained in
this Supplemental Indenture No. 3 or in the 2012 REPS issued hereunder
should be invalid, illegal, or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected, impaired,
prejudiced or disturbed thereby.
SECTION 3.04. Whenever in this Supplemental Indenture No. 3
either of the parties hereto is named or referred to, this shall be
deemed to include the successors or assigns of such party, and all the
covenants and agreements in this Supplemental Indenture No. 3 contained
by or on behalf of the Company or by or on behalf of the Trustee shall
bind and inure to the benefit of the respective successors and assigns of
such parties, whether so expressed or not. Nothing in this Supplemental
Indenture No. 3 or the 2012 REPS, expressed or implied, shall give to any
Person, other than the parties hereto, their successors hereunder and the
Holders of the 2012 REPS, any benefit or any legal or equitable right,
remedy or claim under this Supplemental Indenture No. 3.
SECTION 3.05. (a) This Supplemental Indenture No. 3 may be
executed in any number of counterparts, each of which when so executed
shall be deemed an original, but all such counterparts shall together
constitute but one and the same instrument.
(b) The descriptive headings of the several Articles of this
Supplemental Indenture No. 3 were formulated, used and inserted herein
for convenience only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, McDONALD'S CORPORATION has caused this
Supplemental Indenture No. 3 to be signed, acknowledged and delivered by
its President, Executive Vice President and Chief Financial Officer or
Senior Vice President and Treasurer and its corporate seal to be affixed
hereunto and the same to be attested by its Secretary or Assistant
Secretary, and FIRST UNION NATIONAL BANK, as Trustee, has caused this
Supplemental Indenture No. 3 to be signed, acknowledged and delivered by
one of its Vice Presidents, and its seal to be affixed hereunto and the
same to be attested by one of its Authorized Officers, all as of the day
and year first written above.
McDONALD'S CORPORATION
[CORPORATE SEAL]
By: /s/ Jerry Langley
----------------------
Jerry Langley
Vice President
Attest:
/s/ Joseph R. Thomas
------------------------
Assistant Secretary
FIRST UNION NATIONAL BANK,
as Trustee
[CORPORATE SEAL]
By: /s/ John H. Clapham
-----------------------------
Vice President
Attest:
/s/ David C. Leondi
------------------------
Authorized Officer
STATE OF ILLINOIS )
) SS:
COUNTY OF DuPAGE )
On the 23rd day of June, in the year one thousand nine hundred
ninety-eight, before me appeared Jerry Langley to me personally known,
who, being by me duly sworn, did say that he resides in Chicago,
Illinois, that he is a Vice President of McDONALD'S CORPORATION, one of
the corporations described in and which executed the above instrument;
that he knows the seal of said corporation, that the seal affixed to
said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation; and that he
signed his name thereto by like authority.
/s/ Leona J. Oostman
---------------------
Notary Public
STATE OF PENNSYLVANIA )
) SS:
COUNTY OF PHILADELPHIA )
On the 23rd day of June, in the year one thousand nine hundred
ninety-eight, before me appeared John Clapham to be personally known,
who, being by me duly sworn, did say that he resides at Berwyn, PA, that
he is a Vice President of FIRST UNION NATIONAL BANK, one of the
corporations described in and which executed the above instrument; that
he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation; and that he signed his name
thereto by like authority.
/s/ Joann Fantini
-------------------
Notary Public
<PAGE>
EXHIBIT A
[FORM OF 2012 REPS]
DEBT SECURITY
CUSIP NO.: 580 135 CA7
No. 1 $300,000,000
THIS DEBT SECURITY IS A REGISTERED GLOBAL SECURITY AND IS
REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (``DTC''). UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN. UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR 2012 REPS IN DEFINITIVE
REGISTERED FORM, THIS REGISTERED GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC, OR BY A NOMINEE OF DTC TO
DTC OR ANOTHER NOMINEE OF DTC, OR BY DTC OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
McDONALD'S CORPORATION
6% REset Put Securities (REPS[SM]) due 2012
McDonald's Corporation, a corporation organized and existing
under the laws of the State of Delaware (hereinafter called the
``Company'', which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises
to pay to Cede & Co., or registered assigns, the principal sum of THREE
HUNDRED MILLION DOLLARS ($300,000,000) on June 23, 2012, and to pay
interest thereon to the Registered Holder hereof from June 23, 1998, or
from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually at the rate determined as set
forth on the reverse hereof, on June 23 and December 23, in each year,
commencing December 23, 1998, until the principal hereof is paid or such
payment is duly provided for. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date shall, as
provided in such Indenture, be paid to the Person in whose name this Debt
Security is registered at the close of business on the record date for
such interest, which shall be the June 15 or December 15 (whether or not
a Business Day) next preceding an Interest Payment Date.
Payment of the principal of (and premium, if any) and interest
on this Debt Security shall be made at the designated agency of the
Company maintained for such purpose in The City of New York, New York and
the City of Philadelphia, Pennsylvania, in such coin or currency of the
United States of America as at the time of payment is legal tender for
payment of public and private debts, or, at the option of the Company,
interest so payable may be paid by check to the order of said holder
mailed to his address appearing on the Debt Security register. Any
interest not so punctually paid or duly provided for shall be payable as
provided in the Indenture.
Reference is made to the further provisions of this Debt
Security set forth on the reverse hereof, including those describing the
Call Option, the Mandatory Put and the Coupon Reset Process, which
further provisions shall for all purposes have the same effect as if set
forth in this place.
Unless the Certificate of Authentication hereon has been
executed by the Trustee referred to on the reverse hereof (or by an
Authenticating Agent, as provided in the Indenture) by manual signature,
this Debt Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
In Witness Whereof, McDonald's Corporation has caused this
Instrument to be signed in its corporate name by the Chairman of the
Board or its President or one of its Vice Presidents manually or in
facsimile and a facsimile of its corporate seal to be imprinted hereon
and attested by the manual or facsimile signature of its Secretary or one
of its Assistant Secretaries.
Dated: June 23, 1998
McDONALD'S CORPORATION
By:
-------------------------
Vice President
ATTEST:
By:
--------------------------
Assistant Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated
herein provided for in the within mentioned Indenture.
Dated: June 23, 1998
FIRST UNION NATIONAL BANK,
as Trustee
By:
------------------------
Authorized Officer
McDONALD'S CORPORATION
6% REset Put Securities (REPS[SM]) due 2012
This Debt Security is one of a duly authorized issue of
debentures, notes or other evidences of indebtedness of the Company
(herein called the ``Debt Securities'') of a series hereinafter
specified, all issued and to be issued in one or more series under a
Senior Debt Securities Indenture, dated as of October 19, 1996 (herein
called the ``Indenture''), between the Company and First Union National
Bank, as Trustee (herein called the ``Trustee'', which term includes any
successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement
of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Debt
Securities and of the terms upon which the Debt Securities are, and are
to be, authenticated and delivered. The Debt Securities may be issued in
one or more series, which different series may be issued in various
currencies, may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates,
may be subject to different redemption provisions (if any), may be
subject to different sinking, purchase or analogous funds (if any), may
be subject to different covenants and Events of Default and may otherwise
vary as in the Indenture provided. This Debt Security is one of a series
of Debt Securities of the Company designated as the 6% REPS due 2012 (the
``2012 REPS''), limited in aggregate principal amount to $300,000,000.
Subject to the Call Option and the Mandatory Put described below, the
2012 REPS are not redeemable prior to maturity. The terms of the 2012
REPS include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939. The 2012 REPS
are subject to all such terms and Holders thereof are referred to the
Indenture and the Trust Indenture Act of 1939 for a statement of those
terms.
Interest Payments
The 2012 REPS shall bear interest, payable on each Interest
Payment Date to Holders of record on the Regular Record Date preceding
such Interest Payment Date, at 6% per annum from June 23, 1998 or from
the most recent Interest Payment Date to which interest has been paid or
duly provided for to but excluding June 23, 2002 (the ``Coupon Reset
Date''), whereupon (x) if all of the 2012 REPS are purchased on such date
by the Callholder pursuant to the Call Option, the 2012 REPS shall bear
interest from and including the Coupon Reset Date to but excluding June
23, 2012 (the ``Final Maturity Date'') at the Coupon Reset Rate
determined in accordance with the Coupon Reset Process described below;
or (y) the 2012 REPS shall be purchased by the Company pursuant to the
exercise of the Mandatory Put by the Trustee on behalf of the Holders of
the 2012 REPS. Interest on this Debt Security shall be computed on the
basis of a 360-day year comprised of twelve 30-day months.
If the Callholder elects to purchase the 2012 REPS pursuant to
the Call Option, the Calculation Agent shall reset the interest rate for
the 2012 REPS effective on the Coupon Reset Date, pursuant to the Coupon
Reset Process described below. In such circumstances, (i) this Debt
Security shall be purchased by the Callholder at 100% of the principal
amount hereof on the Coupon Reset Date, on the terms and subject to the
conditions described herein (interest accrued to but excluding the Coupon
Reset Date shall be paid by the Company on such date to the Holder hereof
on the most recent Regular Record Date); and (ii) from and including the
Coupon Reset Date, this Debt Security shall bear interest at the rate
determined by the Calculation Agent in accordance with the procedures set
forth under ``Coupon Reset Process'' below.
In the case where any Interest Payment Date or the maturity
date does not fall on a Business Day, payment of interest or principal
otherwise payable on such day need not be made on such day, but may be
made on the next succeeding Business Day with the same force and effect
as if made on the Interest Payment Date or the maturity date, as the case
may be, and no interest shall accrue for the period from and after such
Interest Payment Date or the maturity date.
Maturity Date
The 2012 REPS shall mature on the Final Maturity Date. On the
Coupon Reset Date, the Holder hereof shall be entitled to receive 100% of
the principal amount hereof from either (i) the Callholder, if the
Callholder purchases this Debt Security pursuant to the Call Option; or
(ii) the Company, by exercise of the Mandatory Put by the Trustee for and
on behalf of the Holder hereof, if the Callholder does not purchase this
Debt Security pursuant to the Call Option.
Call Option; Mandatory Put
(i) Call Option. The Callholder, by giving notice to the
Trustee (the ``Call Notice''), has the right to purchase the aggregate
principal amount of this Debt Security, in whole but not in part (the
``Call Option''), on the Coupon Reset Date, at a price equal to 100% of
the principal amount hereof (the ``Call Price'') (interest accrued to but
excluding the Coupon Reset Date shall be paid by the Company on such date
to the Holder hereof on the most recent Regular Record Date). The Call
Notice is required to be given to the Trustee, in writing, prior to 4:00
p.m., New York City time, no later than 15 calendar days prior to the
Coupon Reset Date. The Call Notice must contain the requisite delivery
details, including the identity of the Callholder's DTC account.
If the Callholder exercises the Call Option, unless terminated
in accordance with its terms, (i) not later than 2:00 p.m., New York City
time, on the Business Day prior to the Coupon Reset Date, the Callholder
shall deliver the Call Price in immediately available funds to the
Trustee for payment thereof to the Holders of the 2012 REPS (including,
if applicable, the Holder hereof) on the Coupon Reset Date; and (ii) the
Holder hereof shall be required to deliver and shall be deemed to have
delivered this Debt Security to the Callholder against payment therefor
on the Coupon Reset Date through the facilities of DTC. The Callholder
is not required to exercise the Call Option, and no Holder of the 2012
REPS or any interest therein shall have any right or claim against the
Callholder as a result of the Callholder's decision whether or not to
exercise the Call Option or performance or non-performance of its
obligations with respect thereto.
The Callholder may at any time assign its rights and
obligations under the Call Option; provided, however, that (i) such
rights and obligations are assigned in whole and not in part; and (ii) it
provides the Trustee and the Company with notice of such assignment
contemporaneously with such assignment. Upon receipt of notice of
assignment, the Trustee shall treat the assignee as Callholder for all
purposes hereunder. The Callholder may assign its rights under the Call
Option without notice to or consent of, the Holders of the 2012 REPS
(including, if applicable, the Holder hereof).
The Indenture sets forth certain circumstances in which the
Call Option shall automatically be terminated.
(ii) Mandatory Put. If the Call Option is not exercised or if
the Callholder fails for any reason to purchase the 2012 REPS on the
Coupon Reset Date pursuant to its exercise of the Call Option, the
Trustee shall exercise the right of the Holders of the 2012 REPS
(including, if applicable, the Holder hereof) to require the Company to
purchase the aggregate principal amount of 2012 REPS, in whole but not in
part (the ``Mandatory Put''), on the Coupon Reset Date at a price equal
to 100% of the principal amount thereof (the ``Put Price''), plus accrued
but unpaid interest to but excluding the Coupon Reset Date, in each case,
to be paid by the Company to the Holders of the 2012 REPS (including, if
applicable, the Holder hereof) in immediately available funds on the
Coupon Reset Date. If the Trustee exercises the Mandatory Put, then the
Company shall deliver the Put Price in immediately available funds to the
Trustee by no later than 12:00 noon, New York City time, on the Coupon
Reset Date and the Holders of the 2012 REPS will be required to deliver
and will be deemed to have delivered the 2012 REPS to the Company against
payment therefor on the Coupon Reset Date through the facilities of DTC.
By its purchase of the 2012 REPS, each Holder irrevocably agrees that the
Trustee shall exercise the Mandatory Put relating to such 2012 REPS for
or on behalf of the Holder as provided herein. No Holder of any 2012
REPS or any interest therein has the right to consent or object to the
exercise of the Trustee's duties under the Mandatory Put.
Notice to Holders by Trustee
In anticipation of the exercise of the Call Option or the
Mandatory Put on the Coupon Reset Date, the Trustee shall notify the
Holder hereof, not less than 30 days nor more than 60 days prior to the
Coupon Reset Date, that all 2012 REPS shall be delivered on the Coupon
Reset Date through the facilities of DTC against payment of the Call
Price by the Callholder under the Call Option or payment of the Put Price
by the Company under the Mandatory Put. The Trustee shall notify the
Holder hereof once it is determined whether the Call Price or the Put
Price shall be delivered in accordance with the provisions hereof.
Coupon Reset Process
Pursuant to and subject to the terms of a calculation agency
agreement, dated as of June 23, 1998, between the Company and Morgan
Stanley & Co. Incorporated, Morgan Stanley & Co. Incorporated (or its
successors or assigns) shall be the Calculation Agent. If the Callholder
timely exercises its Call Option and the Call Option does not otherwise
terminate in accordance with its terms, then the Company and the
Calculation Agent shall complete the following steps (the ``Coupon Reset
Process'') in order to determine the interest rate (``Coupon Reset
Rate'') to be paid on the 2012 REPS from and including the Coupon Reset
Date to but excluding the Final Maturity Date:
(i) The Company shall provide the Calculation Agent with (a) a
list (a ``Dealer List''), no later than five Business Days prior to the
Coupon Reset Date, containing the names and addresses of five dealers
(one of which shall be Morgan Stanley & Co. Incorporated) from which it
desires the Calculation Agent to obtain the Bids (as defined below) for
the purchase of the 2012 REPS; and (b) a copy of any other material
reasonably requested by the Calculation Agent to facilitate a successful
Coupon Reset Process.
(ii) Within one Business Day following receipt by the
Calculation Agent of the Dealer List, the Calculation Agent shall provide
to each dealer (``Dealer'') on the Dealer List (a) a copy of the
Prospectus Supplement and accompanying Prospectus relating to the 2012
REPS; (b) a copy of the form of the 2012 REPS; and (c) a written request
that each such Dealer submit a Bid to the Calculation Agent at 12:00
noon, New York City time, on the third Business Day prior to the Coupon
Reset Date (the ``Bid Date''). The time on the Bid Date upon which Bids
shall be requested may be changed by the Calculation Agent to as late as
3:00 p.m., New York City time. As used herein, ``Business Day'' shall
mean any day other than a Saturday, a Sunday, a legal holiday or a day on
which banking institutions in the cities of New York or Chicago are
authorized or obligated by law, executive order or governmental decree to
be closed. ``Bid'' shall mean an irrevocable written offer given by a
Dealer for the purchase of the 2012 REPS, settling on the Coupon Reset
Date, and shall be quoted by such Dealer as a stated yield to maturity on
the 2012 REPS (``Yield to Maturity''). Each Dealer shall be provided
with (a) the name of the Company; (b) an estimate of the Purchase Price
(as defined below); (c) the principal amount and maturity date of the
2012 REPS; and (d) the method by which interest shall be calculated on
the 2012 REPS.
(iii) The purchase price to be paid by any Dealer for the 2012
REPS, which shall be stated as a U.S. dollar amount and be calculated by
the Calculation Agent in accordance with this clause (iii) (the
``Purchase Price''), shall be equal to (a) the total principal amount of
the 2012 REPS, plus (b) a premium (the ``Notes Premium'') which shall be
equal to the excess, if any, of (x) the discounted present value to the
Coupon Reset Date of a bond with a maturity of June 23, 2012 which has an
interest rate equal to 5.51%, semi-annual interest payments on each June
23 and December 23, commencing December 23, 2002, and a principal amount
of $300,000,000, and assuming a discount rate equal to the Treasury Rate
over (y) the principal amount of the 2012 REPS. ``Treasury Rate'' means
the per annum rate equal to the offer side yield to maturity of the
current on-the-run ten-year United States Treasury security per Telerate
page 500 (or any successor or substitute page as may replace such page on
such service) at 11:00 a.m., New York City time, on the Bid Date (or such
other date or time that may be agreed upon by the Company and the
Calculation Agent) or, if such rate does not appear on Telerate page 500
(or any successor or substitute page as may replace such page on such
service) at such time, the rate on GovPx End-of-Day Pricing at 3:00 p.m.,
New York City time, on the Bid Date (or such other date or time that may
be agreed upon by the Company and the Calculation Agent).
(iv) The Calculation Agent shall immediately notify the
Company of (a) the names of each of the Dealers from whom the Calculation
Agent received Bids on the Bid Date; (b) the Bid submitted by each such
Dealer; and (c) the Purchase Price as determined pursuant to clause (iii)
hereof. Unless the Call Option has terminated in accordance with its
terms, the Calculation Agent shall thereafter select from the Bids
received the Bid with the lowest Yield to Maturity (the ``Selected Bid'')
and set the Coupon Reset Rate equal to the interest rate which would
amortize the Notes Premium fully over the remaining term of the 2012 REPS
at the Yield to Maturity indicated by the Selected Bid; provided,
however, that if the Calculation Agent has not received a timely Bid from
a Dealer, the Selected Bid shall be the lowest of all Bids received by
such time; and provided further, that if any two or more of the lowest
Bids submitted are equivalent, the Company shall in its sole discretion
select any of such equivalent Bids (and such selected Bid shall be the
Selected Bid). In all cases, Morgan Stanley & Co. Incorporated, in its
capacity as a Dealer, shall have the right to match the Bid with the
lowest Yield to Maturity, whereupon Morgan Stanley & Co. Incorporated's
Bid shall become the Selected Bid. The Calculation Agent shall promptly
notify the Company and the Trustee of the Coupon Reset Rate.
If an Event of Default shall occur and be continuing with
respect to the 2012 REPS, the unpaid principal amount of the 2012 REPS
may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than 66 2/3% in
aggregate principal amount of each series of the Debt Securities at the
time outstanding (as defined in the Indenture) to be affected (each
series voting as a class), evidenced as in the Indenture provided, to
execute supplemental indentures adding any provisions to or changing in
any manner or eliminating any of the provisions of the Indenture or of
any supplemental indenture or modifying in any manner the rights of the
Holders of the Debt Securities of all such series; provided, however,
that no such supplemental indenture shall, among other things, (i) extend
the fixed maturity of any Debt Security, or reduce the rate or extend
the time of payment of interest thereon, or reduce the principal amount
or premium if any, thereon, or make the principal thereof, or premium if
any, or interest, if any, thereon payable in any coin or currency other
than that hereinabove provided, without the consent of the Holder of each
Debt Security so affected or reduce the amount of principal of an
Original Issue Discount Security that would be due and payable upon
acceleration of maturity thereof, or (ii) reduce the aforesaid percentage
of Debt Securities that Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holders of each
Debt Security so affected. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
2012 REPS at the time Outstanding, as defined in the Indenture, on behalf
of the Holders of all the 2012 REPS, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the
Holder of this 2012 REPS shall be conclusive and binding upon such
Holder and upon all future Holders of this 2012 REPS and of any 2012 REPS
issued upon the transfer hereof or in exchange therefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this 2012
REPS or upon any 2012 REPS issued upon the transfer hereof or in exchange
therefor or in lieu hereof.
No reference herein to the Indenture and no provision of this
2012 REPS or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this 2012 REPS at the times, places, and rate, and in the
coin and currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, this 2012 REPS is transferable on the Debt Security
register of the Company, upon surrender of this 2012 REPS for transfer at
the office or agent of the Company in The City of New York, New York, or
the City of Philadelphia, Pennsylvania, duly endorsed by or accompanied
by a written instrument of transfer in form satisfactory to the Company
and the Debt Security registrar, duly executed by the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
2012 REPS, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or
transferees.
The 2012 REPS are issuable only as registered 2012 REPS without
coupons in denominations of $1,000 and integral multiples thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, this 2012 REPS is exchangeable for a like aggregate principal
amount of 2012 REPS of different authorized denominations, as requested
by the Holder surrendering the same.
No service charge will be made for any such transfer or
exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection
therewith.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this 2012 REPS is registered
as the owner hereof for the purpose of receiving payment as herein
provided and for all other purposes whether or not this 2012 REPS be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
No recourse shall be made for the payment of the principal of
or the interest on this 2012 REPS or for any claim based herein or
otherwise in any manner in respect hereof, or in respect of the
Indenture, against any incorporator, stockholder, officer or director, as
such past, present or future, of the Company or of any predecessor or
successor corporation, whether by virtue of any constitutional provision
or statute or rule of law, or by the enforcement of any assessment or
penalty or in any other manner, all such liability being expressly waived
and released by the acceptance hereof and as part of the consideration
for the issue hereof.
All terms used in this 2012 REPS which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
The following abbreviations, when used in the inscription on
the face of this Instrument, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - Custodian
--------- ------------
(Cust) (Minor)
under Uniform Gifts to Minors
Act
---------------
(State)
Additional abbreviations may also be used though not in the above list
----------------------------------------------------------------------
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
-------------------------------------------------------------------------
-------------------------------------------------------------------------
the within Instrument of McDONALD'S CORPORATION and hereby does
irrevocably constitute and appoint
Attorney
------------------------------------------------------------
Dated:
--------------- --------------------
NOTICE: this signature to this assignment must correspond with the name
as it appears upon the face of the within Instrument in every particular,
without alteration or enlargement or any change whatever.
Exhibit 4(b)
DEBT SECURITY
CUSIP NO.: 580 135 CA7
No. 1 $300,000,000
THIS DEBT SECURITY IS A REGISTERED GLOBAL SECURITY AND IS
REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (``DTC''). UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN. UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR 2012 REPS IN DEFINITIVE
REGISTERED FORM, THIS REGISTERED GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC, OR BY A NOMINEE OF DTC TO
DTC OR ANOTHER NOMINEE OF DTC, OR BY DTC OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
McDONALD'S CORPORATION
6% REset Put Securities (REPS[SM]) due 2012
McDonald's Corporation, a corporation organized and existing
under the laws of the State of Delaware (hereinafter called the
`` Company'', which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises
to pay to Cede & Co., or registered assigns, the principal sum of THREE
HUNDRED MILLION DOLLARS ($300,000,000) on June 23, 2012, and to pay
interest thereon to the Registered Holder hereof from June 23, 1998, or
from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually at the rate determined as set
forth on the reverse hereof, on June 23 and December 23, in each year,
commencing December 23, 1998, until the principal hereof is paid or such
payment is duly provided for. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date shall, as
provided in such Indenture, be paid to the Person in whose name this Debt
Security is registered at the close of business on the record date for
such interest, which shall be the June 15 or December 15 (whether or not
a Business Day) next preceding an Interest Payment Date.
Payment of the principal of (and premium, if any) and interest
on this Debt Security shall be made at the designated agency of the
Company maintained for such purpose in The City of New York, New York and
the City of Philadelphia, Pennsylvania, in such coin or currency of the
United States of America as at the time of payment is legal tender for
payment of public and private debts, or, at the option of the Company,
interest so payable may be paid by check to the order of said holder
mailed to his address appearing on the Debt Security register. Any
interest not so punctually paid or duly provided for shall be payable as
provided in the Indenture.
Reference is made to the further provisions of this Debt
Security set forth on the reverse hereof, including those describing the
Call Option, the Mandatory Put and the Coupon Reset Process, which
further provisions shall for all purposes have the same effect as if set
forth in this place.
Unless the Certificate of Authentication hereon has been
executed by the Trustee referred to on the reverse hereof (or by an
Authenticating Agent, as provided in the Indenture) by manual signature,
this Debt Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
In Witness Whereof, McDonald's Corporation has caused this
Instrument to be signed in its corporate name by the Chairman of the
Board or its President or one of its Vice Presidents manually or in
facsimile and a facsimile of its corporate seal to be imprinted hereon
and attested by the manual or facsimile signature of its Secretary or one
of its Assistant Secretaries.
Dated: June 23, 1998
McDONALD'S CORPORATION
By:
-------------------------
Vice President
ATTEST:
By:
--------------------------
Assistant Secretary
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated
herein provided for in the within mentioned Indenture.
Dated: June 23, 1998
FIRST UNION NATIONAL BANK,
as Trustee
By:
------------------------
Authorized Officer
<PAGE>
McDONALD'S CORPORATION
6% REset Put Securities (REPS[SM]) due 2012
This Debt Security is one of a duly authorized issue of
debentures, notes or other evidences of indebtedness of the Company
(herein called the ``Debt Securities'') of a series hereinafter
specified, all issued and to be issued in one or more series under a
Senior Debt Securities Indenture, dated as of October 19, 1996 (herein
called the ``Indenture''), between the Company and First Union National
Bank, as Trustee (herein called the ``Trustee'', which term includes any
successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement
of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Debt
Securities and of the terms upon which the Debt Securities are, and are
to be, authenticated and delivered. The Debt Securities may be issued in
one or more series, which different series may be issued in various
currencies, may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates,
may be subject to different redemption provisions (if any), may be
subject to different sinking, purchase or analogous funds (if any), may
be subject to different covenants and Events of Default and may otherwise
vary as in the Indenture provided. This Debt Security is one of a series
of Debt Securities of the Company designated as the 6% REPS due 2012 (the
``2012 REPS''), limited in aggregate principal amount to $300,000,000.
Subject to the Call Option and the Mandatory Put described below, the
2012 REPS are not redeemable prior to maturity. The terms of the 2012
REPS include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939. The 2012 REPS
are subject to all such terms and Holders thereof are referred to the
Indenture and the Trust Indenture Act of 1939 for a statement of those
terms.
Interest Payments
The 2012 REPS shall bear interest, payable on each Interest
Payment Date to Holders of record on the Regular Record Date preceding
such Interest Payment Date, at 6% per annum from June 23, 1998 or from
the most recent Interest Payment Date to which interest has been paid or
duly provided for to but excluding June 23, 2002 (the ``Coupon Reset
Date''), whereupon (x) if all of the 2012 REPS are purchased on such date
by the Callholder pursuant to the Call Option, the 2012 REPS shall bear
interest from and including the Coupon Reset Date to but excluding June
23, 2012 (the ``Final Maturity Date'') at the Coupon Reset Rate
determined in accordance with the Coupon Reset Process described below;
or (y) the 2012 REPS shall be purchased by the Company pursuant to the
exercise of the Mandatory Put by the Trustee on behalf of the Holders of
the 2012 REPS. Interest on this Debt Security shall be computed on the
basis of a 360-day year comprised of twelve 30-day months.
If the Callholder elects to purchase the 2012 REPS pursuant to
the Call Option, the Calculation Agent shall reset the interest rate for
the 2012 REPS effective on the Coupon Reset Date, pursuant to the Coupon
Reset Process described below. In such circumstances, (i) this Debt
Security shall be purchased by the Callholder at 100% of the principal
amount hereof on the Coupon Reset Date, on the terms and subject to the
conditions described herein (interest accrued to but excluding the Coupon
Reset Date shall be paid by the Company on such date to the Holder hereof
on the most recent Regular Record Date); and (ii) from and including the
Coupon Reset Date, this Debt Security shall bear interest at the rate
determined by the Calculation Agent in accordance with the procedures set
forth under ``Coupon Reset Process'' below.
In the case where any Interest Payment Date or the maturity
date does not fall on a Business Day, payment of interest or principal
otherwise payable on such day need not be made on such day, but may be
made on the next succeeding Business Day with the same force and effect
as if made on the Interest Payment Date or the maturity date, as the case
may be, and no interest shall accrue for the period from and after such
Interest Payment Date or the maturity date.
Maturity Date
The 2012 REPS shall mature on the Final Maturity Date. On the
Coupon Reset Date, the Holder hereof shall be entitled to receive 100% of
the principal amount hereof from either (i) the Callholder, if the
Callholder purchases this Debt Security pursuant to the Call Option; or
(ii) the Company, by exercise of the Mandatory Put by the Trustee for and
on behalf of the Holder hereof, if the Callholder does not purchase this
Debt Security pursuant to the Call Option.
Call Option; Mandatory Put
(i) Call Option. The Callholder, by giving notice to the
Trustee (the ``Call Notice''), has the right to purchase the aggregate
principal amount of this Debt Security, in whole but not in part (the
``Call Option''), on the Coupon Reset Date, at a price equal to 100% of
the principal amount hereof (the ``Call Price'') (interest accrued to but
excluding the Coupon Reset Date shall be paid by the Company on such date
to the Holder hereof on the most recent Regular Record Date). The Call
Notice is required to be given to the Trustee, in writing, prior to 4:00
p.m., New York City time, no later than 15 calendar days prior to the
Coupon Reset Date. The Call Notice must contain the requisite delivery
details, including the identity of the Callholder's DTC account.
If the Callholder exercises the Call Option, unless terminated
in accordance with its terms, (i) not later than 2:00 p.m., New York City
time, on the Business Day prior to the Coupon Reset Date, the Callholder
shall deliver the Call Price in immediately available funds to the
Trustee for payment thereof to the Holders of the 2012 REPS (including,
if applicable, the Holder hereof) on the Coupon Reset Date; and (ii) the
Holder hereof shall be required to deliver and shall be deemed to have
delivered this Debt Security to the Callholder against payment therefor
on the Coupon Reset Date through the facilities of DTC. The Callholder
is not required to exercise the Call Option, and no Holder of the 2012
REPS or any interest therein shall have any right or claim against the
Callholder as a result of the Callholder's decision whether or not to
exercise the Call Option or performance or non-performance of its
obligations with respect thereto.
The Callholder may at any time assign its rights and
obligations under the Call Option; provided, however, that (i) such
rights and obligations are assigned in whole and not in part; and (ii) it
provides the Trustee and the Company with notice of such assignment
contemporaneously with such assignment. Upon receipt of notice of
assignment, the Trustee shall treat the assignee as Callholder for all
purposes hereunder. The Callholder may assign its rights under the Call
Option without notice to or consent of, the Holders of the 2012 REPS
(including, if applicable, the Holder hereof).
The Indenture sets forth certain circumstances in which the
Call Option shall automatically be terminated.
(ii) Mandatory Put. If the Call Option is not exercised or if
the Callholder fails for any reason to purchase the 2012 REPS on the
Coupon Reset Date pursuant to its exercise of the Call Option, the
Trustee shall exercise the right of the Holders of the 2012 REPS
(including, if applicable, the Holder hereof) to require the Company to
purchase the aggregate principal amount of 2012 REPS, in whole but not in
part (the ``Mandatory Put''), on the Coupon Reset Date at a price equal
to 100% of the principal amount thereof (the ``Put Price''), plus accrued
but unpaid interest to but excluding the Coupon Reset Date, in each case,
to be paid by the Company to the Holders of the 2012 REPS (including, if
applicable, the Holder hereof) in immediately available funds on the
Coupon Reset Date. If the Trustee exercises the Mandatory Put, then the
Company shall deliver the Put Price in immediately available funds to the
Trustee by no later than 12:00 noon, New York City time, on the Coupon
Reset Date and the Holders of the 2012 REPS will be required to deliver
and will be deemed to have delivered the 2012 REPS to the Company against
payment therefor on the Coupon Reset Date through the facilities of DTC.
By its purchase of the 2012 REPS, each Holder irrevocably agrees that the
Trustee shall exercise the Mandatory Put relating to such 2012 REPS for
or on behalf of the Holder as provided herein. No Holder of any 2012
REPS or any interest therein has the right to consent or object to the
exercise of the Trustee's duties under the Mandatory Put.
Notice to Holders by Trustee
In anticipation of the exercise of the Call Option or the
Mandatory Put on the Coupon Reset Date, the Trustee shall notify the
Holder hereof, not less than 30 days nor more than 60 days prior to the
Coupon Reset Date, that all 2012 REPS shall be delivered on the Coupon
Reset Date through the facilities of DTC against payment of the Call
Price by the Callholder under the Call Option or payment of the Put Price
by the Company under the Mandatory Put. The Trustee shall notify the
Holder hereof once it is determined whether the Call Price or the Put
Price shall be delivered in accordance with the provisions hereof.
Coupon Reset Process
Pursuant to and subject to the terms of a calculation agency
agreement, dated as of June 23, 1998, between the Company and Morgan
Stanley & Co. Incorporated, Morgan Stanley & Co. Incorporated (or its
successors or assigns) shall be the Calculation Agent. If the Callholder
timely exercises its Call Option and the Call Option does not otherwise
terminate in accordance with its terms, then the Company and the
Calculation Agent shall complete the following steps (the ``Coupon Reset
Process'') in order to determine the interest rate (``Coupon Reset
Rate'') to be paid on the 2012 REPS from and including the Coupon Reset
Date to but excluding the Final Maturity Date:
(i) The Company shall provide the Calculation Agent with (a) a
list (a ``Dealer List''), no later than five Business Days prior to the
Coupon Reset Date, containing the names and addresses of five dealers
(one of which shall be Morgan Stanley & Co. Incorporated) from which it
desires the Calculation Agent to obtain the Bids (as defined below) for
the purchase of the 2012 REPS; and (b) a copy of any other material
reasonably requested by the Calculation Agent to facilitate a successful
Coupon Reset Process.
(ii) Within one Business Day following receipt by the
Calculation Agent of the Dealer List, the Calculation Agent shall provide
to each dealer (''Dealer'') on the Dealer List (a) a copy of the
Prospectus Supplement and accompanying Prospectus relating to the 2012
REPS; (b) a copy of the form of the 2012 REPS; and (c) a written request
that each such Dealer submit a Bid to the Calculation Agent at 12:00
noon, New York City time, on the third Business Day prior to the Coupon
Reset Date (the ``Bid Date''). The time on the Bid Date upon which Bids
shall be requested may be changed by the Calculation Agent to as late as
3:00 p.m., New York City time. As used herein, ``Business Day'' shall
mean any day other than a Saturday, a Sunday, a legal holiday or a day on
which banking institutions in the cities of New York or Chicago are
authorized or obligated by law, executive order or governmental decree to
be closed. ``Bid'' shall mean an irrevocable written offer given by a
Dealer for the purchase of the 2012 REPS, settling on the Coupon Reset
Date, and shall be quoted by such Dealer as a stated yield to maturity on
the 2012 REPS (``Yield to Maturity''). Each Dealer shall be provided
with (a) the name of the Company; (b) an estimate of the Purchase Price
(as defined below); (c) the principal amount and maturity date of the
2012 REPS; and (d) the method by which interest shall be calculated on
the 2012 REPS.
(iii) The purchase price to be paid by any Dealer for the 2012
REPS, which shall be stated as a U.S. dollar amount and be calculated by
the Calculation Agent in accordance with this clause (iii) (the
``Purchase Price''), shall be equal to (a) the total principal amount of
the 2012 REPS, plus (b) a premium (the ``Notes Premium'') which shall be
equal to the excess, if any, of (x) the discounted present value to the
Coupon Reset Date of a bond with a maturity of June 23, 2012 which has an
interest rate equal to 5.51%, semi-annual interest payments on each June
23 and December 23, commencing December 23, 2002, and a principal amount
of $300,000,000, and assuming a discount rate equal to the Treasury Rate
over (y) the principal amount of the 2012 REPS. ``Treasury Rate'' means
the per annum rate equal to the offer side yield to maturity of the
current on-the-run ten-year United States Treasury security per Telerate
page 500 (or any successor or substitute page as may replace such page on
such service) at 11:00 a.m., New York City time, on the Bid Date (or such
other date or time that may be agreed upon by the Company and the
Calculation Agent) or, if such rate does not appear on Telerate page 500
(or any successor or substitute page as may replace such page on such
service) at such time, the rate on GovPx End-of-Day Pricing at 3:00 p.m.,
New York City time, on the Bid Date (or such other date or time that may
be agreed upon by the Company and the Calculation Agent).
(iv) The Calculation Agent shall immediately notify the
Company of (a) the names of each of the Dealers from whom the Calculation
Agent received Bids on the Bid Date; (b) the Bid submitted by each such
Dealer; and (c) the Purchase Price as determined pursuant to clause (iii)
hereof. Unless the Call Option has terminated in accordance with its
terms, the Calculation Agent shall thereafter select from the Bids
received the Bid with the lowest Yield to Maturity (the ``Selected Bid'')
and set the Coupon Reset Rate equal to the interest rate which would
amortize the Notes Premium fully over the remaining term of the 2012 REPS
at the Yield to Maturity indicated by the Selected Bid; provided,
however, that if the Calculation Agent has not received a timely Bid from
a Dealer, the Selected Bid shall be the lowest of all Bids received by
such time; and provided further, that if any two or more of the lowest
Bids submitted are equivalent, the Company shall in its sole discretion
select any of such equivalent Bids (and such selected Bid shall be the
Selected Bid). In all cases, Morgan Stanley & Co. Incorporated, in its
capacity as a Dealer, shall have the right to match the Bid with the
lowest Yield to Maturity, whereupon Morgan Stanley & Co. Incorporated's
Bid shall become the Selected Bid. The Calculation Agent shall promptly
notify the Company and the Trustee of the Coupon Reset Rate.
If an Event of Default shall occur and be continuing with
respect to the 2012 REPS, the unpaid principal amount of the 2012 REPS
may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than 66 2/3% in
aggregate principal amount of each series of the Debt Securities at the
time outstanding (as defined in the Indenture) to be affected (each
series voting as a class), evidenced as in the Indenture provided, to
execute supplemental indentures adding any provisions to or changing in
any manner or eliminating any of the provisions of the Indenture or of
any supplemental indenture or modifying in any manner the rights of the
Holders of the Debt Securities of all such series; provided, however,
that no such supplemental indenture shall, among other things, (i) extend
the fixed maturity of any Debt Security, or reduce the rate or extend
the time of payment of interest thereon, or reduce the principal amount
or premium if any, thereon, or make the principal thereof, or premium if
any, or interest, if any, thereon payable in any coin or currency other
than that hereinabove provided, without the consent of the Holder of each
Debt Security so affected or reduce the amount of principal of an
Original Issue Discount Security that would be due and payable upon
acceleration of maturity thereof, or (ii) reduce the aforesaid percentage
of Debt Securities that Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holders of each
Debt Security so affected. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
2012 REPS at the time Outstanding, as defined in the Indenture, on behalf
of the Holders of all the 2012 REPS, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the
Holder of this 2012 REPS shall be conclusive and binding upon such
Holder and upon all future Holders of this 2012 REPS and of any 2012 REPS
issued upon the transfer hereof or in exchange therefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this 2012
REPS or upon any 2012 REPS issued upon the transfer hereof or in exchange
therefor or in lieu hereof.
No reference herein to the Indenture and no provision of this
2012 REPS or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this 2012 REPS at the times, places, and rate, and in the
coin and currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, this 2012 REPS is transferable on the Debt Security
register of the Company, upon surrender of this 2012 REPS for transfer at
the office or agent of the Company in The City of New York, New York, or
the City of Philadelphia, Pennsylvania, duly endorsed by or accompanied
by a written instrument of transfer in form satisfactory to the Company
and the Debt Security registrar, duly executed by the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
2012 REPS, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or
transferees.
The 2012 REPS are issuable only as registered 2012 REPS without
coupons in denominations of $1,000 and integral multiples thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, this 2012 REPS is exchangeable for a like aggregate principal
amount of 2012 REPS of different authorized denominations, as requested
by the Holder surrendering the same.
No service charge will be made for any such transfer or
exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection
therewith.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this 2012 REPS is registered
as the owner hereof for the purpose of receiving payment as herein
provided and for all other purposes whether or not this 2012 REPS be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
No recourse shall be made for the payment of the principal of
or the interest on this 2012 REPS or for any claim based herein or
otherwise in any manner in respect hereof, or in respect of the
Indenture, against any incorporator, stockholder, officer or director, as
such past, present or future, of the Company or of any predecessor or
successor corporation, whether by virtue of any constitutional provision
or statute or rule of law, or by the enforcement of any assessment or
penalty or in any other manner, all such liability being expressly waived
and released by the acceptance hereof and as part of the consideration
for the issue hereof.
All terms used in this 2012 REPS which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
The following abbreviations, when used in the inscription on
the face of this Instrument, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - Custodian
--------- ------------
(Cust) (Minor)
under Uniform Gifts to Minors
Act
---------------
(State)
Additional abbreviations may also be used though not in the above list
----------------------------------------------------------------------
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
-------------------------------------------------------------------------
-------------------------------------------------------------------------
the within Instrument of McDONALD'S CORPORATION and hereby does
irrevocably constitute and appoint
Attorney
------------------------------------------------------------
Dated:
--------------- --------------------
NOTICE: this signature to this assignment must correspond with the name
as it appears upon the face of the within Instrument in every particular,
without alteration or enlargement or any change whatever.
Exhibit 8
June 23, 1998
McDonald's Corporation
One McDonald's Plaza
Oak Brook, Illinois 60523
Morgan Stanley & Co. Incorporated
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J.P. Morgan Securities Inc.
Salomon Brothers Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10035
Ladies and Gentlemen:
We have acted as special U.S. tax counsel to McDonald's
Corporation, a Delaware corporation (the "Company"), in connection with
the Company's offering pursuant to a registration statement on Form S-3
(No. 333-14141) of $300,000,000 aggregate principal amount of its 6%
REset Put Securities (REPS[SM]) due 2012 (the "Securities") to be issued
under a senior debt securities indenture dated as of October 19, 1996 (as
supplemented by Supplemental Indenture No. 3 dated as of June 23, 1998,
the "Indenture") between the Company and First Union National Bank, as
trustee. Such registration statement, as amended when it became
effective, but excluding the documents incorporated by reference therein,
is herein called the "Registration Statement", and the related
prospectus, as supplemented by the prospectus supplement dated June 18,
1998, and as first filed with the Securities and Exchange Commission
pursuant to Rule 424(b)(2) under the Securities Act of 1933, as amended
(the "Act"), but excluding the documents incorporated by reference
therein, is herein called the "Prospectus".
This opinion letter is furnished pursuant to Section 5(d)(v) of the
underwriting agreement dated June 18, 1998 (the "Underwriting Agreement")
between the Company and the several underwriters named in Schedule II
thereto.
In connection with the issuance of the Securities, the Company
and Morgan Stanley & Co. Incorporated have entered into a calculation
agency agreement dated as of June 23, 1998 (the "Calculation Agency
Agreement"). In addition, the Company and Morgan Stanley & Co.
International Limited have entered into a securities purchase option
agreement dated as of June 23, 1998 (the "Securities Purchase Option
Agreement").
As used herein, the term "Transaction Documents" refers
collectively to the Indenture, the Underwriting Agreement, the
Securities, the Securities Purchase Option Agreement and the Calculation
Agency Agreement. Capitalized terms used but not defined herein have the
respective meanings ascribed to them in the Indenture.
In arriving at the opinions expressed below, we have reviewed
the following documents:
(a) an executed copy of the Underwriting Agreement;
(b) the Registration Statement and the documents incorporated
by reference therein;
(c) the Prospectus and the documents incorporated by reference
therein;
(d) a form of the Securities;
(e) an executed copy of the Indenture;
(f) the documents delivered by the Company at the closing
pursuant to the Underwriting Agreement, including copies
of the Company's Certificate of Incorporation and By-Laws
certified by the Secretary of State of the State of
Delaware and the corporate secretary of the Company,
respectively;
(g) an executed copy of the Securities Purchase Option
Agreement; and
(h) an executed copy of the Calculation Agency Agreement.
In addition, we have reviewed the originals or copies certified or
otherwise identified to our satisfaction of all such corporate records of
the Company and such other instruments and other certificates of public
officials, officers and representatives of the Company and such other
persons, and we have made such investigations of law, as we have deemed
appropriate as a basis for the opinions expressed below.
In rendering the opinions expressed below, we have assumed and
not verified that each of the Transaction Documents is the valid, binding
and enforceable agreement of each of the parties thereto.
Our opinion is based on the Internal Revenue Code of 1986, as amended,
U.S. Treasury regulations promulgated thereunder, and administrative and
judicial interpretations thereof, all as of the date hereof and all of
which are subject to change, possibly on a retroactive basis. In
rendering this opinion, we are expressing our views only as to the
federal income tax laws of the United States of America.
Subject to the assumptions, qualifications, and conditions set
forth herein and in the Prospectus under the heading "Certain United
States Federal Income Tax Consequences", it is our opinion that:
1. Under current law and assuming full compliance with the
terms of the Transaction Documents, although there is no authority on
point characterizing instruments such as the Securities, and the matter
is not free from doubt, the Securities should be treated as fixed rate
debt instruments that mature on the Coupon Reset Date.
2. The statements set forth in the Prospectus under the
heading certain "United States Federal Income Tax Consequences", insofar
as such statements purport to summarize certain federal income tax laws
of the United States, constitute a fair summary of the principal United
States federal income tax consequences of an investment in the
Securities.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to this firm under the
heading "Legal Opinions" in the Prospectus. In giving such consent, we
do not thereby admit that we are "experts" within the meaning of the Act
or the rules and regulations of the Commission issued thereunder with
respect to any part of the Registration Statement, including this
exhibit.
Except for the opinions expressed above, we express no opinion
as to any other tax consequences of the transaction to any party under
federal, state, local or foreign laws. This opinion addresses the legal
consequences of only the facts existing or assumed as of the date hereof.
Further, this opinion is being furnished to you solely for your benefit
and is not to be used, circulated, quoted or otherwise referred to for
any purpose without our prior written consent in each instance, except
that you may refer to this opinion in connection with the Prospectus
under the heading "Certain United States Federal Income Tax
Consequences". We disclaim any obligation to update this opinion letter
for events occurring or coming to our attention after the date hereof.
Very truly yours,
CLEARY, GOTTLIEB, STEEN & HAMILTON
By: /s/ Erika W. Nijenhuis
-----------------------------
Erika W. Nijenhuis, a Partner
