<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
McDonald's Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
RR Donnelley
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Notes:
<PAGE>
PROXY
[FULL PAGE PHOTO OF YOUNG BOY EATING A MCDONALD'S CHEESEBURGER APPEARS HERE]
McDonald's Corporation
Proxy Statement
and Notice of 1998
Annual Meeting
of Shareholders
<PAGE>
Board of Directors
- ------------------
[PHOTOS APPEAR HERE]
Hall Adams, Jr.
Robert M. Beavers, Jr.
James R. Cantalupo
Gordon C. Gray
Jack M. Greenberg
Enrique Hernandez, Jr.
Donald R. Keough
Donald G. Lubin
Walter E. Massey, Nominee
Andrew J. McKenna
Michael R. Quinlan
Terry L. Savage
Roger W. Stone
Robert N. Thurston
Fred L. Turner
B. Blair Vedder, Jr.
<PAGE>
Table of contents
- -----------------
<TABLE>
<CAPTION>
<C> <S>
2 Chairman's message to shareholders
and annual meeting notice
3 Board of Directors
5 Election of Directors
6 Stock ownership
7 Executive compensation
13 Stock performance graphs
14 Other information
15 Annual meeting
16 Information about attending
the annual meeting
17 Glossary
</TABLE>
1
<PAGE>
Chairman's message to shareholders and annual meeting notice
- ------------------------------------------------------------
Dear fellow shareholders:
We are pleased to invite you to McDonald's 1998 Annual Shareholders' Meeting. At
the Annual Meeting, we will report on McDonald's past year and future prospects.
Also, you will be asked to elect six Directors to serve until the 2001 Annual
Shareholders' Meeting.
Your vote is important. Please consider the issues and vote your shares as
promptly as possible.
Cordially,
/s/ Michael R. Quinlan
Michael R. Quinlan
Chairman and Chief Executive Officer
To McDonald's Corporation shareholders:
The 1998 McDonald's Corporation Annual Shareholders' Meeting will be held on
Thursday, May 21, 1998, beginning at 10:30 a.m. local time, in the Prairie Room
at The Lodge at McDonald's Office Campus, Oak Brook, Illinois. At the meeting,
shareholders will act on the following matters:
1. The election of six Directors to serve until the 2001 Annual Shareholders'
Meeting; and
2. Any other matters that properly come before the meeting.
By order of the Board of Directors,
/s/ Gloria Santona
Gloria Santona
Secretary
April 7, 1998
2
<PAGE>
Board of Directors
- ------------------
Responsibilities
The Board's primary responsibilities are:
Evaluating the performance of the Company and its executive management;
Reviewing and, where appropriate, approving fundamental operating, financial and
other corporate strategies, as well as major plans and objectives;
Providing advice to the Chief Executive Officer and executive management;
Overseeing management to ensure that the Company's assets are safeguarded and
business is conducted in compliance with laws and regulations; and
Evaluating the overall effectiveness of the Board, as well as selecting and
recommending to shareholders an appropriate slate of candidates for election to
the Board.
Corporate governance
The board's corporate governance guidelines incorporate principles by which the
board has been operating for many years. Among other things, the guidelines
provide that:
A majority of Directors should come from outside the Company and independence is
important in the selection of new candidates. The Board selects candidates and
extends invitations to join the Board.
Only outside Directors serve on the Audit, Compensation and Nominating and
Corporate Governance Committees.
Outside Directors have primary responsibility for matters relating to the
selection and succession of the Chief Executive Officer and the compensation of
executive management. The Chief Executive Officer receives a performance review
conducted annually by the Chairman of the Compensation Committee.
Outside Directors generally meet alone with the Chief Executive Officer at each
Board meeting and, at least once each year, evaluate the performance of
executive management and discuss matters of succession planning and management
development with the Chief Executive Officer.
Outside Directors meet without members of management at least twice each year.
The Board meets on a bi-monthly basis. The agenda is set by the Chairman and
Chief Executive Officer, and Directors may suggest items for inclusion.
Information about the Company's business, performance and prospects, as well as
information regarding recommendations for action by the Board are made available
to the Board a reasonable period before each meeting.
At least once each year, Directors review the Company's strategic plans and
evaluate the impact of such plans on the Company's performance and on the value
of shareholders' interests.
The Nominating and Corporate Governance Committee annually evaluates the
performance and effectiveness of the Board and recommends appropriate changes
for consideration by the entire Board.
The Board may either combine or separate the offices of Chairman and Chief
Executive Officer.
Directors have access to the System's management around the world.
Board committees
The audit committee recommends to the Board the independent accountants who
audit the Company's books and records; reviews the audit with these accountants
and management; reviews the Company's dealings with Directors; reviews financial
reporting issues and practices; reviews the Company's legal affairs; consults
with the independent accountants and management regarding risk management and
the adequacy of financial and accounting controls; and reports to the Board of
Directors about these matters. Throughout the year, the Committee meets with
these accountants without members of management present. Members of the
Committee are Directors Gray, Hernandez, Thurston and Vedder. Mr. Lubin serves
as secretary in a non-voting capacity. In 1997, the Audit Committee met seven
times.
The compensation committee evaluates the performance of the Company's Chief
Executive Officer and recommends his compensation to the Board annually; reviews
and approves senior management's compensation; establishes compensation
guidelines for all other officers and recommends to the Board the compensation
paid to outside Directors. The Committee administers the Company's incentive
compensation and stock option plans and develops compensation policies linked to
the Company's performance. Members of the Committee are Directors Keough, Savage
and Thurston. In 1997, the Compensation Committee met five times.
3
<PAGE>
The nominating and corporate governance committee sets criteria for Board
membership; searches for and screens candidates to fill Board vacancies;
recommends appropriate candidates for election each year and, in this regard,
evaluates individual Director performance; assesses overall Board performance;
considers issues regarding Board composition and size; and evaluates the
Company's corporate governance process. Members of the Committee are Directors
Adams, Lubin, McKenna and Stone. In 1997, the Committee met six times.
Shareholders can nominate Director candidates for consideration by writing to
the Secretary at McDonald's Plaza, Oak Brook IL 60523 and providing the
candidate's name, biographical data and qualifications.
Meeting attendance
In 1997, the Board met six times. During the year, all the Directors attended
all the meetings of the Board and of the committees on which they served except
that two Directors were absent from one Board meeting each and one Director was
absent from one committee meeting.
Compensation of the Board
In 1997, each outside Director earned an annual retainer of $35,000 plus a
$2,000 fee for each Board meeting, a $1,000 fee for each committee meeting and a
$1,000 fee for each meeting of outside Directors not held in conjunction with a
Board meeting. Directors can defer their fees in the form of Common Stock units
under the Company's Directors' Stock Plan. Deferred fees are credited to an
account which is adjusted to reflect dividends as well as gains or losses as if
invested in McDonald's Common Stock.
Each outside Director also receives a credit of $17,500 to his or her
Directors' Stock Plan account at the end of each full year of service, up to a
maximum of ten years. In general, deferred amounts are paid in a lump sum or in
annual installments after the Director retires from the Board.
Each year, on the date of the annual shareholders' meeting, outside Directors
receive an automatic stock option grant to purchase 1,000 shares of Common
Stock. The options vest in equal installments over three years, have a ten-year
life and permit the holder to purchase shares at their fair market value on the
date of grant.
In 1997, Mr. Lubin and Mr. Thurston received the use of corporate vehicles.
Such use was valued at $10,250 and $5,125, respectively.
Directors who are Company employees are not paid for their services as
Directors and are not eligible to participate in the Directors' Stock Plan. As
with its employees, the Company does not offer a pension plan to outside
Directors. To further link director and shareholder interests, the Company
established stock ownership guidelines for outside Directors in 1997, pursuant
to which outside Directors are expected to own McDonald's Common Stock or Common
Stock units equal in value to five times the annual retainer within five years
of first becoming a Director.
Diversity
Diversity is an important criteria when evaluating candidates for the Board. One
female and two minority males currently serve on the Board, and 15 minority men
and 22 women are officers. Also, more than 66% of middle management employees
and more than 28% of franchisees are female and minorities.
Biographical information
Hall Adams, Jr. Retired Chief Executive Officer of Leo Burnett & Co., Inc.
Director of The Dun & Bradstreet Corporation and Sears, Roebuck and Co. Class of
1999. Age: 64. Director since 1993.
Robert M. Beavers, Jr. Senior Vice President. Director of NICOR Inc. Class of
1999. Age: 54. Director since 1984.
James R. Cantalupo. President and Chief Executive Officer--McDonald's
International. Director of Morton International, Inc. Class of 2000. Age: 54.
Director since 1987.
Gordon C. Gray. Chairman of Rio Algom Limited, a Canadian mining company and
metals distributor. Director of Abitibi-Consolidated Inc. and Rogers
Communications Inc. Class of 1999. Age: 70. Director since 1982.
Jack M. Greenberg. Nominee. Vice Chairman, Chairman and Chief Executive
Officer--McDonald's U.S.A. since 1997. Previously, Vice Chairman, Chairman--
U.S.A. and Chief Financial Officer. Director of Arthur J. Gallagher & Co.,
Harcourt General, Inc. and Stone Container Corporation. Class of 1998. Age: 55.
Director since 1982.
Enrique Hernandez, Jr. President and Chief Executive Officer of Inter-Con
Security Systems, Inc., a provider of high-end security and facility support
services to government, utilities and industrial customers. Director of
Washington Mutual, Inc. and Nordstrom, Inc. Class of 2000. Age: 42. Director
since 1996.
Donald R. Keough. Chairman of Allen & Company Incorporated, investment
bankers, and an advisor to the Board of Directors of The Coca-Cola Company.
Director of Excalibur Technologies Corporation, H.J. Heinz Company, The Home
Depot, Inc. and The Washington Post Company. Class of 2000. Age: 71. Director
since 1993.
4
<PAGE>
Election of Directors
- ---------------------
Donald G. Lubin. Nominee. Partner of the law firm of Sonnenschein Nath &
Rosenthal, which provides legal services to the Company on a regular basis.
Director of Molex Incorporated. Class of 1998. Age: 64. Director since 1967.
Walter E. Massey. Nominee. President of Morehouse College. Previously, Provost
and Senior Vice President--Academic Affairs for The University of California
System from 1993 to 1995. Director of the National Science Foundation from 1991
to 1993. Director of Amoco Corporation, BankAmerica Corporation, Bank of America
N.T.S.A. and Motorola, Inc. Nominated for the Class of 2001. Age: 60.
Andrew J. McKenna. Nominee. Chairman and Chief Executive Officer of Schwarz
Paper Company, a printer, converter, producer and distributor of packaging and
promotional materials. Director of Aon Corporation, Dean Foods Company, First
Chicago NBD Corporation, Skyline Corporation and Tribune Company. Class of 1998.
Age: 68. Director since 1991.
Michael R. Quinlan. Chairman and Chief Executive Officer. Director of The Dun
& Bradstreet Corporation and The May Department Stores Company. Class of 2000.
Age: 53. Director since 1979.
Terry L. Savage. Financial journalist, author and President of Terry Savage
Productions, Ltd., which provides speeches, columns and videos on personal
finance for corporate and association meetings, publications and national
television programs. Previously, commentator for CBS News (WBBM-TV) in Chicago.
Class of 1999. Age: 53. Director since 1990.
Roger W. Stone. Nominee. Chairman, President and Chief Executive Officer of
Stone Container Corporation, a multinational paper company primarily producing
and selling pulp, paper and packaging products. Director of Autoliv, Inc.,
Abitibi-Consolidated Inc., Morton International, Inc. and Option Care, Inc.
Class of 1998. Age: 63. Director since 1989.
Robert N. Thurston. Nominee. Business consultant. Director of ACNielsen
Corporation and Ag-Bag International Limited. Class of 1998. Age: 65. Director
since 1974.
Fred L. Turner. Senior Chairman since 1990. Previously, Chairman. Director of
Aon Corporation, Baxter International Inc. and W.W. Grainger, Inc. Class of
1999. Age: 65. Director since 1968.
B. Blair Vedder, Jr. Retired Chief Operating Officer of Needham Harper
Worldwide, Inc. Class of 2000. Age: 73. Director since 1988.
The Board of Directors is currently divided into three classes, each having
three-year terms that expire in successive years. At this year's annual meeting,
six Directors will be elected, each to serve a three-year term or until the
individual is succeeded by another qualified director who has been elected.
Nominees
The nominees for Director are: Jack M. Greenberg, Donald G. Lubin, Walter E.
Massey, Andrew J. McKenna, Roger W. Stone and Robert N. Thurston.
The Board of Directors expects all nominees to be available for election. If
any of them should become unavailable to serve as a Director for any reason
prior to the Annual Meeting, the Board may substitute another person. In that
case, your shares will be voted for that other person.
Your shares will be voted in accordance with your instructions. If you return
your proxy card but do not provide voting instructions, your shares will be
voted FOR the election of the six nominees. The six nominees who receive the
most votes will be elected.
The Board of Directors recommends that shareholders vote for all six
nominees.
5
<PAGE>
Stock ownership
- ---------------
The following table shows the stock ownership of the named individuals and group
as of February 1, 1998, unless otherwise indicated. Directors and Executive
Officers as a group have sole voting and investment power except for 74,389
shares held jointly, 103,561 shares held by members of their immediate family
and 8,200 shares held in trust or in a partnership, over which they shared
voting and investment power. No Director or Executive Officer owns more than
1.0% of the Common Stock. Directors and Executive Officers as a group owned
(directly and through benefit plans) approximately 1.2% of the Common Stock as
of February 1, 1998.
<TABLE>
<CAPTION>
- -------------------------------------------------------------
Common Stock
Name (a,b,c,d,e,f,g)
=============================================================
<S> <C>
Hall Adams, Jr. 6,293
Robert M. Beavers, Jr. 438,430
James R. Cantalupo 1,036,218
Gordon C. Gray 14,844
Jack M. Greenberg 726,042
Enrique Hernandez, Jr. 4,962
Donald R. Keough 13,061
Jeffrey B. Kindler 46,690
Donald G. Lubin 45,601
Walter E. Massey 0
Andrew J. McKenna 31,619
Michael R. Quinlan 1,839,170
Edward H. Rensi 609,773
Terry L. Savage 19,276
James A. Skinner 307,586
Roger W. Stone 26,069
Robert N. Thurston 72,277
Fred L. Turner 1,410,659
B. Blair Vedder, Jr. 29,209
Directors and Executive Officers as a group
(the Group) (28 persons) 8,143,993
- -------------------------------------------------------------
</TABLE>
(a) The Company knows of no single person or group that is the beneficial
owner of more than 5% of the Common Stock.
(b) Beneficial ownership to shares which are owned by members of their
immediate families directly or through trusts is disclaimed as follows: Messrs.
Gray, 2,500; Keough, 600; McKenna, 320; and the Group, 4,272.
(c) Excludes 24,000 shares held by Mr. McKenna as Trustee of the Schwarz Paper
Company Profit Sharing Trust.
(d) Includes unallocated shares held in Profit Sharing Program accounts as
follows: Messrs. Beavers, 24,910; Cantalupo, 3,431; Greenberg, 1,793; Kindler,
326; Quinlan, 3,015; Rensi, 3,087; Skinner, 6,794; Turner, 17,356; and the
Group, 115,429.
(e) Includes shares that could be purchased by exercise of stock options on or
within 60 days after February 1, 1998 (December 18, 1997, in the case of Mr.
Rensi) under the Company's option plans as follows: Messrs. Adams, 2,001;
Beavers, 168,375; Cantalupo, 843,400; Gray, 2,001; Greenberg, 649,750;
Hernandez, 334; Keough, 2,001; Kindler, 45,000; Lubin, 2,001; McKenna, 2,001;
Quinlan, 1,396,250; Rensi, 572,500; Skinner, 216,525; Stone, 2,001; Thurston,
2,001; Turner, 431,500; Vedder, 2,001; Ms. Savage, 2,001; and the Group,
5,491,996.
(f) Includes Common Stock units credited under the Directors' Stock Plan as
follows: Messrs. Adams, 2,291; Gray, 6,207; Hernandez, 428; Keough, 7,460;
Lubin, 14,722; McKenna, 14,298; Stone, 20,068; Thurston 22,348; Vedder, 24,338;
and Ms. Savage, 15,775.
(g) The stock ownership of Mr. Rensi is determined as of December 18, 1997,
the date he resigned from the Board of Directors, and is based on a Form 5 filed
with the SEC and dated February 13, 1998.
6
<PAGE>
Executive compensation
- ----------------------
Compensation committee report
on executive compensation
Dear fellow shareholders:
Our Committee is responsible for approving the compensation of senior
management, establishing compensation guidelines for all corporate officers and
administering the Company's stock option and incentive plans. Our decisions are
based on our understanding of McDonald's business and its long-term strategies,
as well as our knowledge of the capabilities and performance of the Company and
its executives.
Philosophy
We believe that our stakeholders are best served by running the Company with a
long-term perspective while striving to deliver consistently good annual
results. Therefore, the Company's executive compensation program has been
designed to attract, energize, reward and retain superior talent that will
produce strong results and enhance McDonald's position in a highly competitive
global business. The Company is led by exceptional managers, many of them long-
term McDonald's people, while others bring experiences from outside McDonald's.
We have always believed that the Company's executives will more effectively
represent McDonald's shareholders, whose interests they are charged with
enhancing, if they are shareholders themselves. Accordingly, we focus our
executives' attention on managing McDonald's as owners of the business by
encouraging our officers to have significant stock ownership in the Company. Our
profit sharing program and stock option plans are designed to facilitate share
ownership by our executives. To ensure that officers retain significant
stockholdings in the Company, last year, we instituted minimum ownership
requirements applicable to all officers and regional managers. The minimum
levels of ownership range from one to five times base salary.
Senior management compensation
We believe that compensation for our executives should be competitive with other
high-performing companies and alternative careers within the McDonald's System
(i.e., careers as a franchisee or supplier) in order to motivate and retain the
talent needed to produce superior results. In that regard, our Committee
conducts an overall review of compensation annually.
The process we use to establish compensation is not purely a mechanical one.
We review information supplied by independent consultants to determine the
competitiveness of McDonald's total compensation package with that of a peer
group. The peer group, which we use solely for compensation comparison purposes,
consists of 26 of the companies comprising the DJIA on which our consultants
have data. In addition to reviewing competitive pay information, we also review
five- and ten-year shareholder returns for the Company and its peer group as
illustrated in the graphs set forth on page 13 of this Proxy Statement.
We do not seek to position compensation within any particular range as
compared to the peer group. Moreover, because the Committee believes that
special management talents and sensitivities are required to balance the unique
relationships between and among the Company, its employees, franchisees and
suppliers, we go beyond a simple evaluation of competitive salary information
and Company financial results in making compensation decisions. We also consider
qualitative factors which we believe contribute significantly to building
McDonald's global brand, thereby optimizing shareholder value over the long
term.
At this point in time, cash compensation for the officers named in the summary
compensation table on page 10 of this Proxy Statement approximates the middle of
the peer group's range, while stock options are well above the median,
consistent with our philosophy that a significant portion of compensation should
be at risk.
7
<PAGE>
Annual cash compensation
Annual cash compensation for senior management, as for all employees, consists
of base salary and a variable, at-risk incentive under TIP (Target Incentive
Plan). Throughout this report, references to salaries for 1997 relate to
salaries established on April 1, 1997 based on performance in 1996, while
references to TIP payments for 1997 relate to TIP payments made on April 1, 1998
based on performance during 1997.
Our Committee annually establishes an executive's base salary based on our
evaluation of the executive's level of responsibility and individual
performance, considered in light of competitive pay practices. We gauge
individual performance in: developing and executing corporate strategies;
leading and developing people; initiating and managing change; balancing the
many relationships within the McDonald's System; and contributing to programs
which impact the Company's performance.
No base salary merit increases were granted to any of the Company's officers
for 1997 because the Company's 1996 financial performance did not meet the
Company's objectives. Actual salaries earned by officers in 1997, however,
increased slightly over 1996 levels due to the fact that 1996 merit increases
were awarded in April 1996, and were therefore in effect for only three-fourths
of that year while they were in effect for all of 1997. In some limited cases,
officers received promotional raises in connection with changed or increased job
responsibilities.
Under TIP, each employee is assigned a target incentive at the beginning of
the year (the greater the individual's responsibility, the higher the percentage
of target incentive to salary). In determining the annual incentive for 1997, an
individual's target incentive was initially adjusted by an overall Company
performance factor. An individual performance factor was then applied and, in
some cases, a team performance factor, reflecting the overall results of the
organizational unit for which the executive is responsible, was also applied.
Although 1997 was a record year for McDonald's, our financial performance did
not meet the Company's objectives. In determining annual target incentive awards
for 1997 performance, our Committee reviewed the Company's operating income
earned in 1997, as compared to pre-specified targets. Since these targets were
not achieved, incentives paid on April 1, 1998 were computed using a Company
performance factor of less than 100%.
Long-term incentives
Long-term incentives consist of stock options and cash awards under a long-term
incentive plan (LTIP). These awards serve to focus executive attention on the
long-term performance of the business and comprise a significant portion of
total compensation for senior management consistent with our increased emphasis
on the risk-reward element of executive compensation.
Options. Options have proven to be an effective means of linking executive pay
with the creation of shareholder wealth, since an optionee will benefit only if
McDonald's stock price increases. Options granted to executives have a life of
ten years, vest over seven years and have an exercise price equal to the fair
market value of the Common Stock on the grant date. In establishing guidelines
for the size of stock option awards, we consider the following criteria (in
order of importance): level of responsibility, achievement of plan objectives
and the implementation of key strategies. Individual awards to members of senior
management are made within these guidelines, dependent primarily upon current
individual performance and, to a lesser extent, on the potential for positively
influencing future results. The 1997 stock option awards decreased compared with
1996 awards. The decrease was attributable to the adoption of LTIP, as officers
and regional managers received awards under LTIP in lieu of a portion of their
stock option awards.
8
<PAGE>
Long-term incentive plan. Consistent with our increased focus on longer-term
objectives in 1997, we adopted a long-term incentive plan, through which
officers are compensated based on U.S., international and/or corporate
performance targets. A three-year performance cycle is established each year,
with officers receiving a cash payment which varies if minimum, target or
maximum predetermined performance goals are achieved at the end of the cycle. No
payout occurs unless the Company achieves certain threshold performance
objectives. As a pay-for-performance plan, the LTIP is intended to motivate and
reward executives by directly linking the amount of any cash bonus to specific
long-term U.S., international and/or corporate financial goals. Specific
measurements are chosen each year for each successive three-year cycle. For the
1997-99 cycle, the measurements include return on assets and growth in operating
income. In addition, U.S. performance will be measured against certain financial
targets related to U.S. franchisee cash flow and profitability reflecting the
Company's belief that in order for it to prosper, its franchisees must prosper
as well. Because the LTIP was established in 1997, no payouts have been made
under the plan for the 1997-99 cycle.
Chief Executive Officer compensation
Mr. Quinlan participates in the compensation program described throughout this
report and, consistent with our compensation philosophy, at-risk compensation
represents the predominant portion of Mr. Quinlan's total compensation package.
Consistent with all other officers, Mr. Quinlan did not receive a base salary
merit increase in 1997 and he also received a reduced option grant (315,000
compared with 331,000 options for the previous year). On April 1, 1998, Mr.
Quinlan was awarded an incentive payment under TIP of $1,044,000 (compared with
$932,000 for the previous year) based on the Committee's assessment of the
Company's performance in 1997 as well as Mr. Quinlan's leadership in the number
of change initiatives underway.
Policy with respect to the $1 million deduction limit
Section 162(m) of the Code generally limits the tax deductibility of annual
compensation paid to certain officers to $1 million. Our Committee is obligated
to recognize and reward performance which increases shareholder value and will
exercise its discretion in determining whether or not to conform the Company's
executive compensation plans to the approach provided for in the Code. Assuming
continued deferral of compensation by certain officers, we expect that most, if
not all, compensation will qualify as a tax deductible expense.
Respectfully submitted,
The Compensation Committee
/s/ Robert N. Thurston
Robert N. Thurston
Chairman
/s/ Donald R. Keough
Donald R. Keough
/s/ Terry L. Savage
Terry L. Savage
9
<PAGE>
Summary compensation table
The following table summarizes the total compensation earned by or paid for
services rendered in all capacities to the Chief Executive Officer, one former
executive officer and four current executive officers who were most highly
compensated in 1997 (Named Officers). Executive officers are designated by the
Board of Directors.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Annual compensation Long-term compensation
-----------------------------------
Awards Payouts
----------------------- ----------
Restricted Securities All other
stock underlying LTIP* compensation
Name and principal position Year(a,b) Salary($) Bonus($) awards($) options(#) payouts($) ($)(c)
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Michael R. Quinlan 1997 $1,132,500 $1,044,000 0 315,000 0 $335,994
Chairman of the Board and 1996 1,116,475 932,000 0 331,000 0 384,703
Chief Executive Officer 1995 1,050,925 1,050,000 0 529,000 0 362,937
James R. Cantalupo 1997 805,487 535,500 0 190,000 0 210,060
President and Chief Executive 1996 776,250 477,500 0 200,000 0 236,314
Officer--McDonald's 1995 732,675 547,934 0 181,000 0 224,468
International
Jack M. Greenberg 1997 805,487 535,500 0 240,000 0 212,787
Vice Chairman, Chairman and 1996 752,601 462,000 0 190,000 0 227,457
Chief Executive Officer-- 1995 714,250 520,792 0 181,000 0 216,516
McDonald's U.S.A.
James A. Skinner 1997 408,253 228,420 0 47,500 0 96,118
President--Europe Group 1996 386,700 175,302 0 50,000 0 101,712
1995 348,525 179,225 0 31,000 0 91,430
Jeffrey B. Kindler 1997 408,059 233,708 0 50,000 0 135,742
Executive Vice President and
Corporate General Counsel
Edward H. Rensi 1997 790,700 325,000 0 160,000 0 197,811
Former President and 1996 783,525 415,000 0 175,000 0 228,750
Chief Executive Officer--U.S.A. 1995 752,375 495,422 0 181,000 0 225,675
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Long-Term Incentive Plan
(a) Mr. Rensi resigned as President and Chief Executive Officer--McDonald's
U.S.A. on July 8, 1997 and agreed to provide consulting services for the
remainder of the year.
(b) Since Mr. Kindler was not an executive officer of the Company during 1995
and 1996, no information is given for those years.
(c) These amounts represent (i) matching contributions and allocations by the
Company to: (a) the Profit Sharing Program and related equalization plans; (b)
the Deferred Income Plan; and (c) premiums on group term life insurance; and
(ii) certain relocation expenses. For 1997, the amounts in each category were as
follows: Messrs. Quinlan, $17,698, $304,890, $13,406 and $0; Cantalupo, $12,588,
$187,885, $9,587 and $0; Greenberg, $164,926, $33,126, $14,735 and $0; Skinner,
$31,897, $59,287, $4,934 and $0; Kindler, $63,763, $26,811, $1,770 and $43,398;
and Rensi, $111,197, $77,200, $9,414 and $0. Amounts which have been included
with respect to the equalization plans and Deferred Income Plan represent the
Company's obligation to pay such amounts to participants.
10
<PAGE>
Stock options
Options generally become exercisable over a seven-year period. Any unexercised
options expire after ten years. The stock option exercise price is equal to the
fair market value of a share of Common Stock on the grant date. The options have
no value unless the Company's stock price appreciates and the holder satisfies
the applicable vesting requirements. Options granted to the Named Officers were
about 6.6% of the total number of options granted in 1997.
The following table shows how much the Named Officers may eventually realize
in future dollars under two hypothetical situations: if the stock gains 5% or
10% in value per year, compounded over the ten-year life of the options. These
are assumed rates of appreciation and are not intended to forecast future
appreciation of the Common Stock. Also included in this table is the increase in
value to all common shareholders using the same assumed rates of appreciation.
For a perspective, in ten years one share of Common Stock valued at $47.00 on
March 18, 1997 would be worth $76.56 assuming the hypothetical 5% compounded
growth rate, or $121.91 assuming the hypothetical 10% compounded growth rate.
Another way to look at this is to express these amounts in today's dollars by
applying a present value approach to the hypothetical appreciation rates. These
results are shown in the last two columns of the table.
Stock option grants in 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Individual grants Potential
---------------------------------------------- realizable value
Number of % of total at assumed rates of Present value at assumed
securities options stock price appreciation rates of stock price
underlying granted to Exercise for option term(a) appreciation(a,b)
options employees price Expiration -------------------------- -----------------------------
Name granted(#) in 1997 ($/Sh) date 5% 10% 5% 10%
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael R. Quinlan 315,000 2.09% $47.000 3/18/07 $9,310,785 $23,595,357 $4,739,771 $12,011,511
James R. Cantalupo 190,000 1.26 47.000 3/18/07 5,616,029 14,232,120 2,858,910 7,245,038
Jack M. Greenberg 190,000 1.26 47.000 3/18/07 5,616,029 14,232,120 2,858,910 7,245,038
50,000 .33 49.812 7/15/07 1,566,325 3,969,375 833,248 2,111,613
James A. Skinner 47,500 .31 47.000 3/18/07 1,404,007 3,558,030 714,727 1,811,260
Jeffrey B. Kindler 50,000 .33 47.000 3/18/07 1,477,902 3,745,295 752,344 1,906,589
Edward H. Rensi 160,000 1.06 47.000 3/18/07 4,729,288 11,984,943 2,407,503 6,101,085
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in value to all common shareholders(c) $20.4 billion $51.6 billion $10.4 billion $26.3 billion
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Calculated over a ten-year period, representing the life of the options.
(b) Calculated assuming an investment in a ten-year, zero coupon U.S. Treasury
note made at the time the options were granted (6.985% on March 18, 1997 and
6.515% on July 15, 1997).
(c) Calculated using a Common Stock price of $47.00, the closing market price on
March 18, 1997, which is the exercise price of substantially all of the options
granted in 1997, and the total weighted average number of common shares
outstanding for 1997.
11
<PAGE>
Aggregated option exercises in 1997 and fiscal year-end option values table
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Number of securities Value of unexercised
underlying unexercised in-the-money
Shares acquired options at 12/31/97 options at 12/31/97
on exercise Value realized (#)(b) ($)(c)
Name (#) ($)(a) Exercisable/unexercisable Exercisable/unexercisable
====================================================================================================================
<S> <C> <C> <C> <C>
Michael R. Quinlan 163,000 $5,638,688 1,180,500/1,406,500 $27,736,557/$15,784,488
James R. Cantalupo 80,100 2,764,683 748,400/ 723,000 19,109,234/ 7,630,094
Jack M. Greenberg 35,000 1,224,580 514,750/ 759,250 11,268,029/ 7,434,219
James A. Skinner 19,500 687,597 188,900/ 161,300 5,021,710/ 1,588,851
Jeffrey B. Kindler 0 0 32,500/ 147,500 90,625/ 309,375
Edward H. Rensi 0 0 572,500/ 663,000 13,489,649/ 7,285,154
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Calculated by subtracting the exercise price from the market value of the
Common Stock on the exercise date.
(b) The securities underlying the options are shares of Common Stock.
(c) Calculated using the market value of the Common Stock at December 31, 1997
($47.750 per share) less the option exercise price multiplied by the number of
exercisable or unexercisable option shares, as the case may be. All values are
on a pre-tax basis.
Long-term incentives
Long-term incentive plans--awards in 1997 (to be paid in April 2000)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Performance Estimated future payouts under non-stock
or other period price-based plans (a)
until maturation ----------------------------------------
Number of units or payout Threshold Target Maximum
Name (#) ($)(a) ($) ($) ($)
==========================================================================================================
<S> <C> <C> <C> <C> <C>
Michael R. Quinlan 579,390 1/1/97 to 12/31/99 $72,424 $579,390 $1,158,780
James R. Cantalupo 255,775 1/1/97 to 12/31/99 31,972 255,775 511,550
Jack M. Greenberg 255,775 1/1/97 to 12/31/99 31,972 255,775 511,550
James A. Skinner 88,537 1/1/97 to 12/31/99 11,067 88,537 177,074
Jeffrey B. Kindler 97,650 1/1/97 to 12/31/99 12,206 97,650 195,300
Edward H. Rensi 256,977 1/1/97 to 12/31/99 32,122 256,977 513,954
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(a) Awards are in the form of a cash incentive, based on achievement of
performance goals set at the beginning of each performance cycle. Actual awards
are based on the achievement of these goals and a percentage of the individual's
base salary at the start of the performance cycle. No payout occurs unless the
Company achieves certain threshold performance objectives. For the 1997-99
cycle, separate targets were established for the U.S. and international
businesses based on return on assets and growth in operating income. The U.S.
target is adjusted for performance of the Company's U.S. business compared to
U.S. franchisee cash flow and profitability. A participant must be an employee
at the end of the performance period to receive an award; except that if such
participant dies, retires or becomes disabled prior to the end of the
performance period, any award will be prorated based on the portion of the
performance period he was an employee.
12
<PAGE>
Stock performance graphs
- ------------------------
At least annually, we consider which companies comprise a readily identifiable
investment peer group. Given the unique nature of our business, we have
consistently concluded that no one group of companies stands out.
For instance, McDonald's is included in published restaurant indices. However,
unlike most other companies included in these indices, which have no or limited
international operations, McDonald's does business in more than 100 countries.
For added perspective, about 60 percent of our operating income comes from
outside the U.S. In addition, by virtue of our size, McDonald's inclusion in
those indices tends to skew the results. Hence, we believe such a comparison
would not be meaningful.
This view is shared by many who evaluate our Company, as they often consider:
Our operating characteristics and marketing of branded products around the
world, which place McDonald's among global food and beverage companies;
Our recognizable brand and the retail nature of our business, which place
McDonald's among global consumer products companies;
Our strong financial position, free cash flow, solid international presence and
global brand power which place McDonald's among global branded growth companies;
and
Our capitalization, trading volume and importance in an industry that is vital
to the U.S. economy, which have resulted in McDonald's inclusion in the Dow
Jones Industrial Average (DJIA) since 1985.
Thus, in the absence of any readily identifiable peer group for McDonald's, we
believe use of the companies comprising the DJIA as the group for comparison is
appropriate. Like McDonald's, many DJIA companies generate meaningful sales and
revenues outside the U.S. and some manage global brands. Also, investors who are
looking for an investment in blue chip stocks often look at the DJIA as a
benchmark.
The two performance graphs which follow show McDonald's cumulative total
shareholder returns (i.e., price appreciation and reinvestment of dividends)
relative to the S&P 500 and the companies comprising the DJIA (including
McDonald's) for the five- and ten-year periods ended December 31, 1997. Returns
shown are for years ended December 31, and for the DJIA companies, returns are
weighted for market capitalization as of the beginning of each year.
Comparison of five-year cumulative total shareholder returns
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
92 93 94 95 96 97
<S> <C> <C> <C> <C> <C> <C>
McDonald's $100 118 122 189 192 203
S&P 500 $100 110 112 153 189 252
DJIA companies $100 111 117 165 212 282
- ------------------------------------------------------------
</TABLE>
Comparison of ten-year cumulative total shareholder returns
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
87 88 89 90 91 92 93 94 95 96 97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
McDonald's $100 111 160 137 181 234 276 285 443 448 475
S&P 500 $100 117 154 149 194 209 230 233 321 394 526
DJIA companies $100 115 149 152 192 201 224 235 332 426 568
- -----------------------------------------------------------------------------------------------
McDonald's --- S&P 500 === DJIA companies = =
</TABLE>
13
<PAGE>
Other information
- -----------------
Section 16(a) beneficial ownership reporting compliance
Based on Company records and other information, the Company believes that all
SEC filing requirements applicable to its executive officers and Directors were
complied with for 1997 except that Mr. Keough filed one late report covering one
transaction.
Certain relationships and related transactions
Based on information available to the Company, in 1997, the Company and its
subsidiaries purchased approximately $3 million in paper and other printed
products (principally tray liners, french fry bags and pan liners) produced by
Schwarz Paper Company and its subsidiaries and purchased approximately $5.5
million worth of products (principally premiums and gift items) from Group II
Communications, Inc. Mr. McKenna, a Director of the Company, is Chairman and
Chief Executive Officer, as well as a 75% shareholder, of Schwarz and is also
the holder of 49% of the stock of Group II. The Company believes that these
purchases were made on terms at least as favorable as would have been available
from other parties and intends to continue its dealings with Schwarz and Group
II in 1998 on similar terms.
Based on information available to the Company, in 1997, the Company's
subsidiaries purchased approximately $11.5 million in folding cartons and
$800,000 in paper bags produced by affiliates of Stone Container Corporation.
Mr. Stone, a Director of the Company, is Chairman, President and Chief Executive
Officer of Stone. The Company believes that these purchases were made on terms
at least as favorable as would have been available from other parties and
intends to continue dealings with such affiliates in 1998 on similar terms.
In July 1997, Mr. Rensi resigned as President and Chief Executive
Officer--U.S.A. and agreed to provide consulting services to the Company until
August 1, 1998. In exchange for such agreement, he receives a salary of $790,000
plus a bonus of $325,000, some of which is reflected in his 1997 compensation.
Upon termination of this consulting arrangement and for an extended period of
time thereafter, Mr. Rensi will be entitled to exercise his vested options.
Substantially all of his unvested options will vest upon such termination.
In 1997, as part of its ongoing share repurchase program, the Company
purchased shares of Common Stock, in each case at the New York Stock Exchange
composite closing price on the date of purchase, from Directors and Executive
Officers at the following prices: Robert M. Beavers, Jr., $980,000; James R.
Cantalupo, $1,322,296; Winston B. Christiansen, $995,840; Jack M. Greenberg,
$829,332; and Michael R. Quinlan, $877,250. Messrs. Cantalupo, Greenberg and
Quinlan acquired these shares within two years prior to their sales through the
exercise of stock options at the following prices, respectively: $321,184,
$241,868 and $205,437.
Compensation committee interlocks and insider participation
Jack M. Greenberg, Vice Chairman, Chairman and Chief Executive Officer--
McDonald's U.S.A., serves as a member of the compensation committee of the board
of directors of Stone Container Corporation, whose Chairman, President and Chief
Executive Officer, Roger W. Stone, serves as a Director of the Company.
Shareholder proposals for 1999
Shareholder proposals must be received by the Secretary of the Company no later
than December 8, 1998, to be considered for inclusion in the Company's 1999
proxy materials.
Annual report
The Company will provide, without charge, a copy of McDonald's Corporation's
Annual Report on Form 10-K for the year ended December 31, 1997 (including any
financial statements, and a list describing any exhibits not contained therein)
upon written request addressed to: Investor Relations Service Center, McDonald's
Corporation, McDonald's Plaza, Oak Brook IL 60523. The exhibits to the 10-K are
available upon payment of charges which approximate the Company's cost of
reproduction.
Other matters
A list of registered shareholders entitled to vote at the Annual Meeting will be
available for review by any shareholder for any purpose related to the meeting
during ordinary business hours for a period of 10 days prior to the meeting at
the Company's office at McDonald's Plaza, Oak Brook, IL 60523.
Advisory directors
Advisory Directors are appointed by the Board of Directors each year to serve in
a non-voting capacity. They present management's views on matters of interest to
the Board. The 1997 Advisory Directors were: Brad A. Ball, Alan D. Feldman,
Michael J. Roberts and James A. Skinner.
14
<PAGE>
Annual meeting
- --------------
Proxy solicitation
This Proxy Statement and proxy card were mailed to shareholders beginning on or
about April 7, 1998 in connection with the solicitation of proxies by the Board
of Directors to be used at the 1998 Annual Meeting.
The cost of soliciting proxies in the enclosed form will be paid by the
Company. The Company has retained D.F. King & Co., Inc. to aid in the
solicitation at a fee estimated to be $17,000 plus reasonable out-of-pocket
expenses. Proxies may also be solicited by certain employees and Directors of
the Company by mail, by telephone, by fax, by e-mail or in person.
Record date and voting at the annual meeting
Shareholders owning Common Stock outstanding at the close of business on March
23, 1998 may vote at the 1998 Annual Meeting. On that date, 687,337,983 shares
of Common Stock were outstanding. Each share is entitled to one vote on each
matter to be voted at the Annual Meeting.
If you properly sign and return your proxy, your shares will be voted as you
direct. If you do not specify how you want your shares voted, they will be voted
FOR the election of all nominees for director as set forth under "Election of
Directors". You may change your vote at any time before your proxy is exercised
by voting in person at the Annual Meeting, by submitting written notice to the
Company's Secretary, or by submitting another proxy that is properly signed and
later dated.
All votes cast at this year's annual meeting will be tabulated by First
Chicago Trust Company of New York (First Chicago), which has been appointed
independent inspector of election. First Chicago will determine whether or not a
quorum is present. With respect to the election of Directors, First Chicago will
treat votes withheld as shares present for purposes of determining a quorum.
Directors are elected by a plurality vote, so the six persons receiving the
greatest number of votes will be elected. Withheld votes will not affect the
outcome of the election.
We do not know of any other matters to be presented or acted upon at the
meeting. If any other matter properly comes before the meeting, the shares
represented by proxies will be voted in accordance with the judgment of the
person or persons voting those shares.
Proxies submitted by brokers that do not indicate a vote because they do not
have discretionary authority and have not received instructions as to how to
vote on those proposals (so-called "broker non-votes") are considered as present
for quorum purposes but not as shares entitled to vote on that matter. Broker
non-votes will not affect the outcome of the vote.
If indicated on their proxy card or voting instruction form, shareholders can
vote their shares (1) by phone, (2) via the internet or (3) by returning their
signed proxy card. Instructions for shareholders interested in voting by phone
or via the internet are set forth on the enclosed proxy card or voting
instruction form.
Confidential voting
It is the Company's policy to protect the confidentiality of shareholder votes
throughout the voting process. In this regard, the vote of any shareholder will
not be disclosed to the Company, its Directors, officers or employees, except to
meet legal requirements or to assert or defend claims for or against the Company
or except in those limited circumstances where (1) a proxy solicitation is
contested; (2) a shareholder writes comments on a proxy card; or (3) a
shareholder authorizes disclosure. Both the tabulators and inspectors of
election have been and will remain independent of the Company.
Nothing in this policy prohibits shareholders from disclosing the nature of
their votes to the Company, its Directors, officers or employees, or impairs
voluntary communication between the Company and its shareholders, nor does this
policy prevent the Company from ascertaining which shareholders have voted or
from making efforts to encourage shareholders to vote.
Auditors
The Board of Directors has selected Ernst & Young LLP as independent accountants
to audit the consolidated financial statements of the Company for 1998. Ernst &
Young LLP audited such statements for 1997. A representative of that firm will
be present at the meeting and will have an opportunity to make a statement and
answer questions.
15
<PAGE>
Information about attending the annual meeting
- ----------------------------------------------
Date: May 21, 1998
Time: 10:30 a.m. local time
Place: Prairie Room
The Lodge
McDonald's Office Campus
Oak Brook IL 60523
If you plan to attend
Limited seating in the Prairie Room at The Lodge makes it necessary to limit
attendance to shareholders only. If you plan to attend the Annual Meeting,
please bring the admission form from the bottom of your proxy card or a bank or
brokerage statement reflecting your McDonald's share ownership. Admittance
tickets to the Prairie Room will be given to shareholders at the registration
desk on a first come, first serve basis. Overflow rooms will be available for
viewing the meeting.
Your vote is important
Please consider the issues and vote your shares via the internet, phone or mail
by following the instructions on your proxy card. First Chicago is the
independent inspector of election and will receive and tabulate your vote. If
your shares are held in a bank or brokerage account, you may attend the Annual
Meeting, but may not vote at the meeting unless you have first obtained a proxy,
executed in your favor, from your banker or broker.
[MAP APPEARS HERE]
Directions to the annual meeting
From O'Hare Airport/I-294 North
I-294 south to I-88 west (to Aurora). Exit I-88 at Cermak Road/22nd Street
(first exit immediately after York Road toll booth). At Cermak Road/22nd Street
(stoplight), turn right. Go two stoplights to Jorie Boulevard, turn right. Go
two stoplights to Kroc Drive, turn left. At stop sign, Ronald Lane, turn left.
The Lodge is on left, parking is on right.
From downtown Chicago
I-290 west (Eisenhower Expressway) to I-88 west (to Aurora). Exit I-88 at Cermak
Road/22nd Street (first exit immediately after York Road toll booth). At Cermak
Road/22nd Street (stoplight), turn right. Go two stoplights to Jorie Boulevard,
turn right. Go two stoplights to Kroc Drive, turn left. At stop sign, Ronald
Lane, turn left. The Lodge is on left, parking is on right.
From I-294 South
I-294 north to I-88 west (to Aurora). Exit I-88 at Cermak Road/22nd Street
(first exit immediately after York Road toll booth). At Cermak Road/22nd Street
(stoplight), turn right. Go two stoplights to Jorie Boulevard, turn right. Go
two stoplights to Kroc Drive, turn left. At stop sign, Ronald Lane, turn left.
The Lodge is on left, parking is on right.
From I-355 North or South or I-88 West
From either direction, take I-88 east (to Chicago). Exit at Midwest Road and
turn left (stoplight). Take Midwest Road to 31st Street (stoplight), turn left.
Take 31st Street to Jorie Boulevard (stoplight), turn left. Take Jorie Boulevard
to Kroc Drive (stoplight), turn right. At stop sign, Ronald Lane, turn left. The
Lodge is on left, parking is on right.
16
<PAGE>
Glossary
- --------
As used in this Proxy Statement the following terms have the following meanings:
Code:
Internal Revenue Code of 1986, as amended and the regulations thereunder
Common Stock:
McDonald's Corporation Common Stock
DJIA:
Dow Jones Industrial Average companies as constituted on December 31, 1997
SEC:
Securities and Exchange Commission
Home office
McDonald's Corporation
McDonald's Plaza
Oak Brook IL 60523
630-623-3000
The following trademarks used herein are owned by McDonald's Corporation and
affiliates: McDonald's, the McDonald's Golden Arches logo and Hamburger
University.
(C) 1998 McDonald's Corporation
McD8-3658
Cover printed on recycled paper with 10% post-consumer content; Text printed on
recycled paper with 20% post-consumer content
[RECYCLE LOGO APPEARS HERE]
<PAGE>
[FULL PAGE PHOTO OF AN EGG, BACON AND CHEESE BISCUIT SANDWICH
WITH HASH BROWNS APPEARS HERE]
<PAGE>
[FRONT SIDE OF PROXY AND VOTING INSTRUCTION CARD FOR EMPLOYEE SHAREHOLDERS]
9826
PROXY CARD
See instructions below.
THE BOARD RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR DIRECTOR.
I (we), revoking any proxy previously given, appoint Michael R. Quinlan and
Gloria Santona, or either of them, as proxies with full powers of substitution
to vote as directed all shares the undersigned is entitled to vote at McDonald's
Corporation 1998 Annual Shareholders' Meeting and authorize each to vote at his
or her discretion on any other matter than may properly come before the meeting,
or any adjournment thereof. IF THIS SIGNED CARD CONTAINS NO SPECIFIC VOTING
INSTRUCTION, MY (OUR) SHARES WILL BE VOTED "FOR" ALL NOMINEES FOR DIRECTOR.
BOARD NOMINEES: 1. Jack M. Greenberg, 2. Donald G. Lubin, 3. Walter E. Massey,
4. Andrew J. McKenna, 5. Roger W. Stone and 6. Robert N. Thurston.
FOR ALL NOMINEES
EXCEPT AS NOTED
BELOW WITHHOLD
Election of Directors [_] [_]
[_] Waive confidential voting.
[_] Comments are on reverse side.
EMPLOYEES: Please see message on reverse.
PLEASE SIGN AS YOUR NAME(S) APPEAR(S) ABOVE AND RETURN THIS PROXY PROMPTLY. If
signing for a corporation or partnership, or as agent, attorney or fiduciary,
indicate the capacity in which you are signing. If you attend the meeting and
decide to vote by ballot, such vote will supersede this proxy.
X
X Date , 1998 [LOGO]
Detach Here
- --------------------------------------------------------------------------------
PROXY VOTING INSTRUCTIONS ANNUAL MEETING TICKET
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF McDONALD'S
CORPORATION.
McDONALD'S 1998 ANNUAL SHAREHOLDERS' MEETING WILL BE HELD AT 10:30 a.m. (CENTRAL
TIME) ON THURSDAY, MAY 21, 1998 AT THE LODGE ON McDONALD'S OFFICE CAMPUS, KROC
DRIVE, OAK BROOK, ILLINOIS. If you plan to attend the Annual Meeting, please
tear off and keep this form for admission to the meeting.
YOUR VOTE IS IMPORTANT. The proxy card above covers the voting of shares of
McDonald's Corporation Common Stock which you are entitled to vote or to direct
the voting of, including shares in McDonald's employee benefit plans. If you
wish to provide different voting instructions for the benefit plan shares,
complete the reverse side of this card.
Please consider the issues discussed in the Proxy Statement and vote by one of
the following methods:
- - accessing the internet voting site at www.vote-by-net.com or
www.mcdonalds.com/corporate/investor.
- - calling at any time 1-800-652-8683 from the U.S. and Canada or 1-201-324-0377
from other countries.
- - completing, dating, signing and mailing the proxy card in the enclosed
postage-paid envelope.
If voting by phone or via the internet, the voter control number in the box
above is necessary to verify your authority to vote. A phone or internet vote
authorizes the named proxies in the same manner as if you marked, signed and
returned the proxy card. Employees who wish to provide different voting
instructions for the benefit plan shares cannot vote by phone.
YOUR VOTE COUNTS
[LOGO] McDonald's Corporation
McDonald's Plaza
Oak Brook, IL 60523
<PAGE>
[REVERSE SIDE OF PROXY AND VOTING INSTRUCTION CARD FOR EMPLOYEE SHAREHOLDERS]
Information for McDonald's employees only
IF YOU WISH TO VOTE ALL SHARES INCLUDING SHARES IN McDONALD'S BENEFIT PLANS
THE SAME WAY, YOU DO NOT NEED TO COMPLETE THE SECTION BELOW. SIMPLY FOLLOW THE
VOTING INSTRUCTIONS ON THE FRONT OF THIS CARD.
THE BOARD RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR DIRECTOR.
PLAN SHARES NOT YET
PLAN SHARES OWNED CREDITED OR UNVOTED
---------------------- ----------------------
FOR ALL FOR ALL
NOMINEES NOMINEES
EXCEPT AS EXCEPT AS
NOTED BELOW WITHHOLD NOTED BELOW WITHHOLD
Election of Directors ----------- -------- ----------- --------
---------------------- ----------------------
COMMENTS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[LOGO]
- -------------------------------------------------------------------------------
BENEFIT PLAN VOTING INSTRUCTIONS
Your vote on the front of this card directs the trustees of the Profit Sharing
Program and various Equalization Plans (collectively referred to as the "Plans")
to vote the McDonald's shares credited to your accounts under the Plans. When
you vote these shares, you should consider your long-term best interests as a
Plan participant.
In addition, you are also directing the trustees to vote shares held in the
Plans that have not been voted and shares that have not been credited to
participants' accounts. When you direct the vote of these shares, you have a
special responsibility to consider the long-term best interests of other
participants.
If you want to vote the Plan shares you own or the shares you are voting for
other Plan participants differently from the way you voted on the front, please
check the "comment" box on the front and mark your direction above.
Your directions to vote shares held in the Plans will be kept confidential by
First Chicago Trust Company of New York, the independent inspectors of election,
even if you waive confidential voting on the front of this card.
<PAGE>
[FRONT SIDE OF PROXY AND VOTING INSTRUCTION CARD FOR NON-EMPLOYEE SHAREHOLDERS]
9826
PROXY CARD
See instructions below.
THE BOARD RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR DIRECTOR.
I (we), revoking any proxy previously given, appoint Michael R. Quinlan and
Gloria Santona, or either of them, as proxies with full powers of substitution
to vote as directed all shares the undersigned is entitled to vote at McDonald's
Corporation 1998 Annual Shareholders' Meeting and authorize each to vote at his
or her discretion on any other matter that may properly come before the meeting,
or any adjournment thereof. IF THIS SIGNED CARD CONTAINS NO SPECIFIC VOTING
INSTRUCTION, MY (OUR) SHARES WILL BE VOTED "FOR" ALL NOMINEES FOR DIRECTOR.
BOARD NOMINEES: 1. Jack M. Greenberg, 2. Donald G. Lubin, 3. Walter E. Massey,
4. Andrew J. McKenna, 5. Roger W. Stone and 6. Robert N. Thurston.
FOR ALL NOMINEES
EXCEPT AS NOTED
BELOW WITHHOLD
// //
Election of Directors
// Waive confidential voting.
// Comments are on reverse side.
PLEASE SIGN AS YOUR NAME(S) APPEAR(S) ABOVE AND RETURN THIS PROXY PROMPTLY. If
signing for a corporation or partnership, or as agent, attorney or fiduciary,
indicate the capacity in which you are signing. If you attend the meeting and
decide to vote by ballot, such vote will supersede this proxy.
X
X Date ,1998 [LOGO]
Detach Here
- --------------------------------------------------------------------------------
PROXY VOTING INSTRUCTIONS ANNUAL MEETING TICKET
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF McDONALD'S
CORPORATION.
McDONALD'S 1998 ANNUAL SHAREHOLDERS' MEETING WILL BE HELD AT 10:30 a.m. (CENTRAL
TIME) ON THURSDAY, MAY 21, 1998 AT THE LODGE ON McDONALD'S OFFICE CAMPUS, KROC
DRIVE, OAK BROOK, ILLINOIS. If you plan to attend the Annual Meeting, please
tear off and keep this form for admission to the meeting.
YOUR VOTE IS IMPORTANT. The proxy card above covers the voting of shares of
McDonald's Corporation Common Stock which you are entitled to vote or to direct
the voting of.
Please consider the issues discussed in the Proxy Statement and vote by one of
the following methods:
- - accessing the internet voting site at www.vote-by-net.com or
www.mcdonalds.com/corporate/investor/.
- - calling at any time 1-800-652-8683 from the U.S. and Canada or
1-201-324-0377 from other countries.
- - completing, dating, signing and mailing the proxy card in the enclosed
postage-paid envelope.
If voting by phone or via the internet, the voter control number in the box
above is necessary to verify your authority to vote. A phone or internet vote
authorizes the named proxies in the same manner as if you marked, signed and
returned the proxy card.
YOUR VOTE COUNTS
[LOGO] McDonald Corporation
McDonald's Plaza
Oak Brook, IL 60523
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[REVERSE SIDE OF PROXY AND VOTING INSTRUCTION CARD FOR NON-EMPLOYEE
SHAREHOLDERS]
COMMENTS:
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