<PAGE>
PROSPECTUS SUPPLEMENT FILED PURSUANT TO RULE 424(b)(2)
(TO PROSPECTUS DATED OCTOBER 18, 1996) REGISTRATION NO. 333-14141
$150,000,000
MCDONALD'S CORPORATION
6 3/8% DEBENTURES DUE 2028
---------------
The 6 3/8% Debentures due 2028 (the "Debentures") will mature on January 8,
2028. Interest on the Debentures will accrue from the date of original issuance
and is payable semi-annually in arrears on January 8 and July 8, commencing
July 8, 1998 with a final interest payment on January 8, 2028. The Debentures
will be redeemable at the option of McDonald's Corporation (the "Company") at
any time at the redemption price as set forth herein, together with accrued
interest to the redemption date. See "Description of Debentures--Redemption".
The Debentures will be represented by a global security registered in the
name of a nominee of The Depository Trust Company, as depositary. Beneficial
interests in the Debentures will be shown on, and transfers thereof will be
effected only through, records maintained by The Depository Trust Company and
its participants. Except as described herein, Debentures in definitive form
will not be issued. So long as the Debentures are registered in the name of The
Depository Trust Company or its nominee, the Debentures will trade in The
Depository Trust Company's Same-Day Funds Settlement System and secondary
market trading activity in the Debentures will, therefore, settle in
immediately available funds. All payments of principal and interest on the
global security will be made by the Company in immediately available funds. See
"Description of Debentures--Book-Entry System".
Application will be made to list the Debentures on the New York Stock
Exchange.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) COMPANY(1)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Debenture..................... 99.642% .875% 98.767%
- --------------------------------------------------------------------------------
Total............................. $149,463,000 $1,312,500 $148,150,500
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1)Plus accrued interest, if any, from January 8, 1998 to date of delivery.
(2) The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933, as amended.
(3)Before deducting expenses payable by the Company estimated at $175,000.
---------------
The Debentures are offered by the several Underwriters, subject to prior
sale, when, as and if issued and accepted by them, subject to approval of
certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that the
Debentures will be ready for delivery in book-entry form only through the
facilities of The Depository Trust Company on or about January 8, 1998 against
payment therefor in immediately available funds.
---------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
MORGAN STANLEY DEAN WITTER
SALOMON SMITH
BARNEY
---------------
The date of this Prospectus Supplement is January 5, 1998.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Debentures
for general corporate purposes.
RECENT RESULTS OF OPERATIONS OF MCDONALD'S CORPORATION
The Company reported record net income, total revenues and systemwide sales
for the nine months ended September 30, 1997. Net income and net income per
common share increased 6% and 8%, respectively, while systemwide sales and
total revenues increased 7% and 8%, respectively, compared in each case to
results for the nine months ended September 30, 1996.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
(UNAUDITED)
-------------------
1997 1996
--------- ---------
(U.S. DOLLARS IN
MILLIONS, EXCEPT
PER COMMON
SHARE AMOUNTS)
<S> <C> <C>
Systemwide sales...................................... $25,107.9 $23,527.6
Total revenues........................................ 8,456.2 7,864.9
Net income............................................ 1,231.6 1,162.6
Net income per common share........................... 1.76 1.63
</TABLE>
DESCRIPTION OF DEBENTURES
GENERAL
The following description of the particular terms of the Debentures offered
hereby supplements the description of the general terms and provisions of the
Senior Debt Securities set forth in the Prospectus under "Description of Debt
Securities", to which description reference is hereby made. The following brief
summaries of certain provisions contained in the Indenture relating to Senior
Debt Securities, dated as of October 19, 1996, between the Company and First
Union National Bank, as Trustee (the "Trustee"), and the Supplemental Indenture
No. 1, to be dated as of January 8, 1998, relating to the Debentures
(collectively, the "Senior Indenture") do not purport to be complete, use
certain terms defined in the Senior Indenture, and are qualified in their
entirety by express reference to the provisions of the Senior Indenture.
PRINCIPAL AMOUNT, INTEREST AND MATURITY
The Debentures will be limited in aggregate principal amount to $150,000,000.
The Debentures will mature on January 8, 2028, and will bear interest at the
rate per annum shown on the cover page of this Prospectus Supplement from the
date on which the Debentures are originally issued until the principal amount
thereof becomes due and payable. Interest will be payable semi-annually, in
arrears, on each January 8 and July 8, commencing July 8, 1998, with a final
payment on January 8, 2028 (each, an "Interest Payment Date"). Interest (other
than interest payable on redemption or maturity) will be payable to the persons
in whose names the Debentures are registered at the close of business on the
relevant regular Record Dates, which will be the January 1 or July 1 next
preceding an Interest Payment Date (each, a "Record Date"). Interest payable on
redemption or maturity will be payable to the person to whom the principal is
paid. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
S-2
<PAGE>
REDEMPTION
The Debentures will be redeemable as a whole or in part, at the option of the
Company at any time (a "Company Redemption Date"), at a redemption price equal
to the greater of (i) 100% of the principal amount of the Debentures to be
redeemed or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon discounted to the Company Redemption
Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-
day months) at the Treasury Rate plus 10 basis points, plus, in either case,
accrued and unpaid interest on the principal amount being redeemed to the
Company Redemption Date.
"Treasury Rate" means, with respect to any Company Redemption Date, the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Company Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Debentures to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Debentures. "Independent Investment Banker" means one of
the Reference Treasury Dealers appointed by the Trustee after consultation with
the Company.
"Comparable Treasury Price" means, with respect to any Company Redemption
Date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such Company Redemption Date, as set forth in the
daily statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or (ii) if such release (or any successor release)
is not published or does not contain such prices on such business day, (A) the
average of the Reference Treasury Dealer Quotations for such Company Redemption
Date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Quotations. "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any Company Redemption Date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such Company Redemption Date.
"Reference Treasury Dealer" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated and any additional reference dealers appointed by the Company at
the sole discretion of the Company, and their respective successors; provided,
however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"),
the Company will substitute therefor another Primary Treasury Dealer.
Notice of any redemption by the Company will be mailed at least 30 days but
not more than 60 days before any Company Redemption Date to each holder of
Debentures to be redeemed.
Unless the Company defaults in payment of the redemption price, on and after
any Company Redemption Date interest will cease to accrue on the Debentures or
portions thereof called for redemption.
BOOK-ENTRY SYSTEM
The Debentures will be represented by a global security (the "Global
Security"). The Global Security will be deposited with, or on behalf of, The
Depository Trust Company (the "Depositary") and registered in the name of a
nominee of the Depositary. Except under circumstances described below, the
Debentures will not be issuable in definitive form.
S-3
<PAGE>
Upon the issuance of the Global Security, the Depositary will credit on its
book-entry registration and transfer system the accounts of persons designated
by the Underwriters with the respective principal amounts of the Debentures
represented by the Global Security. Ownership of beneficial interests in the
Global Security will be limited to persons that have accounts with the
Depositary or its nominee ("participants") or persons that may hold interests
through participants. Owners of a beneficial interest in the Global Security
will be shown on, and the transfer of that beneficial interest will 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 interests of persons other than participants). The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such laws may impair the
ability to transfer beneficial interests in the Global Security.
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, will be
considered the sole owner or holder of the Debentures represented by the Global
Security for all purposes under the Senior Indenture. Except as provided below,
owners of beneficial interests in the Global Security will not be entitled to
have Debentures represented by the Global Security registered in their names,
will not receive or be entitled to receive physical delivery of Debentures in
definitive form and will not be considered the owners or holders thereof under
the Senior Indenture.
Principal and interest payments on Debentures represented by the Global
Security registered in the name of the Depositary or its nominee will be made
to the Depositary or its nominee, as the case may be, as the registered owner
of the Global Security. None of the Company, the Trustee, any paying agent or
the registrar for the Debentures will have any responsibility or liability for
any aspect of the Depositary's records or any participant's records relating
to, or payments made on account of, beneficial interests in the Global Security
or for maintaining, supervising or reviewing any Depositary's records or any
participant's records relating to such beneficial interests.
The Company expects that the Depositary for the Debentures or its nominee,
upon receipt of any payment of principal or interest, will immediately credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Security
as shown on the records of the Depositary or its nominee. The Company also
expects that payments by participants to owners of beneficial interests in the
Global Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name",
and will be the responsibility of such participants.
If the Depositary is at any time unwilling or unable to continue as
Depositary or is no longer eligible to continue as Depositary, and a successor
Depositary is not appointed by the Company within 90 days, the Company will
issue Debentures in definitive form 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 Debentures represented by the Global Security and, in such
event, will issue Debentures in definitive form in exchange for the entire
Global Security. In any such instance, an owner of a beneficial interest in the
Global Security will be entitled to physical delivery in definitive form of
Debentures represented by the Global Security equal in principal amount to such
beneficial interest and to have such Debentures registered in its name.
Debentures so issued in definitive form will be issued as registered Debentures
in denominations of $1,000 and integral multiples thereof, unless otherwise
specified by the Company.
The Depositary has advised the Company and the Underwriters as follows: the
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended. The Depositary was created to hold
securities of its participants and to facilitate the clearance and settlement
of securities transactions among its participants in such securities through
electronic
S-4
<PAGE>
book-entry changes in accounts of the participants, thereby eliminating the
need for physical movement of securities certificates. The Depositary's
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations, some of which (and/or
their representatives) own the Depositary. Access to the Depositary's book-
entry system is also available to others, such as banks, brokers, dealers and
trust companies, that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Debentures will be made by the Underwriters in immediately
available funds. All payments of principal and interest on the Global Security
will be made by the Company in immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the
Debentures will trade in the Depositary's Same-Day Funds Settlement System
until maturity, and secondary market trading activity in the Debentures will
therefore be required by the Depositary to settle in immediately available
funds. No assurance can be given as to the effect, if any, of settlement in
immediately available funds on trading activity in the Debentures.
GOVERNING LAW
The Senior Indenture and the Debentures are governed by and construed and
enforced in accordance with the internal laws of the State of Illinois.
THE TRUSTEE
First Union National Bank is the Trustee under the Senior Indenture. First
Union National Bank is also Trustee under Indentures dated as of March 1, 1987
and October 18, 1996 relating to certain Subordinated Indebtedness of the
Company.
S-5
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Company has agreed to sell to each of the Underwriters named below, and
each of the Underwriters has severally agreed to purchase, the principal amount
of Debentures set forth opposite its name.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
----------- ------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................... $ 30,000,000
Goldman, Sachs & Co......................................... 30,000,000
J.P. Morgan Securities Inc.................................. 30,000,000
Morgan Stanley & Co. Incorporated........................... 30,000,000
Salomon Brothers Inc........................................ 30,000,000
------------
Total.................................................. $150,000,000
============
</TABLE>
In the Underwriting Agreement, the several Underwriters have agreed, subject
to the terms and conditions set forth therein, to purchase all the Debentures
offered hereby if any Debentures are purchased.
The Underwriters propose initially to offer the Debentures to the public at
the public offering price set forth on the cover page and to certain dealers at
such price less a concession not in excess of .50% of the principal amount of
Debentures. The Underwriters may allow, and such dealers may reallow, a
discount not in excess of .25% of the principal amount of Debentures to certain
other dealers. After the initial public offering, the public offering price,
concession and discount may be changed.
The Debentures are a new issue of securities with no established trading
market. The Company has been advised by the Underwriters that they intend to
make a market in the Debentures but are not obligated to do so and may
discontinue any market making at any time without notice. Application will be
made to list the Debentures on the New York Stock Exchange. There can be no
assurance of a secondary market for any Debenture.
The Underwriting Agreement provides that the Company will indemnify the
several Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933, as amended, or contribute to payments which the
Underwriters may be required to make in respect thereof.
In the ordinary course of their respective businesses, certain of the
Underwriters and their affiliates have engaged, and may in the future engage,
in commercial and investment banking transactions with the Company.
LEGAL OPINIONS
The legality of the Debentures is being passed upon for the Company by Gloria
Santona, Vice President, Deputy General Counsel and Secretary of the Company,
and for the Underwriters by Gardner, Carton & Douglas, Quaker Tower, 321 North
Clark Street, Chicago, Illinois 60610. Ms. Santona is a full-time employee of
the Company and owns shares of the Company's common stock directly and as a
participant in various employee benefit plans. Ms. Santona also holds options
to purchase shares of the Company's common stock.
S-6
<PAGE>
PROSPECTUS
MCDONALD'S CORPORATION
DEBT SECURITIES
McDonald's Corporation (the "Company") intends to issue from time to time in
one or more series its debt securities ("Debt Securities") which may be either
senior debt securities (the "Senior Debt Securities") or subordinated debt
securities (the "Subordinated Debt Securities") with an aggregate initial
public offering price or purchase price of up to $1,200,000,000, or the
equivalent thereof in one or more foreign or composite currencies, including
the European Currency Unit ("ECU"). Debt Securities of each series will be
offered on terms to be determined at the time of sale. Debt Securities may be
sold for U.S. dollars or for one or more foreign or composite currencies, and
the principal of, premium, if any, and any interest on Debt Securities may be
payable in U.S. dollars or in one or more foreign or composite currencies.
Debt Securities of a series may be issuable as individual securities in
registered form without coupons, or as one or more global securities in
registered form. The specific designation and classification as Senior Debt
Securities or Subordinated Debt Securities of the Company, aggregate principal
(or, if principal payable is determined by reference to an index, face)
amount, the currency in which the principal, premium, if any, and any interest
are payable, the rate (or method of calculation) and the time and place of
payment of any interest, authorized denominations, maturity, offering price,
any redemption terms and any other specific terms of the Debt Securities in
respect of which this Prospectus is being delivered will be set forth in an
accompanying Prospectus Supplement (a "Prospectus Supplement").
The Debt Securities will be unsecured. Unless otherwise specified in a
Prospectus Supplement, the Senior Debt Securities will rank equally with all
other unsecured and unsubordinated indebtedness of the Company. The
Subordinated Debt Securities will be subordinated to all Senior Indebtedness
of the Company (as hereinafter defined).
The Debt Securities may be sold by the Company directly, through agents
designated from time to time, through dealers or one or more underwriters, or
through a syndicate of underwriters managed by one or more underwriters. If
underwriters or agents are involved in any offering of Debt Securities, the
names of the underwriters or agents will be set forth in the applicable
Prospectus Supplement. If an underwriter, agent or dealer is involved in any
offering of Debt Securities, the underwriter's discount, agent's commission or
dealer's purchase price will be set forth in, or may be calculated from the
information set forth in, the applicable Prospectus Supplement, and the net
proceeds to the Company from such offering will be the public offering price
of such Debt Securities less such discount, in the case of an offering through
an underwriter, or the purchase price of such Debt Securities less such
commission, in the case of an offering through an agent, and less, in each
case, the other expenses of the Company associated with the issuance and
distribution of such Debt Securities. See "Plan of Distribution" for specific
details.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SE-
CURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTA-
TION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is October 18, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549 and at the following Regional
Offices of the Commission: New York Regional Office, Seven World Trade Center,
13th Floor, New York, New York 10048 and Chicago Regional Office, 500 W.
Madison Street, Suite 1400, Chicago, Illinois 60661; and copies of such
material can be obtained from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such
reports, proxy statements and other information can also be inspected at the
offices of the New York Stock Exchange and Chicago Stock Exchange. The Company
is not required to, and will not, provide an annual report or any other
periodic report to any holder of its debt securities unless specifically
requested by such holder.
The Company has filed with the Commission a Registration Statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the Debt Securities. This Prospectus does not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted from this Prospectus in accordance with the
rules and regulations of the Commission. For further information, reference is
hereby made to the Registration Statement.
A Company franchisee provides food services exclusively to United States
government personnel stationed at the United States naval station in
Guantanamo Bay, Cuba. This statement is made pursuant to the disclosure
requirements of Florida law and is accurate as of the date of this Prospectus.
Investors may obtain current information by contacting the Florida Department
of Banking and Finance, The Capitol, Tallahassee, Florida 32399-0350,
telephone number (904) 488-9805.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission (File No. 1-
5231) pursuant to the Exchange Act and are incorporated herein by reference
and made a part of this Prospectus:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, as amended by the Company's Form 10-K/A Amendment
No. 1 dated June 27, 1996;
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, and June 30, 1996; and
(c) The Company's Current Reports on Form 8-K dated January 25, April 22,
July 18, 1996 and October 7, 1996.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the Debt Securities
shall be deemed to be incorporated herein by reference and made a part of this
Prospectus from the respective dates of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein, in the
accompanying Prospectus Supplement or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute part of this
Prospectus.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any or all of the documents
described above, other than certain exhibits to such documents. Written or
telephone requests should be directed to: McDonald's Shareholder Services,
McDonald's Corporation, Kroc Drive, Oak Brook, Illinois 60523, (630) 623-7428.
----------------
References herein to "U.S. dollars", "dollars" or "$" are to the lawful
currency of the United States of America.
2
<PAGE>
MCDONALD'S CORPORATION
McDonald's Corporation and its subsidiaries develop, operate, franchise and
service a worldwide system of restaurants which prepare, assemble, package and
sell a limited menu of value-priced foods. These restaurants are operated by
the Company and its subsidiaries or, under the terms of franchise
arrangements, by franchisees who are independent third parties, or by
affiliates operating under joint-venture agreements between the Company or its
subsidiaries and local businesspeople.
McDonald's restaurants offer a substantially uniform menu consisting of
hamburgers and cheeseburgers, including the Big Mac, Quarter Pounder with
Cheese and Arch Deluxe sandwiches, the Fish Filet Deluxe, Grilled Chicken
Deluxe and Crispy Chicken Deluxe sandwiches, french fries, Chicken McNuggets,
salads, milk shakes, sundaes and cones, pies, cookies and a limited number of
soft drinks and other beverages. In addition, the restaurants sell a variety
of products during limited promotional time periods. McDonald's restaurants
operating in the United States are open during breakfast hours and offer a
full breakfast menu including the Egg McMuffin and the Sausage McMuffin with
Egg sandwiches, hotcakes and sausage; three varieties of biscuit sandwiches;
Apple Bran muffins; and cereals. McDonald's restaurants in many countries
around the world offer many of these same products as well as other products
and limited breakfast menus. The Company tests new products on an ongoing
basis.
McDonald's restaurants are located in all fifty of the United States and the
District of Columbia, and in many foreign locations, principally Japan,
Canada, Germany, England, Australia and France. At June 30, 1996, there were
17,420 traditional restaurants worldwide, of which 10,524 were located in the
United States and 6,896 in 93 other countries. An additional 542 traditional
restaurants were under construction at June 30, 1996, including 389 outside
the United States.
At June 30, 1996, 66% of McDonald's traditional restaurants were operated by
independent franchisees, 21% were operated by the Company and its subsidiaries
and 13% were operated by affiliates (entities in which the Company and/or its
subsidiaries have an equity interest of 50% or less and in which the remaining
equity interest generally is owned by a local resident).
The Company's principal executive offices are located at One McDonald's
Plaza, Oak Brook, Illinois 60523, telephone: (630) 623-3000.
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Debt Securities
for general corporate purposes, which may include refinancing of debt, capital
expenditures such as the acquisition and development of McDonald's restaurants
and the purchase of common stock of the Company under the Company's ongoing
share repurchase program. Specific allocations of the proceeds for such
purposes have not been made at this time.
3
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------- ------------------------
1996 1995 1995 1994 1993 1992 1991
----- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges......... 5.12 5.03 5.20 5.26 4.86 3.96 3.53
</TABLE>
The ratios of earnings to fixed charges shown above have been computed on a
total enterprise basis. Earnings represent income before provision for income
taxes and fixed charges. Fixed charges consist of interest on all
indebtedness, amortization of debt issuance costs and discount or premium
relating to any indebtedness, fixed charges related to redeemable preferred
stock and such portion of rental charges (after reduction for related sublease
income) considered to be representative of the interest component in the
particular case.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement
and the extent, if any, to which such general provisions may not apply to the
Debt Securities so offered will be described in the Prospectus Supplement
relating to such Debt Securities.
The Senior Debt Securities are to be issued under an Indenture (the "Senior
Indenture"), to be entered into between the Company and First Union National
Bank, as Trustee (the "Trustee"). The Subordinated Debt Securities are to be
issued under a separate Indenture (the "Subordinated Indenture") to be entered
into between the Company and the Trustee. The Senior Indenture and the
Subordinated Indenture are sometimes collectively referred to as the
"Indentures." Copies of the Senior Indenture and the Subordinated Indenture
are filed as exhibits to the Registration Statement of which this Prospectus
is a part. The following summaries of certain provisions of the Senior Debt
Securities, Subordinated Debt Securities and Indentures do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indentures applicable to a particular series of
Debt Securities, including the definitions therein of certain terms. Wherever
particular Sections, Articles or defined terms of the Indentures are referred
to, such Sections, Articles or defined terms are incorporated herein by
reference, and the statements made herein are qualified in their entirety by
such reference. Article and Section references used herein are references to
the applicable Indenture. Except as otherwise indicated, the terms of the
Senior Indenture and the Subordinated Indenture are identical. Capitalized
terms not otherwise defined herein shall have the meaning given to them in the
Indentures to which they relate. As used under this caption, the term "Debt
Securities" includes the debt securities being offered by this Prospectus and
all other debt securities issued from time to time by the Company under the
Indentures.
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and each Indenture provides that
Debt Securities may be issued thereunder from time to time in one or more
series. The Debt Securities will be unsecured. Unless otherwise specified in
the Prospectus Supplement, the Senior Debt Securities when issued will be
unsubordinated obligations of the Company and will rank equally and ratably
with all other unsecured and unsubordinated indebtedness for borrowed money of
the Company. Certain unsecured obligations of the Company may, however, under
certain circumstances, become secured by mortgages pursuant to negative pledge
covenants applicable to such obligations while the Senior Debt Securities
remain unsecured. The Subordinated Debt Securities when issued will be
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness (as defined below) of the Company, as described under
"Subordination of Subordinated Debt Securities" and in the Prospectus
Supplement applicable to an offering of Subordinated Debt Securities.
4
<PAGE>
Reference is made to the Prospectus Supplement related to the series of Debt
Securities being offered thereby (the "Offered Debt Securities"), which sets
forth whether the Offered Debt Securities shall be Senior Debt Securities or
Subordinated Debt Securities, and further sets forth the following terms,
where applicable: (i) the title of the Offered Debt Securities; (ii) the
limit, if any, upon the aggregate principal amount of the Offered Debt
Securities; (iii) the date or dates on which the principal and premium, if
any, of the Offered Debt Securities is payable; (iv) the rate or rates or the
method of determination thereof, at which the Offered Debt Securities will
bear interest, if any; the date or dates from which such interest will accrue;
the interest payment dates on which such interest will be payable; and, the
record dates for the interest payable on such interest payment dates; (v)
whether the Offered Debt Securities are to be issued as Original Issue
Discount Securities (as defined below) and the amount of discount with which
the Offered Debt Securities will be issued; (vi) the place or places where the
principal of, and premium, if any, and any interest on the Offered Debt
Securities will be payable; (vii) the price or prices at which, the period or
periods within which and the terms and conditions upon which the Offered Debt
Securities may be redeemed in whole or in part, at the option of the Company,
pursuant to any sinking fund or otherwise; (viii) the obligation, if any, of
the Company to redeem, purchase or repay the Offered Debt Securities pursuant
to any sinking fund or analogous provisions or at the option of a Holder and
the price or prices at which and the period or periods within which and the
terms and conditions upon which the Offered Debt Securities will be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligation; (ix) if
other than denominations of $1,000 and any integral multiple thereof, the
denominations in which the Offered Debt Securities will be issuable; (x) if
other than the principal amount, the portion of the principal amount of the
Offered Debt Securities which will be payable upon declaration of acceleration
of the maturity thereof pursuant to the Indenture; (xi) any non-application
of, addition to, or change in any of the Events of Default provided for with
respect to the Offered Debt Securities and remedies with respect thereto;
(xii) if the Offered Debt Securities are non-interest bearing, the "stated
intervals"; (xiii) the currency or currencies in which payments on the Offered
Debt Securities are payable; and (xiv) any other terms of the Offered Debt
Securities not inconsistent with the provisions of the applicable Indenture.
(Section 2.02)
If the principal of (and premium, if any) or any interest on the Offered
Debt Securities is payable in a foreign or composite currency, the
restrictions, elections, federal income tax consequences, specific terms and
other information with respect to the Offered Debt Securities and such
currency will be described in the Prospectus Supplement relating thereto.
One or more series of Offered Debt Securities may be sold at a discount
below their stated principal amount, bearing no interest or interest at a rate
that at the time of issuance is below market rates ("Original Issue Discount
Securities"). One or more series of Offered Debt Securities may be variable
rate debt securities that may be exchangeable for fixed rate debt securities.
Federal income tax consequences and other special considerations applicable to
any such series will be described in the Prospectus Supplement relating
thereto.
Unless otherwise provided in the applicable Prospectus Supplement, the
principal of (and premium, if any) and any interest on the Offered Debt
Securities will be payable at the offices of the Trustee in New York, New York
and Charlotte, North Carolina; provided, however, that payment of interest on
Offered Debt Securities may be made at the option of the Company by check
mailed to the Holders thereof. (Sections 2.02, 4.01 and 4.02) Unless otherwise
provided in the applicable Prospectus Supplement, Offered Debt Securities may
be transferred or exchanged at the office or agency maintained by the Company
for such purpose, subject to the limitations provided in the applicable
Indenture, without the payment of any service charge, other than any tax or
governmental charge payable in connection therewith. (Section 2.06)
All moneys paid by the Company to the Trustee or a paying agent for the
payment of principal of (and premium, if any) or any interest on any Offered
Debt Security that remains unclaimed at the end of two years after such
principal, premium or interest shall have become due and payable will be
repaid to the Company on demand, and the Holder of such Offered Debt Security
will thereafter look only to the Company for payment thereof. (Section 12.05)
5
<PAGE>
GLOBAL SECURITIES
If any Offered Debt Securities are issuable in temporary or permanent global
form, the applicable Prospectus Supplement will describe the circumstances, if
any, under which beneficial owners of interests in any such permanent global
Debt Security may exchange such interests for definitive Offered Debt
Securities of such series and of like tenor and principal amount in any
authorized form and denomination. Principal of and premium and interest on a
permanent global Debt Security will be payable in the manner described in the
applicable Prospectus Supplement. (Section 2.01)
LIMITATION ON LIENS COVENANT IN THE SENIOR INDENTURE
The Senior Indenture contains the covenant described below which is
applicable to the Company with respect to any and all series of Senior Debt
Securities issued thereunder unless otherwise specified in the applicable
Prospectus Supplement. Specific covenants, if any, peculiar to a particular
series of Senior Debt Securities to be offered hereby will be described in the
Prospectus Supplement relating thereto.
Section 4.06 of the Senior Indenture requires that the Company will not, nor
will it permit any Restricted Subsidiary (as hereinafter defined) to issue or
assume any debt for money borrowed (hereinafter in this and the following
three paragraphs referred to as "Debt") if such Debt is secured by a mortgage,
security interest, pledge, lien or other encumbrance (mortgages, security
interests, pledges, liens and other encumbrances being hereinafter called
"mortgage" or "mortgages") upon any Principal Property (as hereinafter
defined) or upon any shares of stock or indebtedness of any Restricted
Subsidiary (whether such Principal Property, shares of stock or indebtedness
are now owned or hereafter acquired) without in any such case effectively
providing that the Senior Debt Securities, and at the Company's option any
other indebtedness of the Company or any Restricted Subsidiary ranking equally
with the Senior Debt Securities, shall be secured equally and ratably with
such Debt. The foregoing restrictions shall not apply to Debt secured by (i)
mortgages on property, shares of stock or indebtedness of any corporation
existing at the time such corporation becomes a Restricted Subsidiary, (ii)
mortgages on property existing at the time of acquisition thereof and certain
purchase money mortgages, (iii) mortgages securing Debt of a Restricted
Subsidiary owing to the Company or another Restricted Subsidiary, (iv)
mortgages on property of a corporation existing at the time such corporation
is merged into or consolidated with the Company or a Restricted Subsidiary or
at the time of a sale, lease or other disposition of the properties of a
corporation as an entirety or substantially as an entirety to the Company or a
Restricted Subsidiary, (v) mortgages in favor of any country or any political
subdivision of any country, or any instrumentality thereof, to secure certain
payments pursuant to any contract or statute or to secure any indebtedness
incurred for the purpose of financing all or any part of the purchase price or
the cost of construction of the property subject to such mortgages, or (vi)
any extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any mortgage referred to in the
foregoing clauses (i) to (v), inclusively. Notwithstanding the above, the
Company and one or more Restricted Subsidiaries may, without securing the
Senior Debt Securities, issue or assume secured Debt which would otherwise be
subject to the foregoing restrictions, provided that after giving effect
thereto the aggregate of such secured Debt then outstanding (not including
secured Debt permitted under the foregoing exceptions) at such time does not
exceed 20% of the shareholders' equity of the Company and its consolidated
subsidiaries as of the end of the preceding fiscal year. The transfer of a
Principal Property to a subsidiary or any third party shall not be restricted.
(Section 4.06)
The term "Principal Property" means all real property owned by the Company
or any Restricted Subsidiary which is located within the continental United
States of America and, in the opinion of the Board of Directors of the
Company, is of material importance to the total business conducted by the
Company and its consolidated affiliates as an entity. (Section 1.01)
The term "Subsidiary" means any corporation or other Person of which the
Company, or the Company and one or more Subsidiaries, or any one or more
Subsidiaries, directly or indirectly owns voting securities or other similar
equity interests entitling the owners thereof to elect a majority of the
directors or individuals holding similar positions in other Persons, either at
all times or so long as there is no default or contingency which
6
<PAGE>
permits the owners of any other class or classes of securities or other
interests to vote for the election of one or more directors or individuals
holding similar positions in other Persons, but shall not include any
corporation or other Person with respect to which the Company or any other
Subsidiary has become entitled to elect a majority of the directors or
individuals holding similar positions in other Persons solely due to a default
or other contingency which is temporary in character and has had a continuous
existence of less than one year. (Section 1.01)
The term "Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof. (Section 1.01)
The term "Restricted Subsidiary" means any Subsidiary (i) substantially all
the property of which is located within the continental United States of
America, (ii) which owns Principal Property and (iii) in which the Company's
investment, direct or indirect and whether in the form of equity, debt,
advances or otherwise, is in excess of U.S. $1,000,000,000 as shown on the
books of the Company as of the end of the fiscal year immediately preceding
the date of determination; provided, however, that "Restricted Subsidiary"
shall not include any Subsidiary primarily engaged in financing activities,
primarily engaged in the leasing of real property to persons other than the
Company and its Subsidiaries, or which is characterized by the Company as a
temporary investment. (Section 1.01)
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Unless otherwise indicated in the Prospectus Supplement, the following
provisions will apply to the Subordinated Debt Securities.
The Subordinated Debt Securities will, to the extent and in the manner set
forth in the Subordinated Indenture, be subordinate in right of payment to all
indebtedness for borrowed money of the Company, whether now outstanding or
hereafter incurred, which is not by its terms subordinate to other
indebtedness of the Company; provided, however, that Senior Indebtedness shall
not include amounts owed to trade creditors in the ordinary course of business
(the "Senior Indebtedness"). As of June 30, 1996, the aggregate amount of the
outstanding Senior Indebtedness of the Company was approximately $4.1 billion.
In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization or other similar proceedings in
connection therewith, relative to the Company or its property, and, except as
otherwise provided in the Subordinated Indenture, in the event of any
proceedings for voluntary liquidation, dissolution or other winding up of the
Company, whether or not involving insolvency or bankruptcy proceedings, all
principal, premium, if any, and interest on the Senior Indebtedness will be
paid in full before any payment is made by the Company on the Subordinated
Debt Securities. In the event that pursuant to the terms of the Subordinated
Indenture any Subordinated Debt Security of any series is declared due and
payable because of the occurrence of an Event of Default, as provided in the
Subordinated Indenture, and the previous sentence is not applicable, the
Holders of the Subordinated Debt Securities of such series shall be entitled
to payment from the Company only after the Senior Indebtedness outstanding at
the time such Subordinated Debt Security so becomes due and payable because of
such Event of Default shall first have been paid in full or such payment shall
have been provided for. (Section 15.01.)
The Subordinated Indenture does not limit or prohibit the incurrence of
additional Senior Indebtedness, which may include indebtedness that is senior
to the Subordinated Debt Securities, but subordinate to other obligations of
the Company. The Senior Debt Securities constitute Senior Indebtedness under
the Subordinated Indenture.
The Prospectus Supplement may further describe the provisions, if any,
applicable to the subordination of the Subordinated Debt Securities of a
particular series.
7
<PAGE>
EVENTS OF DEFAULT
The Indentures define an Event of Default with respect to any series of Debt
Securities as being any one of the following events: (a) default for 30 days
in any payment of interest on such series; (b) default in any payment of
principal of or premium, if any, on such series when due (and continuance of
such default for a period of 10 days in the case of Subordinated Debt
Securities); (c) default in the payment of any sinking fund payment when due
(and continuance of such default for a period of 10 days in the case of
Subordinated Debt Securities); (d) default for 60 days, after appropriate
notice, in performance of any other covenants in the Indentures (other than
the Section 4.06 covenant in the Senior Indenture and any other covenant
included in the Indentures solely for the benefit of a series of Debt
Securities other than that series), provided that such default shall not be an
Event of Default if it cannot with due diligence be cured within such 60-day
period due to causes beyond the control of the Company, unless the Company
shall fail to proceed promptly to cure such default and thereafter prosecute
the curing of such default with diligence and continuity; (e) certain events
of bankruptcy, insolvency or reorganization; or (f) default in the performance
of a particular covenant applicable to that series after appropriate notice
and opportunity to cure such default, if any. The Senior Indenture defines a
default for 120 days after appropriate notice in the performance of the
Section 4.06 covenant as an additional Event of Default with respect to the
Senior Debt Securities. An Event of Default with respect to a particular
series of Debt Securities issued under either of the Indentures does not
necessarily constitute an Event of Default with respect to any other series of
Debt Securities issued thereunder. In case an Event of Default under clauses
(a), (b), (c) or (f) set forth above with respect to the Indentures shall
occur and be continuing with respect to any series of Debt Securities, the
Trustee or the Holders of not less than 25% in aggregate principal amount of
Debt Securities then Outstanding of such series may declare the entire
principal (or, if the Debt Securities of such series are Original Issue
Discount Securities, the portion of the principal amount specified in the
terms of such series) of such series to be due and payable. In case an Event
of Default under clauses (d) or (e) set forth above with respect to the
Indentures or with respect to Section 4.06 of the Senior Indenture shall occur
and be continuing, the Trustee or Holders of not less than 25% in aggregate
principal amount of all the Outstanding Debt Securities may declare the entire
principal (or, if any Debt Securities are Original Issue Discount Securities,
the portion of the principal amount specified in the terms thereof) of
Outstanding Debt Securities of all series to be due and payable. Any Event of
Default with respect to a particular series of Debt Securities may be waived
by the Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of such series (or of all the Outstanding Debt Securities, as
the case may be), except in each case a failure to pay principal of, or
premium, if any, or interest on such Debt Securities. (Section 6.01; Section
6.07)
Each Indenture requires the Company to file with the Trustee an officers'
certificate annually as to compliance with all conditions and covenants under
the Indenture. (Section 4.05) Subject to the provisions of the Indentures
relating to the duties of the Trustee, each Indenture provides that the
Trustee shall be under no obligation to exercise any of its rights or powers
under the applicable Indenture at the request, order or direction of the
Holders of the Debt Securities unless such Holders shall have offered to the
Trustee reasonable indemnity. (Sections 6.04 and 7.01) Subject to such
provisions for indemnification and certain other rights of the Trustee, each
Indenture provides that the Holders of a majority (voting as one class) in
principal amount of the Outstanding Debt Securities of each series affected
will have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. (Section 6.07)
MODIFICATION OF THE INDENTURES
Each Indenture provides that the Company and the Trustee may enter into
supplemental indentures without the consent of the Holders of the Debt
Securities to (a) evidence the assumption by a successor corporation of the
obligations of the Company, (b) add covenants for the protection of the
Holders of the Debt Securities, (c) add or change any of the provisions of the
Indenture to permit or facilitate the issuance of Debt Securities of any
series in bearer or coupon form, (d) cure any ambiguity or correct any
inconsistency in such Indenture, (e) establish the form or terms of Debt
Securities of any series as permitted by the terms of the Indenture and (f)
evidence the acceptance of appointment by a successor trustee. (Section 10.01)
8
<PAGE>
Each Indenture contains provisions permitting the Company and the Trustee
thereunder, with the consent of the Holders of not less than 66 2/3% in
aggregate principal amount of the Debt Securities of each series affected by
such supplemental indenture, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions
of the applicable Indenture or any supplemental indenture or modifying in any
manner the rights of the Holders of Debt Securities of each such series,
provided that no such supplemental indenture shall, among other things (i)
extend the fixed maturity of any Debt Security, or reduce the principal amount
thereof (including in the case of a discounted Debt Security the amount
payable upon acceleration of the maturity thereof), reduce the rate or extend
the time of payment of interest thereon, or make the principal of, premium, if
any, or interest, if any, thereon payable in any coin or currency other than
that provided in the Debt Security, without the consent of the Holder of each
Debt Security so affected or (ii) reduce the aforesaid percentage of such Debt
Securities of any series, the consent of the Holders of which is required for
any supplemental indenture, without the consent of the Holder of each such
Debt Security so affected. (Section 10.02)
DISCHARGE OF INDENTURES
The Company, at its option, (a) will be discharged from any and all
obligations in respect of such Debt Securities (except in each case for
certain obligations to register the transfer or exchange of such Debt
Securities, replace stolen, lost or mutilated Debt Securities, maintain paying
agencies and hold monies for payment in trust) or (b) need not comply with
certain restrictive covenants of the Indentures (including that described
under "Limitation on Liens Covenant in the Senior Indenture") and will not be
limited by any restrictions with respect to merger, consolidation or sales of
assets, in each case if the Company deposits with the Trustee, in trust, (x)
money or (y) U.S. Government Obligations or a combination of (x) and (y)
which, through the payment of interest thereon and principal thereof in
accordance with their terms, will provide money in an amount sufficient to pay
all the principal (including any mandatory sinking fund payments) of, and
interest, if any, and premium, if any, on, such Debt Securities on the dates
such payments are due in accordance with the terms of such series. (Section
12.02) In order to avail itself of either of the foregoing options, the
Company must provide to the Trustee an opinion of counsel or a ruling from, or
published by, the Internal Revenue Service, to the effect that Holders of the
Debt Securities of such series will not recognize income, gain or loss for
Federal income tax purposes as a result of the Company's exercise of its
option and will be subject to Federal income tax on the same amount and in the
same manner and at the same times as would have been the case if such option
had not been exercised. (Section 12.02) "U.S. Government Obligations" means
generally (i) direct obligations of the United States of America for the
payment of which its full faith and credit is pledged or (ii) obligations of a
person controlled or supervised by and acting as an agency or instrumentality
of the United States of America, the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case, are not callable or redeemable at
the option of the issuer thereof. (Section 1.01) In addition, the Company can
also obtain a discharge under the Indentures with respect to all the Debt
Securities of a series by depositing with the Trustee, in trust, funds
sufficient to pay at maturity or upon redemption all of the Debt Securities of
such series provided that all of the Debt Securities of such series are by
their terms to become due and payable within one year or are to be called for
redemption within one year. No such opinion of counsel or ruling from the
Internal Revenue Service is required with respect to a discharge pursuant to
the immediately preceding sentence. In the event of any discharge of Debt
Securities pursuant to the terms of the Indentures described above, the
Holders of such Debt Securities will thereafter be able to look solely to such
trust fund, and not to the Company, for payments of principal, premium, if
any, and interest, if any. (Sections 12.01 and 12.02)
CONCERNING THE TRUSTEE
The Company, its subsidiaries and affiliates maintain banking relationships
(including the extension of credit) in the ordinary course of business with
the Trustee. The Trustee is also trustee under other indentures of the Company
under which certain of the Company's senior and subordinated Debt Securities
have been issued.
9
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell Debt Securities in any of three ways: (i) through
underwriters or dealers; (ii) directly to one or more purchasers; or (iii)
through agents. The applicable Prospectus Supplement will set forth the terms
of the offering of any Debt Securities, including the names of any
underwriters, the purchase price of such Debt Securities and the net proceeds
to the Company from such sale, any underwriting discounts and other items
constituting underwriters' compensation or agents' commission, any initial
public offering price, any discounts or concessions allowed or reallowed or
paid to dealers, any securities exchanges on which such Debt Securities may be
listed and any restrictions on the sale and delivery of Debt Securities in
bearer form.
If underwriters or dealers are used in the sale, Debt Securities will be
acquired by such underwriters or dealers for their own account and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Such Debt Securities may be offered to the public either
through underwriting syndicates represented by managing underwriters or by
underwriters without a syndicate. Unless otherwise set forth in the applicable
Prospectus Supplement, the obligations of the underwriters to purchase such
Debt Securities will be subject to certain conditions precedent, and the
underwriters will be obligated to purchase all of such Debt Securities if any
of such Debt Securities are purchased. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
Debt Securities may also be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer
or sale of Debt Securities will be named, and any commissions payable by the
Company to such agent will be set forth, in the applicable Prospectus
Supplement. Unless otherwise indicated in the applicable Prospectus
Supplement, any such agent will act on a best efforts basis for the period of
its appointment.
Any underwriters, dealers or agents participating in the distribution of
Debt Securities may be deemed to be underwriters and any discounts or
commissions received by them on the sale or resale of Debt Securities may be
deemed to be underwriting discounts and commissions under the Securities Act.
Agents and underwriters may be entitled under agreements entered into with the
Company to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act, or to contribution with
respect to payments that the agents or underwriters may be required to make in
respect of such liabilities. Agents and underwriters may be customers of,
engage in transactions with, or perform services for, the Company or its
subsidiaries or affiliates in the ordinary course of business.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters to solicit offers by certain institutions to purchase
the Debt Securities being offered hereby from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to Delayed
Delivery Contracts ("Contracts") providing for payment and delivery on the
date or dates stated in the Prospectus Supplement. Each Contract will be for
an amount not less than, and unless the Company otherwise agrees the aggregate
principal (or face) amount of Debt Securities sold pursuant to Contracts shall
be not less nor more than, the respective amounts stated in the Prospectus
Supplement. Institutions with which Contracts, when authorized, may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and other
institutions, but shall in all cases be subject to the approval of the
Company. Contracts will not be subject to any conditions except that (i) the
purchase by an institution of the Debt Securities covered by its Contract
shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject, and
(ii) if the Debt Securities being offered hereby are being sold to
underwriters, the Company shall have sold to such underwriters the total
principal (or face) amount of such Debt Securities less the principal amount
thereof covered by the Contracts.
10
<PAGE>
LEGAL MATTERS
The legality of the Debt Securities offered hereby will be passed upon for
the Company by Gloria Santona, Vice President, Associate General Counsel and
Secretary of the Company. Ms. Santona is a full-time employee of the Company
and owns shares of the Company's Common Stock directly and as a participant in
various employee benefit plans. Ms. Santona also holds options to purchase
shares of the Company's Common Stock.
EXPERTS
The consolidated financial statements of the Company included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995 have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein, and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
11
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON, OR ANY PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IN CONNECTION WITH THE
OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER, DEALER OR
AGENT. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IS NOT AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
----------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Use of Proceeds............................................................ S-2
Recent Results of Operations of McDonald's Corporation..................... S-2
Description of Debentures.................................................. S-2
Underwriting............................................................... S-6
Legal Opinions............................................................. S-6
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents
by Reference.............................................................. 2
McDonald's Corporation..................................................... 3
Use of Proceeds............................................................ 3
Ratio of Earnings to Fixed Charges......................................... 4
Description of Debt Securities............................................. 4
Plan of Distribution....................................................... 10
Legal Matters.............................................................. 11
Experts.................................................................... 11
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$150,000,000
MCDONALD'S
CORPORATION
LOGO
6 3/8% DEBENTURES DUE 2028
----------------
PROSPECTUS SUPPLEMENT
----------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
MORGAN STANLEY DEAN WITTER
SALOMON SMITH BARNEY
JANUARY 5, 1998
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
