Exhibit 10(e)
McDONALD'S
STOCK SHARING PLAN
As Amended and Restated
Effective January 1, 1989
TABLE OF CONTENTS
PAGE
SECTION I - Definitions....................................... 2
1.1 "Accounts" or "Participant's Accounts"............... 2
1.2 "Authorized Leave of Absence"........................ 3
1.3 "Beneficiary"........................................ 3
1.4 "Benefits Retirement Date"........................... 3
1.5 "Board of Directors"................................. 3
1.6 "Committee".......................................... 3
1.7 "Commonly Controlled Entity"......................... 3
1.8 "Company"............................................ 3
1.9 "Compensation"....................................... 3
1.10 "Considered Compensation"............................ 5
1.11 "Disability"......................................... 5
1.12 "Domestic Affiliate"................................. 5
1.13 "Economic Recovery Tax Act".......................... 5
1.14 "Effective Date"..................................... 5
1.15 "Employee"........................................... 5
1.16 "Employer"........................................... 6
1.17 "Employer Contributions"............................. 6
1.18 "ERISA".............................................. 6
1.19 "Foreign Affiliate".................................. 6
1.20 "Highly Compensated Employee"........................ 6
1.21 "Hour of Service".................................... 9
1.22 "Internal Revenue Code".............................. 11
1.23 "Leased Employee".................................... 11
1.24 "Licensee"........................................... 11
1.25 "Matching and Deferred Stock Ownership Plan"......... 11
1.26 "Participant"........................................ 11
1.27 "Plan"............................................... 11
1.28 "Plan Year".......................................... 11
1.29 "Related Plan"....................................... 11
1.30 "Required Beginning Date"............................ 12
1.31 "Subsidiary"......................................... 12
1.32 "Tax Reduction Act".................................. 12
1.33 "Termination of Service"............................. 12
1.34 "Top Paid Group"..................................... 13
1.35 "Trust".............................................. 13
1.36 "Trust Agreement".................................... 13
1.37 "Trustee"............................................ 13
1.38 "Trust Fund"......................................... 13
1.39 "Valuation Date"..................................... 13
SECTION II - Participation.................................... 14
2.1 Participation........................................ 14
SECTION III - Contributions and Allocations................... 15
3.1 Plan Contributions................................... 15
3.2 Participant's Vested Rights.......................... 16
3.3 Allocations of Contributions......................... 16
3.4 Limits on Allocation and Contributions............... 17
3.5 Contributions Irrevocable............................ 17
3.6 Maximum Limitations on Contributions................. 18
SECTION IV - Trust Fund....................................... 21
4.1 Trust Fund........................................... 21
4.2 Determination of Increase or Decrease in Net Worth
of the Trust Fund.................................... 21
4.3 Statement of Accounts................................ 21
4.4 Participant Rights................................... 21
4.5 Participant's Interest in the Trust Fund............. 22
4.6 Expenses of the Trust Fund........................... 22
4.7 Separate Accounting For Contributions................ 22
4.8 Correction of Error.................................. 22
4.9 Distribution Fund.................................... 23
4.10 Diversification...................................... 23
SECTION V - Distribution of Benefits.......................... 25
5.1 Payment of Benefits in General....................... 25
5.2 Distributions of Participant's Accounts.............. 25
5.3 Death of Participant................................. 26
5.4 Participant Withdrawals.............................. 27
5.5 Form of Distributions................................ 27
5.6 Incompetency, Distribution of Benefits............... 28
5.7 Deduction of Taxes from Amounts Payable.............. 29
5.8 Spousal Consent to Waiver............................ 29
5.9 Latest Time of Distribution.......................... 29
5.10 Direct Rollovers..................................... 30
SECTION VI - Subsidiary Participation......................... 33
6.1 Adoption of Plan and Trust by a Subsidiary........... 33
6.2 Withdrawal from Plan by Participating Employer....... 33
SECTION VII - Administration of the Plan...................... 34
7.1 Appointment of Trustee............................... 34
7.2 Appointment of Committee; Tenure in Office........... 34
7.3 Named Fiduciaries.................................... 34
7.4 Delegation of Responsibilities....................... 35
7.5 Committee Action by Majority - Authorization of
Members to Execute Documents......................... 35
7.6 Secretary............................................ 35
7.7 Member as Participant................................ 35
7.8 Committee Powers and Duties.......................... 35
7.9 Rules and Decisions.................................. 36
7.10 Agents and Counsel................................... 36
7.11 Authorization of Benefit Distribution................ 37
7.12 Claims Procedure..................................... 37
7.13 Information to be Furnished to Committee............. 38
7.14 Fiduciary Responsibility............................. 38
7.15 Fiduciary as Participant............................. 39
SECTION VIII - Amendment, Termination, Merger and
Consolidation of Plan.......................... 40
8.1 Amendment............................................ 40
8.2 Termination of Plan By the Company................... 41
8.3 Merger, Consolidation, or Transfer of Assets......... 41
8.4 Put Option Requirement............................... 41
SECTION IX - Top Heavy Provisions............................. 43
9.1 Application.......................................... 43
9.2 Special Top Heavy Definitions........................ 43
9.3 Special Top Heavy Provisions......................... 51
SECTION X - Miscellaneous Provisions.......................... 55
10.1 Headings............................................ 55
10.2 Indemnification..................................... 55
10.3 Employees' Trust.................................... 55
10.4 Nonalienation of Benefits........................... 55
10.5 Qualified Domestic Relations Order.................. 56
10.6 Exception to Distribution Limitation Period......... 58
10.7 Unclaimed Amounts................................... 58
10.8 Invalidity of Certain Provisions.................... 60
10.9 Gender and Number................................... 60
10.10 Law Governing....................................... 60
McDONALD'S STOCK SHARING PLAN
The McDonald's Stock Sharing Plan, as originally adopted
effective January 1, 1975, and amended from time to time, is hereby
amended and restated to read as herein set forth and is intended to
qualify as an employee stock ownership plan - stock bonus plan as
defined in Sections 301(d) and 301(e) of the Tax Reduction Act and
Sections 401(a) and 409 of the Internal Revenue Code and in Section
331 of the Economic Recovery Tax Act and Section 41 of the Internal
Revenue Code before its repeal effective with respect to compensation
accrued on or after January 1, 1987) of the Internal Revenue Code.
Eligibility, benefits, payment of benefits and the amount of benefits,
if any, of a person whose employment with an Employer terminated
before January 1, 1989 and who is not rehired by an Employer on or
after January 1, 1989 shall, except as otherwise specifically provided
herein, be determined in accordance with the provisions of the Plan as
in effect on the date the person ceased to be an Employee of an
Employer.
As originally adopted and as amended and restated herein, the
purpose of the McDonald's Stock Sharing Plan is to provide eligible
employees with an equity interest in McDonald's Corporation through
their participation in this Plan. Pursuant to this purpose and the
intent of the applicable law, assets of the Plan will be invested
primarily in qualifying employee securities in the form of shares of
common stock of McDonald's Corporation.
No person shall become a participant in the Plan and no further
contributions shall be made to the Plan, except as provided in Section
3.1(a), on or after January 1, 1987.
SECTION I
Definitions
The following words and phrases, when used herein, unless their
context clearly indicates otherwise, shall have the following
respective meanings:
1.1 "Accounts" or "Participant's Accounts" means a Participant's
share in the Trust, including all shares (or fractional shares) of
common stock of McDonald's Corporation allocated to such Accounts.
Each Participant shall have five (5) separate Accounts, which shall
be:
(a) A "Participant Contribution Account", to which shall be
credited Participant Matched Contributions made with respect to
Plan Years ending on or before December 31, 1982, plus income and
gains and less expenses and losses attributable thereto;
(b) An "Unmatched Employer Contribution Account", to which
shall be credited Unmatched Employer Contributions contributed in
accordance with Section 3.1(a), which have been allocated to a
Participant with respect to Plan Years ending on or before
December 31, 1982, plus income and gains and less expenses and
losses attributable thereto;
(c) A "PAYSOP Employer Contribution Account", to which
shall be credited Employer Contributions contributed in
accordance with Section 3.1(b) and which have been allocated to a
Participant with respect to Plan Years beginning on or after
January 1, 1983, plus income and gains and less expenses and
losses attributable thereto;
(d) An "Employer Matching Contribution Account", to which
shall be credited Employer Matching Contributions made by an
Employer to the Plan in accordance with Section 3.1(d) for Plan
Years ending on or before December 31, 1982, plus income and
gains and less expenses and losses attributable thereto;
(e) An "Additional Employer Contribution Account", to which
shall be credited (1) contributions which have been allocated to
a Participant's Additional Company Contribution Account with
respect to Plan Years ending on or before December 31, 1982, and
(2) with respect to contributions for Plan Years ending after
December 31, 1982, contributions in excess of the amount which
qualifies for tax credit under Section 41(a)(2) of the Internal
Revenue Code, plus income and gains and less expenses and losses
attributable thereto.
1.2 "Authorized Leave of Absence" means any absence authorized
by an Employer under the Employer's standard personnel practices. An
absence due to service in the Armed Forces of the United States shall
be considered an Authorized Leave of Absence provided that the
Employee returns to employment with the Employer within the period
provided by law.
1.3 "Beneficiary" means the person or persons designated by a
Participant in accordance with the provisions of Section 5.3 to
receive any death benefit which shall be distributable under the Plan.
1.4 "Benefits Retirement Date" means the date on which a
Participant attains age 55.
1.5 "Board of Directors" means the Board of Directors of the
Company.
1.6 "Committee" means the Committee appointed pursuant to
Section 7.2.
1.7 "Commonly Controlled Entity" means a corporation, trade or
business if it and an Employer are members of a controlled group of
corporations as defined in Section 414(b) of the Internal Revenue
Code, under common control as defined in Section 414(c) of the
Internal Revenue Code, or members of an affiliated service group as
defined in Section 414(m) of the Internal Revenue Code; provided,
however, that solely for purposes of Section 3.6 and of Section 1.29
when used in Section 3.6, the standard of control under Sections
414(b) and 414(c) of the Internal Revenue Code shall be deemed to be
"more than 50%" rather than "at least 80%."
1.8 "Company" means McDonald's Corporation, or any successor
corporation by merger, consolidation, purchase or otherwise which
elects to adopt the Plan and the Trust.
1.9 "Compensation" of a Participant for a Plan Year means
(a) except as otherwise provided herein, the Participant's
total compensation paid during the Plan Year to such Participant
by an Employer while a Participant in the Plan as reflected in
Box 10 of the Participant's Internal Revenue Service Form W-2 (or
Box 1, as revised for 1993, or the equivalent box on any
comparable form which may hereafter replace such form) for the
Plan Year, increased by any amounts by which the Participant's
compensation is reduced pursuant to a compensation reduction
election under any Related Plan or pursuant to other compensation
reduction contributions for medical, dental or dependent care or
other benefits and by the amount of Participant Elected
Contributions under the McDonald's Matching and Deferred Stock
Ownership Plan which are credited to the Participant's account
under the McDonald's McDESOP Equalization Plan for the Plan Year
and excluding provisions for life insurance, reimbursement for
moving expenses, non-cash compensation, officers' discretionary
bonuses, any benefits under the Plan or any other qualified plan
described in Section 401(a) of the Internal Revenue Code, or
income earned from stock options, Stock Exchange Rights or
Performance Units, (as such terms are defined in the McDonald's
Corporation 1978 Incentive Plan) and payments to a Participant
for foreign service in the form of tax gross-up benefits,
allowances for cost of living, housing and education, and other
similar payments;
(b) for purposes of Article IX and for determining the
limitations under Section 3.6, Compensation means the total
compensation paid to the Participant by an Employer, or a
Commonly Controlled Entity, as defined in Section 414(m) of the
Internal Revenue Code for the Plan Year, excluding any benefits
under the Plan or any other qualified plan described in
Section 401(a) of the Internal Revenue Code, or other deferred
compensation, stock options, and any other distribution which
receives special tax benefit; and
(c) for the purpose of determining whether a Participant is
(1) a Highly Compensated Employee, (2) a member of the Top Paid
Group or (3) a Key Employee pursuant to Section 9.2(d),
Compensation shall be Compensation as defined in Section 1.9(b)
increased by the amount by which the Participant's compensation
is reduced pursuant to a cash or deferred arrangement which meets
the requirements of Section 401(k) of the Internal Revenue Code
and pursuant to compensation reduction contributions for medical,
dental or dependent care or other benefits under a cafeteria plan
meeting the requirements of Section 125 of the Internal Revenue
Code.
For purposes of Sections 1.9(a) and (c), Compensation taken into
account under the Plan shall not exceed $200,000 (in 1989, and as
adjusted in subsequent years as provided by the Secretary of the
Treasury) (the "dollar limit"). In determining whether a
Participant's compensation for a Plan Year exceeds the dollar limit,
if and only to the extent required by the Internal Revenue Code, the
compensation of each Five Percent Owner and of each Participant who is
one of the ten Highly Compensated Employees paid the greatest
compensation (determined before the aggregation of the compensation of
any family member) shall include the compensation of such
Participant's spouse and lineal descendants who have not attained
age 19 before the end of the Plan Year earned as employees of
McDonald's or a Commonly Controlled Entity. For purposes of applying
the dollar limit in the first sentence of this paragraph, if the
Compensation of a Five Percent Owner or of a Participant who is one of
the ten Highly Compensated Employees paid the greatest compensation
(determined before the aggregation of the compensation of any family
member) is equal to or greater than the dollar limit or more
("Affected Participant"), the Compensation of each of such Affected
Participant, his spouse and lineal descendants who have not attained
age 19 before the end of the Plan Year ("Affected Family Member")
shall be equal to the dollar limit for the Plan Year multiplied by a
fraction the numerator of which is such individual's Compensation
after application of the dollar limit and the denominator of which is
the sum of such Compensation for the Affected Participant and the
Affected Family Members.
Effective January 1, 1994, "$150,000" shall be substituted for
"$200,000" in the above paragraph.
1.10 "Considered Compensation" means Compensation of a
Participant, excluding any amount in excess of $1.00.
1.11 "Disability" means a mental or physical condition which
renders a Participant permanently unable or incompetent to carry out
the job responsibilities he held or tasks to which he was assigned at
the time the disability was incurred. The determination of disability
shall be made by the Committee on the basis of such medical and other
competent evidence as the Committee shall deem relevant.
1.12 "Domestic Affiliate" means any domestic corporation,
partnership or joint venture of which, in the case of a corporation,
the Company either owns, directly or indirectly, either twenty-five
percent (25%) or more of the voting power of all classes of stock or
twenty-five percent (25%) or more of the value of all stock, or of
which, in the case of a partnership or joint venture, the Company
owns, directly or indirectly, twenty-five percent (25%) or more of
both the capital and profits.
1.13 "Economic Recovery Tax Act" means the Economic Recovery Tax
Act of 1981, as amended, and any subsequent legislation dealing with
payroll-based tax credit employee stock ownership plans as described
in Section 331 of the Economic Recovery Tax Act.
1.14 "Effective Date" of the restatement is January 1, 1989.
1.15 "Employee" means any person who is employed by the Company
or another Employer including persons on an Authorized Leave of
Absence. Such term does not include a consultant, an independent
contractor or a Leased Employee.
1.16 "Employer" means the Company and any Subsidiary of the
Company which, pursuant to Section 6.l, elects to adopt the Plan and
the Trust.
1.17 "Employer Contributions" means contributions by an Employer
under the Plan including:
(a) Employer Matching Contributions made in accordance with
Section 46(a)(2)(B)(ii) of the Internal Revenue Code of 1954 for
years ending on or before December 31, 1978, and thereafter, in
accordance with Section 46(a)(2)(E)(ii) of the Internal Revenue
Code of 1954 for years ending on or before December 31, 1982 and
(b) Unmatched Employer Contributions made in accordance
with Section 46(a)(2)(B)(i) of the Internal Revenue Code of 1954
for years ending on or before December 31, 1978, and thereafter,
in accordance with Section 46(a)(2)(E)(i) of the Internal Revenue
Code of 1954 for years ending on or before December 31, 1982;
(c) PAYSOP Employer Contributions made in accordance with
Section 41(a)(2) of the Internal Revenue Code of 1954, for years
beginning on or after January 1, 1983; and
(d) Additional Employer Contributions, including
contributions allocated to a Participant's Additional Company
Contribution Account for Plan Years ending on or before
December 31, 1982, and thereafter, contributions made by an
Employer and allocated to a Participant's Additional Employer
Contribution Account for Plan Years beginning on or after
January 1, 1983, which are in excess of the amount which
qualifies for tax credit under Section 41(a)(2) of the Internal
Revenue Code of 1954.
1.18 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
1.19 "Foreign Affiliate" means any foreign corporation,
partnership or joint venture of which, in the case of a corporation,
the Company owns, directly or indirectly, twenty-five percent (25%) or
more of the voting power of all classes of stock or twenty-five
percent (25%) or more of the value of all stock, or of which, in the
case of a partnership or a joint venture, the Company owns, directly
or indirectly, twenty-five percent (25%) or more of both the capital
and profits.
1.20 "Highly Compensated Employee" means, for a Plan Year, any
Participant who performs services as an employee for an Employer or
Commonly Controlled Entity during such Plan Year and who:
(a) (1) at any time during the Plan Year or the preceding
Plan Year ("Preceding Plan Year"), was a Five Percent Owner; or
(2) (A) received Compensation in excess of $78,353
(for 1988, adjusted in subsequent years as provided by the
Secretary of the Treasury) during the Preceding Plan Year or
(B) received Compensation in excess of $81,720 (for 1989,
adjusted in subsequent years as provided by the Secretary of
the Treasury) during the Plan Year and was one of the 100
employees of the group consisting of the Employers and
Commonly Controlled Entities who received the most
Compensation during the Plan Year; or
(3) received Compensation for the Preceding Plan Year
in excess of $52,235 (for 1988, adjusted in subsequent years
as provided by the Secretary of the Treasury) and is in the
Top Paid Group for the Preceding Plan Year; or
(4) (A) was an officer of (or performed the duties of
an officer for) an Employer or a Commonly Controlled Entity
during the Preceding Plan Year or was an officer of such an
entity (or performed the duties of an officer of such an
entity) during the Plan Year and one of the 100 employees of
the group consisting of the Employers and Commonly
Controlled Entities who received the most Compensation
during the Plan Year, and (B) received Compensation in
excess of fifty percent (50%) of the amount in effect under
Section 415(b)(1)(A) of the Internal Revenue Code ($94,023
in 1988 and $98,064 in 1989, adjusted in subsequent years as
determined in accordance with regulations prescribed by the
Secretary of the Treasury or his delegate), provided that no
more than fifty (50) persons shall be treated as officers
hereunder for any Plan Year or Preceding Plan Year.
(b) For purposes of this Section 1.20, the Compensation of
(1) any Highly Compensated Employee in the group consisting of
the ten (10) Highly Compensated Employees paid the greatest
Compensation (without regard to this Section 1.20(b)) or, (2) any
Five Percent Owner, shall include any Compensation paid to a
spouse, lineal ascendants or descendants, or any spouse of such
lineal ascendants or descendants of such Highly Compensated
Employee or such Five Percent Owner and such spouse, lineal
ascendants or descendants, or any spouse of such lineal
ascendants or descendants shall not be treated as an employee for
purposes of this Section 1.20.
(c) For purposes of this Section 1.20 and Section 1.38,
employees who are nonresident aliens and who receive no earned
income (within the meaning of Section 911(d)(2) of the Internal
Revenue Code) from an Employer or a Commonly Controlled Entity
which constitutes income from sources within the United States
(within the meaning of Section 861(a)(3) of the Internal Revenue
Code) shall not be treated as employees.
(d) A former employee shall also be treated as a Highly
Compensated Employee for a Plan Year if such former employee had
a Termination of Service prior to such Plan Year and was a Highly
Compensated Employee (without regard to this Section 1.20(d)) for
either the Plan Year in which he had a Termination of Service or
any Plan Year ending on or after his 55th birthday.
(e) Effective July 1, 1993, in lieu of determining which
individuals are Highly Compensated Employees as provided in
paragraphs (a)(1), (a)(2), (a)(3), and (a)(4) of this Section
1.20, the Plan Administrator may elect for any Plan Year to
consider as a Highly Compensated Employee for such Plan Year each
Participant who performs services as an employee for an Employer
or Commonly Controlled Entity during such Plan Year and who,
during the Plan Year:
(1) was at any time a Five Percent Owner;
(2) received Compensation in excess of $81,720 (for
1989, adjusted in subsequent years as provided by the
Secretary of the Treasury or his delegate);
(3) received Compensation in excess of $52,235 (for
1989, adjusted in subsequent years as provided by the
Secretary of the Treasury or his delegate) and was a member
of the Top Paid Group; and
(4) was an officer of (or performed the duties of an
officer for) an Employer, a Commonly Controlled Entity or
member of an Affiliated Service Group and received
Compensation in excess of fifty percent (50%) of the amount
in effect under Section 415(b)(1)(A) of the Internal Revenue
Code ($98,064 for 1989, adjusted in subsequent years as
provided by the Secretary of the Treasury or his delegate).
(f) The Committee may elect for any Plan Year to determine
the Highly Compensated Employees for such year by substituting
(1) "$62,345" (in 1992, adjusted in subsequent years provided by
the Secretary of the Treasury or his delegate) for "$93,518" (in
1992, adjusted in subsequent years provided by the Secretary of
the Treasury or his delegate) in Sections 1.20(a)(ii) or
1.20(e)(2) as applicable, and ignoring Sections 1.20(a)(iii) or
1.20(e)(3), respectively.
1.21 "Hour of Service" means:
(a) Each hour for which an employee or a Leased Employee is
paid directly or indirectly, or entitled to payment, by an
Employer or a Commonly Controlled Entity (regardless of whether
then an Employee):
(1) for performance of duties;
(2) on account of a period of time during which no
duties were performed, provided that, except as herein
otherwise expressly provided, no more than 501 Hours of
Service shall be credited for any single continuous period
during which an Employee performs no duty, and provided that
no Hours of Service shall be credited for payments made or
due under a plan maintained solely for the purpose of
complying with applicable worker's compensation,
unemployment compensation or disability insurance laws, or
for reimbursement of medical expenses shall be excluded; and
(3) for which back pay, irrespective of mitigation of
damages, is awarded or agreed to by the employer, provided
that no more than 501 Hours of Service shall be credited any
single continuous period of time during which the Employee
did not or would not have performed duties.
(b) (1) An Employee's prior or subsequent employment by a
Foreign Affiliate or Domestic Affiliate shall be treated as Hours
of Service by the Employer. If a McDonald's Restaurant operated
by a Licensee is acquired by the Company or one of its
Subsidiaries or affiliates, each person who is employed by such
Licensee as of the date of acquisition and is continuously
employed by McDonald's until the last day of the Plan Year shall
be credited by the Employer with their Hours of Service with such
Licensee.
(2) To the extent an Employee is not otherwise
credited with Hours of Service while on an Authorized Leave
of Absence, an Employee on an Authorized Leave of Absence
shall be credited with a number of Hours of Service for each
payroll period during the Authorized Leave of Absence equal
to the average number of Hours of Service per payroll period
(not to exceed forty Hours of Service per week) credited to
such Employee for the six calendar week period (or pertinent
payroll period if such period is longer), ending immediately
prior to the commencement of the Authorized Leave of
Absence, notwithstanding the limitations of Section
1.21(a)(2). Notwithstanding the foregoing, an Employee who
fails either (l) to return to his employment within ninety
(90) days after the expiration of an Authorized Leave of
Absence or (2) to remain in the employ of an Employer after
the expiration of an Authorized Leave of Absence for the
lesser of (a) a period equal to the period of his Leave of
Absence or (b) one year following his return to employment,
unless such failure shall be due to death, Disability,
illness or retirement on or after the Participant's Benefits
Retirement Date, shall be considered to have voluntarily
terminated his employment as of the date the Leave of
Absence commenced for purposes of determining Hours of
Service under this Section.
(c) Effective January 1, 1985, to the extent not otherwise
credited in Section 1.21, solely for purposes of avoiding a Break
in Service, for periods of absence from work on account of
Parental Leave, an Employee shall be credited with Hours of
Service as defined below:
(1) the Hours of Service which normally would have
been credited to such individual but for the Parental Leave,
or
(2) eight (8) Hours of Service per day of such absence
if the Plan is unable to determine the Hours of Service
which would have been credited to such individual but for
the Parental Leave.
(d) The determination of Hours of Service for reasons other
than the performance of duties shall, except as provided in
Section 1.21(b)(2), be in accordance with the provisions of Labor
Department Regulations Section 2530.200b-2(b), and Hours of
Service shall be credited to computation periods in accordance
with the provisions of Labor Department Regulations Section
2530.200b-2(c).
(e) Except as provided in Section 1.21(b)(2), each Employee
who is paid on a salaried basis shall be credited with 95 Hours
of Service for each semi-monthly payroll period during which such
Employee has any Hours Of Service.
1.22 "Internal Revenue Code" means the Internal Revenue Code of
1986, as from time to time amended and any subsequent Internal Revenue
Code; provided that references to the Internal Revenue Code with
respect to contributions previously permitted hereunder shall be
understood to be references to the Internal Revenue Code as in effect
for the periods during which such contributions were permitted
hereunder and shall be deemed to include any such sections of the
Internal Revenue Code prior to amendment, modification or renumbering.
References to any section of the Internal Revenue Code shall be deemed
to include similar sections of the Internal Revenue Code as renumbered
or amended.
1.23 "Leased Employee" means any person who is not an employee of
an Employer or a Commonly Controlled Entity and who provides service
to an Employer if:
(a) such services are provided pursuant to an agreement
between the recipient and any other person;
(b) such person has performed such services for the
Employer (or for the Employer or any Commonly Controlled Entity)
on a substantially full time basis for a period of at least 1
year; and
(c) such services are of a type historically performed, in
the business field of the Employer or Commonly Controlled Entity,
by employees.
1.24 "Licensee" means any person, other than McDonald's
Corporation or any of its Subsidiaries or Domestic Affiliates or
Foreign Affiliates, who operates a McDonald's Restaurant pursuant to
lease and license agreements (or so-called "Business Facilities
Lease") with the Company or affiliated companies.
1.25 "Matching and Deferred Stock Ownership Plan" means the
McDonald's Matching and Deferred Stock Ownership Plan, as from time to
time amended.
1.26 "Participant" means a person participating in the Plan in
accordance with the provisions of Section 2.l.
1.27 "Plan" means the McDonald's Stock Sharing Plan as herein set
forth and as hereafter amended from time to time.
1.28 "Plan Year" means the 12 month period commencing on
January l and ending on December 31.
1.29 "Related Plan" means any other qualified defined
contribution plan or qualified defined benefit plan (as defined in
Section 415(k) of the Internal Revenue Code) maintained by an Employer
or a Commonly Controlled Entity, respectively called a "Related
Defined Contribution Plan" and a "Related Defined Benefit Plan."
1.30 "Required Beginning Date" means April 1 (but not before
April 1, 1990 for a Participant who is not a Five Percent Owner) of
the calendar year following:
(a) for a Participant who reaches age 70-1/2 before
January 1, 1988, the later of:
(1) the calendar year in which he reaches age 70-1/2,
or
(2) if the Participant is not a Five Percent Owner at
any time during the Plan Year ending with or within the
calendar year in which he attains age 70-1/2 or any of the
four (4) prior Plan Years, the calendar year in which he has
a Termination of Service; provided that if any such
Participant becomes a Five Percent Owner during any Plan
Year after he attains age 70-1/2, the "Required Beginning
Date" for such Participant shall be the April 1 of the
calendar year following the calendar year in which such Plan
Year ends, and
(b) for a Participant who reaches age 70-1/2 on or after
January 1, 1988, the calendar year in which the Participant
reaches age 70-1/2.
Notwithstanding the foregoing, the Required Beginning Date shall not
be any date earlier than any date to which Required Beginning Date can
be delayed in accordance with applicable law, regulations, or rulings.
1.31 "Subsidiary" means any other corporation if it and the
Company are members of a controlled group of corporations within the
meaning of Section 409(l)(4) of the Internal Revenue Code.
1.32 "Tax Reduction Act" means the Tax Reduction Act of 1975 as
amended from time to time, and any successor thereto pertaining to
investment tax credit employee stock ownership plans as described in
Sections 301(d) and 301(e) of the Tax Reduction Act and references to
sections thereof shall be deemed to include any such sections as
amended, modified or renumbered.
1.33 "Termination of Service" means termination of an Employee's
employment with an Employer for any reason, including death,
Disability, resignation, discharge, or retirement on or after Benefits
Retirement Date; provided, however, that the transfer of a Participant
from an Employer to a Foreign or Domestic Affiliate or from one
Foreign or Domestic Affiliate to another Foreign or Domestic Affiliate
or to an Employer shall not be regarded as a Termination of Service.
1.34 "Top Paid Group" means, for a Plan Year, the group
consisting of the top twenty percent of the total number of persons
employed by all Employers and Commonly Controlled Entities when ranked
on the basis of Compensation paid during the Plan Year; provided that
for purposes of determining the total number of persons employed by
such entities, the following employees shall be excluded:
(a) employees who had not completed six (6) months of
service,
(b) employees who worked less than seventeen and one-half
(17-1/2) hours per week,
(c) employees who normally worked during not more than six
(6) months during any Plan Year, and
(d) employees who had not attained age 21.
1.35 "Trust" means the legal entity resulting from the Trust
Agreement between the Company and the Trustee, and any amendments
thereto, by which contributions under the Plan shall be received,
held, invested and distributed to or for the benefit of the
Participants and Beneficiaries.
1.36 "Trust Agreement" means the agreement between the Company
and the Trustee, establishing the McDonald's Stock Sharing Trust, as
amended from time to time.
1.37 "Trustee" means any corporation, individual, or individuals
who shall accept the appointment to execute the duties of Trustee as
set forth in the Trust Agreement.
1.38 "Trust Fund" means all property received by the Trustee,
together with all income, profits and increments thereon, less all
losses and distributions chargeable thereto.
1.39 "Valuation Date" means the last business day of the calendar
quarter and such other dates as the Committee shall specify.
SECTION II
Participation
2.1 Participation. No person shall become a Participant after
December 31, 1986. Any person who was a Participant before that date
shall continue as a Participant until his Accounts are distributed
from the Plan.
SECTION III
Contributions and Allocations
3.1 Plan Contributions.
(a) Additional Employer Contribution. While the Company
does not currently intend to make further contributions to the
Plan, the Company, in its discretion, may contribute to the Trust
for any Plan Year such amount ("Additional Employer
Contribution") as shall be determined by the Board of Directors.
If the Company elects to make an Additional Employer Contribution
for any Plan Year each Employer other than the Company shall
contribute to the Trust for the Plan Year an amount equal to the
product of the total Considered Compensation for the Plan Year of
all Participants who are Employees of such Employer multiplied by
a fraction, the numerator of which is the Additional Employer
Contribution of the Company for the Plan Year and the denominator
of which is the total Considered Compensation for the Plan Year
of all Participants who are Employees of the Company.
Notwithstanding the provisions of this Section 3.l(a), no
Employer shall make any contribution under this Section 3.l(a)
for any Plan Year in excess of the maximum amount deductible from
income by the Employer for the Plan Year under the provisions of
the Internal Revenue Code. The Board of Directors shall
determine and certify to the Committee the amount of any
contribution to be made by each Employer under this Section
3.l(a). Such determination shall be binding on all Participants,
the Committee, the Company, and the other Employers.
(b) Employer Contributions Made Before Effective Date. The
following Employer Contributions made before the date indicated
shall be held in Participant's Accounts as follows:
(1) Unmatched Employer Contributions made with respect
to periods before December 31, 1982 and credited to
Participant's Unmatched Employer Contribution Account;
(2) PAYSOP Employer Contributions made with respect to
periods on or after January 1, 1983 and ending on or before
December 31, 1986 and credited to Participant's PAYSOP
Employer Contribution Account; and
(3) Employer Matching Contributions made with respect
to periods ending on or before December 31, 1982 and
credited to Participant's Employer Matching Contribution
Account.
(c) Participant Contributions After January 1, 1983. No
Participant Contributions may be made with respect to Plan Years
beginning on or after January 1, 1983. Participant Contributions
made before January 1, 1983 shall continue to be held in
Participants' Participant Contribution Accounts.
(d) Form of Contributions. Contributions to the Trust by
an Employer shall be either in cash or in shares of common stock
of the Company, as the Employer shall determine in its
discretion.
3.2 Participant's Vested Rights. Each Participant's rights to
the Participant's Accounts shall be fully vested and non-forfeitable.
3.3 Allocations of Contributions.
(a) Unmatched Employer Contributions. For periods ending
on or before December 31, 1982, Unmatched Employer Contributions
to the Trust for each Plan Year were allocated, as of the last
day of the Plan Year, to each Participant, who (1) completed not
less than 1,000 Hours of Service during the Plan Year, (2) was a
Participant for any period of time during the Plan Year and had a
Termination of Service because of retirement after age 55, death,
or Disability, or (3) was a Participant for any period of time
during the Plan Year and had a Termination of Service during the
Plan Year and had at least 10 years of Credited Service under the
McDonald's Corporation Savings and Profit Sharing Plan as of the
end of the Plan Year, in the proportion that each such
Participant's Considered Compensation for the Plan Year bears to
the Aggregate Considered Compensation for the Plan Year of all
such Participants.
(b) Employer Matching Contributions. For periods ending on
or before December 31, 1982, all Employer Matching Contributions
to the Trust for each Plan Year ending on or before December 31,
1982 were allocated, as of the last day of the Plan Year, to each
Participant who was entitled to an allocation for the year under
Section 3.3(a) in an amount equal to the amount of such
Participant's Fixed Participant Contributions and Variable
Participant Contributions for the Plan Year which have been paid
in such manner and by such time as was established by the
Committee, which date shall be not later than 24 months after the
end of the Plan Year.
(c) PAYSOP Employer Contributions. All PAYSOP Employer
Contributions to the Trust for each Plan Year beginning on or
after January 1, 1983 and ending on or before December 31, 1986,
were allocated, as of the last day of the Plan Year, to each
Participant who (1) completed not less than 1,000 Hours of
Service during the Plan Year, or (2) was a Participant for any
period of time during the Plan Year and had a Termination of
Service because of retirement after age 55, death, or Disability,
or (3) was a Participant for any period of time during the Plan
Year and had a Termination of Service during the Plan Year and
had at least 10 years of Credited Service under the McDonald's
Corporation Savings and Profit Sharing Plan as of the end of the
Plan Year, in the proportion that each such Participant's
Considered Compensation for the Plan Year bears to the Aggregate
Considered Compensation for the Plan Year for all such
Participants.
(d) Additional Employer Contributions. Additional Employer
Contributions, if any, to the Trust for each Plan Year shall be
allocated, as of the last day of the Plan Year, to each
Participant who (1) completed not less than 1,000 Hours of
Service during the Plan Year, or (2) was a Participant for any
period of time during the Plan Year and had a Termination of
Service because of retirement after age 55, death, or Disability,
or (3) was a Participant for any period of time during the Plan
Year and had a Termination of Service during the Plan Year and
had at least 10 years of Credited Service under the Profit
Sharing Plan portion of the McDonald's Corporation Profit Sharing
Program as of the end of the Plan Year, in the proportion that
each such Participant's Considered Compensation for the Plan Year
bears to the Aggregate Considered Compensation for the Plan Year
for all such Participants.
3.4 Limits on Allocation and Contributions. Any of the
provisions of the Plan to the contrary notwithstanding, no amount
shall be allocated to the Account of any Participant in excess of
the maximum amount permitted to be allocated to a participant in
a plan of this type as described in Section 401 of the Internal
Revenue Code and no amount shall be contributed by any Employer
in excess of the maximum amount permitted to be contributed by
such Employer to a plan of this type as described in Section 401
of the Internal Revenue Code.
3.5 Contributions Irrevocable. Amounts contributed by an
Employer to the Plan shall, subject to the provisions of Section 3.6,
be irrevocable, shall not be returned to any Employer, and shall
continue to be allocated in accordance with the provisions of the Plan
notwithstanding any circumstances under which any Employer suffers
recapture of the tax credit obtained initially through the Employer
Contributions to the Plan; provided however, that if, and to the
extent that the amount of Employer Matching Contributions for a Plan
Year exceeds the amount of Participant Matched Contributions for such
Plan Year, such excess shall be returned to the Employer.
3.6 Maximum Limitations on Contributions.
(a) Limitations on Contributions. Any of the provisions
herein to the contrary notwithstanding, a Participant's Annual
Additions for any Plan Year shall not exceed his Maximum Annual
Additions for the Plan Year. If a Participant's Annual Additions
exceed his Maximum Annual Additions (the "Annual Excess"), the
Participant's Annual Additions for the Plan Year shall be reduced
under Section 3.6(c) by the amount necessary to eliminate such
Annual Excess.
(b) Definitions.
(1) "Annual Additions" of a Participant for a Plan
Year means the sum of the following:
(A) Additional Employer Contributions for the
Plan Year;
(B) all annual additions with respect to employer
contributions and forfeitures for such Plan Year
allocated to such Participant's accounts for such Plan
Year under any other Related Defined Contribution Plan,
not already included under Section 3.6(b)(1)(A)
provided that Forfeitures of employer securities under
the Employer Auxiliary ESOP portion of the Profit
Sharing Program and employer contributions used to
repay interest on an exempt loan thereunder shall not
be included under this Section 3.6(b)(1)(B);
(C) the amount of nondeductible participant
contributions under this Plan or any Related Plan made
by the Participant for the Plan Year; and
(D) contributions allocated to any individual
medical account (as defined in Code Section 401(h))
which is part of a defined benefit plan maintained by
an Employer as provided in Code Section 415(1) and any
amount attributable to post-retirement medical benefits
allocated to an account established under Internal
Revenue Code Section 419(d)(1).
(2) "Maximum Annual Addition" of a Participant for a
Plan Year means effective for Plan Years beginning on or
before July 12, 1989 the greater of (A) and (B) below and
effective for Plan Years beginning after July 12, 1989, the
amount in (A) below:
(A) the lesser of (i) and (ii) below:
(i) 25% of the Participant's Compensation,
or
(ii) the greater of (I) $30,000 or
(II) one-fourth (1/4) of the amount in effect
under Section 415(b)(1)(A) of the Internal Revenue
Code ($98,064 in 1989, adjusted in subsequent
years for cost of living adjustments determined in
accordance with regulations prescribed by the
Secretary of Treasury or his delegate pursuant to
the provisions of Section 415(d) of the Internal
Revenue Code).
(B) the lesser of (i) and (ii) below:
(i) 25% of the Participant's Compensation,
or
(ii) the sum of (I) the greater of
(a) $30,000 or (b) one-fourth (1/4) of the amount
in effect under Section 415(b)(1)(A) of the
Internal Revenue Code ($98,064 for 1989, adjusted
in subsequent years for cost of living adjustments
determined in accordance with regulations
prescribed by the Secretary of Treasury or his
delegate pursuant to the provisions of
Section 415(d) of the Internal Revenue Code), and
(II) the lesser of (a) the amount determined under
clause (I) above and (b) the Participant's
leveraged ESOP Annual Additions for the Plan Year
under the McDonald's Profit Sharing Program.
(c) If a Participant has an Annual Excess for a Plan Year,
the Annual Excess shall be eliminated as follows:
(1) The allocations to the Participant's accounts
under McDonald's Profit Sharing Program shall be reduced as
provided therein.
(2) If any Annual Excess remains after application of
paragraph (1), Additional Employer Contributions, in that
order, shall be reduced to the extent such reductions reduce
the amount of the remaining Annual Excess.
(3) Subject to Section 3.6(c)(5), any allocations of
Additional Employer Contributions reduced or eliminated
under this Section 3.6 shall, subject to the limits of this
Section 3.6, be reallocated to the Accounts of the other
Participants as of the last day of the Plan Year in the same
manner as such Employer Contributions were initially
allocated under Section 3.3. Any Additional Employer
Contributions which cannot, under the limits of this
Section 3.6, be reallocated to the Accounts of other
Participants in the Plan Year shall, subject to the limits
of this Section 3.6, be held in an unallocated suspense
account and reallocated in the subsequent Plan Year. If the
Plan is terminated, any amounts held in an unallocated
suspense account not then allocated shall, to the maximum
extent permitted under Section 3.6(a), be allocated among
Participants in the Plan Year of termination and any amounts
in excess of such limit shall be returned to the Employers.
(d) If a Participant participates in any Related Defined
Benefit Plan, the sum of the Defined Benefit Plan Fraction (as
defined in Section 415(e)(2) of the Internal Revenue Code) and
the Defined Contribution Plan Fraction (as defined in
Section 415(e)(3) of the Internal Revenue Code) for such
Participant shall not exceed 1.0 (called the "Combined
Fraction"). If the Combined Fraction of such Participant exceeds
1.0, the Participant's Defined Benefit Plan Fraction shall be
reduced by limiting the Participant's annual benefits payable
from the Related Defined Benefit Plan in which he participates to
the extent necessary to reduce the Combined Fraction of such
Participant to 1.0, and to the extent the Combined Fraction
continues to exceed 1.0, by reducing the Participant's Maximum
Annual Additions to the extent necessary to reduce the Combined
Fraction to 1.0.
SECTION IV
Trust Fund
4.1 Trust Fund. All assets held under the Plan shall be held in
the Trust Fund pursuant to the terms and provisions of the Trust
Agreement, and shall be invested primarily in shares of common stock
of the Company. The Trustee is specifically authorized to invest up
to 100% of the assets of the Trust Fund in shares of common stock of
the Company. The Trustee may, at its discretion, retain in cash an
amount equal to the value of fractional shares allocable to
Participants entitled to receive an immediate distribution from the
Plan and amounts permitted to be so held pursuant to Section 4.9
hereof.
4.2 Determination of Increase or Decrease in Net Worth of the
Trust Fund. As of each Valuation Date the Trustee shall determine the
fair market value of the Trust and give written notice thereof to the
Committee. The Trustee's determination of fair market value shall be
final and conclusive on all persons. The net income thus derived from
the Trust shall be accumulated and shall from time to time be invested
as a part of the Trust Fund. As of each Valuation Date, the Committee
shall determine the Trust Fund's net income, gains or losses since
immediately preceding Valuation Date, and shall proportionately
allocate such net income, gains or losses among (a) the sum of all
Participants' Accounts, and (b) the sum of amounts held in a suspense
account under Section 3.6(c), all valued as of the immediately
preceding Valuation Date. Thereafter, the Committee shall credit (or
charge) each Account of a Participant with such allocated net income,
gains or losses by multiplying such allocated net income, gains or
losses by a fraction, the numerator of which is the balance of such
Participant's Account, reduced by the amount of any distributions
therefrom, as of the immediately preceding Valuation Date, and the
denominator of which is the total value of all Participants' Accounts,
reduced by the amount of any distributions therefrom, as of the
immediately preceding Valuation Date.
4.3 Statement of Accounts. As soon as practicable after the
last day of each Plan Year, the Committee shall deliver to each
Participant a statement of his Account.
4.4 Participant Rights. Each Participant shall have the right
to direct the Committee with respect to shares (and fractional shares)
of stock of the Company allocated to his Account as to the manner of
voting such shares (and fractional shares) and such other rights
(including, but not limited to the right to sell or retain such shares
in extraordinary instances involving an unusual price and terms and
conditions for shares of common stock of the Company such as a tender
offer) as the Participant would be entitled to exercise if the
Participant were the shareholder of record for such shares as provided
in Section 7.8(c). In the event that a Participant shall fail to
direct the Committee as to the manner of voting shares of stock
allocated to the Participant's Account or as to the exercise of other
rights in respect of such shares, the Committee shall direct the
Trustee not to vote such shares or exercise such rights. The Company
shall notify each Participant of his rights (and the Committee of the
Participants' rights), as described under this Section 4.4, a
reasonable period prior to the date on which such rights must be
exercised (not less than 30 days prior to such date unless a lesser
period, in the opinion of counsel for the Company, is permitted,
considering applicable law and provisions with respect to shareholders
of the Company generally under the Company's by-laws) and provide each
Participant with all information with respect to such rights that a
shareholder of record would receive.
4.5 Participant's Interest in the Trust Fund. The Participant's
interest in the Trust Fund shall include all assets of the Trust Fund
allocated to the Participant's Account and any dividends or other
distributions made in respect thereto. All assets allocated to the
Participant's Account and all dividends or distributions received in
respect of assets held in the Participant's Account shall be invested
and reinvested in shares of common stock of the Company.
4.6 Expenses of the Trust Fund. Effective for periods before
January 1, 1990, all expenses of the Plan and of the Trust
("Expenses") of whatever kind including, but not limited to,
administrative and legal expenses, shall be paid by the Company and
shall in no event be paid with any assets of the Trust Fund.
Effective on or after January 1, 1990, Expenses shall be paid by the
Trust from Forfeitures in accordance with Section 10.7 to the extent
not paid by an Employer.
4.7 Separate Accounting For Contributions. Separate Accounts
shall be maintained for each Participant as described
in Section l.l hereof.
4.8 Correction of Error. In the event of any error, including
but not limited to an error in the adjustment of a Participant's
Accounts, an error in including or excluding persons as Participants,
or otherwise, the Committee, in its sole discretion, may correct such
error by either crediting or charging the adjustment required or such
adjustment as the Committee in its sole discretion shall determine to
be equitable, in order to make such correction either to or against
unclaimed amounts in accordance with Section 10.7 or to or against
income and expenses of the Plan for the Plan Year in which the
correction is made, or in the discretion of the Company, by Additional
Employer Contributions to the Plan.
4.9 Distribution Fund. Any of the provisions herein to the
contrary notwithstanding, the Committee shall have the authority to
direct the Trustee to transfer amounts currently distributable in cash
to Participants who have had a Termination of Service to a
distribution fund (the "Distribution Fund") during the calendar
quarter next following the calendar quarter within which such amounts
became distributable occurred. The Distribution Fund shall be held
(a) in a checking account of the Trustee in the name of the Trust with
the Trustee's banking department, and (b) in short term liquid
investments, in such types of investments or pooled, common,
commingled or collective trust funds, including those of the Trustee,
as the Committee may from time to time authorize the Trustee to invest
in such respective amounts and proportions and in such manner as the
Committee shall from time to time determine. The Committee may
authorize one or more of its members, or their designees, to sign,
manually, or by facsimile signature, any and all checks, drafts, and
orders, including orders or directions in informal or letter form,
against any funds in the Distribution Fund and the Trustee is
authorized to honor any and all checks, drafts and orders so signed.
Income, gains, losses and expenses of the Distribution Fund as of the
last day of each calendar quarter (to the extent not paid by an
Employer), shall be determined separately. Any net income of the
Distribution Fund shall be added to the net income of the Trust Fund
for such calendar quarter and any net losses of the Distribution Fund
for a Plan Year shall be paid by the Company. Checks for amounts
transferred to the Distribution Fund, shall be written and sent to
each Participant within 90 days after such amount has been transferred
to the Distribution Fund.
4.10 Diversification. Within 90 days after the last Valuation
Date within the Qualified Election Period, a Qualified Participant may
make a diversification election with respect to the Specified Portion
of his Accounts. The specified portion of a Participant's Accounts
which he elects to diversify shall be distributed to the Participant
within 90 days after the Qualified Election Period. Distributions
shall be made in accordance with this Section 4.10 not withstanding
the requirement that employer securities be held in the Plan for 84
months after the date of acquisition by the Plan. As used herein, the
following terms shall have the meanings indicated:
(a) "Qualified Election Period" means the 6-Plan Year
period beginning with the later of:
(1) the first Plan Year in which the individual first
becomes a Qualified Participant, or
(2) the first Plan Year beginning after December 31,
1986.
(b) "Qualified Participant" means any Participant who has
completed at least ten years of participation in the Plan and has
attained age 55.
(c) "Specified Portion" means 25 percent of the shares of
common stock of McDonald's corporation acquired by the Plan after
December 31, 1986; provided that the Participant's Specified
Portion shall be zero unless the value of such common stock of
McDonald's Corporation is equal to or more than $500. In a
Participant's sixth Qualified Election Period, the preceding
sentence shall be applied by substituting "50 percent" for
"25 percent". The amount which shall be subject to a
diversification election shall equal (A)(i) 25 percent and 50
percent, as applicable, be multiplied by (ii) the sum of (a) the
value of the common stock of McDonald's Corporation credited to
the Participant's Accounts plus (b) the amounts previously
distributed pursuant to this Section 4.10 and Section 5.4 reduced
by (B) the amounts previously distributed pursuant to this
Section 4.10.
The foregoing provisions shall apply only to the extent that a
Participant is not otherwise eligible to elect to receive
distributions of amounts eligible to be distributed hereunder in
accordance with Section 5.4 during a Qualified Election Period.
SECTION V
Distribution of Benefits
5.1 Payment of Benefits in General. A Participant's benefits
under this Plan shall be payable in accordance with the provisions of
this Article.
(a) If a Participant has a Termination of Service due to
retirement on or after his Benefits Retirement Date, Total and
Permanent Disability, or for any other reason other than death,
the Participant's Accrued Benefit shall be payable in a lump sum
in accordance with and subject to the limitations of Section 5.2.
(b) If a Participant dies, his Accrued Benefit shall be
payable to his surviving spouse if he was married at the time of
his death, or to his other Beneficiary or Beneficiaries if he was
not married at the time of his death or to the extent he is
permitted to name a Beneficiary other than his surviving spouse
in a lump sum in accordance with and subject to the limitations
of Section 5.3.
(c) A Participant may elect to receive an in-service
distribution of his Accrued Benefit in accordance with and
subject to the limitations of Section 5.4.
(d) If a Participant is otherwise entitled to a
distribution due to retirement on or after Benefits Retirement
Date, Total and Permanent Disability, death or other Termination
of Service, the Committee may require the immediate distribution
of small vested Accrued Benefits in accordance with and subject
to the limitations of Section 5.9, notwithstanding the provisions
of Sections 5.2, and 5.3.
5.2 Distributions of Participant's Accounts. If the value of a
Participant's Considered Accounts is not greater than $3,500 on the
Valuation Date immediately following his Termination of Service,
within a reasonable time after such Valuation Date, the Participant's
Accounts shall be distributed to the Participant; and within a
reasonable time after the date on which the Company makes its
contribution to the Trust for the Plan Year in which the Participant
has a Termination of Service, the Participant shall receive a
distribution of any amount credited after the initial distribution to
his Accounts for such Plan Year. If the value of a Participant's
Considered Accounts is greater than $3,500 on the Valuation Date
immediately following his Termination of Service, the Participant's
Accounts shall be distributed at an administratively convenient time
(but not later than April 1) in the year following the later of the
year in which the Participant attains age 70-1/2 or has a Termination
of Service, unless such Participant elects in writing to receive a
lump sum distribution at an earlier date.
The term, "Considered Accounts" as used in this Section 5.2 shall
have the following meaning:
(a) Effective before July 1, 1993, the Participant's
Accounts under the Plan; and
(b) Effective on and after July 1, 1993, the sum of (1) the
Participant's Accounts under the Plan on the date valued for
distribution and (2) his vested Net Balance Account under the
Profit Sharing Program.
5.3 Death of Participant.
(a) Form of Payment. If a Participant dies before the
Participant's Accounts have been paid from the Plan, distribution
shall be made as follows:
(1) If the Participant has a surviving spouse, the
Trustee shall distribute the Participant's Accounts to the
Participant's surviving spouse as the Participant's
Beneficiary in accordance with Section 5.3(b) unless the
Participant has named another Beneficiary, the Participant's
spouse has consented in accordance with Section 5.8.
(2) If the Participant does not have a surviving
spouse or if the Participant, with his spouse's consent in
accordance with Section 5.8, has named another Beneficiary,
the Trustee shall distribute the Participant's Accounts in
accordance with Section 5.3(a)(3) to the Beneficiary named
by the Participant in accordance with Section 5.3(b).
(3) The Participant's Accounts shall be distributed
within a reasonable time after the Valuation Date following
the Participant's death in a lump sum except as provided in
Section 5.7, and any amount credited after the initial
distribution to the Participant's Accounts for the Plan Year
will also be so distributed within a reasonable time after
the date on which the Company makes its contribution to the
Trust for the Plan Year within which the Participant dies.
(b) Beneficiary Designation. Subject to Section 5.3(a),
the Participant may change his designation of Beneficiary from
time to time by filing a new Beneficiary designation form with
the Committee. No designation of Beneficiary or change in
designation of Beneficiary shall be effective until filed with
the Committee. Except as provided in Section 5.3(a)(1), if a
Participant shall fail to file a valid Beneficiary designation
form, or if all persons designated on the Beneficiary designation
form predecease the Participant, the Trustee shall distribute
such Participant's Accounts in a lump sum to the following
persons, in the following order of precedence:
(1) His surviving spouse;
(2) Those persons designated by the Participant to
receive his death benefits under the Group Life Insurance
Program of the Employer or, in the absence of such
designation, under the Profit Sharing Plan portion of the
McDonald's Corporation Profit Sharing Program;
(3) The person or entity who receives the
Participant's McDonald's group term life insurance benefits
whether or not designated as beneficiary by the Participant;
(4) Lawful descendants including adopted children, per
stirpes;
(5) Parents in equal shares, or (if only one parent
survives him) his surviving parent;
(6) Lawful descendants of his parents, per stirpes;
and
(7) His estate.
(c) Period of Distribution to Beneficiary. Notwithstanding
any other provisions of this Plan or any elections made by a
Participant or Beneficiary, the Participant's Accrued Benefit
shall be distributed within five (5) years of the Participant's
death.
5.4 Participant Withdrawals. A Participant may, on a form at
such time and in such manner as the Committee shall prescribe, elect
to have distributed to him in shares of common stock of the Company,
the shares which have been allocated to his Account for eighty-four
(84) months following the month in which such shares were allocated to
his Account, provided that such withdrawals shall consist of whole
shares.
5.5 Form of Distributions. The form of distribution to a
Participant or Beneficiary shall be as follows:
(a) Effective before January 1, 1993:
(1) If the distribution would be five (5) or more
shares of common stock of the Company, the distribution
shall be in the form of shares of common stock of the
Company unless the Participant or Beneficiary elects to
receive payment in cash.
(2) If the distribution would be fewer than five (5)
shares of common stock of the Company, the distribution
shall be in the form of cash, unless the Participant or
Beneficiary elects to receive payment in the form of shares
of common stock of the Company.
(b) Effective on or after January 1, 1993:
(1) If amount to be distributed from the Participant's
Account has a value of $1500 or more, the distribution shall
be in the form of shares of common stock of the Company
unless the Participant or Beneficiary elects to receive
payment in cash.
(2) If the amount to be distributed has a value of
less than $1500, the distribution shall be in the form of
cash, unless the Participant or Beneficiary elects to
receive payment in the form of shares of common stock of the
Company.
A Participant or Beneficiary may exercise his right to elect the
form of distribution by filing a written election with the Committee
on forms approved by the Committee at the time and in a manner
prescribed by the Committee on or before the date of distribution.
If a Participant or Beneficiary receives a cash distribution, the
value of his Account shall be determined as of the last day preceding
the date of distribution.
If a Participant's interest in his Account is distributable and
includes a fractional share, the fractional share shall be distributed
to the Participant in cash.
5.6 Incompetency, Distribution of Benefits. In the event a
Participant or Beneficiary is declared an incompetent or is a minor,
and a conservator, guardian or other person legally charged with his
care is appointed, any benefits to which such Participant or
Beneficiary is entitled shall be distributable to such conservator,
guardian or other person legally charged with his care.
If a Participant or Beneficiary is incompetent, a minor or in the
opinion of the Committee, would fail to derive benefit from
distribution of his Account and, if a conservator, guardian or other
person legally charged for his care has not been appointed, the
Committee, in its sole and exclusive discretion, may (a) require the
appointment of a conservator or guardian, (b) distribute the
Participant's Account to relatives of the Participant or Beneficiary
for the benefit of the Participant or Beneficiary, or (c) distribute
such Account directly to or for the benefit of the Participant or
Beneficiary.
The decision of the Committee in such matters shall be final,
binding and conclusive upon the Employer and the Trustee and upon each
Employee, Participant, Beneficiary and every other person or party
interested or concerned, and neither the Employer, the Committee nor
the Trustee shall be under any duty to see to the proper application
of such distributions made to a Participant or Beneficiary, or
conservator, guardian or relatives of a Participant or Beneficiary.
5.7 Deduction of Taxes from Amounts Payable. The Trustee may
deduct from the amount to be distributed such amount as the Trustee,
in its sole discretion, deems proper to protect the Plan
Administrator, Trustee and the Trust against liability for the payment
of death, succession, inheritance, income, or other taxes, and out of
the money so deducted, the Trustee may discharge any such liability
and pay the amount remaining to the Participant, the Beneficiary or
the deceased Participant's estate, as the case may be.
5.8 Spousal Consent to Waiver. A valid spousal consent to the
Participant's naming of a Beneficiary other than his spouse shall be:
(a) in a writing acknowledging the effect of the consent;
(b) witnessed by a notary public; and
(c) effective only for the spouse who exercises the
consent;
provided that notwithstanding the provisions of this Section V, the
consent of a Participant's spouse shall not be required if it is
established to the satisfaction of a Plan representative that such
consent may not be obtained because there is no spouse, because the
spouse cannot be located or because of such other circumstances as the
Secretary of the Treasury may by regulations prescribe.
5.9 Latest Time of Distribution. Any provision herein to the
contrary notwithstanding, distribution shall be made to a Participant
not later than sixty (60) days after the latest of the close of the
Plan Year in which (a) occurs the Participant's Benefits Retirement
Date, (b) the Participant has a Termination of Service, and (c) occurs
the 10th anniversary of the year in which the Participant commenced
participation in the Plan; provided that, all of a Participant's
Accounts shall be distributed not later than the Participant's
Required Beginning Date and further provided that, a Participant, who
is entitled to receive a distribution pursuant to Section V, must
submit a claim for benefits before any distribution will be made
hereunder.
5.10 Direct Rollovers. This Section 10.5 applies to
distributions made on or after January 1, 1993.
(a) Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election
under this Section 5.10, a Distributee may elect, at the time and
in the manner prescribed by the Committee, to have any portion of
an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Distributee in a Direct
Rollover; subject to such reasonable administrative requirements
as the Committee may from time to time establish which may
include, but shall not be limited to, requirements consistent
with Treasury Regulations and other guidance issued by the
Internal Revenue Service permitting de minimis standards for
amounts eligible to be rolled over or paid partly to the
Participant and partly rolled over. A Participant may make an
election pursuant to this Section 5.10 only after the Distributee
has met otherwise applicable requirements for receipt of a
distribution under the Plan, including but not limited to any
applicable requirements that the Participant's spouse or
(pursuant to a Qualified Domestic Relations Order as defined in
Section 10.5) former spouse consent to the Participant's waiver
of a Qualified Joint and Survivor Annuity or Qualified
Preretirement Survivor Annuity.
If a Participant or Beneficiary elects to receive a Direct
Rollover, such distribution may be made or commence to be made less
than 30 days after the notice required under Section 1.411(a)-11(c) of
the Income Tax Regulations is given, provided that:
(A) the Committee shall clearly inform the Participant
or Beneficiary that he has a right to a period of at least
30 days after receiving the notice to consider the decision
of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and
(B) the Participant or Beneficiary after receiving the
notice affirmatively elects a distribution.
(b) In the absence of the adoption by the Committee of any
requirements to the contrary, the following shall apply:
(A) A Distributee whose Eligible Rollover Distribution
is less than $200 upon the Valuation Date immediately
preceding the date of distribution shall not be permitted to
elect to have all or any portion of the distribution made in
the form of a Direct Rollover.
(B) A Distributee who elects a Direct Rollover in an
amount equal to at least $500 may also elect to have the
remaining portion of his distribution paid to the
Distributee.
(C) A Distributee shall be permitted to divide an
Eligible Rollover Distribution into separate distributions
to be paid to two or more Eligible Retirement Plans in two
or more Direct Rollovers.
(D) A Distributee's election to make or not to make a
Direct Rollover with respect to a payment in a series of
periodic payments shall apply to all subsequent payments in
the series until the Distributee changes his election.
(E) If a Distributee, who has been notified as to the
availability of the Direct Rollover option, fails to elect a
Direct Rollover with respect to an Eligible Rollover
Distribution, such Distributee shall be deemed to have
elected not to make a Direct Rollover.
(c) As used in this Section 5.10, the following terms shall
have the following meanings:
(A) "Eligible Rollover Distribution" means any
distribution of all or any portion of the balance to the
credit of the Distributee, except that an Eligible Rollover
Distribution does not include: any distribution that is one
of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint
life expectancies) of the Distributee and the Distributee's
designated Beneficiary, or for a specified period of ten
years or more; any distribution to the extent such
distribution is required under Section 5.2; and the portion
of any distribution that is not includable in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to employer
securities).
(B) "Eligible Retirement Plan" means an individual
retirement account described in Section 408(a) of the
Internal Revenue Code, an individual retirement annuity
described in Section 408(b) of the Internal Revenue Code, an
annuity plan described in Section 403(a) of the Internal
Revenue Code, or a qualified trust described in Section
401(a) of the Internal Revenue Code, that accepts the
Distributee's Eligible Rollover Distributions. However, in
the case of an Eligible Rollover Distribution to a
Participant's surviving spouse or surviving former spouse
who is a Distributee pursuant to a Qualified Domestic
Relations Order, an Eligible Retirement Plan is an
individual retirement account or individual retirement
annuity.
(C) "Distributee" means a Participant. In addition, a
Participant's surviving spouse and a former spouse who is
the alternate payee under a Qualified Domestic Relations
Order are Distributees with regard to the interest of such
spouse or former spouse.
(D) "Direct Rollover" means a payment by the Plan to
the Eligible Retirement Plan specified by the Distributee.
SECTION VI
Subsidiary Participation
6.1 Adoption of Plan and Trust by a Subsidiary. Any Subsidiary
of the Company may, with the approval of the Board of Directors and
under such terms and conditions as the Board of Directors may
prescribe, adopt the Plan and Trust by resolution of its own board of
directors.
6.2 Withdrawal from Plan by Participating Employer. While it is
not the present intention of any Employer to withdraw from the Plan,
any Employer other than the Company shall have the right, at any time,
to withdraw from the Plan and Trust by delivering to the Committee and
the Trustee written notice of its election to so withdraw.
Upon receipt of such notice by the Committee, the Accounts of
Participants employed by the withdrawing Employer as of the date of
withdrawal shall thereafter be distributable
in shares of common stock of the Company by the Trustee at the
discretion of the Committee at such time or times as the Committee, in
its sole discretion, may deem to be in the best interest of such
Participants or their Beneficiaries, provided that, except as provided
in Section 10.6, no distribution shall be made to a Participant with
respect to shares of common stock of the Company which have been
allocated to the Participant's Account for less than eighty-four (84)
months following the month in which such shares were allocated to the
Participant's Account, unless the Participant shall have a separation
from service as defined in Section 409(d) of the Internal Revenue
Code.
SECTION VII
Administration of the Plan
7.1 Appointment of Trustee. The Board of Directors shall have
the power to remove the Trustee, with or without cause, upon thirty
(30) days' written notice to the Trustee unless the Trustee agrees to
a shorter period, and to appoint a successor to a Trustee which has
resigned or been removed, and, with the consent of the Trustee or
Trustees, to appoint a co-Trustee or co-Trustees.
The appointment of a successor Trustee or co-Trustee shall become
effective upon acceptance in writing of such appointment by the
successor Trustee or co-Trustee. The successor Trustee or co-Trustee
may be either a corporate Trustee or an individual Trustee, and the
successor Trustee or co-Trustee shall have no liability for anything
done or omitted to be done by the former Trustee or co-Trustee prior
to the appointment of the successor Trustee or co-Trustee. Each
successor Trustee appointed to and accepting a Trusteeship hereunder
shall have all the rights, title, powers, duties, exemptions and
limitations of the original Trustee.
7.2 Appointment of Committee; Tenure in Office. The Committee,
which shall be the Administrator of the Plan, unless the Committee
shall appoint an Employee to act as Plan Administrator, shall consist
of not less than five (5) members who shall be appointed by the Board
of Directors. The Board of Directors shall have power to determine the
period during which any Committee member shall serve and, in its
discretion, may remove any member of the Committee at any time without
assigning any reason therefor. Upon a vacancy occurring upon the
death, resignation or removal by the Board of Directors of any member
of the Committee, a successor shall be appointed by the Board of
Directors within ninety (90) days after such event. Until a vacancy
in the Committee is filled by the Board of Directors the remaining
members of the Committee shall continue to act as the Committee. The
Board of Directors shall certify to the Trustee the names of the
members of the Committee and, thereafter, any change in its
membership.
7.3 Named Fiduciaries. The Company, the Board of Directors, the
Committee and every employee of the Company, its subsidiaries or
affiliates who becomes a fiduciary by virtue of the delegation of
duties, responsibilities and authority with respect to the
administration and operation of the Plan in accordance with this
Section 7 shall be considered "named fiduciaries" as provided in
Section 402(a)(2) of ERISA, and accordingly afforded the protection
provided for in Section 405(c)(2) of ERISA with respect to named
fiduciaries.
7.4 Delegation of Responsibilities. The Committee and the Board
of Directors shall have the authority to delegate, from time to time,
by instrument in writing, all or any part of its responsibilities
under the Plan (including the power to delegate) to such person or
persons as it may deem advisable, and in the same manner to revoke any
such delegation of responsibility. Periodically, the delegate shall
report to the Committee or Board of Directors concerning the discharge
of the delegated responsibilities. Any action of the delegate in the
exercise of such delegated responsibilities shall have the same force
and effect for all purposes hereunder as if such action had been taken
by the Committee or the Board of Directors. Neither the Committee,
the Board of Directors nor any of their members shall be liable for
the acts or omissions of such delegate except as otherwise required by
federal law.
7.5 Committee Action by Majority - Authorization of Members to
Execute Documents. The Committee may act at a meeting (including a
telephonic meeting) by the consent of a majority of its members or
without a meeting by the unanimous written consent of its members.
No member of the Committee shall vote or decide upon any matter
relating solely to himself or to his specific rights or benefits under
the Plan.
The Committee may authorize any of its members to execute on its
behalf any document which reflects an action or decision of the
Committee and the Committee shall notify the Trustee in writing of the
names of its members so authorized. Until the Committee revokes or
alters such authorization by a written notice to the Trustee, the
Trustee may accept and rely upon any document executed by such members
as reflecting action by the Committee.
7.6 Secretary. The Committee shall appoint a Secretary (who
may, but need not be a member of the Committee) to keep records of the
acts and resolutions of the Committee. The Secretary may also perform
such other duties which may, from time to time, be delegated to him in
writing by the Committee.
7.7 Member as Participant. A member of the Committee who is
also a Participant or a Beneficiary shall receive any benefit to which
he may be entitled as a Participant or Beneficiary in the Plan so long
as such benefit is computed and paid on a basis that is consistent
with the terms of the Plan as applied to all other Participants and
Beneficiaries.
7.8 Committee Powers and Duties. The Committee shall have such
powers as may be necessary to discharge its duties hereunder,
including but not by way of limitation, the following:
(a) To construe and interpret the Plan and to decide all
questions concerning the eligibility for participation and
relating to the amount and manner of distribution of benefits
hereunder;
(b) To receive from the Company and Employer and/or have
prepared by the Company and Employer such records and information
as shall be necessary for the proper administration of the Plan;
(c) To receive each Participant's directions to the Trustee
with respect to the Participant's rights described under Section
4.4, to aggregate all Participant directions (including to the
extent possible, Participant directions with respect to
fractional shares) and to communicate to the Trustee all such
Participant directions;
(d) To have prepared and furnished to Participants and/or
Beneficiaries all information required under federal law or
provisions of this Plan to be furnished to them;
(e) To have prepared and filed or published with the
Department of Labor or the Department of Treasury or other
governmental agency all reports and other information required
under federal law;
(f) To have maintained records of the Trust Fund with
respect to the Accounts of Participants;
(g) To review and monitor the performance of the Trustee
with respect to the responsibilities set forth in the Trust
Agreement; and
(h) To maintain separate accounts for Participants in
accordance with Section 4.7 of the Plan.
7.9 Rules and Decisions. The Committee may, from time to time,
adopt such rules and regulations as it deems necessary or desirable
which are consistent with the provisions or the purposes of the Plan.
All rules and decisions of the Committee shall be uniformly and
consistently applied to all Participants in similar circumstances.
The Committee shall be entitled to, but need not, rely upon
information furnished by a Participant or Beneficiary, a delegate, an
Employer or Employee, a prior Licensee, the Trustee or the Company.
7.10 Agents and Counsel. The Committee and its delegates shall
have the authority to appoint or employ individuals to assist or to
advise in the administration of the Plan and any other agent deemed
advisable, including but not limited to, independent certified public
accountants and legal and actuarial counsel, who may but need not be
the accountants or the legal or the actuarial counsel of the Company.
7.11 Authorization of Benefit Distribution. The Committee shall
issue directions to the Trustee concerning all distributions to be
made from the Trust Fund pursuant to the provisions of the Plan, and
warrants that all such directions are in accordance with the Plan.
7.12 Claims Procedure.
(a) Each Participant or Beneficiary (for purposes of this
Section called a "Claimant") may submit his claim for benefits to
the Plan Administrator in writing in such form as is permitted by
the Committee. A Claimant shall have no right to seek review of
a denial of benefits, or to bring any action in any court to
enforce a claim for benefits, prior to his filing a claim for
benefits and exhausting his rights to review in accordance with
this Section.
When a claim for benefits has been filed properly, such
claim for benefits shall be evaluated and the Claimant shall be
notified of the approval or the denial within ninety (90) days
after the receipt of such claim unless special circumstances
require an extension of time for processing the claim. If such
an extension of time for processing is required, written notice
of the extension shall be furnished to the Claimant prior to the
termination of the initial ninety (90) day period, and such
notice shall specify the special circumstances requiring an
extension and the date by which a final decision will be reached
(which date shall not be later than one hundred and eighty (180)
days after the date on which the claim was filed). A Claimant
shall be given a written notice in which he shall be advised as
to whether the claim is granted or denied, in whole or in part.
If a claim is denied, in whole or in part, the Claimant shall be
given written notice which shall contain (1) the specific reasons
for the denial, (2) references to pertinent Plan provisions on
which the denial is based, (3) a description of any additional
material or information necessary to perfect the claim and an
explanation of why such material or information is necessary, and
(4) the Claimant's rights to seek review of the denial.
(b) If a claim is denied, in whole or in part, the Claimant
shall have the right to request that the Committee review the
denial, provided that he files a written request for review with
the Committee within sixty (60) days after the date on which he
received written notification of the denial. A Claimant (or his
duly authorized representative) may review pertinent documents
and submit issues and comments in writing to the Committee.
Within sixty (60) days after a request for review is received,
the review shall be made and the Claimant shall be advised in
writing of the decision on review, unless special circumstances
require an extension of time for processing the review, in which
case the Claimant shall, within such initial sixty (60) day
period, be given a written notification specifying the reasons
for the extension and when such review shall be completed
(provided that such review shall be completed within one hundred
and twenty (120) days after the date on which the request for
review was filed). The decision on review shall be forwarded to
the Claimant in writing and shall include specific reasons for
the decision and references to Plan provisions upon which the
decision is based. A decision on review shall be final and
binding on all persons for all purposes. If a Claimant shall
fail to file a request for review in accordance with the
procedures herein outlined, such Claimant shall have no rights to
review and shall have no right to bring action in any court, and
the denial of the claim shall become final and binding on all
persons for all purposes.
7.13 Information to be Furnished to Committee. The Company and
Employers shall furnish the Committee or its delegate such data and
information as the Committee may reasonably request.
Participants and their Beneficiaries shall furnish to the
Committee such evidence, data or information as the Committee or its
delegate shall request.
7.14 Fiduciary Responsibility. If a Plan fiduciary acts in
accordance with ERISA, Title I, Subtitle B, Part 4:
(a) in determining that the Participant's spouse has
consented to the naming of a Beneficiary other than the spouse or
that the consent of the Participant's spouse may not be obtained
because there is no spouse, the spouse cannot be located or other
circumstances prescribed by the Secretary of the Treasury by
regulations, then to the extent of payments made pursuant to such
consent, revocation or determination, the Plan and its
fiduciaries shall have no further liability.
(b) in treating a domestic relations order as being (or not
being) a Qualified Domestic Relations Order, or, during any
period in which the issue of whether a domestic relations order
is a Qualified Domestic Relations Order is being determined (by
the Committee, by a court of competent jurisdiction, or
otherwise), in segregating in a separate account in the Plan or
in an escrow account the amounts which would have been payable to
the alternate payee during such period if the order had been
determined to be a Qualified Domestic Relations Order, in paying
the amounts segregated or held in escrow to the person entitled
thereto if within 18 months the domestic relations order (or a
modification thereof) is determined to be a Qualified Domestic
Relations Order, in paying such amounts to the person entitled
thereto if there had been no order, if within 18 months the
domestic relations order is determined not to be qualified or if
the issue is not resolved within 18 months and in prospectively
applying a domestic relations order which is determined to be
qualified after the close of the 18-month period, then the
obligation of the Plan and its fiduciaries to the Participant and
each alternate payee shall be discharged to the extent of any
payment made pursuant to such acts.
7.15 Fiduciary as Participant. A fiduciary who is also a
Participant or a Beneficiary shall receive any benefit to which he may
be entitled as a Participant or Beneficiary in the Plan so long as
such benefit is computed and paid on a basis that is consistent with
the terms of the Plan as applied to all other Participants and
Beneficiaries.
SECTION VIII
Amendment, Termination, Merger and Consolidation of Plan
8.1 Amendment. The Board of Directors shall have the right, at
any time and from time to time, to amend, in whole or in part, any or
all of the provisions of the Plan and the Trust Agreement (except
Section 8.4 of the Plan, which shall not be amended except as provided
therein), provided that no amendment shall authorize or permit any
part of the Trust Fund to be used for or diverted to purposes other
than for the exclusive benefit of the Participants or their
Beneficiaries, or permit any portion of the Trust Fund to revert to or
become the property of any Employer, except as may be required to
obtain or retain qualification, or as permitted, under Section 401(a)
of the Internal Revenue Code or to be a Plan described in Sections
301(d) and 301(e) of the Tax Reduction Act, Section 331 of the
Economic Recovery Tax Act and Section 409 of the Internal Revenue Code
and that no amendment shall deprive any Participant or any Beneficiary
of a deceased Participant of any of the benefits or of an optional
form of benefit to which he is entitled under this Plan with respect
to contributions previously made, nor shall any amendment decrease any
Participant's Accounts provided that no amendment made in conformance
to provisions of the Internal Revenue Code or any other statute
relating to employee's trusts, or any official regulations or rulings
issued pursuant thereto, shall be considered prejudicial to the rights
of any Participant or Beneficiary. No amendment which affects the
rights, duties or responsibilities of the Trust may be made without
the Trustee's written consent.
The Committee shall have the same authority with respect to the
adoption of amendments to the Plan and Trust Agreement as the Board of
Directors in the following circumstances:
(a) to adopt amendments to the Plan which the Committee
determines are necessary or desirable for the Plan to comply with
or to obtain benefits or advantages under the provisions of
applicable law, regulations or rulings or requirements of the
Internal Revenue Service or other government administrative
agency or changes in such law, regulations, rulings or
requirements; and
(b) to adopt any other procedural or cosmetic amendment
that the Committee determines to be necessary or desirable that
does not materially change benefits to Participants or their
Beneficiaries or materially increase the Employer's contributions
to the Plan.
The Committee shall provide notice of amendments adopted by the
Committee to the Board of Directors on a timely basis.
8.2 Termination of Plan By the Company. Although it is the
intention of the Company that this Plan be permanent, the Company
reserves the right to terminate the Plan and the Trust at any time, by
delivering to the Committee, the Trustee and each Employer hereunder,
written notice thereof.
Upon termination of the Plan or permanent discontinuance of
Employer Contributions to the Plan, the interest of each Participant
and Beneficiary in his Accounts shall remain fully vested, but shall
be subject to readjustment as provided in Section 4.2 hereof. In the
event of termination of this Plan, the Board of Directors may direct
that the Trustee continue the Trust for a specified period of time, or
for such period of time as the Trustee, in its sole discretion, may
deem to be in the best interest of the Participants or their
Beneficiaries. In the absence of specific direction from the Board of
Directors, the Trust assets shall be distributed by the Trustee in
shares of common stock of the Company. Notwithstanding the provision
of this Section, no distributions shall be made to any Participant of
any assets which have been allocated to the Participant's Account for
less than eighty-four (84) months following the month in which such
assets were allocated to the Participant's Account, unless the
Participant shall have a separation from service as defined in Section
409(d) of the Internal Revenue Code, except as otherwise permitted in
Section 10.6.
Upon the partial termination of the Plan, the interest of each
Participant whose employment is terminated on account of (or who
otherwise suffers such) partial termination shall remain fully vested.
Sales of McDonald's Restaurants by the Company or another Employee
will not constitute a partial termination unless such sale under all
other facts and circumstances constitutes a partial termination. In
the absence of specific direction from the Board of Directors, the
Trust assets shall be distributed by the Trustee in shares of Company
Stock.
8.3 Merger, Consolidation, or Transfer of Assets. This Plan
shall not be merged or consolidated with, nor shall any assets or
liabilities be transferred to, any other plan, unless the benefits
payable to each Participant, if the Plan were terminated immediately
after such action, would be not less than the benefits which would
have been payable to each such Participant if the Plan had been
terminated immediately before such action.
8.4 Put Option Requirement. If any common stock of the Company
allocated to a Participant's Accounts, except the Participant's
Additional Employer Contribution Account, under the Plan (the "Tax
Credit Employer Security") is not publicly traded when distributed, or
thereafter ceases to be publicly traded (or becomes subject to a
trading limitation), the distributee shall be given an option
exercisable only by the distributee (or the distributee's donees or a
person, including an estate of a distributee, to whom the Tax Credit
Employer Security passes by reason of the Participant's death), to put
the Tax Credit Employer Security to the Company for a 15-month period
beginning on the date of distribution. If such Tax Credit Employer
Security ceases to be publicly traded (or becomes subject to a trading
limitation) within 15 months after the distribution, the Company shall
notify the Participant in writing on or before the 10th day after the
date the Tax Credit Employer Security ceased to be publicly traded (or
became subject to a trading limitation) that the Tax Credit Employer
Security is subject to a put option to the Company for the remainder
of the 15-month period (or, if such notice is given after the 10th day
after the Tax Credit Employer Security ceases to be publicly traded,
for a period equal to the remainder of the 15-month period plus a
number of days equal to the number of days between such 10th day and
the date on which such notice is actually given), and such notice
shall inform the distributees of the terms of the put option. The
Plan shall have the right, but not the obligation, to assume the
rights and obligations of the Company with respect to the put option
at the time the put option is exercised. A put option hereunder shall
be exercised by the holder notifying the Company in writing that the
put option is being exercised. The period during which the put option
is exercisable shall be extended by the duration of any time period
when a distributee is unable to exercise it because the Company is
prohibited from honoring it under applicable Federal or State law. A
put option shall be exercisable at a price equal to the value of the
Tax Credit Employer Security determined as of the most recent
Valuation Date. Payment under a put option shall not be restricted by
the provisions of a loan or other arrangement, including the Company's
articles of incorporation, unless so required by State law.
Provisions for a payment under any put option shall be reasonable.
Payments may be deferred only if adequate security and a reasonable
rate of interest are provided and if periodic payments are made in
substantially equal installments beginning within 30 days after the
date the put option is exercised and extending for no more than 5
years after the put option is exercised.
The provisions of this Section 8.4 shall not be terminated or
amended except to the extent required or permitted under applicable
law, Treasury Regulations and Rulings of the Internal Revenue Service.
SECTION IX
Top Heavy Provisions
9.1 Application. The definitions in Section 9.2 shall apply
under this Section IX and the special rules in Section 9.3 shall
apply, notwithstanding any other provisions of the Plan, for any Plan
Year in which the Plan is a Top Heavy Plan and for such other Plan
Years as may be specified herein.
9.2 Special Top Heavy Definitions. The following special
definitions shall apply under this Section IX.
(a) "Aggregate Employer Contributions" means the sum of all
Employer Contributions and Forfeitures under this Plan allocated
for a Participant to the Plan and employer contributions and
forfeitures allocated for the Participant to all Related Defined
Contribution Plans in the Aggregation Group; provided, however,
that for Plan Years beginning before January 1, 1985, employer
contributions attributable to salary reduction or similar
arrangement which complies with Section 401(k) of the Internal
Revenue Code ("Salary Reduction Contributions") under any Related
Defined Contribution Plans shall not be included in Aggregate
Employer Contributions and further provided that for Plan Years
which began after December 31, 1988, Salary Reduction
Contributions made under any Related Plan and any employer
contributions to such Plan which match Salary Reduction
Contributions.
(b) "Aggregation Group" means the group of plans in a
Mandatory Aggregation Group, if any, that includes the Plan,
unless inclusion of Related Plans in the Permissive Aggregation
Group in the Aggregation Group would prevent the Plan from being
a Top Heavy Plan, in which case "Aggregation Group" means the
group of plans consisting of the Plan and each other Related Plan
in a Permissive Aggregation Group with the Plan.
(1) "Mandatory Aggregation Group" means each plan
(considering the Plan and Related Plans) that, during the
Plan Year that contains the Determination Date or any of the
four preceding Plan Years,
(A) had a participant who was a Key Employee, or
(B) was necessary to be considered with a plan in
which a Key Employee participated in order to enable
the plan in which the Key Employee participated to meet
the requirements of Section 401(a)(4) and Section 410
of the Internal Revenue Code.
If the Plan is not described in (A) or (B) above, it
shall not be part of a Mandatory Aggregation Group.
(2) "Permissive Aggregation Group" means the group of
plans consisting of (A) the plans, if any, in a Mandatory
Aggregation Group with the Plan, and (B) any other Related
Plan, that, when considered as a part of the Aggregation
Group, does not cause the Aggregation Group to fail to
satisfy the requirements of Section 401(a)(4) and Section
410 of the Internal Revenue Code. A Related Plan in (B) of
the preceding sentence may include a simplified employee
pension plan, as defined in Internal Revenue Code Section
408(k), and a collectively bargained plan, if when
considered as a part of the Aggregation Group such plan does
not cause the Aggregation Group to fail to satisfy the
requirements of Section 401(a)(4) and Section 410 of the
Internal Revenue Code considering, if the plan is a
multiemployer plan as described in Internal Revenue Code
Section 414(f) or a multiple employer plan as described in
Internal Revenue Code Section 413(c), benefits under the
plan only to the extent provided to employees of the
employer because of service with the employer and, if the
plan is a simplified employee pension plan, only the
employer's contribution to the plan.
(c) "Determination Date" means, with respect to a Plan
Year, the last day of the preceding Plan Year or, in the case of
the first Plan Year, the last day of such Plan Year. If the Plan
is aggregated with other plans in the Aggregation Group, the
Determination Date for each other plan shall be, with respect to
any Plan Year, the Determination Date for each such other plan
which falls in the same calendar year as the Determination Date
for the Plan.
(d) "Key Employee" means, for the Plan Year containing the
Determination Date, any person or the beneficiary of any person
who is an employee or former employee of an Employer or a
Commonly Controlled Entity as determined under Internal Revenue
Code Section 416(i) and who, at any time during the Plan Year
containing the Determination Date or any of the four (4)
preceding Plan Years (the "Measurement Period"), is a person
described in paragraph (1), (2), (3) or (4), subject to
paragraph (5).
(1) An officer of the Employer or Commonly Controlled
Entity who:
(A) in any Measurement Period, in the case of a
Plan Year beginning after December 31, 1983, is an
officer during the Plan Year and has annual
Compensation for the Plan Year in an amount greater
than fifty percent (50%) of the amount in effect under
Section 415(b)(1)(A) of Internal Revenue Code for the
calendar year in which such Plan Year ends ($30,000 in
1989, adjusted in subsequent years as determined in
accordance with regulations prescribed by the Secretary
of the Treasury or his delegate pursuant to the
provisions of Section 415(d) of the Internal Revenue
Code); and
(B) in any Measurement Period, in the case of a
Plan Year beginning on or before December 1, 1983, is
an officer during the Plan Year, regardless of his
Compensation (except to the extent that applicable law,
regulations and rulings indicate that the compensation
requirement set forth in subparagraph (A) above is
applicable).
No more than a total of fifty (50) persons (or, if
lesser, the greater of three (3) persons or ten percent
(10%) of all persons or beneficiaries of persons who are
employees or former employees) shall be treated as Key
Employees under this paragraph (1) for any Measurement
Period. In the case of an Employer or Commonly Controlled
Entity which is not a corporation (I) in any Measurement
Period, in the case of a Plan Year beginning on or before
February 28, 1985 no persons shall be treated as Key
Employees under this paragraph (1); and (II) in any
Measurement Period, in the case of a Plan Year beginning
after February 28, 1985, the term "officer" as used in this
subsection (d) shall include administrative executives as
described in Section 1.416-1(T-13) of the Treasury
Regulations.
(2) One (1) of the ten (10) persons who, during a Plan
Year in the Measurement Period:
(A) have annual Compensation from the Employer or
a Commonly Controlled Entity for such Plan Year greater
than the amount in effect under Section 415(c)(1)(A) of
the Internal Revenue Code for the calendar year in
which such Plan Year ends ($30,000 for 1989 or one-
fourth of the dollar limitation in effect under Section
415(b)(1)(A) of the Internal Revenue Code, adjusted in
subsequent years as determined in accordance with
regulations prescribed by the Secretary of the Treasury
or his delegate pursuant to the provisions of Section
415(d) of the Internal Revenue Code); and
(B) own (or are considered as owning within the
meaning of Internal Revenue Code Section 318) in such
Plan Year, the largest percentage interests in the
Employer or a Commonly Controlled Entity, in such Plan
Year, provided that no person shall be treated as a Key
Employee under this paragraph unless he owns more than
one-half percent (1/2%) interest in the Employer or a
Commonly Controlled Entity.
No more than a total of ten (10) persons or
beneficiaries of persons who are employees or former
employees shall be treated as Key Employees under this
paragraph (2) for any Measurement Period.
(3) A person who, for a Plan Year in the Measurement
Period, is a more than five percent (5%) owner (or is
considered as owning more than five percent (5%) within the
meaning of Internal Revenue Code Section 318) of the
Employer or a Commonly Controlled Entity.
(4) A person who, for a Plan Year in the Measurement
Period, is a more than one percent (1%) owner (or is
considered as owning more than one percent (1%) within the
meaning of Internal Revenue Code Section 318) of the
Employer or a Commonly Controlled Entity and has an annual
Compensation for such Plan Year from the Employer and
Commonly Controlled Entities of more than $150,000.
(5) If the number of persons who meet the requirements
to be treated as Key Employees under paragraph (1) or (2)
exceed the limitation on the number of Key Employees to be
counted under paragraph (1) or (2), those persons with the
highest annual Compensation in a Plan Year in the
Measurement Period for which the requirements are met and
who are within the limitation on the number of Key Employees
will be treated as Key Employees.
If the requirements of paragraph (1) or (2) are met by
a person in more than one (1) Plan Year in the Measurement
Period, each person will be counted only once under
paragraph (1) or (2):
(A) under paragraph (1), the Plan Year in the
Measurement Period in which a person who was an officer
and had the highest annual Compensation shall be used
to determine whether the person will be treated as a
Key Employee under the preceding sentence;
(B) under paragraph (2), the Plan Year in the
Measurement Period in which the ownership percentage
interest is the greatest shall be used to determine
whether the person will be treated as a Key Employee
under the preceding sentence.
Notwithstanding the above provisions of paragraph (5),
a person may be counted in determining the limitation under
both paragraphs (1) and (2). In determining the sum of the
Present Value of Accrued Benefits for Key Employees under
subsection (h) of this Section, the Present Value of Accrued
Benefits for any person shall be counted only once.
(e) "Non-Key Employee" means (i) a person or the
beneficiary of a person with an account balance in the Plan or an
account balance or accrued benefit in any Related Plan in the
Aggregation Group or (ii) an employee, a former employee or the
beneficiary of such person who has received a distribution during
the Measurement Period and (iii) who during the Measurement
Period is not a Key Employee.
(f) "Present Value of Accrued Benefits" means, for any Plan
Year, an amount equal to the sum of (1), (2) and (3) for each
person who, in the Plan Year containing the Determination Date,
was a Key Employee or a Non-Key Employee and, further provided
that the accrued benefit of any Non-Key Employee shall be
determined under the method which is used for accrual purposes
for all Related Defined Benefit Plans or, if no single accrual
method is used in all such plans, such accrued benefit shall be
determined as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under Section 411(b)(1)(C) of the
Internal Revenue Code.
(1) Subject to (4) below, the value of a person's
Accounts under the Plan and each Related Defined
Contribution Plan in the Aggregation Group, determined as of
the valuation date coincident with or immediately preceding
the Determination Date, adjusted for contributions due as of
the Determination Date, as follows:
(A) in the case of a plan not subject to the
minimum funding requirements of Section 412 of the
Internal Revenue Code, by including the amount of any
contributions actually made after the valuation date
but on or before the Determination Date, and, in the
first plan year of a plan, by including contributions
made after the Determination Date that are allocated as
of a date in that first plan year; and
(B) in the case of a plan that is subject to the
minimum funding requirements, by including the amount
of any contributions that would be allocated as of a
date not later than the Determination Date, plus
adjustments to those amounts as required under
applicable rulings, even though those amounts are not
yet required to be contributed or allocated (e.g.,
because they have been waived) and by including the
amount of any contributions actually made (or due to be
made) after the valuation date but before the
expiration of the extended payment period in
Section 412(c)(10) of the Internal Revenue Code.
(2) Subject to (4) below, the sum of the actuarial
present values of a person's accrued benefits under each
Related Defined Benefit Plan in the Aggregation Group,
expressed as a benefit commencing at normal retirement date
(or the person's attained age, if later) determined based on
the following actuarial assumptions:
(A) Interest rate 5%; and
(B) Post Retirement Mortality: 1984 Unisex
Pension Table;
and determined in accordance with Internal Revenue Code
Section 416(g), provided, however, that if a defined benefit
plan in the Aggregation Group provides for different or
additional actuarial assumptions to be used in determining
the present value of accrued benefits thereunder for the
purpose of determining the top heavy status thereof, then
such different or additional actuarial assumptions shall
apply with respect to each defined benefit plan in the
Aggregation Group.
The present value of an accrued benefit for any person
who is employed by an employer maintaining a plan on the
Determination Date is determined as of the most recent
valuation date which is within a 12-month period ending on
the Determination Date, provided however that:
(C) for the first plan year of the plan, the
present value for an employee is determined as if the
employee had a Termination of Service (1) on the
Determination Date or (2) on such valuation date but
taking into account the estimated accrued benefit as of
the Determination Date; and
(D) for the second and subsequent plan years of
the plan, the accrued benefit taken into account for an
employee is not less than the accrued benefit taken
into account for the first plan year unless the
difference is attributable to using an estimate of the
accrued benefit as of the Determination Date for the
first plan year and using the actual accrued benefit as
of the Determination Date for the second plan year.
For purposes of this paragraph (2), the valuation date
is the valuation date used by the plan for computing plan
costs for minimum funding, regardless of whether a valuation
is performed that year.
If the plan provides for a nonproportional subsidy as
described in Treasury Regulations Section 1.416-1 (T-27),
the present value of accrued benefits shall be determined
taking into account the value of nonproportional subsidized
early retirement benefits and nonproportional subsidized
benefit options.
(3) Subject to (4) below, the aggregate value of
amounts distributed during the plan year that includes the
Determination Date or any of the four preceding plan years
including amounts distributed under a terminated plan which,
if it had not been terminated, would have been in the
Aggregation Group.
(4) The following rules shall apply in determining the
Present Value of Accrued Benefits:
(A) Amounts attributable to qualified voluntary
employee contributions, as defined in Section 219(e) of
the Internal Revenue Code, shall be excluded.
(B) In computing the Present Value of Accrued
Benefits with respect to rollovers or plan-to-plan
transfers, the following rules shall be applied to
determine whether amounts which have been distributed
during the five (5) year period ending on the
Determination Date from or accepted into this Plan or
any plan in the Aggregation Group shall be included in
determining the Present Value of Accrued Benefits:
(i) Unrelated Transfers accepted into the
Plan or any plan in the Aggregation Group after
December 31, 1983 shall not be included.
(ii) Unrelated Transfers accepted on or
before December 31, 1983 and all Related Transfers
accepted at any time into the Plan or any plan in
the Aggregation Group shall be included.
(iii) Unrelated Transfers made from the Plan
or any plan in the Aggregation Group shall be
included.
(iv) Related Transfers made from the Plan or
any plan in the Aggregation Group shall not be
included by the transferor plan (but shall be
counted by the accepting plan).
The accrued benefit of any individual who has not
received any Compensation from an Employer maintaining the
Plan at any time during the five (5) year period ending on
the Determination Date shall be excluded in computing the
Present Value of Accrued Benefits.
(g) "Related Transfer" means a rollover or a plan-to-plan
transfer which is either not initiated by the Employee or is made
between plans each of which is maintained by a Commonly
Controlled Entity.
(h) A "Top Heavy Aggregation Group" means an Aggregation
Group in any Plan Year for which, as of the Determination Date,
the sum of the Present Value of Accrued Benefits for Key
Employees under all plans in the Aggregation Group exceeds sixty
percent (60%) of the sum of the Present Value of Accrued Benefits
for all employees under all plans in the Aggregation Group;
provided that, for purposes of determining the sum of Present
Value of Accrued Benefits for all employees, former Key Employees
who have not performed any services for an Employer or a Commonly
Controlled Entity in the Plan Year containing the Determination
Date at the preceding four Plan Years shall be excluded entirely
from the calculation of the Present Value of Accrued Benefits for
the Plan Year that contains the Determination Date. For purposes
of applying the special rules herein with respect to a Super Top
Heavy Plan, a Top Heavy Aggregation Group will also constitute a
"Super Top Heavy Aggregation Group" if in any Plan Year as of the
Determination Date, the sum of the Present Value of Accrued
Benefits for Key Employees under all plans in the Aggregation
Group exceeds ninety percent (90%) of the sum of the Present
Value of Accrued Benefits for all employees under all plans in
the Aggregation Group.
(i) "Top Heavy Plan" means the Plan in any Plan Year in
which it is a member of a Top Heavy Aggregation Group, including
a Top Heavy Aggregation Group consisting solely of the Plan. For
purposes of applying the rules herein with respect to a Super Top
Heavy Plan, a Top Heavy Plan will also constitute a "Super Top
Heavy Plan" if the Plan in any Plan Year is a member of a Super
Top Heavy Aggregation Group, including a Super Top Heavy
Aggregation Group consisting solely of the Plan.
(j) "Unrelated Transfer" means a rollover or a plan-to-plan
transfer which is both initiated by the Employee and (a) made
from a plan maintained by a Commonly Controlled Entity to a plan
maintained by an employer which is not a Commonly Controlled
Entity or (b) made to a plan maintained by a Commonly Controlled
Entity from a plan maintained by an employer which is not a
Commonly Controlled Entity.
9.3 Special Top Heavy Provisions. For each Plan Year in which
the Plan is a Top Heavy Plan, the following rules shall apply, except
that the special provisions of this Section 9.3 shall not apply with
respect to any employee included in a unit of employees covered by an
agreement which the Secretary of Labor finds to be a
collective-bargaining agreement between employee representatives and
one or more employees if there is evidence that retirement benefits
were the subject of good faith bargaining between such employee
representative and the Employer or Employers:
(a) Minimum Employer Contributions.
(1) For any Plan Year in which the Plan is a Top
Heavy Plan, the Employers shall make additional Employer
Contributions to the Plan as necessary for each Participant
who is employed on the last day of the Plan Year and who is
a Non-Key Employee to bring the amount of his Aggregate
Employer Contributions for the Plan Year up to at least
three percent (3%) of his Compensation, or if the Plan is
not required to be included in an aggregation group in order
to permit a defined benefit plan in the aggregation group to
satisfy the requirements of Section 401(a)(4) or Section 410
of the Internal Revenue Code, such lesser amount as is equal
to the largest percentage of a Key Employee's Compensation
(as limited in accordance with Section 9.3(c)) allocated to
the Key Employee as Aggregate Employer Contributions.
(2) For purposes of determining whether a Non-Key
Employee is a Participant entitled to have minimum Employer
Contributions made on his behalf, a Non-Key Employee will be
treated as a Participant even if he is not otherwise a
Participant (or accrues no benefit) under the Plan because:
(A) he has failed to complete the requisite
number of hours of service (if any) after becoming a
Participant in the Plan,
(B) he is excluded from participation in the Plan
(or accrues no benefit) merely because his compensation
is less than a stated amount, or
(C) he is excluded from participation in the Plan
(or accrues no benefit) merely because of a failure to
make mandatory employee contributions or, if the Plan
is a Plan described in Section 401(k) of the Internal
Revenue Code, because of a failure to make elective
401(k) contributions.
(b) Vesting. For each Plan Year in which the Plan is a Top
Heavy Plan and for each Plan Year thereafter, the vested right of
each Participant who has an Hour of Service after the Plan
becomes a Top Heavy Plan to a percentage of his Accrued Benefit
to the extent the Accrued Benefit had not been forfeited prior to
the Plan's becoming a Top Heavy Plan shall remain fully vested
and nonforfeitable.
(c) Top Heavy Limitations.
(1) In computing the limitations under Section 3.6
hereof, if the Plan is a Top Heavy Plan and is not a Super
Top Heavy Plan, the special rules of Section 416(h) of the
Internal Revenue Code shall be applied in accordance with
applicable regulations and rulings so that
(A) in determining the denominator of the Defined
Contribution Plan Fraction and the Defined Benefit Plan
Fraction, at each place at which "1.25" would have been
used, "1.00" shall be substituted and
(B) in determining the numerator of the
transition fraction described in Section 415(e)(6)(B)
of the Internal Revenue Code by substituting $41,500
for $51,875,
unless the special requirements of Section 416(h)(2) of
the Internal Revenue Code have been satisfied.
(2) In computing the limitations under Section 3.6
hereof, if the Plan is a Super Top Heavy Plan, the special
rules of Section 416(h) of the Code shall be applied in
accordance with applicable regulations and rulings so that
(A) in determining the denominator of the Defined
Contribution Plan Fraction and the Defined Benefit Plan
Fraction, at each place at which "1.25" would have been
used, "1.00" shall be substituted and
(B) in determining the numerator of the
transitional fraction described in Section 415(e)(6)(B)
of the Internal Revenue Code $41,500 shall be
substituted for $51,875.
(d) Transition Rule for a Top Heavy Plan. Notwithstanding
the provisions of Section 9.3(c), for each Plan Year in which the
Plan is a Top Heavy Plan and in which the Plan does not meet the
special requirements of Section 416(h)(2) of the Internal Revenue
Code in order to use 1.25 in the denominator of the Defined
Contribution Plan Fraction and the Defined Benefit Plan Fraction,
if an Employee was a participant in one or more defined benefit
plans and in one or more defined contribution plans maintained by
the employer before the plans became Top Heavy Plans and if such
Participant's Combined Fraction exceeds 1.00 because of accruals
and additions that were made before the plans became Top Heavy
Plans, a factor equal to the lesser of 1.25 or such lesser amount
(but not less than 1.00) as shall be needed to make the
Employee's Combined Fraction equal to 1.00 shall be used in the
denominator of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction if there are no further accruals or
annual additions under any Top Heavy Plans until the
Participant's Combined Fraction is not greater than 1.00 when a
factor of 1.00 is used in the denominators of the Defined Benefit
Plan Fraction and the Defined Contribution Plan Fraction. Any
provisions herein to the contrary notwithstanding, if the Plan is
a Top Heavy Plan and the Plan does not meet the special
requirements of Section 416(h)(2) of the Internal Revenue Code in
order to use 1.25 in the denominator of the Defined Benefit Plan
Fraction and the Defined Contribution Plan Fraction, there shall
be no further Annual Additions for a Participant whose Combined
Fraction is greater than 1.00 when a factor of 1.00 is used in
the denominator of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction, until such time as the
Participant's Combined Fraction is not greater than 1.00.
(e) Transition Rule for a Super Top Heavy Plan.
Notwithstanding the provisions of Sections 9.3(c) and 9.3(d), for
each Plan Year in which the Plan is a Super Top Heavy Plan, (1)
if an Employee was a participant in one or more defined benefit
plans and in one or more defined contribution plans maintained by
the employer before the plans became Super Top Heavy Plans, and
(2) if such Participant's Combined Fraction exceeds 1.00 because
of accruals and additions that were made before the plans became
Super Top Heavy Plans and if immediately before the plans became
Super Top Heavy Plans the Combined Fraction as then computed did
not exceed 1.00, then a factor equal to the lesser of 1.25 or
such lesser amount (but not less than 1.00) as shall be needed to
make the Employee's Combined Fraction equal to 1.00 shall be used
in the denominator of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction if there are no further
accruals or annual additions under any Super Top Heavy Plans
until the Participant's Combined Fraction is not greater than
1.00 when a factor of 1.00 is used in the denominators of the
Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction. Any provisions herein to the contrary notwithstanding,
if the Plan is a Super Top Heavy Plan, there shall be no further
Annual Additions for a Participant whose Combined Fraction is
greater than 1.00 when a factor of 1.00 is used in the
denominator of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction until the Participant's Combined
Fraction is not greater than 1.00.
(f) Terminated Plan. If the Plan becomes a Top Heavy Plan
after it has formally been terminated, has ceased crediting for
benefit accruals and vesting and has been or is distributing all
plan assets to participants and their beneficiaries as soon as
administratively feasible or if a terminated plan has distributed
all benefits of participants and their beneficiaries, the
provisions of Section 11.3 shall not apply to the Plan.
(g) Frozen Plans. If the Plan becomes a Top Heavy Plan
after contributions have ceased under the Plan but all assets
have not been distributed to Participants or their beneficiaries,
the provisions of Section 9.3 shall apply to the Plan.
SECTION X
Miscellaneous Provisions
10.1 Headings. Headings of sections and subsections of the Plan
are inserted for convenience of reference and are not part of the Plan
and are not to be considered in the construction thereof.
10.2 Indemnification. The Company shall indemnify and hold
harmless each member of the Committee, each member of the Board of
Directors, each individual Trustee and each and every employee of the
Company or of a Commonly Controlled Entity, its Subsidiaries or
Affiliates to whom are delegated duties, responsibilities and
authority with respect to the Plan and the Trust against all claims,
liabilities, fines and penalties and all expenses reasonably incurred
by or imposed upon him (including but not limited to reasonable
attorney fees) which arise as a result of his actions or failure to
act in connection with the operation and administration of the Plan
and the Trust to the extent lawfully allowable and to the extent that
such claim, liability, fine, penalty or expense is not paid for by
liability insurance purchased by or paid for by the Company.
Notwithstanding the foregoing, the Company shall not indemnify any
person for any such amount incurred through any settlement or
compromise of any action unless the Company consents in writing to
such settlement or compromise. Expenses incurred in defending a civil
or criminal suit or proceeding may be paid by the Company in advance
of the final disposition of such action, suit or proceeding as
authorized by the Company in the specific case upon receipt of an
undertaking by or on behalf of the member of the Committee, member of
the Board of Directors, each individual Trustee or employee of the
Company or of a Commonly Controlled Entity, its Subsidiary, or
Affiliate, to repay such amount, unless it shall ultimately be
determined that he is entitled to be indemnified by the Company as
authorized in this Section 10.2.
10.3 Employees' Trust. This Plan is created for the exclusive
purpose of providing benefits to the Participants in the Plan and
their Beneficiaries, and shall be interpreted in a manner consistent
with its being a Plan described in Sections 401(a) and 409 of the
Internal Revenue Code, Sections 301(d) and 301(e) of the Tax Reduction
Act and Section 331 of the Economic Recovery Tax Act, and the Trust
exempt under Section 501(a) of the Internal Revenue Code.
10.4 Nonalienation of Benefits.
(a) Benefits payable under this Plan shall not be subject
in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution
or levy of any kind, either voluntary or involuntary, prior to
actually being received by the person entitled to the benefit
under the terms of the Plan; and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, charge,
garnish, execute on, levy or otherwise dispose of any right to
benefits payable hereunder, shall be void. The Trust Fund shall
not in any manner be liable for, or subject to, the debts,
contracts, liabilities, engagements or torts of any person
entitled to benefits hereunder. The foregoing provisions of this
Section 10.4(a) shall not preclude the (1) enforcement of a
Federal tax levy made pursuant to Section 6331 of the Internal
Revenue Code or (2) collection by the United States on a judgment
resulting from an unpaid tax assessment.
(b) Notwithstanding Section 10.4(a), the Trustee
(1) shall comply with an order entered on or after
January 1, 1985 determined by the Plan Administrator to be a
Qualified Domestic Relations Order as provided in
Section 10.5,
(2) shall comply with a domestic relations order
entered before January 1, 1985 if benefits are already being
paid under such order, and
(3) may treat an order entered before January 1, 1985
as a Qualified Domestic Relations Order even if it does not
meet the requirements of Section 10.5.
10.5 Qualified Domestic Relations Order.
(a) "Qualified Domestic Relations Order" means any
judgment, decree, or order (including approval of a property
settlement agreement)
(1) which is made pursuant to a state domestic
relations law (including a community property law),
(2) which relates to the provision of child support,
alimony payments, or marital property rights to a spouse,
former spouse, child, or other dependent of a Participant,
(3) which creates or recognizes the existence of an
alternate payee's right to or assigns to an alternate payee
the right to receive all or a portion of the Participant's
Accounts under the Plan, and
(4) with respect to which the requirements of
paragraphs (b) and (c) are met.
(b) A domestic relations order can be a Qualified Domestic
Relations Order only if such order clearly specifies
(1) the name and the last known mailing address, if
any, of the Participant and the name and mailing address of
each alternate payee covered by the order;
(2) the amount or percentage of the Participant's
Accrued Benefit to be paid by the Plan to each such
alternate payee, or the manner in which such amount or
percentage is to be determined;
(3) the number of payments or period to which such
order applies; and
(4) each Plan Year to which such order applies.
(c) A domestic relations order can be a Qualified Domestic
Relations Order only if such order does not
(1) require the Plan to provide any type or form of
benefit, or any option not otherwise provided under the
Plan,
(2) require the Plan to provide increased benefits
(determined on the basis of actuarial value), or
(3) require the payment of benefits to an alternate
payee which are required to be paid to another alternate
payee under another order previously determined to be a
Qualified Domestic Relations Order.
If so ordered under a Qualified Domestic Relations Order, a
distribution shall be made of shares of Company Stock held in the
Participant's Unmatched Employer Contribution Account, Employer
Matching Contribution Account, Participant Contribution Account
and PAYSOP Employer Contribution Account for less than 84 months
following the month in which such shares were allocated to his
Accounts.
(d) In the case of any payment before a Participant has had
a Termination of Service, a domestic relations order shall not be
treated as failing to meet the requirements of Section 10.5(c)(1)
solely because such order requires that payment of benefits be
made to an alternate payee
(1) (A) Effective for periods before January 1, 1993
on or after the date on which the Participant attains (or
would have attained) the age which is ten years before the
Normal Retirement Date under the Plan, and
(B) Effective for periods on or after January 1, 1993,
without regard to the Participant's attainment of any
specified age; provided that until an IRS determination
letter is received stating that the Plan as amended by this
provision is qualified, no common stock of the Company which
has been held in a Participant's Account for less than 84
months shall be distributed pursuant to a QDRO to an
alternate payee with respect to a Participant who is both
under age 50 and not otherwise eligible to receive a
distribution under the Plan.
(2) as if the Participant had retired on the date on
which such payment is to begin under such order, and
(3) in any form in which such benefits may be paid
under the Plan to the Participant.
(e) To the extent provided in a Qualified Domestic
Relations Order, the former spouse of a Participant shall be
treated as the surviving spouse of such Participant for the
purposes of Section 5.3.
10.6 Exception to Distribution Limitation Period.
Notwithstanding any other provision of the Plan regarding limitations
on the period of distribution of Trust Fund assets, the distribution
limitation period restrictions imposed by Internal Revenue Code
Section 409(d) with respect to distribution of Trust Fund assets from
a Participant's Account shall not apply to assets which have been
allocated to a Participant's Account in the event of:
(a) a transfer of the Participant to the employment of an
acquiring employer from the employment of an Employer upon the
sale by the Employer to the acquiring employer of (i)
substantially all of the assets used by the Employer in a trade
or business conducted by the Employer; or (ii) the sale of
substantially all of the stock of a subsidiary of the Employer;
or
(b) with respect to the stock of the Employer, a
disposition of the Employer's interest in a subsidiary where the
Participant continues employment with such subsidiary.
10.7 Unclaimed Amounts.
(a) Effective for periods before January 1, 1990, unclaimed
amounts shall consist of the amounts of the Accounts of a
retired, deceased or terminated Participant which are not
distributed because of the Committee's inability, after a
reasonable search, to locate a Participant or his Beneficiary
within a period of two years after the payment of benefits
becomes due. Subject to Section 4.8, unclaimed amounts for a
Plan Year shall be allocated as provided in Section 3.3(d) as
Additional Employer Contributions for the Plan Year in which such
two-year period shall end. If an Unclaimed Amount is
subsequently properly claimed by the Participant or the
Participant's Beneficiary, said amount shall be paid to such
Participant or Beneficiary by treating such amount as an expense
of all Participants' Additional Employer Contribution Accounts
during the Plan Year in which the Participant or Beneficiary
makes such claim, unless the Company in its discretion makes a
contribution to the Plan for such Plan Year in an amount
sufficient to pay such amount.
(b) Effective for periods on or after January 1, 1990,
unclaimed amounts shall consist of the amounts of the Accounts of
a retired, deceased or terminated Participant which are not
distributed because of the Committee's inability, after a
reasonable search, to locate a Participant or his Beneficiary
within a period of two years after the payment of benefits
becomes due. As of the last day of the Plan Year in which such
two-year period shall end, and as of the last day of each
succeeding Plan Year in which there remain any Unclaimed Amounts,
each Account which contains Unclaimed Amounts shall be reduced by
an amount ("Forfeiture"), as determined hereinafter, which
Forfeiture shall be applied (i) to restore any prior years'
Forfeitures of Unclaimed Amounts which are properly claimed by a
Participant or by a Participant's Beneficiary during such Plan
Year and (ii) to pay any expenses of the Plan or Trust incurred
during such Plan Year. The total amount of Forfeitures from
Unclaimed Amounts for each Plan Year shall be equal to the sum of
(A) prior years' Forfeitures from Unclaimed Amounts which are
properly claimed by a Participant or by a Participant's
Beneficiary during such Plan Year and are not paid from
contributions made to the Plan by the Company for such Plan Year
and (B) expenses of the Plan incurred during such Plan Year that
are not paid by the Company. Forfeitures for each Plan Year
shall come first from those Unclaimed Amounts which have remained
in the Trust for the greatest period of time since first becoming
Unclaimed Amounts, and thereafter from Unclaimed Amounts in
descending order of maturity. If a Forfeiture of Unclaimed
Amounts is subsequently properly claimed by the Participant or
the Participant's Beneficiary, said amount shall be paid to the
Participant or Beneficiary from Forfeitures for the Plan Year in
which the Participant or Beneficiary makes such claim, as
provided in this Section 10.7, or, to the extent such current
year's Forfeitures are not sufficient, from contributions made to
the Plan by the Company for such purpose.
Subject to receipt of a favorable determination by the
Internal Revenue Service that the application of Forfeitures
pursuant to the provisions of this sentence will not adversely
affect the qualification of the Plan as a tax credit employee
stock ownership plan within the meaning of Section 409(a) of the
Internal Revenue Code or, alternatively, that the Plan, as
amended to provide for the application of Forfeitures pursuant to
the provisions of this sentence, continues to qualify as a tax
credit employee stock ownership plan within the meaning of
Section 409(i) of the Internal Revenue Code, Forfeitures of
Unclaimed Amounts may be applied to the payment of Plan expenses
pursuant to this Section 10.7 without regard to the limitations
on reimbursement for expenses prescribed by Section 409(i) of the
Internal Revenue Code.
10.8 Invalidity of Certain Provisions. If any provision of this
Plan shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof and this
Plan shall be construed and enforced as if such provisions had not
been included.
10.9 Gender and Number. Except when otherwise indicated by the
context, any masculine terminology herein shall also include the
feminine and the singular shall also include the plural.
10.10 Law Governing. This Plan and Trust shall be construed
and enforced according to the laws of the State of Illinois other than
its laws respecting choice of law, to the extent not preempted by
ERISA.
Executed in multiple originals this 21st day of November, 1994.
McDONALD'S CORPORATION
By: /s/ Stanley R. Stein
----------------------------
Its: Senior Vice President