EXHIBIT 10(c)(i)
McDONALD'S
SUPPLEMENTAL EMPLOYEE BENEFIT EQUALIZATION PLAN
("McCAP II")
McDONALD'S
SUPPLEMENTAL EMPLOYEE BENEFIT EQUALIZATION PLAN
(McCAP II)
Section 1
Introduction
1.1 The Plan and Its Effective Date. The McDonald's
Supplemental Employee Benefit Equalization Plan (formerly, the
McDonald's 1986 Tax Reform Equalization Plan) as amended and
restated, effective January 1, 1989 and again amended and
restated January 1, 1990 (the "Plan" or "McCAP II") is hereby
amended and restated, effective January 1, 1996, except as
otherwise provided herein. The Plan provides certain benefits
previously provided by McDonald's 1986 Tax Reform Equalization
Plan with respect to years before January 1, 1989 and certain
additional benefits.
1.2 Purpose. McDonald's Corporation ("McDonald's" or the
"Company") maintains the McDonald's Corporation Profit Sharing
Program ("Profit Sharing Program") which has four components, the
Profit Sharing Plan, McDESOP, the Leveraged ESOP and the
McDonald's Stock Sharing Plan which are intended to meet the
requirements of a qualified plan under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code"). Code
Section 402(g) generally limits to $9,500 (in 1996, as adjusted
in subsequent years by the Secretary of Treasury for cost of
living adjustments in accordance with Code Section 402(g)(5)) the
maximum amount of employee elective deferrals under a qualified
plan ("Elective Contribution Limit"); Code Section 401(a)(17)
limits to $150,000 (in 1996, as adjusted in subsequent years as
provided by the Secretary of the Treasury) the amount of
compensation which may be taken into account for a Plan Year
under a qualified plan ("Compensation Limit"); and elective
deferrals to a nonqualified plan are not taken into account in
determining compensation and benefits under the qualified plans
("Elective Deferral Exclusions") (such limits and exclusion are
collectively referred to herein as the "Limits").
However, the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), permits the provision of benefits under an
unfunded plan maintained by an employer primarily for the purpose
of providing deferred compensation for a select group of
management or highly compensated employees. The purpose of the
Plan is to provide benefits to eligible employees which would be
provided under the Profit Sharing Program as in effect on
January 1, 1989, and thereafter, as from time to time amended,
but which are not provided thereunder because of the Limits,
subject to the requirement that the benefits provided under this
Plan shall be determined as though the only employee elected
deferrals of an Active Participant, as defined in Section 2.1,
are the Participant Elected Contributions elected under the
McDESOP portion of the Profit Sharing Program, the Profit Sharing
Program Equalization Plan ("McEqual"), the McDonald's 1989
Executive Equalization Plan ("McCAP I") and under Section 2.4
hereof. In determining the amounts to be credited to the
accounts of an Active Participant, as defined in Section 2.1,
during a calendar year under the Plan, McEqual, McCAP I, and the
Profit Sharing Program, the Committee may make assumptions based
upon reasonable estimates and, as necessary, make subsequent
adjustments to the extent the estimates prove to be incorrect.
1.3. Defined Terms. Except as otherwise indicated
capitalized terms used in this plan document which are not
defined herein have the same meaning as the same term in the
McDonald's Profit Sharing Program.
Section 2
Participation and Benefits
2.1 Eligibility for Benefits. Before the beginning of each
calendar year, the Committee shall designate as eligible to be
credited with benefits under the Plan for such year a select
group of management or highly compensated employees of the
Company or any other entity which has adopted the Plan in
accordance with Section 4 who are not active participants under
McCAP I for such year ("Active Participants"). Persons to be
designated as Active Participants from the group of employees who
first become participants in the Profit Sharing Program during a
calendar year shall be designated by the Committee on or before
their Profit Sharing Program Entry Date. A person who was a
participant in McDonald's 1986 Tax Reform Equalization Plan for
periods before January 1, 1989 or who becomes an Active
Participant thereafter shall remain a participant ("Participant")
until all amounts credited to his account under the Plan
("McCAP II Account") have been distributed.
2.2 Amount of Benefits. The amount credited to an Active
Participant's McCAP II Account for a calendar year shall equal
(a) the amount, if any, the Active Participant would have
received under the Profit Sharing Program for that year
(including, if the Active Participant pursuant to Section 2.4 so
elects, the amount of any elections of Participant Elected
Contributions made by the Active Participant and any associated
Matching Contributions) in the absence of the limitations under
Section 415 of the Code as stated in Article IX thereof
("415 Limits") and in the absence of the Limits reduced by
(b) the sum of the amounts allocated to such Participant's
accounts under the Profit Sharing Program and amounts credited to
the Participant's account under McEqual for the calendar year
("Annual Benefit Credits"). Notwithstanding the foregoing, (1)
any amount distributed to a participant in the Profit Sharing
Program in accordance with Sections 4.1(c), 5.2(c), 5.2(e) or 5.4
of the Program shall be considered an amount which was received
under the Profit Sharing Program in the calendar year for which
the amount was contributed to the Profit Sharing Program (or
would have been so contributed in the absence of the Limits) and
(2) an Active Participant who does not have an election in effect
under Section 2.4 for a calendar year shall not be credited with
any Participant Elected Contributions or Employer Matching
Contributions hereunder for that calendar year.
2.3 Accounts and Income Credits. Amounts credited to a
Participant's McCAP II Account for periods before January 1, 1996
shall be credited to Participant's McCAP II Accounts as provided
by the Plan as then in effect. Such amounts and amounts credited
to a Participant's McCAP II Account with respect to periods after
December 31, 1995 shall be credited with net earnings, gains and
losses as described below:
(a) McCAP II Profit Sharing Investment Account. The
portion of a Participant's Annual Benefit Credits which, in
the absence of the Limits, would have been Employer Profit
Sharing Contributions to the Profit Sharing Plan portion of
the Profit Sharing Program, shall be credited to the
Participant's McCAP II Profit Sharing Investment Account for
a calendar year. A Participant's McCAP II Profit Sharing
Investment Account shall also be credited with any amounts
with respect to which a Participant has made a
Diversification Election, as provided in Section 2.5, and any
amounts subject to any election made by the Participant
pursuant to Section 2.6. A Participant's McCAP II Profit
Sharing Investment Account shall be credited with net
earnings, gains and losses as of each Valuation Date under
the Profit Sharing Program in an amount equal to the amount
which such account would have earned, gained or lost if at
all times fully invested in the same manner as the
Participant's Profit Sharing Fund Account under the Profit
Sharing Program.
(b) McCAP II McDonald's Common Stock Account. Subject
to Section 2.5, the portion of a Participant's Annual Benefit
Credits which, in the absence of the Limits, would have been
credited to such Active Participant's accounts under the
Profit Sharing Program with respect to Participant Elected
Contributions, Employer Matching Contributions and Employer
Leveraged ESOP Contributions shall be credited to the
Participant's McCAP II McDonald's Common Stock Account for a
calendar year. A Participant's McCAP II McDonald's Common
Stock Account shall be credited with net earnings, gains and
losses as of each Valuation Date under the Profit Sharing
Program in an amount equal to the amount which such account
would have earned, gained or lost if such amounts and the
income credited thereon were at all times fully invested in
the Profit Sharing McDonald's Common Stock Fund.
2.4 Deferral Elections. Each person who is a participant in
the Profit Sharing Program and who is designated by the Committee
as an Active Participant with respect to each calendar year may
elect by filing a written election with the Committee, in
accordance with such rules and procedures as the Committee shall
establish, before the beginning of each subsequent calendar year,
to have the Participant Elected Contributions and Employer
Matching Contributions described in Section 2.2, if any, credited
to his McCAP II Account. An employee who becomes a participant
in the Profit Sharing Program during a year who is designated by
the Committee as an Active Participant hereunder, may elect
within 60 days of the date he becomes a participant in the Profit
Sharing Program to have the Participant Elected Contributions and
Employer Matching Contributions, if any, described in Section 2.2
credited to his McCAP II Account.
If an Active Participant has an election pursuant to this
Section 2.4 in effect for a calendar year, such election and the
Active Participant's elected deferrals under McDESOP may not be
changed during the year. If an Active Participant does not have
an election in effect pursuant to this Section 2.4 for the
calendar year, any amounts of Participant Elected Contributions
in excess of the Elective Contribution Limit which are elected by
such Participant under the McDESOP portion of the Profit Sharing
Program either shall not be contributed or shall be returned to
him as provided thereunder and no benefit shall be credited to
him hereunder with respect to his Participant Elected
Contributions and Employer Matching Contributions under the
Profit Sharing Program.
2.5 Diversification of Investments. If a Participant makes a
Diversification Election in accordance with Section 10.10 of the
Profit Sharing Program (the "Diversification Election"), his
corresponding McCAP II accounts and subaccounts containing the
contributions and income with respect thereto which, if not for
the Limits, would have been credited to his accounts under the
McDESOP or the Leveraged ESOP portions of the Profit Sharing
Program shall to the same extent be credited to the Participant's
McCAP II Profit Sharing Investment Account and shall thereafter
be credited with income as provided in Section 2.3(a).
2.6 Transfers to the Profit Sharing Investment Account. A
Participant may make an irrevocable election to have all amounts
which have been credited to his McCAP II McDonald's Common Stock
Account through March 31, 1991, which represent amounts which
except for the Limits would have been credited to the Profit
Sharing Plan portion of the Profit Sharing Program and any
accumulated income credited thereon, credited with earnings,
gains and losses as of each Valuation Date, as defined in the
McDonald's Profit Sharing Program, equal to the amount which such
credited amounts would have earned, gained or lost if at all
times after the effective date of such election such amounts and
the income credited thereon had been fully invested in the
Participant's McCAP II Profit Sharing Investment Account. Any
election made pursuant to this Section shall be completed,
delivered to the Committee and made effective in such manner and
at such time as the Committee shall determine in accordance with
its rules concerning the manner of making investment elections
under the Profit Sharing Plan portion of the Profit Sharing
Program.
2.7 Vesting. A Participant shall be vested in the portions
of his McCAP II Account which in the absence of the Limits would
have been allocated to his Profit Sharing Account under the
Profit Sharing Program and the earnings, gains or losses thereon
to the same extent he is vested in his Profit Sharing Account
under the Profit Sharing Program. A Participant shall be vested
in the portions of his McCAP II Account which in the absence of
the Limits would have been allocated to his Leveraged ESOP
Account under the Profit Sharing Program and the earnings, gains
and losses thereon to the same extent he is vested in his
Employer Leveraged ESOP Account under the Profit Sharing Program.
All other amounts credited to a Participant's McCAP II Account
and the earnings thereon shall be fully vested.
2.8 Payment of Benefits. Distributions of the McCAP II
Account of a Participant who has not made a Delinking Election,
as provided in Section 2.10(a) or 2.10(b), shall be made as
follows:
(a) McDESOP Portion of McCAP II Account. The portion
of a Participant's McCAP II Account which in the absence of
the Limits would have been benefits provided by the McDESOP
portion of the Profit Sharing Program shall be paid to him in
cash at the same time and in the same form (other than in the
form of an annuity purchased from an insurance company) that
his account under the McDESOP portion of the Profit Sharing
Program is paid or commences to be paid.
(b) Profit Sharing Plan Portion of McCAP II Account.
The portion of a Participant's McCAP II Account which in the
absence of the Limits would have been benefits provided by
the Profit Sharing Plan portion of the Profit Sharing Program
shall be paid to the Participant in cash at the same time and
in the same form (other than in the form of an annuity
purchased from an insurance company) that his account under
the Profit Sharing Plan portion of the Profit Sharing Program
is paid or commences to be paid.
(c) Leveraged ESOP Portion of McCAP II Account. The
portion of a Participant's McCap II Account which in the
absence of the Limits would have been benefits provided by
the Leveraged ESOP portion of the Profit Sharing Program
shall be paid to him in cash at the same time and in the same
form (other than in the form of an annuity contract purchased
from an insurance company) that benefits are paid under the
Leveraged ESOP portion of the Profit Sharing Program.
(d) Annuity Elections. A participant in the Profit
Sharing Program who elects to receive his accounts under the
Profit Sharing Program in the form of an annuity shall
receive payment of the same portions of his McCap II Accounts
in installment payments over a period certain equal to the
joint and last survivor life expectancy of the Participant
and his beneficiary, if any, at the time that the annuity is
purchased under the Profit Sharing Program.
(e) Qualified Domestic Relations Order.
Notwithstanding the foregoing, no distribution shall be made
in accordance with Sections 2.8(a), 2.8(b) or 2.8(c) on
account of the payment, under the Profit Sharing Program, of
a distribution from the account of a participant who is, at
the time of distribution, an active McDonald's employee, nor
shall a distribution be made on account of a distribution
made from the Profit Sharing Program in accordance with a
qualified domestic relations order except as provided in
Section 3.8.
(f) Transaction Costs. To the extent that the amounts
described in Section 2.3(b) are used by the Participant or
former employee to purchase shares of McDonald's stock on the
open market in one or more transactions within seven months
after the date such amounts were distributed, the Company
shall reimburse such Participant or former employee for all
reasonable brokerage fees and other transaction costs
incurred by him in connection with such purchases upon
presentation to the Company not later than 60 days after the
date of each transaction or satisfactory evidence thereof.
2.9 Beneficiary Designation. Absent a Beneficiary Delinking
Election by a Participant under Section 2.10(c):
(a) A Participant's McCap II Profit Sharing Account
shall be paid to the beneficiary entitled to receive his
Profit Sharing Accounts under the Profit Sharing Program in
the same form and same time as distributions are made
thereunder.
(b) A Participant's McCap II McDESOP Account shall be
paid to the beneficiary entitled to receive his McDESOP
Accounts under the Profit Sharing Program in the same form
and same time as distributions are made thereunder.
(c) A Participant's McCap II Leveraged ESOP Account
shall be paid to the beneficiary entitled to receive his
Leveraged ESOP Accounts under the Profit Sharing Program in
the same form and the same time as distributions are made
thereunder.
2.10 Delinking Election. Distributions of McCap II Accounts
pursuant to a Delinking Election, as provided in Sections 2.10(b)
or 2.10(d), (the "Delinking Election") shall be made in
accordance with this Section 2.10 rather than Section 2.8. A
Participant's Delinking Election shall be irrevocable except to
the extent provided in this Section 2.10.
(a) Active Employees. Each Participant who has made a
Delinking Election as to distributions to be made in his
lifetime, as provided herein, shall receive distributions
after he has a Termination of Employment and during his life
in accordance with this Section 2.10(a) ("Lifetime Delinking
Election").
(1) Time of Lifetime Delinking Election. A
Participant who is an active employee on or after
September 20, 1995, may make a Lifetime Delinking
Election or a revised Lifetime Delinking Election to
change the form or timing of distributions under his
Lifetime Delinking Election at any time.
(2) Complete Election. Each Lifetime Delinking
Election shall designate the date on which the
Participant's account balances are to be paid or
commence to be paid and shall select whether payments
are to be made in the form of a single sum payment or in
installments. Installments may be paid monthly,
quarterly or annually over a period designated in the
Lifetime Delinking Election by the Participant which
period which shall not exceed the period specified in
Section 2.11(b). A Lifetime Delinking Election shall
not be effective unless it is complete and includes an
election as to the timing and form of the distribution
or distributions.
(3) Distribution Election. Each Participant who
is an active employee and who has made a Lifetime
Delinking Election shall be permitted to make a new
Lifetime Delinking Election changing his elections as to
the timing and form of his distribution. Each such
Lifetime Delinking Election which is made before
October 31, or such earlier date as the Committee shall
designate by giving notice to Participants, shall become
effective the next January 1 and shall remain effective
through at least December 31 of such year. In the
absence of a new Lifetime Delinking Election, the
Participant's prior Lifetime Delinking Election shall
stay in effect from year to year. The Lifetime
Delinking Election of a Participant who has a
Termination of Employment shall become irrevocable.
(4) Qualified Domestic Relations Order. No
distributions shall be made in accordance with Section
2.10 on account of the payment, under the Profit Sharing
Program, of a distribution from the McCAP II Account of
a Participant who is, at the time of distribution, an
active McDonald's employee, nor shall such a
distribution be made on account of a distribution made
from the Profit Sharing Program in accordance with a
qualified domestic relations order except as provided in
Section 3.8.
(b) Former Employees. Each Participant who was a
former employee on September 20, 1995, may make a Lifetime
Delinking Election or a Beneficiary Delinking Election,
before October 31, 1995, with respect to his McCap I, McCAP
II and McEqual account balances available for distribution
after December 31, 1995. Such a Lifetime Delinking Election
shall be irrevocable in all respects and shall designate both
the form in which the distributions are to be made (a single
sum distribution or monthly, quarterly or yearly installments
paid over a period not to exceed the period specified in
Section 2.11(b)), and the date on which distributions will be
made, if in a single sum, or commence to be made, if in
installments. Under a Beneficiary Delinking Election, the
former employee's beneficiary designation under the Profit
Sharing Program shall no longer apply to designate his
beneficiary under McEqual, McCAP I and McCAP II and he shall
complete a separate beneficiary designation which shall not
name different beneficiaries to receive the Profit Sharing,
McDESOP, leveraged ESOP and Stock Sharing portions of the
McEqual, McCAP I and McCAP II. Except as provided in this
Section 2.10(b), Lifetime Delinking Elections or Beneficiary
Delinking Elections shall not be made by former employees.
(c) Beneficiary Delinking Election. Effective on July
1, 1996 or at such earlier date as the Committee designates,
each Participant who is an active employee may make an
election to delink his beneficiary designation under the
Plan, McEqual or McCAP I (a "Beneficiary Delinking Election")
and may elect to designate beneficiaries to receive his
McEqual, McCAP I and McCAP II Accounts which may or may not
be different persons than the beneficiaries designated to
receive his Net Balance Accounts under the Profit Sharing
Program. Under a Beneficiary Delinking Election, a
Participant shall not name different beneficiaries to receive
the Profit Sharing, McDESOP, Leveraged ESOP and Stock Sharing
portions of the Plan, McEqual and McCAP I. However, several
beneficiaries can be designated to receive a proportion of
the total of such benefits.
(d) Beneficiary's Elections. Each beneficiary of a
deceased Participant who before his death made a Beneficiary
Delinking Election and each beneficiary who is the
beneficiary of a Participant who died before September 20,
1995, shall have a one time opportunity to make an election
designating the form (a single sum distribution or monthly,
quarterly or yearly installments) and the date on which
distributions will be made, if in a single sum, or commence
to be made, if in installments (a "Form of Payment Delinking
Election") as follows:
(1) The beneficiary of a former employee who died
before September 20, 1995, must make his Form of Payment
Delinking Election hereunder not later than October 31,
1995 and such election shall be made with respect to
amounts which otherwise would not be paid until after
December 31, 1995. If such a beneficiary does not make
a Delinking Election, distributions shall be made as
provided in Section 2.8.
(2) The beneficiary of a deceased Participant who
had made a Beneficiary Delinking Election before his
death shall make a Form of Payment Delinking Election
within 183 days of the date of such Participant's death.
Whether or not such a beneficiary makes a Delinking
Election, distributions to such a beneficiary shall not
commence any earlier than 90 days after the one year
anniversary of the Participant's death. Distributions
made to such a beneficiary in the form of installments
shall be made over a period, not to exceed the period
specified in Section 2.11(b). If the beneficiary of a
deceased Participant, who had made a Beneficiary
Delinking Election before his death, does not make a
Form of Payment Delinking Election, his account balances
shall be distributed in a single sum no sooner than the
90th day after the first anniversary of the
Participant's death.
The beneficiary of a Participant's beneficiary who
was subject to a Beneficiary Delinking Election shall
receive his benefits in a single sum payment as soon as
administratively feasible after the Valuation Date
immediately following the beneficiary's death and the
administrative determination of the identity of such
beneficiary's beneficiary.
(3) If a deceased Participant who has made a
Delinking Election fails to designate a beneficiary or
designates as beneficiary an individual who predeceases
the Participant or an entity which ceases to exist
before the Participant's death, the Participant's
beneficiary for purposes of the Plan shall be his
Beneficiary as designated in the Profit Sharing Plan.
2.11 Installment Payments.
(a) Order of Payment of Accounts. Installment
distributions under a Delinking Election made pursuant to
Section 2.10 shall be paid:
(1) first, from the Participant's or beneficiary's
leveraged ESOP account under McEqual, McCAP I and
McCAP II, in that order;
(2) second, from the Participant's or
beneficiary's McDESOP account under McEqual, McCAP I and
McCAP II, in that order; and
(3) last, from the Participant's or beneficiary's
Profit Sharing account under McEqual, McCAP I and
McCAP II in that order.
(b) Maximum Period of Payment. Participants or
Beneficiaries electing to receive installment payments may
elect to receive substantially equal payments over a fixed
period of not more than 25 years or payments in a fixed
dollar amount which shall not be less than the amount which
at the time the election is made would be expected, assuming
no interest and no mortality, to result in the payment of the
Participants' accounts under McEqual, McCAP I and McCAP II in
a period not in excess of 25 years.
2.12 Limitation on Elections and Payments. Notwithstanding
any other provision of this Section 2:
(a) no investment election or other election which is
permitted hereunder to be made by any individual who is an
officer or director of the Company for the purposes of
Section 16 of the Securities Exchange Act of 1934, as amended
(the "Act"), shall be effective before the first date that
such election could be made effective without being
considered a nonexempt purchase or sale under Section 16(b)
of the Act, and
(b) no distribution from the Plan shall be made
hereunder to any person who, at the time of distribution, is,
or within the immediately preceding six months was, an
officer or director of the Company for purposes of Section 16
of the Act before the first date that such distribution would
not be a nonexempt purchase or sale under Section 16(b) of
the Act.
2.13 Valuation of Accounts. The value of any portion of a
Participant's McCap II Profit Sharing Account to be paid in cash
shall be valued as of the Valuation Date, as defined in the
McDonald's Profit Sharing Program, preceding the date of payment,
based upon the value of the Investment Funds under the Profit
Sharing Plan portion of the Profit Sharing Program. The value of
any portion of a Participant's McCap II McDonald's Common Stock
Account to be paid in cash shall be valued as of the Valuation
Date, preceding the date of payment, using the same values of
McDonald's Common Stock determined for the Profit Sharing
McDonald's Common Stock Fund.
2.14 Funding. Benefits payable under the Plan to any person
shall be paid directly by the Company or other adopting employer
(collectively called "Employers") which employs such person. The
Employers shall not be required to fund, or otherwise segregate
assets to be used for payment of benefits under the Plan. While
the Employers may, in the discretion of the Board of Directors,
make investments (a) in shares of McDonald's common stock through
open market purchases or (b) in other investments in amounts
equal or unequal to amounts payable hereunder, the Employers
shall not be under any obligation to make such investments and
any such investment shall remain an asset of the contributing
Employer subject to the claims of its general creditors.
Notwithstanding the foregoing, the Employers, in the discretion
of the Company, may maintain one or more trusts to hold assets to
be used for payment of benefits under the Plan; provided that the
assets of such trust shall be subject to the creditors of the
contributing Employer in an amount equal to the amount held in
the trust multiplied by the percentage of all McCAP II Account
balances which represent amounts credited to Participants on
account of their being employees of such Employer in the event
such Employer becomes insolvent or is subject to bankruptcy or
insolvency proceedings. Any payments by such a trust of benefits
provided to a Participant under the Plan shall be considered
payment by the Participant's Employer and shall discharge such
Employer of any further liability for the payments made by such
trust.
Section 3
Miscellaneous
3.1 Plan Administration. The Plan shall be administered by
the Committee responsible for administration of the Profit
Sharing Program ("Committee"). The Committee shall have, to the
extent appropriate, the same powers, rights, duties and
obligations with respect to the Plan as it has with respect to
the Profit Sharing Program.
3.2 Employment Rights. Establishment of the Plan shall not
be construed to give any employee the right to be retained in the
Company's service or to any benefits not specifically provided by
the Plan, nor shall the establishment of the Plan in any manner
modify the Company's right to modify, amend or terminate the
Profit Sharing Program, McEqual or McCAP I.
3.3 Interests Not Transferable. Except as to withholding of
any tax under the laws of the United States or any state or
locality or as provided in Section 3.8, no benefit payable at any
time under the Plan shall be subject in any manner to alienation,
sale, transfer, assignment, pledge, attachment, or other legal
process, or encumbrance of any kind. Any attempt to alienate,
sell, transfer, assign, pledge or otherwise encumber any such
benefits, whether currently or thereafter payable, shall be void.
No benefit shall, in any manner, be liable for or subject to the
debts or liabilities of any person entitled to such benefits. If
any person shall attempt to, or shall alienate, sell, transfer,
assign, pledge or otherwise encumber his benefits under the Plan,
or if by reason of his bankruptcy or other event happening at any
time, such benefits would devolve upon any other person or would
not be enjoyed by the person entitled thereto under the Plan,
then the Company, in its discretion, may terminate the interest
in any such benefits of the person entitled thereto under the
Plan and hold or apply them to or for the benefit of such person
entitled thereto under the Plan or his spouse, children or other
dependents, or any of them, in such manner as the Company may
deem proper.
3.4 Unclaimed Amounts. Unclaimed amounts shall consist of
the amounts of the McCAP II Accounts of a Participant which
cannot be distributed because of the Committee's inability, after
a reasonable search, to locate the Participant or his beneficiary
within a period of two (2) years after the payment of benefits
becomes due. Unclaimed amounts shall be forfeited at the end of
such two-year period. These forfeitures will reduce the
obligations of the Company under the Plan. After an unclaimed
amount has been forfeited, the Participant or beneficiary, as
applicable, shall have no further right to his McCAP II Account.
3.5 Controlling Law. The law of Illinois, except its law
with respect to choice of law, shall be controlling in all
matters relating to the Plan to the extent not preempted by
ERISA.
3.6 Gender and Number. Words in the masculine gender shall
include the feminine, and the plural shall include the singular
and the singular shall include the plural.
3.7 Action by the Company. Except as otherwise specifically
provided herein, any action required of or permitted by the
Company under the Plan shall be by resolution of the Board of
Directors of McDonald's Corporation or any member of the
Committee or person(s) authorized by resolution of the Board of
Directors of McDonald's Corporation.
3.8 Qualified Domestic Relations Order.
(a) Notwithstanding Section 3.3, the Committee shall
comply with the provisions of any order determined by the
Committee to be a Qualified Relations Order.
(b) "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 Accrued Benefit under the Plan; and
(4) with respect to which the requirements of
paragraphs (c) and (d) are met.
(c) 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 to which such order applies.
(d) 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.
(e) In the case of any payment before a Participant has
had a termination of employment, a domestic relations order
shall not be treated as failing to meet the requirements of
Section 3.8(d)(l) solely because such order requires that
payment of benefits be made to an alternate payee:
(1) without regard to the Participant's attainment
of any specified age;
(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.
Section 4
Subsidiary Participation
4.1 Adoption of Plan. Any Commonly Controlled Entity,
Commonly Controlled Corporation, Domestic Affiliate or Foreign
Affiliate, as defined in the Profit Sharing Program, which has
adopted a portion of the Profit Sharing Program may, with the
approval of the Committee and under such terms and conditions as
the Committee may prescribe, adopt the corresponding portions of
the Plan by resolution of its board of directors.
4.2 Withdrawal from the Plan by Participating Employer.
While it is not the present intention of any adopting employer to
withdraw from the Plan, any such employer other than the Company
shall have the right, at any time, upon the approval of and under
such conditions as may be provided by the Committee, to withdraw
from the Plan by delivering to the Committee written notice of
its election so to withdraw.
Upon receipt of such notice by the Committee, the McCAP II
Accounts of Participants employed by the withdrawing employer as
of the date of withdrawal shall be distributed by such employer
in cash 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.
Section 5
Amendment and Termination
The Company intends the Plan to be permanent, but reserves
the right at any time by action of its Board of Directors or by
the Committee (in accordance with the restrictions in the
following paragraph ) to modify, amend or terminate the Plan,
notwithstanding that an amendment may change the timing or the
optional form of benefit elected by a Participant in a Delinking
Election or the timing or optional form of benefit in which a
Participant's benefits would otherwise have been paid under
Section 2, provided, however, that if a Participant has a
McCAP II Account, benefits provided under Section 2.1 shall
constitute an irrevocable obligation of the employer to the same
extent that such McCAP II Account, had it been an account under
the Profit Sharing Program, would have been an irrevocable
obligation of the Profit Sharing Program.
The Committee shall have the same authority with respect to
the adoption of amendments to the Plan 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
governmental 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 Company's or adopting employers'
contributions to the Plan.
The Committee shall provide notice of amendments adopted by
the Committee to the Board of Directors on a timely basis.
Executed in multiple originals this 18th day of December, 1995.
McDONALD'S CORPORATION
By /s/ Stanley R. Stein
__________________________________
Stanley R. Stein
Senior Vice President