EXHIBIT 4(a)
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SUPPLEMENTAL INDENTURE NO. 2
BETWEEN
McDONALD'S CORPORATION
AND
FIRST UNION NATIONAL BANK
Trustee
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Dated as of January 14, 1997
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SUPPLEMENTAL TO SUBORDINATED DEBT SECURITIES INDENTURE
DATED AS OF OCTOBER 18, 1996
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McDONALD'S CORPORATION
SUPPLEMENTAL INDENTURE NO. 2
Dated as of January 14, 1997
Series of 7 1/2% Subordinated Deferrable Interest Debentures due 2037
$150,000,000
Supplemental Indenture No. 2, dated as of January 14, 1997, between
McDONALD'S CORPORATION, a corporation organized and existing under the laws
of the State of Delaware (hereinafter sometimes referred to as the
``Company''), and FIRST UNION NATIONAL BANK, a national banking association,
authorized to accept and execute trusts (hereinafter sometimes referred to as
the ``Trustee''),
W I T N E S S E T H :
WHEREAS, The Company and the Trustee have executed and delivered a
Subordinated Debt Securities Indenture dated as of October 18, 1996 (the
``Indenture'').
WHEREAS, Section 10.01 of the Indenture provides for the Company, when
authorized by the Board of Directors, and the Trustee to enter into an
indenture supplemental to the Indenture to establish the form or terms of any
series of Debt Securities as permitted by Sections 2.01 and 2.02 of the
Indenture.
WHEREAS, Sections 2.01 and 2.02 of the Indenture provide for Debt
Securities of any series to be established pursuant to an indenture
supplemental to the Indenture.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the series
of Debt Securities provided for herein, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of such series of Debt
Securities, as follows:
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS.
SECTION 1.01. This Supplemental Indenture No. 2 constitutes an integral
part of the Indenture.
SECTION 1.02. For all purposes of this Supplemental Indenture:
(1) Capitalized terms used herein without definition shall have the
meanings specified in the Indenture;
(2) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. 2; and
(3) The terms ``hereof'', ``herein'', ``hereto'', ``hereunder'' and
``herewith'' refer to this Supplemental Indenture.
ARTICLE TWO
THE SERIES OF DEBT SECURITIES.
SECTION 2.01. There shall be a series of Debt Securities designated the
``7 1/2% Subordinated Deferrable Interest Debentures due 2037'' (the
``Debentures''). The Debentures shall be limited to $150,000,000 aggregate
principal amount.
SECTION 2.02. The principal amount of the Debentures shall be payable
on January 2, 2037.
SECTION 2.03. The Debentures will be represented by a global security
(the ``Global Security''). The Global Security will be executed by the
Company, authenticated by the Trustee and deposited with, or on behalf of,
The Depository Trust Company (the ``Depositary'') and registered in the name
of a nominee of the Depositary. Except under circumstances described below,
the Debentures will not be issuable in definitive form.
Ownership of beneficial interests in the Global Security will be limited
to persons that have accounts with the Depositary or its nominee
(``participants'') or persons that may hold interests through participants.
Ownership of a beneficial interest in the Global Security will be shown on,
and the transfer of that beneficial interest will only be effected through,
records maintained by the Depositary or its nominee (with respect to
interests of participants) and on the records of participants (with respect
to interests of persons other than participants).
So long as the Depositary or its nominee is the registered owner of the
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner or Holder of the Debentures represented by the
Global Security for all purposes under the Indenture. Except as provided
below, owners of beneficial interests in the Global Security will not be
entitled to have Debentures represented by the Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
Debentures in definitive form and will not be considered the owners or
Holders thereof under the Indenture.
Principal and interest payments on Debentures represented by the Global
Security registered in the name of the Depositary or its nominee will be made
to the Depositary or its nominee, as the case may be, as the registered owner
of the Global Security.
If the Depositary notifies the Company that it is at any time unwilling
or unable to continue as Depositary or if at any time the Depositary shall no
longer be eligible to continue as Depositary, the Company shall appoint a
successor Depositary with respect to the Debentures. If a successor
Depositary for the Debentures is not appointed by the Company within 90 days
from the date the Company receives such notice or becomes aware of such
ineligibility, the Company will execute, and the Trustee will authenticate
and deliver, Debentures in definitive form in exchange for the entire Global
Security. In addition, the Company may at any time and in its sole
discretion determine not to have the Debentures represented by the Global
Security and, in such event, the Company will execute, and the Trustee will
authenticate and deliver, Debentures in definitive form in exchange for the
entire Global Security. In any such instance, an owner of a beneficial
interest in the Global Security will be entitled to physical delivery in
definitive form of Debentures represented by the Global Security equal in
principal amount to such beneficial interest and to have such Debentures
registered in its name. Debentures so issued in definitive form will be
issued as registered Debentures in denominations of $25 and integral
multiples thereof, unless otherwise specified by the Company.
Upon the exchange of a Global Security for individual Debentures, such
Global Security shall be cancelled by the Trustee. Individual Debentures
issued in exchange for a Global Security shall be registered in such names
and in such authorized denominations as the Depositary for such Global
Security, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee. The Trustee shall deliver such
Debentures to, or in accordance with the instructions of the persons in whose
name such Debentures are so registered.
Unless and until it is exchanged in whole or in part for the individual
Debentures represented thereby, a Global Security representing all or a
portion of the Debentures may not be transferred except as a whole by the
Depositary for the Debentures to a nominee of such Depositary or by a nominee
of such Depositary to such Depositary or another nominee of such Depositary
or by the Depositary or any such nominee to a successor Depositary for the
Debentures or a nominee of such successor Depositary.
SECTION 2.04. The Debentures shall bear interest at the rate of 7 1/2%
per annum, payable quarterly, in arrears, on March 31, June 30, September 30
and December 31 of each year, commencing March 31, 1997, with a final interest
payment on January 2, 2037 (each, an ``Interest Payment Date''). The
Debentures shall be dated the date of authentication and interest shall be
payable on the principal represented thereby from the later of January 14,
1997, or the most recent Interest Payment Date to which interest has been
paid or duly provided for. If any date on which interest is payable is not a
business day, the payment of interest due on such date may be made on the
next succeeding business day (and without any interest or other payment in
respect of such delay).
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Holder in whose name any
Debenture is registered in the Debt Security register at the close of
business on the March 15, June 15, September 15 or December 15 (whether or
not a business day) next preceding such Interest Payment Date (each, a
``Regular Record Date''). Interest payable on redemption or maturity will be
payable to the person to whom the principal is paid.
The Company shall have the right at any time during the term of the
Debentures, prior to an Interest Payment Date, so long as the Company is not
in default in the payment of interest on the Debentures, to extend the
interest payment period for an Extension Period (as defined below). Except
as provided in the next succeeding sentence, no interest shall be due and
payable during an Extension Period, but on the Interest Payment Date
occurring at the end of each Extension Period the Company shall pay to the
Holders of record on the Record Date for such Interest Payment Date
(regardless of who the Holders of record may have been on other dates during
the Extension Period) all interest then accrued but unpaid on the Debentures,
together with interest thereon, compounded quarterly, at the rate of 7 1/2%
per annum, to the extent permitted by law; provided that during any such
Extension Period, the Company shall not declare or pay any dividend on, or
repurchase, redeem or otherwise acquire any of its capital stock, as set
forth in this Section 2.04. Prior to the termination of any Extension
Period, the Company may (a) on any Interest Payment Date pay all or any
portion of the interest accrued on the Debentures as provided herein to
Holders of record on the Regular Record Date for such Interest Payment Date
or (b) from time to time further extend the interest payment period as
provided in the last sentence of this paragraph, provided that any such
Extension Period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarterly interest payment periods
from the last date to which interest on the Debentures was paid in full. If
the Company shall elect to pay all of the interest accrued on the Debentures
on an Interest Payment Date during an Extension Period, such Extension Period
shall automatically terminate on such Interest Payment Date. Upon the
termination of any Extension Period and the payment of all amounts of
interest then due, the Company may commence a new Extension Period, subject
to the above requirements. The Company shall cause the Trustee to give prior
notice, by public announcement given in accordance with New York Stock
Exchange rules (or the rules of any other applicable self-regulatory
organization) and by mail, first class postage prepaid, to each Holder of
Debentures at his address as it appears in the Debt Security register, of
(x) the Company's election to initiate an Extension Period and the
duration thereof,
(y) the Company's election to extend any Extension Period beyond the
Interest Payment Date on which such Extension Period is then scheduled to
terminate, and the duration of such extension, and
(z) the Company's election to make a full or partial payment of
interest accrued on the Debentures of any Interest Payment Date during any
Extension Period and the amount of such payment.
In no event shall notice be given less than five Business Days prior to
the March 15, June 15, September 15 or December 15 next preceding the
applicable Interest Payment Date.
The term ``Extension Period'' means the period from and including the
Interest Payment Date next following the date of any notice of extension of
the interest payment period on the Debentures given pursuant to the last
sentence of the preceding paragraph (or, in the case of any further extension
of the interest payment period pursuant to the third sentence of the
preceding paragraph before the payment in full of all accrued but unpaid
interest on the Debentures, the Interest Payment Date to which interest was
paid in full) to but excluding the Interest Payment Date to which payment of
interest on the Debentures is so extended, after giving affect to any further
extensions of the interest payment period on the Debentures pursuant to the
third sentence of the preceding paragraph; provided that no Extension Period
shall exceed 20 consecutive quarterly interest payment periods from the last
date to which interest on the Debentures was paid in full; and provided,
further, that any Extension Period shall end on an Interest Payment Date.
Notwithstanding the foregoing, in no event shall any Extension Period exceed
January 2, 2037.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
``Defaulted Interest'') shall forthwith cease to be payable to the registered
Holder on the relevant Regular Record Date by virtue of having been such
Holder; and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) and Clause (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Debentures are registered at the close of
business on a Special Record Date (as defined below) for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Debenture and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this Section provided. Thereupon
the Trustee shall fix a Special Record Date (``Special Record Date'') for the
payment of such Defaulted Interest which shall be not more than 15 nor less
than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefore to be mailed, first class postage prepaid, to each Holder of
Debentures at his address as it appears in the Debt Security register, not
less than 10 days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Company, cause a similar
notice to be published at least once in an authorized newspaper in each Place
of Payment, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names the Debentures are registered on such Special Record Date and
shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Debentures may be listed, and upon such notice as may
be required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this Clause, such payment shall
be deemed practicable by the Trustee.
The Company covenants and agrees that, if at any time it has failed to
make any payment of interest or principal on the Debentures when due (after
giving effect to any grace period for payment thereof as provided in Section
6.01 of the Indenture), or the Company exercises its option to extend the
interest payment period as provided for above, the Company will not, until all
Defaulted Interest or accrued but unpaid interest, if the Company exercises
its option to extend the interest payment period on the Debentures and all
principal, if any, then due and payable on the Debentures shall have been paid
in full, (a) declare, set aside, or pay any dividend or distribution on any
capital stock of the Company (except for dividends or distributions in shares
of its capital stock or rights to acquire shares of its capital stock); or (b)
repurchase, redeem, or otherwise acquire any shares of its capital stock
(except: (i) by conversion into or exchange for shares of its capital stock;
or (ii) for a redemption, purchase or other acquisition of shares of its
capital stock made for the purpose of any employee incentive plan or benefit
plan of the Company or any of its affiliates).
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Supplemental Indenture No. 2 upon transfer of or in
exchange for or in lieu of any other Debenture shall carry the rights to
interest accrued but unpaid, and to accrue, which were carried by such other
Debenture.
SECTION 2.05. The Place of Payment for the Debentures shall be both the
City of New York, New York, and the City of Charlotte, North Carolina. The
Trustee shall be the paying agent for the Debentures.
SECTION 2.06. The Debentures may, at the option of the Company, be
redeemed in whole or from time to time in part, upon notice as provided in
Section 3.02 of the Indenture, at any time on or after December 31, 2001, or
at any time upon the occurrence of a Tax Event, at a redemption price equal
to 100% of the principal amount of the Debentures redeemed, together with
accrued but unpaid interest to the date of redemption.
``Tax Event'' means that the Company shall have received an opinion of
independent tax counsel (a ``Tax Opinion'') to the effect that, as a result
of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or
any political subdivision or taxing authority thereof or therein or (b) any
amendment to or change in an interpretation or application of such laws or
regulations by any legislative body, court, governmental agency or regulatory
authority (including the enactment of any legislation and the publication of
any judicial decision or regulatory determination on or after January 9,
1997), in either case on or after January 9, 1997, there is more than an
insubstantial risk that interest payable on the Debentures would not be
deductible, in whole or in part, by the Company for United States federal
income tax purposes.
SECTION 2.07. The Debentures may be issued in denominations of $25 and
any integral multiples thereof.
SECTION 2.08. The Debentures shall be in the form attached as Exhibit A
hereto.
ARTICLE THREE
MISCELLANEOUS.
SECTION 3.01. The recitals of fact herein and in the Debentures shall
be taken as statements of the Company and shall not be construed as made by
the Trustee.
SECTION 3.02. This Supplemental Indenture No. 2 shall be construed in
connection with and as a part of the Indenture.
SECTION 3.03. (a) If any provision of this Supplemental Indenture No. 2
limits, qualifies, or conflicts with another provision of the Indenture
required to be included in indentures qualified under the Trust Indenture Act
of 1939 (as in effect on the date of this Supplemental Indenture No. 2) by
any of the provisions of Sections 310 to 317, inclusive, of said Trust
Indenture Act, such required provisions shall control.
(b) In case any one or more of the provisions contained in this
Supplemental Indenture No. 2 or in the Debentures issued hereunder should be
invalid, illegal, or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected, impaired, prejudiced or disturbed thereby.
SECTION 3.04. Whenever in this Supplemental Indenture No. 2 either of
the parties hereto is named or referred to, this shall be deemed to include
the successors or assigns of such party, and all the covenants and agreements
in this Supplemental Indenture No. 2 contained by or on behalf of the Company
or by or on behalf of the Trustee shall bind and inure to the benefit of the
respective successors and assigns of such parties, whether so expressed or
not.
SECTION 3.05. (a) This Supplemental Indenture No. 2 may be
simultaneously executed in several counterparts, and all said counterparts
executed and delivered, each as an original, shall constitute but one and the
same instrument.
(b) The descriptive headings of the several Articles of this
Supplemental Indenture No. 2 were formulated, used and inserted in this
Supplemental Indenture No. 2 for convenience only and shall not be deemed to
affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, McDONALD'S CORPORATION has caused this Supplemental
Indenture No. 2 to be signed, acknowledged and delivered by its President,
Executive Vice President and Chief Financial Officer or Senior Vice President
and Treasurer and its corporate seal to be affixed hereunto and the same to
be attested by its Secretary or Assistant Secretary, and FIRST UNION NATIONAL
BANK, as Trustee, has caused this Supplemental Indenture No. 2 to be signed,
acknowledged and delivered by one of its Vice Presidents, and its seal to be
affixed hereunto and the same to be attested by one of its Authorized
Officers, all as of the day and year first written above.
McDONALD'S CORPORATION
[CORPORATE SEAL]
By: /s/ Carleton Day Pearl
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Senior Vice President and Treasurer
Attest:
/s/ Gloria Santona
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Secretary
FIRST UNION NATIONAL BANK, as Trustee
[CORPORATE SEAL]
By: /s/ John H. Clapham
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Vice President
Attest:
/s/ Terence C. McPoyle
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Authorized Officer
STATE OF ILLINOIS
SS:
COUNTY OF DuPAGE
On the 14th day of January, in the year one thousand nine hundred ninety
seven, before me appeared Carleton D. Pearl to me personally known, who being
by me duly sworn, did say that he resides at McDonald's Corporation, that he
is Senior Vice President and Treasurer of McDONALD'S CORPORATION, one of the
corporations described in and which executed the above instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
/s/ Mary Velazquez
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Notary Public
COMMONWEALTH OF PENNSYLVANIA
SS:
COUNTY OF PHILADELPHIA
On the 14th day of January, in the year one thousand nine hundred ninety
seven, before me appeared John H. Clapham to me personally known, who, being
by me duly sworn, did say that he resides at 1052 Signal Hill, Berwyn, that
he is Vice President of FIRST UNION NATIONAL BANK, one of the corporations
described in and which executed the above instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such
corporate seal, that it was so affixed by authority of the Board of Directors
of said corporation, and that he signed his name thereto by like authority.
/s/ Aida B. Dales
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Notary Public