Exhibit 4(a)
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SUPPLEMENTAL INDENTURE NO. 3
BETWEEN
McDONALD'S CORPORATION
AND
FIRST UNION NATIONAL BANK
Trustee
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Dated as of June 23, 1998
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SUPPLEMENTAL TO SENIOR DEBT SECURITIES INDENTURE
DATED AS OF OCTOBER 19, 1996
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McDONALD'S CORPORATION
SUPPLEMENTAL INDENTURE NO. 3
Dated as of June 23, 1998
6% REset Put Securities (REPS[SM]) due 2012
$300,000,000
Supplemental Indenture No. 3, dated as of June 23, 1998,
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 Senior Debt Securities Indenture dated as of October 19, 1996
(as amended or supplemented from time to time, the ``Indenture'');
WHEREAS, Section 10.01 of the Indenture provides for the
Company, when authorized by its Board of Directors, and the Trustee to
enter into an indenture supplemental to the Indenture to establish the
form or terms of Debt Securities as permitted by Sections 2.01 and 2.02
of the Indenture; and
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. 3 constitutes an
integral part of the Indenture.
SECTION 1.02. (a) For all purposes of this Supplemental
Indenture No. 3, except as otherwise expressly provided or unless the
context otherwise requires, all capitalized terms used and not defined
herein that are defined in the Indenture shall have the meanings assigned
to them in the Indenture.
(b) The following terms are defined in the following Sections:
Bid Date 2.02(c)(i)
Business Day 2.02(a)
Calculation Agent 2.02(c)(iv)
Calculation Agency Agreement 2.02(c)(iv)
Call Notice 2.02(c)
Call Option 2.02(a)
Call Price 2.02(a)
Callholder 2.02(a)
Coupon Reset Date 2.01(b)
Defaulted Interest 2.01(c)
Depositary 2.01(e)
Final Maturity Date 2.01(d)
Global Security 2.01(e)
Interest Payment Date 2.01(c)
Mandatory Put 2.03(a)
Market Disruption Event 2.02(c)
Put Price 2.03(a)
Regular Record Date 2.01(c)
Special Record Date 2.01(c)
2012 REPS 2.01(a)
(c) All references herein to Articles and Sections, unless
otherwise specified, refer to the corresponding Articles and Sections of
this Supplemental Indenture No. 3.
(d) The terms ``hereof'', ``herein'', ``hereto'', ``hereunder''
and ``herewith'' refer to this Supplemental Indenture No. 3.
ARTICLE TWO
THE SERIES OF DEBT SECURITIES.
SECTION 2.01. (a) There shall be a series of Debt
Securities designated the ``6% REPS due 2012'' (the ``2012 REPS''). The
2012 REPS shall be limited to $300,000,000.
(b) The aggregate principal amount of the 2012 REPS shall be
$300,000,000. The 2012 REPS shall bear interest at the rate of 6% from
June 23, 1998 to but excluding June 23, 2002 (the ``Coupon Reset Date'')
whereupon (x) if all of the 2012 REPS are purchased on such date by the
Callholder pursuant to the Call Option, the 2012 REPS shall bear interest
from and including the Coupon Reset Date to but excluding the Final
Maturity Date at the interest rate determined by the Calculation Agent
pursuant to the procedures set forth in the Calculation Agency Agreement;
or (y) the 2012 REPS shall be purchased by the Company pursuant to the
exercise of the Mandatory Put by the Trustee on behalf of the Holders of
the 2012 REPS.
(c) The 2012 REPS shall bear interest at the rate of 6% per
annum, payable semi-annually, in arrears, on June 23 and December 23 of
each year, commencing December 23, 1998 (each, an ``Interest Payment
Date''). The 2012 REPS shall be dated the date of authentication and
interest shall be payable on the principal represented thereby from the
later of June 23, 1998, 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 2012 REPS is registered in the Debt Security register at the
close of business on the June 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
shall be payable to the person to whom the principal is paid.
Any interest on any 2012 REPS 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
(i) and clause (ii) below:
(i) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the 2012 REPS 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 2012 REPS 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 2012 REPS 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 Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the 2012 REPS are registered on such Special
Record Date and shall no longer be payable pursuant to the following
clause (ii).
(ii) 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 2012 REPS 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.
Subject to the foregoing provisions of this Section, each 2012
REPS delivered under this Supplemental Indenture No. 3 upon transfer of
or in exchange for or in lieu of any other 2012 REPS shall carry the
rights to interest accrued but unpaid, and to accrue, which were carried
by such other 2012 REPS.
(d) The 2012 REPS shall mature on June 23, 2012 (the ``Final
Maturity Date''). On the Coupon Reset Date, Holders of the 2012 REPS
shall be entitled to receive 100% of the principal amount thereof (i)
from the Callholder if it purchases the 2012 REPS, in whole but not in
part, pursuant to the Call Option and the interest rate of the 2012 REPS
shall be reset pursuant to the procedures set forth in the Calculation
Agency Agreement; or (ii) in the event the Callholder does not exercise
the Call Option or the Call Option otherwise terminates, from the Company
following the purchase by it of the 2012 REPS, in whole but not in part,
following the exercise by the Trustee of the Mandatory Put.
(e) The 2012 REPS shall be represented by a global security
(the ''Global Security''). The Global Security shall be executed by the
Company, authenticated by the Trustee and deposited with, or on behalf
of, The Depositary Trust Company (the ``Depositary'') and registered in
the name of a nominee of the Depositary. Except under circumstances
described below, the 2012 REPS shall not be issuable in definitive form.
Ownership of beneficial interests in the Global Security shall
be limited to persons that have accounts with the Depositary or its
nominee (``participants'') or persons that may hold interest through
participants. Ownership of a beneficial interest in the Global Security
shall be shown on, and the transfer of that beneficial interest shall
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 interest 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, shall be considered the sole owner or Holder of the 2012 REPS
represented by the Global Security for all purposes under the Indenture.
Except as provided below, owners of beneficial interests in the Global
Security shall not be entitled to have 2012 REPS represented by the
Global Security registered in their names, shall not receive or be
entitled to receive physical delivery of 2012 REPS in definitive form and
shall not be considered the owners or Holders thereof under the
Indenture.
Principal and interest payments on the 2012 REPS represented by
the Global Security registered in the name of the Depositary or its
nominee shall 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 2012
REPS. If a successor Depositary for the 2012 REPS 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 shall execute and the
Trustee shall authenticate and deliver, 2012 REPS in definitive from 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 2012 REPS
represented by the Global Security and, in such event, the Company shall
execute, and the Trustee shall authenticate and deliver, 2012 REPS in
definitive form in exchange for the entire Global Security. In any such
instance, an owner of a beneficial interest in the Global Security shall
be entitled to physical delivery in definitive form of 2012 REPS
represented by the Global Security equal in principal amount to such
beneficial interest and to have such 2012 REPS registered in its name.
2012 REPS so issued in definitive form shall be issued as registered 2012
REPS in denominations of $1,000 and integral multiples thereof, unless
otherwise specified by the Company.
Upon the exchange of a Global Security for individual 2012
REPS, such Global Security shall be canceled by the Trustee. Individual
2012 REPS 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 2012 REPS to, or in accordance with the
instructions of, the persons in whose name such 2012 REPS are so
registered.
Unless and until it is exchanged in whole or in part for the
individual 2012 REPS represented thereby, a Global Security representing
all or a portion of the 2012 REPS may not be transferred except as a
whole by the Depositary for the 2012 REPS to a nominee of such Depositary
or by the Depositary or any such nominee to a successor Depositary for
the 2012 REPS or a nominee of such successor Depositary.
If the Depositary is not the Holder of the 2012 REPS on the
Coupon Reset Date, payment and delivery shall be made through the
facilities of its successor or assign, if any. If the 2012 REPS are
issued in certificated form under the circumstances described herein,
payment shall be made at the Principal Office of the Trustee against
surrender of the applicable 2012 REPS.
SECTION 2.02. (a) The Company shall have the right to
purchase the 2012 REPS, in whole but not in part (the ``Call Option''),
on the Coupon Reset Date, at a price equal to 100% of the principal
amount thereof (the ``Call Price'') (interest accrued to, but excluding
the Coupon Reset Date shall be paid by the Company on such date to the
Holder of the 2012 REPS on the most recent Regular Record Date) by giving
notice to the Trustee in accordance with Section 2.02(b). The Company,
as holder of the Call Option, or any Person to which the Call Option is
assigned in accordance with Section 2.02(e), is referred to herein as the
``Callholder''.
If the Callholder exercises its rights under the Call Option in
accordance with Section 2.02(b), then, unless terminated in accordance
with Section 2.02(c):
(i) not later than 2:00 p.m., New York City time, on the
Business Day prior to the Coupon Reset Date, the Callholder shall
deliver the Call Price in immediately available funds to the Trustee
for payment thereof to the Holders of the 2012 REPS on the Coupon
Reset Date; and
(ii) the Holders of the 2012 REPS shall be required to deliver
the 2012 REPS to the Callholder against payment therefor on the
Coupon Reset Date through the facilities of the Depositary. In the
event that the 2012 REPS shall have been issued in certificated
form, and any Holder shall fail to surrender as aforesaid its 2012
REPS at or prior to 3:00 p.m., New York City time on the Coupon
Reset Date, the Trustee shall return the Call Price in respect of
such 2012 REPS to the Callholder, whereupon the Trustee shall
exercise the Mandatory Put to the extent of such 2012 REPS and the
Put Price therefor shall be payable upon surrender of such 2012 REPS
as aforesaid.
The Callholder is not required to exercise the Call Option,
and no Holder of the 2012 REPS or any interest therein shall have any
right or claim against the Callholder as a result of the Callholder's
decision whether or not to exercise the Call Option or performance or
non-performance of its obligations with respect thereof. As used herein,
`` Business Day'' means any day other than a Saturday, a Sunday, a legal
holiday or a day on which banking institutions in the cities of New York
or Chicago are authorized or obligated by law, executive order or
governmental decree to be closed.
(b) With respect to the 2012 REPS and the Call Option, the
Callholder must deliver irrevocable, written notice (the ``Call Notice'')
to the Trustee of its exercise of the Call Option prior to 4:00 p.m., New
York City time, no later than 15 calendar days prior to the Coupon Reset
Date. The Call Notice shall contain the requisite delivery details,
including the identification of the Callholder's account with the
Depositary. The Trustee shall send a copy of the Call Notice to the
Holders of the 2012 REPS no later than the immediately succeeding
Business Day.
(c) Except as otherwise specified in clause (i) of this
subsection (c), the Call Option shall be immediately revoked, and the
Trustee shall exercise the Mandatory Put on behalf of the Holders of the
2012 REPS, if the Calculation Agent determines that:
(i) at any time prior to the sale of the 2012 REPS on the
third Business Day immediately preceding the Coupon Reset Date
(the ``Bid Date''), an Event of Default has occurred and is
continuing under Section 61(a), (b), (d), (e) or (f) of the
Indenture (in such event, termination is at the Callholder's
option) or under Section 61(g) or (h) of the Indenture (in such
event, termination is automatic);
(ii) a Market Disruption Event has occurred following the
exercise of the Call Option and, as a result thereof, the
Callholder fails to pay the Call Price by 2:00 p.m., New York
City time, on the Business Day immediately preceding the Coupon
Reset Date;
(iii) if the Call Option has been assigned by the Company to
a third party, the Company reacquires all rights under such
Call Option pursuant to its rights as set forth in the
securities purchase option agreement, dated June 23, 1998,
entered into by the Company, Morgan Stanley & Co. International
Limited and Morgan Stanley & Co. Incorporated; or
(iv) if, following the Call Notice, fewer than two of the
dealers named on a list of dealers provided by the Company to
Morgan Stanley & Co. Incorporated, as calculation agent (the
``Calculation Agent'') shall have provided an irrevocable
written offer given by a dealer for the purchase of the 2012
REPS, settling on the Coupon Reset Date, in a timely manner
substantially as provided in the calculation agency agreement,
dated as of June 23, 1998 (the ``Calculation Agency
Agreement''), between the Company and the Calculation Agent.
``Market Disruption Event'' shall mean any of the following
events, if such events occur and are continuing on any day from and
including the date of the Call Notice to, and including, the Bid Date in
the judgment of the Calculation Agent: (a) a suspension or material
limitation in trading in securities generally on the New York Stock
Exchange, Inc. or the establishment of minimum prices on such exchange;
(b) a general moratorium on commercial banking activities declared by
either federal or New York State authorities; (c) any material adverse
change in the existing financial, political or economic conditions in the
United States of America; (d) an outbreak or escalation of major
hostilities involving the United States of America or the declaration of
a national emergency or war by the United States of America; or (e) any
material disruption of the United States government securities market,
United States corporate bond market or United States federal wire system;
provided, in each case, that in the judgment of the Calculation Agent the
effect of the foregoing makes it impractical to conduct the Coupon Reset
Process.
(d) (i) The Company and, if different, the Callholder shall
promptly notify the Trustee in writing of the termination of the Call
Option. The Trustee shall promptly thereafter notify the Holders of the
2012 REPS that the Trustee, on behalf of such Holders, has exercised the
Mandatory Put.
(ii) In anticipation of the exercise of the Call Option or
the Mandatory Put on the Coupon Reset Date, the Trustee shall notify the
Holders of the 2012 REPS, not less than 30 days nor more than 60 days
prior to the Coupon Reset Date, that all 2012 REPS shall be delivered on
the Coupon Reset Date through the facilities of the Depositary against
payment of the Call Price by the Callholder under the Call Option or
payment of the Put Price by the Company under the Mandatory Put. The
Trustee shall notify the Holders of the 2012 REPS once it is determined
whether the Call Price or the Put Price shall be delivered in accordance
with the provisions hereof.
(e) A Callholder may at any time assign its rights and
obligations under its Call Option; provided that (i) such rights and
obligations are assigned in whole or in part; and (ii) such assigning
Callholder provides the Trustee and the Company with notice of such
assignment contemporaneously with such assignment. Upon receipt of
notice of assignment, the Trustee shall treat the assignee as a
Callholder for all purposes hereunder. A Callholder may assign its
rights under its Call Option without notice to, or consent of, the
Holders of the 2012 REPS.
SECTION 2.03. (a) By its purchase of the 2012 REPS, each
Holder thereof irrevocably agrees that, if the Call Option is not
exercised or the Callholder fails for any reason to purchase the 2012
REPS on the Coupon Reset Date pursuant to its exercise of the Call
Option, the Trustee shall be obligated to exercise on behalf of the
Holders of the 2012 REPS the right (the ``Mandatory Put'') to require the
Company to purchase the 2012 REPS, in whole not in part, on the Coupon
Reset Date at a price equal to 100% of the aggregate principal amount
thereof (the ``Put Price''), plus accrued but unpaid interest to but
excluding the Coupon Reset Date.
(b) If the Trustee exercises the Mandatory Put, the Company
shall deliver the Put Price in immediately available funds to the Trustee
by no later than 12:00 noon, New York City time, on the Coupon Reset Date
and the Holders of the 2012 REPS shall be required to deliver the 2012
REPS to the Company against payment therefor on the Coupon Reset Date
through the facilities of the Depositary so long as the 2012 REPS are in
global form. No Holder of the 2012 REPS or any interest therein has the
right to consent or object to the exercise by the Trustee of the
Mandatory Put. The provisions of this Section may not be amended or
waived without the consent of the Company, and all of the Holders of the
2012 REPS.
SECTION 2.04. If the Calculation Agent is removed or resigns
pursuant to Section 7 of the Calculation Agency Agreement and within 30
days of notice of such removal or resignation no new Calculation Agent
shall have been appointed by the Company, and shall have accepted such
appointment, the Trustee may, on behalf of the Holders of the 2012 REPS,
appeal to a court to appoint a new Calculation Agent.
SECTION 2.05. The 2012 REPS may be issued in denominations of
$1,000 and any integral multiples thereof.
SECTION 2.06. The 2012 REPS shall be in the form attached as
Exhibit A hereto.
SECTION 2.07. The Place of Payment for the 2012 REPS shall be
both The City of New York, New York, and the City of Philadelphia,
Pennsylvania. The Trustee shall be the paying agent for the 2012 REPS.
SECTION 2.08. The terms and provisions contained in the form
of 2012 REPS attached as Exhibit A hereto shall constitute, and are
hereby expressly made, a part of the Indenture and, to the extent
applicable, the Company and the Trustee, by their execution and delivery
hereof, expressly agree to such terms and provisions and to be bound
thereby.
ARTICLE THREE
MISCELLANEOUS.
SECTION 3.01. The recitals of fact herein and in the 2012 REPS
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. 3 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. 3 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. 3) by any of the provisions of Section 310 to
317, inclusive, of the Trust Indenture Act of 1939, such required
provisions shall control.
(b) In case any one or more of the provisions contained in
this Supplemental Indenture No. 3 or in the 2012 REPS 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. 3
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. 3 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. Nothing in this Supplemental
Indenture No. 3 or the 2012 REPS, expressed or implied, shall give to any
Person, other than the parties hereto, their successors hereunder and the
Holders of the 2012 REPS, any benefit or any legal or equitable right,
remedy or claim under this Supplemental Indenture No. 3.
SECTION 3.05. (a) This Supplemental Indenture No. 3 may be
executed in any number of counterparts, each of which when so executed
shall be deemed an original, but all such counterparts shall together
constitute but one and the same instrument.
(b) The descriptive headings of the several Articles of this
Supplemental Indenture No. 3 were formulated, used and inserted herein
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. 3 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. 3 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/ Jerry Langley
----------------------
Jerry Langley
Vice President
Attest:
/s/ Joseph R. Thomas
------------------------
Assistant Secretary
FIRST UNION NATIONAL BANK,
as Trustee
[CORPORATE SEAL]
By: /s/ John H. Clapham
-----------------------------
Vice President
Attest:
/s/ David C. Leondi
------------------------
Authorized Officer
STATE OF ILLINOIS )
) SS:
COUNTY OF DuPAGE )
On the 23rd day of June, in the year one thousand nine hundred
ninety-eight, before me appeared Jerry Langley to me personally known,
who, being by me duly sworn, did say that he resides in Chicago,
Illinois, that he is a Vice President 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/ Leona J. Oostman
---------------------
Notary Public
STATE OF PENNSYLVANIA )
) SS:
COUNTY OF PHILADELPHIA )
On the 23rd day of June, in the year one thousand nine hundred
ninety-eight, before me appeared John Clapham to be personally known,
who, being by me duly sworn, did say that he resides at Berwyn, PA, that
he is a 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/ Joann Fantini
-------------------
Notary Public
EXHIBIT A
[FORM OF 2012 REPS]
DEBT SECURITY
CUSIP NO.: 580 135 CA7
No. 1 $300,000,000
THIS DEBT SECURITY IS A REGISTERED GLOBAL SECURITY AND IS
REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (``DTC''). UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN. UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR 2012 REPS IN DEFINITIVE
REGISTERED FORM, THIS REGISTERED GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC, OR BY A NOMINEE OF DTC TO
DTC OR ANOTHER NOMINEE OF DTC, OR BY DTC OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
McDONALD'S CORPORATION
6% REset Put Securities (REPS[SM]) due 2012
McDonald's Corporation, a corporation organized and existing
under the laws of the State of Delaware (hereinafter called the
``Company'', which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises
to pay to Cede & Co., or registered assigns, the principal sum of THREE
HUNDRED MILLION DOLLARS ($300,000,000) on June 23, 2012, and to pay
interest thereon to the Registered Holder hereof from June 23, 1998, or
from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually at the rate determined as set
forth on the reverse hereof, on June 23 and December 23, in each year,
commencing December 23, 1998, until the principal hereof is paid or such
payment is duly provided for. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date shall, as
provided in such Indenture, be paid to the Person in whose name this Debt
Security is registered at the close of business on the record date for
such interest, which shall be the June 15 or December 15 (whether or not
a Business Day) next preceding an Interest Payment Date.
Payment of the principal of (and premium, if any) and interest
on this Debt Security shall be made at the designated agency of the
Company maintained for such purpose in The City of New York, New York and
the City of Philadelphia, Pennsylvania, in such coin or currency of the
United States of America as at the time of payment is legal tender for
payment of public and private debts, or, at the option of the Company,
interest so payable may be paid by check to the order of said holder
mailed to his address appearing on the Debt Security register. Any
interest not so punctually paid or duly provided for shall be payable as
provided in the Indenture.
Reference is made to the further provisions of this Debt
Security set forth on the reverse hereof, including those describing the
Call Option, the Mandatory Put and the Coupon Reset Process, which
further provisions shall for all purposes have the same effect as if set
forth in this place.
Unless the Certificate of Authentication hereon has been
executed by the Trustee referred to on the reverse hereof (or by an
Authenticating Agent, as provided in the Indenture) by manual signature,
this Debt Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
In Witness Whereof, McDonald's Corporation has caused this
Instrument to be signed in its corporate name by the Chairman of the
Board or its President or one of its Vice Presidents manually or in
facsimile and a facsimile of its corporate seal to be imprinted hereon
and attested by the manual or facsimile signature of its Secretary or one
of its Assistant Secretaries.
Dated: June 23, 1998
McDONALD'S CORPORATION
By:
-------------------------
Vice President
ATTEST:
By:
--------------------------
Assistant Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated
herein provided for in the within mentioned Indenture.
Dated: June 23, 1998
FIRST UNION NATIONAL BANK,
as Trustee
By:
------------------------
Authorized Officer
McDONALD'S CORPORATION
6% REset Put Securities (REPS[SM]) due 2012
This Debt Security is one of a duly authorized issue of
debentures, notes or other evidences of indebtedness of the Company
(herein called the ``Debt Securities'') of a series hereinafter
specified, all issued and to be issued in one or more series under a
Senior Debt Securities Indenture, dated as of October 19, 1996 (herein
called the ``Indenture''), between the Company and First Union National
Bank, as Trustee (herein called the ``Trustee'', which term includes any
successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement
of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Debt
Securities and of the terms upon which the Debt Securities are, and are
to be, authenticated and delivered. The Debt Securities may be issued in
one or more series, which different series may be issued in various
currencies, may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates,
may be subject to different redemption provisions (if any), may be
subject to different sinking, purchase or analogous funds (if any), may
be subject to different covenants and Events of Default and may otherwise
vary as in the Indenture provided. This Debt Security is one of a series
of Debt Securities of the Company designated as the 6% REPS due 2012 (the
``2012 REPS''), limited in aggregate principal amount to $300,000,000.
Subject to the Call Option and the Mandatory Put described below, the
2012 REPS are not redeemable prior to maturity. The terms of the 2012
REPS include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939. The 2012 REPS
are subject to all such terms and Holders thereof are referred to the
Indenture and the Trust Indenture Act of 1939 for a statement of those
terms.
Interest Payments
The 2012 REPS shall bear interest, payable on each Interest
Payment Date to Holders of record on the Regular Record Date preceding
such Interest Payment Date, at 6% per annum from June 23, 1998 or from
the most recent Interest Payment Date to which interest has been paid or
duly provided for to but excluding June 23, 2002 (the ``Coupon Reset
Date''), whereupon (x) if all of the 2012 REPS are purchased on such date
by the Callholder pursuant to the Call Option, the 2012 REPS shall bear
interest from and including the Coupon Reset Date to but excluding June
23, 2012 (the ``Final Maturity Date'') at the Coupon Reset Rate
determined in accordance with the Coupon Reset Process described below;
or (y) the 2012 REPS shall be purchased by the Company pursuant to the
exercise of the Mandatory Put by the Trustee on behalf of the Holders of
the 2012 REPS. Interest on this Debt Security shall be computed on the
basis of a 360-day year comprised of twelve 30-day months.
If the Callholder elects to purchase the 2012 REPS pursuant to
the Call Option, the Calculation Agent shall reset the interest rate for
the 2012 REPS effective on the Coupon Reset Date, pursuant to the Coupon
Reset Process described below. In such circumstances, (i) this Debt
Security shall be purchased by the Callholder at 100% of the principal
amount hereof on the Coupon Reset Date, on the terms and subject to the
conditions described herein (interest accrued to but excluding the Coupon
Reset Date shall be paid by the Company on such date to the Holder hereof
on the most recent Regular Record Date); and (ii) from and including the
Coupon Reset Date, this Debt Security shall bear interest at the rate
determined by the Calculation Agent in accordance with the procedures set
forth under ``Coupon Reset Process'' below.
In the case where any Interest Payment Date or the maturity
date does not fall on a Business Day, payment of interest or principal
otherwise payable on such day need not be made on such day, but may be
made on the next succeeding Business Day with the same force and effect
as if made on the Interest Payment Date or the maturity date, as the case
may be, and no interest shall accrue for the period from and after such
Interest Payment Date or the maturity date.
Maturity Date
The 2012 REPS shall mature on the Final Maturity Date. On the
Coupon Reset Date, the Holder hereof shall be entitled to receive 100% of
the principal amount hereof from either (i) the Callholder, if the
Callholder purchases this Debt Security pursuant to the Call Option; or
(ii) the Company, by exercise of the Mandatory Put by the Trustee for and
on behalf of the Holder hereof, if the Callholder does not purchase this
Debt Security pursuant to the Call Option.
Call Option; Mandatory Put
(i) Call Option. The Callholder, by giving notice to the
Trustee (the ``Call Notice''), has the right to purchase the aggregate
principal amount of this Debt Security, in whole but not in part (the
``Call Option''), on the Coupon Reset Date, at a price equal to 100% of
the principal amount hereof (the ``Call Price'') (interest accrued to but
excluding the Coupon Reset Date shall be paid by the Company on such date
to the Holder hereof on the most recent Regular Record Date). The Call
Notice is required to be given to the Trustee, in writing, prior to 4:00
p.m., New York City time, no later than 15 calendar days prior to the
Coupon Reset Date. The Call Notice must contain the requisite delivery
details, including the identity of the Callholder's DTC account.
If the Callholder exercises the Call Option, unless terminated
in accordance with its terms, (i) not later than 2:00 p.m., New York City
time, on the Business Day prior to the Coupon Reset Date, the Callholder
shall deliver the Call Price in immediately available funds to the
Trustee for payment thereof to the Holders of the 2012 REPS (including,
if applicable, the Holder hereof) on the Coupon Reset Date; and (ii) the
Holder hereof shall be required to deliver and shall be deemed to have
delivered this Debt Security to the Callholder against payment therefor
on the Coupon Reset Date through the facilities of DTC. The Callholder
is not required to exercise the Call Option, and no Holder of the 2012
REPS or any interest therein shall have any right or claim against the
Callholder as a result of the Callholder's decision whether or not to
exercise the Call Option or performance or non-performance of its
obligations with respect thereto.
The Callholder may at any time assign its rights and
obligations under the Call Option; provided, however, that (i) such
rights and obligations are assigned in whole and not in part; and (ii) it
provides the Trustee and the Company with notice of such assignment
contemporaneously with such assignment. Upon receipt of notice of
assignment, the Trustee shall treat the assignee as Callholder for all
purposes hereunder. The Callholder may assign its rights under the Call
Option without notice to or consent of, the Holders of the 2012 REPS
(including, if applicable, the Holder hereof).
The Indenture sets forth certain circumstances in which the
Call Option shall automatically be terminated.
(ii) Mandatory Put. If the Call Option is not exercised or if
the Callholder fails for any reason to purchase the 2012 REPS on the
Coupon Reset Date pursuant to its exercise of the Call Option, the
Trustee shall exercise the right of the Holders of the 2012 REPS
(including, if applicable, the Holder hereof) to require the Company to
purchase the aggregate principal amount of 2012 REPS, in whole but not in
part (the ``Mandatory Put''), on the Coupon Reset Date at a price equal
to 100% of the principal amount thereof (the ``Put Price''), plus accrued
but unpaid interest to but excluding the Coupon Reset Date, in each case,
to be paid by the Company to the Holders of the 2012 REPS (including, if
applicable, the Holder hereof) in immediately available funds on the
Coupon Reset Date. If the Trustee exercises the Mandatory Put, then the
Company shall deliver the Put Price in immediately available funds to the
Trustee by no later than 12:00 noon, New York City time, on the Coupon
Reset Date and the Holders of the 2012 REPS will be required to deliver
and will be deemed to have delivered the 2012 REPS to the Company against
payment therefor on the Coupon Reset Date through the facilities of DTC.
By its purchase of the 2012 REPS, each Holder irrevocably agrees that the
Trustee shall exercise the Mandatory Put relating to such 2012 REPS for
or on behalf of the Holder as provided herein. No Holder of any 2012
REPS or any interest therein has the right to consent or object to the
exercise of the Trustee's duties under the Mandatory Put.
Notice to Holders by Trustee
In anticipation of the exercise of the Call Option or the
Mandatory Put on the Coupon Reset Date, the Trustee shall notify the
Holder hereof, not less than 30 days nor more than 60 days prior to the
Coupon Reset Date, that all 2012 REPS shall be delivered on the Coupon
Reset Date through the facilities of DTC against payment of the Call
Price by the Callholder under the Call Option or payment of the Put Price
by the Company under the Mandatory Put. The Trustee shall notify the
Holder hereof once it is determined whether the Call Price or the Put
Price shall be delivered in accordance with the provisions hereof.
Coupon Reset Process
Pursuant to and subject to the terms of a calculation agency
agreement, dated as of June 23, 1998, between the Company and Morgan
Stanley & Co. Incorporated, Morgan Stanley & Co. Incorporated (or its
successors or assigns) shall be the Calculation Agent. If the Callholder
timely exercises its Call Option and the Call Option does not otherwise
terminate in accordance with its terms, then the Company and the
Calculation Agent shall complete the following steps (the ``Coupon Reset
Process'') in order to determine the interest rate (``Coupon Reset
Rate'') to be paid on the 2012 REPS from and including the Coupon Reset
Date to but excluding the Final Maturity Date:
(i) The Company shall provide the Calculation Agent with (a) a
list (a ``Dealer List''), no later than five Business Days prior to the
Coupon Reset Date, containing the names and addresses of five dealers
(one of which shall be Morgan Stanley & Co. Incorporated) from which it
desires the Calculation Agent to obtain the Bids (as defined below) for
the purchase of the 2012 REPS; and (b) a copy of any other material
reasonably requested by the Calculation Agent to facilitate a successful
Coupon Reset Process.
(ii) Within one Business Day following receipt by the
Calculation Agent of the Dealer List, the Calculation Agent shall provide
to each dealer (``Dealer'') on the Dealer List (a) a copy of the
Prospectus Supplement and accompanying Prospectus relating to the 2012
REPS; (b) a copy of the form of the 2012 REPS; and (c) a written request
that each such Dealer submit a Bid to the Calculation Agent at 12:00
noon, New York City time, on the third Business Day prior to the Coupon
Reset Date (the ``Bid Date''). The time on the Bid Date upon which Bids
shall be requested may be changed by the Calculation Agent to as late as
3:00 p.m., New York City time. As used herein, ``Business Day'' shall
mean any day other than a Saturday, a Sunday, a legal holiday or a day on
which banking institutions in the cities of New York or Chicago are
authorized or obligated by law, executive order or governmental decree to
be closed. ``Bid'' shall mean an irrevocable written offer given by a
Dealer for the purchase of the 2012 REPS, settling on the Coupon Reset
Date, and shall be quoted by such Dealer as a stated yield to maturity on
the 2012 REPS (``Yield to Maturity''). Each Dealer shall be provided
with (a) the name of the Company; (b) an estimate of the Purchase Price
(as defined below); (c) the principal amount and maturity date of the
2012 REPS; and (d) the method by which interest shall be calculated on
the 2012 REPS.
(iii) The purchase price to be paid by any Dealer for the 2012
REPS, which shall be stated as a U.S. dollar amount and be calculated by
the Calculation Agent in accordance with this clause (iii) (the
``Purchase Price''), shall be equal to (a) the total principal amount of
the 2012 REPS, plus (b) a premium (the ``Notes Premium'') which shall be
equal to the excess, if any, of (x) the discounted present value to the
Coupon Reset Date of a bond with a maturity of June 23, 2012 which has an
interest rate equal to 5.51%, semi-annual interest payments on each June
23 and December 23, commencing December 23, 2002, and a principal amount
of $300,000,000, and assuming a discount rate equal to the Treasury Rate
over (y) the principal amount of the 2012 REPS. ``Treasury Rate'' means
the per annum rate equal to the offer side yield to maturity of the
current on-the-run ten-year United States Treasury security per Telerate
page 500 (or any successor or substitute page as may replace such page on
such service) at 11:00 a.m., New York City time, on the Bid Date (or such
other date or time that may be agreed upon by the Company and the
Calculation Agent) or, if such rate does not appear on Telerate page 500
(or any successor or substitute page as may replace such page on such
service) at such time, the rate on GovPx End-of-Day Pricing at 3:00 p.m.,
New York City time, on the Bid Date (or such other date or time that may
be agreed upon by the Company and the Calculation Agent).
(iv) The Calculation Agent shall immediately notify the
Company of (a) the names of each of the Dealers from whom the Calculation
Agent received Bids on the Bid Date; (b) the Bid submitted by each such
Dealer; and (c) the Purchase Price as determined pursuant to clause (iii)
hereof. Unless the Call Option has terminated in accordance with its
terms, the Calculation Agent shall thereafter select from the Bids
received the Bid with the lowest Yield to Maturity (the ``Selected Bid'')
and set the Coupon Reset Rate equal to the interest rate which would
amortize the Notes Premium fully over the remaining term of the 2012 REPS
at the Yield to Maturity indicated by the Selected Bid; provided,
however, that if the Calculation Agent has not received a timely Bid from
a Dealer, the Selected Bid shall be the lowest of all Bids received by
such time; and provided further, that if any two or more of the lowest
Bids submitted are equivalent, the Company shall in its sole discretion
select any of such equivalent Bids (and such selected Bid shall be the
Selected Bid). In all cases, Morgan Stanley & Co. Incorporated, in its
capacity as a Dealer, shall have the right to match the Bid with the
lowest Yield to Maturity, whereupon Morgan Stanley & Co. Incorporated's
Bid shall become the Selected Bid. The Calculation Agent shall promptly
notify the Company and the Trustee of the Coupon Reset Rate.
If an Event of Default shall occur and be continuing with
respect to the 2012 REPS, the unpaid principal amount of the 2012 REPS
may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than 66 2/3% in
aggregate principal amount of each series of the Debt Securities at the
time outstanding (as defined in the Indenture) to be affected (each
series voting as a class), evidenced as in the Indenture provided, to
execute supplemental indentures adding any provisions to or changing in
any manner or eliminating any of the provisions of the Indenture or of
any supplemental indenture or modifying in any manner the rights of the
Holders of the Debt Securities of all such series; provided, however,
that no such supplemental indenture shall, among other things, (i) extend
the fixed maturity of any Debt Security, or reduce the rate or extend
the time of payment of interest thereon, or reduce the principal amount
or premium if any, thereon, or make the principal thereof, or premium if
any, or interest, if any, thereon payable in any coin or currency other
than that hereinabove provided, without the consent of the Holder of each
Debt Security so affected or reduce the amount of principal of an
Original Issue Discount Security that would be due and payable upon
acceleration of maturity thereof, or (ii) reduce the aforesaid percentage
of Debt Securities that Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holders of each
Debt Security so affected. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
2012 REPS at the time Outstanding, as defined in the Indenture, on behalf
of the Holders of all the 2012 REPS, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the
Holder of this 2012 REPS shall be conclusive and binding upon such
Holder and upon all future Holders of this 2012 REPS and of any 2012 REPS
issued upon the transfer hereof or in exchange therefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this 2012
REPS or upon any 2012 REPS issued upon the transfer hereof or in exchange
therefor or in lieu hereof.
No reference herein to the Indenture and no provision of this
2012 REPS or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this 2012 REPS at the times, places, and rate, and in the
coin and currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, this 2012 REPS is transferable on the Debt Security
register of the Company, upon surrender of this 2012 REPS for transfer at
the office or agent of the Company in The City of New York, New York, or
the City of Philadelphia, Pennsylvania, duly endorsed by or accompanied
by a written instrument of transfer in form satisfactory to the Company
and the Debt Security registrar, duly executed by the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
2012 REPS, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or
transferees.
The 2012 REPS are issuable only as registered 2012 REPS without
coupons in denominations of $1,000 and integral multiples thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, this 2012 REPS is exchangeable for a like aggregate principal
amount of 2012 REPS of different authorized denominations, as requested
by the Holder surrendering the same.
No service charge will be made for any such transfer or
exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection
therewith.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this 2012 REPS is registered
as the owner hereof for the purpose of receiving payment as herein
provided and for all other purposes whether or not this 2012 REPS be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
No recourse shall be made for the payment of the principal of
or the interest on this 2012 REPS or for any claim based herein or
otherwise in any manner in respect hereof, or in respect of the
Indenture, against any incorporator, stockholder, officer or director, as
such past, present or future, of the Company or of any predecessor or
successor corporation, whether by virtue of any constitutional provision
or statute or rule of law, or by the enforcement of any assessment or
penalty or in any other manner, all such liability being expressly waived
and released by the acceptance hereof and as part of the consideration
for the issue hereof.
All terms used in this 2012 REPS which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
The following abbreviations, when used in the inscription on
the face of this Instrument, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - Custodian
--------- ------------
(Cust) (Minor)
under Uniform Gifts to Minors
Act
---------------
(State)
Additional abbreviations may also be used though not in the above list
----------------------------------------------------------------------
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
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PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
-------------------------------------------------------------------------
-------------------------------------------------------------------------
the within Instrument of McDONALD'S CORPORATION and hereby does
irrevocably constitute and appoint
Attorney
------------------------------------------------------------
Dated:
--------------- --------------------
NOTICE: this signature to this assignment must correspond with the name
as it appears upon the face of the within Instrument in every particular,
without alteration or enlargement or any change whatever.