Exhibit 10(f)
McDONALD'S CORPORATION
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DEFERRED INCOME PLAN
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(As Amended and Restated Effective as of December 1, 1998)
Section 1
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Introduction
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1.1 The Plan and Effective Date. The McDonald's Corporation Deferred
Income Plan, formerly known as the McDonald's Corporation Deferred Incentive
Plan, ("Plan") was established November 1, 1993. The Plan was amended and
restated effective September 1, 1994 and was subsequently amended by the first
amendment thereof effective as of February 1, 1996 and the second amendment
thereof effective as of August 15, 1996 . The Plan was subsequently amended and
restated effective several times, including amendment and restatements effective
as of January 1, 1997, July 15, 1997 and August 1, 1998. The "effective date" of
the amendment and restatement of the Plan as set forth herein is December 1,
1998 (unless otherwise indicated herein).
1.2 Purpose. McDonald's Corporation ("McDonald's" or the "Company") has
established the Plan for its officers, regional managers, department directors
and certain expatriate international country heads to retain and attract highly
qualified personnel by offering the benefits of a non-qualified, unfunded plan
of deferred compensation. The Company may also allow other subsidiaries or
affiliates to adopt the Plan in accordance with Section 7.
1.3 Administration. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company (the "Committee"). The
Committee shall have the powers set forth in the Plan and the power to interpret
its provisions. Any decisions of the Committee shall be final and binding on all
persons with regard to the Plan. The Committee may delegate its authority
hereunder to an officer or officers of the Company.
Section 2
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Participation and Deferral Elections
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2.1 Eligibility and Participation. Subject to the conditions and
limitations of the Plan, all officers, regional managers and department
directors of the Company and international country heads who are on United
States payroll and who are identified as eligible by the Committee shall be
eligible to participate in the Plan ("Eligible Employees"). Notwithstanding the
foregoing, effective January 1, 1999, an individual who becomes employed in one
of the positions listed in the preceding sentence after the Due Date (as defined
in Section 2.3(b)) shall be eligible to participate in the Plan and become an
Eligible Employee on the first day of the month next following the date of such
employment. Any Eligible Employee who makes a Deferral Election as described in
Section 2.2 below shall become a participant in the Plan
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("Participant") and shall remain a Participant until the entire balance of the
Participant's Deferral Accounts (defined in Section 4.1 below) is distributed.
2.2 Deferral Elections. Any Eligible Employee may make an election to
defer receipt of all or any portion of his or her incentive under the McDonald's
Target Incentive Plan ("TIP") for a calendar year. Subject to Section 2.3(b)
below, any Eligible Employee may also make an election to defer a percentage of
his or her base salary for the following calendar year in accordance with the
following schedule:
Category of Eligible Employee
----------------------------- Maximum Deferral
(or Equivalent Compensation Band) Percentage
--------------------------------- ----------
Highest paid five officers (ranked by the
total of base pay and the target incentive
under TIP for the current year) 90%
Executive Vice Presidents 80%
All other officers and regional managers 70%
Department Directors 60%
provided, however, that the committee of officers designated by the Committee to
administer the Plan (the "Officer Committee") may, in its discretion, grant
individual requests for higher deferral percentages of base salary and provided
further that the Officer Committee may, in its discretion, authorize Eligible
Employees to modify their deferral percentages of base salary as may be
necessary to reflect organizational, title or compensation band changes. Such
modification may be made only with respect to base salary earned and paid after
the effective date of the modification.
If applicable, any Eligible Employee may also make an election to defer all or a
portion of his or her Three-Year Incentive award ("Three-Year Incentive") under
the 1992 Stock Ownership Incentive Plan for a calendar year.
Elections to defer TIP, base salary or Three-Year Incentive awards are referred
to herein as "Deferral Elections". Exit bonuses, severance bonuses or bonuses
paid under the Executive Retention Plan during a transition or retention period
may not be deferred under this Plan.
2.3 Rules for Deferral Elections. Deferral Elections shall be made in
accordance with the rules set forth below:
(a) All Deferral Elections must be in writing on such forms as the
Committee may prescribe and must be returned to the Committee no later
than the date specified by the Committee (the "Due Date"). In no event
will the Due Date be later than the end of the year that precedes the
year that the amount deferred would otherwise be made available to
such Eligible Employee.
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(b) An individual shall be eligible to make a Deferral Election only if he
or she is an Eligible Employee on the Due Date. Notwithstanding the
foregoing, effective January 1, 1999, an individual who becomes an
Eligible Employee after the Due Date in accordance with Section 2.1
will be eligible to make a base salary Deferral Election within 30
days after the date he or she becomes an Eligible Employee. Such
Deferral Elections shall become effective as soon as administratively
feasible after the Deferral Election is made.
(c) If an Eligible Employee terminates employment in the same calendar
year in which he or she makes a Deferral Election, that Deferral
Election (and any Deferral Elections respecting future compensation in
years following the year of employment termination) will be null and
void and no deferral will be made.
(d) Amounts will be deferred to the "Payment Date" specified by the
Eligible Employee in the Deferral Election and payments will commence
within 30 days following the Payment Date in accordance with Section
5.1(b). The Payment Date specified must be no earlier than the March
31st of the calendar year following the year in which the deferred
amounts would otherwise have been paid and must be either a "Specific
Payment Date" or an "Employment Termination Payment Date" as follows:
(i) A "Specific Payment Date" is the 15th or last day of a specified
month (but not December 31) of a specified year.
(ii) An "Employment Termination Payment Date" is the March 31
following the year in which the Eligible Employee terminates
employment, unless the Eligible Employee elects a later
Employment Termination Date in accordance with Section 5.1(a).
If an Eligible Employee terminates employment and has one or more
Specific Payment Dates that would occur after the Employment
Termination Payment Date, all amounts deferred to those Specific
Payment Date(s) shall automatically be accelerated and payment will
commence in accordance with the Eligible Employee's Employment
Termination Payment Date election under Section 5.1(a). Participant
401(k) McDESOP Equalization Amounts and Company Profit Sharing
Equalization Credits described in Section 3 shall be deferred to the
Participant's Employment Termination Payment Date, even though a
Participant has elected a Specific Payment Date for the remainder of
his or her deferral.
(e) Effective December 1, 1998, an Eligible Employee may revoke a Specific
Payment Date and elect an earlier or later Payment Date and may revoke
an Employment Termination Payment Date and elect an earlier Payment
Date, subject to the following rules:
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(i) The election to revoke a Payment Date and elect a new Payment
Date must be made no later than the end of the calendar year
preceding the original designated Payment Date and must be made
at least six months prior to the original designated Payment
Date; and
(ii) Any new designated Payment Date must be in a calendar year
subsequent to the date of the election and must be at least six
months after the date of the election.
Section 3
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Equalization for McDonald's Corporation Profit Sharing Program
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3.1 Equalization to Adjust for Participant 401(k) McDESOP Contributions.
Amounts deferred under this Plan are not considered compensation for the
McDonald's Corporation Profit Sharing Program (the "Profit Sharing Program") or
for the related non-qualified plans: the McDonald's 1989 Executive Compensation
Plan, the McDonald's Supplemental Employee Benefit Equalization Plan and the
McDonald's Profit Sharing Program Equalization Plan (the "McCAP/McEqual Plans").
The McDESOP portion of the Profit Sharing Program allows participants to
contribute a percentage of their compensation as Section 401(k) contributions.
Therefore, Eligible Employees who are Profit Sharing Program participants and
make Deferral Elections for base salary and TIP awards under this Plan shall
automatically have a portion of these deferred amounts set aside until the
Participant's Employment Termination Payment Date to adjust for the fact that
McDESOP Section 401(k) contributions cannot be made to the Profit Sharing
Program or the related non-qualified plans for these deferred amounts (the
"Participant 401(k) McDESOP Equalization Amount"). The Participant 401(k)
McDESOP Equalization Amount shall be based on the amount that would have been
contributed by the Participant under the McDESOP portion of the Profit Sharing
Program and the related non-qualified plans if the deferral of base salary and
TIP had not occurred. No Participant 401(k) McDESOP Equalization credit will be
made for deferrals of Three-Year Incentive awards under this Plan.
3.2 Company Profit Sharing Equalization Credits. Amounts deferred under
this Plan are not considered as compensation under the Profit Sharing Program or
the McCAP/McEqual Plans. Therefore, base salary and TIP awards deferred under
this Plan shall be credited with an amount equal to the Company contribution
that the Participant would have received under the Profit Sharing Program and/or
McCAP/McEqual Plans if such deferral had not occurred ("Company Profit Sharing
Equalization Credit"). If a Participant is not eligible to participate in the
Profit Sharing Program or McCAP/McEqual Plans, or is not eligible to receive a
Company contribution under such plans with respect to a deferred amount, no
Company Profit Sharing Equalization Credit will be made. No Company Profit
Sharing Equalization Credit shall be made for Three-Year Incentive awards
deferred under this Plan.
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3.3 Rules for Profit Sharing Equalization Amounts. Equalization amounts
under Sections 3.1 and 3.2 above (collectively referred to as "Equalization
Amounts") shall be deferred until the Participant's Employment Termination
Payment Date and cannot be withdrawn under Section 5.3. Equalization Amounts
will become part of the Participant's Deferral Account and will be credited with
earnings as part of that Deferral Account as described in Section 4.1.
Section 4
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Deferral Accounts
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4.1 Deferral Accounts. A bookkeeping account shall be established in the
Participant's name ("Deferral Account"). Each Participant's deferral account may
be further divided into:
(a) amounts deferred pursuant to that year's Deferral Election and
earnings thereon,
(b) Company Profit Sharing Equalization Credits associated with that
year's Deferral Election and earnings thereon; and
(c) Participant 401(k) McDESOP Equalization amounts associated with that
year's Deferral Election and earnings thereon.
The Committee may also authorize other divisions or subaccounts of the deferral
accounts as may be necessary to reflect the terms of the Plan as amended from
time to time.
Amounts deferred pursuant to a Deferral Election shall be credited to the
Deferral Account as of the date the Participant would otherwise have received
the deferred amounts in the absence of a Deferral Election. Any Equalization
Amounts shall be credited to the Deferral Account as of the date the amount
would have been allocated under the Profit Sharing Program or the McCAP/McEqual
Plans if the deferral had not occurred.
4.2 Investment Elections and Earnings Credits. Each Participant in the
Plan shall make an investment election, as described below, and such election
shall apply to the entire amount credited to the Participant's Deferral Accounts
under the Plan. However, Section 16 Insiders, as defined in Section 5.5 of the
Plan may not make investment elections involving McDonald's Common Stock. (For
further details concerning these restrictions, see Section 5.5 of the Plan.)
A Participant may change his investment election effective as of the first day
of any month. All investment elections shall be made by filing an investment
election form with the Committee at such time and in such manner as the
Committee may specify. If no new investment election is filed, the Participant's
Deferral Account will continue to be invested in accordance with his or her most
recent investment election.
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Investment elections may be split between the following equivalent rates of
return in increments of 10%, provided that the percentages specified must total
100%.
(a) a rate of return based upon the McDonald's Common Stock Fund under the
Profit Sharing Program, after adjustment for expenses ("McDonald's
Common Stock" equivalent);
(b) a rate of return based upon the Stable Value Fund under the Profit
Sharing Program, after adjustment for expenses ("Stable Value"
equivalent);
(c) a rate of return based upon the Diversified Stock Fund under the
Profit Sharing Program, after adjustment for expenses ("Diversified
Stock" equivalent);
(d) a rate of return based upon the Blended Stock/Bond Fund under the
Profit Sharing Program, after adjustment for expenses ("Blended
Stock/Bond" equivalent); and
(e) a rate of return based upon the Money Market Fund under the Profit
Sharing Program, after adjustment for expenses ("Money Market"
equivalent).
If a Participant who is employed fails to make an investment election, amounts
shall be credited with the same rate of return as amounts for which no
investment election is received under the Profit Sharing component of the
McDonald's Corporation Profit Sharing Program. (Currently, this is the Money
Market equivalent rate of return.) All investment elections will continue in
effect for all Participants until the Participant files a new investment
election.
As of the 15th day (or if the 15th day of the month is not a business day, the
next previous business day) and the last business day of each calendar month, or
such additional dates as the Committee shall specify ("Valuation Date"), each
Deferral Account shall be credited with earnings, gains and losses equal to the
amount the Deferral Account would have earned, gained or lost, since the prior
Valuation Date if actually invested in the funds specified.
4.3 Vesting. A Participant shall be fully vested at all times in the
balance of his or her Deferral Account.
Section 5
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Payment of Benefits
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5.1 Time and Method of Payment. Payments of a Participant's Deferral
Account shall be made to a Participant, or the Participant's beneficiary if the
Participant is deceased, in accordance with the rules set forth below:
(a) Time of Payment. Payment shall be made in accordance with the
applicable Specific Payment Date or Employment Termination Payment
Date. A Participant
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may elect an Employment Termination Payment Date that is later than
the March 31 following the year in which the Participant terminates
employment, which later date shall be either the 15th or last date of
any month (but not December 31) specified by the Participant. Such
election shall be made in writing in such form as the Committee shall
require, no later than December 31 of the year in which the
Participant terminates employment.
(b) Commencement of Payment. Payment to the Participant or the
Participant's beneficiary shall commence within 30 days following the
Payment Date.
(c) Method of Payment. Payments to a Participant or Participant's
beneficiary shall automatically be paid in a lump sum, unless the
Participant or the Participant's beneficiary elects one of the
following installment payment methods:
(i) In monthly, quarterly or annual installments over a period of up
to 25 years, as specified by the Participant or the Participant's
beneficiary. Installment payments shall be made in substantially
equal installments over the installment period specified. Each
installment payment shall be computed by dividing the balance of
the Deferral Account that is to be paid in installments by the
number of payments remaining in the installment period.
(ii) In monthly, quarterly or annual installments of a dollar amount
specified by the Participant or the Participant's beneficiary.
(iii) In an initial partial lump sum payment with subsequent
installment payments. The lump sum payment and first installment
payment shall be distributed in a year specified by the
Participant or the Participant's beneficiary and subsequent
monthly, quarterly or annual installment payments shall be made
either over a period of years (as described in (i) above) or of a
specified dollar amount (as described in (ii) above), as
specified by the Participant or the Participant's beneficiary.
An installment distribution election under this Section 5.1(c) shall
be made in writing in such form as the Committee shall require on or
before the December 31 of the calendar year preceding the Payment
Date. Such installment distribution election shall apply to all
payments that commence on the same Payment Date. Once an installment
election is filed for a Payment Date, it cannot be revoked.
Installment payments shall commence within 30 days after the Payment
Date.
Notwithstanding the foregoing, Deferral Elections made in 1993 which specified a
five year installment payment shall be null and void, and shall be paid in a
lump sum, unless the Participant or the Participant's beneficiary files a
written installment election prior to December 31 of the calendar year preceding
the Payment Date.
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5.2 Form of Payment. All payments shall be made in cash. However, a
Participant who has elected a McDonald's Common Stock based return may elect to
receive payment in the form of shares of McDonald's Common Stock by filing a
written request with the Committee prior to December 31 of the calendar year
preceding the Payment Date.
5.3 Early Withdrawals and Acceleration of Installment Payments. A
Participant shall have the right to withdraw in cash any portion of the balance
of his or her Deferral Accounts (except for the Equalization Amounts of the
Participant's Deferral Accounts under Sections 4.1(b) and (c) and amounts which
were not withdrawable under the terms of the Plan prior to September 1, 1994) at
any time prior to the applicable Payment Date, subject to the Committee's
consent and a 10% forfeiture penalty on the amount requested. A Participant who
is receiving installment payments may accelerate payment of any unpaid amount,
subject to the Committee's consent and 10% forfeiture penalty on the amount
accelerated. The withdrawal or accelerated installment (reduced by the 10%
forfeiture penalty) shall be paid within 30 days of the Valuation Date next
following the date the election to withdraw or accelerate payments is approved
by the Committee. Withdrawals and accelerated installments shall be made first
from the earliest maturing Deferral Account and shall be taken pro rata from the
investment rate equivalents elected by the Participant. Withdrawals shall be
subject to such procedures as the Committee shall establish from time to time.
5.4 Withholding of Taxes. The Company shall withhold any applicable
Federal, state or local income tax from payments due under the Plan in
accordance with such procedures as the Company may establish. Generally, any
Social Security taxes, including the Medicare portion of such taxes, shall be
withheld and paid at the time base salary payments or incentive payments under
TIP or the Three Year Incentive would otherwise have been paid to the
Participant. The Company shall also withhold any other employment taxes as
necessary to comply with applicable laws.
5.5 Limitations For Section 16 Insiders. A "Section 16 Insider" shall
include any Participant who has been deemed to be subject to Section 16 of the
Securities Exchange Act of 1934 (the "Exchange Act") by the Board of Directors
of the Company. Notwithstanding any provision of the Plan to the contrary, the
Deferral Account of each Section 16 Insider is subject to the following
limitations:
(a) An Eligible Employee who is a Section 16 Insider at the time he or she
makes a Deferral Election may elect a McDonald's Common Stock based
return and at the same time must also specify the Payment Date and
whether the payment will be in a lump sum or the specific installment
method that will apply. The election of a McDonald's Common Stock
based return is irrevocable and cannot be changed by an investment
election at a later date. A Participant who is a Section 16 Insider
may not make a withdrawal or accelerate installments under Section 5.3
of any Deferral Account(s) that are credited with a McDonald's Common
Stock based return. Section 16 Insiders who elect a McDonald's Common
Stock based return and a form of payment will not be able to change
those elections, even if the Plan is amended at a later date to
provide increased flexibility.
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(b) A Section 16 Insider who elects to invest in McDonald's Common Stock
based return shall also elect, at the time the deferral is made,
whether the distribution will be paid in cash or in the form of
McDonald's Common Stock. This provision applies only to deferral
elections made on and after August 15, 1996. Amounts deferred under
all deferral elections made prior to August 15, 1996 will be paid in
cash. However, for these cash distributions only, to the extent that a
Section 16 Insider uses the cash distribution to purchase shares of
McDonald's Common Stock on the open market in one or more transactions
within seven months after the date such amounts are distributed, the
Company shall reimburse the Section 16 Insider for all reasonable
brokerage fees and other transaction costs incurred in connection with
such purchases upon presentation of satisfactory evidence thereof not
later than 60 days after the date of each transaction.
(c) If any Participant becomes a Section 16 Insider after making a
Deferral Election under the Plan, any Deferral Account that is being
credited with a McDonald's Common Stock based return shall
automatically be converted to any non-McDonald's Common Stock based
investment return specified by the Participant on an investment
election form as of the Valuation Date immediately preceding the date
the Participant is designated a Section 16 Insider by the Board of
Directors. This automatic change to non-McDonald's Common Stock based
returns will be made to preserve the Participant's right to make
investment choices for investment options that do not involve
McDonald's Common Stock, make early withdrawals and elect accelerated
installments under Section 5.3.
(d) Elections to invest in McDonald's Common Stock based returns can be
made by Section 16 Insiders only at the time the Deferral Election is
made. Investment elections which would result in a transfer into the
McDonald's Common Stock based return at a later date are not permitted
for Section 16 Insiders.
In addition, the Committee may take such other actions as are necessary so that
transactions by Section 16 Insiders do not result in liability under Section
16(b) of the Exchange Act.
5.6 Beneficiary. A Participant shall have the right to name a beneficiary
or beneficiaries who shall receive the balance of a Participant's Deferral
Account in the event of the Participant's death prior to the payment of his or
her entire Deferral Account. A beneficiary may include any person or persons or
an entity (ies) which is tax exempt under Section 501(c)(3) of the Internal
Revenue Code. If no beneficiary is named by a Participant or if he or she
survives all of the named beneficiaries, the Deferral Account shall be paid to
the same beneficiary or beneficiaries to which the Deferral Account would have
been paid if it were in the Participant's Profit Sharing Fund Account under the
Profit Sharing Program as of the date of the Participant's death. To be
effective, any beneficiary designation shall be filed in writing with the
Committee. A Participant may revoke an existing beneficiary designation by
filing another written beneficiary designation with the Committee. The latest
beneficiary designation received by the Committee shall be controlling.
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A beneficiary designated by the Participant who has not yet received payment of
the entire benefit payable to him or her under the Plan shall have the right to
name a beneficiary or beneficiaries to receive the balance of such benefit in
the event of the beneficiary's death prior to the payment of the entire amount
of such benefit. Any such beneficiary designation shall be made in accordance
with the provisions of this Section 5.6
Section 6
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Miscellaneous
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6.1 Funding. Benefits payable under the Plan to any Participant shall be
paid directly by the Company. The Company shall not be required to fund, or
otherwise segregate assets to be used for payment of benefits under the Plan.
While the Company may, in the discretion of the Committee, 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
Company shall not be under any obligation to make such investments and any such
investment shall remain an asset of the Company subject to the claims of its
general creditors. Notwithstanding the foregoing, the Company may maintain one
or more trusts ("Trust") to hold assets to be used for payment of benefits under
the Plan. Any payments by a Trust of benefits provided to a Participant under
the Plan shall be considered payment by the Company and shall discharge the
Company of any further liability under the Plan for such payments.
6.2 Account Statements. The Company shall provide Participants with
statements of the balance of their Deferral Accounts under the Plan at least
annually. The Committee may, in their discretion, also issue statements as of
the March 31, June 30, September 30 and December 31 Valuation Dates, or as of
any other Valuation Date that the Committee deems appropriate.
6.3 Employment Rights. Establishment of the Plan shall not be construed to
give any Eligible Employee the right to be retained in the Company's service or
to any benefits not specifically provided by the Plan.
6.4 Interests Not Transferable. Except as to withholding of any tax under
the laws of the United States or any state or locality and the provisions of
Section 5.6, 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 person 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 benefits under the Plan, or if by
any reason of the Participant's 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
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entitled thereto under the Plan or such individual's spouse, children or other
dependents, or any of them, in such manner as the Company may deem proper.
6.5 Forfeitures and Unclaimed Amounts. Unclaimed amounts shall consist of
the amounts of the Deferral Accounts of a Participant that cannot be distributed
because of the Committee's inability, after a reasonable search, to locate a
Participant or the Participant's beneficiary, as applicable, within a period of
two (2) years after the Payment Date upon which the payment of benefits become
due. Unclaimed amounts shall be forfeited at the end of such two-year period.
Penalties charged for withdrawals under Section 5.3 shall also be forfeited in
the year in which the penalty is charged. 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 the Participant's Deferral Account.
6.6 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.
6.7 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 the Company or by action of any
member of the Committee or person(s) authorized by resolution of the Board of
Directors of the Company.
Section 7
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Employer Participation
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7.1 Adoption of Plan. Any subsidiary or affiliate of the Company
("Employer") 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. The Committee may amend the
Plan as necessary or desirable to reflect the adoption of the Plan by an
Employer, provided however, that an adopting Employer shall not have the
authority to amend or terminate the Plan under Section 8.
7.2 Withdrawal from the Plan by Employer. Any such Employer 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 portion of the Deferral Accounts of Participants
and beneficiaries attributable to credits made while the Participants were
employees of such withdrawing Employer, plus any net earnings, gains and losses
on such credits, shall be distributed from the Trust at the direction of the
Committee in cash at such time or times as the Committee, in its sole
discretion, may deem to be in the best interest of such employees and their
beneficiaries. To the extent the amounts held in the Trust for the benefit of
such Participants and beneficiaries are not sufficient to satisfy the Employer's
obligation to such Participants and their beneficiaries accrued on account of
their employment with the Employer, the remaining amount necessary to satisfy
such obligation shall be an
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obligation of the Employer, and the Company shall have no further obligation to
such Participants and beneficiaries with respect to such amounts.
Section 8
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Amendment and Termination
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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 sentence) to modify, amend or terminate the Plan,
provided however, that any amendment or termination of the Plan shall not reduce
or eliminate any Deferral Account accrued through the date of such amendment or
termination.
The Committee shall have the same authority to adopt amendments to the Plan as
the Board of Directors of the Company 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 or 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' credits to the Plan.
The Committee shall provide notice of amendments adopted by the Committee to the
Board of Directors of the Company on a timely basis.
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Executed in multiple originals this 3rd day of December, 1998.
McDONALD'S CORPORATION
/s/ Stanley R. Stein
By: Stanley R. Stein
Title: Executive Vice President
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