SEC Info - McDonalds Corp - ‘DEF 14A’ for 5/26/95

SEC Info℠

Home

Help

Please Sign In

McDonalds Corp – ‘DEF 14A’ for 5/26/95

As of: Thursday, 4/13/95 · For: 5/26/95 · Accession #: 63908-95-9 · File #: 1-05231

  As Of                Filer                Filing    For·On·As Docs:Size

 4/13/95  McDonalds Corp                    DEF 14A     5/26/95    1:179K

Definitive Proxy Solicitation Material — Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     McDonald's Corp 1995 Definitive Proxy Materials      110    271K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Comments Non-Employee Director
1	1st Page - Filing Submission
39	Non-Employee Director
103	Comments

DEF 14A 1st Page of 110 TOC ↑Top Previous Next ↓Bottom Just 1st
 
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934   

 [Amendment No...........]

Filed by the Registrant  /X/                                                    
Filed by a Party other than the Registrant  / /                                 

Check the appropriate box:                                                      

/ / Preliminary Proxy Statement                                                 
/X/ Definitive Proxy Statement                                                  
/ / Definitive Additional Materials                                             
/ / Soliciting Material Pursuant to Section 240.14a-11(c)                       
or Section 240.14a-12                                                   

McDonald's Corporation  
(Name of Registrant as Specified in its Charter)

Gloria Santona    
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box)                               

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or                 
14a-6(j)(2).                                                            
/ / $500 per each party to the controversy pursuant to Exchange Act             
Rule 14a-6(i)(3).                                                       
/ / Fee computed on table below per Exchange Act Rules 14a-(i)(4) and 0-11.     

1)  Title of each class of securities to which transaction applies:     

--------------------------------------------------              

2)  Aggregate number of securities to which transaction applies:        

--------------------------------------------------              

3)  Per unit price or other underlying value of transaction computed    
pursuant to Exchange Act Rule 0-11:*                            

--------------------------------------------------              

4)  Proposed maximum aggregate value of transaction:                    

--------------------------------------------------              

*Set forth the amount on which the filing fee is calculated and state how       
it was determined.                                                            

/ / Check box if any part of the fee is offset as provided by Exchange Act      
Rule 0-11(a)(2) and identify the filing for which the offsetting fee    
was paid previously.  Identify the previous filing by registration      
statement number, or the Form or Schedule and the date of its filing.   

1)  Amount Previously Paid:  ____________________________________       
2)  Form Schedule or Registration Statement No.:  _______________       
3)  Filing Party:  ______________________________________________       
4)  Date Filed:  ________________________________________________       

COVER:                                                                          

McDONALD'S CORPORATION                                                          

PROXY STATEMENT AND NOTICE                                                      
OF 1995 ANNUAL MEETING OF SHAREHOLDERS                                          

Graphic of:    Big Mac, Large Fry with McDonald's logo on fry box and Large     
Drink                                             

DEF 14A 2nd Page of 110 TOC 1st Previous Next ↓Bottom Just 2nd
1
HIGHLIGHTS                                                                      
----------------------------------------------------------------------          

THESE HIGHLIGHTS ARE A SUMMARY.  PLEASE READ THIS PROXY STATEMENT               
COMPLETELY FOR ALL OF THE INFORMATION WHICH YOU NEED TO VOTE YOUR PROXY.        

YOUR VOTE IS IMPORTANT.  To ensure that your shares will be represented at      
the Annual Meeting, please complete, sign, date and mail your proxy card to     
the independent inspectors of election, First Chicago Trust Company of New      
York, in the enclosed postage-paid envelope or use the toll-free telephone      
number set forth on the proxy card to vote your shares.  If your shares are     
held in the name of a broker, bank or other holder of record, you may           
attend the Annual Meeting, but may not vote at the meeting unless you have      
first obtained a proxy, executed in your favor, from the holder of record.      

THIS YEAR, SHAREHOLDERS OF RECORD CAN VOTE THEIR SHARES VIA A TOLL-FREE         
TELEPHONE CALL FROM THE U.S. AND CANADA OR BY MAILING A SIGNED PROXY CARD.      
THE COMPANY'S VOTING PROCEDURES, INCLUDING VOTING VIA TELEPHONE, ARE            
DESCRIBED ON PAGES 42 AND 43 OF THIS PROXY STATEMENT AND ON THE ENCLOSED        
PROXY CARD.                                                                     

-    McDonald's Corporation's 1995 Annual Meeting of Shareholders will be       
held at 10:00 a.m. on Friday, May 26, 1995, in Oak Brook, Illinois.   
See page 2.                                                           

-    Shareholders will be asked to elect six Directors to serve until the       
1998 Annual Meeting of Shareholders.  The nominees for Director are:  
Jack M. Greenberg, Donald G. Lubin, Andrew J. McKenna, Edward H.      
Rensi, Roger W. Stone and Robert N. Thurston.  The Board recommends a 
vote FOR all nominees.  Information about the nominees is on pages 4  
through 9.                                                            

-    Shareholders will also be asked to act on proposals to approve the         
McDonald's Corporation Non-Employee Director Stock Option Plan and the
Amended and Restated McDonald's Corporation 1992 Stock Ownership      
Incentive Plan.  The Board recommends a vote FOR both proposals in    
order to further align the interests of the Company's employees and   
Directors with the interests of shareholders.  Information about these
plans is on pages 18 through 41.                                      

-    The Board's corporate governance guidelines which incorporate              
principles by which the Board has been operating for years are        
described on page 3.                                                  

-    This Proxy Statement includes information about the pay of McDonald's      
executive management, as well as a report on executive compensation   
prepared by the Board's Compensation Committee.  To read about how    
McDonald's executives are compensated, refer to pages 10 through 12   
and 14 through 16.                                                    

-    The Company's cumulative total return to common shareholders for five-     
and ten-year periods is compared with returns for the Standard &      

DEF 14A 3rd Page of 110 TOC 1st Previous Next ↓Bottom Just 3rd
Poor's 500 Stock Index (S&P) & Dow Jones Industrial Average (DJIA)    
companies on page 13.                                                 

-    A description of the Company's confidential voting policy is found on      
page 43.                                                              

DEF 14A 4th Page of 110 TOC 1st Previous Next ↓Bottom Just 4th
2
CHAIRMAN'S MESSAGE TO SHAREHOLDERS AND ANNUAL MEETING NOTICE AND AGENDA         
----------------------------------------------------------------------          

DEAR FELLOW SHAREHOLDERS:                                                       

It is our pleasure to invite you to McDonald's 1995 Annual Meeting. During      
the meeting, we will report on McDonald's past year and our prospects for       
the future. Also, you will be asked to elect six Directors to serve until       
the 1998 Annual Meeting of Shareholders.                                        

The Board is asking for your support in approving a new stock option plan       
for the Company's non-employee Directors, which we believe will promote the     
long-term financial success of the Company by affording an additional           
opportunity to align the interests of non-employee Directors with the           
interests of shareholders.  We are also recommending that shareholders          
approve an amended and restated McDonald's Corporation 1992 Stock Ownership     
Incentive Plan, which will assist in furthering an important business goal-     
-strengthening the community of interest between McDonald's employees and       
shareholders by encouraging employee stock ownership.                           

Your vote is important. I urge you to consider the issues and to vote your      
shares as promptly as possible.                                                 

Cordially,                                                                      

/s/ Michael R. Quinlan                                                          
-------------------------                                                       
Michael R. Quinlan                                                              
Chairman and Chief Executive Officer                                            

TO SHAREHOLDERS OF MCDONALD'S CORPORATION:                                      

The 1995 McDonald's Corporation Annual Meeting of Shareholders will be held     
on Friday, May 26, 1995, at 10:00 a.m., local time, in the Prairie Room at      
The Lodge at McDonald's Office Campus, corner of Kroc Drive and Ronald          
Lane, Oak Brook, Illinois. The meeting will consider the following items of     
business:                                                                       

1.   The election of six Directors to serve until the 1998 Annual Meeting       
of Shareholders or until their successors are elected and qualified;  

2.   The adoption of the McDonald's Corporation Non-Employee Director Stock     
Option Plan; and                                                      

3.   The approval of the Amended and Restated McDonald's Corporation 1992       
Stock Ownership Incentive Plan.                                       

The Annual Meeting of Shareholders will also act upon such other business       
as may properly come before the meeting or any adjournment thereof.             

By order of the Board of Directors,                                             

/s/ Shelby Yastrow                                                              
-------------------------                                                       

DEF 14A 5th Page of 110 TOC 1st Previous Next ↓Bottom Just 5th
Shelby Yastrow                                                                  
Secretary                                                                       

April 12, 1995                                                                  

DEF 14A 6th Page of 110 TOC 1st Previous Next ↓Bottom Just 6th
3
BOARD OF DIRECTORS                                                              
----------------------------------------------------------------------          

RESPONSIBILITIES                                                                

The Board's primary responsibilities are:                                       

-    Evaluating the performance of the Company and its executive                
management;                                                           

-    Reviewing and, where appropriate, approving fundamental operating,         
financial and other corporate strategies, as well as major plans and  
objectives;                                                           

-    Providing advice and counsel to the Chief Executive Officer and            
executive management;                                                 

-    Overseeing management to ensure that the Company's assets are              
safeguarded and business is conducted in compliance with laws and     
regulations; and                                                      

-    Evaluating the overall effectiveness of the Board, as well as              
selecting and recommending to shareholders for election an appropriate
slate of candidates.                                                  

CORPORATE GOVERNANCE GUIDELINES                                                 

The Board's corporate governance guidelines incorporate principles by which     
the Board has been operating for many years.  Among other things, the           
guidelines provide that:                                                        

-    A majority of Directors should come from the outside and independence      
is increasingly important in the selection of new candidates.  The    
Board itself is responsible for selecting candidates for membership   
and for extending invitations to join the Board.                      

-    The Board retains the right to exercise its discretion in combining or     
separating the offices of Chairman and Chief Executive Officer.       

-    On matters relating to the selection, compensation and succession of       
the Chief Executive Officer, decisions are made by the outside        
Directors. The Chief Executive Officer receives a performance review  
conducted by the Chairman of the Compensation Committee annually.     

-    The Board meets on a bi-monthly basis.  The agenda is set by the           
Chairman and the Chief Executive Officer, and Directors may suggest   
items for inclusion.  Information is made available to the Board a    
reasonable period before each meeting.                                

-    Outside Directors meet in executive session with the Chief Executive       
Officer at each Board meeting and, at least once each year, evaluate  
the performance of executive management and discuss matters of        
succession planning and management development with the Chief         
Executive Officer.                                                    

-    Outside Directors meet in executive session without members of             
management twice each year.                                           

DEF 14A 7th Page of 110 TOC 1st Previous Next ↓Bottom Just 7th
COMMITTEES OF THE BOARD                                                         

THE AUDIT COMMITTEE recommends to the Board independent auditors to audit       
the Company's financial statements; reviews the audit with the auditors and     
management; reviews the Company's dealings with Directors and their             
affiliates; reviews the Company's legal affairs; and consults with the          
auditors and management regarding risk management and the adequacy of           
financial and accounting procedures and controls.  In carrying out its          
responsibilities, the Committee regularly meets with the independent            
auditors in executive session, without members of management present.           

THE COMPENSATION COMMITTEE evaluates, in consultation with all non-employee     
Directors, the performance of the Company's Chief Executive Officer and         
recommends his compensation to the Board annually; reviews and approves all     
other officers' compensation; and recommends to the Board the fees of non-      
employee Directors. The Committee administers the 1975 Option Plan, the         
Incentive Plan and the Deferred Incentive Plan. The Committee's report on       
executive compensation can be found on pages 9 through 11.                      

THE NOMINATING COMMITTEE establishes criteria for Board membership,             
searches for and screens candidates to fill vacancies on the Board,             
recommends an appropriate slate of candidates for election each year and,       
in this regard, evaluates the performance of individual Directors, assesses     
the overall performance of the Board and considers issues regarding the         
composition and size of the Board. The Nominating Committee will consider       
nominations by shareholders made in accordance with the information and         
timely notice requirements of the Company's By-Laws, a copy of which may be     
obtained from the Secretary at McDonald's Plaza, Oak Brook IL 60521.            

DEF 14A 8th Page of 110 TOC 1st Previous Next ↓Bottom Just 8th
4
In addition, the Board of Directors has an EXECUTIVE COMMITTEE which may        
exercise the broad powers and authority granted to it under the Company's       
By-Laws.  The chart below sets forth the composition of the Board's             
committees as of March 1, 1995, as well as the number of meetings each          
Committee held in 1994.                                                         

---------------------------------------------------------------------           
Committee      Member                   Number of meetings in 1994              
---------------------------------------------------------------------           
Audit          Gordon C. Gray                  4                                
Robert N. Thurston                                
B. Blair Vedder, Jr.                              
Donald G. Lubin,                                  
Non-voting Secretary                              
---------------------------------------------------------------------           
Compensation   Terry L. Savage                 4                                
Ballard F. Smith                                  
Robert N. Thurston                                
---------------------------------------------------------------------           
Executive      Donald G. Lubin                 0                                
Michael R. Quinlan                                
Fred L. Turner                                    
---------------------------------------------------------------------           
Nominating     Hall Adams, Jr.                 1                                
Donald G. Lubin                                   
Andrew J. McKenna                                 
Roger W. Stone                                    
---------------------------------------------------------------------           

In 1994, the Board met seven times. During 1994, all the Directors attended     
all the meetings of the Board of Directors and of the committees of which       
they were members except that three of the Company's Directors were absent      

DEF 14A 9th Page of 110 TOC 1st Previous Next ↓Bottom Just 9th
from one Board meeting each and one Director was absent from one committee      
meeting.                                                                        

COMPENSATION OF THE BOARD                                                       

In 1994, each non-employee Director earned an annual retainer of $35,000        
plus a fee of $2,000 for each Board meeting and $1,000 for each committee       
meeting attended. At the election of the recipient, all or any part of          
these fees may be deferred under the McDonald's Corporation Directors'          
Stock Plan (Stock Plan) formerly known as the Directors' Deferred               
Compensation Plan.  The Stock Plan provides a vehicle for non-employee          
Directors to align their interests with those of shareholders since             
deferred fees and the benefits described in the next paragraph are credited     
to a phantom Common Stock account which is adjusted to reflect changes in       
the market price of the Common Stock and dividends paid.  Distributions         
under the Stock Plan are payable to participants or their beneficiaries in      
cash upon death or retirement.                                                  

In January 1995, the account of each non-employee Director in the Stock         
Plan was credited with an amount equal to $17,500 for each year of service      
as a non-employee Director (up to ten years of service).  These amounts         
were credited in lieu of benefits formerly available under the Stock Plan.      
After January 1995, an amount equal to $17,500 shall be credited to the         
account of each non-employee Director at the end of each full year of           
service (up to a maximum of ten years).  Pursuant to plan provisions, a         
maximum of $175,000 shall be credited to the account of any non-employee        
Director.                                                                       

The Company has elected to make contributions to a grantor trust                
administered by an independent trustee in order to provide a source of          
funds to assist the Company in the meeting of its liabilities under the         
Stock Plan.  Trust assets, however, remain subject to the claims of the         
Company's general creditors.  Subject to certain limited restrictions, all      
trust assets are invested in Common Stock.  Participating Directors are         
entitled to direct the trustee in the voting of shares of Common Stock held     
in the trust.                                                                   

Directors who are Company employees are not paid for their services as          
Directors and are not eligible to participate in the Stock Plan.  As with       
its employees, the Company does not offer a pension plan to its non-            
employee Directors.                                                             

DIVERSITY                                                                       

Presently, one female and one minority male serve on the Board, and 24          
minority men and women are officers.  Also, more than 50% of middle             
management employees and over 60% of franchisees in training are female and     
minorities.                                                                     

BIOGRAPHICAL INFORMATION                                                        

Biographical information as of March 1, 1995 regarding each Director            
nominated for election and each Director whose term of office will continue     
after the Annual Meeting is set forth on the next page.                         

DEF 14A 10th Page of 110 TOC 1st Previous Next ↓Bottom Just 10th
5
HALL ADAMS, JR.  Business Consultant. Formerly, Chief Executive Officer of      
Leo Burnett Company, Inc. Director of The Dun & Bradstreet Corporation and      
Sears, Roebuck & Co. Class of 1996. Age: 61. Director since 1993.               

DEF 14A 11th Page of 110 TOC 1st Previous Next ↓Bottom Just 11th
ROBERT M. BEAVERS, JR.  Senior Vice President. Director of NICOR                
Corporation. Class of 1996. Age: 51. Director since 1984.                       

JAMES R. CANTALUPO.  President and Chief Executive Officer--International       
since 1991. Previously, President and Chief Operating Officer--                 
International. Class of 1997. Age: 51. Director since 1987.                     

GORDON C. GRAY.  Chairman of Rio Algom Limited, a Canadian mining company       
and metals distributor, since 1991. Previously, Chairman of Royal LePage        
Ltd. Director of CGC, Inc., Markborough Properties Ltd., Omers Realty           
Corporation, Rogers Communications, Inc., A.E. LePage Investments Ltd.,         
and Stone-Consolidated Corporation. Class of 1996.  Age: 67. Director since     
1982.                                                                           

JACK M. GREENBERG.  Nominee. Vice Chairman and Chief Financial Officer          
since 1992.  Previously, Senior Executive Vice President and Chief              
Financial Officer.  Director of Arthur J. Gallagher & Company and Harcourt      
General, Inc. Class of 1995. Age: 52. Director since 1982.                      

DONALD R. KEOUGH.  Chairman of Allen & Company, Inc., investment bankers,       
and advisor to the Board of Directors of The Coca-Cola Company since 1993.      
Previously, President, Chief Operating Officer, and a Director of The Coca-     
Cola Company. Director of H.J. Heinz Company, The Home Depot, Inc.,             
National Services Industries, Inc., and The Washington Post Company.  Class     
of 1997.  Age: 68. Director since 1993.                                         

DONALD G. LUBIN.  Nominee. Partner, and since 1991, Chairman, of the law        
firm of Sonnenschein Nath & Rosenthal, which provides legal services to the     
Company on a regular basis.  Director of Molex Incorporated.  Class of          
1995.  Age: 61. Director since 1967.                                            

ANDREW J. McKENNA.  Nominee. Chairman, President and Chief Executive            
Officer of Schwarz Paper Company, a printer, converter and distributor of       
packaging and promotional materials. Director of Aon Corporation, Dean          
Foods Company, First Chicago Corporation, The First National Bank of            
Chicago, Skyline Corporation, and The Tribune Company. Class of 1995. Age:      
65.  Director since 1991.                                                       

MICHAEL R. QUINLAN.  Chairman and Chief Executive Officer. Director of The      
Dun & Bradstreet Corporation and The May Department Stores Company.  Class      
of 1997. Age: 50. Director since 1979.                                          

EDWARD H. RENSI.  Nominee. President and Chief Executive Officer--U.S.A.        
since 1991.  Previously, Chief Operations Officer and President and Chief       
Operating Officer--U.S.A.  Director of Snap-On Tools Corporation. Class of      
1995.  Age: 50. Director since 1982.                                            

TERRY L. SAVAGE.  Financial journalist, author, and President of Terry          
Savage Productions, Ltd., which provides speeches, columns and videos on        
personal finance for corporate and association meetings and publications.       
Prior to 1991, commentator for CBS Inc. (WBBM-TV) in Chicago. Director of       
Broadway Stores, Inc. Class of 1996. Age: 50. Director since 1990.              

PAUL D. SCHRAGE.  Senior Executive Vice President, Chief Marketing Officer.     
Director of Safety-Kleen Corporation. Class of 1997.  Age: 60. Director         
since 1988.                                                                     

BALLARD F. SMITH.  President and Chief Executive Officer of Sun Mountain        
Broadcasting, a company operating radio stations.  Also, Chairman of            
Premier Food Services, Inc., a foodservice company.  Class of 1997.  Age:       
48. Director since 1983.                                                        

ROGER W. STONE.  Nominee. Chairman, President and Chief Executive Officer       
of Stone Container Corporation, a multinational paper company primarily         
producing and selling pulp, paper and packaging products. Director of First     
Chicago Corporation, The First National Bank of Chicago, Morton                 

DEF 14A 12th Page of 110 TOC 1st Previous Next ↓Bottom Just 12th
International,                                                                  
Option Care, Inc., and Stone Container Corporation. Class of 1955.  Age: 60.    
Director since 1989.                                                            

ROBERT N. THURSTON.  Nominee. Business consultant. Director of Jiffy Lube       
International, Inc. Class of 1995. Age: 62. Director since 1974.                

FRED L. TURNER.  Senior Chairman since 1990.  Previously, Chairman.             
Director of Aon Corporation, Baxter International Inc., and W.W. Grainger,      
Inc. Class of 1996.  Age: 62. Director since 1968.                              

B. BLAIR VEDDER, JR.  Business consultant.  Class of 1997.  Age: 70.            
Director since 1988.                                                            

DEF 14A 13th Page of 110 TOC 1st Previous Next ↓Bottom Just 13th
6
Photos of Directors and Nominated Directors:                                    

[Photo]                            [Photo]                                      

Greenberg, Beavers,                Quinlan, Lubin,                              
Gray, Cantalupo                    McKenna, Smith                               

[Photo]                            [Photo]                                      

Keough, Schrage, Rensi,            Vedder, Stone                                
Savage, Turner                     Thurston, Adams                              

DEF 14A 14th Page of 110 TOC 1st Previous Next ↓Bottom Just 14th
7
SECURITY OWNERSHIP INFORMATION                                                  
----------------------------------------------------------------------          

SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS                          

MANAGEMENT BELIEVES THAT THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS         
MORE EFFECTIVELY REPRESENT McDONALD'S SHAREHOLDERS, WHOSE INTERESTS THEY        
ARE CHARGED WITH PROTECTING, IF THEY ARE SHAREHOLDERS THEMSELVES.  BY           
ENCOURAGING OUR EXECUTIVES TO HAVE A SIGNIFICANT STOCK OWNERSHIP IN THE         
COMPANY, WE BELIEVE THAT WE FOCUS THEIR ATTENTION ON MANAGING McDONALD'S AS     
OWNERS OF THE BUSINESS AND THAT THIS LEADS TO ENHANCED VALUE FOR ALL            
SHAREHOLDERS.  OUR EXECUTIVE OFFICER GROUP BENEFICIALLY OWNED (DIRECTLY AND     
THROUGH EMPLOYEE BENEFIT PLANS) APPROXIMATELY 5.1 MILLION SHARES OF COMMON      
STOCK ON MARCH 1, 1995.                                                         

Directors and Executive Officers have sole voting and investment power over     
shares held directly, except for 426,790 shares held in joint accounts,         
over which they have shared voting and investment power. They also have         
sole voting and dispositive power over the shares credited or allocated to      
their accounts under the various benefit plans.  No Director or Executive       
Officer owns more than 1.0% of any class of stock.                              

Pursuant to plan provisions, participants in the Profit Sharing Program and     
related equalization plans may direct the voting of unallocated and unvoted     
plan shares.  In addition, Directors may vote shares credited to their          
accounts pursuant to the Stock Plan.  All such shares over which Directors      
and Executive Officers have voting power are shown as beneficially owned,       
except for unvoted shares, which are not shown because the number cannot be     
determined at this time.                                                        

The following table details the stock ownership of the named individuals        
and group as of March 1, 1995.                                                  

----------------------------------------------------------------------          

DEF 14A 15th Page of 110 TOC 1st Previous Next ↓Bottom Just 15th
              Beneficial          Beneficial ownership
            ownership of            of Preferred Stock
            Common Stock       -----------------------
Beneficial owner        (a,b,c,d,e,f)       Series B(g) Series C(g)             
----------------------------------------------------------------------          
Hall Adams, Jr.                 2,536               0            0              
Robert M. Beavers, Jr.        296,580           9,727       12,533              
James R. Cantalupo            587,918           2,069        1,627              
Gordon C. Gray                 10,115               0            0              
Jack M. Greenberg             282,961           2,912        2,827              
Donald R. Keough                5,724               0            0              
Donald G. Lubin                39,303               0            0              
Andrew J. McKenna              13,284               0            0              
Michael R. Quinlan          1,123,194          20,161       27,390              
Edward H. Rensi               440,442           3,387        3,504              
Terry L. Savage                11,999               0            0              
Paul D. Schrage               391,460           5,382        6,676              
Ballard F. Smith               46,253               0            0              
Roger W. Stone                 18,694               0            0              
Robert N. Thurston             65,520               0            0              
Fred L. Turner              1,138,185           6,826        8,808              
B. Blair Vedder, Jr.           23,505               0            0              
Directors and Executive                                                         
Officers as a group                                                             
(the Group) (21 persons)    5,339,182          62,710       75,526              
----------------------------------------------------------------------          

(a)  Included are shares of Common Stock as to which beneficial ownership       
is disclaimed, as follows: Mr. Greenberg, 1,426; Mr. Keough, 200; Mr. 
Lubin, 186; Mr. McKenna, 320; Mr. Quinlan, 489; Mr. Rensi, 39,191; Mr.
Schrage, 18,000; Mr. Turner, 64,778; and the Group, 145,258.  The     
disclaimed shares are owned by spouses or in a custodial capacity for 
children or grandchildren.                                            

(b)  Excluded are 22,000 shares held of record by Mr. McKenna in his            
capacity as Trustee of the Schwarz Paper Company Profit Sharing Trust.

(c)  Included, pursuant to SEC rules, are shares of Common Stock which may      
be received on conversion of Preferred Stock, Series B and C (at      
conversion ratios of .7692 and .8 common share per preferred share,   
respectively), as follows: Mr. Beavers, 17,508; Mr. Cantalupo, 2,893; 
Mr. Greenberg, 4,502; Mr. Quinlan, 37,420; Mr. Rensi, 5,408; Mr.      
Schrage, 9,481; Mr. Turner, 12,297; and the Group, 108,657. In order  
for these shares of Common Stock to be issued to any such person, his 
shares of Preferred Stock, Series B and C, shown in this table would  
have to be converted and would therefore no longer be outstanding.    

DEF 14A 16th Page of 110 TOC 1st Previous Next ↓Bottom Just 16th
8
(d)  Included are shares of Common Stock over which the following have          
voting power pursuant to employee benefit plan provisions, as follows:
Mr. Beavers, 12,039; Mr. Cantalupo, 709; Mr. Greenberg, 1,955;        
Mr. Quinlan, 27,476; Mr. Rensi, 2,659; Mr. Schrage, 6,200;            
Mr. Turner, 8,499; and the Group, 68,245.                             

(e)  Included are shares of Common Stock which could be acquired within 60      
days after March 1, 1995, pursuant to stock options in the following  
amounts: Mr. Beavers, 90,400; Mr. Cantalupo, 438,752; Mr. Greenberg,  
  190,500; Mr. Quinlan, 736,500; Mr. Rensi, 310,284; Mr. Schrage, 183,150;
Mr. Turner, 176,000; and the Group, 2,762,888.                        

(f)  Included are shares of Common Stock over which the following have          
  voting power pursuant to provisions of the Stock Plan and related trust:
  Mr. Adams, 1,136; Mr. Gray, 5,986; Mr. Keough, 2,524; Mr. Lubin, 10,575;
Mr. McKenna, 8,964; Ms. Savage, 10,499; Mr. Smith, 19,205; Mr. Stone, 

DEF 14A 17th Page of 110 TOC 1st Previous Next ↓Bottom Just 17th
 14,694; Mr. Thurston, 17,595; and Mr. Vedder, 18,655.  The terms of the
Stock Plan and related trust are set forth on page 4.                 

(g)  Included are shares of Preferred Stock, Series B and C, over which         
the following have voting power pursuant to employee benefit plan     
 provisions, in the respective amounts indicated: Mr. Beavers, 8,138 and
11,588; Mr. Cantalupo, 479 and 682; Mr. Greenberg, 1,322 and 1,882;   
Mr. Quinlan, 18,571 and 26,445; Mr. Rensi, 1,797 and 2,559;           
Mr. Schrage, 4,190 and 5,967; Mr. Turner, 5,745 and 8,181; and the    
Group, 46,128 and 65,686.                                             

PRINCIPAL SHAREHOLDERS                                                          

The following table sets forth information as of March 1, 1995, with            
respect to the only persons known to the Company to be the beneficial           
owners of more than 5% of any class of the Company's stock.                     

----------------------------------------------------------------------          
                    Amount and
                   nature of
     Name and address            beneficial      Percent
Title of class   of beneficial owner(a)      ownership(a,b)  of class           
----------------------------------------------------------------------          
Preferred Stock  Burton D. Cohen,            11,174,347       98.3%             
G. Lowell Dixon, and                          
Stanley R. Stein, as                          
Trustees of the Profit                        
Sharing Program                               
McDonald's Corporation                        
McDonald's Plaza                              
Oak Brook, IL  60521                          
----------------------------------------------------------------------          

(a)  Under SEC rules, the Trustees of the Profit Sharing Program, all of        
whom are Company officers, may be deemed to share with Program        
participants beneficial ownership of Preferred Stock held in the      
Program for the benefit of such participants.                         
(b)  Under certain circumstances, the Preferred Stock, Series B and C (at       
conversion ratios of .7692 and .8 common share per preferred share,   
respectively), is convertible into 8,776,306 shares of Common Stock   
(1.25% of the class). Also, the Trustees may be deemed to be the      
owners of an additional 25,592,122 shares of Common Stock (3.64% of   
the class) held for the Program and related equalization plans.       

DEF 14A 18th Page of 110 TOC 1st Previous Next ↓Bottom Just 18th
9
PROPOSAL ONE.  ELECTION OF DIRECTORS                                            
----------------------------------------------------------------------          

At the 1995 Annual Meeting, in accordance with the Company's Restated           
Certificate of Incorporation and By-Laws, six Directors are to be elected,      
each to serve a three-year term until the 1998 Annual Meeting of                
Shareholders or until his successor is elected and qualified.                   

The Company's Restated Certificate of Incorporation currently provides that     
the Board of Directors shall consist of not less than 11 nor more than 24       
members, with the exact number fixed by resolution of the Board. Currently,     
the number of Directors is 17, and there are two classes of six Directors       
and one class of five Directors.                                                

NOMINEES                                                                        

The six persons nominated by the Board of Directors for election at the         
1995 Annual Meeting are:                                                        

DEF 14A 19th Page of 110 TOC 1st Previous Next ↓Bottom Just 19th
JACK M. GREENBERG                                                               
DONALD G. LUBIN                                                                 
ANDREW J. MCKENNA                                                               
EDWARD H. RENSI                                                                 
ROGER W. STONE                                                                  
ROBERT N. THURSTON                                                              

RECOMMENDATION                                                                  

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR ALL SIX            
NOMINEES.                                                                       

VOTING INFORMATION FOR PROPOSAL ONE                                             

A proxy cannot be voted for more than six persons. Unless otherwise             
directed, the shares represented by the enclosed proxy, when signed and         
returned to the independent inspectors of election or voted via telephone,      
will be voted FOR the election of the six nominees. All elections for           
Directors shall be decided by a plurality of the votes of the shares of         
Common and Preferred Stock represented in person or by proxy, and entitled      
to vote on the election of Directors at the 1995 Annual Meeting. If any         
nominee becomes unable to serve for any reason (which is not anticipated),      
the shares represented by the enclosed proxy may be voted for such              
substituted nominee as may be designated by the Board of Directors, unless      
before the meeting the directorship has been eliminated by a reduction in       
the size of the Board.                                                          

DEF 14A 20th Page of 110 TOC 1st Previous Next ↓Bottom Just 20th
10
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION                  
----------------------------------------------------------------------          

DEAR FELLOW SHAREHOLDERS:                                                       

We, the Compensation Committee of the Board of Directors, are all               
independent, non-employee Directors.  Our responsibilities include: (a)         
developing compensation policies consistent with and linked to the              
Company's strategies; (b) together with the other non-employee Directors,       
assessing the performance of the Chief Executive Officer and other              
executive officers; and (c) ensuring that compensation is appropriate in        
light of both individual, team and Company performance.  We are responsible     
for approving officers' compensation, recommending the compensation of          
executive management to the Board of Directors, and administering the           
Company's employee stock option and incentive plans.                            

OUR PHILOSOPHY                                                                  

WE BELIEVE THAT THE INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS ARE BEST      
SERVED BY RUNNING OUR BUSINESS WITH A LONG-TERM PERSPECTIVE WHILE STRIVING      
TO DELIVER CONSISTENTLY GOOD ANNUAL RESULTS.  McDONALD'S RECORD OF              
PERFORMANCE ILLUSTRATES THAT THIS APPROACH HAS, BOTH IN THE SHORT- AND THE      
LONG-TERM, BEEN ADVANTAGEOUS TO SHAREHOLDERS.  Accordingly, in making           
compensation decisions, we evaluate management's vision in recognizing          
opportunities which will benefit the Company and its shareholders over the      
long term, the strategies which are put in place to capitalize on these         
opportunities, and management's ability to motivate and develop talent to       
execute these strategies.  In addition, because the unique relationship and     
culture which McDonald's has nurtured among its employees, franchisees and      
suppliers distinguishes us from other companies, the ability of our             
management to direct this balance of independent and interdependent             
entities is of great importance in enhancing shareholder value over the         

DEF 14A 21st Page of 110 TOC 1st Previous Next ↓Bottom Just 21st
long term and is therefore also a significant factor in compensation            
decisions.                                                                      

McDonald's executive compensation program is designed to attract, energize,     
reward and retain executive talent that will produce superior results over      
the long term and enhance the Company's leadership position in a highly         
competitive global business.  Compensation for our executives is based on       
the following principles:                                                       

-    Variable, at-risk compensation should comprise a significant part of       
an executive's compensation, with the percentage at risk increasing at
increased levels of responsibility.                                   

-    Changes in compensation must be driven by individual, team and Company     
performance.                                                          

-    Stock ownership fosters a mutual interest between employees and            
shareholders.                                                         

-    Compensation must be competitive with other high-performing companies      
and alternative careers in the McDonald's System, such as a McDonald's
franchisee or supplier, in order to motivate and retain the talent    
needed to produce superior results.                                   

EXECUTIVE COMPENSATION                                                          

THE PROCESS OF SETTING COMPENSATION IS NOT MECHANICAL; OUR DECISIONS ARE        
BASED ON OUR JUDGMENTS, AS WELL AS INDIVIDUAL, TEAM AND COMPANY                 
PERFORMANCE, AND SHAREHOLDER RETURNS.                                           

Our Committee conducts an overall review of executive compensation              
annually, and in that context, we review five- and ten-year shareholder         
returns for the Company and its peer group as illustrated on the graphs set     
forth on page 13 of this Proxy Statement.  Financial results and long-term      
shareholder returns are important considerations in determining executive       
compensation.  While we review survey data and information supplied by          
independent consultants to determine the competitiveness of McDonald's          
total executive compensation package, we do not seek to position                
compensation within any particular range.  In 1994, we reviewed survey          
information about companies comprising the Dow Jones Industrial Average         
(DJIA).  Based on the most recent survey information reviewed by our            
Committee, each element of annual cash compensation for Executive Officers,     
including the Chief Executive Officer, approximates the middle of the range     
relative to annual cash compensation paid by the companies comprising the       
DJIA.  Long-term incentives awarded to Executive Officers, including the        
Chief Executive Officer, approximates the higher end of the range relative      
to long-term incentives awarded by the companies comprising the DJIA.           

DEF 14A 22nd Page of 110 TOC 1st Previous Next ↓Bottom Just 22nd
11
ANNUAL CASH COMPENSATION                                                        

ANNUAL CASH COMPENSATION FOR OUR EXECUTIVES, AS FOR ALL EMPLOYEES, CONSISTS     
OF BASE SALARY AND A VARIABLE, AT-RISK INCENTIVE UNDER THE TARGET INCENTIVE     
PLAN (TIP).                                                                     

The primary factors in setting an executive's base salary, which is subject     
to adjustment annually, are (in order of importance): the executive's level     
of responsibility and individual performance, the performance of the            
Company as a whole, and the Company's position as an industry leader.  We       
gauge individual performance in many areas, including:  the development and     
execution of strategies, leadership, development of staff and contributions     
to programs which affect the performance of the Company and the McDonald's      
System.  In 1994, base salaries for executives were favorably impacted by       

DEF 14A 23rd Page of 110 TOC 1st Previous Next ↓Bottom Just 23rd
the following corporate and System achievements in 1993:  improved market       
share and return on assets; excellent sales and operating income gains; and     
double-digit growth in earnings per share and net income.                       

Under TIP, at the beginning of the year, each executive is assigned a           
target incentive; the greater an individual's responsibility, the higher        
the percentage of target incentive to salary.  In order to determine this       
annual incentive, a target incentive is initially adjusted by an overall        
Company performance factor (how well the Company did vs. target).  A team       
performance factor, reflecting the overall results of the organizational        
unit for which the executive is responsible, is then applied and finally an     
individual performance factor is applied as described above.                    

In determining annual incentives for 1994, our Committee reviewed overall       
corporate performance during 1994.  In particular, these incentives were        
favorably impacted by significant gains in worldwide operating income,          
improved return on assets, and sizable growth in earnings per share.            
Moreover, we considered the progress in implementing the Company's key          
strategies--increasing the gap between McDonald's and its competitors in        
execution, convenience and value.                                               

LONG-TERM INCENTIVES                                                            

OUR COMMITTEE BELIEVES THAT STOCK OPTIONS ARE PRESENTLY THE BEST VEHICLE BY     
WHICH TO LINK EMPLOYEES' INTERESTS WITH THOSE OF SHAREHOLDERS.                  
Accordingly, long-term incentives consist of a broad-based stock option         
plan--more than 22,000 employees are currently eligible to receive option       
grants.  Options generally have a life of ten years, vest over seven years      
and have an exercise price equal to the fair market value of the Common         
Stock on the grant date.                                                        

In establishing guidelines for the size of stock option awards, we consider     
the following criteria (in order of importance):  level of responsibility,      
achievement of plan objectives, contributions to the near- and long-term        
planning process and the Company's accomplishment of major strategies.          
Stock option awards were favorably impacted by the 1993 corporate and           
System achievements described above as well as progress in the Company's        
execution, convenience and value strategies in 1993.  Awards are dependent      
primarily upon current individual performance and, to some extent, on           
potential for influencing future results.  We also consider the number of       
options granted in previous years.                                              

PROFIT SHARING                                                                  

THE COMPANY HAS NEVER OFFERED A PENSION PLAN; RATHER, ELIGIBLE EMPLOYEES        
PARTICIPATE IN PROFIT SHARING, WITH CONTRIBUTIONS LINKED TO THE COMPANY'S       
FINANCIAL PERFORMANCE.  In addition, employees, including executives, have      
been encouraged to build stock ownership in McDonald's by allowing              
investment of their profit sharing accounts in a Common Stock fund and          
through participation in the two other components of the Profit Sharing         
Program: McDESOP, which is a 401(k) plan, and the Leveraged ESOP.               
Generally, executives participate in the Program on the same terms as           
eligible, non-executive employees.  For all participants, amounts in excess     
of applicable tax limitations are credited to related equalization plans.       

DEF 14A 24th Page of 110 TOC 1st Previous Next ↓Bottom Just 24th
12
CHIEF EXECUTIVE OFFICER COMPENSATION                                            

Mr. Quinlan participates in the compensation program provided to the other      
Executive Officers described in this report.  Mr. Quinlan's total               
compensation in 1994 reflects his outstanding performance, his emphasis on      
constructive change, his significant contributions in leading the Company's     

DEF 14A 25th Page of 110 TOC 1st Previous Next ↓Bottom Just 25th
long-term strategic growth, and his influence on improved financial results     
which were reflected in enhanced returns to shareholders.  Based on these       
factors, for 1994, Mr. Quinlan was awarded an annual incentive for              
performance of $950,000, compared with $800,000 for the previous year, and      
options to purchase 350,000 shares of Common Stock, 50,000 of which were        
granted on March 29, 1994, as a special grant in recognition of his             
exceptional performance and leadership in 1993.  In addition, Mr. Quinlan's     
salary was increased from $980,000 to $998,875.  Stock options represented      
the predominant portion of the increase in Mr. Quinlan's total compensation     
package for 1994, reflecting our Committee's emphasis on variable, at-risk      
compensation and increased stock ownership.  This grant is consistent with      
our philosophy that at-risk compensation should comprise a significant part     
of an executive's overall total compensation.                                   

POLICY WITH RESPECT TO THE $1 MILLION DEDUCTION LIMIT                           

Section 162(m) of the Code, which generally limits the tax deductibility of     
annual compensation paid to certain Executive Officers to $1 million,           
provides an exception for "performance-based" compensation meeting              
specified requirements.  Assuming shareholder approval of proposed changes      
to the Incentive Plan and continued deferral of compensation by certain         
Executive Officers, we expect that most, if not all, compensation paid to       
these Executive Officers will qualify as a tax deductible expense. However,     
it is possible that at some point in the future, circumstances may cause        
our Committee to authorize compensation that is not entirely deductible.        

IN CONCLUSION                                                                   

Our Committee believes that a significant portion of executive compensation     
should be at risk, that performance should be rewarded, that the financial      
interests of Executive Officers should be aligned with shareholders through     
stock ownership, and that compensation should be competitive.  We have          
structured compensation at McDonald's to meet these criteria.                   

Respectfully submitted,                                                         

/s/ Robert N. Thurston                                                          
------------------------                                                        
Robert N. Thurston                                                              
Chairman                                                                        

/s/ Terry L. Savage                                                             
-------------------------                                                       
Terry L. Savage                                                                 

/s/ Ballard F. Smith                                                            
-------------------------                                                       
Ballard F. Smith                                                                

DEF 14A 26th Page of 110 TOC 1st Previous Next ↓Bottom Just 26th
13
COMPARISON OF TOTAL SHAREHOLDER RETURNS                                         
----------------------------------------------------------------------          

McDonald's Corporation is unique; accordingly, we do not have readily           
identifiable investment peers. Our operating characteristics and the            
marketing of branded products around the world place McDonald's among           
global food and beverage companies in the minds of many investors. For          
others, our recognizable brand and the retail nature of our business place      
McDonald's among global consumer products companies. Also, our strong           
financial position, growing cash flow, solid international presence and         

DEF 14A 27th Page of 110 TOC 1st Previous Next ↓Bottom Just 27th
global brand power may cause investors to view McDonald's as a global           
branded growth company. Finally, our capitalization, trading volume and         
importance in an industry that is vital to the U.S. economy have resulted       
in McDonald's inclusion in the DJIA since 1985.                                 

Although McDonald's is included in published restaurant indices, we believe     
that a presentation of a performance graph relative to such indices would       
not be meaningful since by virtue of our size, McDonald's inclusion in          
those indices tends to skew the results.  Also, unlike most other companies     
included in these indices, which have no or limited international               
operations, McDonald's does business in 79 countries and about 50 percent       
of our operating income comes from outside the U.S.                             

Thus, in the absence of any readily identifiable industry peer group for        
McDonald's, we believe use of the companies comprising the DJIA as the          
group for comparison is appropriate. Like McDonald's, many DJIA companies       
generate meaningful sales and revenues outside the U.S. and some manage         
global brands. Also, investors who are looking for an investment in blue        
chip stocks often look at the DJIA as a benchmark.                              

The two performance graphs which follow depict McDonald's cumulative total      
shareholder returns (i.e., price appreciation and reinvestment of               
dividends) relative to the S&P and a group made up of the companies             
comprising the DJIA (including McDonald's) for the five- and ten-year           
periods ended December 31, 1994.  Returns shown are for years ended             
December 31, and for the DJIA companies, returns are weighted for market        
capitalization as of the beginning of each year.                                

WE BELIEVE THAT THE TEN-YEAR GRAPH IS ESPECIALLY MEANINGFUL AS McDONALD'S       
BUSINESS FOCUS AND GROWTH STRATEGIES HAVE BEEN, AND CONTINUE TO BE, LONG        
TERM.                                                                           

FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURNS                                  

[GRAPH]                                                                         

89     90      91     92      93     94 
-------------------------------------------------------------                   
McDonald's          $100   85      113    146     172    178                    
S&P                 $100   97      126    136     150    152                    
DJIA companies      $100   102     129    135     150    158                    
-------------------------------------------------------------                   
Source: S&P Compustat                                                           

TEN-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURNS                                   

[GRAPH]                                                                         

        84   85   86   87   88   89   90   91   92   93   94
----------------------------------------------------------------------          
McDonald's      $100  159  181  198  220  318  272  358  464  547  565          
S&P             $100  132  156  165  192  253  245  319  344  378  383          
DJIA companies  $100  130  147  156  180  232  237  299  313  348  366          
----------------------------------------------------------------------          
Source: S&P Compustat                                                           

DEF 14A 28th Page of 110 TOC 1st Previous Next ↓Bottom Just 28th
14
EXECUTIVE COMPENSATION                                                          
----------------------------------------------------------------------          

SUMMARY COMPENSATION TABLE                                                      

DEF 14A 29th Page of 110 TOC 1st Previous Next ↓Bottom Just 29th
The following table summarizes total compensation earned by or paid for         
services rendered in all capacities to the named Executive Officers during      
each of the years ended December 31, 1994, 1993 and 1992.                       

                                                        [Enlarge/Download Table]


-------------------------------------------------------------------------------------------------------- 
                               Annual compensation   Long-term compensation                              
                                                   --------------------------                            
                                                             Awards             Payouts                  
                                                   --------------------------  ----------                
                                                    Restricted     Securities                  All other 
Name and                                               stock       underlying     LTIP*     compensation 
principal position          Year  Salary($) Bonus($)  awards($) options(#)(a,b)  payouts($)       ($)(c) 
-------------------------------------------------------------------------------------------------------- 
                                                                                                         
Michael R. Quinlan         1994  $998,875  $950,000      0           350,000        0           $167,055 
Chairman of the Board,     1993   980,000   800,000      0           292,000        0            299,176 
Chief Executive Officer    1992   880,000   700,000      0           302,000        0            321,355 

Edward H. Rensi            1994   711,375   485,462      0           176,000        0            129,056 
President,                 1993   669,983   469,638      0           170,000        0            180,870 
Chief Executive Officer-   1992   645,000   405,000      0           132,000        0            205,941 
U.S.A.                                                                                                   

James R. Cantalupo         1994   684,025   499,194      0           176,500        0            124,100 
President,                 1993   631,667   446,446      0           170,000        0            173,862 
Chief Executive Officer-   1992   590,000   385,000      0           152,000        0            188,679 
International                                                                                            

Jack M. Greenberg          1994   668,875   473,478      0           176,000        0            121,337 
Vice Chairman,             1993   606,833   434,850      0           170,000        0            175,447 
Chief Financial Officer    1992   516,000   375,000      0           152,000        0            167,311 

Paul D. Schrage            1994   493,725   262,147      0            72,600        0             99,401 
Senior Executive           1993   466,517   262,064      0            72,600        0            116,427 
Vice President,            1992   444,100   229,000      0            62,000        0            131,890 
Chief Marketing Officer                                                                                  
---------------------------------------------------------------------------------------------------------
*Long-Term Incentive Plan                                                                                


(a)  The securities underlying the options are shares of Common Stock.          
(b)  All options have been adjusted to reflect the two-for-one stock split      
in 1994 which was effected in the form of a stock dividend.           
(c)  These amounts represent 1994 Company contributions and allocations to,     
respectively: (i) the Profit Sharing Program and related equalization 
plans; (ii) the Deferred Incentive Plan; and (iii) premiums on group  
term life insurance, as follows: Mr. Quinlan, $155,316, $0, and       
$11,739; Mr. Rensi, $120,677, $0, and $8,379; Mr. Cantalupo, $106,380,
$9,641, and $8,079; Mr. Greenberg, $104,025, $9,390, and $7,922; and  
Mr. Schrage, $90,081, $0, and $9,320.  Amounts which have been        
included with respect to the unfunded equalization plans and Deferred 
Incentive Plan represent the Company's obligation to pay such amounts 
to participants.                                                      

DEF 14A 30th Page of 110 TOC 1st Previous Next ↓Bottom Just 30th
15
STOCK OPTION GRANTS IN 1994                                                     

Options granted to the named Executive Officers were about 7% of the total      
number of options granted in 1994. All options granted will expire on the       
tenth anniversary of their respective grant dates and become exercisable        

DEF 14A 31st Page of 110 TOC 1st Previous Next ↓Bottom Just 31st
over a seven-year period. Option exercise prices were in all cases equal to     
the fair market value of a share of Common Stock on the date the option was     
granted. The options have no value unless the Company's stock price             
appreciates and the recipient satisfies the applicable vesting                  
requirements.                                                                   

The following table shows the stock options granted to the named Executive      
Officers during 1994 and the potential realizable value of those grants (on     
a pre-tax basis) determined in accordance with SEC rules. The information       
in this table shows how much the named Executive Officers may eventually        
realize in future dollars under two hypothetical situations:  if the stock      
gains 5% or 10% in value per year, compounded over the ten-year life of the     
options. These are assumed rates of appreciation and are not intended to        
forecast future appreciation of the Company's Common Stock.  Also included      
in this table is the increase in value to all common shareholders using the     
same assumed rates of appreciation.  All information has been adjusted to       
reflect the two-for-one stock split in 1994 which was effected in the form      
of a stock dividend.                                                            

For a perspective, in ten years one share of Common Stock valued at $29.937     
on May 26, 1994 would be worth $48.76, assuming the hypothetical 5%             
compounded growth rate, or $77.66, assuming the hypothetical 10% compounded     
growth rate.                                                                    

Another way to look at this is to express these amounts in today's dollars      
by applying a present value approach to the hypothetical appreciation           
rates. These results are shown in the last two columns of the table.            

                                                        [Enlarge/Download Table]


-----------------------------------------------------------------------------------  
                                      Individual grants                              
                    -----------------------------------------------------            
                     Number of          % of                                         
                    securities         total                                         
                    underlying       options                                         
                       options    granted to     Exercise                            
                       granted     employees        price     Expiration             
                         (#)(a)    in 1994(b)      ($/Sh)           date             
-------------------------------------------------------------------------            
                                                                                     
Michael R. Quinlan      50,000          0.4%      $28.875        3/29/04             
                       300,000          2.2        29.937        5/26/04             
Edward H. Rensi        176,000          1.3        29.937        5/26/04             
James R. Cantalupo     176,000          1.3        29.937        5/26/04             
                           500          0.0        26.250        9/20/04             
Jack M. Greenberg      176,000          1.3        29.937        5/26/04             
Paul D. Schrage         72,600          0.5        29.937        5/26/04             

                      Potential realizable value at     Present value at assumed     
                       assumed rates of stock price         rates of stock price     
                    appreciation for option term(c)            appreciation(c,d)     
                    -------------------------------- ------------------------------  
                            5%             10%             5%               10%      
-----------------------------------------------------------------------------------  
                                                                                     
Michael R. Quinlan    $   907,967     $ 2,300,966     $  461,996       $1,170,788    
                        5,648,166      14,313,560      2,778,990        7,042,505    
Edward H. Rensi         3,313,590       8,397,289      1,630,340        4,131,603    
James R. Cantalupo      3,313,590       8,397,289      1,630,340        4,131,603    
                            8,254          20,918          3,870            9,806    
Jack M. Greenberg       3,313,590       8,397,289      1,630,340        4,131,603    
Paul D. Schrage         1,366,856       3,463,882        672,515        1,704,286    
-----------------------------------------------------------------------------------  

DEF 14A 32nd Page of 110 TOC 1st Previous Next ↓Bottom Just 32nd
INCREASE IN VALUE                                                                    
TO ALL COMMON                                                                        
SHAREHOLDERS(e)     $13.2 billion   $33.5 billion    $6.5 billion     $16.5 billion  
-------------------------------------------------------------------------------------


(a)  The securities underlying the options are shares of Common Stock.          
(b)  Based on the total number of options granted to employees under the        
1975 Option Plan and the Incentive Plan.                              
(c)  Calculated over a ten-year period, representing the life of the            
options.                                                              
(d)  Calculated assuming an investment in a ten-year, zero coupon U.S.          
Treasury note made at the time the options were granted (6.99% on     
3/29/94, 7.35% on 5/26/94 and 7.87% on 9/20/94).                      
(e)  Calculated using a Common Stock price of $29.937, the closing market       
price on 5/26/94, which is the exercise price of substantially all of 
the options granted in 1994, and the total weighted average number of 
common shares outstanding for 1994.                                   

DEF 14A 33rd Page of 110 TOC 1st Previous Next ↓Bottom Just 33rd
16
AGGREGATED OPTION EXERCISES IN 1994 AND FISCAL YEAR-END OPTION VALUES TABLE     

The following table shows information concerning the exercise of stock          
options by each of the named Executive Officers during 1994, and the value      
of all remaining exercisable and unexercisable options at December 31,          
1994, on a pre-tax basis.  All information has been adjusted to reflect the     
two-for-one stock split in 1994 which was effected in the form of a stock       
dividend.                                                                       

----------------------------------------------------------------------          
               Number of
                              securities        Value of
                              underlying     unexercised
                             unexercised    in-the-money
        Shares                options at      options at
      acquired                  l2/31/94        12/31/94
            on      Value         (#)(b)          ($)(c)
      exercise   realized   Exercisable/    Exercisable/
Name                   (#)     ($)(a)  unexercisable   unexercisable            
----------------------------------------------------------------------          
Michael R. Quinlan       0          0      724,000/     $10,408,492/            
                              995,000        5,031,721

Edward H. Rensi          0          0      310,284/       4,232,737/            
                              527,000        2,812,954

James R. Cantalupo       0          0      438,752/       6,154,262/            
                              592,000        3,663,476

Jack M. Greenberg   10,000   $122,754      190,500/       1,890,075/            
                              540,500        2,866,587

Paul D. Schrage          0          0      183,150/       2,545,581/            
                              250,050        1,577,750
----------------------------------------------------------------------          

(a)  Calculated by subtracting the exercise price from the market value of      
the Common Stock as of the exercise date.                             
(b)  The securities underlying the options are shares of Common Stock.          
(c)  Calculated using the market value of the Common Stock at December 31,      
1994 ($29.25 per share) less the per share option exercise price      
multiplied by the number of exercisable or unexercisable options, as  
the case may be.                                                      

DEF 14A 34th Page of 110 TOC 1st Previous Next ↓Bottom Just 34th

DEF 14A 35th Page of 110 TOC 1st Previous Next ↓Bottom Just 35th
17
OTHER INFORMATION                                                               
----------------------------------------------------------------------          

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934            

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's     
Executive Officers and Directors to file reports of ownership and changes       
in ownership with the SEC and the New York Stock Exchange. The Company          
believes that during the period from January 1, 1994 through December 31,       
1994, its Executive Officers and Directors complied with all applicable         
Section 16(a) filing requirements, except that Mr. Keough and Mr. McKenna       
each inadvertently filed one late report covering one transaction.  This        
conclusion is based solely on a review of copies of such forms furnished to     
the Company in accordance with SEC regulations and certain written              
representations received by the Company.                                        

RELATED PARTY TRANSACTIONS                                                      

In 1994, the Company and its subsidiaries purchased approximately $2.8          
million worth of products (principally premiums and gift items) from Group      
II Communications, Inc., comprising more than 5% of Group II's gross            
revenues for its last fiscal year. Mr. McKenna, a Director of the Company,      
is the holder of 51% of the stock of Group II. The Company believes that        
such purchases were made on terms at least as favorable as would have been      
available from other parties and expects to continue its dealings with          
Group II in 1995 on similar terms.                                              

In 1994, as part of its ongoing share repurchase program, the Company           
purchased shares of Common Stock, in each case at the New York Stock            
Exchange composite closing price on the date of purchase, from Directors        
and Executive Officers at the following prices:  James R. Cantalupo,            
$387,563; Michael L. Conley, $141,923; Thomas W. Glasgow, Jr., $292,500;        
and Fred L. Turner, $1,759,328. Messrs. Cantalupo and Conley acquired these     
shares within two years prior to their sales through the exercise of stock      
options at the following prices, respectively: $62,868 and $22,975.             

1996 ANNUAL MEETING - RECEIPT OF SHAREHOLDER PROPOSALS                          

Any shareholder proposal must be submitted in writing to the Secretary of       
the Company at McDonald's Plaza, Oak Brook IL 60521 and received by             
December 14, 1995, if it is to be considered for inclusion in the Company's     
1996 proxy materials.                                                           

AVAILABILITY OF ANNUAL REPORT ON FORM 10-K                                      

The Company will provide, without charge, a copy of McDonald's                  
Corporation's Annual Report on Form 10-K for the year ended December 31,        
1994, (including any financial statements and schedules, and a list             
describing any exhibits not contained therein) upon written request             
addressed to:  Investor Relations Service Center, McDonald's Corporation,       
Kroc Drive, Oak Brook IL 60521. The exhibits to the 10-K are available upon     
payment of charges which approximate the Company's cost of reproduction.        

DEF 14A 36th Page of 110 TOC 1st Previous Next ↓Bottom Just 36th
18
PROPOSAL TWO.  ADOPTION OF NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN              
----------------------------------------------------------------------          

DEF 14A 37th Page of 110 TOC 1st Previous Next ↓Bottom Just 37th
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR ADOPTION OF        
THE NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN.                                    

PURPOSE                                                                         

The Board believes that the success of the Company depends largely on its       
continued ability to attract and retain highly qualified Directors who are      
motivated to exert their best efforts on behalf of the Company and its          
shareholders.  The Board has reviewed the Company's current arrangements        
for compensation of Directors and, upon the recommendation of management        
and the Board's Compensation Committee, believes that a program that            
permits the grant of stock options to the Company's non-employee Directors      
(Non-Employee Directors) will promote the long-term financial success of        
the Company by affording an additional opportunity to align the interests       
of the Non-Employee Directors with the interests of shareholders.               

On January 19, 1995, the Board of Directors adopted, subject to approval by     
the Company's shareholders, the Company's Non-Employee Director Stock           
Option Plan (Option Plan).                                                      

A summary of the Option Plan follows.  Shareholders should refer to Exhibit     
A for a detailed statement of the terms and conditions of the Option Plan.      

KEY FEATURES OF THE OPTION PLAN                                                 

-    INITIAL OPTION GRANTS                                                      
1,000 options granted to Non-Employee Directors upon Board approval of
the Option Plan (contingent on shareholder approval) and to new Non-  
Employee Directors upon first appointment or election                 

-    ANNUAL GRANTS                                                              
1,000 options granted to Non-Employee Directors at each annual        
shareholder meeting                                                   

-    ADJUSTMENT                                                                 
Grants automatically adjusted for future stock splits                 

-    OPTION PRICE                                                               
Fair market value on the date of grant                                

-    VESTING                                                                    
Equal installments over a period of three years                       

-    TERM                                                                       
Ten years                                                             

-    AUTHORIZED SHARES                                                          
150,000 shares of Common Stock                                        

BRIEF DESCRIPTION OF THE OPTION PLAN                                            

The Option Plan will be administered by the Board or a committee of the         
Board.  The Board (or such committee) will have the authority to adopt,         
alter and repeal such administrative rules, guidelines and practices            
governing the Option Plan, to interpret the Option Plan and any stock           
option issued under the Option Plan (and any agreement relating thereto)        
and to otherwise supervise the administration of the Option Plan, but will      
have no discretion with respect to the selection of Directors to receive        
options, the number of shares subject to the Option Plan or to each grant,      
or the purchase price for shares subject to any options.                        

Subject to certain adjustments, options for a total of 150,000 shares of        
Common Stock may be granted to Non-Employee Directors under the Option          

DEF 14A 38th Page of 110 TOC 1st Previous Next ↓Bottom Just 38th
Plan.  On January 19, 1995, each Non-Employee Director was granted              
options to purchase 1,000 shares of Common Stock, subject to shareholder        
approval of the Option Plan.                                                    

DEF 14A 39th Page of 110 TOC 1st Previous Next ↓Bottom Just 39th
19
If such approval is not obtained, all outstanding options shall become void,    
no further grants shall be made and the Option Plan shall immediately           
terminate.                                                                      

NON-EMPLOYEE DIRECTOR                                                           
STOCK OPTION PLAN BENEFITS                                                      

----------------------------------------------------------------------          
Name                   Dollar value ($)*      Number of stock options           
----------------------------------------------------------------------          
Hall Adams, Jr.           $ 4,375                    1,000                      
Gordon C. Gray              4,375                    1,000                      
Donald R. Keough            4,375                    1,000                      
Donald G. Lubin             4,375                    1,000                      
Andrew J. McKenna           4,375                    1,000                      
Terry L. Savage             4,375                    1,000                      
Ballard F. Smith            4,375                    1,000                      
Roger W. Stone              4,375                    1,000                      
Robert N. Thurston          4,375                    1,000                      
B. Blair Vedder, Jr.        4,375                    1,000                      
Non-Employee                                                                    
Director Group                                                                  
(10 persons)               43,750                   10,000                      
----------------------------------------------------------------------          
*    The dollar value shown above reflects the increase of $4.375 in the        
Fair Market Value of the Common Stock between January 19, 1995, the   
date of grant, and March 1, 1995.                                     

Each Non-Employee Director shall, on the first meeting of the Board             
following his or her first appointment or election as a Director of the         
Company, and on the date of the Company's Annual Meeting of Shareholders        
each year thereafter during such Director's term, automatically be granted      
an option to purchase 1,000 shares of Common Stock, having an exercise          
price of 100% of the Fair Market Value of the Common Stock on the date of       
grant.  The term of a stock option shall be 10 years, subject to extension      
(but not beyond 13 years) or earlier termination by reason of death,            
disability, retirement or termination of Director status.  Generally, stock     
options vest in equal installments over three years and may not be assigned     
or transferred except by will or by applicable laws of descent and              
distribution so long as required by Rule 16b-3 under the Securities             
Exchange Act of 1934.  Payment of the option price may be made in cash,         
Common Stock held for at least six months, or through a broker-assisted         
exercise.                                                                       

The Board may amend, alter or discontinue the Option Plan, but no               
amendment, alteration or discontinuation may be made which would (i) impair     
the rights of an optionee without the optionee's consent, except such an        
amendment which would cause the Option Plan to qualify for the exemption        
provided by Rule 16b-3 under the Exchange Act or (ii) disqualify the Option     
Plan from exemption the provided by Rule 16b-3 under the Exchange Act;          
provided, however, certain amendments may not be made without shareholder       
approval.                                                                       

Only Non-Employee Directors are eligible to participate in the Option Plan.     
As of March 1, 1995, 10 Non-Employee Directors were eligible to participate     
in the Option Plan.                                                             

DEF 14A 40th Page of 110 TOC 1st Previous Next ↓Bottom Just 40th
FEDERAL TAX CONSEQUENCES                                                        

These options are non-qualified stock options for Code purposes.  The grant     
of non-qualified stock options does not result in any taxable income to the     
participant or any tax deduction to the Company.  Upon the exercise of a        
non-qualified stock option, the excess of the market value of the shares        
acquired over their cost to the participant is taxable to the participant       
as ordinary income and is deductible by the Company.  The participant's tax     
basis for the shares is their Fair Market Value at the time of exercise.        
In addition, the participant's holding period for the shares will commence      
on the exercise date.                                                           

VOTING INFORMATION FOR THE PROPOSAL                                             

The affirmative vote of the holders of a majority of the shares of Common       
and Preferred Stock represented in person or by proxy and entitled to vote      
at the Annual Meeting is required to approve the Proposal.                      

RECOMMENDATION                                                                  

THE BOARD BELIEVES THAT THE ADOPTION OF THE OPTION PLAN WILL PROMOTE THE        
LONG-TERM FINANCIAL SUCCESS OF THE COMPANY BY AFFORDING AN ADDITIONAL           
OPPORTUNITY TO ALIGN THE INTERESTS OF NON-EMPLOYEE DIRECTORS WITH THOSE OF      
SHAREHOLDERS.                                                                   

THE BOARD RECOMMENDS A VOTE FOR THE ADOPTION OF THE NON-EMPLOYEE DIRECTOR       
STOCK OPTION PLAN.                                                              

DEF 14A 41st Page of 110 TOC 1st Previous Next ↓Bottom Just 41st
20
PROPOSAL THREE.  APPROVAL OF THE AMENDED AND RESTATED 1992 STOCK OWNERSHIP      
INCENTIVE PLAN                                                                  
----------------------------------------------------------------------          

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF        
THE AMENDED AND RESTATED 1992 STOCK OWNERSHIP INCENTIVE PLAN.                   

The Company's management believes that McDonald's future success and            
profitability will depend in large measure on its ability to continue to        
attract, retain and motivate highly qualified individuals and that an           
effective compensation policy for these individuals includes not only a         
competitive annual salary, but also long-term incentives linked to              
shareholder returns and Company performance.  The Company is convinced of       
the important role played by stock-based incentives in retaining the            
services of outstanding personnel and in encouraging such employees to have     
a greater personal financial investment and stock ownership in the Company.     

The McDonald's Corporation 1992 Stock Ownership Incentive Plan (Incentive       
Plan) was adopted by the Board of Directors of the Company and approved by      
its shareholders effective as of June 1, 1992.  The Board has amended and       
restated the Incentive Plan as described below, subject to shareholder          
approval at the Annual Meeting.                                                 

The following is a summary of the principal provisions of the amended and       
restated Incentive Plan (Restated Incentive Plan).  Capitalized terms used      
in this summary which are not defined herein have the meanings ascribed to      
them in the Restated Incentive Plan.  The full text of the Restated             
Incentive Plan is set forth in Exhibit B to this Proxy Statement.               

PURPOSE                                                                         

DEF 14A 42nd Page of 110 TOC 1st Previous Next ↓Bottom Just 42nd
The primary purposes of the Restated Incentive Plan are to advance the          
Company's interests by encouraging and enabling employees to acquire a          
larger personal financial interest in the Company through the acquisition       
and ownership of Common Stock and to encourage identification with              
shareholders through employee stock ownership.                                  

GENERAL INFORMATION                                                             

The Restated Incentive Plan provides for the granting of stock options,         
restricted stock awards, stock appreciation rights, performance units and       
stock bonuses (collectively, Awards).  The Company presently intends to use     
the non-qualified stock option feature of the Restated Incentive Plan, and      
will consider the grant of other types of Awards in the future.                 

Awards may be granted to any full-time employee (including officers) of the     
Company or any of its domestic Subsidiaries, or to any employee, officer or     
director of any of the Company's foreign Subsidiaries.  More than 22,000        
employees are currently eligible to participate in the Restated Incentive       
Plan.                                                                           

PROPOSED AMENDMENTS                                                             

The proposed amendments to the Incentive Plan are designed to:                  

-    increase the number of shares of Common Stock reserved for the grant       
of Awards in order to insure sufficient amounts of shares available   
for future Awards;                                                    

-    allow the transfer of Awards to certain family members and charitable      
institutions for estate planning purposes; and                        

-    incorporate Code Section 162(m) requirements in order to maximize the      
tax deductibility of compensation relating to certain Awards to be    
granted by the Committee pursuant to the Restated Incentive Plan.     

SCOPE OF THE RESTATED INCENTIVE PLAN                                            

Five percent of the issued and outstanding shares of Common Stock as of the     
plan's effective date in 1992 were initially authorized by Shareholders for     
the issuance of Awards under the Incentive Plan (subject to appropriate         
adjustment to reflect stock dividends, stock splits, share combinations,        
recapitalizations and other extraordinary corporate events).  As of             
March 27, 1995, approximately 1.9 million shares of Common Stock remained       
available for future grants under the Incentive Plan.  In order to ensure       
sufficient amounts of shares available for Awards, the Restated Incentive       
Plan authorizes an additional 32 million shares of Common Stock to be           
reserved for the grant of Awards.  If any Award expires or terminates           
without having been exercised in full or is forfeited, the shares of Common     
Stock associated with such expired or terminated Award shall become             
available for other Awards.                                                     

Common Stock issued under the Restated Incentive Plan may be either newly       
issued shares, treasury shares or any combination thereof.  The Company         
presently intends to use treasury shares purchased pursuant to the              
Company's share repurchase program in connection with the issuance of           
Common Stock under the Restated Incentive Plan.  As of February 28, 1995,       
approximately 136 million shares of Common Stock were held in treasury          

DEF 14A 43rd Page of 110 TOC 1st Previous Next ↓Bottom Just 43rd
21
and an additional $500 million in share repurchase has been authorized for      
completion through 1996.                                                        

DEF 14A 44th Page of 110 TOC 1st Previous Next ↓Bottom Just 44th
As of March 1, 1995, the closing price for the Common Stock on the New York     
Stock Exchange Composite Tape was $33.125.                                      

PLAN ADMINISTRATION                                                             

Except for certain duties and responsibilities expressly reserved by the        
Board or delegated to another committee, the Restated Incentive Plan is         
administered by a committee of the Board of Directors (Committee).  The         
Board's Compensation Committee of outside Directors currently acts in this      
capacity.  The requirements prescribed by Code Section 162(m) for               
membership on the Committee are incorporated into the Restated Incentive        
Plan.                                                                           

Among other things, the Committee has exclusive discretion (subject to the      
provisions of the Restated Incentive Plan):  to select the persons to whom,     
and the times when, Awards are to be granted, as well as the type, size and     
terms of such Awards; to interpret the Restated Incentive Plan and              
prescribe rules and regulations thereunder; to authorize foreign                
Subsidiaries to adopt stock incentive plans providing for the granting of       
Awards which will be treated as grants under the Restated Incentive Plan;       
and to accelerate the exercisability of, and to waive the restrictions and      
conditions applicable to, Awards; subject to certain restrictions, to           
extend the time during which Awards may be exercised (but not beyond 15         
years); and to prescribe rules and regulations concerning the                   
transferability of any Awards.  In addition, subject to the provisions of       
the Restated Incentive Plan and within certain limits, the Committee has        
the discretion to modify the terms of or replace any Award which has been       
granted under the Restated Incentive Plan, however, no such replacement has     
ever taken place under the Incentive Plan.                                      

AWARDS UNDER THE RESTATED INCENTIVE PLAN                                        

STOCK OPTIONS.  The Restated Incentive Plan provides both for incentive         
stock options (Incentive Options) specifically tailored to the provisions       
of the Code and for options not qualifying as Incentive Options (Non-           
Qualified Options), each of which may (but need not) be granted in              
conjunction with other Awards.  Incentive Options and Non-Qualified Options     
are sometimes referred to herein collectively as "Options."                     

Pursuant to the Restated Incentive Plan, the Option Price cannot be less        
than 100% of the Fair Market Value of the Common Stock on the Grant Date.       
Payment of the Option Price may be made in cash, through the exchange of        
Common Stock held by the grantee for at least six months, or through a          
broker-assisted exercise.  The Committee may allow a grantee to pay the         
Option Price with restricted stock held by the grantee for at least six         
months, or to defer payment of the Option Price, on terms the Committee may     
determine, or may cause the Company to guarantee all or a portion of a loan     
to the grantee in an amount equal to the Option Price.                          

The Committee shall determine when an Option may be exercised, which shall      
be no more than 15 years after the Grant Date (ten years in the case of         
Incentive Options), and the manner in which each Option will become             
exercisable.  Generally, Options are not exercisable less than one year         
after their respective Grant Dates.  The Committee may, in its discretion,      
direct that shares issued upon exercise of Options be restricted and            
non-transferable.                                                               

RESTRICTED STOCK.  Up to five million of the shares of Common Stock             
authorized for the Restated Incentive Plan may be awarded to eligible           
individuals by the Committee as shares of restricted stock.  At the             
Committee's option, restricted stock may be made subject to forfeiture upon     
termination of employment, if the Company or the grantee fails to meet          
specified performance goals (if any) or upon failure to satisfy such other      
restrictions as the Committee may specify (if any).  Generally, restricted      

DEF 14A 45th Page of 110 TOC 1st Previous Next ↓Bottom Just 45th
stock is forfeitable at least until the first anniversary of its Grant          
Date.                                                                           

The Committee may specify the price, if any, to be paid by the grantee for      
restricted stock, except that the grantee must pay at least the Minimum         
Consideration for any shares other than treasury shares.  Such amount shall     
be paid in cash or the Committee may allow the grantee to defer payment, on     
such terms as it may determine, or may cause the Company to guarantee all       
or a portion of a loan to the grantee in an amount equal to the purchase        
price of the restricted stock.                                                  

If a share of restricted stock is forfeited and if the grantee paid an          
amount for such share or acquired such share by Option exercise, upon           
forfeiture the Company shall pay the grantee the lesser of:  (a) the amount     
paid or the Option Price, as the case may be, or (b) the Fair Market Value      
of a share of Common Stock on the date of forfeiture.                           

DEF 14A 46th Page of 110 TOC 1st Previous Next ↓Bottom Just 46th
22
STOCK APPRECIATION RIGHTS.  A stock appreciation right (SAR) may be granted     
alone or in conjunction with another Award.  A SAR is exercisable only on       
or after the first anniversary of its Grant Date and otherwise on               
conditions established by the Committee.  A SAR related to another Award        
generally terminates upon the expiration, termination, forfeiture or            
exercise of the related Award, and is exercisable only to the extent that       
such other Award is exercisable and on such other conditions as may be          
established by the Committee.                                                   

Upon exercise of a SAR, the grantee must surrender the SAR and any related      
Award and will receive in exchange cash or, in the discretion of the            
Committee, Common Stock equal in value to the excess of the Fair Market         
Value of a share of Common Stock on the date the SAR is exercised over the      
Fair Market Value of a share of Common Stock on the date the SAR was            
granted or, if the SAR is related to an Option, the Option Price.  At the       
time of grant, the Committee may place a limitation on the amount payable       
upon exercise of a SAR.                                                         

PERFORMANCE UNITS.  Performance units may be granted alone or they may be       
granted in conjunction with other Awards.  Before the grant of any              
performance unit, the Committee will establish performance goals and            
designate a period (Measuring Period) of not less than one year nor more        
than seven years for the measurement of attainment of such goals.  The          
value of a performance unit (Unit Value) will be established by the             
Committee and may be a fixed dollar amount or an amount which varies from       
time to time in relation to the Fair Market Value of a share of Common          
Stock plus, at the Committee's option, dividends on Common Stock.  The          
benefit realized by the grantee upon exercise of a performance unit will be     
the Unit Value multiplied by the Performance Percentage established by the      
Committee for each level of attainment of the established performance goals     
during the Measuring Period.  Performance goals may be based on earnings        
per share, net income, return on equity, and/or any other measure of            
performance which the Committee deems appropriate.  The Committee may, in       
its discretion, modify performance goals for any reason it may deem             
appropriate.                                                                    

Generally, a performance unit becomes exercisable on the later of the first     
anniversary of its Grant Date or the first day after the end of the             
applicable Measuring Period and, if not issued in conjunction with another      
Award, is deemed exercised on the date it first becomes exercisable.  A         
performance unit related to another Award may be exercised by giving notice     
to the Company and, unless otherwise provided in the applicable Award           
agreement, the related Award shall be cancelled.                                

STOCK BONUSES.  The Committee is authorized, in its discretion, to grant up     
to an aggregate of 200,000 shares of Common Stock as stock bonuses or           

DEF 14A 47th Page of 110 TOC 1st Previous Next ↓Bottom Just 47th
incentives to eligible employees, which shall not include Executive             
Officers.                                                                       

AMENDMENT AND TERMINATION                                                       

The Restated Incentive Plan shall terminate on June 1, 2002.  The Board of      
Directors may before that time terminate the Restated Incentive Plan and        
may amend or modify the Restated Incentive Plan without shareholder             
approval, except as may be advisable for purposes of compliance with            
federal securities laws or listing requirements of a national securities        
exchange.  Termination of the Restated Incentive Plan will not affect any       
Awards then outstanding.                                                        

ESTIMATE OF BENEFITS                                                            

It is impossible to determine the amount of Awards that will be received by     
any of the grantees since the grant of Awards pursuant to the Restated          
Incentive Plan is within the discretion of the Committee.  Information          
regarding Awards to the Company's Chief Executive Officer and the other         
four most highly compensated Executive Officers in 1994 is provided on page     
14 of this Proxy Statement.  In addition, in 1994, 1,237,000 options were       
granted to all current Executive Officers as a group under the Incentive        
Plan and over 11,020,000 options were granted to approximately 6,600            
employees, including all current officers who are not Executive Officers.       
No Awards were made to Directors who are not Executive Officers.                

OTHER TERMS AND CONDITIONS                                                      

In order to comply with a requirement of Code Section 162(m), the Restated      
Incentive Plan provides that the maximum Award payable to any participant       
during any three-year period shall be 2,500,000 shares of Common Stock,         
subject to adjustments for stock splits and other events described in the       
Restated Incentive Plan.  Awards granted under the Incentive Plan to the        
Company's five highest paid executives during the last three fiscal years       
are described on page 14.                                                       

Awards granted under the Incentive Plan (other than shares of restricted        
stock) are generally non-transferable                                           

DEF 14A 48th Page of 110 TOC 1st Previous Next ↓Bottom Just 48th
23
other than by will or the laws of descent and may be exercised, during a        
grantee's lifetime, only by the grantee. The Restated Incentive Plan allows     
the Committee to grant transferable Awards under limited circumstances for      
estate planning purposes.  Restricted stock is non-transferable until it        
becomes non-forfeitable.                                                        

The Restated Incentive Plan contains special rules concerning the               
exercisability and forfeitability of Awards upon termination of employment.     
For a complete description of these rules, shareholders should refer to         
Exhibit B of this Proxy Statement.                                              

Adjustments in the amount of Awards issuable under the Restated Incentive       
Plan and in any Awards outstanding may be made in order to preserve the         
benefits or potential benefits intended to be made available to                 
participants, in the event of merger, consolidation, reorganization, the        
sale of all or substantially all the assets of the Company,                     
recapitalization, reclassification, stock splits, stock dividends or            
similar events.                                                                 

The Company may make such provisions as it deems appropriate to withhold        
any taxes due in connection with any Award and may require the grantee to       
satisfy any relevant tax requirements before authorizing any issuance of        

DEF 14A 49th Page of 110 TOC 1st Previous Next ↓Bottom Just 49th
shares to a grantee or its transferee.  Grantees may elect, subject to          
Committee approval, to have shares of Common Stock otherwise issuable to        
them withheld to satisfy federal, state and local withholding tax liability     
with respect to the exercise of Awards in the year such exercise becomes        
taxable.                                                                        

FEDERAL INCOME TAX CONSEQUENCES OF OPTIONS                                      

The following is a brief description of the principal United States federal     
income tax consequences related to Options granted under the Restated           
Incentive Plan.                                                                 

NON-QUALIFIED OPTIONS.  In general:  (a) a grantee will not be subject to       
tax at the time a Non-Qualified Option is granted; (b) an amount equal to       
the difference between the Option Price and the fair market value of the        
shares acquired on the date of exercise will be included in the grantee's       
ordinary income in the taxable year in which the Non-Qualified Option is        
exercised by the grantee or its transferee; (c) the Company will be             
entitled to deduct such amount in the taxable year in which such grantee        
includes such amount in income; and (d) upon disposition of shares acquired     
upon exercise, appreciation or depreciation after the date of exercise will     
be treated as either capital gain or capital loss.                              

Where an Option provides for issuance of stock subject to restrictions, the     
grantee receiving such restricted stock upon exercise will not recognize        
income for tax purposes until the restrictions lapse.  In these situations,     
the grantee will generally have taxable income upon lapse of the                
restriction equal to the amount by which the Fair Market Value of the           
shares at the time the restriction lapses exceeds the Option Price.             
Proceeds from the sale of stock sold after the restriction period will be       
taxable as a capital gain or capital loss, depending upon the amount by         
which the sale price exceeds or is less than the Fair Market Value of the       
stock at the end of the restriction period.                                     

Alternatively, a grantee who received stock subject to restrictions on          
transfer can elect to recognize income immediately upon exercise of the         
Option, in which case taxable income is generally determined at the time of     
Option exercise and the time of the sale of the stock as explained in the       
first paragraph of this section.  However, if a grantee who has elected to      
recognize income immediately upon exercise of Options for restricted stock      
subsequently sells the stock to the Company as required by the terms of the     
restriction, any loss on the sale will be limited to the amount (if any) by     
which the Option Price exceeds the amount paid by the Company on such sale.     

Generally, the Company will be entitled to a tax deduction in the amount of     
the ordinary income realized by the employee in the year the Option is          
exercised or the restrictions lapse, whichever is applicable.                   

If the grantee pays the Option Price, in whole or in part, with previously      
acquired shares, the exchange will not affect the tax treatment of the          
exercise.  Upon such exchange, no gain or loss is recognized upon delivery      
of the previously acquired shares to the Company, and the shares received       
by the grantee equal in number to the previously acquired shares exchanged      
therefor will have the same basis and holding period for capital gain           
purposes as the previously acquired shares.                                     

Shares received by the grantee in excess of the number of previously            
acquired shares will have a basis equal to the fair market value of such        
additional shares as of the date ordinary income equal to such fair market      
value is realized and a holding period which commences as of such date.         

INCENTIVE OPTIONS.  In general, a grantee will not be subject to tax at the     
time an Incentive Option is granted or exercised.  However, the excess of       
the Fair Market Value of the                                                    

DEF 14A 50th Page of 110 TOC 1st Previous Next ↓Bottom Just 50th

DEF 14A 51st Page of 110 TOC 1st Previous Next ↓Bottom Just 51st
24
shares received upon exercise of the Incentive Option over the Option Price     
is potentially subject to the alternative minimum tax.  Upon disposition of     
the shares acquired upon exercise of an Incentive Option, capital gain or       
capital loss will be recognized in an amount equal to the difference            
between the sale price and the Option Price, provided that the grantee has      
not disposed of the shares within two years of the date of grant or within      
one year from the date of exercise and further provided that the grantee        
has been employed by the Company at all times from the Grant Date until the     
date three months before the date of exercise (one year in the case of          
permanent disability).  If the grantee disposes of the shares without           
satisfying both the holding period and employment requirements (a               
Disqualifying Disposition), the grantee will recognize ordinary income at       
the time of such Disqualifying Disposition to the extent of the difference      
between the Option Price and the lesser of the Fair Market Value of the         
shares on the date the Incentive Option is exercised or the amount realized     
on such Disqualifying Disposition.  Any remaining gain or loss is treated       
as a capital gain or capital loss.                                              

If the grantee pays the Option Price, in whole or in part, with previously      
acquired shares, the exchange will not affect the tax treatment of the          
exercise.  Upon such exchange, and except for Disqualifying Dispositions,       
no gain or loss is recognized upon the delivery of the previously acquired      
shares to the Company, and the shares received by the grantee equal in          
number to the previously acquired shares exchanged therefor will have the       
same basis and holding period for capital gain or capital loss purposes as      
the previously acquired shares.  Shares received by the grantee in excess       
of the number of previously acquired shares will have a basis of zero and a     
holding period which commences as of the date the shares are issued to the      
grantee upon exercise of the Incentive Option.  If such an exercise is          
effected using shares previously acquired through the exercise of an            
Incentive Option, the exchange of the previously acquired shares will be        
considered a disposition of such shares for the purpose of determining          
whether a Disqualifying Disposition has occurred.  The Company is not           
entitled to a tax deduction upon either the exercise of an Incentive Option     
or upon disposition of the shares acquired pursuant to such exercise,           
except to the extent that the grantee recognized ordinary income in a           
Disqualifying Disposition.                                                      

SECTION 162(m).  Subject to certain exceptions, Section 162(m) of the Code      
places a $1 million annual limit on a company's tax deduction for               
compensation paid to a "covered employee".  A "covered employee" is defined     
as the company's chief executive officer and the other four highest paid        
officers named in its proxy statement.  Compensation in excess of $1            
million will, however, continue to be tax deductible by the company if such     
compensation satisfies the applicable requirements for the "performance-        
based compensation" exception (Performance Exception).                          

The Restated Incentive Plan incorporates the requirements for the               
Performance Exception that are applicable to its stock option and stock         
appreciation right features and, where appropriate, it is expected that the     
Committee will administer the Restated Incentive Plan in order to satisfy       
any other requirements for the Performance Exception.  Changes in the           
Restated Incentive Plan include a cap on the Awards that may be made to any     
grantee over a three-year period and the adoption of requirements contained     
in Section 162(m) for membership on the Committee.  As a result, it is          
anticipated that the Company will be able to maximize the tax deductibility     
of the compensation attributable to non-qualified stock options.                
Compensation received by a covered employee which is attributable to the        
other Award features contained in the Restated Incentive Plan will not          
qualify for the Performance Exception unless additional requirements are        
satisfied, including the proper establishment of performance goals,             
shareholder approval of these goals and certification by the Committee that     
the goals have been attained.                                                   

DEF 14A 52nd Page of 110 TOC 1st Previous Next ↓Bottom Just 52nd
VOTING INFORMATION FOR THE PROPOSAL                                             

The affirmative vote of the holders of a majority of the shares of Common       
and Preferred Stock represented in person or by proxy and entitled to vote      
at the Annual Meeting is required to approve the Proposal.                      

RECOMMENDATION                                                                  

THE BOARD BELIEVES THAT THE APPROVAL OF THE RESTATED INCENTIVE PLAN WILL        
FURTHER ALIGN EMPLOYEE INTERESTS WITH THOSE OF SHAREHOLDERS AND MAXIMIZE        
THE TAX DEDUCTIBILITY OF COMPENSATION PAYABLE TO CERTAIN OF THE COMPANY'S       
EXECUTIVE OFFICERS.                                                             

THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF THE AMENDED     
AND RESTATED 1992 STOCK OWNERSHIP INCENTIVE PLAN.                               

DEF 14A 53rd Page of 110 TOC 1st Previous Next ↓Bottom Just 53rd
25
EXHIBIT A.  McDONALD'S CORPORATION NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN      
----------------------------------------------------------------------          

SECTION 1.  PURPOSE; DEFINITIONS                                                

The purposes of the Plan are to promote the long-term success of the            
Company by enhancing the long-term mutuality of interests between the Non-      
Employee Directors and shareholders of the Company and to provide a means       
through which the Company may attract able persons as directors of the          
Company.                                                                        

For purposes of the Plan, the following terms are defined as set forth
below:                                                                          

"Board" means the Board of Directors of the Company.                  

"Code" means the Internal Revenue Code of 1986, as amended from time  
to time, and any successor thereto.                                             

"Common Stock" means the common stock of the Company, without par     
value.                                                                          

"Company" means McDonald's Corporation, a Delaware corporation.       

"Disability" with respect to a Participant means a physical or mental 
condition that prevents the Participant from performing his or her duties       
as a member of the Board, and which is expected to be permanent or for an       
indefinite duration exceeding one year.                                         

"Exchange Act" means the Securities Exchange Act of 1934, as amended  
from time to time, and any successor thereto.                                   

"Fair Market Value" means, as of any applicable date, the closing     
price, regular way, of  the Common Stock as reported on the New York Stock      
Exchange Composite Tape or, if no such reported sale of the Common Stock        
shall have occurred on such date, on the next preceding date on which there     
was a such reported sale.                                                       

"Non-Employee Director" means a person who as of any applicable date  
is a member of the Board and is not an officer or employee of the Company       
or any subsidiary of the Company.                                               

"Optionee" means a Participant or any permissible transferee as       
described in Section 5(e)(v).                                                   

DEF 14A 54th Page of 110 TOC 1st Previous Next ↓Bottom Just 54th
"Participant" means a Non-Employee Director who is granted a Stock    
Option hereunder.                                                               

"Plan" means the McDonald's Corporation Non-Employee Director Stock   
Option Plan as set forth herein and as hereafter amended from time to time.     

"Retirement" means termination of an individual's directorship with at
least ten years of service as a member of the Board or after age 70.            

"Stock Option" means a non-qualified option to purchase shares of     
Common Stock.                                                                   

"Termination of Directorship" means the date upon which any           
Participant ceases to be a member of the Board for any reason whatsoever.       

In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.                                 

SECTION 2.  ADMINISTRATION                                                      

The Plan shall be administered by the Board or by a duly appointed              
committee of the Board having such powers as shall be specified by the          
Board.  The Board (or such committee) shall have the authority to adopt,        
alter and repeal such administrative rules, guidelines and practices            
governing the Plan as it shall, from time to time, deem advisable, to           
interpret the terms and provisions of the Plan and any Stock Option issued      
under the Plan (and any agreement relating thereto) and to otherwise            
supervise the administration of the Plan.                                       

Notwithstanding the foregoing, the selection of the Non-Employee      
Directors to whom Stock Options are to be granted, the timing of such           
grants, the number of shares subject to any Stock Option, the exercise          
price of any Stock Option, the periods during which any Stock Option may be     
exercised and the term of any Stock Option shall be as hereinafter              
provided, and the Board (or such committee) shall have no discretion as to      
such matters.  The Plan is intended to allow Non-Employee Directors to          
receive Stock Options without such Stock Options causing them to cease to       
be "disinterested persons" (within the meaning of  Rule 16b-3 under the         
Exchange Act) with respect to other stock plans of the Company.  To the         
extent that any provision of the Plan or action by the Board (or such           
committee) with respect thereto would be inconsistent with such intent,         
such provision or action shall be null and void.                                

The determination of the Board (or such committee) on all matters     
relating to the Plan or any agreement relating thereto shall be conclusive      
and final.  No member of the Board (or such committee) shall be liable for      
any action or determination made in good faith with respect to the Plan or      
any Stock Option.                                                               

DEF 14A 55th Page of 110 TOC 1st Previous Next ↓Bottom Just 55th
26
SECTION 3.  STOCK SUBJECT TO PLAN                                               

Subject to adjustment as provided herein, the total number of shares of         
Common Stock of the Company available for grant under the Plan while it is      
in effect shall not exceed 150,000.  Such shares may be treasury shares or      
newly issued shares, as may be determined from time to time by the Board        
(or the designated committee).  The shares of  Common Stock related to the      
unexercised or undistributed portion of any terminated, expired or              
forfeited Stock Option shall be made available in connection with future        
Stock Option grants under the Plan.                                             

In the event of any stock dividend, stock split, reverse stock split, 
share combination, recapitalization, merger, consolidation, acquisition of      

DEF 14A 56th Page of 110 TOC 1st Previous Next ↓Bottom Just 56th
property or shares, separation, asset spin-off, reorganization, stock           
rights offering, liquidation or similar event, of or by the Company, the        
aggregate number of shares of Common Stock reserved for issuance under the      
Plan, the number and option price of shares of Common Stock subject to          
outstanding Stock Options and the Grant Amounts specified in Section 5          
shall be appropriately adjusted to the extent that such adjustment is           
necessary to preserve the economic value of the unexercised Stock Options       
and of any future Stock Option grants; provided, however, that the number       
of shares subject to any Stock Option shall always be a whole number.           
Share amounts shall be rounded up to the nearest whole number.                  

SECTION 4.  ELIGIBILITY                                                         

Only individuals who are Non-Employee Directors are eligible to be granted      
Stock  Options under the Plan.                                                  

SECTION 5.  STOCK OPTIONS                                                       

(a)  Initial grants.  As of the effective date of the Plan, a Stock   
Option to purchase 1,000 shares of Common Stock (the "Initial Grant             
Amount") is granted to each person who on that date is an incumbent Non-        
Employee Director.                                                              

(b)  Subsequent grants.  With respect to each person who first becomes
a Non-Employee Director after the effective date of the Plan, a Stock           
Option to purchase 1,000 shares of Common Stock (the "Subsequent Grant          
Amount") is granted as of the date such person is elected or appointed as a     
Non-Employee Director.  Such subsequent grant shall be in addition to any       
annual grants of Stock Options as described in Section 5(c) below.              

(c)  Annual grants.  On the date of each annual meeting of  the       
Company's shareholders following the effective date of the Plan, each           
person who is a Non-Employee Director immediately following such meeting        
(regardless of whether elected, re-elected or retained as a Non-Employee        
Director at such meeting) shall automatically be granted a Stock Option to      
purchase 1,000 shares of Common Stock (the "Annual Grant Amount") as of         
such meeting date.  (The Initial Grant Amount, the Subsequent Grant Amount      
and the Annual Grant Amount shall sometimes be referred to herein               
collectively as the "Grant Amounts".)                                           

(d)  Available shares.  In the event that the number of shares of     
Common Stock available for future grant under the Plan is insufficient to       
make all automatic grants required to be made on a given date, then all         
Non-Employee Directors entitled to a grant on such date shall share ratably     
in the number of Stock Options on shares available for grant under the          
Plan.                                                                           

(e)  Terms.  Stock Options granted under the Plan shall be subject to 
the following terms and conditions in addition to those set forth above.        

(i)  Option term.  The term of each Stock Option shall be 10
years from the date the Stock Option is granted, subject to extension or        
earlier termination as provided herein.                                         

   (ii) Exercisability.  Subject to the express provisions of this
Section 5(e), Stock Options shall be exercisable as follows:                    

    (A)  beginning on the first anniversary of the date of
             grant, for whole shares up to one-third of the shares
    of Common Stock covered by the Stock Option;

     (B)  beginning on the second anniversary of the date of
        grant, for whole shares up to two-thirds of such
shares; and                             

DEF 14A 57th Page of 110 TOC 1st Previous Next ↓Bottom Just 57th
          (C)  beginning on the third anniversary of the date of grant
              and thereafter until the expiration of the term of the
         Stock Option, for whole shares up to 100% of such
shares.                                 

Notwithstanding any of the provisions of this Section 5(e), no Stock  
Option shall be exercisable during the first six months after the grant         
date (or the date of shareholder approval in the case of the Initial            
Grants), unless compliance                                                      

DEF 14A 58th Page of 110 TOC 1st Previous Next ↓Bottom Just 58th
27
with such holding period is not required to qualify for an exemption from       
potential liability under Section 16 of the Exchange Act.                       

Notwithstanding the foregoing, upon approval by the shareholders of   
the Company of a plan of liquidation for the Company, any unexercised           
options theretofore granted shall thereupon become exercisable.                 

   (iii) Option price.  The option price per share of Common Stock
covered by a Stock Option shall be the Fair Market Value of Common Stock as     
of the date of grant.  Such price shall be subject to adjustment as             
provided in Section 3.                                                          

(iv) Methods of exercise.  Subject to the provisions of this
Section 5, Stock Options may be exercised, in whole or in part, at any time     
during the option term by giving written notice of exercise to the Company      
specifying the number of shares of Common Stock subject to the Stock Option     
to be purchased.  Such notice shall be accompanied by payment in full of        
the purchase price.  Payment of the purchase price may, at the election of      
the Optionee, be made in any one or any combination of the following:  (A)      
cash, (B) Common Stock held for at least six months prior to exercise of        
the Stock Option, valued at its Fair Market Value on the date of exercise,      
(C) through simultaneous sale through a broker of shares acquired on            
exercise, as permitted under Regulation T of the Federal Reserve Board.         

No shares of Common Stock shall be issued until full payment
therefor has been made.  An Optionee shall have all rights as a shareholder     
of the Company holding Common Stock as soon as practicable following            
written notice of exercise, payment in full for such shares and the             
Company's receipt of the representation described in Section 7(a), if           
applicable.                                                                     

     (v)  Non-transferability of stock options.  No Stock Option shall
be transferable by the Participant other than by will or by the laws of         
descent and distribution.  All Stock Options shall be exercisable during        
the Participant's lifetime, only by the Participant or by the guardian or       
legal representative of the Participant.                                        

    The foregoing restrictions on transferability shall not apply to
Stock Options granted after the Board (or such committee) has determined        
that such restrictions are not then required for grants under the Plan to       
satisfy the requirements for the exemption provided by Rule 16b-3 under the     
Exchange Act (in the form then applicable to the Company) or for Non-           
Employee Directors to qualify as "disinterested persons" for purposes of        
such Rule; provided, however, that (i) any transfer of a Stock Option is to     
be made for no consideration to any of the following permissible                
transferees:  (w) any member of the Immediate Family of the Participant to      
whom such Stock Option was granted, (x) any trust solely for the benefit of     
members of the Participant's Immediate Family, (y) any partnership whose        
only partners are members of the Participant's Immediate Family or (z)          
Ronald McDonald Children's Charities or any Ronald McDonald House, and (ii)     
the transferee shall remain subject to all of the terms and conditions          
applicable to such Stock Option prior to such transfer.  "Immediate Family"     

DEF 14A 59th Page of 110 TOC 1st Previous Next ↓Bottom Just 59th
means, with respect to a particular Participant, such Participant's spouse,     
children and grandchildren.                                                     

 (vi) Termination for cause.  If a Termination of Directorship
occurs for cause pursuant to Article Thirteenth (c) of the Company's            
Restated Certificate of Incorporation, any unexercised Stock Option shall       
thereupon terminate.                                                            

(vii) Termination by reason of death or disability.  If a   
Termination of Directorship occurs by reason of the death or Disability of      
a Participant, any unexercised option, whether or not exercisable on the        
date of such Termination of Directorship, may be exercised, in whole or in      
part, at any time within three years after such Termination of Directorship     
by the Participant, a permissible transferee (as such term is described in      
Section 5(e)(v) above) or by the Participant's personal representative          
after the Participant's death.                                                  

     (viii) Termination on account of retirement.  If a Termination of
Directorship occurs by reason of Retirement, any unexercised option,            
whether or not exercisable on the date of such Termination of Directorship,     
may be exercised, in whole or in part, for a period of three years from the     
Participant's Retirement or until the expiration of the stated term of such     
Stock Option, whichever period is the shorter.                                  

    (ix) Other termination.  If a Termination of Directorship occurs
for any reason other than for cause (as described in Section 5(e)(vi)           
above) or the death, Disability or Retirement of a Participant, any             
unexercised option to the extent exercisable on the date of Termination         

DEF 14A 60th Page of 110 TOC 1st Previous Next ↓Bottom Just 60th
28
of Directorship, may be exercised, in whole or in part, at any time within      
one year after the Participant's Termination of Directorship.                   

(x)  Extension of term.  Upon Termination of Directorship by
reason of death or Disability, the term of any Stock Option which by its        
terms would otherwise expire after the Participant's Termination of             
Directorship but prior to the end of the period following the Participant's     
Termination of Directorship described in Section 5(e)(vii) above for            
exercise of Stock Options shall be extended so as to permit any unexercised     
portion thereof to be exercised at any time within such period; provided,       
however, that in no event may the term of any Stock Option expire more than     
13 years after the grant date of such Stock Option.                             

SECTION 6.  TERM, AMENDMENT AND TERMINATION                                     

The Plan will terminate on the tenth anniversary of the effective date or       
at such earlier date as the Board may determine.  Termination of the Plan       
shall not affect any Stock Options then outstanding under the Plan.             

The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would (a) impair the          
rights of an Optionee under a Stock Option without the Optionee's consent,      
except such an amendment made to cause grants and other transactions under      
the Plan to qualify for the exemption provided by Rule 16b-3; or (b)            
disqualify grants and other transactions under the Plan from the exemption      
provided by Rule 16b-3; provided, however, no amendment to the Plan may be      
made by the Board without approval of shareholders which (i) changes the        
criteria for Non-Employee Directors who can receive Stock Options under the     
Plan, (ii) changes vesting conditions, term of exercisability, timing,          
amount or exercise price of  Stock Options under the Plan, or (ii)              
materially increases the aggregate number of shares of Common Stock which       
may be issued under the Plan.  In addition, (a) no amendment shall be made      
without the approval of the Company's shareholders to the extent such           

DEF 14A 61st Page of 110 TOC 1st Previous Next ↓Bottom Just 61st
approval is required by law or agreement and (b) if required, the Plan          
shall not be materially amended more often than once every six months other     
than to comport with changes in the Code or the rules and regulations           
promulgated thereunder.                                                         

SECTION 7.  GENERAL PROVISIONS                                                  

(a)  Unless the shares have been registered under the Securities Act  
of 1933, as amended, each person purchasing or receiving shares of Common       
Stock pursuant to a Stock Option shall represent to and agree with the          
Company in writing that such person is acquiring the shares of Common Stock     
without a view to the distribution thereof.  Any certificates for such          
shares of Common Stock shall include an appropriate legend to reflect the       
restrictions on transfer.                                                       

(b)  Nothing contained in the Plan shall prevent the Company or any   
subsidiary from adopting other or additional compensation arrangements for      
its Non-Employee Directors.                                                     

(c)  The Plan and all Stock Options awarded and actions taken with    
respect thereto shall be governed by and construed in accordance with the       
laws of the State of Illinois except its law with respect to choice of law.     

(d)  Benefits payable under the Plan to any person 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.                                                                           

(e)  Nothing in the Plan, or any Stock Option granted under the Plan, 
shall confer any right to any person to continue as a director of the           
Company or interfere in any way with the rights of the shareholders of the      
Company or the Board to elect and remove directors.                             

SECTION 8.  EFFECTIVE DATE OF PLAN                                              

The Plan has been adopted by the Board and has become effective on January      
19, 1995, subject to approval of the Plan by the shareholders of the            
Company at the Company's Annual Meeting to be held on or about May 26, 1995     
or any adjournment thereof.  Notwithstanding any other provision of this        
Plan, no Stock Option may be exercised before such shareholder approval is      
obtained and, if such approval is not obtained, all outstanding Stock           
Options shall become void, no further grants shall be made, and the Plan        
shall immediately terminate.                                                    

DEF 14A 62nd Page of 110 TOC 1st Previous Next ↓Bottom Just 62nd
29
EXHIBIT B.  McDONALD'S CORPORATION 1992 STOCK OWNERSHIP INCENTIVE PLAN          
AS AMENDED AND RESTATED AS OF JUNE 1, 1995                                      
----------------------------------------------------------------------          

THE PLAN                                                                        

McDonald's Corporation, a Delaware corporation (the "Company"), first           
established the McDonald's Corporation 1992 Stock Ownership Incentive Plan      
(the "Prior Plan" ) on June 1, 1992.  The following provisions constitute       
an amendment and restatement of the Prior Plan, effective as of June 1,         
1995.  The provisions of this Plan do not apply to or affect any Awards         
heretofore granted under the Prior Plan or under any other stock option         
plan of the Company, and all such Awards continue to be governed by and         
subject to the applicable provisions of the Prior Plan or any other stock       
option plan of the Company.                                                     

1.   PURPOSE                                                                    

DEF 14A 63rd Page of 110 TOC 1st Previous Next ↓Bottom Just 63rd
The purpose of this Plan is to advance the interest of the Company by           
encouraging and enabling the acquisition of a larger personal financial         
interest in the Company by those employees upon whose judgment and efforts      
the Company is largely dependent for the successful conduct of its              
operations.  An additional purpose of this Plan is to provide a means by        
which employees of the Company and its Subsidiaries can acquire and             
maintain Stock ownership, thereby strengthening their commitment to the         
success of the Company and their desire to remain employed by the Company       
and its Subsidiaries.  It is anticipated that the acquisition of such           
financial interest and Stock ownership will stimulate the efforts of such       
employees on behalf of the Company, strengthen their desire to continue in      
the service of the Company and encourage shareholder and entrepreneurial        
perspectives through employee stock ownership.  It is also anticipated that     
the opportunity to obtain such financial interest and Stock ownership will      
prove attractive to promising new employees and will assist the Company in      
attracting such employees.                                                      

2.   DEFINITIONS                                                                

As used in this Plan, terms defined parenthetically immediately after their     
use shall have the respective meanings provided by such definitions and the     
terms set forth below shall have the following meanings (such meanings to       
be equally applicable to both the singular and plural forms of the terms        
defined):                                                                       

(a)  "Award" means options, shares of restricted stock, stock         
appreciation rights, performance units or stock bonuses granted under this      
Plan.                                                                           

(b)  "Award Agreement" has the meaning specified in Section 4(c)(v).  

(c)  "Board" means the Board of Directors of the Company.             

(d)  "Cause" includes termination based on the commission of any act  
or acts involving dishonesty, fraud, illegality or moral turpitude.             

(e)  "Code" means the Internal Revenue Code of 1986, as amended, and  
regulations and rulings thereunder.  References to a particular section of      
the Code shall include references to successor provisions.                      

(f)  "Committee" means the committee of the Board appointed pursuant  
to Section 4.                                                                   

(g)  "Company" has the meaning set forth in the introductory          
paragraph.                                                                      

(h)  "Disability" means, as relates to the exercise of an incentive   
stock option after termination of employment, a disability within the           
meaning of Section 22(e)(3) of the Code, and for all other purposes, a          
mental or physical condition which, in the opinion of the Committee,            
renders a Grantee unable or incompetent to carry out the job                    
responsibilities which such Grantee held or the tasks to which such Grantee     
was assigned at the time the disability was incurred, and which is expected     
to be permanent or for an indefinite duration exceeding one year.               

(i)  "Effective Date" means June 1, 1992.                             

(j)  "Fair Market Value" of any security of the Company means, as of  
any applicable date the closing price, regular way, of the security as          
reported on the New York Stock Exchange Composite Tape, or if no such           
reported sale of the security shall have occurred on such date, on the next     
preceding date on which there was such a reported sale.                         

(k)  "Grant Date" means the date on which an Award shall be duly      
granted, as determined in accordance with Section 6(a)(i).                      

DEF 14A 64th Page of 110 TOC 1st Previous Next ↓Bottom Just 64th
(l)  "Grantee" means an individual who has been granted an Award.     

(m)  "including" or "includes" means "including, without limitation," 
or "includes, without limitation."                                              

(n)  "Measuring Period" has the meaning specified in Section          
6(f)(i)(B).                                                                     

(o)  "Minimum Consideration" means $.01 per share or such larger      
amount determined pursuant to resolution of the Board to be capital within      
the meaning of Section 154 of the Delaware General Corporation law.             

DEF 14A 65th Page of 110 TOC 1st Previous Next ↓Bottom Just 65th
30
(p)  "1934 Act" means the Securities Exchange Act of 1934, as amended.
References to a particular section of, or rule under, the 1934 Act shall        
include references to successor provisions.                                     

(q)  "Option Price" means the per share purchase price of Stock       
subject to an option.                                                           

(r)  "Performance Percentage" has the meaning specified in            
Section 6(f)(i)(C).                                                             

(s)  "Plan" means the McDonald's Corporation 1992 Stock Ownership     
Incentive Plan, as amended and restated in the manner set forth in the          
introductory paragraph.                                                         

(t)  "Retirement" means a termination of employment with the Company  
and its Subsidiaries any time after attaining age 60 with at least 20 years     
of Company service (excluding any termination of employment to become an        
owner-operator of a McDonald's restaurant).                                     

(u)  "SEC" means the Securities and Exchange Commission.              

(v)  "Section 16 Grantee" means a person subject to potential         
liability under Section 16(b) of the 1934 Act with respect to transactions      
involving equity securities of the Company.                                     

(w)  "Stock" means the common stock of the Company, without par value.

(x)  "Subsidiary" means (i) with respect to incentive stock options, a
corporation as defined in Section 424(f) of the Code with the Company being     
treated as the employer corporation for purposes of this definition, and        
(ii) for all other purposes any entity in which the Company directly or         
through intervening subsidiaries owns twenty-five percent (25%) or more of      
the total combined voting power or value of all classes of stock or, in the     
case of an unincorporated entity, a twenty-five percent (25%) or more           
interest in the capital and profits.                                            

(y)  "10% Owner" means a person who owns stock (including stock       
treated as owned under Section 424(d) of the Code) possessing more than 10%     
of the total combined voting power of all classes of stock of the Company.      

3.   SCOPE OF THIS PLAN                                                         

(a)  The number of shares of Stock which represented five percent (5%)
of the number of issued and outstanding shares of Stock as of June 1, 1992      
was made available and reserved for delivery on account of the exercise of      
Awards and payment of benefits in connection with Awards.  Effective            
June 1, 1995, an additional 32 million shares of Stock are made available       
and are reserved for delivery on account of the exercise of Awards and          
payment of benefits in connection with Awards.  Such shares may be treasury     

DEF 14A 66th Page of 110 TOC 1st Previous Next ↓Bottom Just 66th
shares or newly issued shares, as may be determined from time to time by        
the Board or the Committee.                                                     

(b)  Subject to adjustment as provided in Section 23, the maximum     
number of Shares of Stock for which Awards may be granted to any Grantee in     
any three-year period shall not exceed 2,500,000.                               

(c)  Subject to Section 3(a) and (b) (as to the maximum number of     
shares of Stock available for delivery in connection with Awards) and to        
Section 3(d), up to 5,000,000 shares of restricted stock, and up to 200,000     
bonus shares of Stock may be granted under this Plan.                           

(d)  If and to the extent an Award shall expire or terminate for any  
reason without having been exercised in full (including a cancellation and      
re-grant of an option pursuant to Section 16), or shall be forfeited,           
without, in either case, the Grantee having enjoyed any of the benefits of      
stock ownership (other than voting rights or dividends that are likewise        
forfeited), the shares of Stock (including restricted stock) associated         
with such Award shall become available for other Awards.                        

4.   ADMINISTRATION                                                             

(a)  Subject to Section 4(b), this Plan shall be administered by a    
committee ("Committee") of the Board of Directors.  All members of the          
Committee shall be "Outside Directors" as defined or interpreted for            
purposes of Section 162(m) of the Code.  The composition of the Committee       
shall also be subject to such limitations as the Board deems appropriate to     
permit transactions in Stock pursuant to this Plan to be exempt from            
liability under Rule 16b-3 under the 1934 Act.                                  

(b)  The Board may, in its discretion, reserve to itself or delegate  
to another committee of the Board any or all of the authority and               
responsibility of the Committee with respect to Awards to Grantees who are      
not Section 16 Grantees at the time any such delegated authority or             
responsibility is exercised.  Such other committee may consist of two or        
more directors who may, but need not be, officers or employees of the           
Company or of any of its Subsidiaries.  To the extent that the Board has        
reserved to itself or delegated to such other committee the authority and       
responsibility of the Committee, all references to the Committee in this        
Plan shall be to the Board or such other committee.                             

DEF 14A 67th Page of 110 TOC 1st Previous Next ↓Bottom Just 67th
31
(c)  The Committee shall have full and final authority, in its        
discretion, but subject to the express provisions of this Plan, as follows:     

(i)  to grant Awards,                                       

     (ii) to determine (A) when Awards may be granted, and (B) whether
or not specific Awards shall be identified with other specific Awards, and      
if so whether they shall be exercisable cumulatively with or alternatively      
to such other specific Awards,                                                  

(iii) to interpret this Plan and to make all determinations 
necessary or advisable for the administration of this Plan,                     

(iv) to prescribe, amend, and rescind rules and regulations 
relating to this Plan, including rules with respect to the exercisability       
and nonforfeitability of Awards upon the termination of employment of a         
Grantee,                                                                        

   (v)  to determine the terms and provisions and any restrictions
or conditions (including specifying such performance criteria as the            
Committee deems appropriate, and imposing restrictions with respect to          
stock acquired upon exercise of an option, which restrictions may continue      

DEF 14A 68th Page of 110 TOC 1st Previous Next ↓Bottom Just 68th
beyond the Grantee's termination of employment) of the written agreements       
by which all Awards shall be evidenced ("Award Agreements") which need not      
be identical and, with the consent of the Grantee, to modify any such Award     
Agreement at any time,                                                          

(vi) to cancel, with the consent of the Grantee, outstanding
Awards and to grant new Awards in substitution therefor,                        

(vii) to authorize foreign Subsidiaries to adopt plans as   
provided in Section 15,                                                         

 (viii) to delegate its duties and responsibilities under this
Plan with respect to such foreign Subsidiary plans, except its duties and       
responsibilities with respect to Section 16 Grantees, and (A) the acts of       
such delegates shall be treated hereunder as acts of the Committee and (B)      
such delegates shall report to the Committee regarding the delegated duties     
and responsibilities,                                                           

  (ix) to accelerate the exercisability of, and to accelerate or
waive any or all of the restrictions and conditions applicable to, any          
Award, or any group of Awards for any reason,                                   

     (x)  subject to Section 6(a)(ii), to extend the time during which
any Award or group of Awards may be exercised,                                  

(xi) to make such adjustments or modifications to Awards to 
Grantees working outside the United States as are necessary and advisable       
to fulfill the purposes of this Plan,                                           

 (xii) to impose such additional conditions, restrictions, and
limitations upon the grant, exercise or retention of Awards as the              
Committee may, before or concurrently with the grant thereof, deem              
appropriate, including requiring simultaneous exercise of related               
identified Awards, and limiting the percentage of Awards which may from         
time to time be exercised by a Grantee, and                                     

(xiii) to prescribe rules and regulations concerning the    
transferability of any Awards granted on or after June 1, 1995.                 

The determination of the Committee on all matters relating to this    
Plan or any Award Agreement shall be conclusive and final.  No member of        
the Committee shall be liable for any action or determination made in good      
faith with respect to this Plan or any Award.                                   

5.   ELIGIBILITY                                                                

Awards may be granted to any full-time employee (including any officer) of      
the Company or any of its domestic Subsidiaries, or any employee, officer       
or director of any of the Company's foreign Subsidiaries.  In selecting the     
individuals to whom Awards may be granted, as well as in determining the        
number of shares of Stock subject to, and the other terms and conditions        
applicable to, each Award, the Committee shall take into consideration such     
factors as it deems relevant in promoting the purposes of this Plan.            

6.   CONDITIONS TO GRANTS                                                       

(a)  General conditions.                                              

  (i)  The Grant Date of an Award shall be the date on which the
Committee grants the Award or such later date as specified in advance by        
the Committee.                                                                  

     (ii) The term of each Award (subject to Section 6(c) with respect
to incentive stock options) shall be a period of not more than 15 years         
from the Grant Date, and shall be subject to earlier termination as herein      
provided.                                                                       

DEF 14A 69th Page of 110 TOC 1st Previous Next ↓Bottom Just 69th
     (iii) A Grantee may, if otherwise eligible, be granted additional
Awards in any combination.                                                      

(b)  Grant of options and option price.  No later than the Grant Date 
of any option, the Committee shall determine                                    

DEF 14A 70th Page of 110 TOC 1st Previous Next ↓Bottom Just 70th
32
the Option Price of such option.  The Option Price of an option shall not       
be less than 100% of the Fair Market Value of the Stock on the Grant Date.      
Such price shall be subject to adjustment as provided in Section 23.  The       
Award Agreement may provide that the option shall be exercisable for            
restricted stock.                                                               

(c)  Grant of incentive stock options.  At the time of the grant of   
any option, the Committee may designate that such option shall be made          
subject to additional restrictions to permit it to qualify as an "incentive     
stock option" under the requirements of Section 422 of the Code.  Any           
option designated as an incentive stock option:                                 

(i)  shall not be granted to a 10% Owner;                   

 (ii) shall be for a period of not more than 10 years from the
Grant Date, and shall be subject to earlier termination as provided herein      
or in the applicable Award Agreement;                                           

   (iii) shall not have an aggregate Fair Market Value (determined
for each incentive stock option at its Grant Date) of Stock with respect to     
which incentive stock options are exercisable for the first time by such        
Grantee during any calendar year (under this Plan and any other employee        
stock option plan of the Grantee's employer or any parent or Subsidiary         
thereof ("Other Plans")), determined in accordance with the provisions of       
Section 422 of the Code, which exceeds $100,000 (the "$100,000 Limit");         

(iv) shall, if the aggregate Fair Market Value of Stock     
(determined on the Grant Date) with respect to all incentive stock options      
previously granted under this Plan and any Other Plans ("Prior Grants") and     
any incentive stock options under such grant (the "Current Grant") which        
are exercisable for the first time during any calendar year would exceed        
the $100,000 Limit, be exercisable as follows:                                  

       (A)  the portion of the Current Grant exercisable for the
first time by the Grantee during any calendar year which would, when added      
to any portions of any Prior Grants, be exercisable for the first time by       
the Grantee during such calendar year with respect to Stock which would         
have an aggregate Fair Market Value (determined as of the respective Grant      
Date for such options) in excess of the $100,000 Limit shall,                   
notwithstanding the terms of the Current Grant, be exercisable for the          
first time by the Grantee in the first subsequent calendar year or years in     
which it could be exercisable for the first time by the Grantee when added      
to all Prior Grants without exceeding the $100,000 Limit; and                   

      (B)  if, viewed as of the date of the Current Grant, any
portion of a Current Grant could not be exercised under the provisions of       
the immediately preceding sentence during any calendar year commencing with     
the calendar year in which it is first exercisable through and including        
the last calendar year in which it may by its terms be exercised, such          
portion of the Current Grant shall not be an incentive stock option, but        
shall be exercisable as a separate option at such date or dates as are          
provided in the Current Grant;                                                  

 (v)  shall be granted within 10 years from the earlier of the
date this Plan is adopted or the date this Plan is approved by the              
stockholders of the Company;                                                    

DEF 14A 71st Page of 110 TOC 1st Previous Next ↓Bottom Just 71st
 (vi) shall require the Grantee to notify the Committee of any
disposition of any Stock issued pursuant to the exercise of the incentive       
stock option under the circumstances described in Section 421(b) of the         
Code (relating to certain disqualifying dispositions), within 10 days of        
such disposition; and                                                           

    (vii) shall by its terms not be assignable or transferable other
than by will or the laws of descent and distribution and may be exercised,      
during the Grantee's lifetime, only by the Grantee; provided, however, that     
the Grantee may, to the extent provided in this Plan and  in a manner           
specified by the Committee, designate in writing a beneficiary to exercise      
his incentive stock option after the Grantee's death.                           

Notwithstanding the foregoing and Section 4(c)(v), the Committee may, 
without the consent of the Grantee, at any time before the exercise of an       
option (whether or not an incentive stock option), take any action              
necessary to prevent such option from being treated as an incentive stock       
option.                                                                         

(d)  Grant of Shares of Restricted Stock.                             

(i)  The Committee may, in its discretion grant shares of   
restricted stock to any individual eligible under Section 5 to receive          
Awards.                                                                         

(ii) The Committee shall, in its discretion, determine the  
amount, if any, that a Grantee shall pay for shares of restricted stock,        
subject to the following sentence.  Except with respect to shares of            
restricted stock that are treasury shares, for which no payment need be         
required, the                                                                   

DEF 14A 72nd Page of 110 TOC 1st Previous Next ↓Bottom Just 72nd
33
Committee shall require the Grantee to pay at least the Minimum                 
Consideration for each share of restricted stock granted to such Grantee.       
Such payment shall be made in full by the Grantee before the delivery of        
the shares and in any event no later than 10 days after the Grant Date for      
such shares.  In the discretion of the Committee and to the extent              
permitted by law, payment may also be made in accordance with Section 10.       

  (iii) The Committee may, but need not, provide that all or any
portion of a Grantee's Award of restricted stock, or restricted stock           
acquired upon exercise of an option shall be forfeited:                         

        (A)  except as otherwise specified in the Award Agreement,
upon the Grantee's termination of employment for reasons other than death,      
disability or any other reason specified in the Award Agreement within a        
specified time period after the Grant Date, or                                  

 (B)  if the Company or the Grantee does not achieve
specified performance goals (if any) within a specified time period after       
the Grant Date and before the Grantee's termination of employment, or           

         (C)  upon failure to satisfy such other restrictions as the
Committee may specify in the Award Agreement; provided that subject to          
Sections 4(c)(ix) and 14, in no case shall such Award become nonforfeitable     
before the first anniversary of the Grant Date.                                 

     (iv) If a share of restricted stock is forfeited, then (A) if the
Grantee was required to pay for such share or acquired such restricted          
stock upon the exercise of an option, the Grantee shall be deemed to have       
resold such share of restricted stock to the Company at the lesser of           
(1) the amount paid or, if the restricted stock was acquired on exercise of     
an option, the Option Price paid by the Grantee for such share of               

DEF 14A 73rd Page of 110 TOC 1st Previous Next ↓Bottom Just 73rd
restricted stock, or (2) the Fair Market Value of a share of Stock on the       
date of such forfeiture; (B) the Company shall pay to the Grantee the           
amount determined under clause (A) of this sentence as soon as is               
administratively practical; and such share of restricted stock shall cease      
to be outstanding, and shall no longer confer on the Grantee thereof any        
rights as a stockholder of the Company, from and after the later of the         
date the event causing the forfeiture occurred or the date of the Company's     
tender of the payment specified in clause (B) of this sentence, whether or      
not such tender is accepted by the Grantee.                                     

     (v)  The Committee may provide that any share of restricted stock
shall be held (together with a stock power executed in blank by the             
Grantee) in escrow by the Secretary of the Company until such shares become     
nonforfeitable or are forfeited.  Any share of restricted stock shall bear      
an appropriate legend specifying that such share is non-transferable and        
subject to the restrictions set forth in this Plan and the Award Agreement.     
If any shares of restricted stock become nonforfeitable, the Company shall      
cause certificates for such shares to be issued or reissued without such        
legend.                                                                         

(e)  Grant of stock appreciation rights.  When granted, stock         
appreciation rights may, but need not, be identified with shares of Stock       
subject to a specific option, specific shares of restricted stock, or           
specific performance units of the Grantee (including any option, shares of      
restricted stock, or performance units granted on or before the Grant Date      
of the stock appreciation rights) in a number equal to or different from        
the number of stock appreciation rights so granted.  If stock appreciation      
rights are identified with shares of Stock subject to an option, with           
shares of restricted stock, or with performance units, then, unless             
otherwise provided in the applicable Award Agreement, the Grantee's             
associated stock appreciation rights shall terminate upon (i) the               
expiration, termination, forfeiture or cancellation of such option, shares      
of restricted stock, or performance units, (ii) the exercise of such option     
or performance units, or (iii) the date such shares of restricted stock         
become nonforfeitable.                                                          

(f)  Grant of performance units.                                      

(i)  Before the grant of any performance unit, the Committee
shall:                                                                          

        (A)  determine performance goals applicable to such grant,

         (B)  designate a period, of not less than one year nor more
than seven years, for the measurement of the extent to which performance        
goals are attained, which period may begin prior to the Grant Date (the         
"Measuring Period"), and                                                        

     (C)  assign a "Performance Percentage" to each level of
attainment of performance goals during the Measuring Period, with the           
percentage applicable to minimum attainment being zero percent (0%) and the     
percentage applicable to maximum attainment to be determined by the             
Committee from time to time.                                                    

DEF 14A 74th Page of 110 TOC 1st Previous Next ↓Bottom Just 74th
34
(ii) In establishing performance goals, the Committee may   
consider any performance factor or factors it deems appropriate, including      
net income, growth in net income, earnings per share, growth of earnings        
per share, return on equity or return on capital, remaining employed for a      
specified period, or any other factor.  The Committee may, at any time, in      
its discretion, modify performance goals in order to facilitate their           
attainment for any reason, including recognition of unusual or nonrecurring     
events affecting the Company or a Subsidiary or changes in applicable laws,     
regulations or accounting principles.  If a Grantee is promoted, demoted or     

DEF 14A 75th Page of 110 TOC 1st Previous Next ↓Bottom Just 75th
transferred to a different business unit of the Company during a Measuring      
Period, then, to the extent the Committee determines the performance goals      
or Measuring Period are no longer appropriate, (A) the Committee may            
adjust, change or eliminate the performance goals or the applicable             
Measuring Period as it deems appropriate in order to make them appropriate      
and comparable to the initial performance goals or Measuring Period; or (B)     
make a cash payment to the Grantee in an amount determined in accordance        
with the method described in Section 14(b)(iii), substituting the effective     
date of such promotion, demotion or transfer for the termination of             
employment referred to in Section 14(b)(iii).                                   

(iii) When granted, performance units may, but need not, be 
identified with shares of Stock subject to a specific option, specific          
shares of restricted stock, or specific stock appreciation rights of the        
Grantee granted under this Plan in a number equal to or different from the      
number of the performance units so granted.  If performance units are           
identified with shares of Stock subject to an option, shares of restricted      
stock, or stock appreciation rights, then, unless otherwise provided in the     
applicable Award Agreement, the Grantee's associated performance units          
shall terminate upon (A) the expiration, termination, forfeiture or             
cancellation of such option, shares of restricted stock, or stock               
appreciation rights, (B) the exercise of such option or stock appreciation      
rights, or (C) the date such shares of restricted stock become                  
nonforfeitable.                                                                 

(g)  Grant of stock bonuses.  The Committee may, in its discretion,   
grant shares of Stock to any individual eligible under Section 5 to receive     
Awards, other than executive officers of the Company.                           

7.   GRANTEE'S AGREEMENT TO SERVE                                               

Each Grantee who is granted an Award shall, by executing such Grantee's         
Award Agreement, agree that such Grantee will remain in the employ of the       
Company or any of its Subsidiaries for at least one year after the Grant        
Date.  No obligation of the Company or any of its Subsidiaries as to the        
length of any Grantee's employment shall be implied by the terms of this        
Plan, any grant of an Award hereunder or any Award Agreement.  The Company      
and its Subsidiaries reserve the same rights to terminate employment of any     
Grantee as existed before the Effective Date.                                   

8.   NON-TRANSFERABILITY                                                        

Each Award (other than restricted stock) granted hereunder shall not be         
assignable or transferable other than by will or the laws of descent and        
distribution; provided, however, that a Grantee may, in a manner specified      
by the Committee and to the extent provided in this Plan:  (a) designate in     
writing a beneficiary to exercise his Award after the Grantee's death; (b)      
transfer an option (other than an incentive stock option), stock                
appreciation right or performance unit to a revocable inter vivos trust as      
to which the Grantee is both the settlor and the trustee; and (c) if the        
Award Agreement expressly permits, transfer an Award (other than restricted     
stock or an incentive stock option) for no consideration to any of the          
following permissible transferees (each a "Permissible Transferee"):  (w)       
any member of the Immediate Family of the Grantee to whom such Award was        
granted, (x) any trust solely for the benefit of members of the Grantee's       
Immediate Family, (y) any partnership whose only partners are members of        
the Grantee's Immediate Family or (z) Ronald McDonald Children's Charities      
or any Ronald McDonald House; and further provided that (i) the transferee      
shall remain subject to all of the terms and conditions applicable to such      
Award prior to such transfer; and (ii) any such transfer shall be subject       
to and in accordance with the rules and regulations prescribed by the           
Committee in accordance with Section 4(c)(xiii).  For purposes of this          
Section 8, "Immediate Family" means, with respect to a particular Grantee,      
such Grantee's spouse, children and grandchildren.                              

DEF 14A 76th Page of 110 TOC 1st Previous Next ↓Bottom Just 76th
Notwithstanding the foregoing, each Award (other than restricted stock)         
granted hereunder to a Section 16 Grantee shall not be assignable or            
transferable other than by will or the laws of descent and distribution         
unless the Board (or such committee) has determined that such restrictions      
are not then required for grants under this Plan                                

DEF 14A 77th Page of 110 TOC 1st Previous Next ↓Bottom Just 77th
35
to satisfy the requirements for the exemption provided by Rule 16b-3 under      
the Exchange Act (in the form then applicable to the Company), in which         
event the restrictions set forth in clause (c) of the preceding paragraph       
shall apply to any such transfer.  Notwithstanding the foregoing, a Section     
16 Grantee may, in a manner specified by the Committee and to the extent        
provided by this Plan, designate a beneficiary to exercise an Award after       
the Grantee's death.                                                            

Each share of restricted stock shall be non-transferable until such share       
becomes nonforfeitable.                                                         

9.   EXERCISE                                                                   

(a)  Exercise of options.  Subject to Sections 4(c)(ix) and 14 and    
such terms and conditions as the Committee may impose, each option shall be     
exercisable in one or more installments commencing not earlier than the         
first anniversary of the Grant Date of such option.                             

Each option shall be exercised by delivery to the Company of written  
notice of intent to purchase a specific number of shares of Stock subject       
to the option.  The Option Price of any shares of Stock or shares of            
restricted stock as to which an option shall be exercised shall be paid in      
full at the time of the exercise.  Payment may, at the election of the          
Grantee, be made in any one or any combination of the following:                

(i)  cash,                                                  

 (ii) Stock held by the Grantee for at least 6 months prior to
exercise of the option, valued at its Fair Market Value on the date of          
exercise,                                                                       

  (iii) with the approval of the Committee, shares of restricted
stock held by the Grantee for at least 6 months prior to exercise of the        
option, each valued at the Fair Market Value of a share of Stock on the         
date of exercise, or                                                            

(iv) through simultaneous sale through a broker of shares   
acquired on exercise, as permitted under Regulation T of the Federal            
Reserve Board.                                                                  

In the discretion of the Committee and to the extent permitted by law,
payment may also be made in accordance with Section 10.                         

If restricted stock ("Tendered Restricted Stock") is used to pay the  
Option Price for Stock subject to an option, then the Committee may, but        
need not, specify that (i) all the shares of Stock acquired on exercise of      
the option shall be subject to the same restrictions as the Tendered            
Restricted Stock, determined as of the date of exercise of the option, or       
(ii) a number of shares of Stock acquired on exercise of the option equal       
to the number of shares of Tendered Restricted Stock shall, unless the          
Committee provides otherwise, be subject to the same restrictions as the        
Tendered Restricted Stock, determined as of the date of exercise of the         
option.                                                                         

(b)  Exercise of stock appreciation rights.  Subject to Sections      
4(c)(ix) and 14 and such terms and conditions as the Committee may impose,      
each stock appreciation right shall be exercisable not earlier than the         

DEF 14A 78th Page of 110 TOC 1st Previous Next ↓Bottom Just 78th
first anniversary of the Grant Date of such stock appreciation right, to        
the extent the option with which it is identified, if any, may be exercised     
to the extent the restricted stock with which it is identified, if any, is      
nonforfeitable, or to the extent the performance unit with which it is          
identified, if any, may be exercised unless otherwise provided by the           
Committee.  Stock appreciation rights shall be exercised by delivery to the     
Company of written notice of intent to exercise a specific number of stock      
appreciation rights.  Unless otherwise provided in the applicable Award         
Agreement, the exercise of stock appreciation rights which are identified       
with shares of Stock subject to an option, shares of restricted stock or        
performance units shall result in the cancellation or forfeiture of such        
option, shares of restricted stock or performance units, as the case may        
be, to the extent of such exercise.                                             

The benefit for each stock appreciation right exercised shall be equal
to:                                                                             

 (i)  the Fair Market Value of a share of Stock on the date of
such exercise, reduced by                                                       

(ii) an amount equal to:                                    

          (A)  for any stock appreciation right identified with shares
of Stock subject to an option, the Option Price of such option, unless the      
Committee in the grant of the stock appreciation right specified a higher       
amount or                                                                       

          (B)  for any other stock appreciation right, the Fair Market
Value of a share of Stock on the Grant Date of such stock appreciation          
right, unless the Committee in the grant of the stock appreciation right        
specified a higher amount; provided that the Committee, in its discretion,      
may provide that the benefit for any stock appreciation right shall not         
exceed such percentage of the Fair Market Value of a share of Stock on such     
Grant Date as the Committee shall specify.  The benefit upon the exercise       
of a stock appreciation right shall be payable in cash, except that the         
Committee, may, in its discretion, provide in the                               

DEF 14A 79th Page of 110 TOC 1st Previous Next ↓Bottom Just 79th
36
Award Agreement that benefits, with respect to any particular exercise, may     
be paid wholly or partly in Stock.                                              

(c)  Exercise of performance units.                                   

   (i)  Subject to Section 14 and such terms and conditions as the
Committee may impose, if, with respect to any performance unit, the minimum     
performance goals have been achieved during the applicable Measuring            
Period, then such performance unit shall be exercisable commencing on the       
later of (A) the first anniversary of the Grant Date or (B) the first day       
after the end of the applicable Measuring Period.  Performance units shall      
be exercised by delivery to the Company of written notice of intent to          
exercise a specific number of performance units; provided, however, that        
performance units not identified with shares of Stock subject to an option,     
shares of restricted stock or stock appreciation rights shall be deemed         
exercised on the date on which they first become exercisable.  Unless           
otherwise provided in the applicable Award Agreement, the exercise of           
performance units which are identified with shares of Stock subject to an       
option, shares of restricted stock or stock appreciation rights shall           
result in the cancellation or forfeiture of such shares of Stock subject to     
option, shares of restricted stock or stock appreciation rights as the case     
may be, to the extent of such exercise.                                         

    (ii) The benefit for each performance unit exercised shall be an
amount equal to the product of:                                                 

DEF 14A 80th Page of 110 TOC 1st Previous Next ↓Bottom Just 80th
  (A)  the Unit Value (as defined below) multiplied by

 (B)  the Performance Percentage attained during the
Measuring Period for such performance unit.                                     

 (iii) The Unit Value shall be, as specified by the Committee,

(A)  a dollar amount,                             

         (B)  an amount equal to the Fair Market Value of a share of
Stock on the Grant Date,                                                        

         (C)  an amount equal to the Fair Market Value of a share of
Stock on the exercise date of the performance unit, including, if so            
provided in the Award Agreement, an amount ("Dividend Equivalent Amount")       
equal to the value that would result if dividends paid on a share of Stock      
on or after the Grant Date and on or before the exercise date were invested     
in shares of Stock as of each respective dividend payment date, or              

         (D)  an amount equal to the Fair Market Value of a share of
Stock on the exercise date of the performance unit (plus, if so specified       
in the Award Agreement a Dividend Equivalent Amount), reduced by the Fair       
Market Value of a share of Stock on the Grant Date of the performance unit.     

     (iv) The benefit upon the exercise of a performance unit shall be
payable as soon as is administratively practicable after the later of           
(A) the date the Grantee exercises or is deemed to exercise such                
performance unit, or (B) the date (or dates in the event of installment         
payments) as provided in the applicable Award Agreement.  Such benefit          
shall be payable in cash, except that the Committee, may, in its                
discretion, provide in the Award Agreement that benefits, with respect to       
any particular exercise, may be paid wholly or partly in Stock.  In the         
event the Award Agreement provides that the benefit may be paid wholly in       
Stock unless the Committee, in its discretion, specifies at the time of         
exercise that the benefit shall be paid partly or wholly in cash, the           
number of shares of Stock payable in lieu of cash shall be determined by        
valuing the Stock at its Fair Market Value on the date such benefit is to       
be paid.                                                                        

(d)  Special rules for Section 16 grantees.  No stock appreciation    
right, option or performance unit (if the benefit payable with respect to       
such performance unit is to be determined by reference to the Fair Market       
Value of the Stock on the date the performance unit is exercised) shall be      
exercisable by a Section 16 Grantee during the first six months after its       
Grant Date, except as exempted from Section 16 of the 1934 Act under            
Rule 16a-2(d) under the 1934 Act.                                               

10.  LOANS AND GUARANTEES                                                       

The Committee may, in its discretion:                                           

(a)  allow a Grantee to defer payment to the Company of all or any    
portion of (i) the Option Price of an option, (ii) the purchase price of a      
share of restricted stock, or (iii) any taxes associated with a benefit         
hereunder which is not a cash benefit at the time such benefit is so            
taxable, or                                                                     

(b)  cause the Company to guarantee a loan from a third party to the  
Grantee, in an amount equal to all or any portion of such Option Price,         
purchase price, or any related taxes.                                           

Any such payment deferral or guarantee by the Company pursuant to this
Section 10 shall be on such terms and conditions as the Committee may           
determine; provided that the interest rate applicable to any such payment       
deferral shall be not more favorable to the Grantee                             

DEF 14A 81st Page of 110 TOC 1st Previous Next ↓Bottom Just 81st

DEF 14A 82nd Page of 110 TOC 1st Previous Next ↓Bottom Just 82nd
37
than the terms applicable to funds borrowed by the Company.                     
Notwithstanding the foregoing, a Grantee shall not be entitled to defer the     
payment of such Option Price, purchase price or any related taxes unless        
the Grantee (i) enters into a binding obligation to pay the deferred amount     
and (ii) except with respect to treasury shares, pays upon exercise of an       
option or grant of shares of restricted stock, as the case may be, an           
amount equal to or greater than the Minimum Consideration thereof.  If the      
Committee has permitted a payment deferral or caused the Company to             
guarantee a loan pursuant to this Section 10, then the Committee may, in        
its discretion, require the immediate payment of such deferred amount or        
the immediate release of such guarantee upon the Grantee's termination of       
employment or if the Grantee sells or otherwise transfers the Grantee's         
shares of Stock purchased pursuant to such deferral or guarantee.               

11.  NOTIFICATION UNDER SECTION 83(b)                                           

The Committee may, on the Grant Date or any later date, prohibit a Grantee      
from making the election described below.  If the Committee has not             
prohibited such Grantee from making such election, and the Grantee shall,       
in connection with the exercise of any option, or the grant of any share of     
restricted stock, make the election permitted under Section 83(b) of the        
Code (i.e., an election to include in such Grantee's gross income in the        
year of transfer the amounts specified in Section 83(b) of the Code), such      
Grantee shall notify the Company of such election within 10 days of filing      
notice of the election with the Internal Revenue Service, in addition to        
any filing and notification required pursuant to regulations issued under       
the authority of Section 83(b) of the Code.                                     

12.  MANDATORY WITHHOLDING TAXES                                                

(a)  Whenever under this Plan, cash or shares of Stock are to be      
delivered upon exercise or payment of an Award or upon a share of               
restricted stock becoming nonforfeitable, or any other event with respect       
to rights and benefits hereunder, the Company shall be entitled to require      
as a condition of delivery (i) that the Grantee remit an amount sufficient      
to satisfy all federal, state, and local withholding tax requirements           
related thereto, (ii) the withholding of such sums from compensation            
otherwise due to the Grantee or from any shares of Stock due to the Grantee     
under this Plan or (iii) any combination of the foregoing provided,             
however, that no amount shall be withheld from any cash payment or shares       
of Stock relating to an Award which was transferred by the Grantee in           
accordance with this Plan.                                                      

(b)  If any disqualifying disposition described in Section 6(c)(vi) is
made with respect to shares of Stock acquired under an incentive stock          
option granted pursuant to this Plan or any election described in               
Section 11 is made, then the person making such disqualifying disposition       
or election shall remit to the Company an amount sufficient to satisfy all      
federal, state, and local withholding taxes thereby incurred;  provided         
that, in lieu of or in addition to the foregoing, the Company shall have        
the right to withhold such sums from compensation otherwise due to the          
Grantee or from any shares of Stock due to the Grantee under this Plan.         

13.  ELECTIVE SHARE WITHHOLDING                                                 

(a)  Subject to Section 13(b), a Grantee may elect the withholding    
("Share Withholding") by the Company of a portion of the shares of Stock        
otherwise deliverable to such Grantee upon the exercise or payment of an        
Award or upon a share of restricted stock becoming nonforfeitable (each a       
"Taxable Event") having a Fair Market Value equal to:                           

  (i)  the minimum amount necessary to satisfy required federal,
state, or local withholding tax liability attributable to the Taxable Event     

DEF 14A 83rd Page of 110 TOC 1st Previous Next ↓Bottom Just 83rd
(in 1995, the minimum amount required by federal tax withholding rules is       
28% of the Grantee's taxable income); or                                        

   (ii) with the Committee's prior approval, a greater amount, not
to exceed the estimated total amount of such Grantee's tax liability with       
respect to the Taxable Event.                                                   

(b)  Each Share Withholding election by a Grantee shall be subject to 
the following restrictions:                                                     

   (i)  any Grantee's election shall be subject to the Committee's
right to revoke such election of Share Withholding by such Grantee at any       
time before the Grantee's election if the Committee has reserved the right      
to do so in the Award Agreement;                                                

(ii) if the Grantee is a Section 16 Grantee, such Grantee's 
election shall be subject to the disapproval of the Committee at any time,      
whether or not the Committee has reserved the right to do so;                   

  (iii) the Grantee's election must be made before the date (the
"Tax Date") on which the amount of tax to be withheld is determined;            

DEF 14A 84th Page of 110 TOC 1st Previous Next ↓Bottom Just 84th
38
(iv) the Grantee's election shall be irrevocable;           

    (v)  a Section 16 Grantee may not elect Share Withholding within
six months after the grant of the related option or stock appreciation          
rights (except if the Grantee dies or incurs a Disability before the end of     
the six-month period);                                                          

 (vi) except to the extent such condition may be waived by the
General Counsel of the Company a Section 16 Grantee must elect Share            
Withholding either six months before the Tax Date or during the ten             
business day period beginning on the third business day after the release       
of the Company's quarterly or annual summary statement of sales and             
earnings; and                                                                   

     (vii) provided, however, that no election to have shares of Stock
withheld from any Award shall be effective with respect to an Award which       
was transferred by the Grantee in accordance with this Plan.                    

14.  TERMINATION OF EMPLOYMENT                                                  

(a)  For cause.  If a Grantee has a termination of employment for     
Cause,                                                                          

(i)  the Grantee's shares of restricted stock that are      
forfeitable shall thereupon be forfeited, subject to the provisions of          
Section 6(d)(iv) regarding repayment of certain amounts to the Grantee; and     

(ii) any unexercised option, stock appreciation right, or   
performance unit shall thereupon terminate.                                     

(b)  On account of death or disability.  If a Grantee has a           
termination of employment on account of the Grantee's death or Disability,      
then, except as otherwise provided in the Award Agreement,                      

(i)  the Grantee's shares of restricted stock that were     
forfeitable shall thereupon become nonforfeitable;                              

    (ii) any unexercised option or stock appreciation right, whether
or not exercisable on the date of such termination of employment may be         
exercised, in whole or in part, at any time within three years after such       
termination of employment by the Grantee, or after the Grantee's death, by      

DEF 14A 85th Page of 110 TOC 1st Previous Next ↓Bottom Just 85th
(A) his personal representative or by the person to whom the option or          
stock appreciation right is transferred by will or the applicable laws of       
descent and distribution, (B) the Grantee's beneficiary designated in           
accordance with Sections 6(c)(vii) or 8, (C) the then-acting trustee of the     
trust described in clause (b) in the first paragraph of Section 8 (the          
"Trust") (but, in the case of a Section 16 Grantee, only if the conditions      
set forth in the second paragraph of Section 8 (the "Conditions") have been     
satisfied); or (D) a Permissible Transferee of an Award assigned or             
transferred in accordance with Section 8; and                                   

    (iii) any unexercised performance unit may be exercised in whole
or in part, at any time within three years after such termination of            
employment by the Grantee or, after the Grantee's death, by (A) his             
personal representative or by the person to whom the performance unit is        
transferred by will or the applicable laws of descent and distribution, (B)     
the Grantee's beneficiary designated in accordance with Section 8, (C) the      
Trust (but, in the case of a Section 16 Grantee, only if the Conditions         
have been satisfied), or (D) a Permissible Transferee of an Award assigned      
or transferred in accordance with Section 8; provided that the benefit          
payable with respect to any performance unit with respect to which the          
Measuring Period has not ended as of the date of such termination of            
employment shall be equal to the product of the Unit Value multiplied           
successively by each of the following:                                          

      (1)  a fraction, the numerator of which is the number of
months (including as a whole month any partial month) that have elapsed         
since the beginning of such Measuring Period until the date of such             
termination of employment and the denominator of which is the number of         
months (including as a whole month any partial month) in the Measuring          
Period (the "Time Proration Factor"); and                                       

  (2)  a percentage equal to the greater of the target
percentage, if any, specified in the applicable Award Agreement, or the         
maximum percentage, if any, that would be earned under the terms of the         
applicable Award Agreement assuming that the rate at which the performance      
goals have been achieved as of the date of such termination of employment       
would continue until the end of the Measuring Period (the "Performance          
Percentage Factor").                                                            

(c)  On account of retirement.  If a Grantee has a termination of     
employment on account of Retirement, any unexercised option or stock            
appreciation right (other than a stock appreciation right identified with a     
share of restricted stock or a performance unit) which is then exercisable      
or which would become exercisable within three years of such Retirement if      
the Grantee remained employed by the Company or a Subsidiary throughout         

DEF 14A 86th Page of 110 TOC 1st Previous Next ↓Bottom Just 86th
39
such three-year period, may be exercised, in whole or in part, by the           
Grantee or Permissible Transferee of an Award assigned or transferred in        
accordance with Section 8, at any time within three years after the             
Grantee's Retirement.  The nonforfeitability and exercisability of the          
Grantee's restricted stock and performance units (and any stock                 
appreciation rights identified therewith) shall be determined under Section     
14(e).                                                                          

(d)  On account of termination of employment after age 60.  If a      
Grantee has a termination of employment after attaining age 60, other than      
a termination of employment on account of death, Disability or Retirement       
and other than to become an owner-operator of a McDonald's restaurant, any      
unexercised option or stock appreciation right (other than a stock              
appreciation right identified with a share of restricted stock or a             
performance unit) to the extent exercisable on the date of such termination     
of employment, may be exercised, in whole or in part by the Grantee or          
Permissible Transferee of an Award assigned or transferred in accordance        

DEF 14A 87th Page of 110 TOC 1st Previous Next ↓Bottom Just 87th
with Section 8, at any time within one year after the Grantee's termination     
of employment.  The nonforfeitability and exercisability of the Grantee's       
restricted stock and performance units (and any stock appreciation rights       
identified therewith) shall be determined under Section 14(e).                  

(e)  Any other reason.  If a Grantee has a termination of employment  
for a reason other than for Cause, death of the Grantee, the Grantee's          
Disability, and, with respect to options and stock appreciation rights          
(other than stock appreciation rights identified with a share of restricted     
stock or a performance unit) the termination of employment is for reasons       
other than the Grantee's Retirement or the Grantee's termination of             
employment after attaining age 60,                                              

(i)  the Grantee's shares of restricted stock (and any stock
appreciation rights identified therewith), to the extent forfeitable on the     
date of the Grantee's termination of employment, shall be forfeited on such     
date;                                                                           

  (ii) any unexercised option or stock appreciation right (other
than a stock appreciation right identified with a share of restricted stock     
or performance unit) to the extent exercisable on the date of the Grantee's     
termination of employment, may be exercised in whole or in part by the          
Grantee or Permissible Transferee of an Award assigned or transferred in        
accordance with Section 8, not later than the 30th day following the            
Grantee's termination of employment; provided that if such 30th day is not      
a business day, such option or stock appreciation right may be exercised        
not later than the first business day following such 30th day; and              

     (iii) the Grantee's performance units (and any stock appreciation
rights identified therewith) shall become non-forfeitable and may be            
exercised in whole or in part by the Grantee or Permissible Transferee of       
an Award assigned or transferred in accordance with Section 8, but only if      
and to the extent determined by the Committee.                                  

(f)  Extension of term.  In the event of termination of employment    
other than for Cause, the term of any Award which by its terms would            
otherwise expire after the Grantee's termination of employment but prior to     
the end of the period following the Grantee's termination of employment         
described in Sections (b), (c), (d) and (e) above for exercise of Awards        
shall be extended so as to permit any unexercised portion thereof to be         
exercised at any time by the Grantee or Permissible Transferee of an Award      
assigned or transferred in accordance with Section 8 within such period;        
provided, however, that in no event may the term of any Award expire more       
than 15 years after the Grant Date of such Award.                               

15.  EQUITY INCENTIVE PLANS OF FOREIGN SUBSIDIARIES                             

The Committee may authorize any foreign Subsidiary to adopt a plan for          
granting Awards ("Foreign Equity Incentive Plan").  All awards granted          
under such Foreign Equity Incentive Plans shall be treated as grants under      
this Plan.  Such Foreign Equity Incentive Plans shall have such terms and       
provisions as the Committee permits not inconsistent with the provisions of     
this Plan and which may be more restrictive than those contained in this        
Plan.  Awards granted under such Foreign Equity Incentive Plans shall be        
governed by the terms of this Plan except to the extent that the provisions     
of the Foreign Equity Incentive Plans are more restrictive than the terms       
of this Plan, in which case such terms of the Foreign Equity Incentive          
Plans shall control.                                                            

16.  SUBSTITUTED AWARDS                                                         

If the Committee cancels any Award (granted under this Plan, or any plan of     
any entity acquired by the Company or any of its Subsidiaries), and a new       
Award is substituted therefor, then the Committee may, in its discretion,       
determine                                                                       

DEF 14A 88th Page of 110 TOC 1st Previous Next ↓Bottom Just 88th

DEF 14A 89th Page of 110 TOC 1st Previous Next ↓Bottom Just 89th
40
the terms and conditions of such new Award; provided that (a) the Option        
Price of any new option shall not be less than 100% of the Fair Market          
Value of a share of Stock on the date of grant of the new Award; (b) no         
award shall be canceled without the consent of the Grantee if the terms and     
conditions of the new Award to be substituted are not at least as favorable     
as the terms and conditions of the award to be canceled (and the Grant Date     
of the new Award shall be the date on which such new Award is granted);         
(c) no Section 16 Grantee may exercise a substituted stock appreciation         
right or a substituted option (or substituted performance unit) identified      
with a stock appreciation right within six months after the Grant Date          
(calculated without reference to this Section 16) of such substituted           
option, unless the Company shall have received an opinion of counsel for        
the Company or "no action" or interpretive letter from the staff of the SEC     
to the effect that such limitation is not necessary in order to avoid           
liability under Section 16(b) of the 1934 Act; and (d) such cancelled Award     
shall be counted for purposes of Section 3(b).                                  

17.  SECURITIES LAW MATTERS                                                     

(a)  If the Committee deems necessary to comply with the Securities   
Act of 1933, the Committee may require a written investment intent              
representation by the Grantee and may require that a restrictive legend be      
affixed to certificates for shares of Stock.                                    

(b)  If based upon the opinion of counsel for the Company, the        
Committee determines that the exercise or nonforfeitability of, or delivery     
of benefits pursuant to, any Award would violate any applicable provision       
of (i) federal or state securities law or (ii) the listing requirements of      
any national securities exchange on which are listed any of the Company's       
equity securities, then the Committee may postpone any such exercise,           
nonforfeitability or delivery, as the case may be, but the Company shall        
use its best efforts to cause such exercise, nonforfeitability or delivery      
to comply with all such provisions at the earliest practicable date.            

18.  FUNDING                                                                    

Benefits payable under this Plan to any person 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 this Plan.           

19.  NO EMPLOYMENT RIGHTS                                                       

Neither the establishment of this Plan, nor the granting of any Award shall     
be construed to (a) give any Grantee the right to remain employed by the        
Company or any of its Subsidiaries or to any benefits not specifically          
provided by this Plan or (b) in any manner modify the right of the Company      
or any of its Subsidiaries to modify, amend, or terminate any of its            
employee benefit plans.                                                         

20.  RIGHTS AS A STOCKHOLDER                                                    

A Grantee shall not, by reason of any Award (other than restricted stock)       
have any right as a stockholder of the Company with respect to the shares       
of Stock which may be deliverable upon exercise or payment of such Award        
until such shares have been delivered to him.  Shares of restricted stock       
held by a Grantee or held in escrow by the Secretary of the Company shall       
confer on the Grantee all rights of a stockholder of the Company, except as     
otherwise provided in this Plan.  The Committee, in its discretion, at the      
time of grant of restricted stock, may permit or require the payment of         
cash dividends thereon to be deferred and, if the Committee so determines,      
reinvested in additional restricted stock to the extent shares are              
available under Section 3 or otherwise reinvested.  Stock dividends and         
deferred cash dividends issued with respect to restricted stock shall be        

DEF 14A 90th Page of 110 TOC 1st Previous Next ↓Bottom Just 90th
treated as additional shares of restricted stock that are subject to the        
same restrictions and other terms as apply to the shares with respect to        
which such dividends are issued.  The Committee may, in its discretion,         
provide for crediting to and payment of interest on deferred cash               
dividends.                                                                      

21.  NATURE OF PAYMENTS                                                         

Any and all grants, payments of cash, or deliveries of shares of Stock          
hereunder shall constitute special incentive payments to the Grantee and        
shall not be taken into account in computing the amount of salary or            
compensation of the Grantee for the purposes of determining any pension,        
retirement, death or other benefits under (a) any pension, retirement,          
profit-sharing, bonus, life insurance or other employee benefit plan of the     
Company or any of its Subsidiaries or (b) any agreement between the Company     
or any Subsidiary, on the one hand, and the Grantee, on the other hand,         
except as such plan or agreement shall otherwise expressly provide.             

DEF 14A 91st Page of 110 TOC 1st Previous Next ↓Bottom Just 91st
41
22.  NON-UNIFORM DETERMINATIONS                                                 

Neither the Committee's nor the Board's determinations under this Plan need     
be uniform and may be made by the Committee or the Board selectively among      
persons who receive, or are eligible to receive, Awards (whether or not         
such persons are similarly situated).  Without limiting the generality of       
the foregoing, the Committee shall be entitled, among other things, to make     
non-uniform and selective determinations, to enter into non-uniform and         
selective Award Agreements as to (a) the identity of the Grantees, (b) the      
terms and provisions of Awards, and (c) the treatment, under Section 14, of     
terminations of employment.  Notwithstanding the foregoing, the Committee's     
interpretation of Plan provisions shall be uniform as to similarly situated     
Grantees.                                                                       

23.  ADJUSTMENTS                                                                

The Committee shall make equitable adjustment of:                               

(a)  the aggregate numbers of shares of Stock, shares of restricted   
stock, and bonus stock available under Sections 3(a) and 3(c),                  

(b)  the number of shares of Stock, shares of restricted stock, stock 
appreciation rights or performance units covered by an Award,                   

(c)  the Option Price,                                                

(d)  the Fair Market Value of Stock to be used to determine the amount
of the benefit payable upon exercise of stock appreciation rights or            
performance units, and                                                          

(e)  the maximum number of shares of Stock for which Awards may be    
granted to any Grantee in any three year period under Section 3(b),             

to reflect a stock dividend, stock split, reverse stock split, share            
combination, recapitalization, merger, consolidation, acquisition of            
property or shares, separation, asset spin-off, reorganization, stock           
rights offering, liquidation or similar event, of or by the Company.            

Notwithstanding the foregoing, upon the approval by the stockholders of the     
Company of a plan of liquidation for the Company, any unexercised options,      
stock appreciation rights and performance units theretofore granted shall       
thereupon become exercisable, and any shares of restricted stock that have      
not become nonforfeitable shall become nonforfeitable.                          

24.  AMENDMENT OF THIS PLAN                                                     

DEF 14A 92nd Page of 110 TOC 1st Previous Next ↓Bottom Just 92nd
The Board may from time to time in its discretion amend or modify this Plan     
without the approval of the stockholders of the Company, except as such         
stockholder approval may be required (a) to permit the grant of Awards          
under, and transactions in Stock pursuant to, this Plan to be exempt from       
liability under Section 16(b) of the 1934 Act or (b) under the listing          
requirements of any national securities exchange on which are listed any of     
the Company's equity securities.                                                

25.  TERMINATION OF THIS PLAN                                                   

This Plan shall terminate on the tenth (10th) anniversary of the Effective      
Date or at such earlier time as the Board may determine.  Any termination,      
whether in whole or in part, shall not affect any Award then outstanding        
under this Plan.                                                                

26.  NO ILLEGAL TRANSACTIONS                                                    

This Plan and all Awards granted pursuant to it are subject to all laws and     
regulations of any governmental authority which may be applicable thereto;      
and notwithstanding any provision of this Plan or any Award, Grantees shall     
not be entitled to exercise Awards or receive the benefits thereof and the      
Company shall not be obligated to deliver any Stock or pay any benefits to      
a Grantee if such exercise, delivery, receipt or payment of benefits would      
constitute a violation by the Grantee or the Company of any provision of        
any such law or regulation.                                                     

27.  CONTROLLING LAW                                                            

The law of the State of Illinois, except its law with respect to choice of      
law, shall be controlling in all matters relating to this Plan.                 

28.  SEVERABILITY                                                               

If all or any part of this Plan is declared by any court or governmental        
authority to be unlawful or invalid, such unlawfulness or invalidity shall      
not serve to invalidate any portion of this Plan not declared to be             
unlawful or invalid.  Any Section or part of a Section so declared to be        
unlawful or invalid shall, if possible, be construed in a manner which will     
give effect to the terms of such Section or part of a Section to the            
fullest extent possible while remaining lawful and valid.                       

DEF 14A 93rd Page of 110 TOC 1st Previous Next ↓Bottom Just 93rd
42
GENERAL INFORMATION ABOUT THE ANNUAL MEETING                                    
----------------------------------------------------------------------          

PROXY SOLICITATION                                                              

This Proxy Statement and the accompanying proxy and voting instruction card     
are being furnished to shareholders of the Company beginning on or about        
April 12, 1995 in connection with the solicitation of proxies by the Board      
of Directors to be used in voting at the Annual Meeting of Shareholders on      
May 26, 1995, and any adjournment thereof.                                      

The Company will bear the cost of soliciting proxies, including the charges     
and expenses of brokerage firms and others for forwarding solicitation          
materials to beneficial owners. The Company has retained D.F. King & Co.,       
Inc. to solicit proxies on behalf of the Board at a fee estimated to be         
$16,000 plus reasonable out-of-pocket expenses. Proxies may also be             
solicited by certain employees and Directors of the Company by mail, by         
telephone, or personally, without compensation apart from their normal          
salaries.                                                                       

DEF 14A 94th Page of 110 TOC 1st Previous Next ↓Bottom Just 94th
RECORD DATE AND VOTING AT THE ANNUAL MEETING                                    

Shareholders of record owning Common or Preferred Stock (except Series E        
Preferred Stock) at the close of business on March 27, 1995, are entitled       
to vote at the 1995 Annual Meeting. On that date there were 694,710,144         
shares of Common Stock and 11,356,215 shares of Preferred Stock outstanding     
and entitled to vote at the Annual Meeting. Each share of Common Stock and      
each share of Preferred Stock (except Series E Preferred Stock) is entitled     
to one vote upon each matter presented at the Annual Meeting.  Proxies may      
be revoked by voting in person at the Annual Meeting, by written notice to      
the Company's Secretary, or by delivery of a later-dated proxy, in each         
case prior to the closing of the polls for voting at the Annual Meeting. A      
proxy in the accompanying form which is properly executed,  returned and        
not revoked will be voted in accordance with the instructions indicated.  A     
proxy voted by telephone and not revoked will be voted in accordance with       
the shareholder's instructions.  If no instructions are given, proxies          
which are signed and returned or voted via telephone will be voted FOR the      
slate of six Directors proposed by the Board,  FOR the adoption of the          
Option Plan and FOR the approval of the Restated Incentive Plan. The            
enclosed proxy gives discretionary authority as to any matters not              
specifically referred to therein.  Management is not aware of any other         
matters to be presented for action by shareholders before the Annual            
Meeting.  However, if any such matters properly come before the Annual          
Meeting, it is understood that the designated proxy holders have                
discretionary authority to vote thereon.                                        

All votes cast by proxy or in person at the Annual Meeting will be              
tabulated by First Chicago Trust Company of New York (First Chicago), which     
has been appointed independent inspector of election for the 1995 Annual        
Meeting and will determine whether or not a quorum is present. With respect     
to the election of Directors, First Chicago will treat votes withheld as        
shares that are present for purposes of determining a quorum.  A plurality      
is required to elect Directors, so the six persons receiving the greatest       
number of votes will be elected. Withheld votes will not affect the outcome     
of the election. With respect to the adoption of the Option Plan and the        
approval of the Restated Incentive Plan, First Chicago will treat               
abstentions as shares that are present and entitled to vote for purposes of     
determining a quorum. Since a majority of the shares represented at the         
meeting and entitled to vote is required for approval, abstentions will         
have the effect of a vote against approval of these proposals. If a broker      
indicates on a proxy that it does not have discretionary authority as to        
certain shares to vote on a particular matter, those shares will be             
considered as present for quorum purposes but not as shares entitled to         
vote with respect to that matter. Accordingly, broker non-votes will have       
no effect on such a matter.                                                     

This year, shareholders of record can vote their shares via a toll-free         
telephone call in the U.S. and Canada or by mailing their signed proxy          
card.  The telephone voting procedure is designed to authenticate               
shareholders' identities, to allow shareholders to vote their shares and to     
confirm that their instructions have been properly recorded.  McDonald's        
has been advised by counsel that the procedures which have been put in          
place are consistent with the                                                   

DEF 14A 95th Page of 110 TOC 1st Previous Next ↓Bottom Just 95th
43
requirements of applicable law.  Specific instructions to be followed by        
any shareholder of record interested in voting via telephone are set forth      
on the enclosed proxy card.                                                     

A list of shareholders of record entitled to vote at the Annual Meeting         
will be available for inspection by any shareholder for any purpose germane     
to the meeting during ordinary business hours for a period of 10 days prior     
to the meeting at the Company's office at McDonald's Plaza, Oak Brook IL        
60521.                                                                          

DEF 14A 96th Page of 110 TOC 1st Previous Next ↓Bottom Just 96th
CONFIDENTIAL VOTING                                                             

It is the Company's policy to protect the confidentiality of shareholder        
votes throughout the voting process. In this regard, the vote of any            
shareholder will not be disclosed to the Company, its Directors, officers       
or employees, except to meet legal requirements and to assert or defend         
claims for or against the Company and except in those limited circumstances     
where (i) a proxy solicitation is contested; (ii) a shareholder writes          
comments on a proxy card; or (iii) a shareholder authorizes disclosure.         
Both the tabulators and inspectors of election have been and will remain        
independent of the Company.                                                     

Nothing in this policy prohibits shareholders from disclosing the nature of     
their votes to the Company, its Directors, officers or employees, or            
impairs voluntary communication between the Company and its shareholders,       
nor does this policy prevent the Company from ascertaining which                
shareholders have voted or from making efforts to encourage shareholders to     
vote.                                                                           

AUDITORS                                                                        

The Board of Directors has appointed Ernst & Young LLP as independent           
auditors to examine the consolidated financial statements of the Company        
for the year ending December 31, 1995. Ernst & Young LLP audited such           
statements for the year ended December 31, 1994, and a representative of        
that firm will be present at the Annual Meeting and will have the               
opportunity to make a statement, if the firm elects to do so, and to            
respond to appropriate questions from shareholders.                             

DEF 14A 97th Page of 110 TOC 1st Previous Next ↓Bottom Just 97th
44
HOME OFFICE                                                                     

McDonald's Corporation                                                          
McDonald's Plaza                                                                
Oak Brook IL 60521                                                              
1-708-575-3000                                                                  

DEFINITIONS                                                                     

As used in this Proxy Statement the following terms have the following          
meanings:                                                                       

COMMON STOCK means                                                              
McDonald's Corporation Common Stock                                             

PREFERRED STOCK means                                                           
McDonald's Corporation Preferred Stock, including                               
Series B, C, D and E, as the case may be                                        

SEC means                                                                       
Securities and Exchange Commission                                              

1975 OPTION PLAN means                                                          
McDonald's Corporation 1975 Stock Ownership Option Plan                         

INCENTIVE PLAN means                                                            
McDonald's Corporation 1992 Stock Ownership Incentive Plan                      

OPTION PLANS means                                                              
McDonald's Corporation Non-Employee Director Stock Option Plan                  

DEF 14A 98th Page of 110 TOC 1st Previous Next ↓Bottom Just 98th
DEFERRED INCENTIVE PLAN means                                                   
McDonald's Corporation Deferred Incentive Plan                                  

PROFIT SHARING PROGRAM means                                                    
McDonald's Corporation Profit Sharing Program                                   

STOCK PLAN means                                                                
McDonald's Corporation Directors' Stock Plan                                    

CODE means Internal Revenue Code of 1986, and the regulations promulgated       
thereunder                                                                      

FAIR MARKET VALUE means the closing price of the Common Stock on the New        
York Stock Exchange composite tape as of any given date                         

The following trademarks used herein are owned by McDonald's Corporation:       
McDonald's and the McDonald's Golden Arches logo                                

(copyright) 1995 McDonald's Corporation                                         
McD5-2657                                                                       

(Recycled Paper Graphic)                                                        
Printed on Recycled Paper with                                                  
10% post-consumer content                                                       

DEF 14A 99th Page of 110 TOC 1st Previous Next ↓Bottom Just 99th
APPENDIX                                                                        

Photos of Directors and Nominated Directors appear in the Board of              
Directors section on page 6 herein.                                             

DEF 14A 100th Page of 110 TOC 1st Previous Next ↓Bottom Just 100th
[FRONT SIDE OF PROXY AND VOTING INSTRUCTION CARD                                
FOR NON-EMPLOYEE SHAREHOLDERS]                                                  

                                          McDONALD'S CORPORATION
                                                McDonald's Plaza
     PROXY AND VOTING INSTRUCTION CARD       Oak Brook, IL 60521

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF McDONALD'S       
CORPORATION.                                                                    

McDONALD'S 1995 ANNUAL MEETING OF SHAREHOLDERS WILL BE HELD AT THE LODGE ON     
McDONALD'S OFFICE CAMPUS, KROC DRIVE AND RONALD LANE, OAK BROOK, ILLINOIS,      
AT 10:00 A.M. (CENTRAL TIME) ON MAY 26, 1995.  This Proxy and Voting            
Instruction Card will cover the voting of all shares of Common and              
Preferred Stock of McDonald's Corporation which you are entitled to vote or     
to direct the voting of, including those in the Dividend Reinvestment Plan      
and the System Stock Purchase Plan.                                             

YOUR VOTE IS IMPORTANT.  PLEASE CONSIDER THE ISSUES DISCUSSED IN THE PROXY      
STATEMENT, SIGN, DATE, AND RETURN THIS CARD IN THE ENCLOSED ENVELOPE OR         
CALL TOLL-FREE 1-800-652-8683 FROM THE U.S. AND CANADA TO CAST YOUR VOTE.       
TO VOTE BY PHONE, PLEASE HAVE THIS CARD AND YOUR TAX IDENTIFICATION NUMBER      
READILY AVAILABLE.                                                              

Detach Here                                                           
-------------------------------------------------------------------------       
                                                          9823

THE BOARD RECOMMENDS A VOTE "FOR" ALL NOMINEES      

DEF 14A 101st Page of 110 TOC 1st Previous Next ↓Bottom Just 101st
FOR DIRECTOR AND "FOR" PROPOSALS 2 AND 3.     

The undersigned, revoking any proxy previously given, appoint(s) Michael R.     
Quinlan and Shelby Yastrow, or either of them, as proxies with full power       
of substitution to vote as directed all shares the undersigned is entitled      
to vote at McDonald's Corporation's 1995 Annual Shareholders Meeting and        
AUTHORIZE(S) EACH TO VOTE AT HIS DISCRETION ON ANY OTHER MATTER THAT MAY        
PROPERLY COME BEFORE THE MEETING, or any adjournment thereof.  IF THIS CARD     
CONTAINS NO SPECIFIC VOTING INSTRUCTIONS, MY (OUR) SHARES WILL BE VOTED         
"FOR" THE ELECTION OF ALL NOMINEES FOR DIRECTOR AND "FOR" PROPOSALS 2           
AND 3.                                                                          

Check box to vote your shares                                                   
with the Board's recommendation.     /  /                                       

If you do not check the box above, indicate your vote below.                    

BOARD NOMINEES:  J.M. Greenberg, D.G. Lubin, A.J. McKenna, E.H. Rensi,          
R.W. Stone and R.N. Thurston                                                    

           FOR ALL NOMINEES       WITHHOLD
            EXCEPT AS NOTED        AS TO ALL
           ON LINE BELOW          NOMINEES

1.  Election of Directors          /  /                 /  /                    

-----------------------------------------------                       

         FOR       AGAINST     ABSTAIN

2.  Non-Employee Director                                                       
Stock Option Plan         /  /      /  /        /  /                    

3.  Amended and Restated                                                        
1992 Stock Ownership                                                    
Incentive Plan            /  /      /  /        /  /                    

PLEASE SIGN AS YOUR NAME(S) APPEAR(S) ABOVE AND RETURN THIS PROXY PROMPTLY.     
If signing for a corporation or partnership, or as agent, attorney, or          
fiduciary, indicate the capacity in which you are signing.  If you attend       
the meeting and decide to vote by ballot, such vote will supersede this         
proxy.                                                                          

X                                                                               
------------------------------                                                

X                                  Date                                         
------------------------------       -------------, 1995                      

/  /      COMMENTS:  Check here and write comments on reverse side.             

/  /      Check here to waive confidential voting.                              

DEF 14A 102nd Page of 110 TOC 1st Previous Next ↓Bottom Just 102nd
[REVERSE SIDE OF PROXY AND VOTING INSTRUCTION CARD                              
FOR NON-EMPLOYEE SHAREHOLDERS]                                                  

DEF 14A 103rd Page of 110 TOC 1st Previous Next ↓Bottom Just 103rd
COMMENTS                                                                        
--------------------------------------------------              
----------------------------------------------------------                      
----------------------------------------------------------                      
----------------------------------------------------------                      
----------------------------------------------------------                      

DEF 14A 104th Page of 110 TOC 1st Previous Next ↓Bottom Just 104th
[FRONT SIDE OF PROXY AND VOTING INSTRUCTION CARD                                
FOR EMPLOYEE SHAREHOLDERS]                                                      

                                          McDONALD'S CORPORATION
                                                McDonald's Plaza
     PROXY AND VOTING INSTRUCTION CARD       Oak Brook, IL 60521

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF McDONALD'S       
CORPORATION.                                                                    

McDONALD'S 1995 ANNUAL MEETING OF SHAREHOLDERS WILL BE HELD AT THE LODGE ON     
McDONALD'S OFFICE CAMPUS, KROC DRIVE AND RONALD LANE, OAK BROOK, ILLINOIS,      
AT 10:00 A.M. (CENTRAL TIME) ON MAY 26, 1995.  This Proxy and Voting            
Instruction Card will cover the voting of all shares of Common and              
Preferred Stock of McDonald's Corporation which you are entitled to vote or     
to direct the voting of, including those in the Dividend Reinvestment Plan      
and the System Stock Purchase Plan and, unless you provide different voting     
instructions on the reverse of this card, McDonald's employee benefit           
plans.                                                                          

YOUR VOTE IS IMPORTANT.  PLEASE CONSIDER THE ISSUES DISCUSSED IN THE PROXY      
STATEMENT, SIGN, DATE, AND RETURN THIS CARD IN THE ENCLOSED ENVELOPE OR         
CALL TOLL-FREE 1-800-652-8683 FROM THE U.S. AND CANADA TO CAST YOUR VOTE.       
TO VOTE BY PHONE, PLEASE HAVE THIS CARD AND YOUR TAX IDENTIFICATION NUMBER      
READILY AVAILABLE.                                                              

Detach Here                                                           
-------------------------------------------------------------------------       
                                                          9823

THE BOARD RECOMMENDS A VOTE "FOR" ALL NOMINEES      
FOR DIRECTOR AND "FOR" PROPOSALS 2 AND 3.     

The undersigned, revoking any proxy previously given, appoint(s) Michael R.     
Quinlan and Shelby Yastrow, or either of them, as proxies with full power       
of substitution to vote as directed all shares the undersigned is entitled      
to vote at McDonald's Corporation's 1995 Annual Shareholders Meeting and        
AUTHORIZE(S) EACH TO VOTE AT HIS DISCRETION ON ANY OTHER MATTER THAT MAY        
PROPERLY COME BEFORE THE MEETING, or any adjournment thereof.  IF THIS CARD     
CONTAINS NO SPECIFIC VOTING INSTRUCTIONS, MY (OUR) SHARES WILL BE VOTED         
"FOR" THE ELECTION OF ALL NOMINEES FOR DIRECTOR AND "FOR" PROPOSALS 2           
AND 3.                                                                          

EMPLOYEES:  Please see message on reverse side                                  

Check box to vote your shares                                                   
with the Board's recommendation.     /  /                                       

If you do not check the box above, indicate your vote below.                    

BOARD NOMINEES:  J.M. Greenberg, D.G. Lubin, A.J. McKenna, E.H. Rensi,          
R.W. Stone and R.N. Thurston                                                    

           FOR ALL NOMINEES       WITHHOLD
            EXCEPT AS NOTED        AS TO ALL

DEF 14A 105th Page of 110 TOC 1st Previous Next ↓Bottom Just 105th
           ON LINE BELOW          NOMINEES

1.  Election of Directors          /  /                 /  /                    

-----------------------------------------------                       

         FOR       AGAINST     ABSTAIN

2.  Non-Employee Director                                                       
Option Plan               /  /      /  /        /  /                    

3.  Amended and Restated                                                        
1992 Stock Ownership                                                    
Incentive Plan            /  /      /  /        /  /                    

PLEASE SIGN AS YOUR NAME(S) APPEAR(S) ABOVE AND RETURN THIS PROXY PROMPTLY.     
If signing for a corporation or partnership, or as agent, attorney, or          
fiduciary, indicate the capacity in which you are signing.  If you attend       
the meeting and decide to vote by ballot, such vote will supersede this         
proxy.                                                                          

X                                                                               
------------------------------                                                

X                                  Date                                         
------------------------------       -------------, 1995                      

/  /      COMMENTS:  Check here and write comments on reverse side.             

/  /      Check here to waive confidential voting.                              

DEF 14A 106th Page of 110 TOC 1st Previous Next ↓Bottom Just 106th
[REVERSE SIDE OF PROXY AND VOTING INSTRUCTION CARD                              
FOR EMPLOYEE SHAREHOLDERS]                                                      

INFORMATION FOR McDONALD'S EMPLOYEES ONLY:                                      

Your vote on the front of this card directs the trustees of the Profit          
Sharing Program, the Stock Sharing Plan and various Equalization Plans          
(collectively referred to as the "Plans") to vote the shares credited to        
your accounts under the Plans.  When you vote these shares, you should          
consider your own long-term best interests as a Plan participant.               

In addition, you are also directing the trustees to vote shares held in the     
Plans (except the Stock Sharing Plan) that have not been voted and shares       
that have not yet been credited to participants' accounts.  When you direct     
the vote of these shares, you have a special responsibility to consider the     
long-term best interests of other participants.                                 

IF YOU WANT TO VOTE THE PLAN SHARES YOU OWN OR THE SHARES YOU ARE VOTING        
FOR OTHER PLAN PARTICIPANTS DIFFERENTLY FROM THE WAY YOU VOTED ON THE FRONT     
OF THIS CARD, PLEASE CHECK THE "COMMENT" BOX ON THE FRONT AND MARK YOUR         
DIRECTION BELOW.                                                                

Your directions to vote shares held in the Plans will be kept confidential      
by First Chicago Trust Company of New York, the independent inspectors of       
election, even if you elect to waive confidential voting on the front of        
this card.                                                                      

DEF 14A 107th Page of 110 TOC 1st Previous Next ↓Bottom Just 107th
-------------------------------------------------------------------------       

IF YOU WISH TO VOTE ALL SHARES IN THE SAME WAY, YOU DO NOT NEED TO COMPLETE     
THE SECTION BELOW.  SIMPLY FOLLOW THE VOTING INSTRUCTIONS ON THE FRONT OF       
THIS CARD.                                                                      

THE BOARD RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR DIRECTOR AND "FOR"           
PROPOSALS 2 AND 3.                                                              

                                       PLAN SHARES NOT YET
              PLAN SHARES OWNED        CREDITED OR UNVOTED
              -----------------        -------------------

FOR ALL                     FOR ALL 
             NOMINEES      WITHHOLD      NOMINEES     WITHHOLD
       EXCEPT AS     AS            EXCEPT AS    AS
           NOTED ON      TO ALL        NOTED ON     TO ALL
             LINE BELOW    NOMINEES      LINE BELOW   NOMINEES

1. Election                                                                     
of Directors        -----         -----         -----         -----       

            -------------------         ------------------

               FOR     AGAINST   ABSTAIN   FOR    AGAINST  ABSTAIN
2. Non-Employee                                                                 
Director Stock                                                            
Option Plan        -----    -----    -----     -----   -----   -----      

3. Amended and Restated                                                         
1992 Stock Ownership                                                      
Incentive Plan     -----    -----    -----     -----   -----   -----      

COMMENTS                                                                        
--------------------------------------------------              
----------------------------------------------------------                      
----------------------------------------------------------                      
----------------------------------------------------------                      
----------------------------------------------------------                      

DEF 14A 108th Page of 110 TOC 1st Previous Next ↓Bottom Just 108th
[FRONT SIDE OF PROXY AND VOTING INSTRUCTION CARD                                
FOR STREET NAME SHAREHOLDERS]                                                   

                                          McDONALD'S CORPORATION
                                                McDonald's Plaza
     PROXY AND VOTING INSTRUCTION CARD       Oak Brook, IL 60521

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF McDONALD'S       
CORPORATION.                                                                    

McDONALD'S 1995 ANNUAL MEETING OF SHAREHOLDERS WILL BE HELD AT THE LODGE ON     
McDONALD'S OFFICE CAMPUS, KROC DRIVE AND RONALD LANE, OAK BROOK, ILLINOIS,      
AT 10:00 A.M. (CENTRAL TIME) ON MAY 26, 1995.  The undersigned, revoking        
any proxy previously given, appoint(s) Michael R. Quinlan and Shelby            
Yastrow, or either of them, as proxies with full power of substitution to       
vote as directed all shares the undersigned is entitled to vote at              
McDonald's Corporation's 1995 Annual Shareholders Meeting and AUTHORIZE(S)      
EACH TO VOTE AT HIS DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME       
BEFORE THE MEETING, or any adjournment thereof.  IF THIS CARD CONTAINS NO       

DEF 14A 109th Page of 110 TOC 1st Previous Next ↓Bottom Just 109th
SPECIFIC VOTING INSTRUCTIONS, MY (OUR) SHARES WILL BE VOTED "FOR" THE           
ELECTION OF ALL NOMINEES AND "FOR" PROPOSALS 2 AND 3.                           

DEF 14A Last Page of 110 TOC 1st Previous Next ↓Bottom Just 110th
[REVERSE SIDE OF PROXY AND VOTING INSTRUCTION CARD                              
FOR STREET NAME SHAREHOLDERS]                                                   

YOUR VOTE IS IMPORTANT.  PLEASE SIGN AND RETURN THIS CARD.                      

THE BOARD RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR DIRECTOR AND "FOR"           
PROPOSALS 2 AND 3.                                                              

Check box to vote your shares                                                   
with the Board's recommendation.     /  /                                       

If you do not check the box above, indicate your vote below.                    

BOARD NOMINEES:  J.M. Greenberg, D.G. Lubin, A.J. McKenna, E.H. Rensi,          
R.W. Stone and R.N. Thurston                                                    

           FOR ALL NOMINEES       WITHHOLD
            EXCEPT AS NOTED        AS TO ALL
           ON LINE BELOW          NOMINEES

1.  Election of Directors          /  /                 /  /                    

-----------------------------------------------                       

         FOR       AGAINST     ABSTAIN

2.  Non-Employee Director                                                       
Stock Option Plan         /  /      /  /        /  /                    

3.  Amended and Restated                                                        
1992 Stock Ownership                                                    
Incentive Plan            /  /      /  /        /  /                    

PLEASE SIGN AS YOUR NAME(S) APPEAR(S) ABOVE AND RETURN THIS PROXY PROMPTLY.     
If signing for a corporation or partnership, or as agent, attorney, or          
fiduciary, indicate the capacity in which you are signing.  If you attend       
the meeting and decide to vote by ballot, such vote will supersede this         
proxy.                                                                          

X                                                                               
------------------------------                                                

X                                Date                                           
------------------------------       -------------, 1995

DEF 14A	1st Page of 110	TOC	↑Top	Previous	Next	↓Bottom	Just 1st

DEF 14A	2nd Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 2nd

DEF 14A	3rd Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 3rd

DEF 14A	4th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 4th

DEF 14A	5th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 5th

DEF 14A	6th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 6th

DEF 14A	7th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 7th

DEF 14A	8th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 8th

DEF 14A	9th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 9th

DEF 14A	10th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 10th

DEF 14A	11th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 11th

DEF 14A	12th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 12th

DEF 14A	13th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 13th

DEF 14A	14th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 14th

DEF 14A	15th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 15th

DEF 14A	16th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 16th

DEF 14A	17th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 17th

DEF 14A	18th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 18th

DEF 14A	19th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 19th

DEF 14A	20th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 20th

DEF 14A	21st Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 21st

DEF 14A	22nd Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 22nd

DEF 14A	23rd Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 23rd

DEF 14A	24th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 24th

DEF 14A	25th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 25th

DEF 14A	26th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 26th

DEF 14A	27th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 27th

DEF 14A	28th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 28th

DEF 14A	29th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 29th

DEF 14A	30th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 30th

DEF 14A	31st Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 31st

DEF 14A	32nd Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 32nd

DEF 14A	33rd Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 33rd

DEF 14A	34th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 34th

DEF 14A	35th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 35th

DEF 14A	36th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 36th

DEF 14A	37th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 37th

DEF 14A	38th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 38th

DEF 14A	39th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 39th

DEF 14A	40th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 40th

DEF 14A	41st Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 41st

DEF 14A	42nd Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 42nd

DEF 14A	43rd Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 43rd

DEF 14A	44th Page of 110	TOC	1st	Previous	Next	↓Bottom	Just 44th

Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘DEF 14A’ Filing	Date	First	Last	Other Filings

	6/1/02	47
	12/31/95	96		10-K
	12/14/95	35
	6/1/95	62	68
For Period End:	5/26/95	2	108
Filed on:	4/13/95			DEFA14A
	4/12/95	5	93
	3/27/95	42	94
	3/1/95	8	44
	2/28/95	42
	1/19/95	37	61
	12/31/94	27	96	10-K
	5/26/94	31
	3/29/94	25		10-K
	1/1/94	35
	12/31/93	29		10-K, 10-K/A
	12/31/92	29
	6/1/92	41	65
				List all Filings

↑Top

Filing Submission 0000063908-95-000009 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

McDonalds Corp – ‘DEF 14A’ for 5/26/95

As of: Thursday, 4/13/95 · For: 5/26/95 · Accession #: 63908-95-9 · File #: 1-05231

Previous ‘DEF 14A’: ‘DEF 14A’ on 4/14/94 for 5/27/94 · Next: ‘DEF 14A’ on 4/12/96 for 5/23/96 · Latest: ‘DEF 14A’ on 4/8/24 for 5/22/24

Definitive Proxy Solicitation Material — Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Definitive Proxy Solicitation Material — Schedule 14A
Filing Table of Contents