Exhibit (10)(j)

McDONALD’S CORPORATION

2009 CASH INCENTIVE PLAN

THE PLAN

 

 

McDonald’s Corporation, a Delaware corporation (the “Company”), established the
McDonald’s Corporation 2009 Cash Incentive Plan (the “Plan”) effective as of
May 27, 2009. This Plan is subject to approval by the Company’s stockholders at
the May 27, 2009 Annual Meeting.

 

1.     Purpose

The purpose of this Plan is to advance the interest of the Company by providing
a means to pay performance-based short-term and long-term incentive cash
compensation designed to qualify for the Section 162(m) Exemption (as defined
below) to those employees upon whose judgment and efforts the Company is largely
dependent for the successful conduct of its operations. It is anticipated that
the opportunity to earn such cash compensation will stimulate the efforts of
such employees on behalf of the Company, strengthen their desire to continue in
the service of the Company, and will prove attractive to promising new employees
and will assist the Company in attracting such employees. It is intended that
compensatory awards to employees based on equity securities of the Company will
be granted under the Company’s 2001 Omnibus Stock Ownership Plan and any
successors thereto, rather than under this Plan.

 

2.     Definitions

As used in this Plan and in connection with any Award, 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)          “Affiliate Service” means a Participant’s Company Service plus the
Participant’s aggregate number of years of employment with any Subsidiary during
the period before it became a Subsidiary, unless the Committee determines
otherwise in connection with an entity’s becoming a Subsidiary.

(b)          “Award” means the opportunity to earn cash compensation under this
Plan, subject to the achievement of one or more Performance Goals and such other
terms and conditions as the Committee may impose.

(c)          “Board” means the Board of Directors of the Company.

(d)          “Cause” means a Participant’s commission of any act or acts
involving dishonesty, fraud, illegality or moral turpitude.

(e)          “Change in Control” means the happening of any of the following
events:

(i)        the acquisition by any Person of “beneficial ownership” (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of 20% or more of either
(A) the then-outstanding shares of Stock (“Outstanding Company Common Stock”) or
(B) the combined voting power of the then-outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities”); provided, however, that, for purposes
of this Section 2(e)(i), the following acquisitions shall not constitute a
Change in Control: (1) any acquisition directly from the Company, (2) any
acquisition by the Company, (3) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any entity controlled
by the Company or (4) any acquisition by any entity pursuant to a transaction
that complies with Sections 2(e)(iii)(A), (B) and (C); or

(ii)        individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

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(iii)        consummation of a reorganization, merger, statutory share exchange
or consolidation or similar corporate transaction involving the Company and/or
any entity controlled by the Company, or a sale or other disposition of all or
substantially all of the assets of the Company, or the acquisition of assets or
stock of another entity by the Company or any entity controlled by the Company
(each, a “Business Combination”), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities that
were the beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, an entity that, as a result of such
transaction, owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (B) no Person (excluding any entity
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such entity resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then-outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then-outstanding voting securities of such corporation, except to the extent
that such ownership existed prior to the Business Combination, and (C) at least
a majority of the members of the board of directors of the entity resulting from
such Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination; or

(iv)        approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

(f)          “Code” means the Internal Revenue Code of 1986, as amended, and
regulations and rulings thereunder. References to a particular section of, or
rule under, the Code shall include references to successor provisions.

(g)          “Committee” has the meaning specified in Section 3(a).

(h)          “Company” has the meaning specified in the first paragraph.

(i)          “Company Service” means the Participant’s aggregate number of years
of employment with the Company and its Subsidiaries during periods when those
entities were Subsidiaries.

(j)          “Disability” means a “disability” within the meaning of the
Company’s Profit Sharing and Savings Plan, as amended from time to time.

(k)          “Disaffiliation” of a Subsidiary means the Subsidiary’s ceasing to
be a Subsidiary for any reason (including, without limitation, as a result of a
public offering, or a spinoff or sale by the Company, of the stock of the
Subsidiary).

(l)          “Effective Date” means May 27, 2009.

(m)          “Job Loss” means a Termination of Employment resulting from a
corporate restructuring or reorganization, job restructuring, reduction in
force, outsourcing or replacement of jobs by technology.

(n)          “Participant” means any employee of the Company or its Subsidiaries
who has been granted an Award.

(o)          “Performance Goal” means any of the following measures as applied
to the Company as a whole or to any Subsidiary, division or other unit of the
Company: revenue; operating income; net income; basic or diluted earnings per
share; return on revenue; return on assets; return on equity; return on total
capital; or total shareholder return.

(p)          The “Performance Period” for an Award means the period of time for
the measurement of the extent to which the applicable Performance Goals are
attained.

(q)          “Plan” means this McDonald’s Corporation 2009 Cash Incentive Plan.

(r)          “Retirement” means a Termination of Employment any time after
attaining either (i) age 60 with at least 20 years of Affiliate Service, or
(ii) combined age and years of Affiliate Service equal to or greater than 70,
other than a Termination of Employment for Cause.

(s)          “Section 162(m) Exemption” means the exemption from the limitation
on deductibility imposed by Section 162(m) of the Code that is set forth in
Section 162(m)(4)(C) of the Code.

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(t)        “Special Circumstances” for a Termination of Employment of a
Participant means (i) Job Loss or (ii) the Participant becomes an owner-operator
of a McDonald’s restaurant in connection with the Termination of Employment.

(u)        “Subsidiary” means any entity in which the Company directly or
through intervening subsidiaries owns 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 25% or more interest in the capital and profits.

(v)        “Termination of Employment” of a Participant means the termination of
the Participant’s employment with the Company and the Subsidiaries. A
Participant employed by a Subsidiary also shall be deemed to incur a Termination
of Employment if there occurs a Disaffiliation of that Subsidiary, unless either
(i) the Participant is, immediately after the Disaffiliation, an employee of the
Company or one of the remaining Subsidiaries, or (ii) in connection with the
Disaffiliation, the Awards held by the Participant are assumed, or replaced with
new awards, by the former Subsidiary or an entity that controls the former
Subsidiary following the Disaffiliation.

 

3.     Administration

(a)        This Plan shall be administered by a committee appointed by the Board
(the “Committee”). All members of the Committee shall be “outside directors” (as
defined or interpreted for purposes of the Section 162(m) Exemption). The
Committee shall have full and final authority, in its discretion, but subject to
the express provisions of this Plan, to establish the terms and conditions of
Awards, to determine the extent to which cash payments are actually earned
pursuant to Awards and the amounts to be paid, and to interpret this Plan and to
make all determinations necessary or advisable for the administration of this
Plan. The Committee may delegate any or all of its administrative duties and
responsibilities under this Plan to any individual or group of individuals it
deems appropriate, but no such delegation shall be made to the extent it would
cause an Award not to qualify for the Section 162(m) Exemption.

(b)        The determination of the Committee on all matters relating to this
Plan and all Awards shall be made in its sole discretion, and 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.

 

4.     Eligibility; Maximum Awards

Awards may be granted to any employee of the Company or any of its domestic
Subsidiaries, and to any employee, officer or director of any of the Company’s
foreign Subsidiaries. The maximum amount of cash that may be payable with
respect to any one Award shall be $8 million times the number of years and
fractions thereof in the applicable Performance Period. The maximum number of
Performance Periods that end in any single calendar year for which any one
Participant shall be eligible to earn Awards shall be three.

 

5.     Establishment of Awards

(a)        Basic Terms of Awards. In connection with the grant of each Award,
the Committee shall, within the time period required to qualify for the
Section 162(m) Exemption, (i) determine the Performance Goal(s) and Performance
Period applicable to such Award, (ii) establish the formula for determining the
amounts payable based upon achievement of the applicable Performance Goal,
(iii) determine the consequences for the Award of the Participant’s Termination
of Employment for various reasons or the Participant’s demotion or promotion
during the Performance Period, (iv) specify the consequences for the Award of
the occurrence of a Change in Control during the Performance Period and
(v) establish such other terms and conditions for the Award as it may deem
appropriate.

(b)        Performance Goals may take the form of absolute goals or goals
relative to the performance of one or more other companies comparable to the
Company or of an index covering multiple companies. In establishing Performance
Goals, the Committee may specify that there shall be excluded the effect of
restructuring charges, discontinued operations, extraordinary items, cumulative
effects of accounting changes, and other unusual or nonrecurring items, and
asset impairment and the effect of foreign currency fluctuations, in each case
as those terms are defined under generally accepted accounting principles and
provided in each case that such excluded items are objectively determinable by
reference to the Company’s financial statements, notes to the Company’s
financial statements and/or management’s discussion and analysis in the
Company’s financial statements.

(c)        A cash payment may be made to a Participant pursuant to an Award only
upon the achievement of the applicable Performance Goal(s), except that the
Committee may provide, either in connection with the grant thereof or by
amendment thereafter, that achievement of such Performance Goals will be waived
in whole or in part upon the death or Disability of the Participant, in the
event of a Change in Control, or such other event as the Committee may deem
appropriate. Notwithstanding the foregoing, however, the Committee may not
exercise any discretionary authority it may otherwise have under this Plan with
respect to an Award, in any

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manner to waive the achievement of the applicable Performance Goals or to
increase the amount payable pursuant thereto or the value thereof, or otherwise
in a manner that would cause the Award to cease to qualify for the
Section 162(m) Exemption. Any payment made to a Participant pursuant to an Award
shall be made no later than March 15 of the calendar year following the last day
of the applicable Performance Period.

 

6.     Change in Control

Unless otherwise determined by the Committee in connection with the grant of an
Award and except as provided in the following sentence, upon a Change in Control
during the Performance Period for any Award, the Participant shall be entitled
to receive, promptly following the Change in Control (and in any event within 30
days thereafter), a payment with respect thereto equal to (i) the amount that
would be payable with respect to such Award, if the applicable Performance Goals
for the Performance Period were achieved at the level achieved during the
portion of the Performance Period that precedes the Change in Control times
(ii) a fraction, the numerator of which is the number of days in the portion of
the Performance Period that precedes the Change in Control and the denominator
of which is the total number of days in the Performance Period; provided, that
the Participant shall forfeit his or her right to receive such payment if he or
she experiences a Termination of Employment for Cause before the payment is
made. The Committee shall provide in connection with the grant of Awards that
the timing of any payments to which a Participant becomes entitled in connection
with a Change in Control shall comply with Section 409A of the Code. The amount
paid with respect to any Award under this Section 6 shall offset the amount (if
any) that becomes payable with respect thereto following completion of the
Performance Period of the Award.

 

7.     Non-Transferability

Awards granted hereunder shall not be assignable or transferable other than by
will or the laws of descent and distribution.

 

8.     Withholding Taxes

The Company may withhold or cause to be withheld from any or all cash payments
made under this Plan such amounts as are necessary to satisfy all U.S. federal,
state and local withholding tax requirements related thereto.

 

9.     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.

 

10.     No Employment Rights

Neither the establishment of this Plan, nor the granting of any Award, shall be
construed to (a) give any Participant 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.

 

11.     Nature of Payments

Any and all grants of Awards and payments of cash hereunder shall constitute
special incentive payments to the Participant, other than payments pursuant to
Awards with Performance Periods of one year or less, and shall not be taken into
account in computing the amount of salary or compensation of the Participant for
the purposes of determining any pension, retirement, death or other benefits
under (a) any qualified, non-qualified or supplemental pension, retirement or
profit-sharing plan of the Company or any of its Subsidiaries, (b) any bonus,
life insurance or other employee benefit plan of the Company or any of its
Subsidiaries, or (c) any agreement between the Company or any Subsidiary, on the
one hand, and the Participant, on the other hand, except as such plan or
agreement shall otherwise expressly provide. Without limiting the generality of
the foregoing, payments of cash hereunder may be deferred under any such plan if
and to the extent such plan so provides.

 

12.     Non-Uniform Determinations

The Committee’s determinations under this Plan need not be uniform, and may be
made by the Committee selectively among individuals who receive, or are eligible
to receive, Awards (whether or not such individuals 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 Participants, (b) the terms and provisions of Awards, and (c) the
treatment of Terminations of Employment.

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13.     Amendment and Termination of this Plan and Awards

The Board may from time to time in its discretion amend or modify this Plan or
Awards or terminate the Plan without the approval of the stockholders of the
Company; provided that except as provided in the next sentence, no such
amendment or termination shall adversely affect any previously-granted Award
without the consent of the Participant. Notwithstanding the foregoing, the Board
may from time to time amend this Plan or Awards, and the Committee may from time
to time amend Awards, without the consent of affected Participants, (i) to
comply with applicable law, stock exchange rules or accounting rules, and
(ii) to make changes that do not materially decrease the value of such Awards.
In no event may any Award be amended in any manner that would cause it to cease
to qualify for the Section 162(m) Exemption. The material terms of the
performance goals under the Plan (as defined or interpreted for purposes of the
Section 162(m) Exemption) shall be submitted to the Company’s shareholders for
reapproval as required, and at such times as are required, for Awards to qualify
for the Section 162(m) Exemption.

 

14.     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.