Document:

2004 Cash Incentive Plan

 Exhibit 10(j) 
  
 McDONALD’S CORPORATION 
 2004
CASH INCENTIVE PLAN, 
 Approved by shareholders May 20, 2004 
  
 THE PLAN 

 McDonald’s Corporation, a Delaware corporation (the “Company”), established the McDonald’s Corporation 2004 Cash Incentive Plan (the “Plan”) effective as of January 1, 2004. This Plan is
subject to approval by the Company’s stockholders at the May 20, 2004 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 January 1, 2004. 

  

	 	(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 2004 Cash Incentive Plan. 

  

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	 	(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. 

  

	 	(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 (if such consequences are to be different from those provided in Section 6 below) 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. 
  

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 (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 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. 
  

	6.	Change in Control 

  
 Unless otherwise determined by the Committee in connection with the grant of an Award, 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 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 of this Plan and Awards 

  
 The Board may from time to time in its discretion amend or modify this Plan or Awards without the approval of the stockholders of the Company; provided that except as
provided in the next sentence, no such amendment 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. 
  

	14.	Termination of this Plan 

  
 This Plan shall terminate immediately before the first meeting of the Company’s stockholders that occurs during 2009 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. 
  

	15.	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. 
  

 53Senior Director Letter Agreement between Donald G. Lubin and the Company

 Exhibit 10(k) 
  
 [McDONALD’S LETTERHEAD] 
  
 May 20, 2004 
  
 Donald G. Lubin, Esq. 
 Sonnenschein Nath & Rosenthal 
 8000 Sears Tower 
 Chicago, IL 60606 
  
 Dear Don: 
  
 This letter will acknowledge your agreement to serve as a Senior Director of McDonald’s Corporation, effective immediately following
the Company’s 2004 Annual Meeting of Shareholders on May 20, 2004. As you know, your service as a Senior Director shall be at the pleasure of the Board on the following terms and conditions: 
  

	•	You may attend Board meetings and meetings of Committees upon which you served at the time of your retirement as Director, but you shall not have the right to vote at any such
meeting. 

  

	•	Your appointment as a Senior Director shall be designated annually for a one-year term, but you may not serve more than three such one-year terms. 

  

	•	You shall be compensated in the same manner as you were as a Director, except that you shall not be compensated for attending Committee meetings. 

  

	•	You shall be expressly indemnified by resolution of the Board of Directors under the provisions of the Company’s By-Laws. 

  
 Please acknowledge your acceptance of these terms of appointment by signing and returning
this letter to me at your earliest convenience. 
  
 On behalf of the Directors, we
thank you for your willingness to continue to share your advice and counsel with the Board and McDonald’s management. 
  

	
	 Sincerely,

	
	 /s/ Andrew J. McKenna

	 Andrew J. McKenna

  

	
	 Accepted as of May 20, 2004

	
	 /s/ Donald G. Lubin

	 Donald G. Lubin

  

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