Document:

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                                                                   EXHIBIT 10(g)

                            EXECUTIVE RETENTION PLAN
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                   (as amended and restated October 29, 2002)

                                  Introduction

     McDonald's Corporation, a Delaware corporation (the "Company"), has
established the Executive Retention Plan (this "Plan") effective as of October
1, 1998 (the "Effective Date"). This Plan was amended and restated on March 20,
2001, March 20, 2002 and October 29, 2002. The amendments made to this Plan by
the amendment and restatement of October 29, 2002 (the "Current Restatement
Date") are not applicable to any Executive (as defined in the Plan before the
Current Restatement Date) whose termination of employment or Change-in-Status
Date (as defined in the Plan before the Current Restatement Date) occurred
before the Current Restatement Date, for whom the Plan provisions as in effect
on the date of his or her termination of employment or Change-in-Status Date, as
applicable, shall control.

                                    Article 1
                      Purpose; Employment Periods Generally

     1.01 Purpose. It is in the best interests of the Company and its
shareholders to assure that the Company has the continued dedication of its key
executives in a highly competitive global marketplace. This Plan is established
to promote the retention of these key executives and provide the Company with a
smooth succession process. This Plan is also intended to provide these key
executives with incentives that are designed to focus their energy on
contributing to the ultimate success of the Company.

     1.02 Employment Periods. (a) Definition of Employment Periods. This Plan
provides for the continued employment, subject to the terms and conditions of
this Plan, of the individuals identified on Appendix A as "Tier I Executives,"
"Tier II Executives" and "Tier III Executives" (collectively, the "Executives")
during three successive periods, each of which is defined below: the Retention
Period; the Transition Period; and the Continued Employment Period (collectively
referred to as the "Employment Periods").

     (b) Requirement of Execution of Agreement and Continued Employment. In
order to be eligible for continued employment during each successive Employment
Period, with the pay and benefits set forth herein, an Executive must satisfy
the requirements summarized in this Section 1.02(b) and more fully set forth
below in the Plan. The Executive must properly execute the following agreements
(each, an "Agreement") at the following times: (i) on or before the Executive's
Change in Status Date, an Agreement substantially in the form set forth in
Exhibit A (a "Transition Period Agreement"); (ii) on or before the first day of
the Executive's Continued Employment Period, an Agreement substantially in the
form set forth in Exhibit B (a "Continued Employment Period Agreement"); and
(iii) upon a termination of the Executive's employment at the end of the
Continued Employment Period or under circumstances described in Section 7.01
below, an Agreement substantially in the form set forth in Exhibit C (a
"Termination

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Agreement"). In addition, the Executive must not revoke, and must comply with,
such Agreements. Finally, the Executive must otherwise comply with the
requirements of this Plan. An Executive may also be eligible in some cases for
certain pay and benefits upon termination of his or her employment, as more
fully set forth in Articles 6 and 7 below (the "Termination Benefits"). Exhibit
B to each Agreement shall be completed by the Company at the time of the
Agreement's preparation by the insertion of a list of the "Specified
Competitors," consisting of twenty-five (25) competitors of McDonald's
determined by the Company in its sole discretion.

     (c) Violations by the Executive. If an Executive commits a "Violation" (as
defined below), the Company shall be entitled to cancel any and all future
obligations of the Company to the Executive under this Plan and recoup the value
of all Relevant Prior Benefits (as defined below), together with the Company's
costs and reasonable attorney's fees. In addition, the Company shall be entitled
to pursue any other remedy available to enforce the terms of the Executive's
Agreements. A "Violation" shall have occurred if an Executive (i) files a
lawsuit, charge, complaint or other claim asserting any claim or demand within
the scope of the releases given in any of his or her Agreements, (ii) fails
properly to execute and deliver a required Agreement, or (iii) purports to
revoke any of his or her Agreements. The "Relevant Prior Benefits" means (i) in
the case of a Violation committed by an Executive during an Employment Period,
all payments and benefits that have been provided to the Executive under this
Plan during that Employment Period, and (ii) in the case of a Violation
committed by an Executive after termination of the Executive's employment, all
Termination Benefits provided to the Executive under the Plan.

     (d) Status and Benefits Generally during Employment Periods. During an
Executive's continued employment during each of his or her Employment Periods,
except as otherwise specifically provided in this Plan: (i) the Executive shall
be entitled to participate in the Company's employee compensation plans,
practices, policies and programs as in effect from time to time, including
without limitation all equity compensation, bonus and other incentive
compensation plans, policies and programs (collectively, the "Compensation
Plans"), to the extent that the Executive is eligible under, and in accordance
with, the applicable terms and conditions thereof as modified by this Plan; and
(ii) the Executive shall be entitled to participate in the Company's employee
benefit plans, practices, policies and programs as in effect from time to time
(collectively, the "Employee Plans"), to the extent that the Executive is
eligible under, and in accordance with, the applicable terms and conditions
thereof. Without limiting the generality of the foregoing, except as
specifically provided in Section 7.01(b) below, during an Executive's Employment
Periods and upon and following the termination of his or her employment for any
reason, the Executive's stock options shall continue to vest, be exercisable,
expire and otherwise be subject to the express terms of the related stock option
plan and the applicable Golden M Certificate (or other applicable award
agreement).

     (e) Deferred Compensation Plans. Without limiting the generality of Section
1.02(d) above, except as specifically provided in Section 4.02(b) below, amounts
paid to an Executive during the Executive's Employment Periods shall be treated
as "compensation" for purposes of the McDonald's Corporation Profit Sharing and
Savings Plan, McDonald's Corporation Supplemental Profit Sharing and Savings
Plan and any successor or other deferred compensation plans for which the
Executive may be eligible (collectively, the "Deferred

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Compensation Plans") and all life insurance benefit plans sponsored by
McDonald's Corporation, in each case to the extent permitted by the terms of
such plans as in effect from time to time. No requirement that the Company make
payments under this Plan to an Executive shall be considered violated by the
Company's crediting all or any portion thereof to the Executive's account under
any Deferred Compensation Plan in which the Executive is eligible to
participate, to the extent that the Executive has elected to defer such payment
under the terms of such Deferred Compensation Plan.

                                    Article 2
                               Plan Administration

     2.01 The Committee. The Compensation Committee of the Board of Directors of
the Company (the "Board"), as such committee is constituted from time to time
(the "Committee"), shall have overall responsibility for the establishment,
amendment, administration and operation of this Plan. The Committee shall have
the responsibilities and duties and powers under this Plan which are not
specifically delegated to anyone else, including without limitation the
following powers:

     (i) subject to any limitations under this Plan or applicable law, to make
     and enforce such rules and regulations of this Plan and prescribe the use
     of such forms as it shall deem necessary for the efficient administration
     of this Plan;

     (ii) to require any person to furnish such information as it may reasonably
     request as a condition to receiving any benefit under this Plan;

     (iii) to decide on questions concerning this Plan;

     (iv) to amend Appendix A hereto to add additional Executives, to delete
     Executives whose employment has terminated without the right to receive any
     additional benefits under this Plan or whose rights hereunder have been
     satisfied in full, and to reflect any changes that are agreed with the
     affected Executives;

     (v) to compute or cause to be computed the amount of benefits which shall
     be payable to any person in accordance with the provisions of this Plan;
     and

     (vi) to appoint and remove, as it deems advisable, the Plan Administrator.

     2.02 The Plan Administrator. The Committee may appoint a Plan Administrator
who may (but need not) be a member of the Committee, and in the absence of such
appointment, the Committee shall be the Plan Administrator. The Plan
Administrator shall perform the administrative responsibilities delegated to the
Plan Administrator from time to time by the Committee.

     2.03 Discretionary Power of the Committee. The Committee from time to time
may establish rules for the administration of this Plan. The Committee shall
have the sole discretion to make decisions and take any action with respect to
questions arising in connection with this Plan, including without limitation the
construction and interpretation of this Plan and

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the determination of eligibility for and the amount of benefits under this Plan.
The decisions or actions of the Committee as to any questions arising in
connection with this Plan, including without limitation the construction and
interpretation of this Plan, shall be final and binding upon all Executives and
their respective beneficiaries.

     2.04 Action of the Committee. The Committee may act at a meeting, including
without limitation a telephonic meeting, by the consent of a majority of the
members of the Committee at the time in office, or without a meeting, by the
unanimous written consent of the individual members of the Committee. An
executed document signed by an individual member of the Committee and
transmitted by facsimile shall be valid as the original signed document for all
purposes. Any person dealing with the Committee shall be entitled to rely upon a
certificate of any member of the Committee, or the Secretary or any Assistant
Secretary of the Company, as to any act or determination of the Committee.

     2.05 Advisors and Agents of the Committee. The Committee may, subject to
periodic review, (a) authorize one or more of its members or an agent to execute
or deliver any instrument, and make any payment on its behalf, and (b) utilize
the services of associates and engage accountants, agents, legal counsel, record
keepers, professional consultants (any of whom may also be serving the Company)
or authorized Company personnel to assist in the administration of this Plan or
to render advice with regard to any responsibility or issue arising under this
Plan.

     2.06 Records and Reports of the Committee. The Committee shall maintain
records and accounts relating to the administration of this Plan. An Executive
shall be entitled to review any records relating to his or her individual
participation in this Plan and to make copies of such records upon written
request to the Committee.

     2.07 Liability of the Committee; Indemnification. The members of the
Committee and the Plan Administrator shall have no liability with respect to any
action or omission made by them in good faith nor from any action or omission
made in reliance upon (a) the advice or opinion of any accountant, legal
counsel, medical adviser or other professional consultant, or (b) any
resolutions of the Committee or the Board certified by the Secretary or
Assistant Secretary of the Company. Each member of the Committee and the Plan
Administrator shall be indemnified, defended and held harmless by the Company
and its respective successors against all claims, liabilities, fines and
penalties and all expenses (including without limitation reasonable attorneys'
fees and disbursements and other professional costs incurred in enforcing this
provision) reasonably incurred by or imposed upon such individual which arise as
a result of his or her actions or failure to act in connection with the
operation and administration of this Plan, to the extent lawfully allowable and
to the extent that such claim, liability, fine, penalty or expense is not paid
for by liability insurance purchased by or paid for by the Company or an
affiliate thereof. Notwithstanding the foregoing, the Company shall not
indemnify any person for any such amount incurred through any settlement or
compromise of any action unless the Company consents in writing to such
settlement or compromise, which consent shall not be unreasonably withheld.

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     2.08 Plan Expenses. All expenses under or relating to this Plan shall be
paid from the general assets of the Company. To the extent required by
applicable law, the Company may require any member of the Committee to furnish a
fidelity bond satisfactory to the Company.

     2.09 Service in More than One Capacity. Any person or group of persons may
serve this Plan in more than one capacity.

     2.10 Named Fiduciary. The named fiduciary of this Plan shall be the
Committee.

     2.11 Delegation of Responsibility. The Committee shall have the authority
to delegate from time to time, in writing, all or any part of its
responsibilities under this Plan to one or more members of the Committee. The
Committee may also delegate administrative functions to the Plan Administrator
pursuant to Section 2.02 above. The Committee may in the same manner revise or
revoke any such delegation of responsibility. Any action of the delegate in the
exercise of such delegated responsibilities shall have the same force and effect
for all purposes hereunder as if such action had been taken by the Committee.
The Committee shall not be liable for any acts or omissions of any such
delegate. The delegate shall periodically report to the Committee concerning the
discharge of the delegated responsibilities.

     2.12 Filing a Claim. (a) Each individual eligible for benefits under this
Plan ("Claimant") may submit a claim for benefits ("Claim") to the Plan
Administrator in writing on a form provided or approved by the Plan
Administrator or, if no such form has been so provided or approved, in a written
document that specifies, in reasonable detail, facts and circumstances and the
applicable Plan provisions which the Claimant believes entitle him or her to
compensation or benefits under this Plan. A Claimant shall have no right to seek
review of a denial of benefits, or to bring any action in any court to enforce a
Claim, prior to his or her filing a Claim and exhausting his or her rights to
review under this Article 2.

     (b) When a Claim has been filed properly, it shall be evaluated and the
Claimant shall be notified of the approval or the denial of the Claim within 45
days after the receipt of such Claim unless special circumstances require an
extension of time for processing the Claim. If such an extension is required,
written notice of the extension shall be furnished to the Claimant prior to the
end of the initial 45-day period, which notice shall specify the special
circumstances requiring an extension and the date by which a final decision will
be reached (which date shall not be later than 90 days after the date on which
the Claim was filed). A Claimant shall be given a written notice in which the
Claimant shall be advised as to whether the Claim is granted or denied, in whole
or in part. If a Claim is denied, in whole or in part, the notice shall contain
(i) the specific reasons for the denial, (ii) references to pertinent Plan
provisions upon which the denial is based, (iii) a description of any additional
material or information necessary to perfect the Claim and an explanation of why
such material or information is necessary, and (iv) the Claimant's right to seek
review of the denial.

     (c) An election to become a Transition Officer pursuant to Section 4.01
shall not be considered a Claim and shall not be subject to this Section 2.12.

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     2.13 Review of Claim Denial. (a) If a Claim is denied, in whole or in part,
the Claimant shall have the right to (i) request a review of the denial by the
Committee or its delegate, (ii) review pertinent documents, (iii) submit issues
and comments in writing to the Committee, and (iv) appear before the Committee
in person to present such issues and comments; provided that the Claimant files
a written request for review with the Committee within 60 days after the
Claimant's receipt of written notice of the denial. Within 60 days after the
Committee receives a request for review, the review shall be made and the
Claimant shall be advised in writing of the decision on review, unless special
circumstances require an extension of time for such review, in which case the
Claimant shall be given a written notice within such initial 60-day period
specifying the reasons for the extension and when such review shall be
completed; provided that such review shall be completed within 120 days after
the filing of the request for review. The Committee's decision on review shall
be sent to the Claimant in writing and shall include (i) specific reasons for
the decision, and (ii) references to Plan provisions upon which the decision is
based. A decision on review shall be binding on all persons for all purposes.

     If a Claimant shall fail to file a request for review in accordance with
the procedures herein outlined, such Claimant shall have no right to obtain such
a review or to bring an action in any court, and the denial of the Claim shall
become final and binding on all persons for all purposes except upon a showing
of good cause for such failure.

                                    Article 3
                                Retention Period

     During an Executive's Retention Period (as defined in the next sentence),
the Executive shall remain employed by the Company as an officer, on an at-will
basis. Each Executive's "Retention Period" shall mean the period commencing on
the Executive's Plan Start Date and ending on the later of the Executive's End
Date (as specified on Appendix A) or the day before the Executive's
Change-in-Status Date (as determined pursuant to Section 4.01 below).

                                    Article 4
                                Transition Period

     4.01 Election to Become a Transition Officer. (a) Transition Officer.
Subject to the conditions set forth below, each Executive may elect to become a
"Transition Officer" entitled to the benefits provided to Transition Officers
hereunder (the "Transition Benefits"), effective on a date (hereinafter referred
to as the Executive's "Change-in-Status Date") not earlier than the day after
the Executive's End Date.

     (b) Conditions. The conditions that must be satisfied in order for an
Executive's election to become a Transition Officer to be effective are as
follows: (i) the Executive must remain employed by the Company through the end
of his or her Retention Period; (ii) the Executive must properly execute a
Transition Period Agreement not later than the Change-in-Status Date; (iii) the
Executive must not revoke such Transition Period Agreement; (iv) in the case of
a Tier II Executive or a Tier III Executive whose Change-in-Status Date occurs
before his or her 62nd birthday, a successor to the Executive must have been
selected by the Company and approved by the Chief Executive Officer of the
Company (the "CEO") in the CEO's sole

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discretion; and (v) in the case of an Executive whose Change-in-Status Date
occurs before his or her 62nd birthday, the Committee or the CEO, as applicable,
must consent to the Executive's becoming a Transition Officer, in accordance
with Section 4.01(c) below.

     (c) Election. An Executive shall make an election to become a Transition
Officer by delivering to the Committee (in the case of an election by the CEO)
or to the CEO (in the case of an election by any other Executive) a written
notice indicating the proposed Change-in-Status Date, on such form as the
Committee may from time to time prescribe. If the proposed Change-in-Status Date
occurs before the Executive's 62nd birthday, the Committee or the CEO, as
applicable, shall notify the Executive whether such election is accepted. If the
proposed Change-in-Status Date occurs on or after the Executive's 62nd birthday,
such election shall automatically be deemed accepted. If such election is
accepted or deemed accepted, the Committee or the CEO, as applicable, shall also
(1) notify the Executive whether the actual Change-in-Status Date will be the
date proposed by the Executive or a later or earlier date reasonably selected by
the Committee or the CEO, as applicable (but in no event earlier than the
Executive's End Date), and (2) enclose with such notice the Transition Period
Agreement for execution by the Executive.

     (d) Transition Period. If an Executive properly executes and returns the
Transition Period Agreement, does not revoke the Transition Period Agreement and
satisfies the other conditions set forth above, his or her election to become a
Transition Officer shall become effective upon the applicable Change-in-Status
Date, and the Executive shall thereafter serve as a Transition Officer during a
number of months (the "Transition Period") equal to the lesser of (i) the number
of the Executive's Years of Service (as defined below), or (ii) 18 months,
subject to the provisions of this Plan. An Executive's "Years of Service" shall
equal the number of 12-month intervals during the period beginning on the
earlier of the Executive's historical service date or company service date and
ending on the Change-in-Status Date, rounded down to the nearest complete
12-month interval (e.g., a period of 128 months and 3 days shall equal 10 "Years
of Service").

     4.02 Transition Benefits. (a) Base Salary. During an Executive's Transition
Period, the Company shall pay the Executive a base salary at the annualized rate
in effect on the day immediately preceding the Change-in-Status Date, but in no
event lower than the highest base salary in effect at any time between the
Executive's Plan Start Date and Change-in-Status Date, provided that the base
salary payable under this Section 4.02(a) shall be reduced in accordance with
any across-the-board reductions approved by the Committee prior to the
Change-in-Status Date, which reductions affect Company officers generally. (The
annualized amount of such base salary as in effect from time to time is referred
to as the "Annual Base Salary.") In no event shall an Executive be eligible for
merit increases in base salary during his or her Transition Period.

     (b) Annual Bonus. In respect of each calendar year which ends during or on
the last day of an Executive's Transition Period, the Company shall pay to the
Executive an Annual Bonus (as defined below) in a lump sum on April 1st of the
following year (or such other date on which bonuses for such year are paid to
participants in the Company's Target Incentive Program or any successor plan
("TIP") generally). If the Transition Period ends on a date other than the last
day of a calendar year, the Company shall pay to the Executive (in lieu of an
Annual Bonus)

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a Prorated Annual Bonus (as defined below) in a lump sum in cash within 60 days
after the end of the Transition Period. The Executive shall not be entitled to
elect to defer any portion of the Prorated Annual Bonus under any Deferred
Compensation Plan.

     For purposes of this Plan,

          (i) "Annual Bonus" shall mean an annual bonus equal to the product of
          the Annual Base Salary and the Full Target Percentage (as defined
          below);

          (ii) "Full Target Percentage" shall mean the target percentage which
          the Executive was eligible to receive under TIP on the day immediately
          preceding the Change-in-Status Date without any adjustment, but in no
          event lower than the Executive's highest target percentage in effect
          at any time between the Executive's Plan Start Date and
          Change-in-Status Date, provided that the target percentage shall be
          reduced in accordance with any across-the-board reductions approved by
          the Committee prior to the Change-in-Status Date which reductions
          affect Company officers generally; and

          (iii) "Prorated Annual Bonus" shall mean a bonus in an amount equal to
          the Annual Bonus multiplied by a fraction, the numerator of which is
          the number of days which have elapsed during the calendar year in
          question through the last day of the Transition Period, and the
          denominator of which is 365.

     (c) Three-Year Incentive Plan Awards. During an Executive's Transition
Period, any outstanding awards that the Executive has been granted under the
Company's Three-Year Incentive Plan or any successor plan ("LTIP") shall
continue to vest and become payable in accordance with the Company's policies as
in effect from time to time; provided, that such LTIP awards ("LTIP Awards")
shall be computed by reference to 100% of the target percentage the Executive
would have received pursuant to the terms of the original LTIP grant without any
adjustment; and provided, further, that in the case of a Tier III Executive,
such an LTIP Award shall not be paid unless the minimum corporate performance
thresholds for the applicable performance period are met.

     (d) Benefit Programs and Policies. During an Executive's Transition Period,
he or she shall participate in Employee Plans and Compensation Plans as provided
in Section 1.02(d) above, except that: (i) the Executive shall not be eligible
to participate in TIP except to the extent and on the terms provided for above
in this Section 4.02; (ii) no new stock option grants shall be made to the
Executive; (iii) no new awards shall be granted to the Executive under LTIP;
(iv) no other new awards shall be granted to the Executive under any
Compensation Plans; (v) the Executive shall not be entitled to participate in
any other Compensation Plans; and (vi) the effect of the Executive's entering
the Transition Period for any incentive awards that the Executive holds
immediately before his or her Change in Status Date that are not specifically
provided for above shall be as provided in the applicable plans and/or
agreements.

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     4.03 Duties During Transition Period. During an Executive's Transition
Period, the Executive shall serve as an officer of the Company in a position
that is less senior than his or her position during the Retention Period (and in
any case not an executive officer position), and shall devote substantially all
of his or her normal business time and efforts to the business of the Company,
its subsidiaries and its affiliates, the amount of such time to be sufficient to
permit him or her to diligently and faithfully serve and endeavor to further its
interests to the best of his or her ability. Subject to the foregoing, and to
the requirements of the Executive's Agreement(s) then in effect, the Executive
may participate in various civic and philanthropic activities, may serve on
boards of directors and committees of not-for-profit organizations of the
Executive's choice, and, to the extent consistent with the policies of the
Company, may serve as a non-employee director of one or more corporations
(unless the Committee concludes that such service would be inappropriate or not
in the best interests of the Company).

                                    Article 5
                           Continued Employment Period

     5.01 Employee Status. For the five-year period beginning immediately
following the end of the Transition Period (the "Continued Employment Period"),
the Executive shall serve as a staff employee of the Company, with the pay and
benefits provided for in this Article 5, provided that the Executive: (a)
remains an employee of the Company through the end of his or her Transition
Period; (b) properly executes a Continued Employment Period Agreement not later
than the last day of the Transition Period; (c) does not revoke such Continued
Employment Period Agreement; and (d) complies with all Agreements that he or she
is required under this Plan to execute.

     5.02 Continued Employment Benefits. (a) Base Salary. During an Executive's
Continued Employment Period, the Company shall pay the Executive a base salary
(the "Continued Employment Period Salary") at an annual rate equal to a
percentage of his or her Annual Base Salary as in effect at the end of the
Transition Period, which percentage is set forth opposite his or her name on
Appendix A hereto. In no event shall an Executive be eligible for merit
increases in base salary during his or her Continued Employment Period.

     (b) Three-Year Incentive Plan Awards. During an Executive's Continued
Employment Period, any outstanding awards under LTIP shall be treated as
provided in Section 4.02(c) above.

     (c) Benefit Programs and Policies. During an Executive's Continued
Employment Period, he or she shall participate in Employee Plans and
Compensation Plans as provided in Section 1.02(d) above, except that: (i) the
Executive shall not be eligible to participate in TIP; (ii) no new stock option
grants shall be made to the Executive; (iii) no new awards shall be granted to
the Executive under LTIP; (iv) no other new awards shall be granted to the
Executive under any Compensation Plans; (v) the Executive shall not be entitled
to participate in any other Compensation Plans; and (vi) the effect of the
Executive's entering the Continued Employment Period for any incentive awards
that the Executive holds immediately before the beginning of his or her
Continued Employment Period that are not specifically provided for above shall
be as provided in the applicable plans and/or agreements.

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     5.03 Time Devoted to Duties During Continued Employment Period. During an
Executive's Continued Employment Period, the Executive shall devote such time to
the business of the Company as may be reasonably requested by the Company from
time to time, which requests shall be appropriate taking into account the
compensation the Executive is receiving hereunder and the Executive's outside
activities, services and arrangements permitted by the next sentence; provided,
that in any event the Executive may be required by the Company to devote
sufficient time to qualify for "part-time benefits-eligible" status (which is 20
hours per week, as of the Current Restatement Date). During the Continued
Employment Period, the Executive may participate in various civic and
philanthropic activities, may serve on boards of directors and committees of
not-for-profit organizations of the Executive's choice, may serve as a member of
one or more corporate boards of directors and may engage in a full-time
employment arrangement with another organization of the Executive's choice,
provided that such activities do not violate the Executive's obligations under
the Executive's Agreement(s) then in effect.

     5.04 No Offset. In the event that an Executive shall engage in any
employment arrangement permitted by Section 5.03 above (including without
limitation self-employment) during the Continued Employment Period, no amount
paid to or earned by such Executive therefrom shall reduce any payments or other
benefits due such Executive pursuant to this Plan.

                                    Article 6
                            Termination of Employment

     6.01 Death or Disability. An Executive's employment shall terminate
automatically upon his or her death during any Employment Period. In the event
that (a) the Committee determines in good faith that an Executive is suffering
from a "Disability" (together with its various cognates, as defined below) and
(b) the appropriate decisionmaker under any applicable Company plan or program
providing long-term disability benefits to the Executive (a "Disability Plan")
similarly determines that the Executive is eligible for such benefits by virtue
of the Executive's disability (as defined for purposes of such plan or program),
the Company may deliver to the Executive written notice (a "Disability
Termination Notice") in accordance with Section 6.05 above of the Company's
intention to terminate the Executive's employment. In such event, the
Executive's employment shall terminate effective on the later of (y) the 30th
day after receipt of such Disability Termination Notice by the Executive or (z)
the first date on which the Executive becomes eligible for long-term disability
benefits under the principal Disability Plan applicable to the Executive, (the
"Disability Effective Date"), provided, however, that (1) in the interim the
Executive shall not have returned to full-time performance of the Executive's
duties, and/or (2) the Executive shall not have delivered to the Committee
within 30 days of receipt of a Disability Termination Notice a written objection
thereto (an "Objection"). In the event of a timely Objection, any termination of
the Executive shall be suspended and the Executive shall be promptly examined by
two physicians or other professionals skilled in the relevant field, one
selected by the Executive and one by the Committee. Each of the two
professionals shall issue a written opinion within 15 days following the
completion of his or her examination as to whether the Executive is Disabled in
accordance with the definition provided in this Plan. If the two professionals
agree, each of the Executive and the Company shall be bound by their joint
conclusion. If the two professionals disagree, they shall jointly agree on a
third professional to conduct a similar examination. Each of the Executive and
the Company

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shall be bound by the conclusion of such third professional. The Executive
agrees to each such examination and to waive any confidentiality rights
necessary to allow each of the professionals conducting such examinations to do
so. The Company shall pay all fees and costs of all such examinations. In the
event of a disagreement as to the determination of the Executive's disability
for purposes of a Disability Plan, such disagreement shall be resolved as
provided for in such Disability Plan. For purposes of this Plan, the term
"Disability" shall mean the material inability of the Executive, due to injury,
illness, disease or bodily, mental or emotional infirmity, to carry out the job
responsibilities which such Executive held or the tasks to which such Executive
was assigned at the time of the incurrence of such Disability, which inability
is reasonably expected to be permanent or of indefinite duration exceeding one
year.

     6.02 Cause. The Company may terminate an Executive's employment at any time
for Cause. For purposes of this Plan, "Cause" means: (i) the willful failure of
an Executive to perform substantially all of the Executive's material duties
with the Company (other than any failure resulting from incapacity resulting
from physical or mental illness), after written demand for substantial
performance is delivered to the Executive by the Committee or the CEO; or (ii) a
willful violation of the Company's material rules and policies (including
without limitation the Standards of Business Conduct) as in effect from time to
time; or (iii) the Executive's commission of any act or acts involving
dishonesty, breach of fiduciary obligation to the Company, fraud, illegality,
malfeasance or moral turpitude; or (iv) the Executive commits a criminal or
civil violation or other improper act involving fraud or dishonesty; or (v) the
Executive is found liable for or guilty in a civil matter of engaging in
discriminatory conduct in violation of any labor or employment laws or in
violating or contributing to a violation of an employee's civil rights; or (vi)
the Executive materially breaches the terms of the Plan by revoking any
Agreement that the Executive is required to execute, or by failing properly to
execute, or violating any one or more of the provisions of, any Agreement that
the Executive is required to execute; or (vii) the Executive refuses to carry
out clearly assigned material duties or is otherwise insubordinate. Any act or
failure to act, on the part of an Executive, that is described in clause (i),
(ii), (vi) or (vii) of the preceding sentence of which the Committee receives
actual notice shall not be considered "Cause" unless the Committee, the Board or
an executive officer of the Company notifies the Executive that such act or
failure to act is or may be considered "Cause" within one year after the
Committee first receives such actual notice. For purposes of this provision, no
act or failure to act, on the part of an Executive, shall be considered
"willful," unless it is done, or omitted to be done, by the Executive in bad
faith or without reasonable belief that the Executive's action or omission was
in the best interests of the Company. Any act, or failure to act, on the part of
an Executive, based upon authority given pursuant to a resolution duly adopted
by the Board or upon the instructions of the CEO or an officer of the Company
senior in rank to the Executive to whom the Executive reports or based upon the
advice of counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Company. The cessation of employment of an Executive shall not be deemed to
be for Cause unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of a majority of the
Board at a meeting of the Board called and held upon appropriate notice (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the

                                     - 11 -

<PAGE>

Board, the Executive is guilty of the conduct described in this paragraph, and
specifying the particulars thereof in detail.

     6.03 Good Reason. During a Tier I Executive's Retention Period and
Transition Period, the Tier I Executive may terminate his or her employment at
any time for Good Reason. For purposes of this Plan, "Good Reason" shall mean:

          (a) the assignment to the Executive of any duties inconsistent in any
     respect with the Executive's position (including without limitation status,
     offices, titles and reporting requirements), authority, duties or
     responsibilities as of the Executive's Plan Start Date, or any other action
     by the Company which results in a diminution in such position, authority,
     duties or responsibilities, excluding for this purpose (1) an isolated,
     insubstantial and inadvertent action, and (2) any material change in
     status, duties and responsibilities that is expressly contemplated by this
     Plan; or

          (b) the relocation of the Executive's principal place of employment to
     a location outside the greater Chicago metropolitan area.

Notwithstanding the foregoing: (A) a Tier I Executive's termination of his or
her employment shall not be considered to be for Good Reason if he or she has
consented in writing to the occurrence of the event that constitutes Good
Reason; and (B) a Tier I Executive's termination of his or her employment shall
not be considered to be for Good Reason unless the Executive shall have
delivered a written notice to the Committee within 30 days of his or her first
having actual knowledge of the occurrence of the event that constitutes Good
Reason, stating that he or she intends to terminate his or her employment for
Good Reason and specifying the factual basis for such termination, and such
event is not cured within 30 days of the Committee's receipt of such notice.

     6.04 Termination of Employment By the Company For Any Other Reason. During
an Executive's Retention Period, the Company may also terminate the Executive's
employment for any reason other than Cause by written notice to the Executive in
accordance with Section 6.05 below of its intention to terminate the Executive's
employment. During an Executive's Transition Period and Continued Employment
Period, the Company may not terminate the Executive's employment other than for
Cause or Disability.

     6.05 Notice of Termination. Any termination of an Executive's employment by
the Company or the Executive pursuant to this Article 6 shall be communicated by
Notice of Termination to the other party hereto given in accordance with this
Section 6.05. For purposes of this Plan, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Plan relied upon, (ii) to the extent applicable, sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated, and (iii) if the Date
of Termination (as defined in Section 6.06 below) is other than the date of
receipt of such notice, specifies the termination date (which date shall be not
more than 30 days after the giving of such notice). The failure by the Executive
or the Company to set forth in the Notice of Termination any fact or

                                     - 12 -

<PAGE>

circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.

     6.06 Date of Termination. "Date of Termination" means (i) if an Executive's
employment is terminated other than as a result of the Executive's death or
Disability, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the Executive's employment is
terminated as a result of the Executive's death, the date of death, and (iii) if
the Executive's employment is terminated as a result of the Executive's
Disability, the Disability Effective Date.

                                    Article 7
                   Obligations of the Company upon Termination

     7.01 By an Executive for Good Reason; By the Company Other Than for Cause.
This Section 7.01 sets forth the consequences of the following terminations of
employment: (i) a termination of the employment of a Tier I, Tier II or Tier III
Executive by the Company during his or her Retention Period other than for
Cause; and (ii) a termination by a Tier I Executive of his or her employment for
Good Reason during his or her Retention Period or Transition Period. In each
such case, provided that the Executive properly executes a Termination
Agreement, does not revoke such Termination Agreement, and complies with all
Agreements that he or she is required under this Plan to execute:

          (a) the Company shall pay the following amounts (collectively, the
          "Termination Payments") to the Executive in a lump sum in cash:

               (i)   the Accrued Obligations (as defined below),

               (ii)  the Earned Bonus (as defined below), if any,

               (iii) the Severance Benefit (as defined below), and

               (iv)  the Welfare Benefit (as defined below); and

          (b) the following categories of stock options shall vest as of the
          Executive's Date of Termination and remain exercisable until the first
          to occur of (x) the fifth anniversary (if the Executive is a Tier I
          Executive or a Tier II Executive) or the third anniversary (if the
          Executive is a Tier III Executive) of the Date of Termination, or (y)
          the latest date on which such options would have expired, had the
          Executive's employment not terminated (i) all options that are vested
          as of the Executive's Date of Termination; and (ii) all options that
          would have vested within five years (if the Executive is a Tier I
          Executive or a Tier II Executive) or within three years (if the
          Executive is a Tier III Executive) following the Executive's Date of
          Termination, if the Executive had remained employed by the Company.

                                     - 13 -

<PAGE>

The Termination Payments shall be paid not later than the latest of (1) the 60th
day following the Date of Termination, (2) the first day on which the Executive
has properly executed the Termination Agreement and the Termination Agreement
has ceased to be revocable (and has not been revoked), and (3) in the case of
any Earned Bonus for a year that ends during the Executive's Retention Period,
the date on which bonuses under TIP for such year are paid to TIP participants
generally.

     For purposes of this Plan:

          (A) "Accrued Obligations" shall mean the sum of (1) any unpaid base
          salary accrued through the Date of Termination ("Accrued Salary"), (2)
          if the Date of Termination occurs before the end of the Transition
          Period, the product of (x) the Annual Bonus that would have been
          payable for the calendar year in which the Date of Termination occurs,
          if the Executive's employment had not terminated, and (y) a fraction,
          the numerator of which is the number of days in such calendar year
          through the Date of Termination, and the denominator of which is 365,
          and (3) any accrued vacation pay, in each case to the extent not
          previously paid;

          (B) "Discount Rate" shall mean the interest rate equal to the Prime
          Rate as reported in The Wall Street Journal, Midwest Edition, as in
          effect on the Date of Termination;

          (C) "Earned Bonus" means any annual bonus under TIP in respect of any
          calendar year ended on or before the Date of Termination to which the
          Executive would have been entitled under TIP (if the Date of
          Termination is during the Retention Period) and under this Plan (if
          the Date of Termination is during the Transition Period), if his or
          her employment had not terminated;

          (D) "Severance Benefit" means a lump sum payment equal to (the
          aggregate amounts of Annual Base Salary, Annual Bonuses and/or
          Continued Employment Period Salary that would have been payable to the
          Executive if his or her employment had continued through the end of
          the Continued Employment Period, discounted from the scheduled payment
          dates to the Date of Termination by reference to the Discount Rate;

          (E) "Target Percentage" shall mean the target percentage of the annual
          bonus that the Executive was eligible to receive under TIP on the day
          immediately preceding the Change-in-Status Date without any
          adjustment, but in no event lower than the Executive's highest target
          percentage in effect at any time between the Executive's Plan Start
          Date and Change-in-Status Date, provided that the target percentage
          shall be reduced to reflect any across-the-board reductions
          implemented by the Committee prior to the Change-in-Status Date, which
          reductions affect Company officers generally; and

                                     - 14 -

<PAGE>

          (F) "Welfare Benefit" shall mean a lump sum payment in lieu of
          continued participation in those Benefit Plans that provide health,
          medical, dental and life insurance benefits an amount equal to the
          estimated cost that the Company would have incurred to provide
          benefits under such plans to the Executive through the end of the
          Continued Employment Period (as reasonably determined by the Committee
          in its sole discretion on the Date of Termination).

In determining the Severance Benefit and the Welfare Benefit, the following
rules shall apply. If an Executive's employment has terminated during his or her
Retention Period, such amounts shall be determined as if Date of Termination had
been his or her Change-in-Status Date, and he or she had remained employed
during the Transition Period and a full five-year Continued Employment Period
thereafter. If an Executive's employment has terminated during his or her
Transition Period, such amounts shall be determined as if he or she shall had
remained employed during the remainder of the Transition Period and for a full
five-year Continued Employment Period thereafter.

     7.02 Death; Disability. If, during any of an Executive's Employment
Periods, the Executive dies or the Executive's employment is terminated by
reason of Disability, the Company shall have no further obligations to the
Executive or the Executive's legal representatives pursuant to this Plan, other
than for:

          (a) payment of Accrued Salary through the Date of Termination and any
          Earned Bonus for a year that ends after the Retention Period in a lump
          sum in cash within 60 days of the Date of Termination, and any Earned
          Bonus for a year that ends during the Retention Period at the same
          time as bonuses under TIP for that year are paid to TIP participants
          generally; and

          (b) payment or provision of death benefits or disability benefits, as
          applicable, equal to the benefits provided by the Company to the
          estates and beneficiaries of other employees of the Company at the
          level in which the Executive was serving at the time of his or her
          death or termination for Disability, as applicable.

     7.03 By the Company for Cause. If an Executive's employment is terminated
during any of his or her Employment Periods by the Company for Cause, the
Company shall have no further obligations to the Executive pursuant to this Plan
other than to pay the Executive his or her Accrued Salary through the Date of
Termination in a lump sum in cash within 60 days after the Date of Termination.

     7.04 By a Tier I Executive Without Good Reason or a Tier II or Tier III
Executive for any Reason. If (a) a Tier I Executive terminates his or her
employment during his or her Retention Period or Transition Period without Good
Reason, or during his or her Continued Employment Period for any reason, or (b)
a Tier II or Tier III Executive terminates his or her employment during any of
his or her Employment Periods for any reason or no reason, the Company shall
have no obligation to the Executive pursuant to this Plan other than to pay the

                                     - 15 -

<PAGE>

Executive his or her Accrued Salary through the Date of Termination and any
Earned Bonus for a year that ends after the Retention Period in a lump sum in
cash within 60 days of the Date of Termination, and any Earned Bonus for a year
that ends during the Retention Period at the same time as bonuses for that year
under TIP are paid to TIP participants generally.

     7.05 Change of Control Employment Agreement. Notwithstanding any other
provision of this Plan, in no event shall an Executive be entitled to receive
Termination Benefits under this Plan in connection with a termination of
employment for which the Executive is eligible to elect, and does elect, to
receive severance benefits under a change of control employment agreement with
the Company.

                                    Article 8
                          Legal Fees and Other Expenses

     8.01 Entitlement to Reimbursement. If an Executive incurs legal and other
fees or other expenses in a good faith effort to obtain pay or benefits under
this Plan, regardless of whether the Executive ultimately prevails, the Company
shall reimburse the Executive on a monthly basis upon the written request for
such fees and expenses to the extent not reimbursed under the Company's officers
and directors liability insurance policy, if any. The existence of any
controlling case or regulatory law which is directly inconsistent with the
position taken by the Executive shall be evidence that the Executive did not act
in good faith.

     8.02 Method of Reimbursement. Reimbursement of legal fees and expenses
under this Article 8 shall be made monthly upon the written submission of a
request for reimbursement, together with evidence that such fees and expenses
are due and payable or were paid by the Executive. If the Company shall have
reimbursed the Executive for legal fees and expenses and it is later determined
that the Executive was not acting in good faith, all amounts paid on behalf of,
or reimbursed to, the Executive shall be promptly refunded to the Company.

                                    Article 9
                     Amendment and Termination of this Plan

     This Plan shall be effective on the Effective Date and shall remain in
effect until the later of (i) October 24, 2007, or (ii) a date that is two years
after the date on which the Company gives written notice to all Executives of
its intention to terminate this Plan. The Company has the right to amend this
Plan in whole or in part at any time; provided that no amendment of this Plan
shall be effective as to any Executive who is or may reasonably be expected to
be materially adversely affected thereby (an "Affected Executive") until the
later of (i) October 1, 2004, or (ii) a date that is two years after the date on
which the Company gives written notice to all Affected Executives of its
intention to adopt such amendment, unless such Executive consents in writing.
Notwithstanding the foregoing, no Plan termination or amendment shall become
effective during the Transition Period or Continued Employment Period as to any
Affected Executive unless such Executive consents in writing. Any purported Plan
termination or amendment in violation of this Article 9 shall be void and of no
effect.

                                     - 16 -

<PAGE>

                                   Article 10
                            Miscellaneous Provisions

     10.01 Successors. This Plan shall be binding upon the Company and its
successors and assigns.

     10.02 Executive Information. Each Executive shall notify the Committee of
his or her mailing address and each change of mailing address to the extent that
he or she has not previously informed the Company thereof. In addition, each
Executive shall furnish the Committee with any other information and data that
the Committee reasonably considers necessary for the proper administration of
this Plan and the Executive's Agreements. The information provided by the
Executive under this Section 10.02 shall be binding upon the Executive, his or
her dependents and any beneficiaries for all purposes of this Plan and the
Agreements. The Committee shall be entitled to rely on any representations
regarding personal facts made by a Executive, his or her dependents or
beneficiaries, unless it has knowledge that such representations are false.

     10.03 Payments to Beneficiary. If an Executive dies before receiving
amounts to which he or she is entitled under this Plan or any Agreement, such
amounts shall be paid to the Beneficiary (as defined below) or if none, to the
Executive's estate. If a Beneficiary dies before complete payment of any
benefits attributable to a deceased Executive, the remaining benefits shall be
paid the Beneficiary's estate. For purposes of this Plan, a "Beneficiary" shall
mean any person, firm, corporation, partnership, venture or other entity of any
kind, including without limitation any entity which is tax-exempt under Section
501(c)(3) of the Internal Revenue Code, designated in writing by an Executive in
accordance with procedures established by the Committee.

     10.04 Notices. Any notice, request, election, or other official
communication under this Plan or any Agreement shall be in writing and shall be
delivered personally, by courier service, by registered or certified mail,
return receipt requested or (in the case of the Company, the CEO or the HR
Official (as defined in the Agreements)) by facsimile, and shall be effective
upon actual receipt by the party to which such notice shall be directed, and
shall be addressed as follows: (i) if to the Company, or McDonald's Corporation,
One McDonald's Plaza, Oak Brook IL 60523, Attention: Corporate Secretary,
facsimile: (630) 623-0497, (ii) if to the CEO or the HR Official, to such
official at One McDonald's Plaza, Oak Brook, Illinois 60523, facsimile: (630)
623-7409, and (iii) if to an Executive, the last mailing address as specified by
the Executive in accordance with Section 10.02 above.

     10.05 Right to Amend Compensation Plans and Employee Plans. Nothing in this
Plan or any Agreement shall be construed to limit the ability of the Company to
amend or terminate any of the Compensation Plans and Employee Plans, and any
such terminations or amendments shall be effective as to the Executives.

     10.06 Non-Alienation. No Executive shall have the right to assign, transfer
or anticipate an interest in any benefit under this Plan or any Agreement.

                                     - 17 -

<PAGE>

     10.07 Severability. If any one or more articles, sections or other portions
of this Plan or of any Agreement are declared by any court or governmental
authority to be unlawful or invalid, such unlawfulness or invalidity shall not
serve to invalidate any article, section or other portion not so declared to be
unlawful or invalid. Any article, section or other portion so declared to be
unlawful or invalid shall be construed so as to effectuate the terms of such
article, section or other portion to the fullest extent possible while remaining
lawful and valid.

     10.08 No Waiver. The Company's or an Executive's failure to insist upon
strict compliance with any provision of this Plan or of any Agreement shall not
be deemed a waiver of such provision or any other provision of this Plan or of
any Agreement. The Company or an Executive may waive any or all of the
provisions of this Plan or of any Agreement only by signing a document to that
effect. A waiver of any provision of this Plan or of any Agreement shall not be
deemed a waiver of any other provision, and any waiver of any default in any
such provision shall not be deemed a waiver of any later default thereof or of
any other provision.

     10.09 Governing Law. This Plan is an "employee benefit plan" within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"). It is intended to constitute a "welfare plan" within the
meaning of Section 3(1) of ERISA, but to the extent it is held to be a "pension
plan" within the meaning of Section 3(2) of ERISA, it constitutes an unfunded
plan maintained primarily for the purpose of providing deferred compensation for
a select group of management or highly compensated employees. To the extent not
preempted by federal law, this Plan and all Agreements shall be interpreted and
construed in accordance with the laws of the State of Illinois, without regard
to any otherwise applicable conflicts of law or choice of law principles.

     10.10 Captions. The captions of the Sections and Articles of this Plan are
not a part of the provisions hereof and shall have no force or effect.

                                     - 18 -

<PAGE>

     10.11 No Mitigation or Offset. In no event shall any Executive or the
Company be obligated to take any action by way of mitigation of any damages
caused by the breach by the Company or any Executive, as applicable, of its, his
or her obligations under this Plan. No Executive's Termination Benefits shall be
reduced by any compensation that the Executive earns after his or her Date of
Termination from employment or self-employment, provided that such employment or
self-employment does not violate the Executive's obligations under his or her
Agreements.

                                       McDONALD'S CORPORATION

                                        /s/ Robert N. Thurston
                                       -----------------------------------------
                                       By:     Robert N. Thurston
                                       Title:  Chairman, Compensation Committee
                                       Date:   October 29, 2002

                                     - 19 -

<PAGE>

                                   Appendix A

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                                                              Percentage for
                                                                                               Salary During
                                                                                                 Continued
                                                                                                Employment
   Tier                 Name                Plan Start Date            End Date                   Period
-----------------------------------------------------------------------------------------------------------------
<S>             <C>                         <C>                      <C>                       <C>
    I           Jack M. Greenberg           April 29, 1998           April 29, 2003                 50%
-----------------------------------------------------------------------------------------------------------------
   II           Claire H. Babrowski         October 1, 1998          October 1, 2001                35%
-----------------------------------------------------------------------------------------------------------------
   II           James A. Skinner            October 1, 1998          October 1, 2001                35%
-----------------------------------------------------------------------------------------------------------------
   II           Stanley R. Stein            October 1, 1998          October 1, 2001                35%
-----------------------------------------------------------------------------------------------------------------
   III          Charles Bell                October 29, 2002         October 29, 2005               35%
-----------------------------------------------------------------------------------------------------------------
   III          Michael J. Roberts          October 29, 2002         October 29, 2005               35%
-----------------------------------------------------------------------------------------------------------------
   III          Gloria Santona              October 29, 2002         October 29, 2005               35%
-----------------------------------------------------------------------------------------------------------------
   III          Jack Daly                   October 29, 2002         October 29, 2005               35%
-----------------------------------------------------------------------------------------------------------------
   III          Eduardo Sanchez             October 29, 2002         October 29, 2005               35%
-----------------------------------------------------------------------------------------------------------------
   III          Matthew H. Paull            October 29, 2002         October 29, 2005               35%
-----------------------------------------------------------------------------------------------------------------
   III          Lynn Crump-Caine            October 29, 2002         October 29, 2005               35%
-----------------------------------------------------------------------------------------------------------------
   III          Mats Lederhausen            October 29, 2002         October 29, 2005               35%
-----------------------------------------------------------------------------------------------------------------
   III          Russell P. Smyth            October 29, 2002         October 29, 2005               35%
-----------------------------------------------------------------------------------------------------------------
</TABLE>

                                     - 20 -

<PAGE>

                                   Appendix B
                             Index of Defined Terms

Accrued Obligations .............................................Section 7.01(A)
Accrued Salary ..................................................Section 7.01(A)
Affected Executive ....................................................Article 9
Agreement .......................................................Section 1.02(b)
Annual Base Salary .......................................... Section 4.02(a)(i)
Annual Bonus ....................................................Section 4.02(b)
Beneficiary .......................................................Section 10.03
Board ..............................................................Section 2.01
Cause ..............................................................Section 6.02
CEO .............................................................Section 4.01(b)
Change-in-Status Date ...........................................Section 4.01(a)
Claim ...........................................................Section 2.13(a)
Claimant ........................................................Section 2.13(a)
Committee ..........................................................Section 2.01
Company ............................................................Introduction
Compensation Plans ..............................................Section 1.02(d)
Continued Employment Period ........................................Section 5.01
Continued Employment Period Agreement ...........................Section 1.02(c)
Continued Employment Period Salary .................................Section 5.02
Current Restatement Date ...........................................Introduction
Date of Termination ................................................Section 6.06
Deferred Compensation Plans .....................................Section 1.02(e)
Disability .........................................................Section 6.01
Disability Effective Date ..........................................Section 6.01
Disability Plan ....................................................Section 6.01
Discount Rate ...................................................Section 7.01(B)
Earned Bonus ....................................................Section 7.01(C)
Effective Date .....................................................Introduction
Employee Plans ..................................................Section 1.02(d)
Employment Periods ..............................................Section 1.02(a)
End Date .............................................................Appendix A
Executives ......................................................Section 1.02(a)
Full Target Percentage ......................................Section 4.02(b)(ii)
Good Reason ........................................................Section 6.03
HR Official .......................................................Section 10.04
LTIP ............................................................Section 4.02(c)
LTIP Awards .....................................................Section 4.02(c)
Notice of Termination ..............................................Section 6.05
Objection ..........................................................Section 6.01
Plan ...............................................................Introduction
Plan Administrator .................................................Section 2.02

                                     - 21 -

<PAGE>

Prorated Annual Bonus ......................................Section 4.02(b)(iii)
Relevant Prior Benefits .........................................Section 1.02(c)
Retention Period ......................................................Article 3
Severance Benefit ...............................................Section 7.01(D)
Target Percentage ...............................................Section 7.01(E)
Termination Agreement ...........................................Section 1.02(b)
Termination Benefits ............................................Section 1.02(b)
Termination Payments ............................................Section 7.01(a)
Tier I Executive .....................................................Appendix A
Tier II Executive ....................................................Appendix A
Tier III Executive ...................................................Appendix A
TIP .............................................................Section 4.02(b)
Transition Benefits .............................................Section 4.01(a)
Transition Officer ..............................................Section 4.01(a)
Transition Period ...............................................Section 4.01(d)
Transition Period Agreement .....................................Section 1.02(b)
Violation .......................................................Section 1.02(c)
Welfare Benefit .................................................Section 7.01(F)
Years of Service ................................................Section 4.01(d)

                                     - 22 -

<PAGE>

                                    EXHIBIT A
                       FORM OF TRANSITION PERIOD AGREEMENT

     THIS TRANSITION PERIOD AGREEMENT (this "Agreement") is entered into as of
this __ day of ____, ____, by and between McDonald's Corporation, a Delaware
corporation (the "Company") and _____ (the "Executive"), pursuant to the
Company's Executive Retention Plan (the "Plan"), a copy of which is attached
hereto as Exhibit A.

                              W I T N E S S E T H:
                              - - - - - - - - - --

     WHEREAS, the Executive is a Tier __ Executive under the Plan; and

     WHEREAS, if the Executive complies with his/her obligations under the Plan,
he/she will hereafter be entitled to substantial compensation and benefits under
the Plan to which he/she would not otherwise be entitled; and

     WHEREAS, the Executive is required under the Plan to execute this
Agreement;

     NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties agree as follows:

     1. Definitions. Capitalized terms used but not defined in this Agreement
shall have the meanings given to them in the Plan. The following terms shall
have the meanings set forth below:

          Agreement: defined in the first paragraph above.

          Company: defined in the first paragraph above.

          Company Property: all records, documents, materials, papers, computer
     records or print-outs belonging to McDonald's, including without limitation
     those containing Confidential Information and Trade Secrets.

          Competing Business: any Person (and any branches, offices or
     operations thereof) that is a material and direct competitor of McDonald's
     in any country in the world or in any state of the United States by virtue
     of selling, manufacturing, processing or promoting any product that is
     substantially similar to, competes with, or is intended to compete with,
     replace, or duplicate in the market any product that was sold or under
     development by McDonald's during the five years (or shorter period of the
     Executive's employment with the Company) preceding the date of execution of
     this Agreement or with respect to which the Executive has had specific
     knowledge and involvement.

          Confidential Information and Trade Secrets: all valuable and unique
     tangible and intangible information and techniques acquired, developed or
     used by McDonald's relating to its business, operations, employees and
     customers, which gives McDonald's a competitive advantage in the businesses
     in which McDonald's is engaged, including

<PAGE>

     without limitation processes, methods, techniques, systems, computer data,
     formulae, patents, models, devices, compilations, customer lists, supplier
     lists or any information of whatever nature that gives McDonald's an
     opportunity to obtain an advantage over competitors who do not know or use
     such data or information.

          Executive: defined in the first paragraph above.

          HR Official: the Company's Senior Executive Vice President of Human
     Resources (or any successor position).

          McDonald's: the Company and its subsidiaries, divisions, affiliates
     and related companies.

          McDonald's-Related Person: any director, officer, employee or
     franchisee of the Company or any of its subsidiaries, divisions, affiliates
     and related companies.

          Other Separation Benefits: defined in Section 9(c) below.

          Person: a person, firm, corporation, partnership, venture or other
     entity of any kind.

          Plan: defined in the first paragraph above.

          Recovery Period: defined in Section 10(c)(iii) below.

          Release Date: the Executive's Change-in-Status Date.

          Released Persons: defined in Section 9(a) below.

          Specified Competitors: the entities listed on Exhibit B hereto and
     their respective subsidiaries and affiliates, as required by Section
     1.02(b) of the Plan.

          Stock Option Gains: defined in Section 10(c)(iv) below.

          Violation: defined in Section 8(a) below.

     2. Relationship of Agreement to Plan. The Executive hereby agrees to be
bound by the terms of the Plan, and to fulfill all of his/her obligations under
the Plan, including without limitation to render services as set forth in the
Plan and to execute additional Agreement(s) as and when required by the Plan.
The provisions of the Plan, including without limitation the provision regarding
administration in Article 2 of the Plan, are applicable to this Agreement and to
the obligations of the Company and the Executive hereunder, and are hereby
incorporated by reference into this Agreement. However, any amendments made to
the Plan after the date of this Agreement will not apply to the Executive.

     3. Circumstances Requiring Agreement. The Executive has given notice
pursuant to Section 4.01 of the Plan of his/her election to become a Transition
Officer[, and the

                                      -2-

<PAGE>

CEO]/1/ [Committee]/2/ has consented to such election]/3/. Accordingly, the
Executive's Change-in-Status Date shall be _____, ____ and the Executive's
Transition Period shall be the period from _____, ____ to _____, ____. This
Agreement constitutes the Executive's Transition Period Agreement.

     4. Compensation and Benefits. During the Executive's Transition Period, the
Executive shall receive the compensation and benefits provided for in Article 4
of the Plan, subject to the Executive's compliance with the requirements of the
Plan and this Agreement. In addition, if the Executive remains employed through
the end of the Transition Period and otherwise complies with the requirements of
the Plan and this Agreement, including without limitation executing and not
revoking a Continued Employment Period Agreement, the Executive shall receive
the compensation and benefits provided for in Article 5 of the Plan during
his/her Continued Employment Period. Finally, upon the termination of the
Executive's employment, he/she shall receive the compensation and benefits (if
any) provided for in such circumstances under Article 7 of the Plan.

     5. Company Property and Confidentiality.

          (a) Acknowledgements. The Executive acknowledges that (i) it is the
     policy of McDonald's to maintain as secret and confidential all
     Confidential Information and Trade Secrets; (ii) all Confidential
     Information and Trade Secrets are the sole and exclusive property of
     McDonald's; and (iii) disclosure of Confidential Information and Trade
     Secrets would cause significant damage to McDonald's.

          (b) Company Property. The Executive agrees to turn all Company
     Property over to the CEO or the CEO's designee, at or as promptly as
     practicable following the execution of this Agreement, except for Company
     Property that is necessary to perform his or her assigned functions during
     the Transition Period or the Continued Employment Period. The Executive
     also agrees to turn any Company Property that the Executive retains after
     the date of this Agreement pursuant to the preceding sentence over to the
     CEO or the CEO's designee as soon as it is no longer necessary for the
     Executive to retain such Company Property in order to perform such assigned
     functions, and in any event not later than the last day of the Executive's
     employment with the Company.

          (c) Confidentiality. The Executive shall not, without obtaining the
     Company's consent pursuant to Section 7 below, use, disclose, furnish or
     make accessible to any Person any Confidential Information and Trade
     Secrets obtained during the Executive's employment with the Company at any
     time (including, without limitation, during or after the Retention Period,
     the Transition Period or the Continued Employment Period) for so long as
     such information remains confidential or secret, except as required by the
     duties of the Executive's employment with the Company.

     6. Other Covenants.

______________________

/1/  For Agreements other than with the CEO.

/2/  For Agreements with the CEO.

/3/  Include only if the Change-in-Status Date is before the Executive's 62nd
     birthday.

                                      -3-

<PAGE>

          (a) Acknowledgements. The Executive acknowledges that McDonald's is
     engaged in a highly competitive, global business that requires the
     preservation of Confidential Information and Trade Secrets. The Executive
     further acknowledges that McDonald's has near-permanent relationships with
     vendors, affiliates, customers, suppliers, manufacturers, alliance
     partners, employees and service organizations, which McDonald's has a
     legitimate interest in protecting. Finally, the Executive acknowledges that
     the covenants set forth in this Section 6 are reasonable under the
     circumstances, that he or she has the skill and ability to find alternative
     commensurate work not in violation of such covenants and the Executive has
     the wherewithal to support himself/herself and his/her family without
     violating such covenants, including without limitation the covenant not to
     compete provided for in Section 6(b) below.

          (b) Noncompetition. The Executive agrees to not work for or provide
     services to a Competing Business or to the Specified Competitors during the
     portion of his/her Employment Periods that follows the date of execution of
     the Agreement and for two years following any termination of the
     Executive's employment.

          (c) Other Covenants. In addition, the Executive shall not, at any time
     during the Executive's employment with the Company:

               (i) Promote, sell or create any product sold by a Competing
          Business or a Specified Competitor;

               (ii) Provide marketing services, consultation or services to
          enhance the sales of a Competing Business or a Specified Competitor;
          or

               (iii) Use the McDonald's name or any other brand name of
          McDonald's, or the fact of the Executive's affiliation or former
          affiliation with McDonald's, in any manner that aids or benefits, or
          is intended to aid or benefit, a Competing Business or a Specified
          Competitor.

          (d) Exceptions. It shall not be considered a violation of this Section
     6 for the Executive to engage in any of the following:

               (i) The performance of services for and on behalf of an
          investment banking or commercial banking, auditing or consulting firm
          during the Continued Employment Period or at any time after the
          termination of the Executive's employment, so long as the Executive is
          not personally engaged in rendering services to or soliciting business
          of a Competing Business or any of the Specified Competitors; and

               (ii) Being the record or beneficial owner of up to one (1)
          percent of the outstanding voting securities of any publicly traded
          entity, provided that such investment does not create a conflict of
          interest between the Executive's duties hereunder and the Executive's
          interest in such investment or otherwise violate the Company's rules
          and policies (including without limitation the Standards of Business
          Conduct).

                                      -4-

<PAGE>

          (e) No Solicitation or Hiring of Employees. The Executive shall not,
     during the portion of his/her Employment Periods that follows the date of
     execution of the Agreement and for two years following any termination of
     the Executive's employment, solicit or attempt to solicit any employee
     (other than the Executive's administrative assistant), consultant,
     franchisee, supplier or independent contractor of McDonald's to terminate,
     alter, or lessen that party's affiliation with McDonald's or to interfere
     with or violate the terms of any agreement or understanding between such
     entity, employee or person and McDonald's.

          (f) No Disparagement. The Executive shall not, during the portion of
     his/her Employment Periods that follows the date of execution of the
     Agreement and for three years following any termination of the Executive's
     employment, (i) make any public disclosures or publish any articles or
     books about McDonald's, its business or any McDonald's-Related Person, or
     grant an interview to any representative of the public media, without the
     prior written consent of the CEO, or (ii) intentionally publish any
     statement or make any disclosure about McDonald's, its business or any
     McDonald's-Related Person that is disparaging, derogatory or otherwise
     casts a bad light on McDonald's, its business or any McDonald's-Related
     Person.

     7. Consent Procedure.

          (a) Seeking Consent. The Executive may seek the Company's consent to
     engage in any of the activities prohibited by Section 6 above, by providing
     written notice thereof to the Company addressed to the HR Official [or to
     the CEO]/4/, including a full and complete disclosure in writing to the
     Company of all the relevant facts, including without limitation the
     services to be rendered or activities to be engaged in, places of
     employment, performance of services or activities, compensation to be paid,
     expertise to be provided, amount to be invested, stock or debt to be
     received, and business plan or plans to be executed by such entity or
     person. The Company thereafter shall have fourteen (14) calendar days to
     consider the Executive's contemplated activities as disclosed and shall in
     writing, either consent or object to such activities. It is agreed that
     consent shall not be unreasonably withheld.

          (b) Binding Decisions. All decisions of the Company under this Section
     7 shall be final and binding upon the Executive, and the Executive shall
     not engage in any such activities if the Company shall object.

     8. Legal Compulsion.

          (a) Notice. If the Executive reasonably and in good faith believes
     that he or she is or may be compelled by law or by a court or governmental
     agency by a proper proceeding to disclose Confidential Information and
     Trade Secrets, or to make a statement or take other action that would,
     absent this Section 8, violate Section 6(f) above (each such disclosure,
     statement or action, a "Violation"), then the Executive shall give the
     Company written notice thereof as far in advance of such Violation as is
     lawful and

__________________

/4/  Do not include in an Agreement signed by the CEO.

                                      -5-

<PAGE>

     practicable, shall cooperate (at the Company's sole expense) with the
     Company in its efforts to prevent such Violation from being compelled, and
     shall limit his or her Violation to the minimum compelled by law or court
     order, except to the extent the Company agrees otherwise in writing.

          (b) No Violation. If the Executive complies with the foregoing
     procedure to the greatest extent possible without violating applicable law,
     then the Executive shall not be deemed to have breached Section 5(c) or
     6(f) above, as applicable, as a result of the Violation.

     9. Release Provisions. For the entire period of the Executive's employment
by the Company, including his Retention Period, up to the Release Date:

          (a) Release. The Executive understands, intends and agrees that this
     Section 9 constitutes full, complete and final satisfaction of all claims,
     demands, lawsuits or actions of any kind, whether known or unknown, against
     McDonald's and/or their respective directors, officers or employees (with
     McDonald's, collectively, the "Released Persons"), arising at any time up
     to and including the Release Date, and the Executive hereby forever
     releases each Released Person from all such matters. This includes, but is
     not limited to, a release of claims, demands, lawsuits and actions of any
     kind relating to any employment or application for employment or franchise,
     claims relating to resignation and/or cessation of employment, claims
     alleging breach of contract of any tort, claims for wrongful termination,
     defamation, intentional infliction of emotional distress, personal injury,
     violation of public policy and/or negligence related to employment or
     resignation, claims under Title VII of the Civil Rights Act of 1964, as
     amended, Section 1981 of the Civil Rights Act of 1866, as amended, the Age
     Discrimination in Employment Act of 1967, as amended, the Rehabilitation
     Act of 1973, the Americans with Disabilities Act of 1990, the Employee
     Retirement Income Security Act of 1974, as amended, the Worker Adjustment
     and Retraining Notification Act, the Family and Medical Leave Act of 1993,
     the Illinois Human Rights Act, or any other state, Federal or local law
     prohibiting discrimination, and claims based on any other law, regulation,
     or common law, whether before any Federal, state or local agency, in any
     court of law or before any other forum. Notwithstanding the foregoing, the
     Executive's release shall not extend to any claims (i) for benefits under
     Employee Plans that are qualified under Section 401(a) of the Internal
     Revenue Code, (ii) for compensation or benefits to which the Executive is
     entitled under the Plan as provided in Section 4 above, (iii) for
     compensation or benefits under any Employee Plan or Compensation
     Arrangement to which the Executive is entitled by the terms thereof, except
     as provided otherwise in Section 9(c) below and except to the extent such
     entitlements are specifically amended or eliminated by the Plan, or (iv)
     for indemnification under the Company's policy on indemnification of
     officers and directors and coverage under any related insurance policies.

          (b) Advice, Time to Consider and Revocation. [The Executive is hereby
     advised to consult with an attorney prior to executing this Agreement. The
     Executive is further advised that he/she has a period of 21 days within
     which to consider the terms of this Agreement and whether or not to execute
     it. In addition, for a period of 7 days

                                      -6-

<PAGE>

     following the Executive's execution of this Agreement, he/she has the right
     to revoke this Agreement, and no portion of this Agreement shall become
     effective or enforceable until such revocation period has expired.]/5/

          (c) Other Benefits. The Executive acknowledges and agrees that the
     payments and benefits provided to the Executive under the Plan are in lieu
     of any payments, benefits or arrangements to which the Executive might
     otherwise be entitled to under any Employee Plan or other plan or
     arrangement which provides for severance or separation ("Other Separation
     Benefits"), and the Executive hereby waives any and all rights and claims
     that he or she may now or hereafter have to any Other Separation Benefits;
     provided, that the foregoing waiver shall not apply to any right the
     Executive may have to any gross-up payments related to the excise tax on
     excess parachute payments imposed by Section 4999 of the Internal Revenue
     Code under any change of control employment agreement with the Company. The
     foregoing shall not be construed as affecting in any manner the Executive's
     benefits and entitlements (if any) under any Employee Plan that provides
     pension or retiree medical or life insurance benefits.

          (d) Acknowledgments. The Executive acknowledges having read and
     understood the provisions of this Section 9 as well as the other provisions
     of this Agreement, and represents that his/her execution of this Agreement
     constitutes his/her knowing and voluntary act, made without coercion or
     intimidation. The Executive acknowledges and agrees that the release set
     forth in this Section 9 is being given only in exchange for consideration
     in addition to anything of value to which the Executive already is
     entitled. The Executive finally agrees not to file any lawsuits against the
     Company or any of the released entities or persons with respect to claims
     covered by the release given in this Section 9.

     10. Remedies.

          (a) Acknowledgments. In recognition of the confidential nature of the
     Confidential Information and Trade Secrets, and in recognition of the
     necessity of the limited restrictions imposed by the Agreement, the
     Executive acknowledges it would be impossible to measure solely in money
     the damages which McDonald's would suffer if the Executive were to breach
     any of his/her obligations under Sections 5 and 6 above. The Executive also
     acknowledges that his/her breach of any such obligations would irreparably
     injure the Company.

          (b) Entitlement to Injunctive Relief. If the Executive breaches any of
     his/her obligations under Sections 5 and 6 above, McDonald's shall be
     entitled, in addition to any other remedies to which McDonald's may be
     entitled under the Agreement or otherwise, to an injunction issued by a
     court of competent jurisdiction, to restrain any breach or threatened
     breach, of such provisions, and the Executive waives any right to assert
     any claim or defense that McDonald's has an adequate remedy at law for any
     such

_______________________

/5/  This language may be deleted or modified by the Company, depending upon
     individual circumstances and/or changes in law relating to age
     discrimination or otherwise.

                                      -7-

<PAGE>

     breach and any right to require, or request a court to require, that
     McDonald's post a bond in connection therewith.

          (c) Effect on Other Benefits. In the event of a breach by the
     Executive of any of his/her obligations under this Agreement, excluding for
     this purpose an isolated, insubstantial and inadvertent action, the Company
     shall be entitled to:

               (i) discontinue any and all payments and other benefits to which
          the Executive or his/her beneficiaries would otherwise be entitled
          pursuant to this Agreement and/or the Plan;

               (ii) terminate any and all unexercised stock options then held by
          the Executive or by any transferee of the Executive;

               (iii) in the case of any such breach occurring after the
          Executive's Change-in-Status Date, require the Executive to repay to
          the Company the aggregate amount of cash payments received by the
          Executive from the Company pursuant to this Agreement and/or the Plan
          during the period commencing on the Executive's Change-in-Status Date
          and ending on the date on which the Company requests such repayment
          (the "Recovery Period"); and

               (iv) in the case of any such breach occurring after the
          Executive's Change-in-Status Date, require the Executive to pay to the
          Company any Stock Option Gains (as defined in the next two sentences).
          "Stock Option Gains" with respect to the Executive's stock options
          that were not vested as of his or her Change-in-Status Date means the
          aggregate amount of any gain recognized upon exercise of such stock
          options during the Recovery Period. "Stock Option Gains" with respect
          to the Executive's stock options that were vested as of his or her
          Change-in-Status Date means the excess, if any, of (A) the aggregate
          amount of any gain recognized upon exercise of such stock options
          during the Recovery Period, over (B) the amount of gain that would
          have been recognized, had such exercises instead occurred on the
          Executive's Change-in-Status Date.

     11. Successors. This Agreement shall be binding upon and inure to the
benefit of the Company and the Executive and their respective heirs,
representatives and successors.

     12. Jurisdiction and Venue. Any action arising under this Agreement or
between the Company and the Executive shall be instituted and brought
exclusively under the jurisdiction and venue of the appropriate state or federal
courts for the City of Oak Brook, Illinois, County of DuPage. The Executive
hereby consents to the exclusive jurisdiction of said courts regardless of where
the Executive may be domiciled at the time such suit is brought. It is further
agreed that in the event the Company shall be required to institute any
proceedings to enforce the terms of this Agreement, then the Company shall be
entitled to recover its attorney fees and attendant expenses as part of any
recovery.

     13. Captions. The captions of the Sections of and Exhibits to this
Agreement are not a part of the provisions hereof and shall have no force or
effect.

                                      -8-

<PAGE>

     14. Entire Agreement. This Agreement, together with the Plan, contain the
entire agreement between the parties, and supersede any and all previous
agreements, written or oral, between the Executive and the Company relating to
the subject matter hereof. No amendment or modification of the terms of this
Agreement shall be binding upon the parties hereto unless reduced to writing and
signed by each of the parties hereto.

     15. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.

     16. Severability. If any one or more Sections or other portions of this
Agreement are declared by any court or governmental authority to be unlawful or
invalid, such unlawfulness or invalidity shall not serve to invalidate any
Section or other portion not so declared to be unlawful or invalid. Any Section
or other portion so declared to be unlawful or invalid shall be construed so as
to effectuate the terms of such Section or other portion to the fullest extent
possible while remaining lawful and valid.

     17. Governing Law. To the extent not preempted by federal law, this
Agreement shall be interpreted and construed in accordance with the laws of the
State of Illinois, without regard to any otherwise applicable conflicts of law
or choice of law principles.

                                      -9-

<PAGE>

     IN WITNESS WHEREOF, the Executive has hereunto set his hand, and the
Company has caused these presents to be executed in its name on its behalf, all
as of the day and year first above written.

                             McDONALD'S CORPORATION

                             By:
                                ---------------------------------------
                             Title:
                                   ------------------------------------

                             ------------------------------------------
                             [NAME]

                                      -10-

<PAGE>

                                    EXHIBIT A
                                    ---------

                            Executive Retention Plan
                            ------------------------

                                    [Attach]

                                      -11-

<PAGE>

                                    EXHIBIT B
                                    ---------

                              Specified Competitors
                              ---------------------

       [List of 25 to be inserted upon preparation of specific Agreement]

                                      -12-

<PAGE>

                                    EXHIBIT B
                  FORM OF CONTINUED EMPLOYMENT PERIOD AGREEMENT

     THIS CONTINUED EMPLOYMENT PERIOD AGREEMENT (this "Agreement") is entered
into as of this __ day of ____, ____, by and between McDonald's Corporation, a
Delaware corporation (the "Company") and _____ (the "Executive"), pursuant to
the Company's Executive Retention Plan (the "Plan"), a copy of which is attached
hereto as Exhibit A.

                              W I T N E S S E T H:
                              - - - - - - - - - -

     WHEREAS, the Executive is a Tier __ Executive under the Plan; and

     WHEREAS, if the Executive complies with his/her obligations under the Plan,
he/she will hereafter be entitled to substantial compensation and benefits under
the Plan to which he/she would not otherwise be entitled; and

     WHEREAS, during the Executive's Transition Period, the Executive has
received substantial compensation and benefits under the Plan to which he/she
would not otherwise have been entitled; and

     WHEREAS, the Executive is required under the Plan to execute this
Agreement;

     NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties agree as follows:

     1. Definitions. Capitalized terms used but not defined in this Agreement
shall have the meanings given to them in the Plan. The following terms shall
have the meanings set forth below:

          Agreement: defined in the first paragraph above.

          Company: defined in the first paragraph above.

          Company Property: all records, documents, materials, papers, computer
     records or print-outs belonging to McDonald's, including without limitation
     those containing Confidential Information and Trade Secrets.

          Competing Business: any Person (and any branches, offices or
     operations thereof) that is a material and direct competitor of McDonald's
     in any country in the world or in any state of the United States by virtue
     of selling, manufacturing, processing or promoting any product that is
     substantially similar to, competes with, or is intended to compete with,
     replace, or duplicate in the market any product that was sold or under
     development by McDonald's during the five years (or shorter period of the
     Executive's employment with the Company) preceding the date of execution of
     this Agreement or with respect to which the Executive has had specific
     knowledge and involvement.

<PAGE>

          Confidential Information and Trade Secrets: all valuable and unique
     tangible and intangible information and techniques acquired, developed or
     used by McDonald's relating to its business, operations, employees and
     customers, which gives McDonald's a competitive advantage in the businesses
     in which McDonald's is engaged, including without limitation processes,
     methods, techniques, systems, computer data, formulae, patents, models,
     devices, compilations, customer lists, supplier lists or any information of
     whatever nature that gives McDonald's an opportunity to obtain an advantage
     over competitors who do not know or use such data or information.

          Executive: defined in the first paragraph above.

          HR Official: the Company's Senior Executive Vice President of Human
     Resources (or any successor position).

          McDonald's: the Company and its subsidiaries, divisions, affiliates
     and related companies.

          McDonald's-Related Person: any director, officer, employee or
     franchisee of the Company or any of its subsidiaries, divisions, affiliates
     and related companies.

          Other Separation Benefits: defined in Section 9(c) below.

          Person: a person, firm, corporation, partnership, venture or other
     entity of any kind.

          Plan: defined in the first paragraph above.

          Recovery Period: defined in Section 10(c)(iii) below.

          Release Date: the last day of the Executive's Transition Period.

          Released Persons: defined in Section 9(a) below.

          Specified Competitors: the entities listed on Exhibit B hereto and
     their respective subsidiaries and affiliates, as required by Section
     1.02(b) of the Plan.

          Stock Option Gains: defined in Section 10(c)(iv) below.

          Violation: defined in Section 8(a) below.

     2. Relationship of Agreement to Plan. The Executive hereby agrees to be
bound by the terms of the Plan, and to fulfill all of his/her obligations under
the Plan, including without limitation to render services as set forth in the
Plan and to execute additional Agreement(s) as and when required by the Plan.
The provisions of the Plan, including without limitation the provision regarding
administration in Article 2 of the Plan, are applicable to this Agreement and to
the obligations of the Company and the Executive hereunder, and are hereby
incorporated by reference into this Agreement. However, any amendments made to
the Plan after the date of this Agreement will not apply to the Executive.

                                      -2-

<PAGE>

     3. Circumstances Requiring Agreement. The Executive's Change-in-Status Date
shall be _____, ____ and the Executive's Transition Period shall be the period
from _____, ____ to _____, ____. This Agreement constitutes the Executive's
Continued Employment Period Agreement.

     4. Compensation and Benefits. During the Executive's Continued Employment
Period, the Executive shall receive the compensation and benefits provided for
in Article 5 of the Plan, subject to the Executive's compliance with the
requirements of the Plan and this Agreement. In addition, upon the termination
of the Executive's employment, he/she shall receive the compensation and
benefits (if any) provided for in such circumstances under Article 7 of the
Plan.

     5. Company Property and Confidentiality.

          (a) Acknowledgements. The Executive acknowledges that (i) it is the
     policy of McDonald's to maintain as secret and confidential all
     Confidential Information and Trade Secrets; (ii) all Confidential
     Information and Trade Secrets are the sole and exclusive property of
     McDonald's; and (iii) disclosure of Confidential Information and Trade
     Secrets would cause significant damage to McDonald's.

          (b) Company Property. The Executive agrees to turn all Company
     Property over to the CEO or the CEO's designee, at or as promptly as
     practicable following the execution of this Agreement, except for Company
     Property that is necessary to perform his or her assigned functions during
     the Continued Employment Period. The Executive also agrees to turn any
     Company Property that the Executive retains after the date of this
     Agreement pursuant to the preceding sentence over to the CEO or the CEO's
     designee as soon as it is no longer necessary for the Executive to retain
     such Company Property in order to perform such assigned functions, and in
     any event not later than the last day of the Executive's employment with
     the Company.

          (c) Confidentiality. The Executive shall not, without obtaining the
     Company's consent pursuant to Section 7 below, use, disclose, furnish or
     make accessible to any Person any Confidential Information and Trade
     Secrets obtained during the Executive's employment with the Company at any
     time (including, without limitation, during or after the Retention Period,
     the Transition Period or the Continued Employment Period) for so long as
     such information remains confidential or secret, except as required by the
     duties of the Executive's employment with the Company.

          6. Other Covenants.

          (a) Acknowledgements. The Executive acknowledges that McDonald's is
     engaged in a highly competitive, global business that requires the
     preservation of Confidential Information and Trade Secrets. The Executive
     further acknowledges that McDonald's has near-permanent relationships with
     vendors, affiliates, customers, suppliers, manufacturers, alliance
     partners, employees and service organizations, which McDonald's has a
     legitimate interest in protecting. Finally, the Executive acknowledges that
     the covenants set forth in this Section 6 are reasonable under the
     circumstances, that

                                      -3-

<PAGE>

     he or she has the skill and ability to find alternative commensurate work
     not in violation of such covenants and the Executive has the wherewithal to
     support himself/herself and his/her family without violating such
     covenants, including without limitation the covenant not to compete
     provided for in Section 6(b) below.

          (b) Noncompetition. The Executive agrees to not work for or provide
     services to a Competing Business or to the Specified Competitors during the
     portion of his/her Employment Periods that follows the date of execution of
     the Agreement and for two years following any termination of the
     Executive's employment.

          (c) Other Covenants. In addition, the Executive shall not, at any time
     during the Executive's employment with the Company:

               (i) Promote, sell or create any product sold by a Competing
          Business or a Specified Competitor;

               (ii) Provide marketing services, consultation or services to
          enhance the sales of a Competing Business or a Specified Competitor;
          or

               (iii) Use the McDonald's name or any other brand name of
          McDonald's, or the fact of the Executive's affiliation or former
          affiliation with McDonald's, in any manner that aids or benefits, or
          is intended to aid or benefit, a Competing Business or a Specified
          Competitor.

          (d) Exceptions. It shall not be considered a violation of this
     Section 6 for the Executive to engage in any of the following:

               (i) The performance of services for and on behalf of an
          investment banking or commercial banking, auditing or consulting firm
          during the Continued Employment Period or at any time after the
          termination of the Executive's employment, so long as the Executive is
          not personally engaged in rendering services to or soliciting business
          of a Competing Business or any of the Specified Competitors; and

               (ii) Being the record or beneficial owner of up to one (1)
          percent of the outstanding voting securities of any publicly traded
          entity, provided that such investment does not create a conflict of
          interest between the Executive's duties hereunder and the Executive's
          interest in such investment or otherwise violate the Company's rules
          and policies (including without limitation the Standards of Business
          Conduct).

          (e) No Solicitation or Hiring of Employees. The Executive shall not,
     during the portion of his/her Employment Periods that follows the date of
     execution of the Agreement and for two years following any termination of
     the Executive's employment, solicit or attempt to solicit any employee
     (other than the Executive's administrative assistant), consultant,
     franchisee, supplier or independent contractor of McDonald's to terminate,
     alter, or lessen that party's affiliation with McDonald's or to interfere
     with or

                                      -4-

<PAGE>

     violate the terms of any agreement or understanding between such entity,
     employee or person and McDonald's.

          (f) No Disparagement. The Executive shall not, during the portion of
     his/her Employment Periods that follows the date of execution of the
     Agreement and for three years following any termination of the Executive's
     employment, (i) make any public disclosures or publish any articles or
     books about McDonald's, its business or any McDonald's-Related Person, or
     grant an interview to any representative of the public media, without the
     prior written consent of the CEO, or (ii) intentionally publish any
     statement or make any disclosure about McDonald's, its business or any
     McDonald's-Related Person that is disparaging, derogatory or otherwise
     casts a bad light on McDonald's, its business or any McDonald's-Related
     Person.

     7. Consent Procedure.

          (a) Seeking Consent. The Executive may seek the Company's consent to
     engage in any of the activities prohibited by Section 6 above, by providing
     written notice thereof to the Company addressed to the HR Official [or to
     the CEO],/1/ including a full and complete disclosure in writing to the
     Company of all the relevant facts, including without limitation the
     services to be rendered or activities to be engaged in, places of
     employment, performance of services or activities, compensation to be paid,
     expertise to be provided, amount to be invested, stock or debt to be
     received, and business plan or plans to be executed by such entity or
     person. The Company thereafter shall have fourteen (14) calendar days to
     consider the Executive's contemplated activities as disclosed and shall in
     writing, either consent or object to such activities. It is agreed that
     consent shall not be unreasonably withheld.

          (b) Binding Decisions. All decisions of the Company under this
     Section 7 shall be final and binding upon the Executive, and the Executive
     shall not engage in any such activities if the Company shall object.

     8. Legal Compulsion.

          (a) Notice. If the Executive reasonably and in good faith believes
     that he or she is or may be compelled by law or by a court or governmental
     agency by a proper proceeding to disclose Confidential Information and
     Trade Secrets, or to make a statement or take other action that would,
     absent this Section 8, violate Section 6(f) above (each such disclosure,
     statement or action, a "Violation"), then the Executive shall give the
     Company written notice thereof as far in advance of such Violation as is
     lawful and practicable, shall cooperate (at the Company's sole expense)
     with the Company in its efforts to prevent such Violation from being
     compelled, and shall limit his or her Violation to the minimum compelled by
     law or court order, except to the extent the Company agrees otherwise in
     writing.

          (b) No Violation. If the Executive complies with the foregoing
     procedure to the greatest extent possible without violating applicable law,
     then the Executive shall not
_________________
/1/ Do not include in an Agreement signed by the CEO.

                                       -5-

<PAGE>

     be deemed to have breached Section 5(c) or 6(f) above, as applicable, as a
     result of the Violation.

     9. Release Provisions. For the entire period of the Executive's employment
by the Company, including his Retention Period, up to the Release Date:

          (a) Release. The Executive understands, intends and agrees that this
     Section 9 constitutes full, complete and final satisfaction of all claims,
     demands, lawsuits or actions of any kind, whether known or unknown, against
     McDonald's and/or their respective directors, officers or employees (with
     McDonald's, collectively, the "Released Persons"), arising at any time up
     to and including the Release Date, and the Executive hereby forever
     releases each Released Person from all such matters. This includes, but is
     not limited to, a release of claims, demands, lawsuits and actions of any
     kind relating to any employment or application for employment or franchise,
     claims relating to resignation and/or cessation of employment, claims
     alleging breach of contract of any tort, claims for wrongful termination,
     defamation, intentional infliction of emotional distress, personal injury,
     violation of public policy and/or negligence related to employment or
     resignation, claims under Title VII of the Civil Rights Act of 1964, as
     amended, Section 1981 of the Civil Rights Act of 1866, as amended, the Age
     Discrimination in Employment Act of 1967, as amended, the Rehabilitation
     Act of 1973, the Americans with Disabilities Act of 1990, the Employee
     Retirement Income Security Act of 1974, as amended, the Worker Adjustment
     and Retraining Notification Act, the Family and Medical Leave Act of 1993,
     the Illinois Human Rights Act, or any other state, Federal or local law
     prohibiting discrimination, and claims based on any other law, regulation,
     or common law, whether before any Federal, state or local agency, in any
     court of law or before any other forum. Notwithstanding the foregoing, the
     Executive's release shall not extend to any claims (i) for benefits under
     Employee Plans that are qualified under Section 401(a) of the Internal
     Revenue Code, (ii) for compensation or benefits to which the Executive is
     entitled under the Plan as provided in Section 4 above, (iii) for
     compensation or benefits under any Employee Plan or Compensation
     Arrangement to which the Executive is entitled by the terms thereof, except
     as provided otherwise in Section 9(c) below and except to the extent such
     entitlements are specifically amended or eliminated by the Plan, or (iv)
     for indemnification under the Company's policy on indemnification of
     officers and directors and coverage under any related insurance policies.

          (b) Advice, Time to Consider and Revocation. [The Executive is hereby
     advised to consult with an attorney prior to executing this Agreement. The
     Executive is further advised that he/she has a period of 21 days within
     which to consider the terms of this Agreement and whether or not to execute
     it. In addition, for a period of 7 days following the Executive's execution
     of this Agreement, he/she has the right to revoke this Agreement, and no
     portion of this Agreement shall become effective or enforceable until such
     revocation period has expired.]/2/
___________________
/2/ This language may be deleted or modified by the Company, depending upon
individual circumstances and/or changes in law relating to age discrimination or
otherwise.

                                      -6-

<PAGE>

          (c) Other Benefits. The Executive acknowledges and agrees that the
     payments and benefits provided to the Executive under the Plan are in lieu
     of any payments, benefits or arrangements to which the Executive might
     otherwise be entitled to under any Employee Plan or other plan or
     arrangement which provides for severance or separation ("Other Separation
     Benefits"), and the Executive hereby waives any and all rights and claims
     that he or she may now or hereafter have to any Other Separation Benefits;
     provided, that the foregoing waiver shall not apply to any right the
     Executive may have to any gross-up payments related to the excise tax on
     excess parachute payments imposed by Section 4999 of the Internal Revenue
     Code under any change of control employment agreement with the Company. The
     foregoing shall not be construed as affecting in any manner the Executive's
     benefits and entitlements (if any) under any Employee Plan that provides
     pension or retiree medical or life insurance benefits.

          (d) Acknowledgements. The Executive acknowledges having read and
     understood the provisions of this Section 9 as well as the other provisions
     of this Agreement, and represents that his/her execution of this Agreement
     constitutes his/her knowing and voluntary act, made without coercion or
     intimidation. The Executive acknowledges and agrees that the release set
     forth in this Section 9 is being given only in exchange for consideration
     in addition to anything of value to which the Executive already is
     entitled. The Executive finally agrees not to file any lawsuits against the
     Company or any of the released entities or persons with respect to claims
     covered by the release given in this Section 9.

     10. Remedies.

          (a) Acknowledgements. In recognition of the confidential nature of the
     Confidential Information and Trade Secrets, and in recognition of the
     necessity of the limited restrictions imposed by the Agreement, the
     Executive acknowledges it would be impossible to measure solely in money
     the damages which McDonald's would suffer if the Executive were to breach
     any of his/her obligations under Sections 5 and 6 above. The Executive also
     acknowledges that his/her breach of any such obligations would irreparably
     injure the Company.

          (b) Entitlement to Injunctive Relief. If the Executive breaches any of
     his/her obligations under Sections 5 and 6 above, McDonald's shall be
     entitled, in addition to any other remedies to which McDonald's may be
     entitled under the Agreement or otherwise, to an injunction issued by a
     court of competent jurisdiction, to restrain any breach or threatened
     breach, of such provisions, and the Executive waives any right to assert
     any claim or defense that McDonald's has an adequate remedy at law for any
     such breach and any right to require, or request a court to require, that
     McDonald's post a bond in connection therewith.

          (c) Effect on Other Benefits. In the event of a breach by the
     Executive of any of his/her obligations under this Agreement, excluding for
     this purpose an isolated, insubstantial and inadvertent action, the Company
     shall be entitled to:

                                      -7-

<PAGE>

               (i) discontinue any and all payments and other benefits to which
               the Executive or his/her beneficiaries would otherwise be
               entitled pursuant to this Agreement and/or the Plan;

               (ii) terminate any and all unexercised stock options then held by
               the Executive or by any transferee of the Executive;

               (iii) in the case of any such breach occurring after the
               Executive's Change-in-Status Date, require the Executive to repay
               to the Company the aggregate amount of cash payments received by
               the Executive from the Company pursuant to this Agreement and/or
               the Plan during the period commencing on the Executive's
               Change-in-Status Date and ending on the date on which the Company
               requests such repayment (the "Recovery Period"); and

               (iv) in the case of any such breach occurring after the
               Executive's Change-in-Status Date, require the Executive to pay
               to the Company any Stock Option Gains (as defined in the next two
               sentences). "Stock Option Gains" with respect to the Executive's
               stock options that were not vested as of his or her
               Change-in-Status Date means the aggregate amount of any gain
               recognized upon exercise of such stock options during the
               Recovery Period. "Stock Option Gains" with respect to the
               Executive's stock options that were vested as of his or her
               Change-in-Status Date means the excess, if any, of (A) the
               aggregate amount of any gain recognized upon exercise of such
               stock options during the Recovery Period, over (B) the amount of
               gain that would have been recognized, had such exercises instead
               occurred on the Executive's Change-in-Status Date.

     11. Successors. This Agreement shall be binding upon and inure to the
benefit of the Company and the Executive and their respective heirs,
representatives and successors.

     12. Jurisdiction and Venue. Any action arising under this Agreement or
between the Company and the Executive shall be instituted and brought
exclusively under the jurisdiction and venue of the appropriate state or federal
courts for the City of Oak Brook, Illinois, County of DuPage. The Executive
hereby consents to the exclusive jurisdiction of said courts regardless of where
the Executive may be domiciled at the time such suit is brought. It is further
agreed that in the event the Company shall be required to institute any
proceedings to enforce the terms of this Agreement, then the Company shall be
entitled to recover its attorney fees and attendant expenses as part of any
recovery.

     13. Captions. The captions of the Sections of and Exhibits to this
Agreement are not a part of the provisions hereof and shall have no force or
effect.

     14. Entire Agreement. This Agreement, together with the Plan, contain the
entire agreement between the parties, and supersede any and all previous
agreements, written or oral, between the Executive and the Company relating to
the subject matter hereof. No

                                      -8-

<PAGE>

amendment or modification of the terms of this Agreement shall be binding upon
the parties hereto unless reduced to writing and signed by each of the parties
hereto.

     15. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.

     16. Severability. If any one or more Sections or other portions of this
Agreement are declared by any court or governmental authority to be unlawful or
invalid, such unlawfulness or invalidity shall not serve to invalidate any
Section or other portion not so declared to be unlawful or invalid. Any Section
or other portion so declared to be unlawful or invalid shall be construed so as
to effectuate the terms of such Section or other portion to the fullest extent
possible while remaining lawful and valid.

     17. Governing Law. To the extent not preempted by federal law, this
Agreement shall be interpreted and construed in accordance with the laws of the
State of Illinois, without regard to any otherwise applicable conflicts of law
or choice of law principles.

                                      -9-

<PAGE>

     IN WITNESS WHEREOF, the Executive has hereunto set his hand, and the
Company has caused these presents to be executed in its name on its behalf, all
as of the day and year first above written.

                                   McDONALD'S CORPORATION

                                   By:
                                      ------------------------------------------
                                   Title:
                                         ---------------------------------------

                                   ---------------------------------------------
                                   [NAME]

                                      -10-

<PAGE>

                                    EXHIBIT A
                                    ---------

                            Executive Retention Plan
                            ------------------------

                                    [Attach]

                                      -11-

<PAGE>

                                    EXHIBIT B
                                    ---------

                              Specified Competitors
                              ---------------------

       [List of 25 to be inserted upon preparation of specific Agreement]

                                      -12-

<PAGE>

                                    EXHIBIT C
                          FORM OF TERMINATION AGREEMENT

     THIS TERMINATION AGREEMENT (this "Agreement") is entered into as of this __
day of ____, ____, by and between McDonald's Corporation, a Delaware corporation
(the "Company") and _____ (the "Executive"), pursuant to the Company's Executive
Retention Plan (the "Plan"), a copy of which is attached hereto as Exhibit A.

                              W I T N E S S E T H:
                              - - - - - - - - - --

     WHEREAS, the Executive is a Tier __ Executive under the Plan; and

     WHEREAS, if the Executive complies with his/her obligations under the Plan,
he/she will hereafter be entitled to substantial compensation and benefits under
the Plan to which he/she would not otherwise be entitled; and

     [WHEREAS, during the Executive's Transition Period [and Continued
Employment Period]/1/, the Executive has received substantial compensation and
benefits under the Plan to which he/she would not otherwise have been entitled;
and]/2/

     WHEREAS, the Executive is required under the Plan to execute this
Agreement;

     NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties agree as follows:

     1. Definitions. Capitalized terms used but not defined in this Agreement
shall have the meanings given to them in the Plan. The following terms shall
have the meanings set forth below:

          Agreement: defined in the first paragraph above.

          Company: defined in the first paragraph above.

          Company Property: all records, documents, materials, papers, computer
     records or print-outs belonging to McDonald's, including without limitation
     those containing Confidential Information and Trade Secrets.

          Competing Business: any Person (and any branches, offices or
     operations thereof) that is a material and direct competitor of McDonald's
     in any country in the world or in any state of the United States by virtue
     of selling, manufacturing, processing or promoting any product that is
     substantially similar to, competes with, or is intended to compete with,
     replace, or duplicate in the market any product that was sold or under
     development by McDonald's during the five years (or shorter period of the
     Executive's

_______________

/1/  Include bracketed phrase in Agreements signed after the Continued
     Employment Period begins.

/2/  Include bracketed paragraph in Agreements signed after Change-in-Status
     Date.

<PAGE>

     employment with the Company) preceding the date of execution of this
     Agreement or with respect to which the Executive has had specific knowledge
     and involvement.

          Confidential Information and Trade Secrets: all valuable and unique
     tangible and intangible information and techniques acquired, developed or
     used by McDonald's relating to its business, operations, employees and
     customers, which gives McDonald's a competitive advantage in the businesses
     in which McDonald's is engaged, including without limitation processes,
     methods, techniques, systems, computer data, formulae, patents, models,
     devices, compilations, customer lists, supplier lists or any information of
     whatever nature that gives McDonald's an opportunity to obtain an advantage
     over competitors who do not know or use such data or information.

          Executive: defined in the first paragraph above.

          HR Official: the Company's Senior Executive Vice President of Human
     Resources (or any successor position).

          McDonald's: the Company and its subsidiaries, divisions, affiliates
     and related companies.

          McDonald's-Related Person: any director, officer, employee or
     franchisee of the Company or any of its subsidiaries, divisions, affiliates
     and related companies.

          Other Separation Benefits: defined in Section 9(c) below.

          Person: a person, firm, corporation, partnership, venture or other
     entity of any kind.

          Plan: defined in the first paragraph above.

          Recovery Period: defined in Section 10(c)(iii) below.

          Release Date: the Executive's Date of Termination.

          Released Persons: defined in Section 9(a) below.

          Specified Competitors: the entities listed on Exhibit B hereto and
     their respective subsidiaries and affiliates, as required by Section
     1.02(b) of the Plan.

          Stock Option Gains: defined in Section 10(c)(iv) below.

          Violation: defined in Section 8(a) below.

     2. Relationship of Agreement to Plan. The provisions of the Plan, including
without limitation the provision regarding administration in Article 2 of the
Plan, are applicable to this Agreement and to the obligations of the Company and
the Executive hereunder, and are hereby incorporated by reference into this
Agreement. However, any amendments made to the Plan after the date of this
Agreement will not apply to the Executive.

                                      -2-

<PAGE>

     3. Circumstances Requiring Agreement. The Executive's employment [has
terminated] [will terminate] as a result of [insert the appropriate clause from
the following:]

          [the expiration of his/her Continued Employment Period]

          [termination by the Company during the Executive's Retention Period,
          other than for Cause]

          [termination by the Executive for Good Reason during his/her
          [Retention Period] [Transition Period]]/3/

The Executive's Date of Termination is _____, ____. This Agreement constitutes
the Executive's Termination Agreement.

     4. Termination Benefits. [For a Termination Agreement entered into at the
end of the Continued Employment Period] The Executive's eligibility for retiree
status and retiree benefits for purposes of Compensation Plans and Employee
Plans shall be determined by giving the Executive credit for employment from the
Change-in-Status Date through the Date of Termination, provided that the
Executive properly executes this Agreement, does not revoke this Agreement, and
complies with all Agreements that he or she is required under the Plan to
execute.

     [For a Termination Agreement entered into in connection with a termination
covered by Section 7.01 of the Plan] The Executive shall be entitled to receive
Termination Benefits in accordance with Section 7.01 of the Plan, provided that
the Executive properly executes this Agreement, does not revoke this Agreement,
and complies with all Agreements that he or she is required under the Plan to
execute. These Termination Benefits are outlined on Exhibit C hereto.

     5. Company Property and Confidentiality.

          (a) Acknowledgements. The Executive acknowledges that (i) it is the
     policy of McDonald's to maintain as secret and confidential all
     Confidential Information and Trade Secrets; (ii) all Confidential
     Information and Trade Secrets are the sole and exclusive property of
     McDonald's; and (iii) disclosure of Confidential Information and Trade
     Secrets would cause significant damage to McDonald's.

          (b) Company Property. The Executive agrees to turn all Company
     Property over to the CEO or the CEO's designee, at or as promptly as
     practicable following the execution of this Agreement.

          (c) Confidentiality. The Executive shall not, without obtaining the
     Company's consent pursuant to Section 7 below, use, disclose, furnish or
     make accessible to any Person any Confidential Information and Trade
     Secrets obtained during the Executive's employment with the Company at any
     time (including, without

______________

/3/  Applies only to Tier I Executives.

                                      -3-

<PAGE>

     limitation, during or after the Retention Period, the Transition Period or
     the Continued Employment Period) for so long as such information remains
     confidential or secret.

     6. Other Covenants.

          (a) Acknowledgements. The Executive acknowledges that McDonald's is
     engaged in a highly competitive, global business that requires the
     preservation of Confidential Information and Trade Secrets. The Executive
     further acknowledges that McDonald's has near-permanent relationships with
     vendors, affiliates, customers, suppliers, manufacturers, alliance
     partners, employees and service organizations, which McDonald's has a
     legitimate interest in protecting. Finally, the Executive acknowledges that
     the covenants set forth in this Section 6 are reasonable under the
     circumstances, that he or she has the skill and ability to find alternative
     commensurate work not in violation of such covenants and the Executive has
     the wherewithal to support himself/herself and his/her family without
     violating such covenants, including without limitation the covenant not to
     compete provided for in Section 6(b) below.

          (b) Noncompetition. The Executive agrees to not work for or provide
     services to a Competing Business or to the Specified Competitors at any
     time on or before _____, ____ [insert second anniversary of Date of
     Termination].

          (c) Exceptions. It shall not be considered a violation of this Section
     6 for the Executive to engage in any of the following:

               (i) The performance of services for and on behalf of an
               investment banking or commercial banking, auditing or consulting
               firm during the Continued Employment Period or at any time after
               the termination of the Executive's employment, so long as the
               Executive is not personally engaged in rendering services to or
               soliciting business of a Competing Business or any of the
               Specified Competitors; and

               (ii) Being the record or beneficial owner of up to one (1)
               percent of the outstanding voting securities of any publicly
               traded entity, provided that such investment does not create a
               conflict of interest between the Executive's duties hereunder and
               the Executive's interest in such investment or otherwise violate
               the Company's rules and policies (including without limitation
               the Standards of Business Conduct);

               (iii) The performance of services for a Competing Business or for
               a Specified Competitor at any time after the termination of the
               Executive's employment, so long as the Executive does not perform
               services for or work on a competitive product or a substantially
               similar product of the Company and has obtained the Company's
               consent pursuant to Section 8 below.

          (d) No Solicitation or Hiring of Employees. The Executive shall not,
     at any time on or before _____, ____ [insert second anniversary of Date of
     Termination], solicit or attempt to solicit any employee (other than the
     Executive's administrative assistant),

                                      -4-

<PAGE>

     consultant, franchisee, supplier or independent contractor of McDonald's to
     terminate, alter, or lessen that party's affiliation with McDonald's or to
     interfere with or violate the terms of any agreement or understanding
     between such entity, employee or person and McDonald's.

          (e) No Disparagement. The Executive shall not, at any time on or
     before _____, ____ [insert third anniversary of Date of Termination], (i)
     make any public disclosures or publish any articles or books about
     McDonald's, its business or any McDonald's-Related Person, or grant an
     interview to any representative of the public media, without the prior
     written consent of the CEO, or (ii) intentionally publish any statement or
     make any disclosure about McDonald's, its business or any
     McDonald's-Related Person that is disparaging, derogatory or otherwise
     casts a bad light on McDonald's, its business or any McDonald's-Related
     Person.

     7. Consent Procedure.

          (a) Seeking Consent. The Executive may seek the Company's consent to
     engage in any of the activities prohibited by Section 6 above, by providing
     written notice thereof to the Company addressed to the HR Official [or to
     the CEO]/4/, including a full and complete disclosure in writing to the
     Company of all the relevant facts, including without limitation the
     services to be rendered or activities to be engaged in, places of
     employment, performance of services or activities, compensation to be paid,
     expertise to be provided, amount to be invested, stock or debt to be
     received, and business plan or plans to be executed by such entity or
     person. The Company thereafter shall have fourteen (14) calendar days to
     consider the Executive's contemplated activities as disclosed and shall in
     writing, either consent or object to such activities. It is agreed that
     consent shall not be unreasonably withheld.

          (b) Specific Activities. Without limiting the generality of the
     foregoing, such consent shall not be withheld in any case in which an
     Executive seeks consent to engage in conduct described in Section 6(d)(iii)
     above and provides the Company with representations in form and substance
     reasonably satisfactory to the Company that he or she shall not work on or
     perform services for a competitive product or substantially similar product
     as described in Section 6(d)(iii) above.

          (c) Binding Decisions. All decisions of the Company under this Section
     7 shall be final and binding upon the Executive, and the Executive shall
     not engage in any such activities if the Company shall object.

     8. Legal Compulsion.

          (a) Notice. If the Executive reasonably and in good faith believes
     that he or she is or may be compelled by law or by a court or governmental
     agency by a proper proceeding to disclose Confidential Information and
     Trade Secrets, or to make a statement or take other action that would,
     absent this Section 8, violate Section 6(f) above (each such disclosure,
     statement or action, a "Violation"), then the Executive shall give

_______________

/4/  Do not include in an Agreement signed by the CEO.

                                      -5-

<PAGE>

     the Company written notice thereof as far in advance of such Violation as
     is lawful and practicable, shall cooperate (at the Company's sole expense)
     with the Company in its efforts to prevent such Violation from being
     compelled, and shall limit his or her Violation to the minimum compelled by
     law or court order, except to the extent the Company agrees otherwise in
     writing.

          (b) No Violation. If the Executive complies with the foregoing
     procedure to the greatest extent possible without violating applicable law,
     then the Executive shall not be deemed to have breached Section 5(c) or
     6(f) above, as applicable, as a result of the Violation.

     9. Release Provisions. For the entire period of the Executive's employment
by the Company, including his Retention Period, up to the Release Date:

          (a) Release. The Executive understands, intends and agrees that this
     Section 9 constitutes full, complete and final satisfaction of all claims,
     demands, lawsuits or actions of any kind, whether known or unknown, against
     McDonald's and/or their respective directors, officers or employees (with
     McDonald's, collectively, the "Released Persons"), arising at any time up
     to and including the Release Date, and the Executive hereby forever
     releases each Released Person from all such matters. This includes, but is
     not limited to, a release of claims, demands, lawsuits and actions of any
     kind relating to any employment or application for employment or franchise,
     claims relating to resignation and/or cessation of employment, claims
     alleging breach of contract of any tort, claims for wrongful termination,
     defamation, intentional infliction of emotional distress, personal injury,
     violation of public policy and/or negligence related to employment or
     resignation, claims under Title VII of the Civil Rights Act of 1964, as
     amended, Section 1981 of the Civil Rights Act of 1866, as amended, the Age
     Discrimination in Employment Act of 1967, as amended, the Rehabilitation
     Act of 1973, the Americans with Disabilities Act of 1990, the Employee
     Retirement Income Security Act of 1974, as amended, the Worker Adjustment
     and Retraining Notification Act, the Family and Medical Leave Act of 1993,
     the Illinois Human Rights Act, or any other state, Federal or local law
     prohibiting discrimination, and claims based on any other law, regulation,
     or common law, whether before any Federal, state or local agency, in any
     court of law or before any other forum. Notwithstanding the foregoing, the
     Executive's release shall not extend to any claims (i) for benefits under
     Employee Plans that are qualified under Section 401(a) of the Internal
     Revenue Code, (ii) for Termination Benefits to which the Executive is
     entitled under the Plan as provided in Section 4 above, (iii) for
     compensation or benefits under any Employee Plan or Compensation
     Arrangement to which the Executive is entitled by the terms thereof, except
     as provided otherwise in Section 9(c) below and except to the extent such
     entitlements are specifically amended or eliminated by the Plan, or (iv)
     for indemnification under the Company's policy on indemnification of
     officers and directors and coverage under any related insurance policies.

          (b) Advice, Time to Consider and Revocation. [The Executive is hereby
     advised to consult with an attorney prior to executing this Agreement. The
     Executive is further advised that he/she has a period of 21 days within
     which to consider the terms of

                                      -6-

<PAGE>

     this Agreement and whether or not to execute it. In addition, for a period
     of 7 days following the Executive's execution of this Agreement, he/she has
     the right to revoke this Agreement, and no portion of this Agreement shall
     become effective or enforceable until such revocation period has
     expired.]/5/

          (c) Other Benefits. The Executive acknowledges and agrees that the
     payments and benefits provided to the Executive under the Plan are in lieu
     of any payments, benefits or arrangements to which the Executive might
     otherwise be entitled to under any Employee Plan or other plan or
     arrangement which provides for severance or separation ("Other Separation
     Benefits"), and the Executive hereby waives any and all rights and claims
     that he or she may now or hereafter have to any Other Separation Benefits;
     provided, that the foregoing waiver shall not apply to any right the
     Executive may have to any gross-up payments related to the excise tax on
     excess parachute payments imposed by Section 4999 of the Internal Revenue
     Code under any change of control employment agreement with the Company. The
     foregoing shall not be construed as affecting in any manner the Executive's
     benefits and entitlements (if any) under any Employee Plan that provides
     pension or retiree medical or life insurance benefits.

          (d) Acknowledgements. The Executive acknowledges having read and
     understood the provisions of this Section 9 as well as the other provisions
     of this Agreement, and represents that his/her execution of this Agreement
     constitutes his/her knowing and voluntary act, made without coercion or
     intimidation. The Executive acknowledges and agrees that the release set
     forth in this Section 9 is being given only in exchange for consideration
     in addition to anything of value to which the Executive already is
     entitled. The Executive finally agrees not to file any lawsuits against the
     Company or any of the released entities or persons with respect to claims
     covered by the release given in this Section 9.

     10. Remedies.

          (a) Acknowledgements. In recognition of the confidential nature of the
     Confidential Information and Trade Secrets, and in recognition of the
     necessity of the limited restrictions imposed by the Agreement, the
     Executive acknowledges it would be impossible to measure solely in money
     the damages which McDonald's would suffer if the Executive were to breach
     any of his/her obligations under Sections 5 and 6 above. The Executive also
     acknowledges that his/her breach of any such obligations would irreparably
     injure the Company.

          (b) Entitlement to Injunctive Relief. If the Executive breaches any of
     his/her obligations under Sections 5 and 6 above, McDonald's shall be
     entitled, in addition to any other remedies to which McDonald's may be
     entitled under the Agreement or otherwise, to an injunction issued by a
     court of competent jurisdiction, to restrain any breach or threatened
     breach, of such provisions, and the Executive waives any right to assert
     any claim or defense that McDonald's has an adequate remedy at law for any
     such

_________________

/5/  This language may be deleted or modified by the Company, depending upon
     individual circumstances and/or changes in law relating to age
     discrimination or otherwise.

                                      -7-

<PAGE>

     breach and any right to require, or request a court to require, that
     McDonald's post a bond in connection therewith.

          (c) Effect on Other Benefits. In the event of a breach by the
     Executive of any of his/her obligations under this Agreement, excluding for
     this purpose an isolated, insubstantial and inadvertent action, the Company
     shall be entitled to:

               (i) discontinue any and all payments and other benefits to which
               the Executive or his/her beneficiaries would otherwise be
               entitled pursuant to this Agreement and/or the Plan;

               (ii) terminate any and all unexercised stock options then held by
               the Executive or by any transferee of the Executive;

               (iii) in the case of any such breach occurring after the
               Executive's Change-in-Status Date, require the Executive to repay
               to the Company the aggregate amount of cash payments received by
               the Executive from the Company pursuant to this Agreement and/or
               the Plan during the period commencing on the Executive's
               Change-in-Status Date and ending on the date on which the Company
               requests such repayment (the "Recovery Period"); and

               (iv) in the case of any such breach occurring after the
               Executive's Change-in-Status Date, require the Executive to pay
               to the Company any Stock Option Gains (as defined in the next two
               sentences). "Stock Option Gains" with respect to the Executive's
               stock options that were not vested as of his or her
               Change-in-Status Date means the aggregate amount of any gain
               recognized upon exercise of such stock options during the
               Recovery Period. "Stock Option Gains" with respect to the
               Executive's stock options that were vested as of his or her
               Change-in-Status Date means the excess, if any, of (A) the
               aggregate amount of any gain recognized upon exercise of such
               stock options during the Recovery Period, over (B) the amount of
               gain that would have been recognized, had such exercises instead
               occurred on the Executive's Change-in-Status Date.

     11. Successors. This Agreement shall be binding upon and inure to the
benefit of the Company and the Executive and their respective heirs,
representatives and successors.

     12. Jurisdiction and Venue. Any action arising under this Agreement or
between the Company and the Executive shall be instituted and brought
exclusively under the jurisdiction and venue of the appropriate state or federal
courts for the City of Oak Brook, Illinois, County of DuPage. The Executive
hereby consents to the exclusive jurisdiction of said courts regardless of where
the Executive may be domiciled at the time such suit is brought. It is further
agreed that in the event the Company shall be required to institute any
proceedings to enforce the terms of this Agreement, then the Company shall be
entitled to recover its attorney fees and attendant expenses as part of any
recovery.

                                      -8-

<PAGE>

     13. Captions. The captions of the Sections of and Exhibits to this
Agreement are not a part of the provisions hereof and shall have no force or
effect.

     14. Entire Agreement. This Agreement, together with the Plan, contain the
entire agreement between the parties, and supersede any and all previous
agreements, written or oral, between the Executive and the Company relating to
the subject matter hereof. No amendment or modification of the terms of this
Agreement shall be binding upon the parties hereto unless reduced to writing and
signed by each of the parties hereto.

     15. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.

     16. Severability. If any one or more Sections or other portions of this
Agreement are declared by any court or governmental authority to be unlawful or
invalid, such unlawfulness or invalidity shall not serve to invalidate any
Section or other portion not so declared to be unlawful or invalid. Any Section
or other portion so declared to be unlawful or invalid shall be construed so as
to effectuate the terms of such Section or other portion to the fullest extent
possible while remaining lawful and valid.

     17. Governing Law. To the extent not preempted by federal law, this
Agreement shall be interpreted and construed in accordance with the laws of the
State of Illinois, without regard to any otherwise applicable conflicts of law
or choice of law principles.

                                      -9-

<PAGE>

     IN WITNESS WHEREOF, the Executive has hereunto set his hand, and the
Company has caused these presents to be executed in its name on its behalf, all
as of the day and year first above written.

                             McDONALD'S CORPORATION

                             By:
                                -------------------------------
                             Title:
                                   ----------------------------

                             ----------------------------------
                             [NAME]

                                      -10-

<PAGE>

                                    EXHIBIT A
                                    ---------

                            Executive Retention Plan
                            ------------------------

                                    [Attach]

                                      -11-

<PAGE>

                                    EXHIBIT B
                                    ---------

                              Specified Competitors
                              ---------------------

       [List of 25 to be inserted upon preparation of specific Agreement]

                                      -12-

<PAGE>

                                    EXHIBIT C
                                    ---------

                              Termination Benefits
                              --------------------

            [To be completed upon preparation of specific Agreement]

Termination Benefits paid in a lump sum as per Section 7.01(a) of the Plan:

         Accrued Obligations:                           $______________________

         Earned Bonus:                                  $______________________

         Severance Benefit:                             $______________________

         Welfare Benefit:                               $______________________

Stock Options that vest and remain exercisable in accordance with Section
7.01(b) of the Plan:

         [List]

                                      -13-<PAGE>

Exhibit 10.10

                 WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT

This WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT (the "Waiver and
Amendment") is made and entered into as of this 8th day of November, 2002, by
and among PNC BANK, NATIONAL ASSOCIATION, in its capacity as the agent under the
hereinafter defined Credit Agreement (in such capacity the "Agent"), the BANKS
party to the Credit Agreement, ELGIN NATIONAL INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), and the GUARANTORS party to the Credit Agreement.

                                   WITNESSETH

          WHEREAS, reference is made to that certain Credit Agreement, dated as
of September 24, 1993, as amended and restated as of January 18, 2001, and as
further amended as of March 1, 2001, as of June 28, 2001, and as of March 31,
2002 (the "Credit Agreement");

          WHEREAS, the Borrower has requested that the Agent and the Banks waive
compliance with certain financial covenants under the Credit Agreement for a
fixed period of time; and

          WHEREAS, the parties hereto wish to amend certain portions of the
Credit Agreement as hereinafter provided.

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein and in the Credit Agreement and for
other good and valuable consideration, the mutuality, receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:

                                 Defined Terms.

  Capitalized terms used herein, not otherwise defined herein, shall have the
               meanings given to them under the Credit Agreement.
           Temporary Waiver of Certain Provisions of Credit Agreement.

          The Borrower hereby requests and the Agent and the Banks hereby waive,
for the period commencing on September 30, 2002 and ending at 11:59 P.M.
(Pittsburgh, Pennsylvania time) on January 31, 2003 (the "Waiver Period") the
following provisions:

Compliance for the period commencing July 1, 2002 through and including
September 30, 2002 with Sections 8.2.16 [Minimum Fixed Charge Coverage Ratio],
8.2.17 [Maximum Leverage Ratio], and 8.2.18 [Minimum Interest Coverage Ratio] of
the Credit Agreement; and
The Borrower's non-compliance with the provisions of the Credit Agreement set
forth in the foregoing clause 1. of this Section B constituting a Potential
Default during the Waiver Period.

                         Amendments to Credit Agreement.

Section 1.1 [Certain Definitions] of the Credit Agreement is hereby amended by
the addition, in alphabetical order, of the following new definitions of
"Consolidated EBITDA Projection" and "Fourth Amendment Effective Date":

          "Consolidated EBITDA Projection shall have the meaning set forth in
          Section 6.1.9 (iv)."

          "Fourth Amendment Effective Date shall mean November 8, 2002, which
          date shall be the effective date of the Waiver and Fourth Amendment,
          among the Agent, the Banks, and the Loan Parties, to the Credit
          Agreement."

Section 2.3 [Commitment Fees.] is hereby amended by deleting in the first
sentence thereof clause (b) in its entirety and inserting in lieu thereof the
following:

<PAGE>

          "(b) from and after the Initial Adjustment Date through, but not
          including, the Fourth Amendment Effective Date, a fee per annum equal
          to the percentage set forth on the pricing grid at Schedule 1.1(A)
          based upon the ratio of the Borrower's Consolidated Total Debt to
          Annual Consolidated EBITDA, calculated as set forth in (a) above, and
          (c) from and after the Fourth Amendment Effective Date, a fee of 1/2 %
          per annum, calculated as set forth in (a) above."

Section 4.1.1 [Revolving Credit Interest Rate Options.] is hereby amended and
restated in its entirety to read as follows:

          "4.1.1 Revolving Credit Interest Rate Options.

          (a)     The Borrower shall have the right to select from the following
          Interest Rate Options applicable to the Revolving Credit Loans for any
          period prior to the Fourth Amendment Effective Date:

                         (i)   Revolving Credit Base Rate Option: A fluctuating
                         rate per annum (computed on the basis of a year of 365
                         or 366 days, as the case may be, and actual days
                         elapsed) equal to the Base Rate plus the Applicable
                         Margin, such interest rate to change automatically from
                         time to time effective as of the effective date of each
                         change in the Base Rate; or

                         (ii)  Revolving Credit Euro-Rate Option: A rate per
                         annum (computed on the basis of a year of 360 days and
                         actual days elapsed) equal to the Euro-Rate plus the
                         Applicable Margin.

          (b)     All Revolving Credit Loans made on and after the Fourth
          Amendment Effective Date shall bear interest at a fluctuating rate per
          annum (computed on the basis of a year of 365 or 366 days, as the case
          may be, and actual days elapsed) equal to the Base Rate plus 1.75%,
          such interest rate to change automatically from time to time effective
          as of the effective date of each change in the Base Rate. A Revolving
          Credit Loan which is subject to the Revolving Credit Euro-Rate Option
          on the date immediately preceding the Fourth Amendment Effective Date
          shall continue to be subject to such Interest Rate Option until the
          Euro-Rate Interest Period applicable thereto has expired, and from and
          after the date of expiration of such Euro-Rate Interest Period such
          Revolving Credit Loan shall bear interest at a fluctuating rate per
          annum (computed on the basis of a year of 365 or 366 days, as the case
          may be, and actual days elapsed) equal to the Base Rate plus 1.75%,
          such interest rate to change automatically from time to time effective
          as of the effective date of each change in the Base Rate. "

Section 4.1.2 [Term Loan Interest Rate Options.] is hereby amended and restated
in its entirety to read as follows:

          "4.1.2 Term Loan Interest Rate Options.

          (a)     The Borrower shall have the right to select from the following
          Interest Rate Options applicable to the Term Loans for any period
          prior to the Fourth Amendment Effective Date:

                         (i)   Term Loan Base Rate Option: A fluctuating rate
                         per annum (computed on the basis of a year of 365 or
                         366 days, as the case may be, and actual days elapsed)
                         equal to the Base Rate plus the Applicable Margin, such
                         interest rate to change automatically from time to time
                         effective as of the effective date of each change in
                         the Base Rate; or

<PAGE>

                         (ii)  Term Loan Euro-Rate Option: A rate per annum
                         (computed on the basis of a year of 360 days and actual
                         days elapsed) equal to the Euro-Rate plus the
                         Applicable Margin.

          (b)     Any portion of the Term Loans which is subject to the Term
          Loan Euro-Rate Option on the date immediately preceding the Fourth
          Amendment Effective Date shall continue to be subject to such Interest
          Rate Option until the Euro-Rate Interest Period applicable thereto has
          expired, and from and after the date of expiration of such Euro-Rate
          Interest Period such portion of the Term Loans shall bear interest at
          a fluctuating rate per annum (computed on the basis of a year of 365
          or 366 days, as the case may be, and actual days elapsed) equal to the
          Base Rate plus 1.75%, such interest rate to change automatically from
          time to time effective as of the effective date of each change in the
          Base Rate. Any portion of the Term Loans which is subject to the Term
          Loan Base Rate Option on the date immediately preceding the Fourth
          Amendment Effective Date shall from and after the Fourth Amendment
          Effective Date bear interest at a fluctuating rate per annum (computed
          on the basis of a year of 365 or 366 days, as the case may be, and
          actual days elapsed) equal to the Base Rate plus 1.75%, such interest
          rate to change automatically from time to time effective as of the
          effective date of each change in the Base Rate. "

Section 4.3.2 [Other Obligations] is hereby amended and restated in its entirety
to read as follows:

          " 4.3.2 Other Obligations.

          Each other Obligation hereunder if not paid when due shall bear
          interest at a rate per annum equal to: (i) for any period prior to the
          Fourth Amendment Effective Date, the sum of the rate of interest
          applicable under the Revolving Credit Base Rate Option plus an
          additional two percent (2%) per annum from the time such Obligation
          becomes due and payable and until it is paid in full, and (ii) for any
          period on or after the Fourth Amendment Effective Date, the Base Rate
          plus an additional three and three-quarters percent (3.75%) per annum
          from the time such Obligation becomes due and payable and until it is
          paid in full."

Section 4.5 [Selection of Interest Rate Options.] is hereby amended by deleting
the first word "If" in the first sentence thereof and inserting in lieu thereof
the words, "Subject to the provisions of Sections 4.1.1 and 4.1.2 hereof which
prohibit Loans from being subject to a Euro-Rate Option, as applicable, on or
after the Fourth Amendment Effective Date, if, during any period when the
Borrower may elect a Euro-Rate Option,".

Section 6.1.9 [Financial Statements] of the Credit Agreement is hereby amended
by adding thereto the following new clause (iv):

          "(iv)   Consolidated EBITDA Projection. The Borrower has delivered to
          the Agent a projection of Consolidated EBITDA of the Borrower and its
          Subsidiaries for the months of October through and including December
          of 2002 (the "Consolidated EBITDA Projection"). The Consolidated
          EBITDA Projection is reasonable in light of the history of the
          business, present and foreseeable conditions and the intentions of the
          Borrower's management."

Article 8.2 [Negative Covenants] is hereby amended by inserting the following
new Section 8.2.21 [Minimum Consolidated EBITDA]:

          "Section 8.2.21 Minimum Consolidated EBITDA

                  The Loan Parties shall not permit Consolidated EBITDA,
          calculated as of the last day of each month set forth below, to be
          less than the amount set forth below for the specified month:

          Month Ended                        Minimum Consolidated EBITDA

          October 31, 2002                   $907,200
          November 30, 2002                  $900,600
          December 31, 2002                  $1,144,800"

<PAGE>

Clause (i) of the first sentence of Section 2 [Letter of Credit Fees.] of
Exhibit 2.9 [Letter of Credit Provisions] is hereby amended and restated in its
entirety to read as follows:

          "(i) to the Agent for the ratable account of the Banks a fee (the
          "Letter of Credit Fee") equal to, for periods prior to the Fourth
          Amendment Effective Date, the Applicable Margin for the Revolving
          Credit Euro-Rate Option per annum and for periods on or after the
          Fourth Amendment Effective Date 3.50% per annum, and".

Section 1 [Monthly Financial Statements.] of Exhibit 8.3 [Reporting
Requirements] is hereby amended by inserting after the second paragraph thereof
the following additional paragraph:

          "As soon as available and in any event within thirty (30) calendar
          days after the end of each calendar month ending on or after October
          31, 2002, a detailed calculation of Consolidated EBITDA for such month
          and a certification by an Authorized Officer of the Borrower of the
          Borrower's compliance with Section 8.2.21 [Minimum Consolidated
          EBITDA] for such month."

  Release. As additional consideration for the Agent's and the Banks' entering
 into this Waiver and Amendment, the Borrower hereby fully and unconditionally
     releases and forever discharges the Agent and the Banks, their agents,
 employers, directors, officers, attorneys, branches, affiliates, subsidiaries,
        successors and assigns and all persons, firms, corporations and
   organizations acting on any of their behalves (the "Released Parties") of
    and from any and all claims, liabilities, demands, obligations, damages,
    losses, actions and causes of action whatsoever which the Borrower, its
  Subsidiaries, or any of them may now have or claim to have against the Agent
    or any Bank or any other Released Parties as of the date hereof, whether
      presently known or unknown and of any nature and extent whatsoever,
     including, without limitation, on account of or in any way affecting,
   concerning or arising out of or founded upon this Waiver and Amendment or
    the Loan Documents, including but not limited to all such loss or damage
   of any kind heretofore sustained or that may arise as a consequence of the
  dealings between the parties up to and including the date hereof, including
    but not limited to, the administration or enforcement of the Loans, the
                    Obligations or any of the Loan Documents.
   Closing Fees. The Loan Parties jointly and severally agree to reimburse the
     Agent and the Banks on demand for all costs, expenses and disbursements
   relating to this Waiver and Amendment which are payable by the Loan Parties
   as required in accordance with the Credit Agreement. In addition, the Loan
    Parties shall pay to the Agent for the benefit of each Bank which on or
   before the effective date hereof executes this Waiver and Amendment (each
    an "Approving Bank"), an aggregate fee equal to $30,000, to be allocated
      among such Banks in accordance with their respective Ratable Share.
   Conditions of Effectiveness. The effectiveness of this Waiver and Amendment
          is expressly conditioned upon the occurrence and completion
                            of all of the following:

The representations and warranties of the Loan Parties contained in Section 6 of
the Credit Agreement and in the other Loan Documents shall be true and correct
on the date hereof with the same effect as though such representations and
warranties had been made on and as of such date (except representations and
warranties which relate solely to an earlier date or time, which representations
and warranties shall be true and correct on and as of the specific dates or
times referred to therein), the Loan Parties shall have performed and complied
with all covenants and conditions thereof, and no Event of Default or Potential
Default under the Credit Agreement shall have occurred and be continuing or
shall exist, except as expressly waived by this Waiver and Amendment. By
execution and delivery to the Agent of this Waiver and Amendment, the Loan
Parties shall be deemed to have certified the accuracy of all of the matters in
this Section F.1; Receipt by the Agent on behalf of the Banks of all fees, costs
expenses and disbursements due and payable to the Agent and any Bank as of the
date hereof and for all fees, costs, expenses and disbursements in connection
with this Waiver and Amendment, including, without limitation, the fees and
expenses set forth in Section E of this Waiver and Amendment; and

<PAGE>

All legal details and proceedings in connection with the transactions
contemplated by this Waiver and Amendment shall be in form an substance
satisfactory to the Agent. The Agent shall have received counterparts of this
Waiver and Amendment duly executed by the Loan Parties, the Agent, and the
Required Banks.

There shall be delivered to the Agent for the benefit of each Bank a certificate
dated the effective date hereof and signed by the Secretary or an Assistant
Secretary of each of the Loan Parties, certifying as appropriate as to:

          a.   all action taken by each Loan Party in connection with this
               Waiver and Amendment;

          b.   the names of the officer or officers authorized to sign this
               Waiver and Amendment and the true signatures of such officer or
               officers and specifying the officers authorized to act on behalf
               of each Loan Party for purposes of this Waiver and Amendment and
               the true signatures of such officers, on which the Agent and each
               Bank may conclusively rely; and

          c.   a confirmation that the organizational documents, including its
               certificate of incorporation, bylaws, certificate of limited
               partnership, partnership agreement, certificate of formation, and
               limited liability company agreement as previously certified to
               the Agent and delivered to the Agent on the Closing Date remain
               in full force and effect as of the effective date hereof, without
               amendment thereto.

     This Waiver and Amendment shall be dated as of and shall be effective from
     and as of the date and year first above written, which date shall be deemed
     to be the date of satisfaction of all conditions precedent to the
     effectiveness of this Waiver and Amendment as set forth in this Section F.

     Consent of Banks. Pursuant to Section 11 of the Credit Agreement, this
     Waiver and Amendment shall require the written consent of the Required
   Banks, which shall be evidenced by the execution and delivery to the Agent
   by the Required Banks of counterparts of this Waiver and Amendment and from
   and after the effective date of this Waiver and Amendment, this Waiver and
   Amendment shall be binding upon each Loan Party, the Agent and each of the
                                     Banks.
    Full Force and Effect. Each Loan Party reconfirms, restates, and ratifies
    the Credit Agreement and all other Loan Documents executed in connection
       therewith, and subject to the amendment of the Credit Agreement as
    expressly provided by this Waiver and Amendment, each of the Loan Parties
      confirms that all of the Loan Documents have remained and continue to
      remain in full force and effect since the date of their execution. No
    novation is intended or shall occur by or as a result of this Waiver and
                                   Amendment.

     The parties hereto do not amend or waive any provisions of the Credit
     Agreement or the other Loan Documents except as expressly set forth herein.

      Counterparts. This Waiver and Amendment may be executed by different
   parties hereto in any number of separate counterparts, each of which, when
    so executed and delivered, either personally or by facsimile transmission
      with confirmation of delivery, shall be an original, and all of such
     counterparts shall together constitute one and the same instrument. Any
    party that delivers its original counterpart signature to this Waiver and
   Amendment by facsimile transmission hereby covenants to personally deliver
      its original counterpart signature promptly thereafter to the Agent.
    Governing Law. This Waiver and Amendment shall be deemed to be a contract
    under the laws of the State of Pennsylvania and for all purposes shall be
   governed by and construed and enforced in accordance with the internal laws
       of the State of Pennsylvania without regard to its conflict of laws
                                   principles.

                            [SIGNATURE PAGES FOLLOW]

<PAGE>

   [SIGNATURE PAGE 1 OF 4 TO WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT]

     IN WITNESS WHEREOF and intending to be legally bound hereby, the parties
hereto have executed this Waiver and Amendment as of the date first above
written.

ATTEST:                                      ELGIN NATIONAL INDUSTRIES, INC.

/s/ Lynn C. Batory                           By: /s/ Wayne J. Conner
----------------------------------------         -------------------------------
Name: Lynn C. Batory                         Name:  Wayne J. Conner
      ----------------------------------           -----------------------------
Title: Vice President/ Controller            Title: Vice President/ CFO
       ---------------------------------           -----------------------------

[Seal]

                                             EACH GUARANTOR LISTED ON
                                             SCHEDULE 1 HERETO

/s/ Lynn C. Batory                           By: /s/ Wayne J. Conner
----------------------------------------         -------------------------------
Name:  Lynn C. Batory                        Name:  Wayne J. Conner
      ----------------------------------           -----------------------------
Title:  Vice President/Controller            Title: Vice President/ CFO
       ---------------------------------            ----------------------------

<PAGE>

                                   SCHEDULE 1

CABELL CONSTRUCTION COMPANY
CENTRIFUGAL SERVICES, INC.
CLINCH RIVER CORPORATION
ENI INTERNATIONAL, LTD
ELGIN INTERNATIONAL, LTD
LELAND-POWELL FASTENERS, INC.
MINING CONTROLS, INC.
NORRIS SCREEN AND MANUFACTURING INC.
ROBERTS & SCHAEFER COMPANY
ROBERTS & SCHAEFER INTERNATIONAL, LTD
SOROS ASSOCIATES, INC.
SOROS INTERNATIONAL, LTD
TABOR MACHINE COMPANY
THOMPSON-STARRETT CONSTRUCTION COMPANY, INC.
TRANSERVICE, INC.
VANCO INTERNATIONAL, INC.
BEST METAL FINISHING, INC.

<PAGE>

   [SIGNATURE PAGE 2 OF 4 TO WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT]

                                         PNC BANK, NATIONAL ASSOCIATION,
                                         individually and as Agent

                                         By: /s/ Wayne Hunley
                                            ------------------------------------
                                         Name: Wayne Hunley
                                              ----------------------------------
                                         Title: SVP
                                               ---------------------------------

<PAGE>

   [SIGNATURE PAGE 3 OF 4 TO WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT]

                                         BANK OF SCOTLAND

                                         By: /s/ Stephen E. Green
                                            ------------------------------------
                                         Name: Stephen E. Green
                                              ----------------------------------
                                         Title: Vice President
                                               ---------------------------------

<PAGE>

   [SIGNATURE PAGE 4 OF 4 TO WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT]

                                         NATIONAL CITY BANK

                                        By: /s/ Joseph Fratus
                                            ------------------------------------
                                         Name: Joseph Fratus
                                              ----------------------------------
                                         Title: First Vice President
                                               ---------------------------------

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