Document:

Exhibit 4(c)

 

SUPPLEMENTAL
INDENTURE NO. 8

BY

AND

BETWEEN

McDONALD’S
CORPORATION

AND

U.S.
BANK NATIONAL ASSOCIATION

(formerly, First Union National Bank),

as Trustee

Dated
December 15, 2006

SUPPLEMENTAL
TO SENIOR DEBT SECURITIES INDENTURE

DATED AS OF OCTOBER 19, 1996

 

 

McDONALD’S
CORPORATION

SUPPLEMENTAL INDENTURE NO. 8

Dated December 15, 2006

Medium-Term Notes, Series I, Due from 1 Year to 60 Years from Date of Issue

Supplemental Indenture No. 8, dated December 15, 2006,
by and between McDONALD’S CORPORATION, a corporation organized and existing
under the laws of the State of Delaware (hereinafter sometimes referred to as
the “Company”), and U.S. BANK NATIONAL
ASSOCIATION (formerly, First Union National Bank), a national banking
association authorized to accept and execute trusts (hereinafter sometimes
referred to as the “Trustee”).

W
I T N E S S E T H:

WHEREAS, The Company and the Trustee have executed and
delivered a Senior Debt Securities Indenture dated as of October 19, 1996 (as
amended or supplemented from time to time, the “Indenture”);

WHEREAS, Section 10.01 of the Indenture provides for
the Company, when authorized by its Board of Directors, and the Trustee to
enter into an indenture supplemental to the Indenture to establish the form or
terms of Debt Securities, as permitted by Sections 2.01 and 2.02 of the
Indenture; and

WHEREAS, Sections 2.01 and 2.02 of the Indenture
provide for Debt Securities of any series to be established pursuant to an
indenture supplemental to the Indenture;

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE
WITNESSETH:

For and in consideration of the premises and the
purchase of the series of Debt Securities provided for herein, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders
of such series of Debt Securities, as follows:

ARTICLE
ONE

RELATION TO INDENTURE; DEFINITIONS

SECTION 1.01.              This Supplemental Indenture No. 8
constitutes an integral part of the Indenture.

SECTION 1.02.              (a)  For all purposes of this Supplemental
Indenture No. 8, except as otherwise expressly provided or unless the context
otherwise requires, all capitalized terms used and not defined herein shall
have the meanings assigned to them in the Indenture or in Exhibits A and B
hereto.

(b)         All
references herein to Articles, Sections and Exhibits, unless otherwise
specified, refer to the corresponding Articles, Sections or Exhibits of this
Supplemental Indenture No. 8; and

 

(c)          The
terms “hereof,” “herein,” “hereto,” “hereunder” and “herewith” refer to this
Supplemental Indenture No. 8.

ARTICLE TWO

THE SERIES OF DEBT SECURITIES

SECTION 2.01.              (a)  There shall be a series of Debt Securities
issuable in registered form (the “Notes”)
and designated the “Medium-Term Notes, Series I, Due from 1 Year to 60 Years
from Date of Issue”.  The Notes shall be
issuable without limitation as to the aggregate principal amount thereof
thereof.

(b)         Each
Note shall bear interest either at a fixed rate (a “Fixed Rate
Note”), which may be zero in the case of Original Issue Discount
Notes (as defined below), or at a floating rate (a “Floating
Rate Note”) or at a rate determined by reference to an Index (as
defined below) in the case of certain Indexed Notes (as defined below).

SECTION 2.02.              Fixed Rate Notes and Floating Rate
Notes shall contain substantially the terms and provisions set forth in either
the form of Series I Fixed Rate Note or the form of Series I Floating Rate Note
attached as Exhibits A and B, respectively, or such other forms of Notes
specified in an Officers’ Certificate pursuant to duly adopted resolutions of
the Board of Directors of the Company. 
All of the terms and provisions of such Notes are hereby incorporated by
reference herein.

SECTION 2.03.              In addition to the terms described
in Section 2.02, a Note shall contain the following terms to be specified in a
Pricing Supplement:

(a)    the principal amount and
currency (which may be U.S. dollars or one or more foreign currencies,
including the Euro, as designated by the Company (the “Specified
Currency”)) for such Note (and, if the Specified Currency is other
than U.S. dollars, certain other terms relating to such Note and such Specified
Currency, including the authorized denominations of such Note);

(b)    whether such Note is a
Fixed Rate Note, Floating Rate Note or an Indexed Note (as defined below) as to
which interest is determined by reference to an Index;

(c)    the price (expressed as a
percentage of the aggregate principal amount thereof) at which such Note will
be issued (the “Issue Price”);

(d)    the date on which such Note
will be issued (the “Original Issue Date”);

(e)    the date on which such Note
will mature (the “Stated Maturity”);

(f)     if such Note is a Fixed
Rate Note, the rate per annum at which such Note will bear interest, if any,
and the dates on which interest will be payable if other than February 15 and
August 15 (each an “Interest Payment Date”);

(g)    if such Note is a Floating
Rate Note, the Base Rate, the Initial Interest Rate, the Interest Reset Period,
the Interest Payment Dates, the Maximum Interest Rate, if any, 

 2
 

 

the Minimum
Interest Rate, if any, the Spread or Spread Multiplier, if any (all as defined
in Sections 2.02 and 2.06), and any other terms relating to the particular
method of calculating the interest rate for such Note;

(h)    whether such Note is an
Original Issue Discount Note;

(i)     if such Note is an Indexed
Note, the manner in which the principal amount of the Note payable at Stated
Maturity and/or the interest amount payable will be determined (other than as
described in Section 2.07);

(j)     whether such Note may be
redeemed at the option of the Company, or repaid at the option of the Holder,
prior to Stated Maturity and, if so, the provisions (other than the redemption
and prepayment provisions specified in Sections 2.02) relating to such
redemption or repayment, including, in the case of an Original Issue Discount
Note, Indexed Note or Amortizing Note (as defined below), the information
necessary to determine the amount due upon redemption or repayment;

(k)    if such Note is an
Amortizing Note, information necessary to determine the repayment schedule,
including the manner in which payments thereon will be applied to interest and
the reduction of unpaid principal; and

(l)     any other terms of such
Note not inconsistent with the provisions of the Indenture.

SECTION 2.04.              The Bank of New York Trust
Company, N.A., 2 North LaSalle Street, Suite 1020, Chicago, Illinois, is hereby
initially appointed as Authenticating Agent, Registrar, Paying Agent and
Calculation Agent with respect to the Notes.

SECTION 2.05.              With respect to any Notes issued
hereunder, (a) the term “Original Issue
Discount Note” shall mean (i) a Note, including any such Note whose
interest rate is zero, that has a stated redemption price at maturity that
exceeds its Issue Price by at least 0.25% of its aggregate principal amount,
multiplied by the number of full years from the Original Issue Date to the
Stated Maturity of such Note; and (ii) any other Note designated by the Company
as issued with original issue discount for U.S. federal income tax purposes;
and (b) the term “Yield to Stated Maturity”
shall mean the yield to Stated Maturity, calculated at the time of issuance of
the Notes or, if applicable, at the most recent redetermination of interest on
such Notes and calculated in accordance with accepted financial practice.

SECTION 2.06.              (a) With respect to any Notes
hereunder, the term “Indexed Note”
shall mean a Note, the principal amount payable at Stated Maturity of which
(the “Indexed Principal Amount”)
and/or the interest amount payable on which is determined by reference to a
measure (the “Index”) which will
be related to (i) the rate of exchange between the Specified Currency for such
Note and the other currency or composite currency (the “Index Currency”) specified in such Indexed
Note (such Indexed Note, “Currency Indexed
Note”); (ii) the difference in the price of a specified commodity
(the “Indexed Commodity”) on
specified dates (such Indexed Note, “Commodity
Indexed Note”); (iii) the difference in the level of a specified
stock index (the “Stock Index”),
which may be based on U.S. or foreign stocks, on specified dates (such Indexed
Note,

 3
 

 

“Stock
Indexed Note”); or (iv) such other objective price or economic
measures as are described in such Indexed Note.

(b)         Unless
otherwise specified in an Indexed Note, interest on such Indexed Note will be
payable by the Company based on the amount designated therein as the “Face Amount” of such Indexed Note. Such Indexed Note will
describe whether the principal amount of such Indexed Note that would be
payable upon redemption or repayment prior to Stated Maturity will be the Face
Amount of such Indexed Note, the Indexed Principal Amount of such Indexed Note
at the time of redemption or repayment, or another amount described in such
Indexed Note.

SECTION 2.07.              With respect to any Notes
hereunder, the term “Amortizing Notes”
shall mean any Note, payments in respect of which represent interest due and
the reduction of unpaid principal, as provided in such Amortizing Note.

SECTION 2.08.              Any interest on any Note which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called “Defaulted
Interest”) shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder; and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (a) and clause (b) below:

(a)               The Company may
elect to make payment of any Defaulted Interest to the Persons in whose names
the Notes are registered at the close of business on a special record date (“Special Record Date”) for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed to
be paid on each Note and the date of the proposed payment, and at the same time
the Company shall deposit with the Trustee or any paying agent designated by
the Company an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee or with any paying agent designated by the Company
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Section provided. 
Thereupon the Trustee shall fix a Special Record Date for the payment of
such Defaulted Interest which shall be not more than 15 nor less than 10 days
prior to the date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment.  The Trustee shall promptly notify the Company
of such Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first class postage prepaid, to each
Holder of Notes at his address as it appears in the Debt Security Register, not
less than 10 days prior to such Special Record Date.  Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose names
the Notes are registered on such Special Record Date and shall no longer be
payable pursuant to the following clause (b).

(b)              The Company may
make payment of any Defaulted Interest in any other lawful manner not
inconsistent with the requirements of any securities exchange on 

 4
 

 

which the
Notes may be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee of the proposed payment
pursuant to this clause, such payment shall be deemed practicable by the
Trustee.

(c)               Subject to the
foregoing provisions of this Section, each Note delivered under this
Supplemental Indenture No. 8 upon transfer of or in exchange for or in lieu of
any other Note shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Note.

SECTION 2.09.              The Place of Payment for the Notes
shall be both The City of New York, New York, and the City of Philadelphia,
Pennsylvania.

SECTION 2.10.              The terms and provisions contained
in the form of the Notes attached as Exhibits A and B shall constitute, and are
hereby expressly made, a part of the Indenture and, to the extent applicable,
the Company and the Trustee, by their execution and delivery hereof, expressly
agree to such terms and provisions and to be bound thereby.

ARTICLE THREE

MISCELLANEOUS

SECTION 3.01.              The recitals of fact herein and in
the Notes shall be taken as statements of the Company and shall not be
construed as made by the Trustee.

SECTION 3.02.              This Supplemental Indenture No. 8
shall be construed in connection with and as a part of the Indenture.

SECTION 3.03.              (a)  If any provision of this Supplemental
Indenture No. 8 limits, qualifies or conflicts with another provision of the
Indenture required to be included in indentures qualified under the Trust
Indenture Act of 1939 (as in effect on the date of this Supplemental Indenture
No. 8) by any of the provisions of Sections 310 to 317, inclusive, of the Trust
Indenture Act of 1939, such required provisions shall control.

(b)         In
case any one or more of the provisions contained in this Supplemental Indenture
No. 8 or in the Notes issued hereunder should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected, impaired, prejudiced or disturbed thereby.

SECTION 3.04.              Whenever in this Supplemental
Indenture No. 8 either of the parties hereto is named or referred to, this
shall be deemed to include the successors or assigns of such party, and all the
covenants and agreements in this Supplemental Indenture No. 8 contained by or
on behalf of the Company or by or on behalf of the Trustee shall bind and inure
to the benefit of the respective successors and assigns of such parties,
whether so expressed or not. Nothing in this Supplemental Indenture No. 8 or
the Notes, expressed or implied, shall give to any Person, other than the
parties hereto, their successors hereunder and the Holders of the Notes, any
benefit or any legal or equitable right, remedy or claim under this Supplemental
Indenture No. 8.

 5
 

 

SECTION 3.05.              (a)  This Supplemental Indenture No. 8 may be
executed in any number of counterparts, each of which so executed shall be
deemed an original, but all such counterparts shall together constitute but one
and the same instrument.

(b)         The
descriptive headings of the several Articles of this Supplemental Indenture No.
8 were formulated, used and inserted herein for convenience only and shall not
be deemed to affect the meaning or construction of any of the provisions
hereof.

 6
 

 

IN WITNESS WHEREOF, McDONALD’S CORPORATION has caused
this Supplemental Indenture No. 8 to be signed, acknowledged and delivered by
its President, Executive Vice President and Chief Financial Officer or Senior
Vice President and Treasurer and the same to be attested by its Secretary or
Assistant Secretary, and U.S. BANK NATIONAL ASSOCIATION, as Trustee, has caused
this Supplemental Indenture No. 8 to be signed, acknowledged and delivered by
one of its Vice Presidents and the same to be attested by one of its Authorized
Officers, all as of the day and year first written above.

 

	
  

  	
  McDONALD’S CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Richard

  	
   

  
	
   

  	
   

  	
  Michael D. Richard

  
	
   

  	
   

  	
  Corporate Senior Vice President and

  
	
   

  	
   

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George J. Rayzis

  	
   

  
	
   

  	
   

  	
  George J. Rayzis

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Authorized
  Officer

  	
   

  	
   

  

 

 

 7

 

EXHIBIT A

Form of Fixed Rate Note

	
  SERIES I FIXED RATE NOTE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  REGISTERED

  	
   

  	
  PRINCIPAL AMOUNT

  
	
   

  	
   

  	
   

  
	
  No.

  	
  McDONALD’S
  CORPORATION

  	
   

  
	
   

  	
  MEDIUM-TERM NOTE,
  SERIES I

  	
   

  
	
   

  	
  (FIXED RATE)

  	
  CUSIP

  

 

Due From One Year To 60 Years From Date Of Issue

IF THE REGISTERED OWNER OF THIS
NOTE (AS INDICATED BELOW) IS THE DEPOSITORY TRUST COMPANY  (“DTC”) OR A NOMINEE OF DTC, THIS NOTE IS A
GLOBAL SECURITY AND THE FOLLOWING LEGEND IS APPLICABLE: UNLESS THIS CERTIFICATE
IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES
REPRESENTED HEREBY IN DEFINITIVE REGISTERED FORM, THIS REGISTERED GLOBAL
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC,
OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC, OR BY DTC OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

IF APPLICABLE, THE “TOTAL AMOUNT OF OID,” “YIELD TO STATED MATURITY”
AND “INITIAL ACCRUAL PERIOD OID” (COMPUTED UNDER THE APPROXIMATE METHOD)
BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL
INCOME TAX ORIGINAL ISSUE DISCOUNT (“OID”) RULES.

	
  Issue Price:

  	
  %

  	
  Original Issue Date:

  
	
   

  	
   

  
	
  Interest Rate:

  	
  %

  	
  Stated Maturity:

  
	
   

  
	
  Specified
  Currency:

  	
   

  
	
  (Applicable only
  if other than U.S. dollars)

  	
   

  
	
   

  	
   

  
	
  Option to
  Receive Payments in Specified Currency:

  	
  o
  Yes

  	
   

  	
  o
  No

  
	
  (Applicable only
  if Specified Currency is

  	
   

  
	
  other than U.S.
  dollars)

  	
   

  
	
   

  	
   

  
	
  Authorized
  Denominations:

  	
   

  
	
  (Applicable only
  if other than U.S.$1,000

  	
   

  
	
  and increments
  of U.S.$1,000 or if Specified

  	
   

  
	
  Currency is
  other than U.S. dollars)

  	
   

  
	
   

  	
   

  
	
  Method of
  Payment of Principal:

  	
   

  
	
  (Applicable only
  if other than immediately available funds)

  	
   

  
						

 

 A-1
 

 

 

	
  Interest Payment Dates:

  	
   

  
	
  (Applicable only
  if other than February 15 and August 15 of each year)

  
	
   

  
	
  Regular Record Dates:

  	
   

  
	
  (Applicable only
  if other than February 1 and August 1 of each year)

  
	
   

  
	
  Optional Redemption:

  	
   

  
	
   

  	
   

  
	
  Optional
  Redemption Dates:

  	
   

  
	
  Redemption
  Prices:

  	
   

  
	
   

  	
   

  
	
  o

  	
  The Redemption Price shall initially be       %
  of the principal amount of the Note to be redeemed and shall decline at each
  anniversary of the initial Optional Redemption Date by% of the principal
  amount to be redeemed until the Redemption Price is 100% of such principal
  amount; provided, however, that if this Note
  is an Original Issue Discount Note, the Redemption Price shall be the
  Amortized Face Amount of the principal amount to be redeemed.

  
	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  Other:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sinking Fund:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Sinking Fund Dates:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Sinking Fund Amounts:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Amortizing Note:

  	
  o   Yes

  	
  o   No

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Amortizing Schedule:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Optional Repayment:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Optional Repayment Dates:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Optional Repayment Prices:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Original Issue Discount Note:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total Amount of OID:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Yield to Stated Maturity:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Initial Accrual Period OID:

  	
   

  
										

 

 A-2
 

 

 

McDONALD’S CORPORATION, a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the “Company”, which
term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to         or
registered assigns, on the Stated Maturity shown above, the principal sum
specified above (or so much thereof as shall then remain outstanding) in the
currency specified above (the “Specified Currency”)
and to pay interest on the principal sum outstanding from time to time in the
Specified Currency at the Interest Rate shown above from and including the
Original Issue Date shown above or from and including the most recent date to
which interest has been paid or duly provided for, semi-annually in arrears,
unless otherwise specified on the face hereof, on but excluding February 15 and
August 15 of each year and at but excluding Maturity (each such day being an “Interest Payment Date”), until the principal hereof is paid
or duly provided for.  Interest on this
Note, if any, will be computed on the basis of a 360-day year of twelve 30-day
months.  The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date as specified
on the face hereof shall, as provided in such Indenture, be paid to the person
in whose name this Note is registered at the close of business on the Regular
Record Date for such interest as which, unless otherwise specified on the face
hereof, shall be the February 1 or August 1 (whether or not a Business Day), as
the case may be, next preceding an Interest Payment Date.  Notwithstanding the foregoing, if this Note
is issued between a Regular Record Date and the related Interest Payment Date,
the interest so payable for the period from the Original Issue Date to such
Interest Payment Date shall be paid on the next succeeding Interest Payment
Date to the Registered Holder hereof on the related Regular Record Date.  For purposes of this Note, “Business Day” means any day, other than Saturday or Sunday,
that is (i) neither a legal holiday nor a day on which banking institutions are
authorized or required by law, regulation or executive order to close in (a)
The City of New York, (b) the City of Chicago, or (c) if the Specified Currency
for this Note is other than U.S. dollars, or Euro, the Principal Financial
Center (as defined below) of the country issuing such currency; (ii) if the
Specified Currency for this Note is Euro, a day on which the TARGET System is
operating or in any other place or any other days as may be specified
herein.  “Principal
Financial Center” will be the capital city of the country issuing
the currency or composite currency in which any payment in respect of this Note
is to be made, except that with respect to Australian dollars, Canadian
dollars, U.S. dollars, Swiss francs and Euro, the Principal Financial Center
shall be Sydney, Toronto, The City of New York, Zurich and London,
respectively.

The principal hereof and any
premium and interest hereon are payable by the Company in the Specified
Currency shown above.  If the Specified
Currency shown above is other than U.S. dollars, the Company or the Paying
Agent will (unless otherwise specified on the face hereof) arrange to convert
all payments in respect hereof into U.S. dollars in the manner described on the
reverse hereof.  The Holder hereof may,
if so indicated above, elect to receive all payments in respect hereof in the
Specified Currency by delivery of a written notice to the Paying Agent not
later than 15 calendar days prior to the applicable payment date.  Such election will remain in effect until
revoked by written notice to the Paying Agent received not later than 15
calendar days prior to the applicable payment date.  If the Company determines that the Specified
Currency is not available to the Company for making payments in respect hereof
due to the imposition of exchange controls or other circumstances beyond the
Company’s control, then the Holder hereof may not so elect to receive payments
in the Specified Currency, and any such outstanding election shall be
automatically suspended, and payments shall be in U.S. dollars, until the
Company determines that the Specified Currency is again available to the
Company for making such payments.

If this Note is a
Certificated Note, payments of interest in U.S. dollars (other than interest
payable at Maturity) will be made by check mailed to the address of the Person
entitled thereto as such address shall appear on the Debt Security Register on
the applicable Regular Record Date, provided that,
if the Holder hereof is the Holder of U.S.$10,000,000 (or the equivalent
thereof in a Specified Currency other than U.S. dollars determined as provided
on the reverse hereof) or more in aggregate principal amount of Notes of like
tenor and term, such U.S. dollar interest payments will be made by wire
transfer of immediately available funds, but only if appropriate wire transfer
instructions have been received in writing by the Paying Agent not less than 15
calendar days prior to the applicable Interest Payment Date.  Simultaneously with any election by the
Holder hereof to receive payments in respect hereof in the Specified Currency
(if other than U.S. dollars), such Holder shall provide appropriate wire
transfer instructions to the Paying Agent and all such payments will be made by

 A-3
 

 

wire
transfer of immediately available funds to an account maintained by the payee with
a bank located outside the United States. 
Unless otherwise specified on the face hereof, the principal hereof and
any premium and interest hereon payable at Maturity will be paid in immediately
available funds upon surrender of this Note at the Place of Payment.  If this Note is a Global Security, beneficial
owners of interest herein will be paid in accordance with DTC’s and its
participants’ procedures in effect from time to time.

Reference is hereby made to
the further provisions of this Note set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth
in this place.

THIS NOTE SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF ILLINOIS.

Unless the Certificate of
Authentication hereon has been executed by the Trustee referred to on the
reverse hereof (or by an Authenticating Agent, as provided in the Indenture) by
manual signature, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

 A-4
 

 

IN WITNESS WHEREOF, McDonald’s
Corporation has caused this Note to be signed in its corporate name by the
Chairman of the Board or its President or one of its Vice Presidents manually
or in facsimile and a facsimile of its corporate seal to be imprinted hereon
and attested by the manual or facsimile signature of its Secretary or one of
its Assistant Secretaries.

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  McDONALD’S CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Corporate Senior Vice President and Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
   

  	
   

  
										

 

TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

This
is one of the Debt Securities of the series designated herein provided for in
the within mentioned Indenture.

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  
	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK TRUST COMPANY, N.A.,

  
	
   

  	
  as Authenticating Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  
								

 

 A-5
 

 

McDONALD’S
CORPORATION

MEDIUM-TERM NOTE, SERIES I

(FIXED RATE)

This Note is one of a single
series of duly authorized issue of debentures, notes or other evidences of
indebtedness of the Company (the “Debt Securities”)
of a single series hereinafter specified, all issued or to be issued in one or
more series under a Senior Debt Securities Indenture dated as of October 19,
1996 (herein called the “Indenture”),
between the Company and U.S. Bank National Association (formerly, First Union
National Bank), as trustee (herein called the “Trustee”,
which term includes any successor trustee under the Indenture) to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the Debt
Securities and of the terms upon which the Debt Securities are, and are to be,
authenticated and delivered.  The Debt
Securities may be issued in one or more series, which different series may be
issued in various currencies, may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if any) at different
rates, may be subject to different redemption provisions (if any), may be
subject to different sinking, purchase or analogous funds (if any), may be
subject to different covenants and Events of Default and may otherwise vary as
in the Indenture provided.  This Debt
Security is one of the series designated on the face hereof, which may be
issued without limitation as to aggregate principal amount.  The U.S. dollar equivalent of the public
offering price or purchase price of Notes denominated in foreign currency will
be determined by an agent designated by the Company, which initially shall be
The Bank of New York Trust Company, N.A. (the “Paying Agent”),
on the basis of the noon buying rate in The City of New York for cable
transfers in foreign currencies as certified for customs purposes by the
Federal Reserve Bank of New York (the “Market Exchange Rate”)
for such currencies on the applicable trade dates.

“Maturity”,
when used with respect to this Note, means the date on which the principal of
this Note or an installment of principal becomes due and payable as provided
herein or in the Indenture, whether at Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.

Unless otherwise specified
on the face hereof in the case of Notes represented by a Global Security, the
authorized denominations of Notes denominated in U.S. dollars will be
U.S.$1,000 and any larger amount that is a multiple of U.S.$1,000.  The authorized denominations of Notes
denominated in a currency other than U.S. dollars will be as set forth on the
respective faces thereof.

Each Note will be issued
initially as either a Book-Entry Note or a Certificated Note.

If the Specified Currency is
other than U.S. dollars, the amount of any U.S. dollar payment to be made in
respect hereof will be determined by the Paying Agent based on the highest firm
bid quotation expressed in U.S. dollars received by the Paying Agent at
approximately 11:00 A.M., New York City time, on the second Business Day before
the applicable payment date (or, if no such rate is quoted on such date, the
Paying Agent will use the last date on which such rate was quoted), from three
(or, if three are not available, then two) recognized foreign exchange dealers
in New York City (which may include the agents, their affiliates or the Paying
Agent) selected by the Paying Agent for the purchase by the quoting dealer, for
settlement on such payment date, of the aggregate amount of the Specified
Currency payable on such payment date in respect of all Notes denominated in
such Specified Currency.  All currency
exchange costs will be borne by the Holders of such Notes by deductions from
such U.S. dollar payments.  If no such
bid quotations are available, then such payments will be made in the Specified
Currency, unless the Specified Currency is unavailable due to the imposition of
exchange controls or to other circumstances beyond the Company’s control, in
which case payment will be made as described in the next paragraph.

 A-6
 

 

If the Specified Currency is
other than U.S. dollars and this Note is a Global Note, the Holder of a
beneficial interest in this Global Note may elect to receive a payment or
payments in the Specified Currency by notifying the DTC participant through
which its Notes are held on or prior to the applicable Record Date of (1) the
Holder’s election to receive all or a portion of the payment in the Specified
Currency, and (2) wire transfer instructions to an account located outside of
the United States.  DTC must be notified
of an election and wire transfer instructions (1) on or prior to the third New
York Business Day (as defined below) after the Record Date for any payment of
interest, and (2) on or prior to the tenth New York Business Day after the
Record Date for any payment of principal. 
DTC will notify the Paying Agent of an election and wire transfer
instructions (1) on or prior to 5:00 P.M. New York City time on the fifth New
York Business Day after the Record Date for any payment of interest, and (2) on
or prior to 5:00 P.M. New York City time on the twelfth New York Business Day
after the Record Date for any payment of principal.  If complete instructions are forwarded to DTC
through DTC participants and by DTC to the Paying Agent on or prior to such
dates, such Holder will receive payment in the Specified Currency outside of
DTC; otherwise, only U.S. dollar payments will be made by the Paying Agent to
DTC.

The term “New York Business Day” means any day other than a Saturday
or Sunday or a day on which banking institutions in the City of New York are
authorized or required by law or executive order to close.

Except as set forth below,
if any payment in respect hereof is required to be made in a Specified Currency
other than U.S. dollars and such currency is unavailable to the Company due to
the imposition of exchange controls or other circumstances beyond the Company’s
control or is no longer used by the government of the country issuing such
currency (unless otherwise replaced by the Euro) or for the settlement of
transactions by public institutions of or within the international banking
community, then such payment shall be made in U.S. dollars until such currency
is again available to the Company or so used. 
The amount so payable in such foreign currency shall be converted into
U.S. dollars on the basis of the most recently available Market Exchange Rate
for such currency or as otherwise indicated on the face hereof.  Any payment made under such circumstances in
U.S. dollars will not constitute an Event of Default under the Indenture.

If the principal of and any
interest and premium, if any, on the Notes is payable in any Specified Currency
other than U.S. dollars and (i) the country of which such Specified
Currency has been a currency of legal tender for the payment of public and
private debts (the “Currency Country”)
becomes a Participating Member State (as defined below), then the Company may,
solely at its option and without the consent of the Holders of such Notes or
the need to amend the Indenture, on any Interest Payment Date after the date on
which such country has become a Participating Member State has occurred, (such
Interest Payment Date, a “Redenomination Date”),
redenominate all of those Notes into Euros upon the giving of not less than 30
days’ notice thereof in accordance with the terms of such Notes, which notice
shall set forth the manner in which such redenomination shall be effected.  If the Company elects to redenominate a tranche
of Notes, the election to redenominate will have effect as follows:

1.             each denomination will be deemed to
be denominated in such amount of Euro as is equivalent to its denomination or
the amount of interest in the Specified Currency at the Fixed Conversion Rate
(as defined below) adopted by the Council of the European Union for the
Specified Currency, rounded down to the nearest Euro 0.01;

2.             after the Redenomination Date, all
payments in respect of those Notes, other than payments of interest in respect
of periods commencing before the Redenomination Date, will be made solely in
Euro as though references in those Notes to the Specified Currency were to
Euro.  Payments will be made in Euro by
credit or transfer to a Euro account (or any other account to

 A-7

 

which
Euro may be credited or transferred) specified by the payee, or at the option
of the payee, by a Euro cheque;

3.             If those Notes are Notes which bear
interest at a fixed rate and interest for any period ending on or after the
Redenomination Date is required to be calculated for a period of less than one
year, it will be calculated on the basis of the applicable fraction specified
in the Pricing Supplement; and

4.             such other changes shall be made to
the terms of those Notes as we may decide, after consultation with the Trustee,
and as may be specified in the notice, to conform them to conventions then
applicable to debt securities denominated in Euro or to enable those Notes to
be consolidated with other notes, whether or not originally denominated in the
Specified Currency or Euro.  Any such
other changes will not take effect until after they have been notified to the
Holders.

The definitions of Business
Day and Market Day that shall apply to the Notes for payments on or in respect
thereof following any redenomination thereof and for all other purposes under
the Notes and under the Indenture shall be (A) business day and market day
definitions for fixed or floating rate (as applicable) Euro-denominated debt
obligations issued in the Euromarkets and held in international clearing
systems which are consistent with existing or anticipated market practices as
determined by the Company or (B) if no such Business Day and Market Day
definitions are so determined, the definitions of Business Day and Market Day
which applied to such Notes before redenomination or (C) if the Company
would be unable to make payments on the Notes on the date that payment is
expressed to be due if (B) above were to apply, such other business day
and market day definitions as are determined by the Company.

“EMU”
means Economic and Monetary Union as contemplated by the Treaty of Rome;

“Euro”
means the single or unified currency to be introduced in the Participating
Member States, whether known as the Euro or otherwise;

“Fixed
Conversion Rate” with respect to any Specified Currency means the
irrevocably fixed conversion rate between the Euro and such Specified Currency
adopted by the Council of the European Union according to
Article 109 1(4) first sentence of the Treaty of Rome;

“Maastricht
Treaty” means the treaty on European Union which was signed in
Maastricht on February 1, 1992 and came into force on November 1, 1993;

“Participating
Member State” means a member state of the European Community that
adopts the Euro in accordance with the Treaty of Rome; and

“Treaty of
Rome” means the Treaty of Rome of March 25, 1957, as amended by the
Single European Act of 1986 and the Maastricht Treaty, establishing the
European Community, as amended from time to time.

The Company may, with the
consent of the Trustee, and without the need to obtain the consent of the
Holders of any Note, make any changes or additions to the terms of the Notes of
a series which correct any manifest error or any ambiguity or correct or
supplement any defective provisions described herein, and which changes or
additions the Company and the Trustee believe are not materially prejudicial to
the interests of the Holders of the Notes of such series.  Any such change or addition shall be binding
on the Company, the Holders of the Notes of such series, the Trustee, the
Paying Agents and 

 A-8
 

 

any
other agent of the Company.  Any change
or addition shall be considered to be made by operation of the terms of the
relevant Notes.  The Company shall
promptly give notice of any such change or addition.

Except as provided in the
Note or in the Pricing Supplement with respect to the redenomination of the
Notes into Euros, the occurrence or non-occurrence of an EMU Event (as defined
below) or the entry into force of any law, regulation, directive or order
requiring redenomination to be undertaken on terms different than those
described herein, will not have the effect of altering any term of, or
discharging or excusing performance under, the Indenture or Notes nor give the
Company, the Trustee or the Holder of such Notes, the right unilaterally to
alter or terminate the Indenture or Notes or give rise to any Event of Default
or otherwise be the basis for any acceleration, early redemption, rescission,
notice, repudiation, adjustment or renegotiation of the terms of the Indenture
or Notes.  The occurrence or
non-occurrence of an EMU Event will be considered to occur automatically
pursuant to the terms of the Notes. For purposes hereof, “EMU Event”
means any event associated with EMU in the European Community, including,
without limitation, each (and any combination) of (i) the fixing of
exchange rates between the currency of a Participating Member State and the
Euro or between the currencies of Participating Members States; (ii) the
introduction of the Euro as lawful currency in a Participating Member State;
(iii) the withdrawal from legal tender of any currency that, before the
introduction of the Euro, was lawful currency in any of the Participating
Member States; or (iv) the disappearance or replacement of a relevant rate
option or other price source for the national currency of any participating
Member State, or the failure of the agreed sponsor (or a successor sponsor) to
publish or display a relevant rate, index, price, page or screen.

If so specified on the face
hereof, the Company may, at its option, redeem this Note in whole, or from time
to time in part in accordance with the procedures set forth in the Indenture,
on the date or dates designated as the Optional Redemption Date(s) on the face hereof,
at the Redemption Price(s) specified on the face hereof declining from a
specified premium, if any, to par, together with accrued interest to the
Optional Redemption Date.  The Company
may exercise such option by causing the Trustee or the Paying Agent to mail a
notice of such redemption at least 30 but not more than 60 days prior to the
applicable Optional Redemption Date.  In
the event of redemption of this Note in part only, a new Note or Notes for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.

If so specified on the face
hereof, this Note will be repayable prior to its Stated Maturity at the option
of the Holder on the Optional Repayment Date(s) shown on the face hereof at the
Optional Repayment Price(s) shown on the face hereof, together with accrued
interest to the date of repayment.  In
order for this Note to be repaid, the Paying Agent must receive at least 30 but
not more than 45 days prior to an Optional Repayment Date (i) this Note with
the form below entitled “Option to Elect Repayment” duly completed; or (ii) a
facsimile transmission or letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company in the United States of America setting forth
the name of the Holder of this Note, the principal amount of the Note to be
repaid, the certificate number or a description of the tenor and terms of this
Note, a statement that the option to elect repayment is being exercised thereby
and a guarantee that this Note with the form below entitled “Option to Elect
Repayment” duly completed will be received by the Paying Agent not later than
five Business Days after the date of such facsimile transmission or letter.  If the procedure described in clause (ii) of
the preceding sentence is followed, this Note with the form duly completed must
be received by the Paying Agent by such fifth Business Day.  Any tender of this Note for Repayment shall
be irrevocable.  The repayment option may
be exercised by the Holder of this Note for less than the entire principal
amount of the Note, provided that
the principal amount of this Note remaining outstanding after repayment is an
authorized denomination.  Upon such
partial repayment, this Note shall be canceled and a new Note or Notes for the
remaining principal amount hereof shall be issued in the name of the Holder of
this Note.

 A-9
 

 

Unless otherwise specified
on the face hereof, this Note will not be subject to any sinking fund.  Any such sinking fund shall be administered
in accordance with the terms specified on the face hereof and otherwise as set
forth in the Indenture.

Notwithstanding anything
herein to the contrary, if this Note is an Original Issue Discount Note, the
amount payable in the event of redemption or repayment prior to the Stated
Maturity hereof, in lieu of the principal amount due at the Stated Maturity
hereof, shall be the Amortized Face Amount of this Note as of the Optional
Redemption Date or the Optional Repayment Date, as the case may be.  The “Amortized Face Amount”
of this Note shall be the amount equal to (a) the Issue Price (as set forth on
the face hereof) plus (b) that portion of the difference between the Issue
Price and the principal amount hereof that has accrued at the Yield to Stated
Maturity (as set forth on the face hereof) (computed in accordance with
generally accepted United States bond yield computation principles) at the date
as of which the Amortized Face Amount is calculated, but in no event shall the
Amortized Face Amount of this Note, if it is an Original Issue Discount Note,
exceed its principal amount.

If this Note is a Global
Security, ownership of beneficial interests herein will be limited to
participants in DTC or persons that hold interests through such participants,
and the transfer of beneficial interests herein will be effected only through
records maintained by DTC (and with respect to interests of participants in
DTC) and by participants in DTC or persons that may hold interests through such
participants (with respect to persons other than participants in DTC).

As provided in the Indenture
and subject to certain limitations therein set forth, this Note is exchangeable
for a like aggregate principal amount of Notes of different authorized
denominations, as requested by the Person surrendering the same.

If this Note is a Global
Security, this Note is exchangeable only if (x) DTC notifies the Company that
it is unwilling or unable to continue as depositary for this Note or if at any
time DTC ceases to be in good standing under the Securities Exchange Act of
1934, as amended, and the Company does not appoint a successor depositary
within 90 days after the Company receives such notice or becomes aware that DTC
is no longer in good standing; or (y) the Company in its sole discretion
determines that this Note shall be exchanged for Certificated Notes in
definitive form, provided that the definitive Notes so issued in exchange for
this Note shall be in authorized denominations and be of like aggregate
principal amount and tenor and terms as the portion of this Note to be
exchanged.  Except as provided above,
owners of beneficial interests in this Note (if a Global Security) will not be
entitled to have this Note or Notes represented by this Note registered in
their names or receive physical delivery of Notes in definitive form and will
not be considered the Holders hereof for any purpose under the Indenture.

As provided in the Indenture
and subject to certain limitations therein set forth, this Note is transferable
on the Debt Security register of the Company, upon surrender of this Note for
registration of transfer at the offices or agencies as may be designated and
maintained by the Company for such purpose in accordance with the provisions of
the Indenture, duly endorsed by or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Debt Security registrar,
duly executed by the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Notes of this series, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

No service charge shall be
made for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

 A-10
 

 

The Company, the Trustee and
any agent of the Company or of the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this Note
be overdue, and neither the Company, the Trustee nor such agent shall be
affected by notice to the contrary.

If an Event of Default shall
occur and be continuing with respect to the Notes, the unpaid principal amount
of the Notes may be declared due and payable in the manner and with the effect
provided in the Indenture.

The Indenture contains
provisions permitting the Company and the Trustee, with the consent of the
Holders of not less than 66 2/3% in aggregate principal amount of each series
of the Debt Securities at the time outstanding (as defined in the Indenture) to
be affected (each series voting as a class), evidenced as in the Indenture
provided, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
Holders of the Debt Securities of all such series; provided,
however, that no such supplemental
indenture shall, among other things, (i) extend the fixed maturity of any Debt
Security, or reduce the rate or extend the time of payment of interest thereon,
or reduce the principal amount or premium if any, thereon, or make the
principal thereof, or premium if any, or interest, if any, thereon payable in
any coin or currency other than that hereinabove provided, without the consent
of the Holder of each Debt Security so affected or reduce the amount of
principal of an Original Issue Discount Security that would be due and payable
upon acceleration of maturity thereof, or (ii) reduce the aforesaid percentage
of Debt Securities the Holders of which are required to consent to any such
supplemental indenture, without the consent of the Holders of each Debt
Security so affected.  The Indenture also
contains provisions permitting the Holders of a majority in aggregate principal
amount of the Notes at the time Outstanding, as defined in the Indenture, on
behalf of the Holders of all the Notes, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences.  Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Notes
issued upon the transfer hereof or in exchange therefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note or
upon any Note issued upon the transfer hereof or in exchange therefor or in
lieu hereof.

No reference herein to the
Indenture and no provision of this Note or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of and interest on this Note at the times, places and rate,
and in the coin and currency, herein prescribed.

No recourse shall be made
for the payment of the principal of or the interest on this Note or for any
claim based herein or otherwise in any manner in respect hereof, or in respect
of the Indenture, against any incorporator, stockholder, officer or director,
as such past, present or future, of the Company or of any predecessor or
successor corporation, whether by virtue of any constitutional provision or
statute or rule of law, or by the enforcement of any assessment or penalty or
in any other manner, all such liability being expressly waived and released by
the acceptance hereof and as part of the consideration for the issue hereof.

All terms used in this Note
that are defined in the Indenture shall have the meanings assigned to them in
the Indenture.

 A-11
 

 

ABBREVIATIONS

The
following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

	
  TEN COM -as tenants in
  common

  	
  UNIF GIFT MIN ACT-        
  Custodian 

  
	
   

  	
   

  
	
  TEN ENT-as
  tenants by the entireties

  	
   

  	
   (Cust) 

  	
   

  	
   (Minor)

  	
   

  
	
   

  	
   

  
	
   

  	
  Under Uniform Gifts to Minors Act

  
	
   

  	
   

  
	
  JT ENT-as joint
  tenants with right of

  	
  (State)

  	
   

  
	
  survivorship and not as tenants

  	
   

  	
   

  
	
  in common

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Additional
  abbreviations may also be used though not in the above list

  
	
   

  	
   

  	
   

  
									

 

OPTION
TO ELECT REPAYMENT

The undersigned hereby irrevocably requests and instructs the Company
to repay $               
principal amount of the within Note, pursuant to its terms, on the “Optional
Repayment Date” first occurring after the date of receipt of the within Note as
specified below, together with interest thereon accrued to the date of
repayment, to the undersigned at:

	
  

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
  (Please Print or
  Type Name and Address of the Undersigned)

  

 

and
to issue to the undersigned, pursuant to the terms of the Indenture, a new Note
or Notes representing the remaining principal amount of this Note.

For this Option to Elect Repayment to be effective, this Note with the
Option to Elect Repayment duly completed must be received by the Company within
the relevant time period set forth above at its office or agency in the Borough
of Manhattan, the City and State of New York, located initially at the office
of the Registrar at The Bank of New York Trust Company, N.A.,                             ,
New York, New York                 ,
Attention:  Corporate Trust
Administration.

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Note: The signature
  to this Option to Elect

  Repayment must correspond with the name as written

  upon the face of the within Note in every particular

  without alteration or enlargement or any change

  whatsoever.

  

 

 A-12
 

 

FOR
VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

	
  Please Insert Social
  Security or Other

  	
   

  	
   

  	
   

  
	
  Identifying Number of Assignee

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Please Print or
  Typewrite Name and Address of Assignee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  the within Instrument of McDONALD’S CORPORATION and
  hereby does irrevocably constitute and appoint

  
	
   

  	
   

  	
   

  
	
   

  	
  Attorney

  
	
  to transfer such Note on the books of McDONALD’S
  CORPORATION with full power of substitution in the premises.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  	
   

  	
   

  	
   

  
								

 

 

NOTICE:  The signature to this
assignment must correspond with the name as it appears upon the face of the
Note in every particular, without alteration or enlargement or any change
whatsoever.

 A-13

 

EXHIBIT B

Form of Floating Rate Note

	
  SERIES H FLOATING RATE NOTE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  REGISTERED

  	
   

  	
  PRINCIPAL
  AMOUNT

  
	
   

  	
   

  	
   

  
	
  NO.

  	
  McDONALD’S CORPORATION

  	
   

  
	
   

  	
  MEDIUM-TERM
  NOTE, SERIES I

  	
   

  
	
   

  	
  (FLOATING RATE)

  	
  CUSIP

  

 

Due from One Year to 60
Years from Date of Issue

IF THE REGISTERED OWNER OF THIS
NOTE (AS INDICATED BELOW) IS THE DEPOSITORY TRUST COMPANY  (“DTC”) OR A NOMINEE OF DTC, THIS NOTE IS A
GLOBAL SECURITY AND THE FOLLOWING LEGEND IS APPLICABLE: UNLESS THIS CERTIFICATE
IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO. HAS AN INTEREST HEREIN. 
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES
REPRESENTED HEREBY IN DEFINITIVE REGISTERED FORM, THIS REGISTERED GLOBAL
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC,
OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC, OR BY DTC OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

IF APPLICABLE, THE “TOTAL AMOUNT
OF OID,” “YIELD TO STATED MATURITY” AND “INITIAL ACCRUAL PERIOD OID” (COMPUTED
UNDER THE APPROXIMATE METHOD) SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE
PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT (“OID”)
RULES.

	
  Issue Price:

  	
  %

  	
  Original Issue Date:

  
	
   

  	
   

  
	
  Initial Interest Rate:

  	
  %

  	
  Stated Maturity:

  
	
   

  
	
  Specified
  Currency:

  	
   

  
	
  (Applicable only
  if other than U.S. dollars)

  	
   

  
	
   

  	
   

  
	
  Option to Receive Payments in Specified Currency:

  	
  o  Yes

  	
   

  	
  o  No

  
	
  (Applicable only if Specified Currency is other than U.S. dollars and
  if this Note is not a Book-Entry Note)

  
	
   

  	
   

  
	
  Method of Payment of Principal:

  	
   

  
	
  (Applicable only if other than immediately available funds)

  	
   

  
						

 

 B-1
 

 

 

	
  Authorized Denominations:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  (Applicable only
  if other than U.S. $1,000 and increments of $1,000 or if Specified Currency
  is other than U.S. dollars)

  	 

	
   

  	 

	
  Base Rate: o
  CD Rate

  	
  o
  CMT Rate

  	
  o Commercial
  Paper

  	
     o
  Federal Funds Rate

  	
  o
  LIBOR

  	
   

  	 

	
  o Treasury
  Rate

  	
     o Prime
  Rate

  	
  o Other
  (see attached)

  	
   

  	
   

  	 

	
  If Base Rate is
  CMT Rate, specify Designated CMT Moneyline Telerate Page:

  	 

	
   

  	 

	
  If Base Rate is
  LIBOR, specify: LIBOR Reuters:

  	
  Designated LIBOR Page:

  	
  LIBOR 

  	 

	
  Moneyline
  Telerate:

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
  Interest Reset
  Period:

  	
  LIBOR Currency:

  	
  Index Maturity:

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  Interest Reset
  Dates:

  	
   

  	
   

  	
   

  	
   

  	 

	
  (Applicable only if other than as described on the
  reverse hereof)

  	 

	
   

  	 

	
  Interest Payment
  Dates:

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  Interest
  Accrual:

  	
   

  	
   

  	
   

  	
   

  	 

	
  (Applicable only if other than as described on the
  reverse hereof)

  	 

	
   

  	 

	
  Spread
  Multiplier:

  	
   

  	
  Spread (+/-):

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  Maximum Interest
  Rate:

  	
  Minimum Interest
  Rate:

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  Optional
  Redemption:

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  Optional Redemption Dates:

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  Redemption Prices:

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  o

  	
  The Redemption Price shall initially be% of the
  principal amount of the Note to be redeemed and shall decline at each
  anniversary of the initial Optional Redemption Date by% of the principal
  amount to be redeemed until the Redemption Price is 100% of such principal
  amount; provided, however, that if this Note is an Original
  Issue Discount Note, the Redemption Price shall be the Amortized Face Amount
  of the principal amount to be redeemed.

  	 

	
   

  	
   

  	 

	
  o

  	
  Other:

  	 

	
   

  	
   

  	 

	
  Sinking Fund:

  	
   

  	
  Amortizing Note:

  	
   

  	
   

  
	
  Sinking Fund Dates:

  	
   

  	
  Amortization
  Schedule:

  
	
  Sinking Fund Amounts:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Optional Repayment:

  	
  Original Issue Discount
  Note:

  	
   

  	
   

  
	
  Optional Repayment Dates:

  	
  Total Amount of OID:

  	
   

  	
   

  
	
  Optional Repayment Prices:

  	
  Yield to Stated
  Maturity:

  	
   

  	
   

  
	
   

  	
   

  	
  Initial Accrual Period
  OID:     

  	
   

  	
   

  
																														

 

 B-2
 

 

McDONALD’S CORPORATION, a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the “Company”, which
term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to         or
registered assigns, on the Stated Maturity shown above, the principal sum
specified above (or so much thereof as shall then remain outstanding) in the
currency specified above (the “Specified Currency”)
and to pay interest on the principal sum outstanding from time to time in the
Specified Currency at the Initial Interest Rate shown above from and including
the Original Issue Date shown above until but excluding the first Interest
Reset Date shown above following the Original Issue Date and thereafter at the
Base Rate shown above, adjusted by the Spread and/or Spread Multiplier, if any,
shown above, determined in accordance with the provisions on the reverse
hereof, until said principal amount is paid or duly provided for in accordance
with the terms hereof.  The interest so
payable, and punctually paid or duly provided for, on each Interest Payment
Date as specified on the face hereof shall, as provided in the Indenture
referred to on the reverse hereof, be paid to the person in whose name this
Note is registered at the close of business on the Regular Record Date for such
interest as specified on the face hereof, which, unless otherwise specified on
the face hereof, shall be the date (whether or not a Business Day), 15 calendar
days immediately preceding such Interest Payment Date.  Notwithstanding the foregoing, if this Note
is issued between a Regular Record Date and the related Interest Payment Date,
the interest so payable for the period from the Original Issue Date to such
Interest Payment Date shall be paid on the next succeeding Interest Payment
Date to the Registered Holder hereof on the related Regular Record Date.  For purposes of this Note, “Business Day” means any day, other than Saturday or Sunday,
that is (i) neither a legal holiday nor a day on which banking institutions are
authorized or required by law, regulation or executive order to close in (a)
The City of New York, (b) the City of Chicago, or (c) if the Specified Currency
for this Note is other than U.S. dollars, or Euro, the Principal Financial
Center (as defined below) of the country issuing such currency; (ii) if the
Specified Currency for this Note is Euro, a day on which the TARGET System is
operating or in any other place or any other days as may be specified herein;
and (iii) if this Note is a LIBOR Note, a London Business Day.  “Principal Financial Center”
will generally be the capital city of the country issuing the currency or
composite currency in which any payment in respect of this Note is to be made,
except that with respect to Australian dollars, U.S. dollars, Swiss francs and
Euro, the Principal Financial Center shall be Sydney, The City of New York,
Zurich and Brussels, respectively. “London Business Day”
means a day on which banking institutions are open for business (including
dealings in the LIBOR Currency) in London.

The principal hereof and any
premium and interest hereon are payable by the Company in the Specified
Currency shown above.  If the Specified
Currency shown above is other than U.S. dollars, the Company or the Paying
Agent will (unless otherwise specified on the face hereof) arrange to convert
all payments in respect hereof into U.S. dollars in the manner described on the
reverse hereof.  The Holder hereof may,
if so indicated above, elect to receive all payments in respect hereof in the
Specified Currency by delivery of a written notice to the Paying Agent not
later than 15 calendar days prior to the applicable payment date.  Such election will remain in effect until
revoked by written notice to the Paying Agent received not later than 15
calendar days prior to the applicable payment date.  If the Company determines that the Specified
Currency is not available to the Company for making payments in respect hereof
due to the imposition of exchange controls or other circumstances beyond the
Company’s control, then the Holder hereof may not so elect to receive payments
in the Specified Currency, and any such outstanding election shall be
automatically suspended, and payments shall be in U.S. dollars, until the
Company determines that the Specified Currency is again available to the
Company for making such payments.

If this Note is a
Certificated Note, payments of interest in U.S. dollars (other than interest
payable at Maturity) will be made by check mailed to the address of the Person
entitled thereto as such address shall appear on the Debt Security Register on
the applicable Regular Record Date, provided that,
if the Holder hereof is the Holder of U.S.$10,000,000 (or the equivalent
thereof in a Specified Currency other than U.S. dollars determined as provided
on the reverse hereof) or more in aggregate principal amount of Notes of like
tenor and term, such U.S. dollar interest payments will be made by wire
transfer of immediately available funds, but only if appropriate wire transfer
instructions have been received in writing by the Paying Agent not less than 15
calendar days prior to the applicable Interest Payment Date.  Simultaneously with any election by the
Holder 

 B-3
 

 

hereof
to receive payments in respect hereof in the Specified Currency (if other than
U.S. dollars), such Holder shall provide appropriate wire transfer instructions
to the Paying Agent and all such payments will be made by wire transfer of
immediately available funds to an account maintained by the payee with a bank
located outside the United States. 
Unless otherwise specified on the face hereof, the principal hereof and
any premium and interest hereon payable at Maturity will be paid in immediately
available funds upon surrender of this Note at the Place of Payment.  If this Note is a Global Security, beneficial
owners of interest herein will be paid in accordance with DTC’s and its
participants’ procedures in effect from time to time.

Reference is hereby made to
the further provisions of this Note set forth on the reverse hereof, and such
further provisions shall for all purposes have the same effect as if set forth
in this place.

THIS NOTE SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF ILLINOIS.

Unless the Certificate of
Authentication hereon has been executed by the Trustee referred to on the
reverse hereof (or by an Authenticating Agent, as provided in the Indenture) by
manual signature, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

 B-4
 

 

IN WITNESS WHEREOF, McDonald’s
Corporation has caused this Note to be signed in its corporate name by the
Chairman of the Board or its President or one of its Vice Presidents manually
or in facsimile and a facsimile of its corporate seal to be imprinted hereon
and attested by the manual or facsimile signature of its Secretary or one of
its Assistant Secretaries.

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  McDONALD’S CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Corporate Senior Vice President and Treasurer

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
   

  
									

 

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

This is one of the Debt
Securities of the series designated herein provided for in the within mentioned
Indenture.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S. BANK
  NATIONAL ASSOCIATION,

  
	
   

  	
  as
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK NEW
  YORK TRUST COMPANY, 

  
	
   

  	
  N.A.,

  
	
   

  	
  as
  Authenticating Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   Authorized
  Signatory

  
							

 

 B-5
 

 

MCDONALD’S CORPORATION

MEDIUM-TERM NOTE,
SERIES I

(FLOATING
RATE)

This Note is one of a single series of duly
authorized issue of debentures, notes or other evidences of indebtedness of the
Company (the “Debt Securities”) of a single
series hereinafter specified, all issued or to be issued in one or more series
under a Senior Debt Securities Indenture dated as of October 19, 1996 (herein
called the “Indenture”), between the Company and
U.S. Bank National Association (formerly, First Union National Bank), as
trustee (the “Trustee”, which term includes any
successor Trustee under the Indenture) to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Debt Securities and of the terms upon which
the Debt Securities are, and are to be, authenticated and delivered.  The Debt Securities may be issued in one or
more series, which different series may be issued in various currencies, may be
issued in various aggregate principal amounts, may mature at different times,
may bear interest (if any) at different rates, may be subject to different
redemption provisions (if any), may be subject to different sinking, purchase
or analogous funds (if any), may be subject to different covenants and Events
of Default and may otherwise vary as in the Indenture provided.  This Debt Security is one of the series designated on the face hereof,
which may be issued without limitation as to aggregate principal amount.  The U.S.
dollar equivalent of the public offering price or purchase price of Notes
denominated in a foreign currency will be determined by an agent designated by
the Company, which initially shall be The Bank of New York Trust Company, N.A.
(the “Paying Agent”), on the basis of the noon
buying rate in New York City for cable transfers in foreign currencies as
certified for customs purposes by the Federal Reserve Bank of New York (the “Market Exchange Rate”) for such currencies on the applicable
trade dates.

“Maturity”, when
used with respect to this Note, means the date on which the principal of this
Note or an installment of principal becomes due and payable as provided herein
or in the Indenture, whether at Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.

Unless otherwise specified on the face hereof in
the case of Notes represented by a Global Security, the authorized
denominations of Notes denominated in U.S. dollars will be U.S.$1,000 and any
larger amount that is a multiple of U.S.$1,000. 
The authorized denominations of Notes denominated in a currency other than
U.S. dollars will be as set forth on the respective faces thereof.

Each Note will be issued initially as either a
Book-Entry Note or a Certificated Note.

If the Specified Currency is other than U.S.
dollars, the amount of any U.S. dollar payment to be made in respect hereof
will be determined by the Paying Agent based on the highest firm bid quotation
expressed in U.S. dollars received by the Paying Agent as of 11:00 A.M., New
York City time, on the second Business Day before the applicable payment date
(or, if no such rate is quoted on such date, the Paying Agent will use the last
date on which such rate was quoted) from three (or, if three are not available,
then two) recognized foreign exchange dealers in The City of New York (which
may include the agents, their affiliates or the Paying Agent) selected by the
Paying Agent for the purchase by the quoting dealer, for settlement on such
payment date, of the aggregate amount of the Specified Currency payable on such
payment date in respect of all Notes denominated in such Specified Currency.  All currency exchange costs will be borne by
the Holders of such Notes by deductions from such U.S. dollar payments.  If no such bid quotations are available, then
such payments will be made in the Specified Currency, unless the Specified
Currency is unavailable due to the imposition of exchange controls or to other
circumstances beyond the Company’s control, in which case payment will be made
as described in the next paragraph.

 B-6
 

 

If the Specified Currency is other than U.S.
dollars and this Note is a Global Note, the Holder of a beneficial interest in
this Global Note may elect to receive a payment or payments in the Specified
Currency by notifying the DTC participant through which its Notes are held on
or prior to the applicable Record Date of (1) the Holder’s election to receive
all or a portion of the payment in the Specified Currency, and (2) wire
transfer instructions to an account located outside of the United States.  DTC must be notified of an election and wire
transfer instructions (1) on or prior to the third New York Business Day (as
defined below) after the Record Date for any payment of interest, and (2) on or
prior to the tenth New York Business Day after the Record Date for any payment
of principal.  DTC will notify the Paying
Agent of an election and wire transfer instructions (1) on or prior to 5:00
P.M. New York City time on the fifth New York Business Day after the Record
Date for any payment of interest, and (2) on or prior to 5:00 P.M. New York
City time on the twelfth New York Business Day after the Record Date for any
payment of principal.  If complete
instructions are forwarded to DTC through DTC participants and by DTC to the
Paying Agent on or prior to such dates, such Holder will receive payment in the
Specified Currency outside of DTC; otherwise, only U.S. dollar payments will be
made by the Paying Agent to DTC.

The term “New York Business Day”
means any day other than a Saturday or Sunday or a day on which banking
institutions in the City of New York are authorized or required by law or executive
order to close.

Except as set forth below, if any payment in
respect hereof is required to be made in a Specified Currency other than U.S.
dollars and such currency is unavailable to the Company due to the imposition
of exchange controls or other circumstances beyond the Company’s control or is
no longer used by the government of the country issuing such currency (unless
otherwise replaced by the Euro) or for the settlement of transactions by public
institutions of or within the international banking community, then such
payment shall be made in U.S. dollars until such currency is again available to
the Company or so used.  The amount so
payable in such foreign currency shall be converted into U.S. dollars on the
basis of the most recently available Market Exchange Rate for such currency or
as otherwise indicated on the face hereof. 
Any payment made under such circumstances in U.S. dollars will not
constitute an Event of Default under the Indenture.

If the principal of and any
interest and premium, if any, on the Notes is payable in any Specified Currency
other than U.S. dollars and (i) the country of which such Specified
Currency has been a currency of legal tender for the payment of public and
private debts (the “Currency Country”)
becomes a Participating Member State (as defined below), then the Company may,
solely at its option and without the consent of the Holders of such Notes or
the need to amend the Indenture, on any Interest Payment Date after the date on
which such country has become a Participating Member State has occurred, (such
Interest Payment Date, a “Redenomination Date”),
redenominate all of those Notes into Euros upon the giving of not less than 30
days’ notice thereof in accordance with the terms of such Notes, which notice
shall set forth the manner in which such redenomination shall be effected.  If the Company elects to redenominate a
tranche of Notes, the election to redenominate will have effect as follows:

1.               each
denomination will be deemed to be denominated in such amount of Euro as is
equivalent to its denomination or the amount of interest in the Specified
Currency at the Fixed Conversion Rate (as defined below) adopted by the Council
of the European Union for the Specified Currency, rounded down to the nearest
Euro 0.01;

2.               after
the Redenomination Date, all payments in respect of those Notes, other than
payments of interest in respect of periods commencing before the Redenomination
Date, will be made solely in Euro as though references in those Notes to the
Specified Currency were to Euro. 
Payments will be made in Euro by credit or transfer to a Euro account
(or any other account to which Euro 

 B-7
 

 

may be credited or transferred) specified by the payee, or at the
option of the payee, by a Euro cheque;

3.               if
those Notes redenominated in accordance with this section are Notes bearing
interest at a floating rate, the pricing supplement will specify any relevant
changes to the provisions relating to interest; and

4.               such
other changes shall be made to the terms of those Notes as we may decide, after
consultation with the Trustee, and as may be specified in the notice, to
conform them to conventions then applicable to debt securities denominated in
Euro or to enable those Notes to be consolidated with other notes, whether or
not originally denominated in the Specified Currency or Euro.  Any such other changes will not take effect
until after they have been notified to the Holders.

The definitions of Business
Day and Market Day that shall apply to the Notes for payments on or in respect
thereof following any redenomination thereof and for all other purposes under
the Notes and under the Indenture shall be (A) business day and market day
definitions for fixed or floating rate (as applicable) Euro-denominated debt
obligations issued in the Euromarkets and held in international clearing
systems which are consistent with existing or anticipated market practices as
determined by the Company or (B) if no such Business Day and Market Day
definitions are so determined, the definitions of Business Day and Market Day
which applied to such Notes before redenomination or (C) if the Company
would be unable to make payments on the Notes on the date that payment is
expressed to be due if (B) above were to apply, such other business day
and market day definitions as are determined by the Company.

“EMU”
means Economic and Monetary Union as contemplated by the Treaty of Rome;

“Euro”
means the single or unified currency to be introduced in the Participating
Member States, whether known as the Euro or otherwise;

“Fixed
Conversion Rate” with respect to any Specified Currency means the
irrevocably fixed conversion rate between the Euro and such Specified Currency
adopted by the Council of the European Union according to
Article 109 1(4) first sentence of the Treaty of Rome;

“Maastricht
Treaty” means the treaty on European Union which was signed in
Maastricht on February 1, 1992 and came into force on November 1, 1993;

“Participating
Member State” means a member state of the European Union that adopts
the Euro in accordance with the Treaty of Rome; and

“Treaty of
Rome” means the Treaty of Rome of March 25, 1957, as amended by the
Single European Act of 1986 and the Maastricht Treaty, establishing the
European Community, as amended from time to time.

The Company may, with the
consent of the Trustee, and without the need to obtain the consent of the
Holders of any Note, make any changes or additions to the terms of the Notes of
a series which correct any manifest error or any ambiguity or correct or
supplement any defective provisions described herein, and which changes or
additions the Company and the Trustee believe are not materially prejudicial to
the interests of the Holders of the Notes of such series.  Any such change or addition shall be binding
on the Company, the Holders of the Notes of such series, the Trustee, the
Paying Agents and any other agent of the Company.  Any such change or addition shall be
considered to be made by

 B-8

 

operation of the terms of
the relevant Notes.  The Company shall
promptly give notice of any such change or addition.

Except as provided in the
Note or in the Pricing Supplement with respect to the redenomination of the
Notes into Euros, the occurrence or non-occurrence of an EMU Event (as defined
below) or the entry into force of any law, regulation, directive or order
requiring redenomination to be undertaken on terms different than those
described herein, will not have the effect of altering any term of, or
discharging or excusing performance under, the Indenture or Notes, nor give the
Company, the Trustee or the Holder of such Notes, the right unilaterally to
alter or terminate the Indenture or Notes or give rise to any Event of Default
or otherwise be the basis for any acceleration, early redemption, rescission,
notice, repudiation, adjustment or renegotiation of the terms of the Indenture
or Notes.  The occurrence or
non-occurrence of an EMU Event will be considered to occur automatically
pursuant to the terms of the Notes.  For
purposes hereof, “EMU Event” means any event
associated with EMU in the European Union, including, without limitation, each
(and any combination) of (i) the fixing of exchange rates between the
currency of a Participating Member State and the Euro or between the currencies
of Participating Members States; (ii) the introduction of the Euro as
lawful currency in a Participating Member State; (iii) the withdrawal from
legal tender of any currency that, before the introduction of the Euro, was
lawful currency in any of the Participating Member States; or (iv) the
disappearance or replacement of a relevant rate option or other price source
for the national currency of any participating Member State, or the failure of
the agreed sponsor (or a successor sponsor) to publish or display a relevant
rate, index, price, page or screen.

If so specified on the face hereof, the Company
may, at its option, redeem this Note in whole, or from time to time in part in
accordance with the procedures set forth in the Indenture, on the date or dates
designated as the Optional Redemption Date(s) on the face hereof, at the
Redemption Price(s) specified on the face hereof declining from a specified
premium, if any, to par, together with accrued interest to the Optional
Redemption Date.  The Company may
exercise such option by causing the Trustee or the Paying Agent to mail a
notice of such redemption at least 30 but not more than 60 days prior to the
applicable Optional Redemption Date.  In
the event of redemption of this Note in part only, a new Note or Notes for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.

If so specified on the face hereof, this Note
will be repayable prior to its Stated Maturity at the option of the Holder on
the Optional Repayment Date(s) shown on the face hereof at the Optional
Repayment Price(s) shown on the face hereof, together with accrued interest to
the date of repayment.  In order for this
Note to be repaid, the Paying Agent must receive at least 30 but not more than
45 days prior to an Optional Repayment Date (i) this Note with the form below
entitled “Option to Elect Repayment” duly completed; or (ii) a facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company in the United States of America setting forth the name of the Holder of
this Note, the principal amount of the Note to be repaid, the certificate number
or a description of the tenor and terms of this Note, a statement that the
option to elect repayment is being exercised thereby and a guarantee that this
Note with the form below entitled “Option to Elect Repayment” duly completed
will be received by the Paying Agent not later than five Business Days after
the date of such facsimile transmission or letter.  If the procedure described in clause (ii) of
the preceding sentence is followed, this Note with the form duly completed must
be received by the Paying Agent by such fifth Business Day.  Any tender of this Note for repayment shall
be irrevocable.  The repayment option may
be exercised by the Holder of this Note for less than the entire principal
amount of the Note, provided that
the principal amount of this Note remaining outstanding after repayment is an
authorized denomination.  Upon such
partial repayment, this Note shall be canceled and a new Note or Notes for the
remaining principal amount hereof shall be issued in the name of the Holder of
this Note.

 B-9
 

 

Unless otherwise specified on the face hereof,
this Note will not be subject to any sinking fund.  Any such sinking fund shall be administered
in accordance with the terms specified on the face hereof and otherwise as set
forth in the Indenture.

Notwithstanding anything herein to the contrary,
if this Note is an Original Issue Discount Note, the amount payable in the
event of redemption or repayment prior to the Stated Maturity hereof, in lieu
of the principal amount due at the Stated Maturity hereof, shall be the
Amortized Face Amount of this Note as of the Optional Redemption Date or the
Optional Repayment Date, as the case may be. 
The “Amortized Face Amount” of this Note
shall be the amount equal to (a) the Issue Price (as set forth on the face hereof)
plus (b) that portion of the difference between the Issue Price and the
principal amount hereof that has accrued at the Yield to Stated Maturity (as
set forth on the face hereof) (computed in accordance with generally accepted
United States bond yield computation principles) at the date as of which the
Amortized Face Amount is calculated, but in no event shall the Amortized Face
Amount of this Note, if it is an Original Issue Discount Note, exceed its
principal amount.

This Note will bear interest from its Original
Issue Date to the first Interest Reset Date (as defined below) at the Initial
Interest Rate set forth on the face hereof. 
Thereafter, the interest rate hereon for each Interest Reset Period (as
defined below) will be determined by reference to the Base Rate or Rates
specified on the face hereof, plus or minus the Spread, if any, and/or
multiplied by the Spread Multiplier, if any, specified on the face hereof.  The Base Rates that may be specified on the
face hereof are the CD Rate, the CMT Rate, the Commercial Paper Rate, the
Federal Funds Rate, LIBOR, the Treasury Rate, the Prime Rate or any other Base
Rate or formula specified on the face hereof. “H.15(519)”
means the publication entitled “Statistical Release H.15(519), Selected
Interest Rates” or any successor publication, published by the Board of
Governors of the Federal Reserve System. 
“Composite Quotations” means the daily
statistical release entitled “Composite 3:30 P.M. Quotations for U.S.
Government Securities” published by the Federal Reserve Bank of New York.

As specified on the face hereof, this Note may
also have either or both of the following (in each case expressed as a rate per
annum on a simple interest basis): 
(i) a maximum limitation, or ceiling, on the rate at which interest
may accrue during any interest period (“Maximum Interest Rate”)
and (ii) a minimum limitation, or floor, on the rate at which interest may
accrue during any interest period (“Minimum Interest Rate”).  In addition to any Maximum Interest Rate that
may be specified on the face hereof, the interest rate will in no event be
higher than the maximum rate permitted by applicable law, as the same may be
modified by United States law of general application.

The interest rate hereon will be reset daily,
weekly, monthly, quarterly, semiannually or annually (such period being the “Interest Reset Period” specified on the face hereof, and the
first day of each Interest Reset Period being an “Interest
Reset Date”).  Unless
otherwise specified on the face hereof, the Interest Reset Dates will be, if
this Note resets daily, each Business Day; if this Note (unless this Note is a
Treasury Rate Note) resets weekly, Wednesday of each week; if this Note is a
Treasury Rate Note that resets weekly, Tuesday of each week (except as provided
below under “Determination of Treasury Rate”);
if this Note resets monthly, the third Wednesday of each month; if this Note
resets quarterly, the third Wednesday of March, June, September and December of
each year; if this Note resets semiannually, the third Wednesday of each of the
two months of each year specified on the face hereof; and if this Note resets
annually, the third Wednesday of one month of each year specified on the face
hereof.  If an Interest Reset Date would
otherwise be a day that is not a Business Day, such Interest Reset Date shall
be postponed to the next succeeding Business Day, except that, if the Base Rate
specified on the face hereof is LIBOR and such Business Day is in the next
succeeding calendar month, such Interest Reset Date shall be the immediately
preceding Business Day.

 B-10
 

 

Unless otherwise specified on the face hereof,
the interest payable hereon on each Interest Payment Date shall be the accrued
interest from and including the Original Issue Date or the last date to which
interest has been paid or duly provided for, as the case may be, to but
excluding such Interest Payment Date or Maturity, as the case may be.  Unless otherwise specified on the face
hereof, accrued interest shall be calculated by multiplying the principal
amount hereof by an accrued interest factor. 
Such accrued interest factor will be computed by adding the interest
factors calculated for each day in the period for which accrued interest is
being calculated.  Unless otherwise
specified on the face hereof, the interest factor (expressed as a decimal
calculated to seven decimal places without rounding) for each such day shall be
computed by dividing the interest rate in effect on such day by 360 if the Base
Rate specified on the face hereof is the CD Rate, the Commercial Paper Rate,
the Federal Funds Rate, LIBOR or the Prime Rate, or by the actual number of
days in the year, if the Base Rate specified on the face hereof is the Treasury
Rate or the CMT Rate.  For purposes of
making the foregoing calculation, the interest rate in effect on any Interest
Reset Date will be the applicable rate as reset on such date.  Unless otherwise specified on the face
hereof, all percentages resulting from any calculation of the rate of interest
hereof will be rounded, if necessary, to the nearest 1/100,000 of 1%
(.0000001), with five one-millionths of a percentage point rounded upward, and
all currency amounts used in or resulting from such calculation will be rounded
to the nearest one-hundredth of a unit (with .005 of a unit being rounded
upward).

Unless otherwise specified on the face hereof
and except as provided below, interest will be payable, if this Note resets
daily, weekly or monthly, on the third Wednesday of each month or on the third
Wednesday of March, June, September and December of each year, as specified on
the face hereof; if this Note resets quarterly, on the third Wednesday of
March, June, September and December of each year; if this Note resets
semiannually, on the third Wednesday of each of the two months of each year
specified on the face hereof; and if this Note resets annually, on the third
Wednesday of one month of each year specified on the face hereof (each such day
being an “Interest Payment Date”) and, in each
case, at Maturity.  If an Interest
Payment Date (other than at Maturity) would otherwise fall on a day that is not
a Business Day, such Interest Payment Date shall be postponed to the next
succeeding Business Day, except that, if the Base Rate specified on the face
hereof is LIBOR and such Business Day would fall in the next succeeding
calendar month, such Interest Payment Date shall be the immediately preceding
Business Day.

If the Maturity of this Note falls on a day that
is not a Business Day, the required payment of principal, premium (if any)
and/or interest will be made on the next succeeding Business Day as if made on
the date such payment was due, and no interest shall accrue on such payment for
the period from and after Maturity to the date of such payment on the next
succeeding Business Day.

The Company has appointed and entered into an
agreement with an agent (a “Calculation Agent”)
to calculate the interest rates on Floating Rate Notes.  Unless otherwise specified on the face
hereof, The Bank of New York Trust Company, N.A. shall be the Calculation
Agent.  At the request of the Holder
hereof, the Calculation Agent will provide to such Holder the interest rate
then in effect, and, if determined, the interest rate that will become
effective on the next Interest Reset Date. 
All determinations of interest rates by the Calculation Agent shall, in
the absence of manifest error, be conclusive for all purposes and binding on
the Holder hereof.

Subject to applicable provisions of law and
except as specified herein, on each Interest Reset Date the rate of interest
shall be the rate determined in accordance with the provisions of the
applicable heading below.

 B-11
 

 

Determination of CD Rate

If the Base Rate specified on the face hereof is
the CD Rate, this Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the CD Rate and any Spread and/or
Spread Multiplier, if any, specified on the face hereof.  The “CD Rate” for
each Interest Reset Period shall be:

(1) the rate as of the
second Business Day prior to the Interest Reset Date for such Interest Reset
Period (a “CD Rate Determination Date”) for
negotiable U.S. dollar certificates of deposit having the Index Maturity
specified on the face hereof, as published in H.15(519) under the caption ‘‘CDs
(secondary market)’’, or

(2) if the rate referred to
in clause (1) is not so published by 3:00 P.M., New York City time, on the
Calculation Date (as defined below) pertaining to such CD Rate Determination
Date, then the “CD Rate” for such Interest Reset Period will be the rate on
such CD Rate Determination Date for negotiable U.S. dollar certificates of
deposit of the particular Index Maturity as published in H.15 Daily Update, or
other recognized electronic source used for the purpose of displaying the
applicable rate, under the caption ‘‘CDs (secondary market)’’, or

(3) if the rate referred to
in clause (2) is not so published by 3:00 P.M., New York City time, on such
Calculation Date, then the “CD Rate” for such Interest Reset Period will be
calculated by the Calculation Agent as the arithmetic mean of the secondary
market offered rates as of 10:00 A.M., New York City time, on such CD Rate
Determination Date, of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York (which may include the agents
or their affiliates) selected by the Calculation Agent for negotiable U.S.
dollar certificates of deposit of major United States money market banks (in
the market for negotiable U.S. certificates of deposit) with a remaining
maturity closest to the particular Index Maturity in an amount that is
representative for a single transaction in that market at that time, or

(4) if the dealers so
selected by the Calculation Agent are not quoting offered rates as mentioned in
clause (3), the CD Rate for such Interest Reset Period will be the CD Rate in
effect on such CD Rate Determination Date, or, if none, the initial Interest
Rate.

The “Calculation Date”
pertaining to any CD Rate Determination Date shall be the earlier of (i) the
tenth calendar day after such CD Rate Determination Date or, if such day is not
a Business Day, the next Business Day or (ii) the Business Day immediately
before the applicable Interest Payment Date or Maturity, as the case may be.

Determination
of Commercial Paper Rate

If the Base Rate shown on the face hereof is the
Commercial Paper Rate, this Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the Commercial Paper
Rate and any Spread and/or Spread Multiplier, if any, specified on the face
hereof.  The “Commercial
Paper Rate” for each Interest Reset Period will be determined by the
Calculation Agent as:

(1) of the second Business
Day prior to the Interest Reset Date for such Interest Reset Period (a “Commercial Paper Rate Determination Date”) and shall be the
Money Market Yield (as defined below) on such Commercial Paper Rate
Determination Date of the rate for commercial paper having the Index Maturity
specified on the face hereof, as published in H.15(519) under the caption ‘‘Commercial
Paper—Nonfinancial’’, or

 B-12
 

 

(2) if the rate referred to
in clause (1) is not so published by 3:00 P.M., New York City time, on the
Calculation Date (as defined below), then the “Commercial Paper Rate” for such
Interest Reset Period shall be the Money Market Yield on such Commercial Paper
Rate Determination Date of the rate for commercial paper of the Index Maturity
specified on the face hereof as published in H.15 Daily Update, or such other
recognized electronic source used for the purpose of displaying the applicable
rate, under the caption ‘‘Commercial Paper—Nonfinancial’’, or

(3) if the rate referred to
in clause (2) is not so published by 3:00 P.M., New York City time, on such
Calculation Date, then the “Commercial Paper Rate” for such Interest Reset
Period shall be the Money Market Yield of the arithmetic mean of the offered
rates as of 11:00 A.M., New York City time, on such Commercial Paper Rate
Determination Date of three leading dealers of U.S. dollar commercial paper in The
City of New York (which may include the agents or their affiliates) selected by
the Calculation Agent for commercial paper of the Index Maturity specified on
the face hereof placed for industrial issuers whose bond rating is ‘‘AA’’, or
the equivalent, from a nationally recognized statistical rating organization,
or

(4) if the dealers so
selected by the Calculation Agent are not quoting offered rates as mentioned in
clause (3), the “Commercial Paper Rate” for such Interest Reset Period will be
the Commercial Paper Rate in effect on such Commercial Paper Rate Determination
Date, or, if none, the Initial Interest Rate.

“Money Market Yield”
shall be a yield calculated in accordance with the following formula and
expressed as a percentage:

	
  Money Market
  Yield =

  	
   

  	
  D  x  360  x  100

  	
   

  	
   

  
	
   

  	
   

  	
  360
  - (D x M)

  	
   

  

 

where “D” refers to the applicable per annum
rate for commercial paper quoted on a bank discount basis and expressed as a
decimal, and “M” refers to the actual number of days in the period for which
accrued interest is being calculated.

The “Calculation Date”
pertaining to any Commercial Paper Rate Determination Date shall be the earlier
of (i) the tenth calendar day after such Commercial Paper Rate Determination
Date or, if such day is not a Business Day, the next Business Day or (ii) the
Business Day immediately before the applicable Interest Payment Date or
Maturity, as the case may be.

Determination
of Federal Funds Rate

If the Base Rate specified on the face hereof is
the Federal Funds Rate, this Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the Federal Funds Rate
and Spread and/or Spread Multiplier, if any, specified on the face hereof.  The “Federal Funds Rate”
for each Interest Reset Period shall be:

(1) the effective rate on
the second Business Day prior to the Interest Reset Date for such Interest
Reset Period (a “Federal Funds Rate Determination Date”)
for U.S. dollar federal funds as published in H.15(519) under the caption ‘‘Federal
Funds (Effective)’’ and displayed on Moneyline Telerate (or any successor
service) on page 120 (or any other page as may replace the specified page on
that service) (‘‘Moneyline Telerate Page 120’’), or

 B-13
 

 

(2) if the rate referred to
in clause (1) does not so appear on Moneyline Telerate Page 120 or is not so
published by 3:00 P.M., New York City time, on the Calculation Date (as defined
below) pertaining to such Federal Funds Rate Determination Date, the “Federal
Funds Rate” for such Interest Reset Period shall be the rate on such Federal
Funds Rate Determination Date for U.S. dollar federal funds as published in
H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying the applicable rate, under the caption ‘‘Federal Funds
(Effective)’’, or

(3) if the rate referred to
in clause (2) is not so published by 3:00 P.M., New York City time, on such
Calculation Date, then the “Federal Funds Rate” for such Interest Reset Period
shall be the arithmetic mean of the rates for the last transaction in overnight
U.S. dollar federal funds arranged by each of three leading brokers of U.S.
dollar federal funds transactions in The City of New York (which may include
the agents or their affiliates) selected by the Calculation Agent prior to 9:00
A.M., New York City time, on such Federal Funds Rate Determination Date, or

(4) if fewer than three
brokers so selected by the Calculation Agent are not quoting as mentioned in
clause (3), the “Federal Funds Rate” for such Interest Reset Period will  be the Federal Funds Rate in effect on such
Federal Funds Rate Determination Date, or, if none, the Initial Interest Rate.

The “Calculation Date” pertaining to any Federal
Funds Rate Determination Date shall be the earlier of (i) the tenth calendar
day after such Federal Funds Rate Determination Date or, if such day is not a
Business Day, the next Business Day or (ii) the Business Day immediately before
the applicable Interest Payment Date or Maturity, as the case may be.

Determination of LIBOR

If the Base Rate specified on the face hereof is
LIBOR, this Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to LIBOR and the Spread and/or Spread
Multiplier, if any, specified on the face hereof.  If LIBOR is indexed to the offered rates for
deposits in a currency other than U.S. dollars, the method for determining such
rate will be specified on the face hereof. 
If LIBOR is indexed to the offered rate for U.S. dollar deposits, “LIBOR” for each Interest Reset Period shall be determined by
the Calculation Agent as follows:

(1) if ‘‘LIBOR Moneyline
Telerate’’ is specified on the face hereof or if neither ‘‘LIBOR Reuters’’ nor ‘‘LIBOR
Moneyline Telerate’’ is specified as the method for calculating LIBOR, the rate
for deposits in the LIBOR Currency having the Index Maturity designated on the
applicable LIBOR Determination Date (defined below) that appears on the
Designated LIBOR Page specified on the face hereof as of 11:00 A.M., London
time, on such LIBOR Determination Date. 
If fewer than two such offered rates appear, or if no such rate appears,
as applicable, LIBOR in respect of the related LIBOR Determination Date will be
determined in accordance with the provisions described in clause (3) below, or

(2) on the second London
Business Day prior to the Interest Reset Date for such Interest Reset Period (a
“LIBOR Determination Date”), if ‘‘LIBOR
Reuters’’ is specified on the face hereof, the arithmetic mean of the offered
rates (unless the specified Designated LIBOR Page by its terms provides only
for a single rate, in which case such single rate shall be used), calculated by
the Calculation Agent, for deposits in the LIBOR Currency having the Index
Maturity designated on the face hereof, commencing on the related Interest
Reset Date, that appear on the Designated LIBOR Page specified on the face
hereof as of 11:00 A.M., London time, on such 

 B-14
 

 

LIBOR
Determination Date, if at least two such offered rates appear (unless, as
aforesaid, only a single rate is required) on such Designated LIBOR Page, or

(3) if fewer than two
offered rates appear, or no rate appears, as the case may be, on such LIBOR
Determination Date as specified in clause (1) or (2), as applicable, with
respect to this LIBOR Note and an Interest Reset Period to which this clause
(3) applies, the Calculation Agent will request the principal London offices of
each of four major reference banks in the London interbank market (which may
include the agents or their affiliates), as selected by the Calculation Agent,
to provide the Calculation Agent with its offered quotation for deposits in the
LIBOR Currency for the period of the Index Maturity designated on the face
hereof, commencing on the second London Business Day immediately following such
LIBOR Determination Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such LIBOR Determination Date and in
a principal amount that is representative for a single transaction in such
LIBOR Currency in such market at such time. 
If at least two such quotations are provided, LIBOR determined on such
LIBOR Determination Date will be calculated by the Calculation Agent as the
arithmetic mean of such quotations, or

(4) if fewer than two
quotations referred to in clause (3) are provided, LIBOR determined on such
LIBOR Determination Date will be calculated by the Calculation Agent as the
arithmetic mean of the rates quoted at approximately 11:00 A.M. in the
applicable Principal Financial Center, on such LIBOR Determination Date by
three major banks (which may include the agents or their affiliates) in that
Principal Financial Center selected by the Calculation Agent for loans in the
LIBOR Currency to leading European banks, having the Index Maturity designated
on the face hereof and in a principal amount that is representative for a
single transaction in such LIBOR Currency in such market at such time, provided
however, that, or

(5) if the banks so selected
by the Calculation Agent are not quoting as mentioned in clause (4), LIBOR determined
as of such LIBOR Determination Date will be LIBOR in effect on such LIBOR
Determination Date.

“Calculation Date”
pertaining to LIBOR shall be the LIBOR Determination Date.

“Designated LIBOR Page”
means either (a) if “LIBOR Reuters” is specified on the face hereof, the
display on the Reuters Monitor Money Rates Service for the purpose of
displaying the London interbank rates of major banks for the applicable LIBOR
Currency, or (b) if “LIBOR Moneyline Telerate” is specified on the face hereof
or neither “LIBOR Reuters” nor “LIBOR Moneyline Telerate” is specified as the
method for calculating LIBOR, the display on the Moneyline Telerate Service for
the purpose of displaying the London interbank rates of major banks for the
applicable LIBOR Currency.

“LIBOR Currency”
means the currency specified on the face hereof as the currency for which LIBOR
shall be calculated.  If no such currency
is specified on the face hereof, the LIBOR Currency shall be U.S. dollars.

“Principal Financial Center”
will be the capital city of the country of the Specified Currency or LIBOR
Currency, except that with respect to Australian dollars, Canadian dollars,
U.S. dollars, Swiss francs and Euro, the Principal Financial Center shall be
Sydney, Toronto, The City of New York, Zurich and (solely in the case of the
LIBOR Currency) London, respectively.

 B-15
 

 

Determination of Treasury Rate

If the Base Rate specified on the face hereof is
the Treasury Rate, this Note will bear interest for each Interest Reset Period
at the interest rate calculated with reference to the Treasury Rate and the
Spread and/or Spread Multiplier, if any, specified on the face hereof.  The “Treasury Rate”
for each Interest Reset Period will be:

(1) the rate from the
auction (“Auction”) held on the Treasury Rate Determination Date (defined
below) for such Interest Reset Period of direct obligations of the United
States (‘‘Treasury Bills’’) having the Index
Maturity specified on the face hereof, under the caption ‘‘INVESTMENT RATE’’ on
the display on Moneyline Telerate (or any successor service) on page 56 (or any
other page as may replace that page on that service) (‘‘Moneyline
Telerate Page 56’’) or page 57 (or any other page as may replace
that page on that service) (‘‘Moneyline Telerate Page 57’’),
or

(2) if the rate referred to
in clause (1) is not so published by 3:00 P.M., New York City time, on the
related Calculation Date (as defined below) pertaining to such Treasury Rate
Determination Date, the Bond Equivalent Yield of the rate for the applicable
Treasury Bills as published in H.15 Daily Update, or another recognized
electronic source used for the purpose of displaying the applicable rate, under
the caption ‘‘U.S. Government Securities/Treasury Bills/Auction High’’, or

(3) if the rate referred to
in clause (2) is not so published by 3:00 P.M., New York City time, on the
Calculation Date, the Bond Equivalent Yield of the auction rate of the
applicable Treasury Bills as announced by the U.S. Department of the Treasury,
or

(4) if the rate referred to
in clause (3) is not so announced by the U.S. Department of the Treasury, or if
the Auction is not held, the Bond Equivalent Yield of the rate on the Treasury
Rate Determination Date of the applicable Treasury Bills as published in
H.15(519) under the caption “U.S. Government Securities/Treasury
Bills/Secondary Market”, or

(5) if the rate referred to
in clause (4) is not so published by 3:00 P.M., New York City time, on the
related Calculation Date, the rate on the Treasury Rate Determination Date of
the applicable Treasury Bills as published in H.15 Daily Update, or another
recognized electronic source used for the purpose of displaying the applicable
rate, under the caption ‘‘U.S. Government Securities/Treasury Bills/Secondary
Market’’, or

(6) if the rate referred to
in clause (5) is not so published by 3:00 P.M., New York City time, on the
related Calculation Date, the rate on the Treasury Rate Determination Date
calculated by the Calculation Agent as the Bond Equivalent Yield of the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
P.M., New York City time, on the Treasury Rate Determination Date, of three
leading primary U.S. government securities dealers (which may include the
agents or their affiliates) selected by the Calculation Agent, for the issue of
Treasury Bills with a remaining maturity closest to the Index Maturity
specified herein, or

(7), if the dealers so
selected by the Calculation Agent are not quoting as mentioned in clause (6),
the Treasury Rate in effect on such Treasury Rate Determination Date, or, if
none, the Initial Interest Rate.

The “Treasury Rate
Determination Date” for each Interest Reset Period will be the day
of the week in which the Interest Reset Date for such Interest Reset Period
falls on which Treasury Bills would

 B-16

 

normally be
auctioned.  Treasury Bills are normally
sold at auction on Monday of each week, unless that day is a legal holiday, in
which case the auction is normally held on the following Tuesday, except that
such auction may be held on the preceding Friday.  If, as the result of a legal holiday, an
auction is so held on the preceding Friday, such Friday will be the Treasury
Rate Determination Date pertaining to the Interest Reset Period commencing in
the next succeeding week.  If an auction
date shall fall on any day that would otherwise be an Interest Reset Date for a
Note whose Base Rate is the Treasury Rate, then such Interest Reset Date shall
instead be the Business Day immediately following such auction date.

The “Calculation Date”
pertaining to any Treasury Rate Determination Date shall be the earlier of (i)
the tenth calendar day after such Treasury Rate Determination Date, or if such
day is not a Business Day, the next Business Day or (ii) the Business Day
immediately before the applicable Interest Payment Date or Maturity, as the
case may be.

The ‘‘Bond
Equivalent Yield’’ means a yield (expressed as a percentage)
calculated in accordance with the following formula:

	
  Bond
  Equivalent Yield =

  	
  D × N

  	
   × 100

  	
   

  
	
   

  	
  360-(D × M)

  	
   

  

 

where ‘‘D’’ refers to the
applicable annual rate for Treasury Bills quoted on a bank discount basis and
expressed as a decimal, ‘‘N’’ refers to 365 or 366, as the case may be, and ‘‘M’’
refers to the actual number of days in the applicable Interest Reset Period.

Determination of Prime Rate

If the Base Rate specified on the face hereof is
the Prime Rate, this Note will bear interest for each Interest Reset Period at
the interest rate calculated with reference to the Prime Rate and the Spread
and/or Spread Multiplier, if any, specified on the face hereof.  The “Prime Rate” for
each Interest Reset Period will be determined by the Calculation Agent as:

(1) of the second Business
Day prior to the Interest Reset Date for such Interest Reset Period (a “Prime Rate Determination Date”) and shall be the rate
published in H.15(519) under the caption ‘‘Bank Prime Loan’’, or

(2) if the rate referred to
in clause (1) is not so published by 3:00 P.M., New York City time, on the
Calculation Date (as defined below), then the “Prime Rate” for such Interest
Reset Period on such Prime Rate Determination Date shall be as published in
H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying the applicable rate, under the caption ‘‘Bank Prime Loan’’,
or

(3) if the rate referred to
in clause (2) is not so published by 3:00 P.M., New York City time, on the
Calculation Date, then the “Prime Rate” for such Interest Reset Period on such
Prime Rate Determination Date calculated by the Calculation Agent shall be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen US PRIME 1 Page (as defined below) as such bank’s
prime rate or base lending rate as of 11:00 A.M., New York City time, on such
Prime Rate Determination Date, or

(4) if fewer than four rates
referred to in clause (3) are so published by 3:00 P.M., New York City time, on
the related Calculation Date, the “Prime Rate” will be the rate calculated by
the Calculation Agent on the Prime Rate Determination Date as the arithmetic
mean of the prime rates or base lending rates quoted on the basis of the actual
number of days in the year divided by 

 B-17
 

 

a
360-day year as of the close of business on such Prime Rate Determination Date
by three major banks (which may include the agents or their affiliates) in The
City of New York selected by the Calculation Agent, or

(5) if the banks so selected
by the Calculation Agent are not quoting as mentioned in clause (4), the Prime
Rate of such Interest Reset Period will be the Prime Rate in effect on such
Prime Rate Determination Date, or, if none, the Initial Interest Rate.

“Reuters
Screen US PRIME 1 Page” means the display on the Reuters Monitor
Money Rates Service (or any successor service) on the “US PRIME 1” page (or any
other page as may replace that page on that service) for the purpose of
displaying prime rates or base lending rates of major U.S. banks.

The “Calculation Date”
pertaining to a Prime Rate Determination Date shall be the earlier of (i) the
tenth calendar day after such Prime Rate Determination Date or, if such day is
not a Business Day, the next Business Day or (ii) the Business Day immediately
before the applicable Interest Payment Date or Maturity, as the case may be.

Determination of CMT Rate

If the Base Rate specified on the face hereof is
the CMT Rate, this Note will bear interest for each Interest Reset Period at
the interest rate calculated with reference to the CMT Rate and the Spread
and/or Spread Multiplier, if any, specified on the face hereof.

Unless otherwise specified on the face hereof,
the “CMT Rate” for each Interest Reset Period
will be determined by the Calculation Agent and shall be the rate:

(1) if CMT Moneyline
Telerate Page (as defined below) is 7051, as of the second Business Day prior
to the Interest Reset Date for such Interest Reset Period (a “CMT Determination Date”) is specified hereof:

(a) the percentage equal to
the yield for United States Treasury securities at ‘‘constant maturity’’ having
the Index Maturity specified hereof as published in H.15(519) under the caption
‘‘Treasury Constant Maturities’’, as the yield is displayed on Moneyline
Telerate (or any successor service) on page 7051 (or any other page as may
replace the specified page on that service) (‘‘Moneyline
Telerate Page 7051’’), for such CMT Determination Date, or

(b) if the rate referred to
in clause (a) does not so appear on Moneyline Telerate Page 7051, the
percentage equal to the yield for United States Treasury securities at ‘‘constant
maturity’’ having the particular Index Maturity and for such CMT Determination
Date as published in H.15(519) under the caption ‘‘Treasury Constant Maturities’’,
or

(c) if the rate referred to
in clause (b) does not so appear in H.15(519), the rate on such CMT
Determination Date for the period of the particular Index Maturity as may then
be published by either the Federal Reserve System Board of Governors or the
United States Department of the Treasury that the Calculation Agent determines
to be comparable to the rate which would otherwise have been published in
H.15(519), or

 B-18
 

 

(d) if the rate referred to
in clause (c) is not so published, the rate on such CMT Determination Date
calculated by the Calculation Agent as a yield to maturity based on the
arithmetic mean of the secondary market bid prices at approximately 3:30 P.M.,
New York City time, on the Calculation Date relating to such CMT Determination
Date of three leading primary U.S. government securities dealers in The City of
New York (which may include the agents or their affiliates) (each, a ‘‘Reference Dealer’’), selected by the Calculation Agent from
five Reference Dealers selected by the Calculation Agent and eliminating the
highest quotation, or, in the event of equality, one of the highest, and the
lowest quotation or, in the event of equality, one of the lowest, for U.S.
Treasury securities with an original maturity equal to the particular Index
Maturity, a remaining term to maturity no more than one year shorter than that
Index Maturity and in a principal amount that is representative for a single
transaction in the securities in that market at that time, or

(e) if fewer than five but
more than two of the prices referred to in clause (d) are provided as
requested, the rate on such CMT Determination Date calculated by the
Calculation Agent based on the arithmetic mean of the bid prices obtained and
neither the highest nor the lowest of the quotations shall be eliminated, or

(f) if fewer than three
prices referred to in clause (d) are provided as requested, the rate on such
CMT Determination Date calculated by the Calculation Agent as a yield to
maturity based on the arithmetic mean of the secondary market bid prices as of
approximately 3:30 P.M., New York City time, on that Interest Determination
Date of three Reference Dealers selected by the Calculation Agent from five
Reference Dealers selected by the Calculation Agent and eliminating the highest
quotation or, in the event of equality, one of the highest and the lowest
quotation or, in the event of equality, one of the lowest, for U.S. Treasury
securities with an original maturity greater than the particular Index
Maturity, a remaining term to maturity closest to that Index Maturity and in a
principal amount that is representative for a single transaction in the securities
in that market at that time, or

(g) if fewer than five but
more than two prices referred to in clause (f) are provided as requested, the
rate on such CMT Determination Date calculated by the Calculation Agent based
on the arithmetic mean of the bid prices obtained and neither the highest nor
the lowest of the quotations will be eliminated, or

(h) if fewer than three
Reference Dealers selected by the Calculation Agent are quoting as described in
clause (g), the “CMT Rate” will be the CMT Rate in effect on such CMT
Determination Date, or, if none, the Initial Interest Rate.

(2) if CMT Moneyline
Telerate Page is 7052:

(a) the percentage equal to
the one-week or one-month, as specified hereof, average yield for U.S. Treasury
securities at ‘‘constant maturity’’ having the Index Maturity specified hereof
as published in H.15(519) opposite the caption ‘‘Treasury Constant Maturities’’,
as the yield is displayed on Moneyline Telerate (or any successor service) (on
page 7052 or any other page as may replace the specified page on that service)
(‘‘Moneyline Telerate Page 7052’’), for the
week or month, as applicable, ended immediately preceding the week or month, as
applicable, in which the CMT Determination Date falls, or

 B-19
 

 

(b) if the rate referred to
in clause (a) does not so appear on Moneyline Telerate Page 7052 by 3:00 P.M.,
New York City time, on the related Calculation Date, the percentage equal to
the one-week or one-month, as specified herein, average yield for U.S. Treasury
securities at ‘‘constant maturity’’ having the particular Index Maturity and
for the week or month, as applicable, preceding the CMT Determination Date as
published in H.15(519) opposite the caption ‘‘Treasury Constant Maturities,’’
or

(c) if the rate referred to
in clause (b) does not so appear in H.15(519) by 3:00 P.M., New York City time,
on the related Calculation Date, the one-week or one-month, as specified
herein, average yield for U.S. Treasury securities at ‘‘constant maturity’’
having the particular Index Maturity as otherwise announced by the Federal
Reserve Bank of New York for the week or month, as applicable, ended
immediately preceding the week or month, as applicable, in which such CMT
Determination Date falls, or

(d) if the rate referred to
in clause (c) is not so published by 3:00 P.M., New York City time, on the
related Calculation Date, the rate on such CMT Determination Date calculated by
the Calculation Agent as a yield to maturity based on the arithmetic mean of
the secondary market bid prices at approximately 3:30 P.M., New York City time,
on that CMT Determination Date of three Reference Dealers selected by the
Calculation Agent from five Reference Dealers selected by the Calculation Agent
and eliminating the highest quotation, or, in the event of equality, one of the
highest, and the lowest quotation or, in the event of equality, one of the
lowest, for U.S. Treasury securities with an original maturity equal to the
particular Index Maturity, a remaining term to maturity no more than one year
shorter than that Index Maturity and in a principal amount that is
representative for a single transaction in the securities in that market at
that time, or

(e) if fewer than five but
more than two of the prices referred to in clause (d) are provided as
requested, the rate on the particular CMT Determination Date calculated by the
Calculation Agent based on the arithmetic mean of the bid prices obtained and
neither the highest nor the lowest of the quotations shall be eliminated, or

(f) if the Calculation Agent
cannot obtain three prices referred to in clause (d), the “CMT Rate” for such
Interest Reset Period shall be calculated by the Calculation Agent and will be
a yield to maturity based on the arithmetic mean of the secondary market bid
prices as of approximately 3:30 P.M., New York City time, on that CMT
Determination Date of three Reference Dealers selected by the Calculation Agent
from five Reference Dealers selected by the Calculation Agent and eliminating
the highest quotation or, in the event of equality, one of the highest and the
lowest quotation or, in the event of equality, one of the lowest, for U.S.
Treasury securities with an original maturity of the number of years that is
the next highest to the Index Maturity specified on the face hereof and a
remaining term to maturity closest to the Index Maturity specified on the face
hereof and in an amount of at least $100 million, or

(g) if fewer than five but
more than two Reference Dealers are quoting as referred to in clause (f), then
the CMT Rate will be calculated by the Calculation Agent based on the
arithmetic mean of the offer prices obtained and neither the highest or the
lowest of the quotations will be eliminated, or

(h) if fewer than three
Reference Dealers selected by the Calculation Agent are quoting as described in
clause (g), the “CMT Rate” will be the CMT Rate in effect on such CMT
Determination Date, or if none, the Initial Interest Rate.

 B-20
 

 

If two U.S. Treasury securities with an original
maturity greater than the Index Maturity specified hereof have remaining terms
to maturity equally close to the particular Index Maturity, the quotes for the
U.S. Treasury security with the shorter original remaining term to maturity
will be used.

“CMT Moneyline Telerate
Page” means the display on the Moneyline Telerate Service on the
page designated on the face hereof (or any other page as may replace such page
on that service for the purpose of displaying Treasury Constant Maturities as
reported in H.15(519)).  If no such page
is specified on the face hereof, the CMT Moneyline Telerate Page shall be 7052,
for the most recent week.

The “Calculation Date”
pertaining to any CMT Determination Date shall be the earlier of (i) the tenth
day after such CMT Determination Date or, if such day is not a Business Day,
the next Business Day or (ii) the Business Day immediately before the
applicable Interest Payment Date or Maturity, as the case may be.

If this Note is a Global Security, ownership of
beneficial interests herein will be limited to participants in DTC or persons
that hold interests through such participants, and the transfer of beneficial
interests herein will be effected only through records maintained by DTC (and
with respect to interests of participants in DTC) and by participants in DTC or
persons that may hold interests through such participants (with respect to
persons other than participants in DTC).

As provided in the Indenture and subject to
certain limitations therein set forth, this Note is exchangeable for a like
aggregate principal amount of Notes of different authorized denominations, as
requested by the Person surrendering the same.

If this Note is a Global Security, this Note is
exchangeable only if (x) DTC notifies the Company that it is unwilling or
unable to continue as depositary for this Note or if at any time DTC ceases to
be in good standing under the Securities Exchange Act of 1934, as amended, and
the Company does not appoint a successor depositary within 90 days after the
Company receives such notice or becomes aware that DTC is no longer in good
standing; or (y) the Company in its sole discretion determines that this Note
shall be exchanged for Certificated Notes in definitive form, provided that the
definitive Notes so issued in exchange for this Note shall be in authorized
denominations and be of like aggregate principal amount and tenor and terms as
the portion of this Note to be exchanged. 
Except as provided above, owners of beneficial interests in this Note
(if a Global Security) will not be entitled to have this Note or Notes
represented by this Note registered in their names or receive physical delivery
of Notes in definitive form and will not be considered the Holders hereof for
any purpose under the Indenture.

As provided in the Indenture and subject to
certain limitations therein set forth, this Note is transferable on the Debt
Security register of the Company, upon surrender of this Note for registration
of transfer at the offices or agencies as may be
designated and maintained by the Company for such purpose in accordance with
the provisions of the Indenture,
duly endorsed by or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Debt Security registrar, duly executed by
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Notes of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

As provided in the Indenture and subject to
certain limitations therein set forth, this Note is exchangeable for a like
aggregate principal amount of Notes of different authorized denominations, as
requested by the Holder surrendering the same.

 B-21
 

 

No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

The Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this Note is
registered as the owner hereof for purposes of receiving payment as herein
provided and for all other purposes, whether or not this Note be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.

If an Event of Default shall occur and be
continuing with respect to the Notes, the unpaid principal of all Notes may be
declared due and payable in this manner and with the effect provided in the
Indenture.

The Indenture contains provisions permitting the
Company and the Trustee, with the consent of the Holders of not less than 66
2/3% in aggregate principal amount of each series of the Debt Securities at the
time outstanding (as defined in the Indenture) to be affected (each series
voting as a class), evidenced as in the Indenture provided, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the Holders of the Debt
Securities of all such series; provided, however, that no such
supplemental indenture shall, among other things, (i) extend the fixed maturity
of any Debt Security, or reduce the rate or extend the time of payment of
interest thereon, or reduce the principal amount or premium if any, thereon, or
make the principal thereof, or premium if any, or interest, if any, thereon
payable in any coin or currency other than that hereinabove provided, without
the consent of the Holder of each Debt Security so affected or reduce the amount
of principal of an Original Issue Discount Security that would be due and
payable upon acceleration of maturity thereof, or (ii) reduce the aforesaid
percentage of Debt Securities the Holders of which are required to consent to
any such supplemental indenture, without the consent of Holders of each Debt
Security so affected.  The Indenture also
contains provisions permitting the Holders of a majority in aggregate principal
amount of the Notes at the time Outstanding, as defined in the Indenture, on
behalf of the Holders of all the Notes, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences.  Any
such consent or waiver by the Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Notes issued upon the transfer hereof or in exchange therefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note or
upon any Note issued upon the transfer hereof or in exchange therefor or in
lieu hereof.

No reference herein to the Indenture and no
provision of this Note or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of
and interest on this Note at the times, places and rate, and in the coin and
currency, herein prescribed.

No recourse shall be made for the payment of the
principal of or the interest on this Note or for any claim based herein or
otherwise in any manner in respect hereof, or in respect of the Indenture,
against any incorporator, stockholder, officer or director, as such past,
present or future, of the Company or of any predecessor or successor
corporation, whether by virtue of any constitutional provision or statute or
rule or law, or by the enforcement of any assessment or penalty or in any other
manner, all such liability being expressly waived and released by the
acceptance hereof and as part of the consideration for the issue hereof.

All terms used in this Note that are defined in
the Indenture shall have the meanings assigned to them in the Indenture.

 B-22
 

 

ABBREVIATIONS

The
following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

	
  TEN COM -as tenants in
  common

  	
  UNIF GIFT MIN ACT-

  	
   

  	
   Custodian 

  	
   

  
	
   

  	
   

  	
   (Cust) 

  	
   

  	
  (Minor)

  	
   

  
	
  TEN ENT-as
  tenants by the entireties

  	
  Under Uniform Gifts to Minors Act

  	
   

  
	
   

  	
   

  
	
  JT ENT-as joint
  tenants with right of

  	
  (State)

  	
   

  
	
  survivorship and not as tenants

  	
   

  	
   

  
	
  in common

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Additional
  abbreviations may also be used though not in the above list

  
	
   

  
	
   

  	
   

  	
   

  
											

 

OPTION
TO ELECT REPAYMENT

The undersigned hereby irrevocably requests and instructs the Company
to repay $                 
principal amount of the within Note, pursuant to its terms, on the “Optional
Repayment Date” first occurring after the date of receipt of the within Note as
specified below, together with interest thereon accrued to the date of
repayment, to the undersigned at:

	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Please Print or Type Name and Address of the
  Undersigned)

  

 

and
to issue to the undersigned, pursuant to the terms of the Indenture, a new Note
or Notes representing the remaining principal amount of this Note.

For this Option to Elect Repayment to be effective, this Note with the
Option to Elect Repayment duly completed must be received by the Company within
the relevant time period set forth above at its office or agency in the Borough
of Manhattan, the City and State of New York, located initially at the office
of the Registrar at The Bank of New York Trust Company, N.A.,                                   ,
New York, New York              ,
Attention:  Corporate Trust Administration.

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Note: The signature to this Option to Elect
  Repayment must correspond with the name as written upon the face of the
  within Note in every particular without alteration or enlargement or any
  change whatsoever.

  

 

 B-23
 

 

FOR VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

	
  Please Insert Social
  Security or Other

  	
   

  	
   

  
	
  Identifying
  Number of Assignee

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Please Print or Typewrite Name and Address of
  Assignee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  the within Instrument of McDONALD’S CORPORATION and
  all rights thereunder, hereby does

  irrevocably constitute and appoint

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attorney

  	
   

  
	
  to transfer such Note on the books of McDONALD’S
  CORPORATION with full power of substitution in

  the premises.

  
	
   

  
	
   

  
	
  Dated:

  	
   

  
	
  Signature

  	
   

  
				

 

 

NOTICE:  The signature to this
assignment must correspond with the name as it appears upon the face of the
Note in every particular, without alteration or enlargement or any change
whatsoever.

 B-24United States Securities & Exchange Commission EDGAR Filing

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) entered into as of May 4, 2006, by and between Mark Di Ianni (the “Executive”) and SFBC International, Inc., a Delaware corporation (the “Company”).  The effective date of the Agreement shall be 1 April, 2006, the date of hire of the Executive (the “Effective Date”).

WHEREAS, in its business, the Company has acquired and developed certain trade secrets, including but not limited to proprietary processes, sales methods and techniques, and other like confidential business and technical information, including, but not limited to, technical information, design systems, proprietary assays, pricing methods, pricing rates or discounts, process, procedure, formula, design of computer software or improvement of any portion or phase thereof, whether patented or not, that is of any value whatsoever to the Company, as well as certain unpatented information relating to the Services (as defined below) information concerning proposed new services, market feasibility studies, proposed or existing marketing techniques or plans (whether developed or produced by the Company or by any other entity for the Company), other Confidential Information (as defined below) and information about the Company’s employees, officers, and directors, which necessarily will be communicated to the Executive by reason of his or her employment with the Company; and

WHEREAS, the Company has strong and legitimate business interests in preserving and protecting its investment in the Executive, its trade secrets and Confidential Information, and its substantial relationships with suppliers, and Clients (as defined below), actual and prospective; and

WHEREAS, the Company desires to preserve and protect its legitimate business interests further by restricting competitive activities of the Executive during the term of employment and following (for a reasonable time) termination of employment; and

WHEREAS, the Company’s Board of Directors (the “Board”) considers it essential to and in the best interests of the Company’s direct and indirect holders of ownership interests (collectively, the "Stockholders") to foster the continued employment of the Executive and has approved the severance arrangement set forth in this Agreement; and 

WHEREAS, the Company desires to employ the Executive and to ensure the continued availability to the Company of the Executive’s services, and the Executive is willing to accept such employment and render such services, all upon and subject to the terms and conditions contained in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth in this Agreement, and intending to be legally bound, the Company and the Executive agree as follows:

1.

Representations and Warranties.  The Executive hereby represents and warrants to the Company that he is not subject to any written nonsolicitation or noncompetition agreement affecting his employment with the Company (other than any prior agreement with the Company or its Affiliate (as defined below)), (b) is not subject to any written confidentiality or nonuse/nondisclosure agreement affecting his employment with the Company (other than any prior agreement with the 

Company or its Affiliate), and (c) has not brought to the Company any trade secrets, confidential business information, documents, or other personal property of a prior employer.

2.

Term of Employment.

(a)

Term.  Subject to Section 6 hereof, the Company hereby employs the Executive, and the Executive hereby accepts employment with the Company, for a period commencing on the Effective Date (as defined below) and ending three (3) years from the Effective Date (the “Initial Term”).  Thereafter, this Agreement shall automatically renew for successive one (1) year terms (each, a “Renewal Term”, and together with the Initial Term, the “Employment Term”), unless either party gives written notice of his/its intention not to renew within ninety (90) days prior to the end of the Initial Term or any Renewal Term, as applicable.  

(b)

Continuing Effect.  Notwithstanding any termination of employment, at the end of the Employment Term or otherwise, the provisions of Sections 7 and 8 shall remain in full force and effect and the provisions of Section 8 shall be binding upon the legal representatives, successors and assigns of the Executive.

3.

Duties.

(a)

General Duties.  The Executive shall serve as the Executive Vice President Strategic Initiatives, with duties and responsibilities that are customary for such position, including without limitation, managing the Strategic Initiatives (as defined below) at the direction of the Company CEO (as defined below).  The Executive shall report directly to Jeffrey P. McMullen, the Chief Executive Officer of the Company or his successor (the “Company CEO”).  The Executive shall use his best efforts to perform his duties and discharge his responsibilities pursuant to this Agreement competently, carefully and faithfully.  During the Employment Term, the Executive shall be deemed an officer (but not an executive officer) and a member of the Executive Committee of the Company.  In addition, Executive may be required to execute and deliver to the Company, on a timely basis, quarterly certifications or sub-certifications in order to permit Company to comply with its reporting obligations, including those under the Sarbanes Oxley Act of 2002.

(i)

For purposes of this Agreement, “Strategic Initiatives” shall include, but not limited to, the following: (A) managing the Company's Phase I clinical facilities in Florida, including the facilities located in Miami, Florida (the "Miami Facility"), Ft. Myers, Florida and Temple Terrace, Florida (collectively, the "Phase I Facilities"), with such responsibility anticipated to continue for no more than twelve 12 months from the Effective Date (the "Phase I Facility Management"), (B) conducting in-depth review and analysis of processes and procedures employed at the Phase I Facilities and recommend to the Company CEO revisions to such processes and procedures to enhance the regulatory compliance and overall efficiency of the operations at the Phase I Facilities (this responsibility, together with the Phase I Facility Management, referred to as the "Phase I Facility Responsibility"), (C) managing the recruitment process to identify and hire the person to assume the management of the Phase I Facilities after the conclusion of Executive's Phase I Facility Responsibility, (D) gradually leading and managing the Company's corporate-wide business development, and (E) engaging in a substantial role in the Company's corporate development activities including, but not limited to, expansion into new services and businesses.

(ii)

While the Executive is engaged in his Phase I Facility Responsibility, the following employment terms shall apply: (A) Executive shall report to work primarily at the Miami Facility, (B) the Company shall provide the Executive with housing in Miami, Florida, in accordance with the Company’s existing policies, (C) the Company shall provide the Executive with use of an automobile in Miami, Florida, (D) the Company shall provide Executive with a per diem meal and miscellaneous expense allowance in accordance with Company’s expense reimbursement policy, (E) the Executive shall be entitled to receive reimbursement for roundtrip commercial air travel from Miami, Florida to Princeton, New Jersey once per week (in accordance with the Company's travel policy), (F) the Executive shall be entitled to receive reimbursement for his immediate family's roundtrip commercial air travel from Princeton, New Jersey to Miami, Florida once per month (in accordance with the Company's travel policy).

(b)

Devotion of Time.  The Executive shall devote the amount of time and attention to the business and affairs of the Company that are reasonably necessary to competently perform his duties.  Except as set forth in Section 7(d), the Executive shall not enter the employ of or serve as a consultant to, or in any way perform any services with or without compensation to, any other persons, business or organization without the prior written consent of the board of directors of the Company.  Notwithstanding the foregoing, the Executive shall be permitted, subject to the first sentence of this Section 3(b) and Sections 7, 8, 9 and 10 hereof, to (i) serve on corporate, advisory, civic or charitable boards or committees, (ii) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (iii) manage personal investments.

(c)

Location of Office. The Executive’s principal business office shall be at the Company’s office location in Princeton, New Jersey, as it may be changed from time to time by the senior management of the Company; provided, however, that a substantial portion of the Executive’s duties hereunder will require him to spend considerable time at the Company facilities located outside of Princeton, New Jersey thus the Executive’s job responsibilities shall include all business travel reasonably necessary to such requirements.  

(d)

Adherence to Inside Information Policies.  The Executive acknowledges that the Company is publicly-held and, as a result, has implemented inside information policies designed to preclude its employees and those of its subsidiaries from violating the federal securities laws by trading on material, non-public information or passing such information on to others in breach of any duty owed to the Company or any third party.  The Executive shall promptly execute any agreements generally distributed by the Company to its employees requiring such employees to abide by its inside information policies.

4.

Compensation and Expenses.

(a)

Annual Base Salary.  For the services of the Executive to be rendered under this Agreement, during the Employment Term the Company shall pay the Executive an annual base salary equivalent to $325,000 per annum (the “Annual Base Salary”). The Annual Base Salary shall be adjusted annually on such Executive’s employment anniversary date (as such date has been, or may in the future be, modified) at the greater of (i) four (4%), (ii) an amount approved by the Compensation Committee of the Company’s Board of Directors or (iii) the Consumer Price Index in accordance with the formula attached hereto as Exhibit A.  The Annual Base Salary shall be payable in accordance with the Company’s normal payroll practices. 

(b)

Annual (Cash) Incentive.  In addition to any other compensation received pursuant to this Agreement, the Executive shall be eligible to participate in the same Company cash incentive plan or plans that the members of the Company’s Executive Committee are eligible to participate.

(c)

Long-Term Incentive.  The Executive shall be eligible to participate in all long-term incentive plan or plans that the members of the Company’s Executive Committee are eligible to participate.

(d)

Grant of Restricted Stock.  Upon the Effective Date, the Executive shall receive a restricted stock grant for 15,000 shares of common stock of the Company (“Common Stock”), which shall vest equally in six (6) month increments over a three-year period, commencing on the Effective Date, subject to the continued employment of Executive with the Company. The shares of Common Stock granted pursuant to this Section 4(d) shall be granted in accordance with the terms and conditions of the Company’s standard form of stock grant agreement and applicable equity compensation plan.

(e)

Expenses.  In addition to any compensation received pursuant to this Section 4, the Company shall reimburse or advance funds to the Executive for reasonable travel, entertainment, professional dues and miscellaneous expenses incurred in connection with the performance of his duties under this Agreement and in accordance with the Company’s policies relating to travel and expenses, subject to receipt by the Company of evidence of such expenses.

5.

Benefits. 

(a)

Vacation.  During each year of employment, the Executive shall be entitled to twenty (20) business days of vacation without loss of compensation or other benefits to which he is entitled under this Agreement, such vacation to be taken at such times as the Executive may select and the affairs of the Company may permit. 

(b)

Employee Benefit Programs.  The Executive is entitled to participate in any pension, 401(k), medical insurance, disability insurance, life insurance or other employee benefit plan that is maintained by the Company, including reimbursement of membership fees in professional organizations, subject to the eligibility requirements of these specific plans.

(c)

Insurance.  The Company shall pay the cost of all insurance premiums in connection with the insurance or benefit programs referred to in Section 5(b) in which the Executive chooses to participate, except to the extent any benefit program is funded by deferrals from the Executive’s compensation.  In addition, the Company shall include the Executive in the Company’s D&O (director and officer) liability insurance policy as an additional insured for the benefit of the Executive.

(d)

Transportation Benefit.  The Executive shall be entitled to receive a per month motor vehicle allowance equivalent to one thousand dollars ($1,000) per month. For the purposes of clarity, (i) such monthly motor vehicle allowance shall be in addition to the Company’s provision of  an automobile in Miami, Florida while the Executive is engaged in his Phase I Facility Responsibility, and (ii) the Company shall not reimburse the Executive for any applicable tax the Executive may incur as a result of his or her receipt of this monthly motor vehicle allowance.

6.

Termination; Severance.  

(a)

Certain Definitions.  For purpose of this Agreement:

"Cause" means a reasonable belief by the Company that the Executive has: (i) been convicted of a felony involving any subject matter; (ii) been charged with a felony relating to the business of the Company or any Affiliate; (iii) been convicted of a misdemeanor directly involving the Executive’s employment that directly affects the business of the Company; (iv) been found after an internal investigation to have engaged in sexual misconduct which is related to the Executive’s employment or the business of the Company and/or violated the Company’s sexual harassment policy; (v) in carrying out his duties hereunder, acted with gross negligence or intentional misconduct resulting, in either case, in harm to the Company; (vi) misappropriated the Company funds or otherwise defrauds the Company; (vii) breached his fiduciary duty to the Company resulting in profit to him, directly or indirectly; (viii) been found to have committed any act or failed to take any action which results in the common stock of the Company (the “Common Stock”) being delisted for trading on its principal trading market or exchange; (ix) been convicted of illegal possession or illegal use of a controlled substance; (x) engaged in chronic drinking or the use of illegal drugs, chemicals or controlled substances or the abuse of otherwise legal drugs or chemicals or controlled substances that affects the performance of his duties as reasonable determined by the Company; (xi) failed or refused to cooperate in any official investigation conducted by or on behalf of the Company; (xii) materially breached any provision of this Agreement, including Section 3(d) herein, after notice and a reasonable opportunity to cure such behavior (if the behavior is of the nature that it can be cured); (xiii) intentionally or willfully failed to comply with the reasonable directives of the Board or the CEO of the Company; (xiv) committed an act or omission constituting gross negligence or willful misconduct which causes, at least in part, the Company to restate its financial statements for a completed fiscal period after having filed such financial statements with the Securities and Exchange Commission; or (xv) been found by a court, the Securities and Exchange Commission or any state governmental authority which regulates or enforces such state’s securities laws, in a final determination, to have violated any applicable securities laws, whether such finding was after a hearing or trial or on consent without admitting or denying any allegations of wrongdoing..  

“Disability" means the occurrence of either of the following circumstances: (i) if Executive is deemed disabled for purposes of any long-term disability insurance policy paid for by the Company and in effect at such time, or (ii) if in the exercise of the reasonable judgment of the Company, due to accident, mental or physical illness, or any other reason, Executive has become physically or mentally incapable of performing, with or without reasonable accommodation, the essential functions of his employment for a period of more than sixty(60) consecutive days or for ninety (90) days within a three hundred and sixty-five (365) day period.

"Effective Date of Termination" with respect to any purported termination of the Executive's employment, shall mean (i) if the Executive's employment is terminated by his death, the date of his death, (ii) if the Executive's employment is terminated for Cause or without Cause, the date specified in the Notice of Termination, (iii) if the Executive's employment is terminated as a result of a Disability, the date on which it is finally determined that the Executive is Disabled and (iv) if Executive terminates his employment for Good Reason or otherwise voluntarily terminates his employment, the date specified in the Notice of Termination.

"Good Reason" means the material breach of any of the material terms or conditions of this Agreement by the Company.

"Notice of Termination" means a notice indicating the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment with the Company under the provision so indicated.

"Person" shall have the meaning ascribed thereto in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended, as modified, applied and used in Sections 13(d) and 14(d) thereof; provided, however, a Person shall not include (i) the Company, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company (in its capacity as such), (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporate entity owned, directly or indirectly, by the Stockholders in substantially the same character and proportions as their ownership of interests in the Company.

(b)

Termination.  

(i)

Either the Company or the Executive, in his or its sole discretion, may terminate the Executive’s employment without Cause at any time upon ninety (90) days written notice.  Upon the Effective Date of Termination, whether with or without Cause, the Executive shall have no right to compensation or reimbursement under Section 4 (except for compensation earned or reimbursable expenses incurred through the Effective Date of Termination) or to participate in any employee benefit programs under Section 5 for any period subsequent to the Effective Date of Termination, except as provided for by law or this Agreement. On or before the Effective Date of Termination or prior to receiving any final compensation or expenses due him, the Executive shall (a) return to the Company’s headquarters, (b) participate in an exit interview, and (c) execute a “Certificate of Conclusion of Employment,” certifying that he has complied with his obligations and acknowledging his continuing obligations under this Agreement.  The Executive’s failure to comply with the requirements of this Section shall constitute a material breach of this Agreement.  For clarity, if the Executive’s employment is terminated by the Company for any reason other than Cause, he shall be entitled to the Severance Payments set forth below.

(ii)

The Company may terminate the Executive’s employment pursuant to the terms of this Agreement at any time for Cause (as defined below) by giving written notice of termination.  The Executive shall have ten (10) days from the date of the notice to provide the Company CEO with evidence that the Company is mistaken as to Cause and that the Executive’s behavior does not meet the criteria for Cause.   During such ten (10) day period, the Executive shall be suspended without pay; provided, however, that if employment is reinstated then the Executive shall be paid for such ten (10) day period or if the termination is upheld, the Effective Date of Termination shall de deemed to be the date of receipt by the Executive of the written notice of termination.  Upon any such termination for Cause, the Executive shall have no right to compensation or reimbursement under Section 4 (except for compensation earned or reimbursable expenses incurred through the Effective Date of Termination), or to participate in any employee benefit programs under Section 5 for any period subsequent to the Effective Date of Termination, except as provided by law.

(c)

Severance.  In the event that the Executive executes and does not revoke a written release upon termination of employment, in substantially the form attached hereto as Exhibit B, the Company shall cause the payments and benefits described in this Section (the "Severance Payments") to be made upon the termination or non-renewal of the Executive's employment with the Company during the Employment Term unless such termination is (i) by the Company for Cause, death or Disability, or (ii) by the Executive without Good Reason.  Severance Payments due and payable to the Executive by the Company in accordance with this Section consist of:

(i)

In lieu of any further salary payments to the Executive for periods subsequent to the Effective Date of Termination, the Company shall cause an aggregate severance payment to be made to the Executive, in cash, equal to two (2) times such Executive's Annual Base Salary, along with the immediate vesting of all unvested long-term incentive grants, plus all of the Executive's deferred compensation, if any (the "Cash Severance Payment") in twenty-four (24) equal monthly installments; and

(ii)

For a twenty-four (24) month period after the Effective Date of Termination, the Company shall arrange to provide the Executive with life, disability, accident and health insurance benefits substantially similar to those which the Executive is receiving immediately prior to the Effective Date of Termination. Benefits otherwise receivable by the Executive pursuant to this Section shall be reduced to the extent comparable benefits are actually received by or made available to the Executive without cost during such period following the Executive's termination of employment (and any such benefits actually received by the Executive shall be reported to the Company by the Executive).

(d)

No Special Reimbursement. In the event that the Executive becomes entitled to Severance Payments which constitute an "excess parachute payment" as defined in Section 280G(b) of the Code and the Executive is subject to an excise tax imposed under Section 4999 of the Code or a similar non-U.S. tax (the "Excise Tax"), then the Severance Payments shall be reduced by an amount that results in the receipt by the Executive of the greatest Severance Payments that do not trigger the Excise Tax. All determinations under this Section shall be made by the Company's independent accounting firm immediately prior to the Effective Date of Termination.

(e)

Date of Payment. The Cash Severance Payment shall be made on the fifteenth day of each of the twenty-four (24) months following the month in which the Effective Date of Termination occurs. At the time that payments are made under this Section, the Company shall provide the Executive with a detailed written statement setting forth the manner in which such payments were calculated and the basis for such calculations.  Notwithstanding the foregoing, Cash Severance Payments shall immediately cease and no longer be payable if Executive violates any of the terms set forth in Sections 7 or 8 hereof.  Such remedy shall be in addition to any and all other remedies available by law or equity.

(f)

Notice of Termination. Any purported termination of the Executive's employment with the Company (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 16.  

7.

Non-Competition Agreement. 

(a)

Competition with the Company.  During the Employment Term and for twenty-four (24) months after the Effective Date of Termination, the Executive, directly or indirectly or, in association with or as a stockholder, director, officer, consultant, employee, partner, joint venturer, member or otherwise of or through any person, firm, corporation, partnership, association or other entity (any of the foregoing, an “Affiliated Entity”) shall not act as an executive officer or provide Services (as such term is defined in Section 8 hereof) to any entity which competes with the Company or its Affiliates, within any metropolitan area in the United States or elsewhere in which the Company or its subsidiaries or affiliates (collectively, the “Affiliates”), if applicable, is then engaged in the offer and sale of competitive Services (the “Prohibited Business”); provided, the foregoing shall not prohibit Executive from owning up to five percent (5%) of the securities of any publicly-traded enterprise that engages in the Prohibited Business provided the Executive is not an employee, director, officer, consultant to such enterprise or otherwise reimbursed for services rendered to such enterprise.  In addition, during the period commencing on the Effective Date of Termination and continuing for twenty-four (24) months thereafter, the Executive may not, directly or indirectly, including through any Affiliated Entity, seek Prohibited Business from any Client (as defined below) on behalf of any enterprise or business other than the Company, refer Prohibited Business generated from any Client to any enterprise or business other than the Company, cause any Client to cancel or reduce any existing contract for services it may have with the Company or receive commissions based on sales or otherwise relating to the Prohibited Business from any Client, enterprise or business other than the Company. For purposes of this Agreement, the term “Client” means any person, firm, corporation, limited liability company, partnership, association or other entity (i) to which the Company sold or provided Services in excess of $100,000 during the twenty-four (24) month period prior to the time at which any determination is required to be made as to whether any such person, firm, corporation, partnership, association or other entity is a Client, or (ii) who or which has been approached by an employee of the Company for the purpose of soliciting business for the Company and which business was reasonably expected to generate revenue in excess of $100,000.

(b)

No Payment.  The Executive acknowledges and agrees that no separate or additional payment will be required to be made to him in consideration of his undertakings in this Section 7.

(c)

References. References to the Company in this Section 7 shall include the Company’s Affiliates.

(d)

Prior Consultancy.  Subject to the terms of this Section 7, Executive may complete any consulting assignments (that Executive is engaged in the day prior to the Effective Date) within sixty (60) days of the Effective Date; provided that, such consulting effort will not interfere with the Executive’s responsibilities to the Company under this Agreement.

8.

Non-Disclosure of Confidential Information.  

(a)

Confidential Information. “Confidential Information” includes, but is not limited to, trade secrets (as defined by the common law and statute in Florida or New Jersey or any future Florida or New Jersey statute), processes, policies, procedures, techniques (including recruiting techniques), designs, drawings, know-how, show-how, technical information, specifications, computer 

software and source code, information and data relating to the development, research, testing, costs, marketing and uses of the Services, the Company’s budgets and strategic plans, and the identity and special needs of Clients, databases, data, all technology relating to the Company’s businesses, systems, methods of operation, Client lists, Client information, solicitation leads, marketing and advertising materials, methods and manuals and forms, all of which pertain to the activities or operations of the Company, names, home addresses and all telephone numbers and e-mail addresses of the Company’s employees, former employees, clients and former clients. In addition, Confidential Information also includes the identity of Clients and the identity of and telephone numbers, e-mail addresses and other addresses of employees or agents of Clients who are the persons with whom the Company’s employees and agents communicate in the ordinary course of business.  For purposes of this Agreement, the following will not constitute Confidential Information: (i) information which is or subsequently becomes generally available to the public through no act of the Executive, (ii) information set forth in the written records of the Executive prior to disclosure to the Executive by or on behalf of the Company, and (iii) information which is lawfully obtained by the Executive in writing from a third party (excluding any Affiliates of the Executive) who did not acquire such confidential information or trade secret, directly or indirectly, from the Executive or the Company.  As used herein, the term “Services” shall include the providing of early and late stage clinical drug development services, clinical trials management services and other services engaged in by the Company during the Employment Term.  

(b)

Legitimate Business Interests.  The Executive recognizes that the Company has legitimate business interests to protect and, as a consequence, the Executive agrees to the restrictions contained in this Agreement because they further the Company’s legitimate business interests.  These legitimate business interests include, but are not limited to (i) trade secrets, (ii) valuable confidential business or professional information that otherwise does not qualify as trade secrets, including all Confidential Information, (iii) substantial relationships with specific prospective or existing Clients or clients, (iv) Client goodwill associated with the Company’s business and (v) specialized training relating to the Services and the Company’s technology, methods and procedures.  

(c)

Confidentiality.  The Confidential Information shall be held by the Executive in the strictest confidence and shall not, without the prior written consent of the Company, be disclosed to any person other than in connection with the Executive’s employment with the Company.  The Executive further acknowledges that such Confidential Information as is acquired and used by the Company is a special, valuable and unique asset.  The Executive shall exercise all due and diligence precautions to protect the integrity of the Company’s Confidential Information and to keep it confidential whether it is in written form, on electronic media or oral.  The Executive shall not copy any Confidential Information except to the extent necessary to his or her employment nor remove any Confidential Information or copies thereof from the Company’s premises except to the extent necessary to his or her employment and then only with the authorization of an officer of the Company.  All records, files, materials and other Confidential Information obtained by the Executive in the course of his or her employment with the Company are confidential and proprietary and shall remain the exclusive property of the Company or its Clients, as the case may be.  The Executive shall not, except in connection with and as required by his or her performance of his or her duties under this Agreement, for any reason use for his or her own benefit or the benefit of any person or entity with which he may be associated or disclose any such Confidential Information to any person, firm, corporation, association or other entity for any reason or purpose whatsoever without the prior written consent of an officer of the Company (excluding the Executive, if applicable).

(d)

References to the Company in this Section 8 shall include the Company’s Affiliates.

9.

Equitable Relief.

(a)

The Company and the Executive recognize that the services to be rendered under this Agreement by the Executive are special, unique and of extraordinary character, and that in the event of the breach by the Executive of the terms and conditions of this Agreement or if the Executive, shall cease to be an employee of the Company for any reason and take any action in violation of Section 7 and/or Section 8, the Company shall be entitled to institute and prosecute proceedings in any court of competent jurisdiction referred to in Section 9(b) below to enjoin the Executive from breaching the provisions of Section 7 or Section 8.  In such action, the Company shall not be required to plead or prove irreparable harm or lack of an adequate remedy at law or post a bond or any security.

(b)

Any action between the Company and Executive must be commenced in Mercer County, New Jersey.  The Executive and the Company irrevocably and unconditionally submit to the exclusive jurisdiction of such courts and agree to take any and all future action necessary to submit to the jurisdiction of such courts.  The Executive and the Company irrevocably waive any objection that they now have or hereafter irrevocably waive any objection that they now have or hereafter may have to the laying of venue of any suit, action or proceeding brought in any such court and further irrevocably waive any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  Final judgment against the Executive or the Company in any such suit shall be conclusive and may be enforced in other jurisdictions by suit on the judgment, a certified or true copy of which shall be conclusive evidence of the fact and the amount of any liability of the Executive or the Company therein described, or by appropriate proceedings under any applicable treaty or otherwise.

10.

Conflicts of Interest.  Except as otherwise set forth in Section 7(a), while employed by the Company, the Executive shall not, directly or indirectly, unless approved  by the Board:

(a)

participate as an individual in any way in the benefits of transactions with any of the Company suppliers or Clients, including, without limitation, having a financial interest in the Company’s suppliers or Clients, or making loans to, or receiving loans from, the Company’s suppliers or Clients;

(b)

realize a personal gain or advantage from a transaction in which the Company has an interest or use information obtained in connection with the Executive’s employment with the Company for the Executive’s personal advantage or gain; or

(c)

accept any offer to serve as an officer, director, partner, consultant, manager with, or to be employed in a technical capacity by, a person or entity that does business with the Company.

As used in Section 10(a), (b) or (c), references to the Company also includes its Affiliates.

11.

Inventions, Ideas, Processes, and Designs.  All inventions, ideas, processes, programs, software, and designs (including all improvements) (a) conceived or made by the Executive during the 

course of his or her employment with the Company (whether or not actually conceived during regular business hours) and for a period of six (6) months subsequent to the Effective Date of Termination or expiration of such employment with the Company and (b) related to the business of the Company, shall be disclosed in writing promptly to the Company and shall be the sole and exclusive property of the Company.  An invention, idea, process, program, software, or design (including an improvement) shall be deemed related to the business of the Company if (x) it was made with the Company’s equipment, supplies, facilities, or Confidential Information, (y) results from work performed by the Executive for the Company, or (z) pertains to the current business or demonstrably anticipated research or development work of the Company.  The Executive shall cooperate with the Company and its attorneys in the preparation of patent and copyright applications for such developments and, upon request, shall promptly assign all such inventions, ideas, processes, and designs to the Company.  The decision to file for patent or copyright protection or to maintain such development as a trade secret shall be in the sole discretion of the Company, and the Executive shall be bound by such decision.  

12.

Indebtedness.  If, during the course of the Executive’s employment under this Agreement, the Executive becomes indebted to the Company for any reason, the Company may, if it so elects, set off any sum due to the Company from the Executive and collect any remaining balance from the Executive.

13.

Non-Disparagement. During the Employment Term and any time thereafter the Executive shall not disparage or cause to be disparaged (whether directly or indirectly), in any forum or through any medium of communication, the Company or any of its affiliates, employees, consultants, customers, advisors or agents.

14.

Assignability.  The rights and obligations of the Company under this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company. The Executive’s obligations hereunder may not be assigned or alienated and any attempt to do so by the Executive will be void.

15.

Severability.

(a)

The Executive expressly agrees that the character, duration and geographical scope of the non-competition provisions set forth in this Agreement are reasonable in light of the circumstances as they exist on the date hereof.  Should a decision, however, be made at a later date by a court of competent jurisdiction that the character, duration or geographical scope of such provisions is unreasonable, then it is the intention and the agreement of the Executive and the Company that this Agreement shall be construed by the court in such a manner as to impose only those restrictions on the Executive’s conduct that are reasonable in the light of the circumstances and as are necessary to assure to the Company the benefits of this Agreement.  If, in any judicial proceeding, a court shall refuse to enforce all of the separate covenants deemed included herein because taken together they are more extensive than necessary to assure to the Company the intended benefits of this Agreement, it is expressly understood and agreed by the parties hereto that the provisions of this Agreement that, if eliminated, would permit the remaining separate provisions to be enforced in such proceeding shall be deemed eliminated, for the purposes of such proceeding, from this Agreement.

(b)

If any provision of this Agreement otherwise is deemed to be invalid or unenforceable or is prohibited by the laws of the state or jurisdiction where it is to be performed, this 

Agreement shall be considered divisible as to such provision and such provision shall be inoperative in such state or jurisdiction and shall not be part of the consideration moving from either of the parties to the other.  The remaining provisions of this Agreement shall be valid and binding and of like effect as though such provision were not included and the invalid or unenforceable provision shall be substituted with a provision which most closely approximates the intent and the economic effect of the invalid or unenforceable provision and which would be enforceable to the maximum extent permitted in such jurisdiction or in such case.

16.

Notices and Addresses.  All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by Federal Express or similar overnight delivery, or by facsimile delivery followed by Federal Express or similar next business day delivery, as follows:

To the Company:

SFBC International, Inc.

504 Carnegie Center

Princeton, NJ 08540

Fax: (609)514-0390

Attn: Chief Executive Officer

With a copy to:

Morgan Lewis & Bockius, LLP

502 Carnegie Center

Princeton, NJ 08540

Fax: (609)919-6701

Attn: Denis Segota, Esq.

To the Executive:

Mark Di Ianni

24 Van Dyke Road

Hopewell, NJ 08525

Fax: (305) 398-9981

or to such other address as either of them, by notice to the other may designate from time to time.  The transmission confirmation receipt from the sender’s facsimile machine shall be evidence of successful facsimile delivery.  Time shall be counted to, or from, as the case may be, the delivery in person or by mailing.

17.

Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  The execution of this Agreement may be by actual or facsimile signature. 

18.

Attorney’s Fees.  In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation, breach or enforcement thereof, and any action or proceeding is commenced to enforce the provisions of this Agreement, each party shall be responsible for its own attorney’s fee, costs and expenses.

19.

Governing Law.  This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating to its execution, its validity, the 

obligations provided therein or performance shall be governed or interpreted according to the internal laws of the State of New Jersey without regard to choice of law considerations.  

20.

Entire Agreement.  This Agreement constitutes the entire agreement between the parties and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof.  Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, except by a statement in writing signed by the party or parties against which enforcement or the change, waiver discharge or termination is sought.

21.

Additional Documents.  The parties hereto shall execute such additional instruments as may be reasonably required by their counsel in order to carry out the purpose and intent of this Agreement and to fulfill the obligations of the parties hereunder.

22.

Section and Paragraph Headings.  The section and paragraph headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date set forth above.

SFBC International, Inc.

By:  /s/ JEFFREY P. MCMULLEN

Jeffrey P. McMullen 

Chief Executive Officer

IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date set forth above.

Executive

/s/ MARK DI IANNI

Mark Di Ianni

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