Document:

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                                                         Exhibit 10(e)

McDONALD'S CORPORATION 1992 STOCK OWNERSHIP INCENTIVE PLAN AS AMENDED AND
RESTATED

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THE PLAN

McDonald's Corporation, a Delaware corporation (the "Company") established the
McDonald's Corporation 1992 Stock Ownership Incentive Plan (the "Plan")
effective as of June 1, 1992. The Plan was first amended and restated, effective
as of June 1, 1995 and was subsequently amended and restated effective as of
March 19, 1997, January 20, 1998, May 1, 1999, January 25, 2000 and January 1,
2001. Unless specifically provided for in an Award (as defined herein) to the
contrary, an Award shall be governed by and subject to the applicable provisions
of the Plan in effect on the date such Award was granted, or in the case of an
amended Award, the date the Award was amended.

1.   Purpose

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

2.   Definitions

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

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

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

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

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

     (e)  "Change in Control" shall be deemed to have occurred at such time as:

          (i)  any "person" (as that term is used in Sections 13(d) and 14(d)(2)
of the Exchange Act) (other than any subsidiary of the Company, any employee
benefit plan of the Company or any of its subsidiaries, or any related trust) is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities representing 20% or more of the
combined voting power for election of directors of the then outstanding
securities of the Company or any successor of the Company;
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          (ii)  during any period of two consecutive years or less,
individuals who at the beginning of such period constituted the Board of
Directors of the Company cease, for any reason, to constitute at least a
majority of the Board of Directors, unless the election or nomination for
election of each new director was approved by a vote of at least two-thirds of
the directors then still in office who were directors at the beginning of the
period or whose election or nomination for election was so approved; or

          (iii) the stockholders of the Company approve any a merger,
reorganization, consolidation, or similar transaction, a plan or agreement for
the sale or other disposition of assets which, as of the date of the Company's
most recent annual or quarterly consolidated financial statements, accounted for
50% or more of the net book value of the Company's consolidated assets or 50% or
more of the Company's consolidated revenues, or a plan of liquidation of the
Company (any of the foregoing, a "Reorganization Transaction") that, based on
information included in the proxy and other materials distributed by the Company
to its stockholders in connection with the solicitation of such stockholder
approval, is not expected to qualify as an Exempt Reorganization Transaction.

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

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

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

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

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

     (k)  "Exempt Reorganization Transaction" means a Reorganization Transaction
that results in the persons who were the direct or indirect owners of the
outstanding voting securities of the Company immediately before such
Reorganization Transaction becoming, immediately after the consummation of such
Reorganization Transaction, the direct or indirect beneficial owners of voting
securities representing more than 70% of the combined voting power of the then-
outstanding voting securities of the surviving corporation, in substantially the
same respective proportions as such persons' ownership of the voting securities
of the Company immediately before such Reorganization Transaction.

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

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

     (n)  "Grantee" means an individual who has been granted an Award.

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

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     (p)  "Job Elimination" includes terminations of employment by the Company
due to corporate restructuring or reorganization, job restructuring, reductions
in force, outsourcing or replacement of jobs by technology.

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

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

     (s)  "1934 Act" means the Securities Exchange Act of 1934, as amended.
References to a particular section of, or rule under, the 1934 Act shall include
references to successor provisions.

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

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

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

     (w)  "Retirement" means a termination of employment with the Company and
its Subsidiaries any time after attaining age 60 with at least 20 years of
Company service. For options granted on or after May 1, 1999, Retirement shall
also mean a termination of employment with the Company and its Subsidiaries with
combined age and years of service equal to or greater than 70.

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

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

     (z)  "Stock" means the common stock of the Company, par value $.01 per
share.

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

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

3.   Scope of this Plan

     (a)  The number of shares of Stock which represented five percent (5%) of
the number of issued and outstanding shares of Stock as of June 1, 1992 was made
available and reserved for delivery on account of the exercise of Awards and
payment of benefits in connection with Awards. Effective June 1, 1995, January
20, 1998, May 20, 1999, January 25, 2000 and January 1, 2001 an additional 64
million, 30 million, 10 million, 18 million and 25 million shares of Stock,
respectively, were made available and were reserved for delivery on account of
the exercise of Awards and payment of benefits in connection with Awards. Such
shares may be treasury shares or newly issued shares, as may be determined from
time to time by the Board or the Committee.

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     (b)  Subject to adjustment as provided in Section 22, the maximum number of
Shares of Stock for which Awards may be granted to any Grantee in any three-year
period shall not exceed 5,000,000.

     (c)  Subject to Section 3(a) and (b) (as to the maximum number of shares of
Stock available for delivery in connection with Awards) and to Section 3(d), up
to 10,000,000 shares of restricted stock, and up to 400,000 bonus shares of
Stock may be granted under this Plan.

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

4.   Administration

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

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

     (c)  The Committee shall have full and final authority, in its discretion,
but subject to the express provisions of this Plan, as follows:

          (i)   to grant Awards,

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

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

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

          (v)   to determine the terms and provisions and any restrictions or
conditions (including specifying such performance criteria as the Committee
deems appropriate, and imposing restrictions with respect to stock acquired upon
exercise of an option, which restrictions may continue beyond the Grantee's
termination of employment) of the written agreements by which all Awards shall
be evidenced ("Award Agreements") which need not be identical and, with the
consent of the Grantee, to modify any such Award Agreement at any time,

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

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

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

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

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

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

          (xii)  to prescribe rules and regulations concerning the
transferability of any Awards granted on or after June 1, 1995 and to make such
adjustments or modifications to Awards transferable pursuant to Section 8 as are
necessary and advisable to fulfill the purposes of this Plan.

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

5.   Eligibility

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

6.   Conditions to Grants

     (a)  General conditions.

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

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

          (iii) A Grantee may, if otherwise eligible, be granted additional
Awards in any combination.

     (b)  Grant of options and option price. No later than the Grant Date of any
option, the Committee shall determine the Option Price of such option. The
Option Price of an option shall not be less than 100% of the Fair Market Value
of the Stock on the Grant Date. Such price shall be subject to adjustment as
provided in Section 22. The Award Agreement may provide that the option shall be
exercisable for restricted stock.

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

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

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

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

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

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

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

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

          (vi)  shall require the Grantee to notify the Committee of any
disposition of any Stock issued pursuant to the exercise of the incentive stock
option under the circumstances described in Section 421(b) of the Code (relating
to certain disqualifying dispositions), within 10 days of such disposition; and

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

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

     (d)  Grant of Shares of Restricted Stock.

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

          (ii)  The Committee shall, in its discretion, determine the amount, if
any, that a Grantee shall pay for shares of restricted stock, subject to the
following sentence. Except with respect to shares of restricted stock that are
treasury shares, for which no payment need be required, the Committee shall
require the Grantee to pay at least the Minimum Consideration for each share of
restricted stock granted to such Grantee. Such payment shall be made in full by
the Grantee before the delivery of the shares and in any event no later than 10
days after the Grant Date for such shares. In the discretion of the Committee
and to the extent permitted by law, payment may also be made in accordance with
Section 10.

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

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

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

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

          (iv)  If a share of restricted stock is forfeited, then (A) if the
Grantee was required to pay for such share or acquired such restricted stock
upon the exercise of an option, the Grantee shall be deemed to have resold such
share of restricted stock to the Company at the lesser of (1) the amount paid
or, if the restricted stock was acquired on exercise of an option, the Option
Price paid by the Grantee for such share of restricted stock, or (2) the Fair
Market Value of a share of Stock on the date of such forfeiture; (B) the Company
shall pay to the Grantee the amount determined under clause (A) of this sentence
as soon as is administratively practical; and such share of restricted stock
shall cease to be outstanding, and shall no longer confer on the Grantee thereof
any rights as a stockholder of the Company, from and after the later of the date
the event causing the forfeiture occurred or the date of the Company's tender of
the payment specified in clause (B) of this sentence, whether or not such tender
is accepted by the Grantee.

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

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

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option or performance units, or (iii) the date such shares of restricted stock
become nonforfeitable.

     (f)  Grant of Performance Units.

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

                 (A)  determine performance goals applicable to such grant,

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

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

          (ii)   In establishing performance goals, the Committee may consider
any performance factor or factors it deems appropriate, including net income,
growth in net income, earnings per share, growth of earnings per share, return
on equity or return on capital, remaining employed for a specified period, or
any other factor. The Committee may, at any time, in its discretion, modify
performance goals in order to facilitate their attainment for any reason,
including recognition of unusual or nonrecurring events affecting the Company or
a Subsidiary or changes in applicable laws, regulations or accounting
principles. If a Grantee is promoted, demoted or transferred to a different
business unit of the Company during a Measuring Period, then, to the extent the
Committee determines the performance goals or Measuring Period are no longer
appropriate, (A) the Committee may adjust, change or eliminate the performance
goals or the applicable Measuring Period as it deems appropriate in order to
make them appropriate and comparable to the initial performance goals or
Measuring Period; or (B) make a cash payment to the Grantee in an amount
determined in accordance with the method described in Section 14(b)(iii),
substituting the effective date of such promotion, demotion or transfer for the
termination of employment referred to in Section 14(b)(iii).

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

          (iv)   If a Grantee commences employment after the performance goals
of a particular Measuring Period are established, the Committee may grant an
Award that is proportionately adjusted based on the period of actual service
during the Measuring Period.

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

7.   Grantee's Agreement to Serve

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

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Award Agreement. The Company and its Subsidiaries reserve the same rights to
terminate employment of any Grantee as existed before the Effective Date.

8.       Non-Transferability

Each Award (other than restricted stock) granted hereunder shall not be
assignable or transferable other than by will or the laws of descent and
distribution; provided, however, that a Grantee may, in a manner specified by
the Committee and to the extent provided in this Plan: (a) designate in writing
a beneficiary to exercise his Award after the Grantee's death; (b) transfer an
option (other than an incentive stock option), stock appreciation right or
performance unit to a revocable inter vivos trust as to which the Grantee is
both the settlor and the trustee; and (c) if the Award Agreement expressly
permits, transfer an Award (other than restricted stock or an incentive stock
option) for no consideration to any of the following permissible transferees
(each a "Permissible Transferee"): (w) any member of the Immediate Family of the
Grantee to whom such Award was granted, (x) any trust for the benefit of members
of the Grantee's Immediate Family, (y) any partnership whose partners are
members of the Grantee's Immediate Family or (z) Ronald McDonald Children's
Charities or any Ronald McDonald House; and further provided that (i) the
transferee shall remain subject to all of the terms and conditions applicable to
such Award prior to such transfer; (ii) any such transfer shall be subject to
and in accordance with the rules and regulations prescribed by the Committee in
accordance with Section 4(c)(xii) (the "Transfer Rules") and (iii) except as
otherwise expressly provided for in the Plan or in the Transfer Rules, a
Permissible Transferee shall have all the rights and obligations of the Grantee
hereunder and the Grantee shall not retain any rights with respect to the
transferred Award and further provided that the payment of any tax attributable
to the exercise of an Award shall remain the obligation of the Grantee and the
period during which an Award shall remain exercisable under Section 14 shall
depend upon the time and nature of the Grantee's termination of employment. For
purposes of this Section 8, "Immediate Family" includes, such Grantee's spouse,
children, grandchildren, stepchildren, parents, stepparents, grandparents,
siblings , nieces, nephews and in-laws. Notwithstanding the foregoing, the
Committee may, from time to time, in its sole discretion designate additional
individuals, persons or classes as Permissible Transferees.

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

9.       Exercise

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

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

               (i)    cash,

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

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

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

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

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

         (b)   Exercise of Stock Appreciation Rights. Subject to Sections
4(c)(viii) and 14 and such terms and conditions as the Committee may impose,
each stock appreciation right shall be exercisable not earlier than the first
anniversary of the Grant Date of such stock appreciation right, to the extent
the option with which it is identified, if any, may be exercised, to the extent
the restricted stock with which it is identified, if any, is nonforfeitable, or
to the extent the performance unit with which it is identified, if any, may be
exercised unless otherwise provided by the Committee. Stock appreciation rights
shall be exercised by delivery to the Company of written notice of intent to
exercise a specific number of stock appreciation rights. Unless otherwise
provided in the applicable Award Agreement, the exercise of stock appreciation
rights which are identified with shares of Stock subject to an option, shares of
restricted stock or performance units shall result in the cancellation or
forfeiture of such option, shares of restricted stock or performance units, as
the case may be, to the extent of such exercise.

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

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

               (ii) an amount equal to:

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

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

         (c)   Exercise of Performance Units.

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

                                       10
<PAGE>

rights shall result in the cancellation or forfeiture of such shares of Stock
subject to option, shares of restricted stock or stock appreciation rights as
the case may be, to the extent of such exercise.

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

                      (A)  the Unit Value (as defined below) multiplied by

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

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

                      (A)  a dollar amount,

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

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

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

               (iv)   Unless expressly provided for in the Award Agreement, the
benefit upon the exercise of a performance unit shall be payable on or about
April 1st following the close of the Measuring Period.

               (v)    Benefits upon exercise of a performance unit shall be
payable in cash (unless deferred under the terms and conditions of the Company's
Deferred Income Plan or in accordance with such other rules and regulations as
the Committee may approve), except that the Committee, may, in its discretion,
provide in the Award Agreement that benefits, with respect to any particular
exercise, may be paid wholly or partly in Stock. In the event the Award
Agreement provides that the benefit may be paid wholly in Stock unless the
Committee, in its discretion, specifies at the time of exercise that the benefit
shall be paid partly or wholly in cash, the number of shares of Stock payable in
lieu of cash shall be determined by valuing the Stock at its Fair Market Value
on the date such benefit is to be paid.

10.      Loans and Guarantees

The Committee may, in its discretion:

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

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

         Any such payment deferral or guarantee by the Company pursuant to this
Section 10 shall be on such terms and conditions as the Committee may determine;
provided that the interest rate applicable to any such payment deferral shall be
not more favorable to the Grantee than the terms applicable to funds borrowed by
the Company. Notwithstanding the foregoing, a Grantee shall not be entitled to
defer the

                                       11
<PAGE>

payment of such Option Price, purchase price or any related taxes unless the
Grantee (i) enters into a binding obligation to pay the deferred amount and (ii)
except with respect to treasury shares, pays upon exercise of an option or grant
of shares of restricted stock, as the case may be, an amount equal to or greater
than the Minimum Consideration thereof. If the Committee has permitted a payment
deferral or caused the Company to guarantee a loan pursuant to this Section 10,
then the Committee may, in its discretion, require the immediate payment of such
deferred amount or the immediate release of such guarantee upon the Grantee's
termination of employment or if the Grantee sells or otherwise transfers the
Grantee's shares of Stock purchased pursuant to such deferral or guarantee.

11.      Notification under Section 83(b)

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

12.      Mandatory Withholding Taxes

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

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

13.      Elective Share Withholding

         (a)   Subject to Section 13(b), a Grantee may elect the withholding
("Share Withholding") by the Company of a portion of the shares of Stock
otherwise deliverable to such Grantee upon the exercise or payment of an Award
or upon a share of restricted stock becoming nonforfeitable (each a "Taxable
Event") having a Fair Market Value equal to the minimum amount necessary to
satisfy required federal, state, or local withholding tax liability attributable
to the Taxable Event.

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

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

                                       12
<PAGE>

               (ii)   the Grantee's election shall be irrevocable;

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

14.      Termination of Employment

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

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

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

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

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

               (ii)   any unexercised option or stock appreciation right,
whether or not exercisable on the date of such termination of employment may be
exercised, in whole or in part, at any time within three years after such
termination of employment by the Grantee, or after the Grantee's death, by (A)
his personal representative or by the person to whom the option or stock
appreciation right is transferred by will or the applicable laws of descent and
distribution, (B) the Grantee's beneficiary designated in accordance with
Sections 6(c)(vii) or 8, (C) the then-acting trustee of the trust described in
clause (b) in the first paragraph of Section 8 (the "Trust"); or (D) a
Permissible Transferee of an Award assigned or transferred in accordance with
Section 8; and

               (iii)  any unexercised performance unit shall be deemed exercised
upon such termination of employment by the Grantee (or, if applicable, an
individual or entity as specified in Section 14(b)(ii)) as follows: (A) the
value of any vested performance units shall be payable at the same time that
payments for that Measuring Period are made to other Grantees under the Plan;
and (B) the value of any unvested performance units shall be payable on or about
April 1st of the year following the year of such termination; provided that the
value of any unvested performance unit shall be equal to the product of the Unit
Value multiplied successively by each of the following:

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

                      (2)  the percentage that would be earned under the terms
of the applicable Award Agreement assuming that the rate at which the
performance goals are achieved as of December 31 following termination would
continue until the end of the Measuring Period (the "Performance Percentage
Factor").

         (c)   On Account of Retirement. (i) If a Grantee has a termination of
employment on account of Retirement after age 60 with 20 years or more of
Company service, any unexercised option or stock appreciation right (other than
a stock appreciation right identified with a share of restricted stock or a
performance unit) which is then exercisable or which would become exercisable
within three years of such Retirement if the Grantee remained employed by the
Company or a Subsidiary throughout such three-year

                                       13
<PAGE>

period, may be exercised, in whole or in part, by the Grantee or Permissible
Transferee of an Award assigned or transferred in accordance with Section 8, at
any time within three years after the Grantee's Retirement. (ii) If a Grantee
has a termination of employment on account of Retirement with combined age and
years of Company service equal to or greater than 70, any unexercised option,
which was granted on or after May 1, 1999 and that is then exercisable or which
would become exercisable within three years of such Retirement if the Grantee
remained employed by the Company or a Subsidiary throughout such three-year
period, may be exercised, in whole or in part, by the Grantee or Permissible
Transferee of an Award assigned or transferred in accordance with Section 8, at
any time within three years after the Grantee's Retirement; provided that the
Grantee executes and delivers to the Company a two-year non-competition
agreement (in a form reasonably satisfactory to the Company); and further
provided that the Grantee provides one-year's prior written notice of the
Grantee's intention to retire to the officer in charge of the Benefits and
Compensation Department in Oak Brook Illinois. If the Grantee violates the
provisions of the non-competition agreement during the two-year period following
Retirement, all unexercised options granted on or after May 1, 1999 will
immediately terminate and will not be exercisable.

The nonforfeitability and exercisability of the Grantee's restricted stock (and
any stock appreciation rights identified therewith) shall be determined under
Section 14(f). The vesting and exercisability of the Grantee's performance units
shall be determined under Section 14(b)(iii).

         (d)   On Account of Termination of Employment After Age 60. If a
Grantee has a termination of employment after attaining age 60, other than a
termination of employment on account of death, Disability or Retirement, any
unexercised option or stock appreciation right (other than a stock appreciation
right identified with a share of restricted stock or a performance unit) to the
extent exercisable on the date of such termination of employment, may be
exercised, in whole or in part by the Grantee or Permissible Transferee of an
Award assigned or transferred in accordance with Section 8, at any time within
one year after the Grantee's termination of employment. The nonforfeitability
and exercisability of the Grantee's restricted stock (and any stock appreciation
rights identified therewith) shall be determined under Section 14(f). The
vesting and exercisability of the Grantee's performance units shall be
determined under Section 14(b)(iii).

         (e)   Special Circumstances. If a Grantee terminates employment to
become an owner-operator of a McDonald's restaurant or if a Grantee terminates
after January 15, 2000 as a result of a Job Elimination, the Grantee or
Permissible Transferee of an Award assigned or transferred in accordance with
Section 8 will receive an extension of time to exercise any unexercised Options
granted on or after May 1, 1999 and accelerated vesting of these Options based
on the following rules that incorporate age and years of Company service:

<TABLE>
<CAPTION>
               Age & Years of               Additional Vesting and Time to Exercise
               Company Service              Options Granted On or After May 1, 1999
               ---------------              ---------------------------------------
               <S>                          <C>
               70 plus years                3 Years
               60 to 69 years               2 Years
               50 to 59 years               1 Year
</TABLE>

         (f)   Any Other Reason.  If a Grantee has a termination of employment
for a reason other than those specified in this Section 14,

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

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

                                       14
<PAGE>

not a business day, such option or stock appreciation right may be exercised not
later than the first business day following such 30th day; and

               (iii)  the Grantee's performance units (and any stock
appreciation rights identified therewith) shall not vest further and may not be
exercised in whole or in part by the Grantee or Permissible Transferee of an
Award assigned or transferred in accordance with Section 8; provided that the
value of any vested performance units shall be payable to the Grantee at the
same time that payments for that Measuring Period are made to other Grantees
under the Plan.

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

15.      Equity Incentive Plans of Foreign Subsidiaries

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

16.      Securities Law Matters

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

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

17.      Funding

Benefits payable under this Plan to any person shall be paid directly by the
Company. The Company shall not be required to fund, or otherwise segregate
assets to be used for payment of, benefits under this Plan.

18.      No Employment Rights

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

                                       15
<PAGE>

19.      Rights as a Stockholder

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

20.      Nature of Payments

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

21.      Non-Uniform Determinations

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

22.      Adjustments

The Committee shall make equitable adjustment of:

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

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

         (c)   the Option Price,

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

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

                                       16
<PAGE>

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

All unexercised Options granted on or after May 1, 1999, which are held by a
Grantee shall become immediately exercisable upon the occurrence of a Change in
Control. Upon the approval by the stockholders of the Company of a plan of
liquidation for the Company, any unexercised options, stock appreciation rights
and performance units theretofore granted shall thereupon become exercisable,
and any shares of restricted stock that have not become nonforfeitable shall
become nonforfeitable.

23.      Amendment of this Plan

The Board may from time to time in its discretion amend or modify this Plan
without the approval of the stockholders of the Company, except as such
stockholder approval may be required (a) to permit the grant of Awards under,
and transactions in Stock pursuant to, this Plan to be exempt from liability
under Section 16(b) of the 1934 Act or (b) under the listing requirements of any
national securities exchange on which are listed any of the Company's equity
securities.

24.      Termination of this Plan

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

25.      No Illegal Transactions

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

26.      Controlling Law

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

27.      Severability

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

         Executed this 4th day of May 2001.

                                                  McDONALD'S CORPORATION

                                                  By:  /s/ Stanley R. Stein
                                                       -------------------------
                                                       Stanley R. Stein
                                                       Executive Vice President

                                       17<PAGE>

                                                                   Exhibit 10(h)

                           EXECUTIVE RETENTION PLAN
                           ------------------------
                   (as amended and restated March 20, 2001)

          McDonald's Corporation, a Delaware corporation (the "Company"), hereby
establishes the Executive Retention Plan (the "Plan") effective as of October 1,
1998 (the "Effective Date"). The Plan was amended and restated effective March
20, 2001.

                                   Article 1

                                    Purpose

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

                                   Article 2

                              Plan Administration

          2.01 The Committee. The Compensation Committee of the Board of
               -------------
Directors of the Company, as constituted from time to time (the "Committee"),
shall have overall responsibility for the establishment, amendment,
administration and operation of the Plan. The Committee may elect to delegate
certain of such responsibilities to one or more of its members and, in such
case, all references in this Plan to the "Committee" shall include a reference
to one or more of the Committee members to whom any such responsibilities have
been delegated. This Plan shall be administered in a uniform and
nondiscriminatory manner by the Committee, which shall have the responsibilities
and duties and powers under this Plan which are not specifically delegated to
anyone else, including the following powers:

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

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

          (iii) to decide on questions concerning this Plan and the eligibility
          of the persons identified as "Tier I Executives" and "Tier II
          Executives" (collectively, the "Executives") on Appendix A to
          participate in this Plan, in accordance with the provisions of this
          Plan;

                                       1
<PAGE>

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

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

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

          2.03 Discretionary Power of the Committee. The Committee from time to
               ------------------------------------
time may establish rules for the administration of this Plan. The Committee
shall have the sole discretion to make decisions and take any action with
respect to questions arising in connection with this Plan, including the
construction and interpretation of this Plan and the determination of
eligibility for and the amount of benefits under this Plan. The decisions or
actions of the Committee as to any questions arising in connection with this
Plan, including the construction and interpretation of this Plan, shall be final
and binding upon all Executives and their respective beneficiaries.

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

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

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

          2.07 Liability of the Committee; Indemnification. The members of the
               -------------------------------------------
Committee and the Plan Administrator shall have no liability with respect to any
action or

                                       2
<PAGE>

omission made by them in good faith nor from any action or omission made in
reliance upon (a) the advice or opinion of any accountant, legal counsel,
medical adviser or other professional consultant or (b) any resolutions of the
Board (or the Committee) certified by the Secretary or Assistant Secretary of
the Company. Each member of the Committee and the Plan Administrator shall be
indemnified, defended and held harmless by the Company and its respective
successors against all claims, liabilities, fines and penalties and all expenses
(including reasonable attorneys' fees and disbursements and other professional
costs incurred in enforcing this provision) reasonably incurred by or imposed
upon such individual which arise as a result of his or her actions or failure to
act in connection with the operation and administration of this Plan, to the
extent lawfully allowable and to the extent that such claim, liability, fine,
penalty or expense is not paid for by liability insurance purchased by or paid
for by the Company or an affiliate thereof. Notwithstanding the foregoing, the
Company shall not indemnify any person for any such amount incurred through any
settlement or compromise of any action unless the Company consents in writing to
such settlement or compromise, which consent shall not be unreasonably withheld.

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

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

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

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

          2.12 Allocations of Responsibility. The Committee shall have the
               -----------------------------
authority to allocate from time to time, in writing, all or any part of its
responsibilities under this Plan to one or more of its members as it may deem
advisable, and in the same manner to revoke such allocation of responsibilities.
Any action of the member to whom responsibilities are allocated in the exercise
of such allocated responsibilities shall have the same force and effect for all
purposes hereunder as if such action had been taken by the allocating authority.
The Committee shall not be liable for any acts or omissions of such member. The
member to whom responsibilities have been allocated shall periodically report to
the Committee concerning the discharge of the allocated responsibilities.

                                       3
<PAGE>

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

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

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

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

                                       4
<PAGE>

                                   Article 3

                               Retention Period

          As a condition of receiving the Transition Benefits (as defined in
Section 4.02) and the Continued Employment Benefits (as defined in Section
5.02), an Executive must provide services to the Company as an Executive Officer
(as defined below) throughout the Retention Period. During the Retention Period,
(i) an Executive's employment shall be on an at-will basis and (ii) the
Executive shall be entitled to participate in the Company's benefits and
compensation plans, practices, policies and programs as in effect from time to
time.

          For purposes of this Plan:

               (a)  an Executive's "Retention Period" shall mean the period
               commencing on the Executive's Start Date (as specified on
               Appendix A) and ending five years thereafter (in the case of Jack
               Greenberg) or three years thereafter (in the case of all other
               Executives); and

               (b)  "Executive Officer" means an executive officer (as defined
               by Rule 3b-7 (or any successor rule) under the Securities
               Exchange Act of 1934 as in effect from time to time) of the
               Company.

                                   Article 4

                               Transition Period

          4.01 Election to Become a Transition Officer. Upon an Executive's
               ---------------------------------------
completion of his or her Retention Period, such Executive may elect by written
notice (accompanied by a fully executed Release (as described in Section
8.01(i)) and Noncompetition Agreement (as defined in Section 9.01) (such notice,
Release and Noncompetition Agreement collectively referred to herein as the
"Transition Documents") to the Committee to become an officer of the Company who
is not an Executive Officer (such non-Executive Officer, a "Transition Officer),
provided that, in the case of a Tier II Executive (i) a successor has been
selected by the Company and has been approved by the Chief Executive Officer of
the Company (the "CEO") in such CEO's sole discretion, or (ii) such Tier II
Executive has attained age 62. Such election shall become effective upon the
Change-in-Status Date (as defined below) and the Executive shall thereafter
serve as a Transition Officer during a number of months (the "Transition
Period") equal to the lesser of (i) the number of the Executive's Years of
Service (as defined below), or (ii) 18 months. During the Transition Period, an
Executive's employment shall be on an at-will basis and subject to the
termination provisions set forth in Articles 6 and 7.

          For purposes of this Plan:

                                       5
<PAGE>

               (a)  an Executive's "Change-in-Status Date" shall mean the date
               specified in the Executive's Transition Documents, provided that
               the Committee may accelerate such date in its sole discretion;
               and

               (b)  an Executive's "Years of Service" shall equal the number of
               consecutive complete 12-month intervals during the period
               beginning on the earlier of the Executive's historical service
               date or company service date and ending on the Change-in-Status
               Date rounded down to the nearest complete 12-month interval
               (e.g., a period of 10 years, 8 months and 3 days shall equal 10
               "years of service").

          4.02 Transition Benefits. (a) Base Salary. During the Transition
               -------------------
Period, the Company shall pay an Executive a base salary at the annualized rate
in effect on the day immediately preceding the Change-in-Status Date but in no
event lower than the highest base salary in effect at any time between the
Effective Date and the Change-in-Status Date, provided that the base salary
payable under this Section shall be reduced to reflect any across-the-board
reductions implemented by the Committee prior to the Change-in-Status Date which
reductions affect Company officers generally (the "Annual Base Salary"). The
Annual Base Salary shall also be reduced to the extent that the Executive elects
to defer or reduce such salary under the terms of any deferred compensation plan
or other employee benefit plan or arrangement maintained or established by the
Company.

               (b)  Annual Bonus. In respect of each calendar year which ends
during the Transition Period, the Company shall pay to the Executive an Annual
Bonus (as defined below), which bonus shall be payable in a lump sum on April
1st of the year following the year in which it was earned (or such other date,
as determined by the Committee in accordance with the Company's Target Incentive
Program or any successor plan ("TIP")). In respect of any calendar year in which
the Transition Period ends, the Company shall pay to the Executive (in lieu of
an Annual Bonus) a Prorated Annual Bonus (as defined below), which Prorated
Bonus shall be payable in a lump sum within 60 days after the end of the
Transition Period.

          Notwithstanding the foregoing, the Annual Bonus shall be reduced to
the extent that the Executive previously elected to defer or reduce such bonus
under the terms of any deferred compensation plan or other employee benefit plan
or arrangement maintained or established by the Company. The Executive shall not
be entitled to defer any portion of the Prorated Bonus.

          For purposes of this Plan,

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

               (ii) "Full Target Percentage" shall mean the target percentage
               which the Executive was eligible to receive under TIP on the day
               immediately

                                       6
<PAGE>

               preceding the Change-in-Status Date without any adjustment, but
               in no event lower than the Executive's highest target percentage
               in effect at any time between the Effective Date and the Change-
               in-Status Date, provided that the target percentage shall be
               reduced to reflect any across-the-board reductions implemented by
               the Committee prior to the Change-in-Status Date which reductions
               affect Company officers generally, and

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

               (c)  Three-Year Incentive Plan Awards. During the Transition
Period, any outstanding awards under the Company's Three-Year Incentive Plan or
any successor plan ("LTIP") will continue to vest and become payable in
accordance with the Company's policies as in effect from time to time. Such LTIP
awards ("LTIP Awards") shall be computed by reference to 100% of the target
percentage the Executive would have received pursuant to the terms of the
original LTIP grant without any adjustment. During the Transition Period, the
Executive shall not be eligible to participate in any new cycles under LTIP or
other long-term incentive plan.

               (d)  Continued Vesting and Exercisability of Stock Options.
During the Transition Period, stock options will continue to vest, expire and
otherwise be subject to the express terms of the related stock option plan and
the applicable Golden M Certificate (or other applicable award agreement).
During the Transition Period, an Executive shall retain the right to exercise
any unexercised stock option to the extent vested on the date of exercise,
provided, however, that an Executive shall not be entitled to receive any
additional stock option grants and in no event shall the term of any stock
option extend beyond its original term.

               (e)  Benefit Programs and Policies. During the Transition Period,
all benefit plans, policies, fringe benefits and practices in effect from time
to time shall continue to apply to the Executive in accordance with the terms of
the benefit plans sponsored by the Company and the Company's policies and
procedures established for officers of the Company who are not Executive
Officers, except that: (i) the Executive will not be eligible for any pay
increase, (ii) the Executive will not be eligible to participate in TIP during
any year if the Transition Period ends prior to the end of a calendar year,
(iii) no new stock option grants will be given to the Executive, and (iv) no new
awards will be granted under LTIP. Amounts paid during the Transition Period
shall be treated as "compensation" for purposes of determining any benefits
provided under McDonald's Corporation Profit Sharing Program and the related
non-qualified benefit plans known as McCAP I, McCAP II or McEQUAL, and
McDonald's Corporation Deferred Income Plan and life insurance benefit plans
sponsored by McDonald's Corporation (collectively, the "Benefit Plans") to the
extent permitted by the terms of such Benefit Plans as in effect from time to
time. Nothing in this Plan shall be construed to limit the ability of the
Company to amend or terminate any of the plans, programs or arrangements under
which benefits are provided to officers and employees of the Company, and any
such terminations or amendments shall be effective as to the Executives.

                                       7
<PAGE>

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

                                   Article 5

                          Continued Employment Period

          5.01 Employee Status. Following the Transition Period, the Executive
               ---------------
will become a staff employee of the Company for a five year "Continued
Employment Period", provided that the Executive complies with the Noncompetition
Agreement at all times during the term of the Continued Employment Period. As a
condition to receiving the Continued Employment Benefits (defined in Section
5.02), the Executive shall have executed and delivered to the Committee the
Release described in Section 8.01(ii). During the Continued Employment Period,
an Executive's employment shall be on an at-will basis and subject to the
termination provisions set forth in Articles 6 and 7.

          5.02 Continued Employment Benefits. (a) Base Salary. During the
               -----------------------------
Continued Employment Period, the Company shall pay the Executive a base salary
for each year equal to twenty-five percent (25%) of his or her Annual Base
Salary (fifty percent (50%) in the case of Jack M. Greenberg, and thirty-five
percent (35%) in the case of James R. Cantalupo) (the "Continued Employment
Period Salary"), provided, however, that the Continued Employment Period Salary
shall be reduced to the extent that the Executive elects to defer or reduce such
salary under the terms of any employee benefit plan or arrangement maintained or
established by the Company.

               (b)  Target Incentive Awards. During the Continued Employment
Period, an Executive shall not be eligible to participate in TIP or any other
annual incentive plan of the Company.

               (c)  LTIP Awards. During the Continued Employment Period, any
outstanding awards under LTIP will continue to vest and become payable in
accordance with the Company's then current policies notwithstanding the
Executive's staff employee status during this period. Such LTIP Awards shall be
computed by reference to 100% of the target percentage the Executive would have
received pursuant to the terms of the original LTIP grant without any
adjustment. During the Continued Employment Period, the Executive shall not be
eligible to participate in any new cycles under LTIP or other long-term
incentive plan.

                                       8
<PAGE>

               (d)  Continued Vesting and Exercisability of Stock Options.
During the Continued Employment Period, stock options will continue to vest,
expire and otherwise be governed by the express terms of the related stock
option plan and the applicable Golden M Certificate (or other applicable award
agreement). During the Continued Employment Period, an Executive shall retain
the right to exercise any unexercised stock option to the extent vested on the
date of exercise, provided, however, that an Executive shall not be entitled to
receive any additional stock option grants and, in no event, shall the term of
any stock option extend beyond its original term.

               (e)  Benefit Programs and Policies. During the Continued
Employment Period, all benefit plans, policies, fringe benefits and practices in
effect from time to time shall continue to apply to the Executive in accordance
with the terms of the benefit plans sponsored by McDonald's and McDonald's
policies and procedures established for staff employees of the Company, except
that: (i) the Executive will not be eligible for any pay increase, (ii) the
Executive will not be eligible to participate in the TIP, (iii) no new stock
option grants will be given to the Executive, and (iv) no new awards will be
granted under LTIP. Amounts paid during the Continued Employment Period shall be
treated as "compensation" for purposes of determining any benefits provided
under the Benefit Plans to the extent permitted by the terms of such Benefit
Plans as in effect from time to time. Nothing in this Plan shall be construed to
limit the ability of the Company to amend or terminate any of the plans,
programs or arrangements under which benefits are provided to officers or
employees of the Company, and any such terminations or amendments shall be
effective as to the Executives.

          5.03 Time Devoted to Duties During Continued Employment Period. During
               ---------------------------------------------------------
the Continued Employment Period, an Executive shall devote such time to the
business of the Company as may be reasonably requested by the Company from time
to time, which requests shall be commensurate with the compensation the
Executive is receiving hereunder. Notwithstanding the foregoing, an Executive
may participate in various civic and philanthropic activities, may serve on
boards of directors and committees of not-for-profit organizations of the
Executive's choice, may serve as a member of one or more corporate boards of
directors and may engage in a full-time employment arrangement with another
organization of the Executive's choice, provided that such activities do not
violate the Executive's obligations set forth in Article 9. The Company shall
have the right to request that the Executive provide services to the Company
during the Continued Employment Period in a manner that reasonably accommodates
such outside activities, services and arrangements.

          5.04 Mitigation. In the event that an Executive shall engage in any
               ----------
employment arrangement permitted by Section 5.03 (including self-employment)
during the Continued Employment Period, no amount paid to or earned by such
Executive therefrom shall reduce any payments or other benefits due such
Executive pursuant to the Plan.

                                       9
<PAGE>

                                   Article 6

                           Termination of Employment

          6.01 Death or Disability. An Executive's employment shall terminate
               -------------------
automatically upon his or her death. In the event that (a) the Committee
determines in good faith that the Executive is suffering from a "Disability"
(together with its various cognates, as defined below) and (b) the appropriate
decisionmaker under any applicable Company plan or program providing disability
benefits to the Executive (a "Disability Plan") similarly determines that the
Executive is eligible for such benefits by virtue of the Executive's disability
(as defined for purposes of such plan or program), the Company may deliver to
the Executive written notice (a "Disability Termination Notice") in accordance
with Section 6.05 of this Plan of the Company's intention to terminate the
Executive's employment. In such event, the Executive's employment shall
terminate effective on the later of (y) the 30th day after receipt of such
Disability Termination Notice by the Executive and (z) the first date on which
the Executive becomes eligible for long-term disability benefits under the
principal Disability Plan applicable to the Executive (the "Disability Effective
Date"), provided, however, that (1) in the interim the Executive shall not have
returned to full-time performance of the Executive's duties and/or (2) the
Executive shall not have delivered to the Committee within 30 days of receipt of
a Disability Termination Notice a written objection thereto (an "Objection"). In
the event of a timely Objection, any termination of the Executive shall be
suspended and the Executive shall be promptly examined by two physicians or
other professionals skilled in the relevant field, one selected by the Executive
and one by the Committee. Each of the two professionals shall issue a written
opinion within 15 days following the completion of his or her examination as to
whether the Executive is Disabled in accordance with the definition provided in
this Plan. If the two professionals agree, each of the Executive and the Company
shall be bound by their joint conclusion. If the two professionals disagree,
they shall jointly agree on a third professional to conduct a similar
examination. Each of the Executive and the Company shall be bound by the
conclusion of such third professional. The Executive agrees to each such
examination and to waive any confidentiality rights necessary to allow each of
the professionals conducting such examinations to do so. The Company shall pay
all fees and costs of all such examinations. In the event of a disagreement as
to the determination of the Executive's disability for purposes of a Disability
Plan, such disagreement shall be resolved as provided for in such Disability
Plan. For purposes of this Plan, the term "Disability" shall mean the material
inability of the Executive, due to injury, illness, disease or bodily, mental or
emotional infirmity, to carry out the job responsibilities which such Executive
held or the tasks to which such Executive was assigned at the time of the
incurrence of such Disability, which inability is reasonably expected to be
permanent or of indefinite duration exceeding one year.

          6.02 Cause. The Company may terminate an Executive's employment at any
               -----
time for Cause. For purposes of this Plan, "Cause" means: (i) the willful
failure of an Executive to perform substantially all of the Executive's duties
with the Company (other than any failure resulting from incapacity due to
physical or mental illness), after written demand for substantial performance is
delivered to the Executive by the Committee or the CEO; (ii) a willful violation

                                       10
<PAGE>

of McDonald's rules and policies as in effect from time to time; or (iii) the
commission of any act or acts involving dishonesty, fraud, illegality or moral
turpitude. For purposes of this provision, no act or failure to act, on the part
of the Executive, shall be considered "willful", unless it is done, or omitted
to be done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the CEO or an officer of the
Company senior in rank to the Executive to whom the Executive reports or based
upon the advice of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company. The cessation of employment of the Executive shall not
be deemed to be for Cause unless and until there shall have been delivered to
the Executive a copy of a resolution duly adopted by the affirmative vote of a
majority of the Board at a meeting of the Board called and held upon appropriate
notice (after reasonable notice is provided to the Executive and the Executive
is given an opportunity, together with counsel, to be heard before the Board),
finding that, in the good faith opinion of the Board, the Executive is guilty of
the conduct described in this paragraph, and specifying the particulars thereof
in detail.

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

                    (i)  the assignment to the Executive of any duties
               inconsistent in any respect with the Executive's position
               (including status, offices, titles and reporting requirements),
               authority, duties or responsibilities as of the Effective Date,
               or any other action by the Company which results in a diminution
               in such position, authority, duties or responsibilities,
               excluding for this purpose an isolated, insubstantial and
               inadvertent action, provided that any change in status, duties
               and responsibilities resulting from a change in status from
               Executive Officer to Transition Officer pursuant to the
               provisions of this Plan shall not constitute Good Reason; or

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

Notwithstanding the foregoing, a Tier I Executive cannot terminate employment
for Good Reason (i) if the Executive consented in writing to the occurrence of
the event giving rise to the claim of Good Reason or (ii) unless the Executive
shall have delivered a written notice to the Committee within 30 days of his
having actual knowledge of the occurrence of such event stating that he intends
to terminate his employment for Good Reason and specifying the factual basis for
such termination, and such event is not cured within 30 days of the receipt of
such notice.

          6.04 Termination of Employment For Any Other Reason. The Company may
               ----------------------------------------------
terminate an Executive's employment at any time by written notice to the
Executive in accordance with Section 6.05 of this Agreement of its intention to
terminate the Executive's employment for any reason other than death, Disability
or Cause.

                                       11
<PAGE>

          6.05 Notice of Termination. Any termination by the Company other than
               ---------------------
for death, or by a Tier I Executive for Good Reason, shall be communicated by
Notice of Termination to the other party hereto given in accordance with this
Section 6.05. For purposes of this Plan, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Plan relied upon, (ii) to the extent applicable, sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated, and (iii) if the Date
of Termination (as defined in Section 6.06) is other than the date of receipt of
such notice, specifies the termination date (which date shall be not more than
30 days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.

          6.06 Date of Termination. "Date of Termination" means (i) if the
               -------------------
Executive's employment is terminated by the Company other than for death or
Disability, or by the Tier I Executive for Good Reason, the date of receipt of
the Notice of Termination or any later date specified therein, as the case may
be, (ii) if the Executive's employment is terminated by death, the date of
death, and (iii) if the Executive's employment is terminated by reason of
Disability, the Disability Effective Date.

                                   Article 7

                  Obligations of the Company upon Termination

          7.01 By an Executive for Good Reason; By the Company Other Than for
               --------------------------------------------------------------
Cause, Death or Disability. If the Company terminates an Executive's employment
--------------------------
other than for Cause, death or Disability or if a Tier I Executive terminates
his employment for Good Reason,

                    (i)  the Company shall pay the following amounts
               (collectively, the "Termination Payment") to the Executive in a
               lump sum in cash within 60 days after the Date of Termination:

                         A.   the Accrued Obligations (as defined below), and

                         B.   the Severance Benefit (as defined below), and

                         C.   the Welfare Benefit (as defined below); and

                    (ii) the Executive shall have the right to exercise the
               following categories of stock options as of his or her Date of
               Termination and for five years thereafter: (i) all options
               exercisable as of the Executive's Date of Termination, and (ii)
               all options that will become exercisable within

                                       12
<PAGE>

                           five years following the Executive's Date of
                           Termination (collectively, the "Exercisable
                           Options"), provided that in no event shall any option
                           be exercised more than ten years after the date of
                           grant.

                  For purposes of this Plan:

                           (a) "Accrued Obligations" shall mean the sum of (1)
                           any unpaid base salary accrued through the Date of
                           Termination unless previously deferred by the
                           Executive pursuant to the terms of an employee
                           benefit plan or arrangement maintained by the Company
                           ("Accrued Salary"), (2) any unpaid annual bonus
                           amounts in respect of any calendar year ended before
                           the Date of Termination (computed by reference to the
                           Target Percentage (as defined below)) ("Earned
                           Bonus"), unless previously deferred by the Executive
                           pursuant to the terms of an employee benefit plan or
                           arrangement maintained by the Company, (3) the
                           product of (x) any annual bonus in respect of any
                           incomplete calendar year (computed by reference to
                           the Target Percentage and (y) a fraction, the
                           numerator of which is the number of days in the
                           current fiscal year through the Date of Termination,
                           and the denominator of which is 365 ("Prorated
                           Bonus"), and (4) any accrued vacation pay, in each
                           case to the extent not previously paid;

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

                           (c) "Severance Benefit" means (x) in the case of a
                           termination of employment which occurs during the
                           Retention Period, a lump sum payment equal to the
                           aggregate of the amounts of the Annual Base Salary,
                           the Annual Bonus and Continued Employment Period
                           Salary which would have been receivable by the
                           Executive if his or her Transition Period commenced
                           on the Date of Termination and he or she had remained
                           employed during the Transition Period and the
                           Continued Employment Period, and (y) in the case of a
                           termination of employment which occurs during the
                           Transition Period or the Continued Employment Period,
                           a lump sum payment equal to the aggregate of the
                           amounts of the Annual Base Salary, the Annual Bonus
                           and Continued Employment Period Salary which
                           otherwise would have been receivable by the Executive
                           if he or she had remained employed during the
                           Transition Period and the Continued Employment
                           Period; with the applicable amount being discounted
                           from its scheduled payment date to the Date of
                           Termination by reference to the Discount Rate,

                           (d) "Target Percentage" shall mean the target
                           percentage which the Executive was eligible to
                           receive under TIP on the day immediately preceding
                           the Change-in-Status Date (or in the absence of a
                           Change-In-

                                       13
<PAGE>

                           Status Date, the day immediately preceding the Date
                           of Termination) without any adjustment, but in no
                           event lower than the Executive's highest target
                           percentage in effect at any time between the
                           Effective Date and the Change-in-Status Date (or in
                           the absence of a Change-In-Status Date, the Date of
                           Termination), provided that the target percentage
                           shall be reduced to reflect any across-the-board
                           reductions implemented by the Committee prior to the
                           Change-in-Status Date (or in the absence of a Change-
                           In-Status Date, the Date of Termination) which
                           reductions affect Company officers generally; and

                           (e) "Welfare Benefit" shall mean a lump sum payment
                           (in lieu of continued participation in the Benefit
                           Plans) equal to an amount equal to the Company's
                           estimated cost of providing the Benefit Plans to the
                           Executive throughout the Transition Period and the
                           Continued Employment Period (as reasonably
                           determinable by the Committee in its sole discretion
                           on the Date of Termination).

                  7.02 Death. If the Executive dies during the Retention Period,
                       -----
the Transition Period or the Continued Employment Period (collectively, the
"Periods"), the Company shall have no further obligations to the Executive's
legal representatives under this Plan, other than for payment of Accrued Salary,
any Earned Bonus and any payment or provision of Other Benefits (as defined in
this Section 7.02). Such amounts shall be paid to the Executive's legal
representatives in a lump sum in cash within 60 days of death unless deferred in
accordance with the terms of an employee benefit plan or arrangement maintained
by the Company. Upon death, the Executive's unexercised stock options shall
remain subject to the applicable provisions of the related stock option plans
and applicable Golden M Certificates (or other applicable award agreements).

                  The term "Other Benefits" as utilized in this Section shall
mean benefits equal to the benefits provided by the Company to the estates and
beneficiaries of:

                  (i)   other Executive Officers of the Company if the Executive
                  dies during the Retention Period,

                  (ii)  other officers of the Company who are non-Executive
                  Officers if the Executive dies during the Transition Period,
                  or

                  (iii) other staff employees of the Company if the Executive
                  dies during the Continued Employment Period,

under such plans, programs, practices and policies relating to death benefits,
if any, as in effect on the date of the Executive's death.

                  7.03 Disability. If the Executive's employment is terminated
                       ----------
by reason of Disability during any of the Periods, the Company shall not have
any further obligations to the

                                       14
<PAGE>

Executive, other than for payment of Accrued Salary, any Earned Bonus and
payment or provision of Other Benefits (as defined in this Section 7.03). Such
amounts shall be paid to the Executive in a lump sum in cash within 60 days of
the Disability Effective Date unless deferred in accordance with the terms of an
employee benefit plan or arrangement maintained by the Company. In the event of
Disability, the Executive's unexercised stock options shall remain subject to
the applicable provisions of the related stock option plans and applicable
Golden M Certificates (or other applicable award agreements).

                  The term "Other Benefits" as utilized in this Section shall
mean disability and other benefits equal to those generally provided by the
Company to:

                  (i)   disabled Executive Officers and/or their families if the
                  Executive becomes disabled during the Retention Period,

                  (ii)  disabled officers who are not Executive Officers and/or
                  their families if the Executive becomes disabled during the
                  Transition Period, or

                  (iii) disabled staff employees and/or their families if the
                  Executive becomes disabled during the Continued Employment
                  Period,

in accordance with such plans, programs, practices and policies relating to
disability, if any, as in effect on the Disability Effective Date.

                  7.04 By the Company for Cause. If an Executive's employment is
                       ------------------------
terminated during any of the Periods by the Company for Cause, the Company shall
have no obligation to the Executive pursuant to this Plan other than to pay the
Executive his or her Accrued Salary through the Date of Termination and any
Earned Bonus. In any such case, all Accrued Salary and Earned Bonus shall be
paid to the Executive in a lump sum in cash within 60 days of the Date of
Termination unless otherwise deferred by the Executive pursuant to the terms of
an employee benefit plan or arrangement maintained by the Company. Upon such
termination, the Executive's stock options shall be governed by the express
provisions of the related stock option plans and applicable Golden M
Certificates (or other applicable award agreements).

                  7.05 By a Tier I Executive Without Good Reason. If a Tier I
                       -----------------------------------------
Executive terminates his employment during the Retention Period or the
Transition Period without Good Reason, or during the Continued Employment Period
for any reason, the Company shall have no obligation to the Executive pursuant
to this Plan other than to pay the Executive his or her Accrued Salary through
the Date of Termination and any Earned Bonus. In any such case, all Accrued
Salary and Earned Bonus shall be paid to the Executive in a lump sum in cash
within 60 days of the Date of Termination unless otherwise deferred by the
Executive pursuant to the terms of an employee benefit plan or arrangement
maintained by the Company. Upon such termination, the Executive's stock options
shall be governed by the express provisions of the related stock option plans
and applicable Golden M Certificates (or other applicable award agreements).

                                       15
<PAGE>

                  7.06 By a Tier II Executive for any Reason. If a Tier II
                       -------------------------------------
Executive terminates his employment during any of the Periods for any reason or
no reason, the Company shall have no obligation to the Executive pursuant to
this Plan other than to pay the Executive his or her Accrued Salary through the
Date of Termination and any Earned Bonus. In any such case, all Accrued Salary
and Earned Bonus shall be paid to the Executive in a lump sum in cash within 60
days of the Date of Termination unless otherwise deferred by the Executive
pursuant to the terms of an employee benefit plan or arrangement maintained by
the Company. Upon such termination, the Executive's stock options shall be
governed by the express provisions of the related stock option plans and
applicable Golden M Certificates (or other applicable award agreements).

                                   Article 8

                      Requirement of Effective Releases;
                  Integration with Other Separation Benefits

                  8.01 Releases as a Condition to Plan Benefits. It shall be a
                       ----------------------------------------
condition to an Executive's right to receive any benefits pursuant to this Plan
that the Executive shall execute and deliver to the Company the following
releases in the form provided by the Company (each, a "Release"):

                           (i)   in the case of Transition Benefits, a Release
                  with respect to the period ended on the Change-in-Status Date,

                           (ii)  in the case of Continued Employment Benefits, a
                  Release with respect to all periods ended on or before the
                  last day of the Transition Period, and

                           (iii) in the case of the Termination Payment, a
                  Release with respect to all periods ended on the Date of
                  Termination.

                  8.02 Form of Release. Each Release shall provide among other
                       ---------------
things that the Executive understands, intends and agrees that the agreement he
or she is signing constitutes full, complete and final satisfaction of all
claims, demands, lawsuits or actions of any kind, whether known or unknown,
against the Company or its subsidiaries, divisions, affiliates and related
companies (collectively "McDonald's") or their respective directors, officers or
employees (with McDonald's collectively the "Released Persons') and that the
Executive forever releases each Released Person from all such matters. This
includes, but is not limited to, a release of claims, demands, lawsuits and
actions of any kind relating to any employment or application for employment or
franchise, claims relating to resignation and/or cessation of employment, claims
alleging breach of contract of any tort, claims for wrongful termination,
defamation, intentional infliction of emotional distress, personal injury,
violation of public policy and/or negligence related to employment or
resignation, claims under Title VII of the Civil Rights Act of 1964, as amended,
Section 1981 of the Civil Rights Act of 1866, as amended, the Age Discrimination
in Employment Act of 1967, as amended, the Rehabilitation Act of 1973, the
Americans with Disabilities Act of 1990, the Employee Retirement Income Security
Act of 1974, as amended, the

                                       16
<PAGE>

Worker Adjustment and Retraining Notification Act, the Family and Medical Leave
Act of 1993, the Illinois Human Rights Act, or any other state, Federal or local
law prohibiting discrimination, and claims based on any other law, regulation,
or common law, whether before any Federal, state or local agency, in any court
of law or before any other forum.

                  8.03 Other Separation Benefits. The Releases will also provide
                       -------------------------
that (i) the payments or benefits provided for hereunder shall be in lieu of any
payments, benefits or arrangements to which the Executive might otherwise be
entitled to under any plan or arrangement which provides for severance or
separation ("Other Separation Benefits") and, that (ii) the Executive waives any
and all rights and claims that he or she may then or thereafter have to (A) any
Other Separation Benefits and (B) retiree status under any of the Company's
stock option plans.

                  8.04 Effect of Claim. If an Executive (i) files a lawsuit,
                       ---------------
charge, complaint or other claim asserting any claim or demand within the scope
of his or her Releases, (ii) fails to execute and deliver a Release required
pursuant to Section 8.01, or (iii) purports to revoke any of the Releases, the
Company shall retain all rights and benefits of the Releases, and in addition,
shall be entitled to cancel any and all future obligations under this Plan and
recoup the value of all payments and benefits under this Plan, together with the
Company's costs and reasonable attorney's fees. In addition, the Company shall
be entitled to pursue any other remedy available to enforce the terms of the
Releases and Noncompetition Agreement described in Article 9.

                                   Article 9

                    Requirement of Noncompetition Agreement

                  9.01 Noncompetition Agreement as a Condition to Plan Benefits.
                       --------------------------------------------------------
It shall be a condition to receive Transition Benefits, Continued Employment
Benefits and the Severance Benefit under this Plan that the Executive shall have
signed a confidentiality and noncompetition agreement in the form provided by
the Company as substantially described in this Article 9 (the "Noncompetition
Agreement"). The failure or refusal of an Executive to sign such a
Noncompetition Agreement shall disqualify the Executive from receiving any
benefits under this Plan.

         9.02  Form of Noncompetition Agreement.
               --------------------------------

         (a)  Confidentiality. Each Executive's Noncompetition Agreement shall
provide that:

                           (i) the Executive acknowledges that it is the policy
                           of McDonald's to maintain as secret and confidential
                           all valuable and unique tangible and intangible
                           information and techniques acquired, developed or
                           used by McDonald's relating to its business,
                           operations, employees and customers, which gives
                           McDonald's a competitive advantage in the businesses
                           in which McDonald's is engaged ("Confidential
                           Information").

                                       17
<PAGE>

                           (ii)  the Executive recognizes that all such
                           Confidential Information is the sole and exclusive
                           property of McDonald's, and that disclosure of
                           Confidential Information would cause significant
                           damage to McDonald's; and

                           (iii) the Executive shall not, without the prior
                           written consent of the Company, use, disclose,
                           furnish or make accessible to any person, firm,
                           corporation, partnership or other entity of any kind
                           (collectively, "Person") any Confidential Information
                           obtained during the Executive's employment with
                           McDonald's at any time (including, without
                           limitation, during or after the Retention Period, the
                           Transition Period or the Continued Employment Period)
                           for so long as such information is valuable and
                           unique except (A) with the prior written consent of
                           McDonald's in respect of such disclosure, (B) as
                           required by the duties of the Executive's employment
                           with McDonald's, (C) in connection with the
                           Executive's good-faith enforcement of his or her
                           rights under this Plan, or (D) if the Executive
                           reasonably and in good faith believes that he or she
                           is compelled by law or by a court or governmental
                           agency by a proper proceeding; provided that the
                           Executive, to the extent not prohibited from doing so
                           by applicable law or court order, shall give the
                           Company written notice of the Confidential
                           Information to be so disclosed pursuant to clause (C)
                           or (D) of this sentence as far in advance of its
                           disclosure as is lawful and practicable, shall
                           cooperate (at the Company's sole expense) with the
                           Company in its efforts to protect the information
                           from disclosure, and shall limit his or her
                           disclosure of such Confidential Information to the
                           minimum disclosure required by law or court order
                           unless the Company agrees in writing to a greater
                           level of disclosure.

                  (b)  Noncompetition. Each Executive's Noncompetition Agreement
will also provide that the Executive will not, at any time during the period
specified in Section 9.02(c), directly or indirectly:

                           (i)   in any capacity, engage or participate in, or
                           become employed by or render advisory or consulting
                           or other services in connection with any Prohibited
                           Business (as defined in Section 9.03), provided that
                           nothing in this Section 9.02(b) shall preclude an
                           Executive from performing services on behalf of an
                           investment banking or commercial banking, auditing or
                           consulting firm so long as he or she is not engaged
                           in rendering services to or soliciting business of a
                           Prohibited Business;

                           (ii)  make any financial investment, whether in the
                           form of equity or debt, or own any interest, directly
                           or indirectly, in any Prohibited Business, provided
                           that nothing in this Section 9.02(b) shall restrict
                           the Executive from owning, of record or beneficially,
                           up to one percent of the outstanding voting
                           securities of any publicly traded corporation;
                           provided

                                       18
<PAGE>

                           that such investment does not create a conflict of
                           interest between the Executive's duties hereunder and
                           the Executive's interest in such investment;

                           (iii) employ any employee of McDonald's (with the
                           exception of the Executive's administrative
                           assistant) or any Person who was employed by the
                           Company within 180 days of such hiring; or

                           (iv)  interfere with McDonald's relationship with, or
                           endeavor to entice away from McDonald's any employees
                           (other than the Executive's administrative
                           assistant), customers, vendors or suppliers,
                           franchisees or business partners of the Company.

                  (c)  Restrictive Period. The Noncompetition Agreement shall
provide that the covenants described in Section 9.02(b) shall remain in effect
(i) at all times during an Executive's Transition Period and Continued
Employment Period and (ii) if the Executive's employment is terminated by the
Company or by the Executive for any reason or for no reason during the
Transition Period or the Continued Employment Period, for two years after the
Date of Termination (but in no event after the end of the Continued Employment
Period).

                  9.03 Prohibited Business. For purposes of this Plan,
                       -------------------
"Prohibited Business" means any Person (and any branches, offices or operations
thereof) that is a material and direct competitor of McDonald's in any country
in the world or in any state of the United States, but shall not include any
Person which is not one of the 15 or fewer Persons designated as a Prohibited
Business on Annex A attached to the Executive's Noncompetition Agreement.

                  9.04 Remedy. (a) Injunctive Relief. The Noncompetition
                       ------
Agreement shall also provide that:

                           (i)   in recognition of the confidential nature of
                           the Confidential Information, and in recognition of
                           the necessity of the limited restrictions imposed by
                           the Noncompetition Agreement, it would be impossible
                           to measure solely in money the damages which the
                           Company would suffer if the Executive were to breach
                           any of his obligations under such Agreement;

                           (ii)  any breach of any such provisions of the
                           Noncompetition Agreement would irreparably injure the
                           Company;

                           (iii) if the Executive breaches any of the provisions
                           of the Noncompetition Agreement, the Company shall be
                           entitled, in addition to any other remedies to which
                           the Company may be entitled under the Noncompetition
                           Agreement or otherwise, to an injunction issued by a
                           court of competent jurisdiction, to restrain any
                           breach or threatened breach, of such provisions, and
                           the Executive waives any right to assert

                                       19
<PAGE>

                           any claim or defense that the Company has an adequate
                           remedy at law for any such breach.

                  (b)  Effect on Other Benefits. Each Executive's Noncompetition
Agreement shall also provide that, in the event of a breach by such Executive of
the provisions of his or her Noncompetition Agreement excluding for this purpose
an isolated, insubstantial and inadvertent action, the Company shall be entitled
to (i) discontinue any and all payments and other benefits to which the
Executive or his or her beneficiaries would otherwise be entitled pursuant to
this Plan, (ii) terminate any and all unexercised stock options then held by the
Executive or by any transferee of the Executive, (iii) require the Executive to
repay to the Company the aggregate amount of cash payments received by the
Executive from the Company pursuant to this Plan during the period commencing on
the Executive's Change-in-Status Date and ending on the date on which the
Company requests such repayment (the "Recovery Period") and (iv) require the
Executive to pay to the Company (A) with respect to stock options that were not
vested as of the Executive's Change-in-Status Date, the aggregate amount of gain
recognized by the Executive during the Recovery Period as the result of the
exercise by the Executive or by any transferee of the Executive of such stock
options, and (B) with respect to stock options that were vested as of the
Executive's Change-in-Status Date, an amount equal to the positive difference,
if any, of (I) the aggregate amount of gain recognized by the Executive during
the Recovery Period as the result of the exercise by the Executive or by any
transferee of the Executive of such stock options ("Exercised Options"), minus
(II) the amount of gain that would have been recognized by the Executive had the
Exercised Options been exercised as of the Executive's Change-in-Status Date.

                                  Article 10

                         Legal Fees and Other Expenses

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

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

                                       20
<PAGE>

                                  Article 11

                    Amendment and Termination of this Plan

                  This Plan shall be effective on the Effective Date and shall
remain in effect until the later of (i) October 1, 2004, or (ii) a date that is
two years after the date on which the Company gives written notice to all
Executives of its intention to terminate the Plan. The Company has the right to
amend this Plan in whole or in part at any time; provided that no amendment of
this Plan shall be effective as to any Executive who is or may reasonably be
expected to be materially adversely affected thereby (an "Affected Executive")
until the later of (i) October 1, 2004, or (ii) a date that is two years after
the date on which the Company gives written notice to all Affected Executives of
its intention to adopt such amendment. Notwithstanding the foregoing, no Plan
termination or amendment shall become effective during the Transition Period or
Continued Employment Period as to any Affected Executive. Any purported Plan
termination or amendment in violation of this Section 11 shall be void and of no
effect. Notwithstanding the foregoing, any Executive may consent in writing to
any amendment or termination of this Plan.

                                  Article 12

                           Miscellaneous Provisions

                  12.01 Successors. This Plan shall be binding upon the Company
                        ----------
and its successors and assigns. Subject to satisfaction of the conditions set
forth in Sections 3, 4, 5 and 8, the Plan shall inure to the benefit of the
Executives and their respective successors, heirs and permitted assigns.

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

                  12.03 Payments to Beneficiary. If an Executive dies before
                        -----------------------
receiving amounts to which he is entitled under this Plan, such amounts shall be
paid to the Beneficiary (as defined below) or if none, to the Executive's
estate. If a Beneficiary dies before complete payment of any benefits
attributable to a deceased Executive, the remaining benefits shall be paid the
Beneficiary's estate. For purposes of this Plan, a Beneficiary shall mean any
Person or Persons, including any entity which is tax-exempt under Section
501(c)(3) of the Internal Revenue Code, designated in writing by an Executive.

                                       21
<PAGE>

                  12.04 Notices. Any notice, request, election, or other
                        -------
official communication under this Plan shall be in writing and shall be
delivered personally, by courier service, by registered or certified mail,
return receipt requested or by telecopy and shall be effective upon actual
receipt by the party to which such notice shall be directed, and shall be
addressed as follows: (i) if to the Company, McDonald's Corporation, One
McDonald's Plaza, Oak Brook IL 60523, Attention: Corporate Secretary, and (ii)
if to an Executive, the last mailing address as specified by the Executive in
accordance with Section 12.02.

                  12.05 No Employment Contract. The existence of this Plan shall
                        ----------------------
not confer any legal or other rights upon any Executive to a continuation of
employment. The Company and each successor thereof reserves the right to
terminate the employment of any Executive, with or without cause, at any time,
notwithstanding the existence of this Plan.

                  12.06 Non-Alienation. Except to the extent expressly permitted
                        --------------
by law, no Executive shall have the right to assign, transfer or anticipate an
interest in any benefit under this Plan.

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

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

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

                  12.10 Construction. Any masculine personal pronoun shall be
                        ------------
considered to mean also the corresponding feminine or neuter personal pronoun,
as the context requires. The singular and plural forms of any term used in this
Plan shall be interchangeable, as the context requires.

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

                                       22
<PAGE>

                  Executed as of this 20th day of March 2001.

                                   McDonald's Corporation

                                   By: /s/ Robert N. Thurston
                                   -------------------------
                                   Robert N. Thurston
                                   Chairman, Compensation Committee Of the Board
                                   of Directors of McDonald's Corporation

                                       23
<PAGE>

                                  Appendix A

Tier I Executives
-----------------

Jack Greenberg
Jim Cantalupo

Tier II Executives
------------------

Claire Babrowski
Mike Conley
Alan Feldman
Jeff Kindler
Jim Skinner
Stan Stein

Start Dates
-----------

Tier I Executives: April 29, 1998
Tier II Executives: October 1, 1998

                                       24

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