McDonald’s Corporation European Equity Compensation Award Terms Supplement (2007)
This document outlines the terms for McDonald’s Corporation stock options and restricted stock units (RSUs) granted to employees in European markets after February 14, 2007. It details what happens to these awards if an employee retires, is terminated, or leaves the company, including specific rules for retirement with notice, termination due to death or disability, termination for cause, and voluntary resignation. The agreement sets out conditions for vesting, exercise periods, and forfeiture of awards, and requires a non-compete agreement for certain retirement benefits.
Exhibit 10(u)
This European Prospectus Supplement describes the stock ownership plans of McDonald’s Corporation. You should read this European Prospectus Supplement as well as the global prospectus, dated February 14, 2007 (the “Global Prospectus”). This European Prospectus Supplement focuses on the treatment of McDonald’s stock options and restricted stock units granted on or after February 14, 2007 to recipients in European Markets. In the case of a discrepancy between the plans, the Global Prospectus and this European Prospectus Supplement, the terms of this European Prospectus Supplement govern for matters addressed herein. Capitalized terms used and not defined in this European Prospectus Supplement have the meanings given in the Amended and Restated 2001 Omnibus Stock Ownership Plan, unless otherwise noted.
What happens to my stock options and restricted stock units (RSUs) if I no longer work for McDonald’s?
| • | Retirement With At Least 12 Months Notice and Execution of Non-Compete Agreement |
If you retire from employment with the Company and you (i) provide at least 12 months advance notice of your retirement to the officer in charge of the Global Compensation Department in Oak Brook, Lisa Emerson, and such notice is accepted by the officer, and (2) execute and deliver to the Company a non-competition agreement satisfactory to the Company the following rules apply.
Stock Options. Options that are either exercisable on the date of your termination or that are scheduled to become exercisable within two (2) years of that date can be exercised immediately or at any time within two (2) years following your termination (but not after the original expiration date of the grant). If you violate the non-competition agreement following your termination, all of your stock options will immediately terminate and will no longer be exercisable.
RSUs. You will vest in a pro-rata portion of your RSUs, based on the formula provided in the Global Prospectus, and, unless the RSUs are subject to performance-based vesting, those vested RSUs will be paid out in shares or cash, at the Company’s discretion, as soon as administratively practicable after termination of employment, except that if you were an Officer (as defined in the Global Prospectus), your payment will be deferred until as soon as administratively practicable following the first to occur of the originally scheduled vesting date, the six-month anniversary of your termination of employment, or your death. If the RSUs are subject to performance-based vesting, they will be paid out in shares or cash, at the Company’s discretion, as soon as administratively practicable after the originally scheduled vesting date, in the same amount, if any, that would have been paid to you based on actual performance had you remained employed through the originally scheduled vesting date but subject to the proration noted above in accordance with the formula provided in the Global Prospectus.
| • | Termination As a Result of Death or Disability |
If your employment with the Company ends because of death or Disability, the following rules apply.
Stock Options. All options will be exercisable at any time for three (3) years following termination, regardless of the original expiration date of the options. However, in no event may any option be exercised after the fifteenth anniversary of the grant date.
RSUs. If you terminate employment because of death or Disability before your RSUs vest, they will, unless the award is subject to performance-based vesting, immediately vest and be paid out in shares or in cash, at the Company’s discretion, as soon as is administratively practicable after termination of employment, except that if you were an Officer (as defined in the Global Prospectus) and your termination is due to Disability but you are not disabled within the meaning of Section 409A, your payment will be deferred until as soon as administratively practicable following the first to occur of the originally scheduled vesting date, the six-month anniversary of your termination of employment, or your death. If your RSUs are subject to performance-based vesting and you die or terminate employment because of Disability before your RSUs vest, they will be paid out in shares or in cash, at the Company’s discretion, as soon as is administratively practicable after the originally scheduled vesting date, in the same amount, if any, that would have been paid to you based on actual performance had you remained employed through the originally scheduled vesting date.
| • | Termination For Cause |
If your employment with the Company is terminated for Cause (generally, any termination based on an act or acts involving dishonesty, fraud, illegality or moral turpitude), your unexercised stock options and unvested RSUs will be terminated immediately.
| • | All Other Company Initiated Terminations |
If the Company terminates your employment for any reason other than those detailed above, the following rules will apply.
Stock Options. Options that are either exercisable on the date of your termination or that are scheduled to become exercisable within one (1) year of that date can be exercised immediately or at any time within one (1) year following your termination (but not after the original expiration date of the grant).
RSUs. You will vest in a pro-rata portion of your RSUs, based on the formula provided in the Global Prospectus, and, unless the RSUs are subject to performance-based vesting, those vested RSUs will be paid out in shares or cash, at the Company’s discretion, as soon as administratively practicable after termination of employment, except that if you were an Officer (as defined in the Global Prospectus), your payment will be deferred until as soon as administratively practicable following the first to occur of the originally scheduled vesting date, the six-month anniversary of your termination of employment, or your death. If the RSUs are subject to performance-based vesting, they will be paid out in shares or cash, at the Company’s discretion, as soon as administratively practicable after the originally scheduled vesting date, in the same amount, if any, that would have been paid to you based on actual performance had you remained employed through the originally scheduled vesting date but subject to the proration noted above in accordance with the formula provided in the Global Prospectus.
| • | Employee Initiated Termination |
If you choose to terminate your employment with the Company and do not qualify for an extension pursuant to the rules detailed above, the following rules apply.
Stock Options. Any stock options exercisable on the date of your termination may be exercised within ninety (90) calendar days following your termination. Stock options not vested on your termination date will be immediately forfeited (no options will vest post-termination).
RSUs. All unvested RSUs will be immediately forfeited upon your termination.
