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<SEC-DOCUMENT>0000950131-01-501108.txt : 20010504
<SEC-HEADER>0000950131-01-501108.hdr.sgml : 20010504
ACCESSION NUMBER:		0000950131-01-501108
CONFORMED SUBMISSION TYPE:	S-3
PUBLIC DOCUMENT COUNT:		9
FILED AS OF DATE:		20010503

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MCDONALDS CORP
		CENTRAL INDEX KEY:			0000063908
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-EATING PLACES [5812]
		IRS NUMBER:				362361282
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-3
		SEC ACT:		
		SEC FILE NUMBER:	333-60170
		FILM NUMBER:		1621766

	BUSINESS ADDRESS:	
		STREET 1:		ONE MCDONALD'S PLZ
		CITY:			OAK BROOK
		STATE:			IL
		ZIP:			60523
		BUSINESS PHONE:		6306233000
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-3
<SEQUENCE>1
<FILENAME>ds3.txt
<DESCRIPTION>FORM S-3
<TEXT>

<PAGE>

      As filed with the Securities and Exchange Commission on May 3, 2001

                                             Registration Statement No. 333-

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                                ---------------
                                   FORM S-3
                            REGISTRATION STATEMENT
                                     under
                          THE SECURITIES ACT OF 1933
                                ---------------
                            McDONALD'S CORPORATION
            (Exact name of registrant as specified in its charter)
               Delaware                              36-2361282
                                           (I.R.S. Employer Identification
    (State or other jurisdiction of                    Number)
    incorporation or organization)
         One McDonald's Plaza Oak Brook, Illinois 60523 (630) 623-3000
  (Address, including zip code, and telephone number, including area code, of
                   registrant's principal executive offices)
                                ---------------
                                Gloria Santona
                                Vice President,
                             U.S. General Counsel
                                 and Secretary
                            McDonald's Corporation
                             One McDonald's Plaza
                           Oak Brook, Illinois 60523
                                (630) 623-3000
(Name, address, including zip code, and telephone number, including area code,
                             of agent for service)
                                  COPIES TO:
 George C. McKann Gardner, Carton & Douglas 321 North Clark StreetQuaker Tower
                    Chicago, Illinois 60610 (312) 245-8417
  Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as determined
by market conditions.
  If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
  If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
  If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
  If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
  If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
                                ---------------
                        CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                          Proposed
                                           Proposed       Maximum
 Title of each Class of      Amount        Maximum       Aggregate
    Securities to be         to be      Offering Price    Offering       Amount of
       Registered        Registered(3)  Per Unit(1)(2)  Price(1)(2)   Registration Fee
- --------------------------------------------------------------------------------------
<S>                      <C>            <C>            <C>            <C>
Debt Securities........  $1,500,000,000      100%      $1,500,000,000     $375,000
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee
    pursuant to Rule 457(o).
(2) Exclusive of accrued interest, if any.
(3) Or, if any Debt Securities are issued at a discount, such greater amount
    as shall result in an aggregate offering price to the public which shall
    not exceed $1,500,000,000.
                                ---------------
  The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus supplement is not complete and may be      +
+changed. The Company may not sell these securities until the registration     +
+statement filed with the Securities and Exchange Commission is effective.     +
+This prospectus supplement and the accompanying prospectus are not an offer   +
+to sell these securities and are not soliciting an offer to buy these         +
+securities in any state where the offer or sale is not permitted.             +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                    SUBJECT TO COMPLETION, DATED MAY 3, 2001

Prospectus Supplement
(To prospectus dated          , 2001)

                                 $1,500,000,000
                             McDonald's Corporation
                          Medium-Term Notes, Series G
                 Due from 1 Year to 60 Years from Date of Issue

                                  -----------

  We may use this prospectus supplement to offer Medium-Term Notes, Series G,
with a total initial public offering price of up to $1,500,000,000 or the
equivalent in one or more foreign currencies, subject to reduction as a result
of our sale of other debt securities.

  The following terms may apply to the notes. We will provide the final terms
for each note in a pricing supplement.

  . Mature in 1 year to 60 years and may be subject to redemption at our
    option or repayment at the option of the holder.

  . Denominated in U.S. dollars unless we specify otherwise.

                            -Treasury Rate

  . Fixed or floating interest rate. The floating interest rate formula may be
    based on:
                            -Prime Rate


        -CD Rate            -CMT Rate


        -Commercial Paper Rate
                            - Another Base Rate or formula described in the
                              pricing supplement

        -Federal Funds Rate

        -LIBOR

  . May be issued as indexed notes.

  . Certificated or book-entry form.

  . Interest paid on fixed rate notes on February 15 and August 15 of each
    year unless we specify otherwise.

  . Interest paid on floating rate notes on dates determined at the time of
    issuance.

  . Minimum denominations of $1,000 increased in multiples of $1,000 or other
    specified denominations for notes denominated in foreign currencies.

  We will receive between $1,497,750,000 and $1,488,750,000 of the proceeds
from the sale of the notes after paying the agent's commissions of between
$2,250,000 and $11,250,000. The exact proceeds we will receive will be set at
the time of issuance. We do not expect that any of the notes will be listed on
an exchange, and a market for any particular series of notes may not develop.

  See "Risk Factors" beginning on page S-2 for a discussion of certain risks
that should be considered in connection with an investment in the notes.

                                  -----------

  Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus supplement, the accompanying prospectus
or any pricing supplement. Any representation to the contrary is a criminal
offense.

                                  -----------
                                     agents
Merrill Lynch & Co.
   ABN AMRO Incorporated
       Banc of America Securities LLC
           Banc One Capital Markets, Inc.
               Barclays Capital
                   Deutsche Banc Alex. Brown
                       Fleet Securities, Inc.
                           Goldman, Sachs & Co.
                              JPMorgan
                                  Morgan Stanley Dean Witter
                                      Salomon Smith Barney

                                  -----------

             The date of this prospectus supplement is     , 2001.
<PAGE>

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
                             Prospectus Supplement

<S>                                                                         <C>
Risk Factors...............................................................  S-2
Capitalization.............................................................  S-5
Important Currency Information.............................................  S-5
Description of Notes.......................................................  S-5
United States Tax Considerations........................................... S-21
Plan of Distribution....................................................... S-26
Glossary................................................................... S-27

                                  Prospectus

McDonald's Corporation.....................................................    2
Use of Proceeds............................................................    3
Ratio of Earnings to Fixed Charges.........................................    3
Description of Debt Securities.............................................    3
Plan of Distribution.......................................................    8
Legal Matters..............................................................    9
Experts....................................................................    9
</TABLE>

  You should rely only on the information contained in or incorporated by
reference in this prospectus supplement, the accompanying prospectus and any
pricing supplement. We have not authorized anyone to provide you with
different or additional information. We are not making an offer of these
securities in any state where the offer is not permitted. You should not
assume that the information provided by this prospectus supplement or the
accompanying prospectus is accurate as of any date other than the date on the
front of this prospectus supplement.

  References in this prospectus supplement to "the Company," "we," "us," or
"our" are to McDonald's Corporation.

                                 RISK FACTORS

  This prospectus supplement does not describe all of the risks of an
investment in the notes, whether arising because the notes are denominated in
a currency other than the U.S. dollar or because the return on the notes is
linked to one or more interest rate or currency indices or formulas. The
information set forth in this prospectus supplement is directed to prospective
purchasers of notes who are U.S. residents. We disclaim any responsibility to
advise any other prospective purchasers with respect to any matters that may
affect the purchase, sale or holding of notes. These persons should consult
their own legal and financial advisors with regard to such matters. You should
consult your own financial and legal advisors about the risks entailed by an
investment in the notes and the suitability of your investment in the notes in
light of your particular circumstances. The notes are not an appropriate
investment for investors who are unsophisticated with respect to foreign
currency transactions or transactions involving the type of index or formula
used to determine the amount payable. You should also consider carefully,
among other factors, the matters described below.

Foreign Currency Notes Are Subject to Exchange Rate and Exchange Control Risks

  An investment in a note denominated in a currency other than U.S. dollars
entails significant risks. These risks include the possibility of significant
changes in rates of exchange between the U.S. dollar and that currency and the
possibility of the imposition or modification of foreign exchange controls by
either the United States or foreign governments. These risks generally depend
on factors over which we have no control, such as economic and political
events and the supply of and demand for the relevant currencies. Moreover, if
payments on your foreign currency notes are determined by reference to a
formula containing a multiplier or leverage factor, the

                                      S-2
<PAGE>

effect of any change in the exchange rates between the applicable currencies
will be magnified. In recent years, rates of exchange between the U.S. dollar
and certain currencies have been highly volatile, and you should be aware that
volatility may occur in the future. Fluctuations in any particular exchange
rate that have occurred in the past, however, are not necessarily indicative
of fluctuations in the rate that may occur during the term of any note.
Depreciation of the specified currency for a note against the U.S. dollar
would result in a decrease in the effective yield of such note (on a U.S.
dollar basis) below its coupon rate and, in certain circumstances, could
result in a loss to you on a U.S. dollar basis.

  Except as set forth below, if payment in respect of a note is required to be
made in a currency other than U.S. dollars, and such currency is unavailable
to us due to the imposition of exchange controls or other circumstances beyond
our control or is no longer used by the government of the relevant country
(unless otherwise replaced by the Euro) or for the settlement of transactions
by public institutions of or within the international banking community, then
all payments in respect of such note will be made in U.S. dollars until such
currency is again available to us or so used. The amounts payable on any date
in such currency will be converted into U.S. dollars on the basis of the most
recently available market exchange rate for such currency or as otherwise
indicated in the applicable pricing supplement. Any payment in respect of such
note so made in U.S. dollars will not constitute an event of default under the
Indenture. The paying agent will make all determinations referred to above at
its sole discretion. All determinations will, in the absence of clear error,
be binding on holders of the notes.

Redemption May Adversely Affect Your Return on the Notes

  If the notes are redeemable at our option, we may choose to redeem the notes
at times when prevailing interest rates are relatively low. In addition, if
the notes are subject to mandatory redemption, we may be required to redeem
the notes also at times when prevailing interest rates are relatively low. As
a result, you generally will not be able to reinvest the redemption proceeds
in a comparable security at an effective interest rate as high as the notes
being redeemed.

Courts May Not Render Judgments for Money Damages in Any Currency Other Than
U.S. Dollars

  The notes will be governed by and construed in accordance with the internal
laws of the State of Illinois. Courts in the United States customarily have
not rendered judgments for money damages denominated in any currency other
than the U.S. dollar.

Index Notes May Have Risks Not Associated with a Conventional Debt Security

  An investment in indexed notes entails significant risks that are not
associated with an investment in a conventional fixed rate debt security.
Indexation of the interest rate of a note may result in an interest rate that
is less than that payable on a conventional fixed rate debt security issued at
the same time, including the possibility that no interest will be paid.
Indexation of the principal of and/or premium on a note may result in an
amount of principal and/or premium payable that is less than the original
purchase price of the note, including the possibility that no amount will be
paid. The secondary market for indexed notes will be affected by a number of
factors, independent of our creditworthiness. Such factors include the
volatility of the index selected, the time remaining to the maturity of the
notes, the amount outstanding of the notes and market interest rates. The
value of an index can depend on a number of interrelated factors, including
economic, financial and political events, over which we have no control.
Additionally, if the formula used to determine the amount of principal,
premium and/or interest payable with respect to indexed notes contains a
multiple or leverage factor, the effect of any change in the index will be
increased. The historical experience of an index should not be taken as an
indication of its future performance. The credit ratings assigned to our
medium-term note program are a reflection of our credit status and do not
reflect the impact of the factors discussed above on the market value of
indexed notes. Accordingly, you should consult your own financial and legal
advisors as to the risks entailed by an investment in indexed notes.

                                      S-3
<PAGE>

There May Not Be Any Trading Market for the Notes; Many Factors Affect the
Trading and Market Value of the Notes

  Upon issuance, the notes will not have an established trading market. We
cannot assure you a trading market for the notes will ever develop or be
maintained if developed. In addition to our creditworthiness, many factors
affect the trading market for, and trading value of, the notes. These factors
include:

  . the complexity and volatility of the index or formula applicable to the
    notes,

  . the method of calculating the principal, premium and interest in respect
    of the notes,

  . the time remaining to the maturity of the notes,

  . the outstanding amount of notes related to the notes,

  . any redemption features of the notes,

  . the amount of other debt securities linked to the index or formula
    applicable to the notes, and

  . the level, direction and volatility of market interest rates generally.

  There may be a limited number of buyers when you decide to sell your notes.
This may affect the price you receive for your notes or your ability to sell
your notes at all. In addition, notes that are designed for specific
investment objectives or strategies often experience a more limited trading
market and more price volatility than those not so designed. You should not
purchase notes unless you understand and know you can bear all of the
investment risks involving the notes.

                                      S-4
<PAGE>

                                CAPITALIZATION

  The following table sets forth the capitalization of the Company and its
consolidated subsidiaries at December 31, 2000.

<TABLE>
<CAPTION>
                                                                    December 31,
                                                                        2000
                                                                    ------------
                                                                    Outstanding
                                                                    ------------
                                                                    (in millions
                                                                      of U.S.
                                                                      dollars)
<S>                                                                 <C>
Short-term debt, including current portion of long-term debt.......  $     630
Long-term debt, less current portion...............................    7,843.9
Shareholders' equity...............................................    9,204.4
                                                                     ---------
Total capitalization(1)............................................  $17,678.3
                                                                     =========
</TABLE>
- --------
(1) At December 31, 2000, we had 3.5 billion authorized shares of common
    stock, with $.01 par value, of which 1,660.6 million were issued and
    1,304.9 million were outstanding. There has been no material change in our
    consolidated capitalization since December 31, 2000.

                        IMPORTANT CURRENCY INFORMATION

  You are required to pay for each note in the currency specified by us. You
may ask an agent to use its reasonable best efforts to arrange for the
exchange of U.S. dollars into the specified currency to enable you to pay for
such note. You must make this request on or before the third Business Day
preceding the delivery date for such note or by a later date if allowed by the
agent. Each exchange will be made on the terms and conditions established by
the agent and all costs will be paid by you.

                             DESCRIPTION OF NOTES

  The following description of terms of the notes supplements the general
description of the debt securities provided in the accompanying prospectus.
However, the pricing supplement for each offering of notes will contain the
specific information and terms for that offering. The pricing supplement may
also add, update or change information contained in this prospectus supplement
or the accompanying prospectus. It is important for you to consider the
information contained in the accompanying prospectus, this prospectus
supplement and the pricing supplement in making your investment decision.

  We have provided a glossary at the end of this prospectus supplement to
define any capitalized words we use but do not define in this prospectus
supplement.

General

  We will issue the notes as a series of debt securities under the Senior
Indenture between us and the Trustee. We are limited to issuing notes with a
total initial public offering price or purchase price of up to $1,500,000,000
or the equivalent amount in one or more foreign currencies, including the
Euro. The U.S. dollar equivalent will be determined by a paying agent chosen
by us, which will initially be Bank One, N.A. In order to determine the
equivalent amount in connection with offerings in a foreign or composite
currency, the paying agent will use the noon buying rate in The City of New
York for cable transfers in foreign currencies as certified for customs
purposes by The Federal Reserve Bank of New York. The total price of the notes
we are authorized to offer may be reduced due to our sale of other debt
securities. If payments on any series of notes must be made in the currency of
a country that adopts the Euro, then we may redenominate all of the notes of
that series into Euros by giving holders notice of the redenomination as
described under "Description of Notes--Redenomination" below.

                                      S-5
<PAGE>

  The notes will be issued in fully registered form only, without coupons.

  Each note will be issued either as a "book-entry" note, represented by a
permanent global note registered in the name of The Depository Trust Company
("DTC"), or its nominee, or as a certificate issued in temporary or definitive
form. Except as described below under "Book-Entry System," book-entry notes
will not be issuable in certificated form.

  The authorized denominations for notes denominated in U.S. dollars will be
$1,000 and any larger amount that is a multiple of $1,000. The authorized
denominations of notes denominated in some other specified currency will be
described in the pricing supplement.

  Each note will mature on any day from 1 year to 60 years from its date of
issue. However, each note may also be subject to redemption at our option or
repayment at the option of the holder.

  The pricing supplement relating to a note will describe the following terms:

  (a) the specified currency;

  (b) whether the note is a fixed rate note, a floating rate note, an indexed
      note or an amortizing note;

  (c) the issue price;

  (d) the original issue date;

  (e) the stated maturity date;

  (f) for a fixed rate note, the rate per year at which it will bear
      interest, if any, and the dates on which interest will be payable if
      other than February 15 and August 15;

  (g) for a floating rate note, the base rate, the initial interest rate, the
      interest reset period, the interest payment dates, the Index Maturity,
      the maximum interest rate, if any, the minimum interest rate, if any,
      the Spread and/or Spread Multiplier, if any, and any other terms
      relating to the particular method of calculating the interest rate for
      the note;

  (h) whether the note is an Original Issue Discount Note;

  (i) for an indexed note, the manner in which the principal amount payable
      at the stated maturity date will be determined;

  (j) whether the note may be redeemed at our option, or repaid at the
      holder's option prior to the stated maturity date as described further
      under "Optional Redemption, Repayment and Repurchase" below, and if so,
      the terms of the redemption or repayment; and

  (k) any other terms that do not conflict with the provisions of the Senior
      Indenture.

  Interest rates that we offer with respect to the notes may differ depending
on, among other things, the aggregate principal amount of the notes purchased
in any single transaction.

  Except as described in this prospectus supplement, there are no covenants
specifically designed to protect you against a reduction in our
creditworthiness in the event of a highly leveraged transaction or to prohibit
other transactions that may adversely affect you.

Payment of Principal and Interest

  We will make payments on each note in a currency that we specify. If the
specified currency is other than U.S. dollars, either we or the paying agent
will arrange to convert all payments in respect of the note into U.S. dollars
as described in the following paragraph. If you hold a note denominated in a
currency other than U.S. dollars and the pricing supplement and note so allow,
you may elect to receive all payments in the foreign

                                      S-6
<PAGE>

currency by sending a written notice to the paying agent not later than 15
days before the applicable payment date, except under the circumstances
described in "Risk Factors--Foreign Currency Notes are Subject to Exchange
Rate and Exchange Control Risks." Your election will remain in effect until
you revoke it by written notice to the paying agent received not later than 15
days before the applicable payment date.

  The paying agent will determine the amount of any U.S. dollar payment on a
note denominated in a currency other than U.S. dollars based on the highest
firm bid quotation, expressed in U.S. dollars, that it receives at
approximately 11:00 a.m., New York City time two Business Days before the
applicable payment date (if no rate is quoted on that date, the paying agent
will use the last date on which the rate was quoted). To determine the highest
quote, the paying agent will request quotes from three (or, if three are not
available, then two) recognized foreign exchange dealers in The City of New
York (which may include the agents, their affiliates or the paying agent) for
the purchase, and settlement on the applicable payment date, of the total
amount of the specified currency then payable. You will be responsible for all
currency exchange costs, such amount to be deducted from your U.S. dollar
payments. If no bid quotations are available, we will make payments in the
foreign currency, unless the currency is unavailable due to the imposition of
exchange controls or other circumstances beyond our control. In that case, we
will make payments as described under "Risk Factors--Foreign Currency Notes
are Subject to Exchange Rate and Exchange Control Risks."

  Any pricing supplement relating to notes having a specified currency other
than U.S. dollars will contain information concerning historical exchange
rates for that currency against the U.S. dollar and a brief description of any
relevant exchange controls.

  U.S. dollar payments of interest on notes are generally payable to the
person in whose name the note is registered at the close of business on the
record date before each interest payment date. However, interest will be
payable at Maturity to the person to whom principal is payable. The first
interest payment on any note originally issued between a record date and an
interest payment date or on an interest payment date will be made on the
interest payment date after the next record date. If you hold at least
$10,000,000 (or the equivalent thereof in a specified currency other than U.S.
dollars) in aggregate principal amount of notes of like tenor and term, you
will be entitled to receive your U.S. dollar interest payments by wire
transfer, but only if the paying agent has received your wire transfer
instructions not later than 15 days before the applicable interest payment
date. Simultaneously with your election to receive payments in a currency
other than U.S. dollars, as discussed earlier, you must provide wire transfer
payment instructions to the paying agent, and all payments made in that
currency will be made by wire transfer to an account maintained by you with a
bank located outside the United States. Any payment due at Maturity will be
paid in immediately available funds upon surrender of your note at the
corporate trust office or an agency of the paying agent located in the City of
Chicago. The corporate trust office for Bank One, N.A. is located at One First
National Plaza, Chicago, Illinois.

  Unless otherwise specified in the applicable pricing supplement, if the
principal of any Original Issue Discount Note is declared to be due and
payable immediately as described under "Description of Debt Securities--Events
of Default" in the accompanying prospectus, the amount of principal due and
payable will be limited to the principal amount of the note multiplied by the
sum of its issue price (expressed as a percentage of the principal amount)
plus the original issue discount amortized from the date the note was issued
to the date of declaration, which amortization shall be calculated using the
"interest method" (computed in accordance with generally accepted accounting
principles in effect on the date of declaration).

  Unless otherwise specified in the applicable pricing supplement, the record
date for any interest payment date for a floating rate note will be the date
(whether or not a Business Day) 15 calendar days immediately before the
interest payment date, and for a fixed rate note will be the February 1 or
August 1 (whether or not a Business Day) immediately before the interest
payment date or Maturity, as the case may be.

                                      S-7
<PAGE>

  Interest payments on the notes will equal the amount of interest accrued
from and including the immediately preceding interest payment date on which
interest was paid or made available for payment (or from and including the
date of issue, if no interest has been paid) to but excluding the related
interest payment date or Maturity, as the case may be.

Fixed Rate Notes

  Each fixed rate note will bear interest from the date it is originally
issued at the rate per year stated on its face until the principal amount is
paid or made available for payment. Unless otherwise set forth in the
applicable pricing supplement, we will pay interest on each fixed rate note
semiannually in arrears on each February 15 and August 15 and at Maturity.
Each payment of interest on an interest payment date will include interest
accrued to but excluding such interest payment date. Unless otherwise
specified in the applicable pricing supplement, interest on fixed rate notes
will be computed using a 360-day year of twelve 30-day months.

  If any payment date for a fixed rate note falls on a day that is not a
Business Day, we will make the payment on the next Business Day, without
additional interest.

Floating Rate Notes

  Each floating rate note will have an interest rate formula. The formula may
be based on:

  (a) the CD Rate;

  (b) the CMT Rate;

  (c) the Commercial Paper Rate;

  (d) the Federal Funds Rate;

  (e) LIBOR;

  (f) the Prime Rate;

  (g) the Treasury Rate; or

  (h) another Base Rate or formula described in the pricing supplement.

  The pricing supplement will also indicate any Spread and/or Spread
Multiplier, which would be applied to the interest rate formula to determine
the interest rate. Any floating rate note may have a maximum or minimum
interest rate limitation.

  We will appoint a calculation agent to calculate interest rates on the
floating rate notes. Unless we choose a different party in the pricing
supplement, the paying agent will be the calculation agent for each note. Upon
request, the calculation agent will provide the current interest rate and, if
different, the interest rate that will become effective on the next Interest
Reset Date.

  The interest rate on each floating rate note may be reset daily, weekly,
monthly, quarterly, semiannually or annually (this period is the "Interest
Reset Period", and the first day of each Interest Reset Period is an "Interest
Reset Date"), as specified in the pricing supplement. Unless otherwise
specified in the pricing supplement, the Interest Reset Dates will be:

  (a) for floating rate notes that reset daily, each Business Day;

  (b) for floating rate notes (other than Treasury Rate notes) that reset
      weekly, Wednesday of each week;

  (c) for Treasury Rate notes that reset weekly, Tuesday of each week (except
      as provided below under "Treasury Rate Notes");

  (d) for floating rate notes that reset monthly, the third Wednesday of each
      month;

  (e) for floating rate notes that reset quarterly, the third Wednesday of
      March, June, September and December of each year;

                                      S-8
<PAGE>

  (f) for floating rate notes that reset semiannually, the third Wednesday of
      each of the two months of each year specified in the pricing
      supplement; and

  (g) for floating rate notes that reset annually, the third Wednesday of one
      month of each year specified in the pricing supplement.

  If an Interest Reset Date for any floating rate note falls on a day that is
not a Business Day, it will be postponed to the following Business Day, except
that, in the case of a LIBOR note, if that Business Day is in the next
calendar month, the Interest Reset Date will be the immediately preceding
Business Day.

  Floating rate notes will accrue interest from and including the original
issue date or the last date to which interest has been paid or provided for,
as the case may be, to but excluding the applicable Interest Payment Date, as
described below, or Maturity, as the case may be.

  Accrued interest on floating rate notes will be calculated by multiplying
the principal amount of such note (or, in the case of an indexed note, unless
otherwise specified in the pricing supplement, the face amount of such indexed
note) by an accrued interest factor. The accrued interest factor will be
computed by adding the interest factors calculated for each day in the period
for which accrued interest is being calculated. Unless we state otherwise in
the applicable pricing supplement, the interest factor (expressed as a decimal
calculated to seven decimal places without rounding) for each day will be
computed by dividing the interest rate in effect on that day by 360, in the
case of CD Rate notes, Commercial Paper Rate notes, Federal Funds Rate notes,
LIBOR notes and Prime Rate notes, or by the actual number of days in the year,
in the case of Treasury Rate notes or CMT Rate notes. For these calculations,
the interest rate in effect on any Interest Reset Date will be the new reset
rate.

  The calculation agent will round all percentages resulting from any
calculation of the rate of interest on a floating rate note, if necessary, to
the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a
percentage point rounded upward, and all currency amounts used in or resulting
from any calculation on floating rate notes will be rounded to the nearest
one-hundredth of a unit (with .005 of a unit being rounded upward).

  Unless we state otherwise in the applicable prospectus supplement, we will
pay interest on floating rate notes as follows:

  (a) for notes that reset daily, weekly or monthly, on the third Wednesday
      of each month or on the third Wednesday of March, June, September and
      December of each year as specified in the applicable pricing
      supplement;

  (b) for notes that reset quarterly, on the third Wednesday of March, June,
      September, and December of each year;

  (c) for notes that reset semiannually, on the third Wednesday of each of
      two months of each year specified in the pricing supplement; and

  (d) for notes that reset annually, on the third Wednesday of one month of
      each year specified in the pricing supplement.

Each of the above dates is an "Interest Payment Date." We will also pay
interest on all notes at Maturity.

  If an Interest Payment Date (other than at Maturity) for any floating rate
note falls on a day that is not a Business Day, it will be postponed to the
following Business Day, except that, in the case of a LIBOR note, if that
Business Day would fall in the next calendar month, the Interest Payment Date
will be the immediately preceding Business Day.

  If the Maturity for a floating rate note falls on a day that is not a
Business Day, we will make the payment on the next Business Day, without
additional interest.

  References below to information services include any successor information
services.

                                      S-9
<PAGE>

CD Rate Notes

  Each CD Rate note will bear interest at a specified rate that will be reset
periodically based on the CD Rate and any Spread and/or Spread Multiplier. CD
Rate notes, like other notes, are not deposit obligations of a bank and are
not insured by the Federal Deposit Insurance Corporation.

  "CD Rate" means:

    (1) the rate on the particular Interest Determination Date for negotiable
  U.S. dollar certificates of deposit having the Index Maturity specified in
  the applicable pricing supplement as published in H.15(519) under the
  caption "CDs (secondary market)", or

    (2) if the rate referred to in clause (1) is not so published by 3:00
  P.M., New York City time, on the related Calculation Date, the rate on the
  particular Interest Determination Date for negotiable United States dollar
  certificates of deposit of the particular Index Maturity as published in
  H.15 Daily Update, or other recognized electronic source used for the
  purpose of displaying the applicable rate, under the caption "CDs
  (secondary market)", or

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

    (4) if the dealers so selected by the calculation agent are not quoting
  as mentioned in clause (3), the CD Rate in effect on the particular
  Interest Determination Date.

Commercial Paper Rate Notes

  Each Commercial Paper Rate note will bear interest at a specified rate that
will be reset periodically based on the Commercial Paper Rate and any Spread
and/or Spread Multiplier.

  "Commercial Paper Rate" means:

    (1) the Money Market Yield on the particular Interest Determination Date
  of the rate for commercial paper having the Index Maturity specified in the
  applicable pricing supplement as published in H.15(519) under the caption
  "Commercial Paper--Nonfinancial", or

    (2) if the rate referred to in clause (1) is not so published by 3:00
  P.M., New York City time, on the related Calculation Date, the Money Market
  Yield of the rate on the particular Interest Determination Date for
  commercial paper having the particular Index Maturity as published in H.15
  Daily Update, or such other recognized electronic source used for the
  purpose of displaying the applicable rate, under the caption "Commercial
  Paper--Nonfinancial", or

    (3) if the rate referred to in clause (2) is not so published by 3:00
  P.M., New York City time, on the related Calculation Date, the rate on the
  particular Interest Determination Date calculated by the calculation agent
  as the Money Market Yield of the arithmetic mean of the offered rates at
  approximately 11:00 A.M., New York City time, on that Interest
  Determination Date of three leading dealers of U.S. dollar commercial paper
  in The City of New York (which may include the Agents or their affiliates)
  selected by the calculation agent for commercial paper having the
  particular Index Maturity placed for industrial issuers whose bond rating
  is "Aa", or the equivalent, from a nationally recognized statistical rating
  organization, or

    (4) if the dealers so selected by the calculation agent are not quoting
  as mentioned in clause (3), the Commercial Paper Rate in effect on the
  particular Interest Determination Date.


                                     S-10
<PAGE>

Federal Funds Rate Notes

  Each Federal Funds Rate note will bear interest at a specified rate that
will be reset periodically based on the Federal Funds Rate and any Spread
and/or Spread Multiplier.

  "Federal Funds Rate" means:

    (1) the rate on the particular Interest Determination Date for U.S.
  dollar federal funds as published in H.15(519) under the caption "Federal
  Funds (Effective)" and displayed on Bridge Telerate, Inc. (or any successor
  service) on page 120 (or any other page as may replace the specified page
  on that service) ("Telerate Page 120"), or

    (2) if the rate referred to in clause (1) does not so appear on Telerate
  Page 120 or is not so published by 3:00 P.M., New York City time, on the
  related Calculation Date, the rate on the particular Interest Determination
  Date for United States dollar federal funds as published in H.15 Daily
  Update, or such other recognized electronic source used for the purpose of
  displaying the applicable rate, under the caption "Federal Funds
  (Effective)", or

    (3) if the rate referred to in clause (2) is not so published by 3:00
  P.M., New York City time, on the related Calculation Date, the rate on the
  particular Interest Determination Date calculated by the calculation agent
  as the arithmetic mean of the rates for the last transaction in overnight
  U.S. dollar federal funds arranged by three leading brokers of U.S. dollar
  federal funds transactions in The City of New York (which may include the
  Agents or their affiliates), selected by the calculation agent prior to
  9:00 A.M., New York City time, on that Interest Determination Date, or

    (4) if the brokers so selected by the calculation agent are not quoting
  as mentioned in clause (3), the Federal Funds Rate in effect on the
  particular Interest Determination Date.

LIBOR Notes

  Each LIBOR note will bear interest at a specified rate that will be reset
periodically based on LIBOR and any Spread and/or Spread Multiplier.

  "LIBOR" means:

    (1) if "LIBOR Telerate" is specified in the applicable pricing supplement
  or if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the
  applicable pricing supplement as the method for calculating LIBOR, the rate
  for deposits in the LIBOR Currency having the Index Maturity specified in
  the applicable pricing supplement, commencing on the related Interest Reset
  Date, that appears on the LIBOR Page as of 11:00 A.M., London time, on the
  particular Interest Determination Date, or

    (2) if "LIBOR Reuters" is specified in the applicable pricing supplement,
  the arithmetic mean of the offered rates, calculated by the calculation
  agent, or the offered rate, if the LIBOR Page by its terms provides only
  for a single rate, for deposits in the LIBOR Currency having the particular
  Index Maturity, commencing on the related Interest Reset Date, that appear
  or appears, as the case may be, on the LIBOR Page as of 11:00 A.M., London
  time, on the particular Interest Determination Date, or

    (3) if fewer than two offered rates appear, or no rate appears, as the
  case may be, on the particular Interest Determination Date on the LIBOR
  Page as specified in clause (1) or (2), as applicable, the rate calculated
  by the calculation agent of at least two offered quotations obtained by the
  calculation agent after requesting the principal London offices of each of
  four major reference banks (which may include affiliates of the Agents), in
  the London interbank market to provide the calculation agent with its
  offered quotation for deposits in the LIBOR Currency for the period of the
  particular Index Maturity, commencing on the related Interest Reset Date,
  to prime banks in the London interbank market at approximately 11:00 A.M.,
  London time, on that Interest Determination Date and in a principal amount
  that is representative for a single transaction in the LIBOR Currency in
  that market at that time, or

                                     S-11
<PAGE>

    (4) if fewer than two offered quotations referred to in clause (3) are
  provided as requested, the rate calculated by the calculation agent as the
  arithmetic mean of the rates quoted at approximately 11:00 A.M., in the
  applicable Principal Financial Center, on the particular Interest
  Determination Date by three major banks (which may include affiliates of
  the Agents), in that Principal Financial Center selected by the calculation
  agent for loans in the LIBOR Currency to leading European banks, having the
  particular Index Maturity and in a principal amount that is representative
  for a single transaction in the LIBOR Currency in that market at that time,
  or

    (5) if the banks so selected by the calculation agent are not quoting as
  mentioned in clause (4), LIBOR in effect on the particular Interest
  Determination Date.

Treasury Rate Notes

  Each Treasury Rate note will bear interest at a specified rate that will be
reset periodically based on the Treasury Rate and any Spread and/or Spread
Multiplier.

  "Treasury Rate" means:

    (1) the rate from the auction held on the Treasury Rate Determination
  Date (the "Auction") of direct obligations of the United States ("Treasury
  Bills") having the Index Maturity specified in the applicable pricing
  supplement under the caption "INVESTMENT RATE" on the display on Bridge
  Telerate, Inc. (or any successor service) on page 56 (or any other page as
  may replace that page on that service) ("Telerate Page 56") or page 57 (or
  any other page as may replace that page on that service) ("Telerate Page
  57"), or

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

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

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

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

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

    (7) if the dealers so selected by the calculation agent are not quoting
  as mentioned in clause (6), the Treasury Rate in effect on the particular
  Interest Determination Date.

                                     S-12
<PAGE>

Prime Rate Notes

  Each Prime Rate note will bear interest at a specified rate that will be
reset periodically based on the Prime Rate and any Spread and/or Spread
Multiplier.

  "Prime Rate" means:

    (1) the rate on the particular Interest Determination Date as published
  in H.15(519) under the caption "Bank Prime Loan", or

    (2) if the rate referred to in clause (1) is not so published by 3:00
  P.M., New York City time, on the related Calculation Date, the rate on the
  particular Interest Determination Date as published in H.15 Daily Update,
  or such other recognized electronic source used for the purpose of
  displaying the applicable rate, under the caption "Bank Prime Loan", or

    (3) if the rate referred to in clause (2) is not so published by 3:00
  P.M., New York City time, on the related Calculation Date, the rate on the
  particular Interest Determination Date calculated by the calculation agent
  as the arithmetic mean of the rates of interest publicly announced by each
  bank that appears on the Reuters Screen US PRIME 1 Page as the applicable
  bank's prime rate or base lending rate as of 11:00 A.M., New York City
  time, on that Interest Determination Date, or

    (4) if fewer than four rates referred to in clause (3) are so published
  by 3:00 p.m., New York City time, on the related Calculation Date, the rate
  calculated by the calculation agent as the particular Interest
  Determination Date calculated by the calculation agent as the arithmetic
  mean of the prime rates or base lending rates quoted on the basis of the
  actual number of days in the year divided by a 360-day year as of the close
  of business on that Interest Determination Date by three major banks (which
  may include affiliates of the Agents) in The City of New York selected by
  the calculation agent, or

    (5) if the banks so selected by the calculation agent are not quoting as
  mentioned in clause (4), the Prime Rate in effect on the particular
  Interest Determination Date.

CMT Rate Notes

  Each CMT Rate note will bear interest at a specified rate that will be reset
periodically based on the CMT Rate and any Spread or Spread Multiplier.

  "CMT Rate" means:

    (1) if CMT Telerate Page 7051 is specified in the applicable pricing
  supplement:

    (a) the percentage equal to the yield for United States Treasury
    securities at "constant maturity" having the Index Maturity specified
    in the applicable pricing supplement as published in H.15(519) under
    the caption "Treasury Constant Maturities", as the yield is displayed
    on Bridge Telerate, Inc. (or any successor service) on page 7051 (or
    any other page as may replace the specified page on that service)
    ("Telerate Page 7051"), for the particular Interest Determination Date,
    or

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

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

    (d) if the rate referred to in clause (c) is not so published, the rate
    on the particular Interest Determination Date calculated by the
    calculation agent as a yield to maturity based on the arithmetic

                                     S-13
<PAGE>

    mean of the secondary market bid prices at approximately 3:30 P.M., New
    York City time, on that Interest Determination Date of three leading
    primary U.S. government securities dealers in The City of New York
    (which may include the agents or their affiliates) (each, a "Reference
    Dealer"), selected by the calculation agent from five Reference Dealers
    selected by the calculation agent and eliminating the highest
    quotation, or, in the event of equality, one of the highest, and the
    lowest quotation or, in the event of equality, one of the lowest, for
    U.S. Treasury securities with an original maturity equal to the
    particular Index Maturity, a remaining term to maturity no more than
    one year shorter than that Index Maturity and in a principal amount
    that is representative for a single transaction in the securities in
    that market at that time, or

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

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

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

    (h) if fewer than three prices referred to in clause (f) are provided
    as requested, the CMT Rate in effect on the particular Interest
    Determination Date.

    (2) if CMT Telerate Page 7052 is specified in the applicable pricing
  supplement:

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

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

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

                                     S-14
<PAGE>

    (d) if the rate referred to in clause (c) is not so published by 3:00
    P.M., New York City time, on the related Calculation Date, the rate on
    the particular Interest Determination Date calculated by the
    calculation agent as a yield to maturity based on the arithmetic mean
    of the secondary market bid prices at approximately 3:30 P.M., New York
    City time, on that Interest Determination Date of three Reference
    Dealers selected by the calculation agent from five Reference Dealers
    selected by the calculation agent and eliminating the highest
    quotation, or, in the event of equality, one of the highest, and the
    lowest quotation or, in the event of equality, one of the lowest, for
    U.S. Treasury securities with an original maturity equal to the
    particular Index Maturity, a remaining term to maturity no more than 1
    year shorter than that Index Maturity and in a principal amount that is
    representative for a single transaction in the securities in that
    market at that time, or

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

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

    (g) if fewer than five but more than two prices referred to in clause
    (f) are provided as requested, the rate on the particular Interest
    Determination Date calculated by the calculation agent based on the
    arithmetic mean of the bid prices obtained and neither the highest or
    the lowest of the quotations will be eliminated, or

    (h) if fewer than three prices referred to in clause (f) are provided
    as requested, the CMT Rate in effect on that Interest Determination
    Date.

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

European Monetary Union

  Unless we state otherwise in a pricing supplement, to the extent legally
permissible, neither the occurrence or non-occurrence of an EMU Event, nor the
entry into force of any law, regulation, directive or order that requires us
to redenominate or consolidate on terms different from those we describe
below, will alter any term of, or discharge or excuse performance under, the
Senior Indenture or the notes, nor would it permit the Trustee, the holders of
the notes, us or any of our agents the right unilaterally to alter or
terminate the Senior Indenture or the notes or give rise to any event of
default or otherwise be the basis for any rescission or renegotiation of the
Senior Indenture or the notes. To the extent legally permissible, the
occurrence or non-occurrence of an EMU Event will be considered to occur
automatically pursuant to the terms of the notes.

  An "EMU Event" means any event associated with the European Monetary Union
in the European Community, including:

  (a) the fixing of exchange rates between the currency of a Participating
      Member State and the Euro or between the currencies of Participating
      Member States;

                                     S-15
<PAGE>

  (b) the introduction of the Euro as the lawful currency in a Participating
      Member State;

  (c) the withdrawal from legal tender of any currency that, before the
      introduction of the Euro, was the lawful currency in any of the
      Participating Member States;

  (d) the disappearance or replacement of a relevant rate option or other
      price source for the currency of any Participating Member State or the
      failure of the agreed price or rate sponsor or screen provider to
      publish or display the required information; or

  (e) any combination of the above.

Redenomination

  If payments on the notes of a series are to be made in a foreign or
composite currency and the issuing country of that currency becomes a
Participating Member State, then we may, solely at our option and without the
consent of holders or the need to amend the Senior Indenture or the notes,
redenominate all of the notes of that series into Euros (whether or not any
other similar series of notes are so redenominated) on any interest payment
date and after the date on which that country became a Participating Member
State. We will give holders at least 30 days' notice of the redenomination,
including a description of the way we will implement it. If we elect to
redenominate a series of notes, it will be redenominated either:

  (a) in a manner and in compliance with all requirements of relevant
      monetary, stock exchange or other authorities and existing or expected
      market practices consistent with the requirements for debt obligations
      issued in the Euromarkets that are held in international clearing
      systems; or

  (b) if we do not implement the redenomination as described above, we will
      convert the nominal specified currency amount of each note of the
      series into Euros by using the fixed conversion rate adopted by the
      Council of the European Union for the affected currency, and the series
      will be replaced either (1) by notes of the same series equal in value
      to the amount redenominated, but denominated in Euros and each with a
      denomination of one cent; or (2) if the international clearing systems
      for the notes do not then accept for clearance and settlement
      redenominated Euromarket debt obligations, each of that denomination,
      by notes of the same series equal in value to the amount redenominated,
      but denominated in Euros and each with a denomination of one Euro.

  We will pay any balance remaining from a redenomination in cash. The cash
adjustment will be payable in Euros to or on the order of holders of the
affected series in the same way interest is paid.

  Despite the above procedures, solely at our option and without the consent
of holders or the need to amend the Senior Indenture or the notes, we may
elect that, beginning on the date of redenomination of a series of notes or
any later interest payment date as we may specify, the denominations of the
notes of that series will be one cent (if applicable), Euro 1, Euro 10, Euro
100, Euro 1,000, Euro 10,000, Euro 100,000 and Euro 1,000,000. The minimum
denominations of the notes after redenomination will not be lower than the
equivalent of any minimum denominations of the notes required by law,
regulation or market practice. We may elect to permit holders to exchange
then-existing Euro-denominated notes of a series for notes of the new
denominations having the same aggregate nominal amount as the notes being
exchanged. We will give holders at least 30 days' irrevocable notice if we
make this election.

   Solely at our option and without the consent of holders, references in the
notes to any other convention (whether for the calculation of interest,
determination of payment dates or otherwise) may be amended, with effect from
(1) the date of redenomination; (2) the interest payment date following the
substitution of the Euro for the specified currency; or (3) any later interest
payment date that we may specify to comply with conventions applicable to
Euro-denominated Euromarket debt obligations under requirements of relevant
monetary, stock exchange or other authorities, and any market practices
consistent with those requirements as we, in our discretion, determine to
apply to other Euromarket debt obligations that have also been redenominated.
The terms of the notes will be deemed to be amended accordingly.

                                     S-16
<PAGE>

  If we elect to consolidate the notes of a series with other similar series
of notes by reference to the same interest payment date as a redenomination of
the notes of that series into Euros or to a later interest payment date, we
will apply the provisions of "Description of Notes--Consolidation" below with
effect from the date of consolidation.

  If a redenominated note is a floating rate note, the rate of interest that
will apply to the note beginning on the interest payment date falling on or
immediately prior to the redenomination date will be (1) the interest rate
that applied prior to redenomination, with Euros substituted for the specified
currency, unless that interest rate is inconsistent with then-existing or
expected market practices for Euro-denominated Euromarket debt obligations
with floating rate interest payments of frequencies identical or substantially
similar to the frequency of interest payments under the note, as we determine;
or (2) if that interest rate is so inconsistent, the interest rate that would
be consistent with then-existing or expected market practices for Euro-
denominated Euromarket debt obligations, in each case with such interest rate
equal to the interest rate applicable to the note (adjusted as described
above), plus or minus any Spread or Spread Multiplier indicated in the pricing
supplement, as we determine.

  Unless and until the notes of a redenominated series are consolidated with
similar series of other securities as described under "Description of Notes--
Consolidation" below, the interest accrual basis and the provisions of the
notes of that series relating to the source and determination of the interest
accrual basis that will begin on the interest payment date falling on or
immediately prior to the date of redenomination will be:

  (a) the interest accrual basis and those provisions that applied prior to
      redenomination, unless that interest accrual basis is or those
      provisions are inconsistent with then-existing or expected market
      practices for Euro-denominated Euromarket debt obligations with fixed
      rate or floating rate interest payments of frequencies identical or
      substantially similar to the frequency of interest payments under those
      notes, based, in the case of floating interest rate payments, on the
      reference rate for the notes prior to the date of redenomination, as we
      determine; or

  (b) if the interest accrual basis that applied previously is or those
      provisions are so inconsistent, the interest accrual basis or the
      provisions of the notes of that series relating to the source and
      determination of that interest accrual basis, as the case may be, which
      is consistent with the then-existing or expected market practices for
      Euro-denominated Euromarket debt obligations with fixed rate or
      floating rate interest payments of frequencies identical or
      substantially similar to the frequency of interest payments under those
      notes, based, in the case of floating interest rate payments, on the
      reference rate applicable to the notes (adjusted as described above),
      as we determine.

  We may, with the consent of the Trustee but without consent of the holder of
any note, make any change or addition to the terms of the notes of a series if
we and the Trustee believe it is necessary or appropriate to facilitate the
implementation of the practical aspects of the introduction of the Euro or to
correct any clear error or any ambiguity or any defective provisions of the
notes, so long as the change or addition is not materially prejudicial to the
interests of the holders of the affected series. Any change or addition will
be binding on the holders of the notes of that series, the Trustee, the paying
agents, us and any of our other agents. Any change or addition will be
considered to be made by operation of the terms of the relevant notes. We will
promptly notify holders of any change or addition.

Consolidation

  If (1) the payments on the notes of a series are to be made in any specified
currency other than U.S. dollars; and (2) the issuing country of that currency
becomes a Participating Member State, then, subject to the provisions below,
we may, without the consent of the holders of those notes or the need to amend
the Senior Indenture, consolidate the notes of that series with one or more
other similar series of notes on any interest payment date (or if that day is
not a Business Day in any location that we determine to be necessary or
appropriate for the consolidation, the next day that is a Business Day in that
location). We will give holders at least 30 days' notice of the consolidation,
including a description of the way we will implement it. A consolidation may
only be

                                     S-17
<PAGE>

carried out if all of the affected notes have been redenominated in Euros on
or before the interest payment date falling on or immediately prior to the
date of the proposed consolidation (if not already so denominated), and no
default or event of default under any of the notes is continuing.

  We may exercise our right referred to above if we determine that the notes
that we propose to consolidate (1) may be cleared and settled on an
interchangeable basis with the same securities identification numbers through
the main clearing systems through which each series of notes was previously
cleared and settled unless on the date of the proposed consolidation it will
be impossible so to clear and settle the consolidated notes in one or more of
those systems, in which case the consolidated notes need not so clear and
settle through any unavailable clearing system unless it would be materially
prejudicial to the holders of the notes of the affected series; and (2) if any
of the series to be consolidated was listed on any European stock exchange on
which debt obligations are customarily listed immediately prior to the
consolidation, will be listed on at least one of those exchanges.

  Once we have consolidated two or more series of notes, "Business Day" for
those notes will be (1) as defined for fixed or floating rate Euro-denominated
Euromarket debt obligations and in a way consistent with existing or
anticipated market practices as we determine them to be; or (2) if we do not
make the determination described in clause (1), as defined prior to the
consolidation; or (3) if we would be unable to make payments on the notes on
the required dates if the term were defined as described in clause (2), as
defined by us in any other way.

  From the date of consolidation of any series of notes or any later interest
payment date, we may, solely at our option and without the consent of holders,
change the nominal amounts in which those notes are denominated as a result of
any previous redenomination, as well as the conventions applicable to those
notes, in each case as described under "Description of Notes--Redenomination".

  The interest accrual basis and the provisions of a series relating to the
source and determination of the interest accrual basis that will apply to the
consolidated notes beginning on the interest payment date falling on or
immediately prior to the date of consolidation will remain the same if the
series consolidated had the same interest accrual basis and the same
provisions prior to consolidation. If that is not the case, then despite the
provisions of "Description of Notes--Redenomination" above, the interest
accrual basis or the provisions of the notes of a consolidated series relating
to the source and determination of the interest accrual basis that will apply
beginning on the interest payment date falling on or immediately prior to the
date of consolidation will be:

  (a) the interest accrual basis or those provisions that applied to those
      notes prior to consolidation, unless that interest accrual basis is or
      those provisions are inconsistent with then-existing or expected market
      practices for Euro-denominated Euromarket debt obligations with fixed
      rate or floating rate interest payments of frequencies identical or
      substantially similar to the frequency of interest payments under those
      notes, as we determine; or

  (b) if the interest accrual basis that applied prior to consolidation is or
      those provisions are so inconsistent, the interest accrual basis or the
      provisions of the notes of that series relating to the source and
      determination of the interest accrual basis that would be consistent
      with then-existing or expected market practices for Euro-denominated
      Euromarket debt obligations with fixed rate or floating rate interest
      payments of frequencies identical or substantially similar to the
      frequency of interest payments under those notes, as we determine.

  Upon any consolidation, without the consent of holders of the affected
notes, we may change the nominal amounts in which the affected notes are
denominated as a result of any previous redenomination. Upon any consolidation
of the notes of a series represented by a global note or master note with any
other series of notes so represented, we may change the depositary that holds
the notes of either series either physically or on behalf of the clearing
system through which the notes of that series are held or we may issue a
replacement global note or global notes representing them. Notes of any series
represented by certificated notes must be exchanged for notes represented by a
global note or master note prior to any consolidation. If an exchange is not
possible under the terms of any notes, we will not consolidate those notes
with any other series of notes represented by a global note or master note.

                                     S-18
<PAGE>

  We may, with the consent of the Trustee but without the consent of the
holders of any note, make any change or addition to the terms of the notes of
a series if we and the Trustee believe it is necessary or appropriate to
implement the relevant consolidation of notes or to correct any clear error or
any ambiguity or any defective provisions of the notes, so long as the change
or addition is not materially prejudicial to the interests of the holders of
the affected series. Any change or addition will be binding on the holders of
the notes of that series, the Trustee, the paying agents, us and any of our
agents. Any change or addition will be considered to be made by operation of
the terms of the relevant notes. We will promptly notify holders of any change
or addition.

Indexed Notes

  We may offer indexed notes under which principal or interest is determined
by reference to an index related to:

  (a) the rate of exchange between the specified currency for such note and
      the Index Currency;

  (b) the difference in the price of a specified commodity on specified
      dates;

  (c) the difference in the level of a specified stock index, which may be
      based on U.S. or foreign stocks, on specified dates; or

  (d) any other objective price or economic measures described in the pricing
      supplement.

  We will describe the manner of determining principal and interest amounts in
the pricing supplement. We will also include historical and other information
regarding the index or indexes and information concerning tax consequences to
holders of indexed notes.

  Interest payable on an indexed note will be based on the face amount of the
note. The pricing supplement will describe whether the principal payable upon
redemption or repayment prior to Maturity will be the face amount, the index
principal amount at the time of redemption or repayment or some other amount.

Amortizing Notes

  We may offer amortizing notes. Unless otherwise specified in the pricing
supplement, interest on an amortizing note will be computed using a 360-day
year of twelve 30-day months. Payments on amortizing notes will be applied
first to interest due and payable and then to the unpaid principal amount.
Further information about amortizing notes will be specified in the pricing
supplement.

Book-Entry System

  Upon issuance, all notes having the same original issue date and otherwise
identical terms will be represented by one or more global notes. Each global
note representing book-entry notes will be deposited with DTC. This means that
we will not issue certificates to each holder. DTC will keep a computerized
record of its participants (for example, your broker) whose clients have
purchased the notes. Unless it is exchanged in whole or in part for a
certificated note, a global note may not be transferred, except that DTC, its
nominees and their successors may transfer a global note as a whole to one
another.

  Beneficial interests in global notes will be shown on, and transfers of
interests will be made only through, records maintained by DTC and its
participants. The laws of some jurisdictions require that certain purchasers
take physical delivery of securities in definitive form. These laws may impair
the ability to transfer beneficial interests in a global note.

  We will wire principal and interest payments to DTC or its nominee. We and
the Trustee will treat DTC or its nominee as the owner of a global note for
all purposes. Accordingly, we, the Trustee and any paying agent will have no
direct responsibility or liability to pay amounts due on a global note to
owners of beneficial interests in a global note.

                                     S-19
<PAGE>

  It is DTC's current practice, upon receipt of any payment of principal or
interest, to credit participants' accounts on the payment date according to
their respective holdings of beneficial interests in the global note as shown
on DTC's records. In addition, it is DTC's current practice to assign any
consenting or voting rights to participants whose accounts are credited with
notes on a record date, by using an omnibus proxy. Payments by participants to
owners of beneficial interests in a global note, and voting by participants,
will be governed by the customary practices between the participants and
owners of beneficial interests, as is the case with notes held for the account
of customers registered in "street name." However, payments will be the
responsibility of the participants and not our responsibility or that of DTC
or the Trustee.

  Notes represented by a global note will be exchangeable for certificated
notes with the same terms in authorized denominations only if:

  (a) DTC notifies us that it is unwilling or unable to continue as
      depositary or if DTC ceases to be a clearing agency registered under
      applicable law and a successor depositary is not appointed by us within
      90 days; or

  (b) we determine not to require all of the notes of a series to be
      represented by global notes and notify the Trustee of our decision.

  DTC has advised us as follows: DTC is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
DTC was created to hold securities of its participants and to facilitate the
clearance and settlement of securities transactions among its participants in
such securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers
(including the Agents), banks, trust companies, clearing corporations, and
certain other organizations, some of whom (and/or their representatives) own
DTC. Access to DTC's book-entry system is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.

Other Provisions; Addenda

  We may modify any provisions of a note by using the section marked "Other
Provisions" on the face of the note or by providing an addendum to the note.

Optional Redemption, Repayment and Repurchase

  The pricing supplement for a note will indicate whether we will have the
option to redeem the note before the stated maturity and the price and date or
dates on which redemption may occur. If we are allowed to redeem a note, we
may exercise the option by notifying the Trustee and the paying agent at least
45 days prior to the redemption date. At least 30 but not more than 60 days
before the redemption date, the Trustee will mail notice or cause the paying
agent to mail notice of redemption to the holders. If a note is only redeemed
in part, we will issue a new note or notes for the unredeemed portion.

  The pricing supplement relating to a note will also indicate whether you
will have the option to elect repayment by us prior to the stated maturity and
the price and the date or dates on which repayment may occur.

  For a note to be repaid, the paying agent must receive, at least 30 but not
more than 45 days prior to an optional repayment date, such note with the form
entitled "Option to Elect Repayment" on the reverse of the note completed. You
may also send the paying agent a facsimile or letter from a member of a
national securities exchange or the National Association of Securities
Dealers, Inc. or a commercial bank or trust company in the United States
describing the particulars of the repayment including a guarantee that the
note and the form entitled "Option to Elect Repayment" will be received by the
paying agent no later than five Business Days after such

                                     S-20
<PAGE>

facsimile or letter. If you present a note for repayment, that act will be
irrevocable. You may exercise the repayment option for less than the entire
principal of the note, provided the remaining principal outstanding is an
authorized denomination. If you elect partial repayment, your note will be
cancelled, and we will issue a new note or notes for the remaining amount.

  DTC or its nominee will be the holder of each global note and will be the
only party that can exercise a right of repayment. If you are a beneficial
owner of a global note and you want to exercise your right of repayment, you
must instruct your broker or indirect participant through which you hold your
interest to notify DTC. You should consult your broker or such indirect
participant to discuss the appropriate cut-off times and any other
requirements for giving this instruction.

  Regardless of anything in this prospectus supplement to the contrary, if a
note is an Original Issue Discount Note (other than an indexed note), the
amount payable in the event of redemption or repayment prior to its stated
maturity will be the amortized face amount on the redemption or repayment
date, as the case may be. The amortized face amount of an Original Issue
Discount Note will be equal to (1) the issue price plus (2) that portion of
the difference between the issue price and the principal amount of the note
that has accrued at the yield to maturity described in the pricing supplement
(computed in accordance with generally accepted U.S. bond yield computation
principles) by the redemption or repayment date. However, in no case will the
amortized face amount of an Original Issue Discount Note exceed its principal
amount.

  We may at any time purchase notes at any price in the open market or
otherwise. We may hold, resell or surrender for cancellation any notes that we
purchase.

                       UNITED STATES TAX CONSIDERATIONS

  The following is a summary of certain U.S. federal income tax considerations
that may be relevant to a holder of a note that is a U.S. holder. For the
purposes of this discussion, a U.S. holder is an individual who is a citizen
or resident of the United States, a United States domestic corporation, or any
other person that is subject to United States federal income tax on a net
income basis in respect of its investment in a note. This summary is based on
laws, regulations, rulings and decisions now in effect, which may change. Any
change could apply retroactively and could affect the continued validity of
this summary. This summary deals only with U.S. holders that hold notes as
capital assets. It does not address specific tax considerations applicable to
investors that may be subject to special tax rules, such as pass-through
entities (e.g. partnerships) or persons who hold the notes through pass-
through entities, banks, thrifts, real estate investment trusts, regulated
investment companies, insurance companies, dealers in securities or
currencies, traders in securities or commodities that elect mark to market
treatment, persons that will hold notes as a hedge against currency risk or as
a position in a "straddle" or conversion transaction, tax exempt
organizations, holders who are not U.S. holders, or persons that have a
"functional currency" other than the U.S. dollar.

  You should consult your tax adviser about the tax consequences of holding
notes, including the relevance to your particular situation of the
considerations discussed below, as well as of state, local or other tax laws.

Payments or Accruals of Interest

  Payments of or accruals of "qualified stated interest" (as defined below) on
a note will be taxable to a U.S. holder as ordinary interest income at the
time that the holder accrues or receives such amounts (in accordance with the
holder's method of tax accounting). If a U.S. holder using the cash method of
tax accounting receives payments of interest pursuant to the terms of a note
in a currency or currency unit other than U.S. dollars (a "foreign currency"),
the amount of interest income to be included in income by the holder will be
the U.S. dollar value of the foreign currency payment based on the exchange
rate in effect on the date of receipt regardless of whether the payment is
converted into U.S. dollars. In the case of a U.S. holder who uses the accrual
method of accounting or who is otherwise required to accrue interest prior to
receipt, the amount of interest income will

                                     S-21
<PAGE>

be based on the average exchange rate in effect during the interest accrual
period (or with respect to an interest accrual period that spans two taxable
years, at the average exchange rate for the partial period within the taxable
year). Alternatively, an accrual basis U.S. holder may elect to translate all
interest income on foreign currency-denominated notes at the spot rate on the
last day of the accrual period (or the last day of the taxable year, in the
case of an accrual period that spans more than one taxable year) or on the
date the holder receives the interest payment if that date is within five
business days of the end of the accrual period. A U.S. holder that makes this
election must apply it consistently to all debt instruments from year to year
and cannot change the election without the consent of the Internal Revenue
Service. A U.S. holder that uses the accrual method of accounting for tax
purposes will recognize foreign currency gain or loss on the receipt of a
foreign currency interest payment if the exchange rate in effect on the date
the payment is received differs from the rate applicable to a previous accrual
of that interest income. This foreign currency gain or loss will be treated as
ordinary income or loss, but generally will not be treated as an adjustment to
interest income received on the note.

Purchase, Sale and Retirement of Notes

  A U.S. holder's tax basis in a note generally will equal the cost of the
note to that holder, increased by any amounts includible in income by the
holder as original issue discount and market discount, and reduced by any
amortized premium (each as described below) and any payments other than
qualified stated interest made on the note. The cost to a U.S. holder of a
note denominated in a foreign currency will be the U.S. dollar value of the
foreign currency purchase price on the date of purchase calculated at the
exchange rate in effect on that date. In the case of a foreign currency note
that is traded on an established securities market, a cash-basis U.S. holder
(or, if it so elects, an accrual-basis U.S. holder) will determine the U.S.
dollar value of the cost of the note by translating the amount paid at the
spot rate of exchange on the settlement date of the purchase. The amount of
any subsequent adjustments to the holder's tax basis in a note in respect of
foreign currency-denominated original issue discount, market discount and
premium will be determined in the manner described below. The conversion of
U.S. dollars to a foreign currency and the immediate use of that currency to
purchase a note generally will not result in taxable gain or loss for a U.S.
holder.

  Upon the sale, exchange or retirement of a note, a U.S. holder generally
will recognize gain or loss equal to the difference between the amount
realized on the transaction (less any accrued qualified stated interest, which
will be taxable as such) and the U.S. holder's tax basis in the note. If a
U.S. holder receives foreign currency in respect of the sale, exchange or
retirement of a foreign currency note, the amount realized generally will be
the dollar value of the foreign currency the holder receives calculated at the
exchange rate in effect on the date the foreign currency note is disposed of
or retired. In the case of a foreign currency note that is traded on an
established securities market, a cash-basis U.S. holder (or, if it so elects,
an accrual-basis U.S. holder) will determine the U.S. dollar value of the
amount realized by translating the amount at the spot rate of exchange on the
settlement date of the sale, exchange or retirement.

  The election available to accrual-basis U.S. holders in respect of the
purchase and sale of foreign currency notes traded on an established
securities market, which is discussed in the two preceding paragraphs, must be
applied consistently to all debt instruments from year to year and cannot be
changed without the consent of the Internal Revenue Service.

  Except as discussed below with respect to market discount and foreign
currency gain or loss, gain or loss recognized by a U.S. holder on the sale,
exchange or retirement of a note generally will be long-term capital gain or
loss if the U.S. holder has held the note for more than one year. The Internal
Revenue Code of 1986, provides preferential treatment under certain
circumstances for net long-term capital gains recognized by individual
investors. Net long-term capital gain recognized by an individual U.S. holder
generally will be subject to a maximum tax rate of 20% for notes held more
than one year. The ability of U.S. holders to offset capital losses against
ordinary income is limited.

  Notwithstanding the foregoing, gain or loss recognized by a U.S. holder on
the sale, exchange or retirement of a foreign currency note generally will be
treated as ordinary income or loss to the extent that the gain or loss is
attributable to changes in exchange rates during the period in which the
holder held the note. This foreign currency gain or loss will not be treated
as an adjustment to interest income that the holder receives on the note.

                                     S-22
<PAGE>

Original Issue Discount

  U.S. holders of Original Issue Discount Notes generally will be subject to
the special tax accounting rules for original issue discount obligations
provided by the Internal Revenue Code and certain Treasury regulations. U.S.
holders of these notes should be aware that, as described in greater detail
below, they generally must include original issue discount in ordinary gross
income for U.S. federal income tax purposes as it accrues, in advance of the
receipt of cash attributable to that income.

  In general, each U.S. holder of an Original Issue Discount Note with a
maturity greater than one year, whether the U.S. holder uses the cash or the
accrual method of tax accounting, will be required to include in ordinary
gross income the sum of the "daily portions" of original issue discount on
that note for all days during the taxable year that the holder owns the note.
The daily portions of original issue discount on an Original Issue Discount
Note are determined by allocating to each day in any accrual period a ratable
portion of the original issue discount allocable to that period. Accrual
periods may be any length and may vary in length over the term of an Original
Issue Discount Note, so long as no accrual period is longer than one year and
each scheduled payment of principal or interest occurs on the first or last
day of an accrual period. In the case of an initial holder, the amount of
original issue discount on an Original Issue Discount Note allocable to each
accrual period is determined by (i) multiplying the "adjusted issue price" (as
defined below) of the note at the beginning of the accrual period by a
fraction, the numerator of which is the annual yield to maturity of the note
and the denominator of which is the number of accrual periods in a year and
(ii) subtracting from that product the amount (if any) payable as qualified
stated interest allocable to that accrual period. The term "qualified stated
interest" generally means stated interest that is unconditionally payable in
cash or property (other than debt instruments issued by us) at least annually
during the entire term of an Original Issue Discount Note at a single fixed
interest rate or, subject to certain conditions, based on one or more interest
indices.

  In the case of an Original Issue Discount Note that is a floating rate note
qualifying as a variable rate debt instrument as defined in the Treasury
Regulations, both the "annual yield to maturity" and the "qualified stated
interest" will be determined for these purposes as though the note will bear
interest in all periods at a fixed rate generally equal to the rate that would
be applicable to interest payments on the note on its date of issue or, in the
case of some floating rate notes, the rate that reflects the yield that is
reasonably expected for the note. Accordingly, the stated interest that is
payable at least annually on a floating rate note generally will be treated as
"qualified stated interest" and such a note will not be an Original Issue
Discount Note solely as a result of the fact that it provides for interest at
a variable rate. If a floating rate note does not qualify as a "variable rate
debt instrument," the note will be subject to special rules that govern the
tax treatment of debt obligations that provide for contingent payments.
(Additional rules may apply if interest on a floating rate note is based on
more than one interest index. We will provide detailed guidance of the tax
considerations relevant to U.S. holders of any such notes in the pricing
supplement.)

  The "adjusted issue price" of an Original Issue Discount Note at the
beginning of any accrual period will generally be the sum of its issue price
(including any accrued interest) and the amount of original issue discount
allocable to all prior accrual periods, reduced by the amount of all payments
other than any qualified stated interest payments on the note in all prior
accrual periods. All payments on an Original Issue Discount Note (other than
qualified stated interest) will generally be viewed first as payments of
previously accrued original issue discount (to the extent of the previously
accrued discount), with payments considered made from the earliest accrual
periods first, and then as a payment of principal. The "annual yield to
maturity" of a note is the discount rate (appropriately adjusted to reflect
the length of accrual periods) that causes the present value on the issue date
of all payments on the note to equal the issue price. As a result of this
"constant yield" method of including original issue discount income, the
amounts so includible in gross income by a U.S. holder in respect of an
Original Issue Discount Note denominated in U.S. dollars are generally lesser
in the early years and greater in the later years than amounts that would be
includible on a straight-line basis.

  A U.S. holder generally may make an irrevocable election to include in its
income its entire return on a note (i.e., the excess of all remaining payments
to be received on the note, including payments of qualified stated interest,
over the amount paid by the holder for the note) under the constant yield
method described above. For

                                     S-23
<PAGE>

notes purchased at a premium or bearing market discount in the hands of the
U.S. holder, the holder making this election will also be deemed to have made
the election (discussed below in "Premium and Market Discount") to amortize
premium or to accrue market discount in income currently on a constant yield
basis.

  In the case of an Original Issue Discount Note that is also a foreign
currency note, a U.S. holder should determine the U.S. dollar amount
includible as original issue discount for each accrual period by (i)
calculating the amount of original issue discount allocable to each accrual
period in the foreign currency using the constant yield method, and (ii)
translating the foreign currency amount so received at the average exchange
rate in effect during that accrual period (or, with respect to an interest
accrual period that spans two taxable years, at the average exchange rate for
each partial period). Alternatively, the holder may translate the foreign
currency amount so derived at the spot rate of exchange on the last day of the
accrual period (or the last day of the taxable year, for an accrual period
that spans two taxable years) or at the spot rate of exchange on the date of
receipt, if that date is within five business days of the last day of the
accrual period, provided that the U.S. holder has made the election described
under "Payments or Accruals of Interest" above. Because exchange rates may
fluctuate, a U.S. holder of an Original Issue Discount Note that is also a
foreign currency note may recognize a different amount of original issue
discount income in each accrual period than would the holder of an otherwise
similar Original Issue Discount Note denominated in U.S. dollars. Upon the
receipt of an amount attributable to original issue discount (whether in
connection with a payment of an amount that is not qualified stated interest
or the sale or retirement of the Original Issue Discount Note), a U.S. holder
will recognize ordinary income or loss measured by the difference between the
amount received (translated into U.S. dollars at the exchange rate in effect
on the date of receipt or on the date of disposition of the Original Issue
Discount Note, as the case may be) and the amount accrued (using the exchange
rate applicable to such previous accrual).

  A subsequent U.S. holder of an Original Issue Discount Note that purchases
the note at a cost less than its "remaining redemption amount", or an initial
United States holder that purchases an Original Issue Discount Note at a price
other than the note's issue price, also generally will be required to include
in gross income the daily portions of original issue discount, calculated as
described above. However, if the subsequent holder acquires the Original Issue
Discount Note at a price greater than its adjusted issue price, the holder may
reduce its periodic inclusions of original issue discount income to reflect
the premium paid over the adjusted issue price. The remaining redemption
amount for an Original Issue Discount Note is the total of all future payments
to be made on the note other than qualified stated interest.

  Certain of the Original Issue Discount Notes may be redeemed prior to
maturity, either at our option or at the option of the holder, or may have
special repayment or interest rate reset features as indicated in the pricing
supplement. Original Issue Discount Notes containing these features may be
subject to rules that differ from the general rules discussed above. If you
purchase Original Issue Discount Notes with these features, you should
carefully examine the pricing supplement and consult your tax adviser about
them since the tax consequences of original issue discount will depend, in
part, on the particular terms and features of the notes.

Short-Term Notes

  The rules described above will also generally apply to Original Issue
Discount Notes with maturities of one year or less ("short-term notes"), but
with some modifications.

  First, the original issue discount rules treat none of the interest on a
short-term note as qualified stated interest, but treat a short-term note as
having original issue discount. Thus, all short-term notes will be Original
Issue Discount Notes. Except as noted below, a cash-basis U.S. holder of a
short-term note that does not identify the short-term note as part of a
hedging transaction will generally not be required to accrue original issue
discount currently, but will be required to treat any gain realized on a sale,
exchange or retirement of the note as ordinary income to the extent such gain
does not exceed the original issue discount accrued with respect to the note
during the period the holder held it. A U.S. holder may not be allowed to
deduct all of the interest paid or accrued on any indebtedness incurred or
maintained to purchase or carry a short-term note until the Maturity of the
note or its earlier disposition in a taxable transaction. Notwithstanding the
foregoing, a cash-basis U.S. holder

                                     S-24
<PAGE>

of a short-term note may elect to accrue original issue discount on a current
basis (in which case the limitation on the deductibility of interest described
above will not apply). A U.S. holder using the accrual method of tax
accounting and some cash method holders (including banks, securities dealers,
regulated investment companies and certain trust funds) generally will be
required to include original issue discount on a short-term note in gross
income on a current basis. Original issue discount will be treated as accruing
for these purposes on a ratable basis or, at the election of the holder, on a
constant yield basis based on daily compounding.

  Second, any U.S. holder of a short-term note (whether a cash- or accrual-
basis holder) can elect to accrue the "acquisition discount", if any, with
respect to the note on a current basis. Acquisition discount is the excess of
the remaining redemption amount of the note at the time of acquisition over
the purchase price. Acquisition discount will be treated as accruing ratably
or, at the election of the holder, under a constant yield method based on
daily compounding. If a U.S. holder elects to accrue acquisition discount, the
original issue discount rules will not apply.

  Finally, the market discount rules described below will not apply to short-
term notes.

  As described above, certain of the notes may be subject to special
redemption features. These features may affect the determination of whether a
note has a maturity of one year or less and thus is a short-term note. If you
purchase notes with these features, you should carefully examine the pricing
supplement and consult your tax adviser about these features.

Premium and Market Discount

  A U.S. holder that purchases a note at a cost greater than the note's
remaining redemption amount will be considered to have purchased the note at a
premium, and may elect to amortize the premium as an offset to interest
income, using a constant yield method, over the remaining term of the note.
This election, once made, generally applies to all debt instruments held or
subsequently acquired by the holder during or after the first taxable year to
which the election applies. The election may not be revoked without the
consent of the Internal Revenue Service. A U.S. holder that elects to amortize
the premium must reduce its tax basis in the note by the amount of the premium
amortized during its holding period. Original Issue Discount Notes purchased
at a premium will not be subject to the original issue discount rules
described above. In the case of premium on a foreign currency note, the holder
should calculate the amortization of the premium in the foreign currency.
Amortization deductions attributable to a period reduce interest payments in
respect of that period, and therefore are translated into U.S. dollars at the
rate used by the U.S. holder for those interest payments. Exchange gain or
loss will be realized with respect to amortized premium on a foreign currency
note based on the difference between the exchange rate computed on the date or
dates the premium is amortized against interest payments on the note and the
exchange rate on the date when the holder acquired the note. For a U.S. holder
that does not elect to amortize premium, the amount of premium will be
included in the holder's tax basis when the note matures or is disposed of.
Therefore, a U.S. holder that does not elect to amortize premium and that
holds the note to Maturity must generally treat the premium as capital loss
when the note matures.

  If a U.S. holder purchases a note at a price that is lower than the note's
remaining redemption amount, or in the case of an Original Issue Discount
Note, the note's adjusted issue price, by 0.25% or more of the remaining
redemption amount (or adjusted issue price), multiplied by the number of
remaining whole years to maturity, the note will be considered to bear "market
discount" in the hands of the holder. In this case, gain realized by the
holder on the disposition of the note generally will be treated as ordinary
interest income to the extent of the market discount that accrued on the note
while held by the holder. In addition, the holder could be required to defer
the deduction of a portion of the interest paid on any indebtedness incurred
or continued to purchase or carry the note. In general, market discount will
be treated as accruing ratably over the term of the note, or, at the election
of the holder, under a constant yield method. A U.S. holder must accrue market
discount on a foreign currency note in the specified currency. The amount
includible in income by a U.S. holder in respect of accrued market discount
will be the U.S. dollar value of the accrued amount, generally calculated at
the exchange rate in effect on the date that the note is disposed of.

                                     S-25
<PAGE>

  A U.S. holder may elect to include market discount in gross income currently
as it accrues (on either a ratable or constant yield basis), in lieu of
treating a portion of any gain realized on a sale of the note as ordinary
income. If a U.S. holder elects to include market discount on a current basis,
the interest deduction deferral rule described above will not apply. The
election, once made, applies to all market discount debt instruments acquired
by the United States holder on or after the first day of the first taxable
year to which the election applies. The election may not be revoked without
the consent of the Internal Revenue Service. Any accrued market discount on a
foreign currency note that is currently includible in income will be
translated into U.S. dollars at the average exchange rate for the accrual
period (or portion thereof within the holder's taxable year).

Indexed Notes and Other Notes Providing for Contingent Payment

  Special rules govern the tax treatment of debt obligations that provide for
contingent payments ("contingent debt obligations"). These rules generally
require accrual of interest income on a constant yield basis in respect of
contingent debt obligations at a yield determined at the time of issuance of
the obligation, and may require adjustments to these accruals when any
contingent payments are made. We will provide a detailed description of the
tax considerations relevant to U.S. holders of any contingent debt obligations
in the pricing supplement.

Information Reporting and Backup Withholding

  The paying agent will be required to file information returns with the
Internal Revenue Service with respect to payments made to certain U.S.
holders. In addition, certain U.S. holders may be subject to a 31% backup
withholding tax in respect of these payments if they do not provide their
taxpayer identification numbers to the paying agent.

                             PLAN OF DISTRIBUTION

  We are offering the notes through the agents who have agreed to use their
reasonable best efforts to solicit orders. We have the right to accept orders
or reject proposed purchases in whole or in part. The agents also have the
right, using their reasonable discretion, to reject any proposed purchase of
the notes in whole or in part. We will pay an agent a commission ranging from
 .150% to .750% of the principal amount of notes with a stated maturity of 1
year to 30 years. The exact commission paid will be determined by the stated
maturity of the notes sold. Commissions with respect to notes with stated
maturities of over 30 years will be negotiated at the time of sale. The
following table describes the potential proceeds we will receive but does not
include expenses payable by us which we estimate to be $970,000:

<TABLE>
<CAPTION>
                               Price to     Agents' Commissions and
                                Public             Discounts             Proceeds to the Company
                            -------------- ------------------------- --------------------------------
   <S>                      <C>            <C>                       <C>
   Per Note................      100%           .150% to .750%              99.850% to 99.250%
   Total................... $1,500,000,000 $2,250,000 to $11,250,000 $1,497,750,000 to $1,488,750,000
</TABLE>

  We may arrange for notes to be sold through any agent or may sell notes
directly to investors. If we sell notes directly to investors, no commission
or discount will be paid. We also may sell notes to any agent as principal for
the agent's account at a price agreed upon at the time of sale. Such notes may
be resold by the agent to investors at a fixed public offering price or at
prevailing market prices, or at a related price, as determined by the agent.
Unless otherwise specified in the pricing supplement, any note sold to an
agent as principal will be purchased at a price equal to 100% of the principal
amount minus a discount equal to the commission that would be paid on an
agency sale of a note of identical maturity.

  Agents may sell notes purchased from us as principal to other dealers for
resale to investors and other purchasers and may provide any portion of the
discount received in connection with their purchase from us to such dealers.
After the initial public offering of the notes, the public offering price, the
concession and the discount may be changed.


                                     S-26
<PAGE>

  The notes will not have an established trading market when issued. Also, the
notes will not be listed on any securities exchange. The agents may make a
market in the notes, but are not obligated to do so and may discontinue any
market-making at any time without notice. There can be no assurance of a
secondary market for any notes, or that any notes will be sold.

  The agents may be deemed to be "underwriters" within the meaning of the
Securities Act. We have agreed to indemnify the agents against certain
liabilities, including liabilities under the Securities Act, or to contribute
to payments that they may be required to make in connection with such
indemnification.

  The notes have not been and will not be registered under the Securities and
Exchange Law of Japan. We and the agents will not offer or sell any note
directly or indirectly in Japan or to residents of Japan or for the benefit of
any Japanese person (which term means any person resident in Japan, including
any corporation or other entity organized under the laws of Japan) or to
others for reoffering or resale directly or indirectly in Japan or to any
Japanese person except in circumstances that result in compliance with any
applicable laws, regulations and ministerial guidelines of Japan taken as a
whole.

                                   GLOSSARY

  The following is a glossary of terms used in this prospectus supplement.

  "Bond Equivalent Yield" means a yield (expressed as a percentage) calculated
in accordance with the following formula:
                      Bond Equivalent Yield = D X N X 100
                                         360-(D X M)

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

  "Business Day" means any day, other than Saturday or Sunday, that is (1)
neither a legal holiday nor a day on which banking institutions are authorized
or required by law, regulation or executive order to close in (a) The City of
New York, (b) the City of Chicago or (c) if the specified currency for a note
is other than U.S. dollars or Euro, the Principal Financial Center of the
country issuing such currency; (2) if the specified currency for the note is
Euro, a day on which the TARGET System is operating or in any other place or
any other days as may be specified in the pricing supplement; and (3) if the
note is a LIBOR note, a London Business Day.

  "Calculation Date" means the date by which the calculation agent calculates
an interest rate for a floating rate note, which will be one of the following:

    "Prime Rate"-- the earlier of (1) the tenth day after the related Prime
  Rate Interest Determination Date or, if such day is not a Business Day, the
  next Business Day, or (2) the Business Day immediately before the
  applicable interest payment date or Maturity, as the case may be.

    "CD Rate"-- the earlier of (1) the tenth day after the related CD Rate
  Interest Determination Date or, if such day is not a Business Day, the next
  Business Day, or (2) the Business Day immediately before the applicable
  interest payment date or Maturity, as the case may be.

    "CMT Rate"-- the earlier of (1) the tenth day after the related CMT Rate
  Interest Determination Date or, if such day is not a Business Day, the next
  Business Day, or (2) the Business Day immediately before the applicable
  interest payment date or Maturity, as the case may be.

    "Commercial Paper Rate"-- the earlier of (1) the tenth day after the
  related Commercial Paper Rate Interest Determination Date or, if such day
  is not a Business Day, the next Business Day, or (2) the Business Day
  immediately before the applicable interest payment date or Maturity, as the
  case may be.

    "LIBOR"-- the LIBOR Interest Determination Date.

                                     S-27
<PAGE>

    "Treasury Rate"-- the earlier of (1) the tenth day after the related
  Treasury Rate Interest Determination Date or, if such day is not a Business
  Day, the next Business Day, or (2) the Business Day immediately before the
  applicable interest payment date or Maturity, as the case may be.

    "Federal Funds Rate"-- the earlier of (1) the tenth day after the related
  Federal Funds Effective Rate Interest Determination Date or, if such day is
  not a Business Day, the next Business Day, or (2) the Business Day
  immediately before the applicable interest payment date or Maturity, as the
  case may be.

  "Composite Quotations" means the daily statistical release entitled
"Composite 3:30 p.m. Quotations for U.S. Government Securities" published by
the Federal Reserve Bank of New York.

  "Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page designated in the applicable pricing supplement (or any
other page as may replace such page so that service for
the purpose of displaying Treasury Constant Maturities as reported in
H.15(519)), for the purpose of displaying Treasury Constant Maturities as
reported in H.15(519). If no such page is specified in the applicable pricing
supplement, the Designated CMT telerate Page shall be 7052, for the most
recent week.

  "Designated LIBOR Page" means either (a) if "LIBOR Reuters" is specified in
the applicable pricing supplement, the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London interbank rates of
major banks for the applicable Index Currency, or (b) if "LIBOR Telerate" is
specified in the applicable pricing supplement or neither "LIBOR Reuters" nor
"LIBOR Telerate" is specified as the method for calculating LIBOR, the display
on the Dow Jones Telerate Service for the purpose of displaying the London
interbank rates of major banks for the applicable Index Currency.

  "Fixed Conversion Rate" with respect to any specified currency means the
irrevocably fixed conversion rate between the Euro and such specified currency
adopted by the Council of the European Union according to Article 109 1(4)
first sentence of the Treaty of Rome.

  "H.15(519)" means the publication entitled "Statistical Release H. 15(519),
Selected Interest Rates", or any successor publication, published by the Board
of Governors of the Federal Reserve System.

  "H.15 Daily Update" means the daily update of H.15(519), or any successor
site or publication.

  "Index Currency" means the currency (including composite currencies)
specified in the applicable pricing supplement. If no such currency is
specified in the pricing supplement, the Index Currency will be U.S. dollars.

  "Index Maturity" for any note is the period of maturity of the instrument,
obligation or index from which the Base Rate is calculated.

  "Interest Determination Date" means the date as of which the interest rate
for a floating rate note is to be determined, to be effective as of the
following Interest Reset Date and calculated no later than the related
Calculation Date (except in the case of LIBOR, which is calculated on the
related LIBOR Interest Determination Date). The Interest Determination Dates
will be indicated in the applicable pricing supplement and in the note.

  "LIBOR Currency" means the currency specified in the applicable pricing
supplement as to which LIBOR shall be calculated or, if no currency is
specified in the applicable pricing supplement, U.S. dollars.

  "LIBOR Page" means either:

  (a) if "LIBOR Reuters" is specified in the applicable pricing supplement,
  the display on the Reuter Monitor Money Rates Service (or any successor
  service) on the page specified in the applicable pricing supplement (or any
  other page as may replace that page on that service) for the purpose of
  displaying the London interbank rates of major banks for the LIBOR
  Currency; or

                                     S-28
<PAGE>

  (b) if "LIBOR Telerate" is specified in the applicable pricing supplement
  or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the
  applicable pricing supplement as the method for calculating LIBOR, the
  display on Bridge Telerate, Inc. (or any successor service) on the page
  specified in the applicable pricing supplement (or any other page as may
  replace such page on such service) for the purpose of displaying the London
  interbank rates of major banks for the LIBOR Currency.

  "London Business Day" means (i) if the Index Currency is other than Euro,
any day on which dealings in such Index Currency are transacted in the London
interbank market or (ii) if the Index Currency is Euro, a day on which the
TARGET System is operating or in any other place or any other days as may be
specified in the pricing supplement.

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

  "Maturity" means the date on which the principal of a note or an installment
of principal becomes due and payable as provided in the note or in the Senior
Indenture, whether at stated maturity or by declaration of acceleration, call
for redemption or otherwise.

  "Money Market Yield" shall be a yield calculated in accordance with the
following formula:

                      Money Market Yield = D X 360 X 100
                                          360 - (D X M)

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

  "Original Issue Discount Note" means (i) any note where the difference
between (x) the first price at which a substantial amount of the notes that
are part of the same issue is sold for money (other than to an underwriter,
placement agent or wholesaler) and (y) the stated redemption price at the
maturity of the note is at least 0.25% of that stated redemption price
multipled by the number of full years from the issue date to the stated
maturity; and (ii) any other note we designate as issued with original issue
discount for U.S. federal income tax purposes. The stated redemption price at
Maturity of an Original Issue Discount Note is the total of all payments to be
made under the Original Issue Discount Note, other than payments of qualified
stated interest.

  "Participating Member State" means a member state of the European Community
that adopts the Euro in accordance with the Treaty of Rome.

  "Principal Financial Center" will generally be the capital city of the
country of the specified Index Currency or LIBOR Currency, as the case may be,
except that with respect to Australian dollars, Deutsche marks, Dutch
guilders, Italian lire and Swiss francs, the Principal Financial Center shall
be Sydney, Frankfurt, Amsterdam, Milan and Zurich, respectively.

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

  "Senior Indenture" means the Indenture for Senior Debt Securities dated
October 19, 1996 between McDonald's Corporation and the Trustee, as
supplemented.

  "Spread" means the number of basis points (one basis point equals one one-
hundredth of a percentage point) that may be specified in the applicable
pricing supplement as being applicable to the interest rate of a floating rate
note.


                                     S-29
<PAGE>

  "Spread Multiplier" means the percentage that may be specified in the
applicable pricing supplement as being applicable to the interest rate of a
floating rate note.

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

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

  "Trustee" means First Union National Bank or its successor.

                                     S-30
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. The    +
+Company may not sell these securities until the registration statement filed  +
+with the Securities and Exchange Commission is effective. This prospectus and +
+accompanying prospectus supplement are not an offer to sell these securities  +
+and are not soliciting an offer to buy these securities in any state where    +
+the offer or sale is not permitted.                                           +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

                    SUBJECT TO COMPLETION, DATED May 3, 2001

PROSPECTUS

                             McDONALD'S CORPORATION

                                Debt Securities

  We may use this prospectus to issue from time to time one or more series of
debt securities which may be either senior debt securities or subordinated debt
securities with a total initial public offering price or purchase price of up
to $1,500,000,000, or the equivalent thereof in one or more foreign currencies.
Debt securities of each series will be offered on terms to be determined at the
time of sale. We may sell debt securities for U.S. dollars or a foreign or
composite currency, and payments on debt securities may be made in U.S. dollars
or a foreign or composite currency. Debt securities may be issuable as
individual securities in registered form without coupons, or as one or more
global securities in registered form. We will provide the specific terms of an
offering of debt securities, including the designation as senior debt
securities or subordinated debt securities, in an accompanying prospectus
supplement or pricing supplement.

  The debt securities will be unsecured. Unless otherwise specified in a
prospectus supplement, the senior debt securities will rank equally with all of
our other unsecured and unsubordinated indebtedness. The subordinated debt
securities will be subordinated to all of our senior indebtedness.

  We may offer debt securities in any of the following ways:

    . directly;

    . through agents;

    . through dealers; or

    . through one or more underwriters or a syndicate of underwriters in an
      underwritten offering.

  We will describe how a particular offering of debt securities will be made in
the prospectus supplement or pricing supplement for the offering.

                                 ------------

  Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.

                                 ------------

                   The date of this prospectus is     , 2001.
<PAGE>

                            McDONALD'S CORPORATION

General

  We are a Delaware corporation organized on March 1, 1965 as the successor to
an Illinois corporation formed in 1956. Our principal executive offices are at
One McDonald's Plaza, Oak Brook, Illinois 60523, telephone: (630) 623-3000,
and our registered office in Delaware is at 1013 Centre Road, Wilmington,
Delaware 19805.

  We and our subsidiaries develop, operate, franchise and service a worldwide
system of restaurants that prepare, assemble, package and sell a limited menu
of value-priced foods. These restaurants are operated by us and our
subsidiaries or, under the terms of franchise agreements, by franchisees who
are independent third parties, or by affiliates operating under joint-venture
agreements between us or our subsidiaries and local business people.

  We operate primarily in the quick-service hamburger restaurant business
under the McDonald's brand. We also operate other restaurant concepts: Aroma
Cafe, Boston Market, Chipotle Mexican Grill and Donatos Pizza. McDonald's
restaurant business comprises virtually all of our consolidated operating
results.

  Our restaurants offer a substantially uniform menu consisting of hamburgers
and cheeseburgers, including the Big Mac and Quarter Pounder with Cheese, the
Filet-O-Fish, several chicken sandwiches, french fries, Chicken McNuggets,
salads, milk shakes, McFlurries, sundaes and cones, pies, cookies and soft
drinks and other beverages. In addition, we sell a variety of products during
limited promotional time periods. Our restaurants operating in the United
States and certain international markets are open during breakfast hours and
offer a full or limited breakfast menu including the Egg McMuffin and the
Sausage McMuffin with Egg sandwiches, hotcakes and sausage; three varieties of
biscuit sandwiches; bagel sandwiches and Apple-Bran muffins. We test new
products on an ongoing basis.

  We and our subsidiaries, franchisees and affiliates purchase food products
and packaging from numerous independent suppliers. Quality specifications for
both raw and cooked food products are established and strictly enforced.
Alternative sources of these items are generally available. Quality assurance
labs in the U.S., Europe, and the Pacific work to ensure that our high
standards are consistently met. The quality assurance process involves ongoing
testing and on-site inspections of suppliers' facilities. Independently owned
and operated distribution centers distribute products and supplies to most of
our restaurants. The restaurants then prepare, assemble and package these
products using specially designed production techniques and equipment to
obtain uniform standards of quality.

  Our restaurants are located in all fifty of the United States and the
District of Columbia and in many foreign locations, principally Japan, Canada,
Germany, England, France, Australia and Brazil. At December 31, 2000, there
were 28,707 restaurants worldwide, of which 12,804 were located in the United
States and 15,903 in 120 other countries. An additional 218 restaurants were
under construction at December 31, 2000, including 145 outside the United
States.

Where to Get More Information

  We have filed a registration statement with the Securities and Exchange
Commission (the "SEC") relating to the debt securities. This prospectus does
not contain all of the information described in the registration statement.
For further information, you should refer to the registration statement.

  We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements or
other information we file at the SEC's public reference room at 450 Fifth
Street, N.W., in Washington, D.C. 20549. You can request copies of these
documents, upon payment of a duplicating fee, by writing to the SEC. Please
call the SEC at 1-800-SEC-0330 for further information on the operation of the
public reference room. Our SEC filings are also available to the public at the
SEC's web site

                                       2
<PAGE>

at http://www.sec.gov (this uniform resource locator (URL) is an inactive
textual reference only and is not intended to incorporate the SEC web site
into this prospectus).

  The following documents that we have filed with the SEC are incorporated
into this prospectus by reference and considered a part of this prospectus:

  (a) Our Annual Report on Form 10-K for the fiscal year ended December 31,
      2000; and

  (b) Our Current Reports on Form 8-K filed as of February 1, March 19, and
      April 23, 2001.

Later information that we file with the SEC will update and/or supersede this
information. We are also incorporating by reference all documents that we file
with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, after the date of this prospectus and prior
to the termination of the offering of the debt securities.

  We will provide any of the above documents (including any exhibits that are
specifically incorporated by reference in them) to each person, including any
beneficial owner, to whom a prospectus is delivered. You may request these
documents at no cost. Written or telephone requests should be directed to:
McDonald's Shareholder Services, McDonald's Corporation, Kroc Drive, Oak
Brook, Illinois 60523, telephone: (630) 623-7428.

                                USE OF PROCEEDS

  Unless otherwise stated in the applicable prospectus supplement, we intend
to use the net proceeds from the sale of the debt securities for general
corporate purposes, which may include refinancing of debt, capital
expenditures such as the acquisition and development of McDonald's restaurants
and the purchase of our common stock under our ongoing share repurchase
program. Specific allocations of the proceeds for such purposes have not been
made at this time.

                      RATIO OF EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>
                                                        Year Ended December 31,
                                                        ------------------------
                                                        2000 1999 1998 1997 1996
                                                        ---- ---- ---- ---- ----
<S>                                                     <C>  <C>  <C>  <C>  <C>
Ratio of earnings to fixed charges..................... 5.39 5.76 4.82 5.16 5.11
</TABLE>

  The ratios of earnings to fixed charges shown above have been computed on a
total enterprise basis. Earnings represent income before provision for income
taxes and fixed charges. Fixed charges consist of interest on all
indebtedness, amortization of debt issuance costs and discount or premium
relating to any indebtedness, fixed charges related to redeemable preferred
stock and a portion of rental charges (after reduction for related sublease
income) considered to be representative of the interest component in the
particular case.

                        DESCRIPTION OF DEBT SECURITIES

  The following is a description of the general terms of the debt securities.
We will provide specific terms of a series of debt securities and the extent
to which these general provisions apply to that series in a supplement to this
prospectus.

  The senior debt securities are issued under an Indenture (the "Senior
Indenture"), dated October 19, 1996, between us and First Union National Bank,
as Trustee (the "Trustee"). The subordinated debt securities are issued under
a separate Indenture (the "Subordinated Indenture") dated as of October 18,
1996, between us and the Trustee. The Senior Indenture and the Subordinated
Indenture are sometimes collectively referred to in this prospectus as the
"Indentures." Copies of the Indentures are filed as exhibits to our
registration statement No. 333-14141 and are incorporated into this prospectus
by reference. The following summaries highlight some of

                                       3
<PAGE>

the provisions of the Indentures but they may not contain all of the
information that is important to you. Numerical references in parentheses
below are to Articles and Sections of the Indentures. Except as otherwise
indicated, the terms of the Indentures are identical. As used under this
caption, the term "debt securities" includes the debt securities being offered
by this prospectus and all other debt securities issued by us under the
Indentures.

General

  The Indentures do not limit the amount of debt securities that we may issue,
and we may issue debt securities in one or more series. The debt securities
will be unsecured. Unless otherwise specified in the prospectus supplement,
the senior debt securities will be unsubordinated obligations of the Company
and will rank equally with all of our other unsecured and unsubordinated
indebtedness. Certain of our unsecured obligations may, however, under certain
circumstances, become secured by mortgages as a result of negative pledge
covenants applicable to such obligations while the senior debt securities
remain unsecured. Payments on the subordinated debt securities will be
subordinated to the prior payment in full of all of our senior indebtedness,
as described under "Subordination of Subordinated Debt Securities" and in the
applicable prospectus supplement. In addition, we may, from time to time,
without the consent of the registered holders of the notes, issue additional
notes or other debt securities having the same terms as previously issued
notes (other than the date of issuance, the date interest, if any, begins to
accrue and the offering price, which may vary) that will form a single issue
with the previously issued notes.

  The prospectus supplement or the pricing supplement for each offering will
specify whether the debt securities being offered will be senior debt
securities or subordinated debt securities, and will provide the following
terms, where applicable:

  (a) the title of the debt securities;

  (b) any limit on the aggregate principal amount of the debt securities;

  (c) the date or dates on which the principal and any premium of the debt
      securities will be payable;

  (d) the rate or rates at which the debt securities will bear interest; the
      date or dates from which interest will accrue; the interest payment
      dates on which interest will be payable; and the record dates for such
      interest payment dates;

  (e) whether the debt securities are to be issued as original issue discount
      securities and the amount of discount with which the debt securities
      will be issued;

  (f) the place or places where payments will be made;

  (g) the terms of any redemption of the debt securities that we may make at
      our option;

  (h) the terms of our obligation, if any, to redeem, purchase or repay the
      debt securities pursuant to any sinking fund or similar provisions or
      at the option of a holder;

  (i) if other than denominations of $1,000 and any integral multiple
      thereof, the denominations in which the debt securities will be
      issuable;

  (j) if other than the principal amount, the portion of the principal amount
      of the debt securities that will be payable if the maturity of the debt
      securities is accelerated;

  (k) any changes in any of the events of default or remedies with respect to
      the debt securities;

  (l) if the debt securities are non-interest bearing, the "stated
      intervals";

  (m) the currency in which we will make payments on the debt securities; and

  (n) any other terms of the debt securities that do not conflict with the
      applicable Indenture. (Section 2.02)

  We may issue debt securities at a discount below their stated principal
amount, bearing no interest or interest at a rate that at the time of issuance
is below market rates. We may also issue debt securities that have floating
rates of interest but are exchangeable for fixed rate debt securities. Federal
income tax consequences and other relevant considerations will be described in
the applicable prospectus supplement.

                                       4
<PAGE>

  Unless otherwise provided in the prospectus supplement for an offering,
payments on the debt securities will be made at the offices of the Trustee in
New York, New York and Charlotte, North Carolina, although we may make
payments of interest by check mailed to the holders. (Sections 2.02, 4.01 and
4.02) Debt securities may be transferred or exchanged at the office or agency
that we maintain for that purpose, subject to the limitations provided in the
applicable Indenture, without any charge except for any tax or governmental
charges. (Section 2.06)

  Any money that we pay for principal of (and premium, if any) or any interest
on any debt security that remains unclaimed at the end of two years will be
repaid to us on demand, and afterwards the holder of such debt security may
look only to us for payment. (Section 12.05)

  The Indenture and the debt securities will be governed by and construed and
enforced in accordance with the internal laws of the State of Illinois.

Global Securities

  If any debt securities are issuable in temporary or permanent global form,
the applicable prospectus supplement will describe the circumstances, if any,
under which beneficial owners of interests in the global security may obtain
definitive debt securities. Payments on a permanent global debt security will
be made in the manner described in the prospectus supplement. (Section 2.01)

Limitation on Liens Covenant in the Senior Indenture

  The covenant described below applies with respect to any and all series of
senior debt securities, unless we specify otherwise in the applicable
prospectus supplement. We will describe any additional covenants for a
particular series of senior debt securities in the applicable prospectus
supplement.

  For your reference, we have provided a list of definitions of the
capitalized terms used in the covenant at the end of the description.

  We will not, nor will we permit any Restricted Subsidiary to, issue or
assume any debt for money borrowed if such debt is secured by a mortgage,
security interest, pledge, lien or other encumbrance (mortgages, security
interests, pledges, liens and other encumbrances are called "mortgage" or
"mortgages") upon any Principal Property or upon any shares of stock or
indebtedness of any Restricted Subsidiary (whether such Principal Property,
shares of stock or indebtedness are now owned or hereafter acquired) without
in any such case effectively providing that the senior debt securities, and at
our option any other indebtedness of the Company or any Restricted Subsidiary
ranking equally with the senior debt securities, are secured equally and
ratably. These restrictions do not apply to debt secured by:

  (a) mortgages on property, shares of stock or indebtedness of any
      corporation existing at the time the corporation becomes a Restricted
      Subsidiary;

  (b) mortgages on property existing at the time of its acquisition and
      certain purchase money mortgages;

  (c) mortgages securing debt of a Restricted Subsidiary owing to us or
      another Subsidiary;

  (d) mortgages on property of a corporation existing at the time it is
      merged into or consolidated with us or a Restricted Subsidiary or at
      the time of a sale, lease or other disposition of the properties of a
      corporation as an entirety or substantially as an entirety to us or a
      Restricted Subsidiary;

  (e) mortgages in favor of any country or any political subdivision of any
      country, or any instrumentality thereof, to secure certain payments
      pursuant to any contract or statute or to secure any indebtedness
      incurred for the purpose of financing all or any part of the purchase
      price or the cost of construction of the property subject to such
      mortgages; or

  (f) any extension, renewal or replacement (or successive extensions,
      renewals or replacements), in whole or in part, of any mortgage
      referred to in the foregoing clauses.

                                       5
<PAGE>

  Notwithstanding the above, we and one or more Restricted Subsidiaries may,
without securing the senior debt securities, issue or assume secured debt if,
after giving effect to the transaction, the aggregate of the secured debt then
outstanding (not including secured debt permitted under the above exceptions)
does not exceed 20% of the shareholders' equity of us and our consolidated
subsidiaries as of the end of the preceding fiscal year. The transfer of a
Principal Property to a subsidiary or any third party will not be restricted.
(Section 4.06)

  The term "Principal Property" means all real property owned by us or any
Restricted Subsidiary which is located within the continental United States of
America and, in the opinion of our Board of Directors, is of material
importance to the total business we and our consolidated affiliates, as an
entity, conduct. (Section 1.01)

  The term "Restricted Subsidiary" means any subsidiary (i) substantially all
the property of which is located within the continental United States of
America, (ii) which owns Principal Property and (iii) in which our investment,
direct or indirect and whether in the form of equity, debt, advances or
otherwise, is in excess of U.S. $1,000,000,000 as shown on our books as of the
end of the fiscal year immediately preceding the date of determination. A
"Restricted Subsidiary" does not include any subsidiary primarily engaged in
financing activities, primarily engaged in the leasing of real property to
persons other than us and our subsidiaries, or that we characterize as a
temporary investment. (Section 1.01)

Subordination of Subordinated Debt Securities

  Unless otherwise indicated in the prospectus supplement, the following
provisions apply to the subordinated debt securities.

  The subordinated debt securities will, to the extent described in the
Subordinated Indenture, be subordinate in right of payment to all of our
indebtedness for borrowed money, whether now or in the future, which is not by
its terms subordinate to our other indebtedness. However, senior indebtedness
will not include amounts owed to our trade creditors in the ordinary course of
business. At December 31, 2000, our aggregate amount of senior indebtedness
was approximately $7.9 billion.

  Except as provided under the Subordinated Indenture, if any one of the
following events occurs, we will pay all principal, premium, if any, and
interest on the senior indebtedness in full before we make any payment on the
subordinated debt securities:

  (a)  any insolvency or bankruptcy proceedings of our company, including any
       receivership reorganization or similar proceedings;

  (b)  any proceedings for voluntary liquidation, dissolution or other
       winding up of our company, whether or not involving insolvency or
       bankruptcy proceedings; and

  (c)  any series of subordinated debt securities is declared due and payable
       because of an occurrence of an event of default under the Subordinated
       Indenture.

  The Subordinated Indenture does not limit the incurrence of additional
senior indebtedness. The senior debt securities constitute senior indebtedness
under the Subordinated Indenture.

  The prospectus supplement may have further information regarding the
subordination of the subordinated debt securities of a particular series.

Events of Default

  The Indentures describe an event of default with respect to any series of
debt securities as being any one of the following events:

  (a)  default for 30 days in any payment of interest on such series;

  (b)  default in any payment of principal of or premium, if any, on debt
       securities of such series when due (and continuance of such default
       for a period of 10 days in the case of subordinated debt securities);

                                       6
<PAGE>

  (c)  default in the payment of any sinking fund payment on debt securities
       of such series when due (and continuance of such default for a period
       of 10 days in the case of subordinated debt securities);

  (d)  default for 60 days, after appropriate notice, in performance of any
       other covenants in the Indentures (other than the limitation on liens
       covenant in the Senior Indenture and any other covenant included in
       the Indentures solely for the benefit of another series of debt
       securities), unless it cannot with due diligence be cured within the
       60-day period due to causes beyond our control;

  (e)  certain events of bankruptcy, insolvency or reorganization of our
       company; or

  (f)  default in the performance of a particular covenant applicable to that
       series after appropriate notice and opportunity to cure the default.

  The Senior Indenture defines a default for 120 days after appropriate notice
in the performance of the limitation on liens covenant as an additional event
of default with respect to the senior debt securities.

  An event of default with respect to a particular series of debt securities
issued under either of the Indentures does not necessarily constitute an event
of default with respect to any other series of debt securities issued under
the Indentures. If an event of default under clause (a), (b), (c) or (f) above
with respect to the Indentures is continuing with respect to any series of
debt securities, the Trustee or the holders of not less than 25% in aggregate
principal amount of the affected series of debt securities may declare the
principal amount (or, if the debt securities are original issue discount
securities, the specified portion of the principal amount) of such series to
be due and payable. In case an event of default under clause (d) or (e) above
with respect to the Indentures or with respect to the limitation on liens
covenant of the Senior Indenture is continuing, the Trustee or holders of not
less than 25% in aggregate principal amount of all the debt securities may
declare the principal amount (or, if any debt securities are original issue
discount securities, the specified portion of the principal amount) of the
debt securities of all series to be due and payable. Any event of default with
respect to a particular series of debt securities may be waived by the holders
of a majority in aggregate principal amount of those debt securities, except,
in each case, a failure to pay principal of, or premium, if any, or interest
on those debt securities. (Section 6.01; Section 6.07)

  We are required to file an annual officers' certificate with the Trustee
concerning our compliance with the Indentures. (Section 4.05) Subject to the
provisions of the Indentures relating to the duties of the Trustee, each
Indenture provides that the Trustee will be under no obligation to exercise
any of its rights or powers at the request, order or direction of the holders
of the debt securities unless the holders have offered the Trustee reasonable
indemnity. (Sections 6.04 and 7.01) Subject to indemnification and other
rights of the Trustee, the holders of a majority (voting as one class) in
principal amount of each affected series of debt securities may direct the
time, method, and place of conducting any proceeding for any remedy available
to the Trustee or exercising any of the Trustee's trusts or powers. (Section
6.07)

Modification of the Indentures

  We may enter into supplemental indentures with the Trustee without the
consent of the holders of the debt securities to:

  (a)  evidence the assumption by a successor corporation of our obligations;

  (b)  add covenants for the protection of the holders of the debt
       securities;

  (c)  add or change any of the provisions of the Indentures to permit or
       facilitate the issuance of debt securities of any series in bearer or
       coupon form;

  (d)  cure any ambiguity or correct any inconsistency in the Indentures;

  (e)  establish the form or terms of debt securities of any series as
       permitted by the terms of the Indentures; and

  (f)  evidence the acceptance of appointment by a successor trustee.
       (Section 10.01)

                                       7
<PAGE>

  With the consent of the holders of not less than 66 2/3% in aggregate
principal amount of each affected series of debt securities, we may execute
supplemental indentures with the Trustee to add provisions or change or
eliminate any provision of the Indentures or modify the rights of the holders
of those debt securities. However, no such supplemental indenture will, among
other things (a) extend the fixed maturity of any debt security, or reduce the
principal amount (including in the case of a discounted debt security the
amount payable upon acceleration of the maturity thereof), reduce the rate or
extend the time of payment of interest, or make the principal of, premium, if
any, or interest, if any, payable in any coin or currency other than that
provided in the debt security, without the consent of the holder of each
affected debt security or (b) reduce the percentage of holders required to
consent to the supplemental indenture, without the consent of the holder of
each affected debt security. (Section 10.02)

Discharge of Indentures

  We, at our option, (a) will be discharged from all obligations under the
Indentures in respect of the debt securities of a series (except in each case
for certain obligations to register the transfer or exchange of those debt
securities, replace stolen, lost or mutilated debt securities, maintain paying
agencies and hold monies for payment in trust) or (b) need not comply with
certain restrictive covenants of the Indentures (including the limitation on
liens covenant in the Senior Indenture) and will not be limited by any
restrictions with respect to merger, consolidation or sales of assets with
respect to those debt securities, in each case if we deposit with the Trustee,
in trust, (x) money or (y) U.S. government obligations or a combination of (x)
and (y) which will provide enough money to pay all the principal (including
any mandatory sinking fund payments) of, and interest, if any, and premium, if
any, on, those debt securities when due. (Section 12.02) In order to select
either option, we must provide the Trustee with an opinion of counsel or a
ruling from, or published by, the Internal Revenue Service, to the effect that
holders will not recognize income, gain or loss for Federal income tax
purposes as a result of our exercising the option and will be subject to
Federal income tax as if we had not exercised the option. (Section 12.02) In
addition, we may also discharge our obligations with respect to a series of
debt securities by depositing with the Trustee, in trust, enough money to pay
at maturity or upon redemption all of the debt securities of such series,
provided that all of the debt securities of such series are by their terms to
become due and payable or called for redemption within one year. No opinion of
counsel or ruling from the Internal Revenue Service is required with respect
to a discharge in these circumstances. Upon any discharge of debt securities
described above, the holders of those debt securities may look solely to such
trust fund, and not to us, for payments. (Sections 12.01 and 12.02)

Concerning the Trustee

  We and our subsidiaries and affiliates maintain banking relationships
(including the extension of credit) in the ordinary course of business with
the Trustee. The Trustee is also trustee under other indentures under which we
have issued other senior and subordinated debt securities.

                             PLAN OF DISTRIBUTION

  We may offer debt securities in any of the following ways:

  (a) directly;

  (b) through agents;

  (c) through dealers; or

  (d) through one or more underwriters or a syndicate of underwriters in an
   underwritten offering.

  We will describe how a particular offering of debt securities will be made,
including the names of any underwriters, the purchase price of the securities,
the proceeds of the offering and any underwriters' discounts or commissions,
in the prospectus supplement or pricing supplement for the offering.

                                       8
<PAGE>

  If we use underwriters or dealers in the sale, the underwriters or dealers
will acquire the debt securities for their own account and may resell them in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. We may
offer debt securities to the public either through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate.
Unless otherwise described in the applicable prospectus supplement, the
obligations of the underwriters to purchase debt securities will be subject to
certain conditions precedent, and the underwriters must purchase all of such
debt securities if they buy any of them. The underwriters may change any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers from time to time.

  We may also sell debt securities directly or through designated agents. Any
agent involved in the offer or sale of debt securities will be named, and any
commissions payable by us to such agent will be described, in the applicable
prospectus supplement or pricing supplement. Unless otherwise indicated, an
agent will act on a best efforts basis for the period of its appointment.

  Any underwriters, dealers or agents participating in the distribution of
debt securities may be deemed to be underwriters and any discounts or
commissions received by them on the sale or resale of debt securities may be
deemed to be underwriting discounts and commissions under the Securities Act
of 1933, as amended (the "Securities Act"). Agents and underwriters may be
entitled under agreements entered into with us to indemnification against
certain civil liabilities, including liabilities under the Securities Act, or
to contribution with respect to payments that the agents or underwriters may
be required to make in respect of such liabilities. Agents and underwriters
may be customers of, engage in transactions with, or perform services for, us
or our subsidiaries or affiliates in the ordinary course of business.

  If so indicated in the prospectus supplement, we will authorize agents and
underwriters to solicit offers by certain institutions to purchase our debt
securities at the public offering price set forth in the prospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery on
the date or dates stated in the prospectus supplement. These delayed delivery
contracts will be subject only to those conditions described in the relevant
prospectus supplement, and the prospectus supplement will describe the
commissions payable for the solicitation.

                                 LEGAL MATTERS

  Gloria Santona, our Vice President, U.S. General Counsel and Secretary will
pass on the legality of the debt securities being offered by us. Ms. Santona
is a full-time employee of ours and owns shares of our common stock directly
and as a participant in various employee benefit plans. Ms. Santona also holds
options to purchase shares of our common stock.

                                    EXPERTS

  Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 2000, as set forth in their report, which is incorporated
by reference in this prospectus. Our consolidated financial statements are
incorporated by reference in reliance on Ernst & Young LLP's report, given on
their authority as experts in accounting and auditing.

                                       9
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                                 $1,500,000,000

                             McDonald's Corporation


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

                                 ------------

                             PROSPECTUS SUPPLEMENT

                                 ------------

                              Merrill Lynch & Co.
                             ABN AMRO Incorporated
                         Banc of America Securities LLC
                         Banc One Capital Markets, Inc.
                                Barclays Capital
                           Deutsche Banc Alex. Brown
                             Fleet Securities, Inc.
                              Goldman, Sachs & Co.
                                    JPMorgan
                           Morgan Stanley Dean Witter
                              Salomon Smith Barney

                                       , 2001

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

                                    PART II
                    INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

  The following table sets forth all expenses in connection with the issuance
and distribution of the debt securities being registered. All the amounts are
estimated, except the Securities and Exchange Commission registration fee.

<TABLE>
      <S>                                                              <C>
      Securities and Exchange Commission registration fee............. $375,000
      Fees and expenses of accountants................................   65,000
      Fees and expenses of counsel....................................  150,000
      Fees and expenses of Trustee and agents.........................   60,000
      Printing and engraving expenses.................................  150,000
      Rating agency fees..............................................  150,000
      Miscellaneous...................................................   20,000
                                                                       --------
        Total......................................................... $970,000
                                                                       ========
</TABLE>

Item 15. Indemnification of Directors and Officers.

  Section 145 of the Delaware General Corporation Law (the "GCL") provides for
indemnification of directors and officers against any legal liability (other
than liability arising from derivative suits) if the director or officer acted
in good faith and in a manner that he or she reasonably believed to be in or
not opposed to the best interests of the corporation. In criminal actions, the
director or officer must also have had no reasonable cause to believe that his
or her conduct was unlawful. A corporation may indemnify a director or officer
in a derivative suit if the director or officer acted in good faith and in a
manner that he or she reasonably believed to be in or not opposed to the best
interests of the corporation unless the director or officer is found liable to
the corporation (in which case a court may permit indemnity for such director
or officer to the extent it deems proper).

  Article V of our By-Laws provides that we shall indemnify and hold harmless
each director and officer to the fullest extent permitted under the GCL,
provided that the person seeking indemnification has met the applicable
standard of conduct set forth in the By-Laws. Such indemnification could cover
all expenses as well as liabilities and losses incurred by directors and
officers. The Board of Directors has the authority by resolution to provide
for other indemnification of directors and officers as it deems appropriate.

  The By-Laws further provide that we may maintain insurance at our expense to
protect any director or officer against any expenses, liabilities or losses,
whether or not we would have the power to indemnify such director or officer
against such expenses, liabilities or losses under the GCL. Pursuant to this
provision, we maintain insurance against any liability incurred by our
directors and officers in defense of any action in which they are made parties
by reason of their positions as directors and officers.

                                     II-1
<PAGE>

Item 16. List of Exhibits.

<TABLE>
<CAPTION>
 <C>   <S>
  1(a) Form of Underwriting Agreement.
   (b) Form of Distribution Agreement.
  4(a) Form of Senior Debt Securities Indenture between McDonald's Corporation
         and First Union National Bank, as Trustee (including form of Senior
         Debt Security).*
   (b) Form of Subordinated Debt Securities Indenture between McDonald's
         Corporation and First Union National Bank, as Trustee (including form
         of Subordinated Debt Security).*
   (c) Form of Supplemental Indenture No. 6 between McDonald's Corporation and
         First Union National Bank, as Trustee.
   (d) Form of Series G Fixed Rate Registered Note.
   (e) Form of Series G Floating Rate Registered Note.
  5    Opinion and consent of Gloria Santona, Vice President, U.S. General
        Counsel and Secretary of the Company.
 12    Statement re computation of ratios of earnings to fixed charges.**
 23(a) Consent of Ernst & Young LLP, independent auditors.
 23(b) Consent of Gloria Santona, Vice President, U.S. General Counsel and
        Secretary of the Company is included in Exhibit 5.
 24    Powers of Attorney (set forth on page II-4 of this Registration
        Statement).
 25    Statement of Eligibility and Qualification on Form T-1 of First Union
        National Bank, as Trustee.
</TABLE>
- --------
*  Exhibits 4(a) and 4(b) were previously filed as Exhibits 4(a) and 4(b) of
   the Company's Registration Statement on Form S-3 (File No. 333-14141) as
   filed October 15, 1996 and are incorporated by reference herein.
** Exhibit 12 above was previously filed as Exhibit 12 of the Company's Annual
   Report on Form 10-K, dated December 31, 2000, and is incorporated herein by
   reference.

                                     II-2
<PAGE>

Item 17. Undertakings.

  The undersigned Registrant hereby undertakes:

    (a) To file, during any period in which offers or sales are being made, a
  post-effective amendment to this Registration Statement:

      (i) to include any prospectus required by Section 10(a)(3) of the
    Securities Act of 1933;

      (ii) to reflect in the prospectus any facts or events arising after
    the effective date of this Registration Statement (or the most recent
    post-effective amendment thereof) which, individually or in the
    aggregate, represent a fundamental change in the information set forth
    in this Registration Statement. Notwithstanding the foregoing, any
    increase or decrease in volume of securities offered (if the total
    dollar value of securities offered would not exceed that which was
    registered) and any deviation from the low or high end of the estimated
    maximum offering range may be reflected in the form of prospectus filed
    with the Securities and Exchange Commission pursuant to Rule 424(b) of
    the Securities Act of 1933 if, in the aggregate, the changes in volume
    and price represent no more than a 20% change in the maximum aggregate
    offering price set forth in the "Calculation of Registration Fee" table
    in the effective Registration Statement; and

      (iii) to include any material information with respect to the plan of
    distribution not previously disclosed in this Registration Statement or
    any material change to such information in this Registration Statement;

  provided, however, that the undertakings set forth in paragraphs (i) and
  (ii) above do not apply if the information required to be included in a
  post-effective amendment by those paragraphs is contained in periodic
  reports filed with or furnished to the Securities and Exchange Commission
  by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
  Exchange Act of 1934 that are incorporated by reference in this
  Registration Statement.

    (b) That, for the purpose of determining any liability under the
  Securities Act of 1933, each such post-effective amendment shall be deemed
  to be a new Registration Statement relating to the securities offered
  therein, and the offering of such securities at that time shall be deemed
  to be the initial bona fide offering thereof.

    (c) To remove from registration by means of a post-effective amendment
  any of the securities being registered which remain unsold at the
  termination of the offering.

    (d) That, for purposes of determining any liability under the Securities
  Act of 1933, each filing of the Registrant's annual report pursuant to
  Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
  is incorporated by reference in this Registration Statement shall be deemed
  to be a new Registration Statement relating to the securities offered
  therein, and the offering of such securities at that time shall be deemed
  to be the initial bona fide offering thereof.

    (e) That, insofar as indemnification for liabilities arising under the
  Securities Act of 1933 may be permitted to directors, officers and
  controlling persons of the Registrant pursuant to the provisions referred
  to in Item 15 of this Registration Statement, or otherwise, the Registrant
  has been advised that in the opinion of the Securities and Exchange
  Commission such indemnification is against public policy as expressed in
  the Securities Act of 1933 and is, therefore, unenforceable. In the event
  that a claim for indemnification against such liabilities (other than the
  payment by the Registrant of expenses incurred or paid by a director,
  officer or controlling person of the Registrant in the successful defense
  of any action, suit or proceeding) is asserted by such director, officer or
  controlling person in connection with the securities being registered, the
  Registrant will, unless in the opinion of its counsel the matter has been
  settled by controlling precedent, submit to a court of appropriate
  jurisdiction the question whether such indemnification by it is against
  public policy as expressed in the Securities Act of 1933 and will be
  governed by the final adjudication of such issue.

                                     II-3
<PAGE>

                                  SIGNATURES

  Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3, and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Oak Brook, and State of Illinois, on the 2nd day
of May 2001.

                                          McDONALD'S CORPORATION

                                                 /s/ Michael L. Conley
                                          By___________________________________
                                             Michael L. Conley Executive Vice
                                               President and Chief Financial
                                                          Officer

  Each person whose signature appears below constitutes and appoints Michael
L. Conley, Jeffrey B. Kindler, Michael D. Richard, Gloria Santona and Phillip
H. Rudolph, and each of them, his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him or her and
in his or her name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto and all other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.

  Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated and on the 2nd day of May 2001.

<TABLE>
<CAPTION>
             Signature                                 Title
             ---------                                 -----
<S>                                   <C>
       /s/ Hall Adams, Jr.
- ------------------------------------
          Hall Adams, Jr.             Director
     /s/ James R. Cantalupo
- ------------------------------------
         James R. Cantalupo           Vice Chairman and President--
                                       McDonald's Corporation
       /s/ Gordon C. Gray
- ------------------------------------
           Gordon C. Gray             Director
      /s/ Jack M. Greenberg
- ------------------------------------
         Jack M. Greenberg            Chairman and Chief Executive Officer--
                                       McDonald's Corporation and Director
    /s/ Enrique Hernandez, Jr.
- ------------------------------------
       Enrique Hernandez, Jr.         Director
      /s/ Jeanne P. Jackson           Director
____________________________________
         Jeanne P. Jackson


      /s/ Donald R. Keough
- ------------------------------------
          Donald R. Keough            Director
       /s/ Donald G. Lubin
- ------------------------------------
          Donald G. Lubin             Director
</TABLE>

                                     II-4
<PAGE>

<TABLE>
<CAPTION>
             Signature                                 Title
             ---------                                 -----
<S>                                   <C>
       /s/ Walter E. Massey
- ------------------------------------
          Walter E. Massey            Director
      /s/ Andrew J. McKenna
- ------------------------------------
         Andrew J. McKenna            Director
      /s/ Michael R. Quinlan
- ------------------------------------
         Michael R. Quinlan           Chairman of the Executive Committee
       /s/ Terry L. Savage
- ------------------------------------
          Terry L. Savage             Director
- ------------------------------------
           Roger W. Stone             Director
      /s/ Robert N. Thurston
- ------------------------------------
         Robert N. Thurston           Director
        /s/ Fred L. Turner
- ------------------------------------
           Fred L. Turner             Senior Chairman and Director
      /s/ Michael L. Conley
- ------------------------------------
         Michael L. Conley            Executive Vice President and Chief
                                       Financial Officer
     /s/ Christopher Pieszko
- ------------------------------------
        Christopher Pieszko           Senior Vice President and Corporate
                                       Controller
</TABLE>

                                      II-5
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
 Exhibit No.
 -----------
 <C>         <S>
     1(a)    Form of Underwriting Agreement.
      (b)    Form of Distribution Agreement.
     4(a)    Form of Senior Debt Securities Indenture between McDonald's
               Corporation and First Union National Bank, as Trustee (including
               form of Senior Debt Security).*
      (b)    Form of Subordinated Debt Securities Indenture between McDonald's
               Corporation and First Union National Bank, as Trustee (including
               form of Subordinated Debt Security).*
      (c)    Form of Supplemental Indenture No. 6 between McDonald's
               Corporation and First Union National Bank, as Trustee.
      (d)    Form of Series G Fixed Rate Registered Note.
      (e)    Form of Series G Floating Rate Registered Note.
     5       Opinion and consent of Gloria Santona, Vice President, U.S.
              General Counsel and Secretary of the Company.
    12       Statement re computation of ratios of earnings to fixed charges.**
    23(a)    Consent of Ernst & Young LLP, independent auditors.
    23(b)    Consent of Gloria Santona, Vice President, U.S. General Counsel
              and Secretary of the Company is included in Exhibit 5.
    24       Powers of Attorney (set forth on page II-4 of this Registration
              Statement).
    25       Statement of Eligibility and Qualification on Form T-1 of First
              Union National Bank, as Trustee.
</TABLE>
- --------
*  Exhibits 4(a) and 4(b) were previously filed as Exhibits 4(a) and 4(b) of
   the Company's Registration Statement on Form S-3 (File No. 333-14141) as
   filed October 15, 1996, and are incorporated by reference herein.
** Exhibit 12 above was previously filed as Exhibit 12 of the Company's Annual
   Report on Form 10-K, dated December 31, 2000, and is incorporated herein by
   reference.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.(A)
<SEQUENCE>2
<FILENAME>dex1a.txt
<DESCRIPTION>FORM OF UNDERWRITING AGREEMENT
<TEXT>

<PAGE>

                                                                    Exhibit 1(a)

                            McDONALD'S CORPORATION

                            UNDERWRITING AGREEMENT
                            ----------------------



To the Representatives named in Schedule I hereto of
 the Underwriters named in Schedule II hereto

Ladies and Gentlemen:

     1. Introductory. McDonald's Corporation (the "Company"), a Delaware
corporation, proposes to sell to the underwriters named in Schedule II hereto
(the "Underwriters"), for whom you are acting as representatives (the
"Representatives", which term may refer to a single Representative if so
indicated on Schedule I hereto), the principal amount of its securities
identified in Schedule I hereto (the "Securities"), to be issued under an
Indenture, dated as of October 19, 1996 as supplemented by Supplemental
Indenture No. 6 to be dated as of _______, 2001 (collectively, the "Indenture"),
between the Company and First Union National Bank, as trustee (the "Trustee").
(If the firm or firms listed in Schedule II hereto include only the firm or
firms listed in Schedule I hereto, then the terms "Underwriters" and
"Representatives," as used herein, shall each be deemed to refer to such firm or
firms.)

     2. Representations and Warranties of the Company. The Company represents
and warrants to each of the Underwriters that:

          (a) The Company has filed with the Securities and Exchange Commission
     (the "Commission") a registration statement on Form S-3 under the
     Securities Act of 1933, as amended (the "Securities Act") (File No. 333-
     ____), which has become effective, for the registration under the
     Securities Act of the Securities. Such registration statement meets the
     requirements set forth in Rule 415(a)(1)(i) under the Securities Act and
     complies in all other material respects with said Rule. The Indenture is
     duly qualified under the Trust Indenture Act of 1939, as amended (the
     "Trust Indenture Act"), and the Company has duly authorized the issuance of
     the Securities. The Company proposes to file with the Commission pursuant
     to Rule 424(b)(2) or (b)(5) under the Securities Act a supplement to the
     form of prospectus included in registration statement File No. 333-_____
     relating to the Securities and the plan of distribution thereof or (b), if
     the Company elects to rely on Rule 434 under the Securities Act, a Term
     Sheet (as such term is hereinafter defined) relating to the Securities that
     shall contain such information as is required or permitted by Rules 434 and
     424(b) under the Securities Act. The registration statement File No. 333-
     _____ , including the exhibits thereto, is hereinafter called the
     "Registration Statement"; (i) the prospectus in the form in which it
     appears in registration statement File No. 333-_____ is hereinafter called
     the "Basic Prospectus"; and such supplemented form of prospectus, in the
     form in which it shall be filed with the Commission pursuant to Rule
     424(b)(2) or (b)(5) (including the Basic Prospectus as so supplemented) or
     (ii), if the Company elects to rely on Rule 434 under the Securities Act,
     in the form of the Term Sheet as first filed with the Commission pursuant
     to Rule 424(b)(7) (together with the Basic Prospectus), is hereinafter
     called the "Final Prospectus". Any preliminary form of the Final Prospectus
     which has heretofore been filed pursuant to Rule 424(a) is hereinafter
     called the "Preliminary Final Prospectus". Any abbreviated term sheet that
     satisfies the requirements of Rule 434 under the Securities Act is
     hereinafter called the "Term Sheet." Any reference

                                       1
<PAGE>

     herein to the Registration Statement, the Basic Prospectus, any Preliminary
     Final Prospectus or the Final Prospectus shall be deemed to refer to and
     include the documents incorporated by reference therein pursuant to Item 12
     of Form S-3 which were filed under the Securities Exchange Act of 1934, as
     amended (the "Exchange Act"), on or before the date of this Agreement, or
     the issue date of the Basic Prospectus, any Preliminary Final Prospectus or
     the Final Prospectus, as the case may be; and any reference herein to the
     terms "amend", "amendment" or "supplement" with respect to the Registration
     Statement, the Basic Prospectus, any Preliminary Final Prospectus or the
     Final Prospectus shall be deemed to refer to and include the filing of any
     document under the Exchange Act after the date of this Agreement, or the
     issue date of the Basic Prospectus, any Preliminary Final Prospectus or the
     Final Prospectus, as the case may be, and deemed to be incorporated therein
     by reference.

          (b) As of the date hereof, when the Final Prospectus is first filed
     pursuant to Rule 424(b) under the Securities Act, when, prior to the
     Closing Date (as hereinafter defined), any amendment to the Registration
     Statement becomes effective (including the filing of any document
     incorporated by reference in the Registration Statement), when any
     supplement to the Final Prospectus is filed with the Commission and at the
     Closing Date (as hereinafter defined), (i) the Registration Statement, as
     amended as of any such time, the Final Prospectus, as amended or
     supplemented as of any such time, and the Indenture will comply in all
     material respects with the applicable requirements of the Securities Act,
     the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
     and the Exchange Act and the respective rules and regulations thereunder
     and (ii) neither the Registration Statement, as amended as of any such
     time, nor the Final Prospectus, as amended or supplemented as of any such
     time, will contain any untrue statement of a material fact or omit to state
     any material fact required to be stated therein or necessary in order to
     make the statements therein not misleading; provided, however, that the
     Company makes no representations or warranties as to (i) that part of the
     Registration Statement which shall constitute the Statement of Eligibility
     (Form T-1) under the Trust Indenture Act of the Trustee, (ii) information,
     if any, contained in the Registration Statement or Final Prospectus
     relating to the Depository Trust Company ("DTC") and its book-entry system,
     or (iii) the information contained in or omitted from the Registration
     Statement or the Final Prospectus or any amendment thereof or supplement
     thereto in reliance upon and in conformity with information furnished in
     writing to the Company by or on behalf of any Underwriter through the
     Representatives specifically for use in connection with the preparation of
     the Registration Statement and the Final Prospectus.

          (c) The financial statements of the Company and its consolidated
     subsidiaries included in the Registration Statement fairly present the
     financial condition of the Company and its consolidated subsidiaries as of
     the dates indicated and the results of operations and cash flow for the
     periods therein specified; and said financial statements have been prepared
     in accordance with generally accepted accounting principles applied on a
     consistent basis throughout the periods involved, except as otherwise
     stated therein. As used herein, "consolidated subsidiaries" means each
     subsidiary of the Company which is included in the consolidated financial
     statements of the Company contained in its annual report to shareholders
     for 2000 in accordance with the consolidation policies set forth therein or
     which would have been so included if it had been a subsidiary of the
     Company as of the date of such consolidated financial statements, and each
     other subsidiary of the Company which is included in consolidated financial
     statements of the Company prepared from time to time thereafter.

          (d) Subsequent to the respective dates as of which information is
     given in the Registration Statement and the Final Prospectus and prior to
     the Closing Date hereinafter mentioned, except as set forth or contemplated
     in the Final Prospectus, (1) neither the Company nor any of its
     consolidated subsidiaries has

                                       2
<PAGE>

     entered into any transaction not in the ordinary course of business which
     is material to the Company and its consolidated subsidiaries, considered as
     a whole, (2) there has been no material adverse change in the properties,
     business, financial condition or results of operations of the Company and
     its consolidated subsidiaries, considered as a whole, and (3) no legal or
     governmental proceeding, which has or will have materially affected the
     Company or any of its consolidated subsidiaries, considered as a whole, or
     the transactions contemplated by this Agreement, has been or will have been
     instituted or threatened.

          (e) The consummation of the transactions herein contemplated and the
     fulfillment of the terms hereof will not conflict with or result in a
     breach of any of the terms and provisions of, or constitute a default
     under, [any indenture, mortgage, deed of trust or other agreement or
     instrument to which the Company is a party, or] the Restated Certificate of
     Incorporation or By-Laws of the Company as presently in effect [, or any
     order, rule or regulation applicable to the Company of any court or any
     federal or state regulatory body or administrative agency or other
     governmental body having jurisdiction over the Company or its properties].

          (f) The Securities have been duly and validly authorized and, when
     issued, authenticated and delivered against payment therefor in accordance
     with the terms of the Indenture and this Agreement, will constitute valid
     and legally binding obligations of the Company enforceable in accordance
     with their terms and entitled to the benefits of the Indenture, except as
     enforcement thereof may be limited by applicable bankruptcy, insolvency,
     moratorium and other laws affecting the enforceability of creditors' rights
     and general principles of equity, and will conform to the descriptions
     thereof contained in the Final Prospectus. The Indenture has been duly and
     validly authorized by the Company and will be a valid and legally binding
     agreement of the Company enforceable in accordance with its terms, except
     as enforcement thereof may be limited by applicable bankruptcy, insolvency,
     moratorium and other laws affecting the enforceability of creditors' rights
     and general principles of equity. The Indenture conforms to the description
     in the Final Prospectus, and is duly qualified under the Trust Indenture
     Act.
          (g) The Company is not, and upon the issuance and sale of the
     Securities as herein contemplated and the application of the net proceeds
     therefrom as described in the Final Prospectus will not be, an "investment
     company" within the meaning of the Investment Company Act of 1940, as
     amended (the "Act").

     3. Sale, Purchase and Delivery of Securities. On the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, the Company hereby agrees to sell to the
Underwriters, severally and not jointly, and each Underwriter, severally and not
jointly (unless otherwise indicated on Schedule I hereto), agrees to purchase
from the Company, at the purchase price set forth in Schedule I hereto, the
principal amount of the Securities set forth opposite such Underwriter's name in
Schedule II hereto, except that, if Schedule I hereto provides for the sale of
Securities pursuant to delayed delivery arrangements, the respective principal
amounts of Securities to be purchased by the Underwriters shall be as set forth
in Schedule II hereto, less the respective amounts of Contract Securities
determined as provided below. Securities to be purchased by the Underwriters are
herein sometimes called the "Underwriters' Securities" and Securities to be
purchased pursuant to Delayed Delivery Contracts as hereinafter provided are
herein called "Contract Securities".

     If so provided in Schedule I hereto, the Underwriters are authorized to
solicit offers to purchase Securities from the Company pursuant to delayed
delivery contracts ("Delayed Delivery Contracts"), substantially in the form of
Schedule III hereto but with such changes therein as the Company may authorize
or approve. The

                                       3
<PAGE>

Underwriters will endeavor to make such arrangements and, as compensation
therefor, the Company will pay to the Representatives, for the account of the
Underwriters, on the Closing Date, the percentage set forth in Schedule I hereto
of the principal amount of the Securities for which Delayed Delivery Contracts
are made. Delayed Delivery Contracts are to be with institutional investors,
including commercial and savings banks, insurance companies, pension funds,
investment companies and educational and charitable institutions. The Company
will make Delayed Delivery Contracts in all cases where sales of Contract
Securities arranged by the Underwriters have been approved by the Company but,
except as the Company may otherwise agree, each such Delayed Delivery Contract
must be for not less than the minimum principal amount set forth in Schedule I
hereto and the aggregate principal amount of Contract Securities may not exceed
the maximum aggregate principal amount set forth in Schedule I hereto. The
Underwriters will not have any responsibility in respect of the validity or
performance of Delayed Delivery Contracts. The principal amount of Securities to
be purchased by each Underwriter as set forth in Schedule II hereto shall be
reduced by an amount which shall bear the same proportion to the total principal
amount of Contract Securities as the principal amount of Securities set forth
opposite the name of such Underwriter bears to the aggregate principal amount
set forth in Schedule II hereto, except to the extent that you determine that
such reduction shall be otherwise than in such proportion and so advise the
Company in writing; provided, however, that the total principal amount of
Securities to be purchased by all Underwriters shall be the aggregate principal
amount set forth in Schedule II hereto, less the aggregate principal amount of
Contract Securities.

     Delivery of and payment for the Underwriters' Securities shall be made at
the office, on the date and at the time specified in Schedule I hereto, which
date and time may be postponed by agreement between the Representatives and the
Company or as provided in Section 9 hereof (such date and time of delivery and
payment for the Underwriters' Securities being herein called the "Closing
Date"). Delivery of the Underwriters' Securities shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company in Federal (same day) funds,
or, if so indicated on Schedule I hereto, in New York Clearinghouse (same day)
funds. Certificates for the Underwriters' Securities shall be registered in such
names and in such denominations as the Representatives may request not less than
two full business days in advance of the Closing Date.

     The Company agrees to have the Underwriters' Securities available for
inspection, checking and packaging by the Representatives in New York, New York,
not later than 1:00 PM on the business day prior to the Closing Date.

     If so provided in Schedule I hereto, Underwriters' Securities will be
represented by one or more definitive global Securities in book-entry form which
will be deposited by or on behalf of the Company with DTC or DTC's designated
custodian. In such case, (a) delivery of the Underwriters' Securities shall be
made to the Representatives for the respective accounts of the several
Underwriters by causing DTC to credit the Underwriters' Securities to the
account of the Representatives at DTC, and (b) the Company will cause the
certificates representing the Underwriters' Securities to be made available to
the Representatives for inspection not later than 1:00 p.m., New York City time,
on the business day prior to the Closing Date at the office of DTC or its
designated custodian.

     4. Covenants of the Company. The Company covenants and agrees with the
Underwriters that:

          (a) Prior to the termination of the offering of the Securities, the
     Company will not file any amendment to the Registration Statement or
     supplement (including the Final Prospectus) to the Basic Prospectus unless

                                       4
<PAGE>

     the Company has furnished you a copy for your review prior to filing, and
     the Company will not file any such proposed amendment or supplement to
     which you reasonably object. Subject to the foregoing sentence, the Company
     will promptly cause the Final Prospectus to be filed with the Commission
     pursuant to Rule 424 and/or Rule 434 under the Securities Act. The Company
     will promptly advise the Representatives (i) when the Final Prospectus
     shall have been filed with the Commission pursuant to Rule 424 and/or Rule
     434 under the Securities Act, (ii) when any amendment to the Registration
     Statement relating to the Securities shall have become effective, (iii) of
     any request by the Commission for any amendment of the Registration
     Statement or amendment of or supplement to the Final Prospectus or for any
     additional information, (iv) of the issuance by the Commission of any stop
     order suspending the effectiveness of the Registration Statement or the
     institution or threatening of any proceeding for that purpose and (v) of
     the receipt by the Company of any notification with respect to the
     suspension of the qualification of the Securities for sale in any
     jurisdiction or the initiation or threatening of any proceeding for such
     purpose. The Company will use its best efforts to prevent the issuance of
     any such stop order and, if issued, to obtain as soon as possible the
     withdrawal thereof.

          (b) The Company will prepare and file with the Commission, promptly
     upon the request of the Representatives, any amendments or supplements to
     the Registration Statement or Final Prospectus which, in the opinion of
     counsel for the Underwriters, may be necessary to enable the several
     Underwriters to continue the sale of the Securities, and the Company will
     use its best efforts to cause any such amendments to become effective and
     any such supplements to be filed with the Commission and approved for use
     by the Underwriters as promptly as possible. If at any time when a
     prospectus relating to the Securities is required to be delivered under the
     Securities Act, any event relating to or affecting the Company occurs as a
     result of which the Final Prospectus as then amended or supplemented would
     include an untrue statement of a material fact, or omit to state any
     material fact necessary to make the statement therein not misleading, or if
     it is necessary at any time to amend or supplement the Final Prospectus to
     comply with the Securities Act or the Exchange Act or the respective rules
     thereunder, the Company promptly will prepare and file with the Commission,
     subject to the first sentence of paragraph (a) of this Section 4, an
     amendment or supplement which will correct such statement or omission or
     which will effect such compliance. For the purposes of this paragraph (b),
     the Company will furnish such information with respect to itself as the
     Representatives may from time to time reasonably request.

          (c) As soon as practicable, but not later than 90 days after the end
     of the 12-month period beginning at the end of the current fiscal quarter
     of the Company, the Company will make generally available to its security
     holders and you an earnings statement covering a period of at least twelve
     months beginning not earlier than said effective date which shall satisfy
     the provisions of Section 11(a) of the Securities Act.

          (d) The Company will furnish to the Representatives and counsel for
     the Underwriters, without charge, copies of the Registration Statement
     (including exhibits thereto and documents incorporated by reference
     therein) and each amendment thereto which shall become effective on or
     prior to the Closing Date and, so long as delivery of a prospectus by an
     Underwriter or dealer may be required by the Securities Act, as many copies
     of any Preliminary Final Prospectus and the Final Prospectus and any
     amendments thereof and supplements thereto as the Representatives may
     reasonably request. The Company will pay the expenses of printing all
     documents relating to the offering.

          (e) The Company will furnish such information and execute such
     instruments as may be required to qualify the Securities for sale under the
     securities or blue sky laws of such jurisdictions within the United States
     as you designate, will continue such qualifications in effect so long as
     required for distribution and

                                       5
<PAGE>

     will arrange for the determination of the legality of the Securities for
     purchase by institutional investors. The Company shall not be required to
     register or qualify as a foreign corporation nor, except as to matters and
     transactions relating to the offer and sale of the Securities, consent to
     service of process in any jurisdiction.

          (f) So long as the Securities shall be outstanding, the Company will
     deliver to you (i) as soon as practicable after the end of each fiscal
     year, consolidated balance sheets, statements of income, retained earnings
     and cash flows of the Company and its consolidated subsidiaries, as at the
     end of and for such year and the last preceding year, all in reasonable
     detail and audited by independent public accountants, (ii) as soon as
     practicable after the end of each of the first three quarterly periods in
     each fiscal year, unaudited consolidated balance sheets, statements of
     income, retained earnings and cash flows of the Company and its
     consolidated subsidiaries, as at the end of and for such period and for the
     comparable period of the preceding year, all in reasonable detail, (iii) as
     soon as available, all such proxy statements, financial statements and
     reports as the Company shall send or make available to its stockholders
     generally, and (iv) copies of all such annual, periodic and current reports
     as the Company or any subsidiary shall file with the Commission or any
     securities exchange.

          (g) The Company will pay all costs and expenses in connection with the
     transactions herein contemplated, including, but not limited to, the fees
     and disbursements of its counsel; the fees, costs and expenses of
     preparing, printing and delivering the Indenture and the Securities; the
     fees, costs and expenses of the Trustee; accounting fees and disbursements;
     the costs and expenses in connection with the qualification or exemption of
     the Securities under state securities or blue sky laws, including filing
     fees and reasonable fees and disbursements of counsel for the Underwriters
     in connection therewith and in connection with any Blue Sky Memorandum; the
     costs and expenses in connection with the preparation, printing and filing
     of the Registration Statement (including exhibits thereto) and the Basic,
     Preliminary Final, and Final Prospectus, the preparation and printing of
     this Agreement and the furnishing to the Underwriters of such copies of
     each prospectus as the Underwriters may reasonably require; and the fees of
     rating agencies. It is understood, however, that, except as provided in
     this Section and in Sections 7 and 8 hereof, the Underwriters will pay all
     of their own costs and expenses, including the fees of their counsel and
     any advertising expenses connected with any offers they may make.

          (h) Until the business day following the Closing Date, the Company
     will not, without the consent of the Representatives, offer or sell, or
     announce the offering of, any debt securities (other than up to
     $200,000,000 principal amount of the Company's medium term notes to be
     issued pursuant to the Company's Registration Statement on Form S-3 (File
     No. 333-______)) covered by the Registration Statement or any other
     registration statement filed under the Securities Act.

     5. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Securities shall be subject
to the accuracy of the representations and warranties on the part of the Company
contained herein as of the date hereof, as of the date of the effectiveness of
any amendment to the Registration Statement filed prior to the Closing Date
(including the filing of any document incorporated by reference therein) and as
of the Closing Date, to the accuracy of the written statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:

          (a) No stop order suspending the effectiveness of the Registration
     Statement, as amended from time to time, shall have been issued and no
     proceedings for that purpose shall have been instituted or shall be
     pending, or, to the knowledge of the Company, shall be contemplated by the
     Commission.

                                       6
<PAGE>

          (b) No event, nor any material adverse change in the condition of the
     Company, financial or otherwise, shall have occurred, nor shall any event
     exist, which makes untrue or incorrect any material statement or
     information contained in the Registration Statement or the Final Prospectus
     or which is not reflected in the Registration Statement or the Final
     Prospectus, but should be reflected therein in order to make the statements
     or information contained therein not misleading.

          (c) You shall have received at the Closing Date (or prior thereto as
     indicated) the following:

             (i) An opinion from Gloria Santona, Vice President, U.S. General
          Counsel and Secretary, or a Vice President and Assistant General
          Counsel of the Company, dated the Closing Date, to the effect that:

                 (A) The Company has been duly incorporated and is validly
             existing as a corporation in good standing under the laws of the
             State of Delaware with corporate power and authority to own its
             properties and conduct its business as set forth in the Final
             Prospectus.

                 (B) The Indenture has been duly and validly authorized,
             executed and delivered by the Company and the Trustee, is duly
             qualified under the Trust Indenture Act, and is a valid and legally
             binding agreement of the Company enforceable in accordance with its
             terms, except as enforcement thereof may be limited by applicable
             bankruptcy, insolvency, moratorium and other laws affecting the
             enforceability of creditors' rights and general principles of
             equity.

                 (C) The Securities have been duly and validly authorized by all
             necessary corporate action and, when duly executed and issued on
             behalf of the Company, duly authenticated by the Trustee or the
             Trustee's authenticating agent, and duly delivered to the several
             Underwriters against payment therefor in accordance with the
             provisions of this Agreement, in the case of the Underwriters'
             Securities, or to the purchasers thereof pursuant to Delayed
             Delivery Contracts, in the case of Contract Securities, will
             constitute valid and legally binding obligations of the Company
             enforceable in accordance with their terms and entitled to all the
             benefits of the Indenture, except as enforcement thereof may be
             limited by applicable bankruptcy, insolvency, moratorium and other
             laws affecting the enforceability of creditors' rights and general
             principles of equity.

                 (D) The Indenture and the Securities conform as to legal
             matters with the statements concerning them made in the Final
             Prospectus, and such statements accurately set forth the provisions
             thereof required to be set forth in the Final Prospectus.

                 (E) This Agreement and any Delayed Delivery Contracts have been
             duly and validly authorized, executed and delivered by the Company.

                 (F) (1) The Registration Statement and any amendments thereto
             have become effective under the Securities Act, and, to the best of
             the knowledge of such counsel, no stop order suspending the
             effectiveness of the Registration Statement, as amended, has been
             issued and no proceedings for that purpose have been instituted or
             are pending or contemplated under the Securities Act; (2) the
             Registration Statement, the Final Prospectus, and each amendment
             thereof or supplement thereto (except for the financial statements
             and other financial data included therein, as to which such counsel
             need express no opinion) comply as to form in all material respects
             with the requirements of the Securities Act and the Exchange Act
             and the respective rules thereunder; (3) such counsel

                                       7
<PAGE>

             has no reason to believe that either the Registration Statement or
             the Final Prospectus, or any such amendment or supplement, contains
             any untrue statement of a material fact or omits to state a
             material fact required to be stated therein or necessary to make
             the statements therein not misleading; the descriptions in the
             Registration Statement and Final Prospectus of statutes, legal and
             governmental proceedings and contracts and other documents are
             accurate and fairly present the information required to be shown;
             and (4) such counsel does not know of any legal or governmental
             proceedings required to be described in the Final Prospectus which
             are not described as required, nor of any contracts or other
             documents of a character which are required to be described in the
             Registration Statement or the Final Prospectus or to be filed as
             exhibits to the Registration Statement which are not described and
             filed as required.

                  (G) The execution and delivery of this Agreement and the
             consummation of the transactions herein contemplated and the
             fulfillment of the terms hereof or of any Delayed Delivery
             Contracts will not result in any breach of any of the terms and
             provisions of, or constitute a default under, any indenture,
             mortgage, deed of trust or other agreement or instrument to which,
             to the knowledge of such counsel, the Company is a party, or the
             Restated Certificate of Incorporation or By-Laws of the Company as
             presently in effect or, to the knowledge of such counsel, any
             order, rule or regulation applicable to the Company of any court or
             of any federal or state regulatory body or administrative agency or
             other governmental body having jurisdiction over the Company or its
             properties.

                  (H) No authorization, approval, consent or other action of any
             governmental authority or agency is required in connection with the
             sale of the Securities as contemplated by this Agreement or in any
             Delayed Delivery Contracts except such as may be required under the
             Securities Act or under state securities or blue sky laws.

             (ii) Such opinion or opinions of Gardner, Carton & Douglas, counsel
          for the Underwriters, dated the Closing Date, with respect to the
          sufficiency of all corporate proceedings and other legal matters
          relating to this Agreement, any Delayed Delivery Contracts, the
          validity of the Securities, the Registration Statement, the Final
          Prospectus and other related matters as you may reasonably request.

               The Company shall have furnished to such counsel such documents
          as they may reasonably request for the purpose of enabling them to
          render their opinions. In connection with such opinions, such counsel
          may rely on representations or certificates of officers of the Company
          as to factual matters.

             (iii) A certificate of the President or a Vice President, and the
          Chief Financial Officer of the Company or its Treasurer, dated the
          Closing Date, to the effect that:

                  (A) The representations and warranties of the Company in
             Section 2 of this Agreement are true and correct on and as of the
             Closing Date, and the Company has complied with all the agreements
             and satisfied all the conditions on its part to be performed or
             satisfied at or prior to the Closing Date.

                  (B) No stop order suspending the effectiveness of the
             Registration Statement has been issued and no proceedings for that
             purpose have been instituted or are pending or, to the knowledge of
             the respective signers of the certificate, are contemplated under
             the Securities Act.

                                       8
<PAGE>

                 (C) The signers of the certificate have carefully examined the
             Registration Statement and the Final Prospectus; neither the
             Registration Statement, the Final Prospectus nor any amendment or
             supplement thereto includes, as of the Closing Date, any untrue
             statement of a material fact or omits, as of the Closing Date, to
             state any material fact required to be stated therein or necessary
             to make the statements therein not misleading; since the latest
             respective dates as of which information is given in the
             Registration Statement, there has been no material adverse change
             in the financial position, business or results of operations of the
             Company and its consolidated subsidiaries, considered as a whole,
             except as set forth in or contemplated by the Final Prospectus; and
             since the effective date of the Registration Statement, as amended,
             no event has occurred which is required to be set forth in the
             Final Prospectus which has not been so set forth.

             (iv) A letter from Ernst & Young LLP, dated the Closing Date,
          addressed to you substantially in the form heretofore approved by you.

          (d) Prior to the Closing Date, the Company shall have furnished to you
     such further certificates and documents as you may reasonably request.

          (e) The Company shall have accepted Delayed Delivery Contracts in any
     case where sales of Contract Securities arranged by the Underwriters have
     been approved by the Company.

     If any condition of the Underwriters' obligations hereunder required to be
satisfied prior to the Closing Date is not so satisfied, this Agreement may be
terminated by you by notice in writing or by facsimile transmission to the
Company.

     In rendering the opinions described in Sections 5(d)(i) and (ii) above, Ms.
Gloria Santona, other counsel for the Company, and counsel for the Underwriters,
may limit his or her opinion to the laws of the United States of America, the
laws of the State of Illinois, and the General Corporation Law of the State of
Delaware.

     All such opinions (including opinions, if any, of local counsel),
certificates, letters and documents will be in compliance with the provisions
hereof only if they are in all material respects satisfactory to you and to
counsel for the Underwriters, as to which both you and such counsel shall act
reasonably. The Company will furnish you with such conformed copies of such
opinions, certificates, letters and documents as you request.

     You, on behalf of the Underwriters, may waive in writing the compliance by
the Company of any one or more of the foregoing conditions or extend the time
for their performance.

     6. Representation of the Underwriters. Each of the Underwriters severally
represents and warrants to the Company that the information furnished to the
Company in writing by such Underwriter or by you expressly for use in the
preparation of the Registration Statement or the Final Prospectus does not, and
any amendments thereof or supplements thereto thus furnished will not, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading.

     7. Termination of Agreement. This Agreement may be terminated by you on
behalf of the Underwriters by notice in writing delivered to the Company prior
to the Closing Date if prior to such time (i) trading in the Company's common
stock shall have been suspended by the Commission or the New York Stock Exchange
for a period of 24 hours or more or trading in securities generally on the New
York Stock Exchange shall have been suspended or materially limited, in either
case to such a degree as would in your judgment materially

                                       9
<PAGE>

adversely affect the market for the Securities; (ii) a general moratorium on
commercial banking activities in the State of New York or the United States
shall have been declared by Federal authorities; or (iii) there has occurred any
material outbreak, or material escalation, of hostilities involving the United
States or other national or international calamity or crisis, of such magnitude
and severity in its effect on the financial markets of the United States, in
your reasonable judgment, as to prevent or materially impair the marketing, or
enforcement of contracts for sale, of the Securities.

     If this Agreement shall be terminated by you because of any failure on the
part of the Company to comply with any of the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company shall be unable
to perform its obligations under this Agreement, the Company shall pay, in
addition to the costs and expenses referred to in Section 4(h), all reasonable
out-of-pocket expenses incurred by the Underwriters in contemplation of the
performance by them of their obligations hereunder, including but not limited to
the reasonable fees and disbursements of counsel for the Underwriters, the
Underwriters' reasonable printing and traveling expenses, and postage and
telephone charges relating directly to the offering contemplated by the Final
Prospectus, and also including advertising expenses incurred after the effective
date of the Registration Statement, it being understood that such out-of-pocket
expenses shall not include any compensation, salaries or wages of the officers,
partners or employees of any of the Underwriters.

     The Company shall not in any event be liable to the several Underwriters
for damages on account of loss of anticipated profits arising out of the
transactions contemplated by this Agreement.

     8. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter either within the meaning of the Securities Act or the Exchange Act
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter or such controlling person may become subject, under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment thereof, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter and each such controlling person for any legal or
other expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter through the Representatives specifically for use in the
preparation thereof; and provided, further, that the foregoing indemnification
with respect to the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) from whom the person asserting any such
loss, claim, damage or liability purchased the Securities, if such Underwriter
failed to send or give copies of the Final Prospectus, as amended or
supplemented, excluding documents incorporated therein by reference, to such
person at or prior to the written confirmation of the sale of such Securities to
such person in any case where such delivery is required by the Securities Act
and the untrue statement or omission of a material fact contained in the Basic
Prospectus or any Preliminary Final Prospectus was corrected in the Final
Prospectus (or the Final Prospectus as amended or supplemented). This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.

                                       10
<PAGE>

  (b) Each Underwriter severally, but not jointly, agrees to indemnify and hold
harmless the Company, each person, if any, who controls the Company either
within the meaning of the Securities Act or the Exchange Act, each of its
directors and each of its officers who has signed the Registration Statement,
against any losses, claims, damages or liabilities to which the Company, any
such controlling person or any such director or officer may become subject,
under the Securities Act, the Exchange Act, or otherwise, to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through you specifically for use in
the preparation of the documents referred to in the foregoing indemnity.  The
Company acknowledges that the statements set forth under the heading "Plan of
Distribution" (exclusive of the sixth paragraph thereof) and, if Schedule I
hereto provides for sale of Securities pursuant to delayed delivery
arrangements, in the last sentence under the heading "Delayed Delivery
Arrangements" in the Final Prospectus constitute the only information furnished
in writing by or on behalf of the several Underwriters for inclusion in the
Final Prospectus, and you confirm that such statements are correct. This
indemnity agreement will be in addition to any liability which each such
Underwriter may otherwise have.

  (c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section, notify the indemnifying party in writing of the commencement thereof,
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or in addition to those available
to the indemnifying party, the indemnified party or parties shall have the right
to select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt by such indemnified party of notice from the indemnifying
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives of the Underwriters in the
case of subparagraph (a), representing the indemnified parties under
subparagraph (a) or (b), as the case may be, who are parties to such action),
(ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party; provided, further, that, with respect to legal and other
expenses incurred by an indemnified party for which an indemnifying party shall
be liable hereunder, all such legal fees and expenses shall be reimbursed by the
indemnifying party as they are incurred.

  (d) In order to provide for just and equitable contribution in circumstances
in which the indemnification provided for in paragraph (a) of this Section 8 is
due in accordance with its terms but is for any reason held by a court to be
insufficient or unavailable, the Company and the Underwriters shall severally
contribute to the

                                       11
<PAGE>

aggregate of such losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or defending
same) to which the Company and one or more of the Underwriters may be subject in
such proportion so that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount bears to the sum of
such discount and the purchase price of the Securities set forth in Schedule I
hereto and the Company is responsible for the balance; provided, however, that
(i) in no case shall any Underwriter (except as may be provided in any agreement
among underwriters relating to the offering of the Securities) be responsible
for any amount in excess of the underwriting discount applicable to the
Securities purchased by such Underwriter hereunder and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls an Underwriter within the meaning of the Securities Act
shall have the same rights to contribution as such Underwriter, and each person
who controls the Company within the meaning of either the Securities Act or the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clause (i) of this
paragraph (d). Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this paragraph (d), notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
paragraph (d).

  9.  Default by an Underwriter. If the Underwriters' obligations to purchase
Securities pursuant to Section 3 hereof are several and not joint and if any one
or more Underwriters shall fail to purchase and pay for any of the Securities
agreed to be purchased by such Underwriter or Underwriters hereunder and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement and unless otherwise provided in Schedule
I hereto, the remaining Underwriters shall be obligated severally to take up and
pay for (in the respective proportions which the amount of Securities set forth
opposite their names in Schedule II hereto bear to the aggregate amount of
Securities set opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule II hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Representatives shall determine in order that the required
changes in the Registration Statement and the Final Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company and any nondefaulting Underwriter for damages occasioned by its default
hereunder.

  10. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations and warranties of the Company or its
officers and the several Underwriters, set forth in or made pursuant to this
Agreement, will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter, the Company or any of its officers,
directors or any controlling persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.

                                       12
<PAGE>

  11. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives, will be mailed, delivered
or sent by facsimile transmission and confirmed to them, at the address
specified in Schedule I hereto; or, if sent to the Company, will be mailed,
delivered or sent by facsimile transmission and confirmed to the Company at One
McDonald's Plaza, Oak Brook, Illinois 60523, Attention of the Treasurer, with a
copy to the Controller.

  12. Successors; Governing Law. This Agreement will inure to the benefit of and
be binding upon the parties hereto and the officers, directors and controlling
persons referred to in Section 8 hereof and their respective successors,
assigns, heirs, executors and administrators, and no other persons will have any
right or obligation hereunder. The terms "successors" and "assigns" as used
herein shall not include a purchaser as such from any Underwriter. This
Agreement shall be governed by and construed and enforced in accordance with,
the internal laws of the State of Illinois.

  13. Business Day. For purposes of this Agreement, "business day" means any day
on which the New York Stock Exchange is open for trading.

                                       13
<PAGE>

  If the foregoing is in accordance with your understanding of our agreement,
sign and return to us the enclosed duplicate hereof, whereupon it will become a
binding agreement between the Company and the several Underwriters in accordance
with its terms.

                                   Very truly yours,

                                   McDONALD'S CORPORATION

                                   By: ______________________________________


The foregoing Underwriting Agreement is hereby
confirmed and accepted by us in Chicago, Illinois,
acting on behalf of ourselves, the other Representatives
(if any), and the several Underwriters (if any) named in
Schedule II annexed hereto, as of the date first above written.

[Name of Representative]


By: ______________________________________________

Date:

                                       14
<PAGE>

                                  SCHEDULE I

Underwriting Agreement dated

Registration Statement No.

Representatives:

Title, Purchase Price and Description of Securities:

  Title:
  Aggregate Principal Amount:
  Price to Public:
  Purchase Price by Underwriter
    (include accrued interest or
    amortization if applicable):

  Maturity:
  Interest Rate:
  Interest Payment Dates:
  Regular Record Dates:
  Redemption Provisions:
  Sinking Fund Provisions:
  Other Provisions:

Sale and Delivery Provisions under Section 3:
  Obligation to Purchase is:  several and not joint [_]

                              several and not joint; provided, however that,
                              notwithstanding the provisions of Section 9 of the
                              Underwriting Agreement, the Representative(s)
                              listed above will, subject to the terms and
                              conditions hereof, purchase or cause to be
                              purchased any Securities which any defaulting
                              Underwriter or Underwriters have agreed but failed
                              or refused to purchase pursuant to Section 3
                              hereof [_]

                              joint and several [_]

  Payment to Be Made in:      New York Clearinghouse (same day) funds [_]
                              or Federal (same day) funds [_]

  Delivery of Securities:     Physical delivery to Underwriters through
                              Representatives [_]

                              or delivery to Underwriters through facilities of
                              DTC by delivery to DTC of one or more definitive
                              global securities in book-entry form "


Closing Date, Time and Location:

<PAGE>

[Delayed Delivery Arrangements:

     Payment to Be Made in:        New York Clearinghouse (same day) funds [_]
                                   or Federal (same day) funds [_]

     Fee:

     Minimum principal amount of each contract:
     Maximum aggregate principal amount of all contracts:]

Address for Notice to Representatives:

<PAGE>

                                  SCHEDULE II


                                                                 Principal
Underwriters                                                      Amount
- ------------
                                                                $



                                                                __________

     Total                                                      $

<PAGE>

                                 SCHEDULE III

                           Delayed Delivery Contract


                                                   _______________________, 2001


[Insert name and address
of lead Representative]

Dear Ladies and Gentlemen:

  The undersigned hereby agrees to purchase from McDonald's Corporation (the
"Company"), and the Company agrees to sell to the undersigned, on
______________, 2001, (the "Delivery Date"), $ ______________principal amount of
the Company's (the "Securities") offered by the Company's Final Prospectus dated
____________, 2001, receipt of a copy of which is hereby acknowledged, at a
purchase price of ____% of the principal amount thereof, plus accrued interest,
if any, thereon from _________, 2001, to the date of payment and delivery, and
on the further terms and conditions set forth in this contract.

  Payment for the Securities to be purchased by the undersigned shall be made on
or before 11:00 AM on the Delivery Date to or upon the order of the Company in
New York Clearinghouse (same day) funds or Federal (same day) funds, as
specified in Schedule I to the Underwriting Agreement referred to in the Final
Prospectus mentioned above, at your office or at such other places as shall be
agreed between the Company and the undersigned upon delivery to the undersigned
of the Securities in definitive fully registered form and in such authorized
denominations and registered in such names as the undersigned may request by
written communication addressed to the Company not less than five full business
days prior to the Delivery Date. If no request is received, the Securities will
be registered in the name of the undersigned and issued in a denomination equal
to the aggregate principal amount of Securities to be purchased by the
undersigned on the Delivery Date.

  The obligation of the undersigned to take delivery of and make payment for
Securities on the Delivery Date, and the obligation of the Company to sell and
deliver Securities on the Delivery Date, shall be subject to the conditions (and
neither party shall incur any liability by reason of the failure thereof) and
(1) the purchase of Securities to be made by the undersigned, which purchase the
undersigned represents is not prohibited on the date hereof, shall not on the
Delivery Date be prohibited under the laws of the jurisdiction to which the
undersigned is subject, and (2) the Company, on or before the Delivery Date,
shall have sold to certain underwriters (the "Underwriters") such principal
amount of the Securities as is to be sold to them pursuant to the Underwriting
Agreement referred to in the Final Prospectus mentioned above. Promptly after
completion of such sale to the Underwriters, the Company will mail or deliver to
the undersigned at its address set forth below notice to such effect,
accompanied by a copy of the opinion of counsel for the Company delivered to the
Underwriters in connection therewith. The obligation of the undersigned to take
delivery of and make payment for the Securities, and the obligation of the
Company to cause the Securities to be sold and delivered, shall not be affected
by the failure of any purchaser to take delivery of and make payment for the
Securities pursuant to other contracts similar to this contract.

  This contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
<PAGE>

  It is understood that acceptance of this contract and other similar contracts
is in the Company's sole discretion and, without limiting the foregoing, need
not be on a first come, first served basis. If this contract is acceptable to
the Company, it is required that the Company sign the form of acceptance below
and mail or deliver one of the counterparts hereof to the undersigned at its
address set forth below. This will become a binding contract between the Company
and the undersigned, as of the date first above written, when such counterpart
is so mailed or delivered.
<PAGE>

  This agreement shall be governed by and construed and enforced in accordance
with, the internal laws of the State of Illinois.


                           Very truly yours,


                           ______________________________________________
                                       (Name of Purchaser)


                           By ___________________________________________
                                  (Signature and Title of Officer)

                           ______________________________________________
                                             (Address)

Accepted:
McDONALD'S CORPORATION

By __________________________________
      (Authorized Signature)
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.(B)
<SEQUENCE>3
<FILENAME>dex1b.txt
<DESCRIPTION>FORM OF DISTRIBUTION AGREEMENT
<TEXT>

<PAGE>

                                                                    Exhibit 1(b)


                            McDonald's Corporation

                              U.S.$1,500,000,000

                          Medium-Term Notes, Series G

                Due from 1 Year to 60 Years from Date of Issue

                          U.S. DISTRIBUTION AGREEMENT

                                                             _____________, 2001




Merrill Lynch & Co.
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
North Tower, 4 World Financial Center
250 Vesey Street, 15/th/ Floor
New York, New York 1028110080

ABN AMRO Incorporated
1325 Avenue of the Americas, 10/th/ Floor
New York, New York 10019

Banc of America Securities LLC
Bank of America Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255

Banc One Capital Markets, Inc.
1 Bank One Plaza
Suite 1L1-0595
21 South Clark Street
Chicago, Illinois 60670

Barclays Capital Inc.
222 Broadway
New York, New York 10038

Deutsche Banc Alex. Brown Inc.
31 W. 52/nd/ Street
New York, New York 10019

Fleet Securities, Inc.
100 Federal Street
Boston, Massachusetts 02110

Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004

J.P. Morgan Securities Inc.
270 Park Avenue, 8/th/ Floor
New York, New York 10017

Morgan Stanley & Co. Incorporated
1585 Broadway, 2/nd/ Floor
New York, New York 10020

Salomon Brothers Inc.
Seven World Trade Center
New York, New York 10048

Ladies and Gentlemen:

          McDonald's Corporation, a Delaware corporation (the "Company"),
confirms its agreement with you with respect to the issue and sale by the
Company of its Medium-Term
<PAGE>

Notes, Series G due from 1 to 60 years from date of issue having an aggregate
initial public offering price or purchase price of up to U.S. $1,500,000,000 or
its equivalent in foreign currencies, including the Euro, or any composite
currency (the "Notes").

          The Notes are to be issued under an indenture dated as of October 19,
1996 between the Company and First Union National Bank, as trustee (the
"Trustee") and any indentures supplemental thereto (collectively, the
"Indenture"), will be issued in fully registered definitive form in
denominations of $1,000 and integral multiples of $1,000 in excess thereof (or
in such other denominations as shall be provided in a supplement to the Basic
Prospectus referred to below). Notes may bear interest at fixed or floating
rates or rates determined by reference to a designated index or by application
of a formula, in any case to be provided in a supplement to the Basic Prospectus
referred to below, and may, whether or not bearing interest, be issued with
original issue discount. The Notes may be issued in amounts denominated in
United States dollars or in amounts denominated in foreign currencies, including
the Euro, or any composite currency. References herein to amounts stated in
United States dollars shall be deemed to refer to the equivalent amount of
foreign currency or composite currency to the extent applicable.

          Subject to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell Notes directly to investors on
its own behalf or through other agents, dealers or underwriters, the Company
hereby appoints each of you (individually as "Agent" and collectively the
"Agents") as an agent for the purpose of soliciting offers to purchase the Notes
from the Company by others and agrees that if and whenever the Company
determines to sell Notes directly to an Agent as principal for resale to others
it will enter into a Terms Agreement relating to such sale in accordance with
the provisions of Section 2(b) hereof. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, each Agent agrees, severally but not jointly, to use its reasonable
efforts to solicit offers to purchase Notes upon terms acceptable to the Company
at such times and in such amounts as the Company shall from time to time
specify. In acting under this Agreement and in connection with the sale of any
Notes by the Company (other than Notes sold to an Agent as principal pursuant to
a Terms Agreement), each Agent is acting solely as agent of the Company and does
not assume any obligation towards or relationship of agency or trust with any
purchaser of the Notes.

          1.   Representations and Warranties.  The Company represents and
               ------------------------------
warrants to each Agent as follows:

          (a)  The Company has filed with the Securities and Exchange Commission
               (the "Commission") a registration statement on Form S-3 (File No.
               333-______) under the Securities Act of 1933, as amended (the
               "Securities Act") which has become effective, for the
               registration under the Securities Act of the offering of the
               Notes. Such registration statement meets the requirements set
               forth in Rule 415(a)(1)(x) under the Securities Act and complies
               in all other material respects with said Rule. The Indenture is
               duly qualified under the Trust Indenture Act of 1939, as amended
               (the "Trust Indenture Act"), and the Company has duly authorized
               the issuance of the Notes. The Company

                                       2
<PAGE>

               proposes to file with the Commission from time to time, pursuant
               to Rule 424(b)(2) or (b)(5) under the Securities Act, supplements
               to the form of prospectus included in registration statement File
               No. 333-_______ relating to the Notes and the plan of
               distribution thereof or, if the Company elects to rely on Rule
               434 under the Securities Act, a Term Sheet (as such term is
               hereinafter defined) relating to the Notes that shall contain
               such information as is required or permitted by Rules 434 and
               424(b) under the Securities Act. The registration statement File
               No. 333-_____, including the exhibits thereto, is hereinafter
               called the "Registration Statement"; (i) the prospectus
               (including the supplement thereto relating to the Notes) in the
               form in which it appears in registration statement File No. 333-
               _______ is hereinafter called the "Basic Prospectus"; and such
               supplemented form of prospectus, in the form in which it shall be
               filed with the Commission pursuant to Rule 424(b)(2) or (b)(5)
               (including the Basic Prospectus as so supplemented) or (ii) if
               the Company elects to rely on Rule 434 under the Securities Act,
               in the form of the Term Sheet as first filed with the Commission
               pursuant to Rule 424(b)(7) (together with the Basic Prospectus),
               is hereinafter called the "Prospectus". Any abbreviated term
               sheet that satisfies the requirements of Rule 434 under the
               Securities Act is hereinafter called the "Term Sheet". Any
               reference herein to the Registration Statement, Basic Prospectus
               or Prospectus shall be deemed to refer to and include the
               documents incorporated by reference therein pursuant to Item 12
               of Form S-3 which were filed under the Securities Exchange Act of
               1934, as amended (the "Exchange Act"), on or before the date of
               this Agreement, or the issue date of any Basic Prospectus or
               Prospectus, as the case may be; and any reference herein to the
               terms "amend", "amendment" or "supplement" with respect to the
               Registration Statement, any Basic Prospectus or any Prospectus
               shall be deemed to refer to and include the filing of any
               document under the Exchange Act after the date of this Agreement,
               or the issue date of any Basic Prospectus or any Prospectus, as
               the case may be, and deemed to be incorporated therein by
               reference.

          (b)  As of the date hereof, when the Prospectus is first filed
               pursuant to Rule 424(b) under the Securities Act, when, prior to
               the Commencement Date (as hereinafter defined), any amendment to
               the Registration Statement becomes effective (including the
               filing of any document incorporated by reference in the
               Registration Statement), when any supplement to the Prospectus is
               filed with the Commission, on the Commencement Date and on each
               Settlement Date (as hereinafter defined), (i) the Registration
               Statement, as amended as of any such time, the Prospectus, as
               amended or supplemented as of any such time, and the Indenture
               will comply in all material respects with the applicable
               requirements of the Securities Act, the Trust Indenture Act and
               the Exchange Act and the respective rules and regulations
               thereunder and (ii) neither the Registration Statement, as
               amended as of any such time, nor the Prospectus, as amended or
               supplemented as of any such time, will contain any untrue
               statement of a material fact or omit to state any material fact
               required to be

                                       3
<PAGE>

               stated therein or necessary in order to make the statements
               therein not misleading; provided, however, that the Company makes
               no representations or warranties as to (i) that part of the
               Registration Statement which shall constitute the Statement of
               Eligibility (Form T-1) under the Trust Indenture Act of the
               Trustee; (ii) information, if any, contained in the Registration
               Statement or Prospectus relating to The Depository Trust Company
               and its book-entry system; or (iii) the information contained in
               or omitted from the Registration Statement or the Prospectus or
               any amendment thereof or supplement thereto in reliance upon and
               in conformity with information furnished in writing to the
               Company by or on behalf of any Agent specifically for use in
               connection with the preparation of the Registration Statement and
               the Prospectus.

          (c)  The financial statements of the Company and its consolidated
               subsidiaries included in the Registration Statement fairly
               present the financial condition of the Company and its
               consolidated subsidiaries as of the dates indicated and the
               results of operations and cash flow for the periods therein
               specified; and said financial statements have been prepared in
               accordance with generally accepted accounting principles applied
               on a consistent basis throughout the periods involved, except as
               otherwise stated therein. As used herein, "consolidated
               subsidiaries" means each subsidiary of the Company which is
               included in the consolidated financial statements of the Company
               contained in its Annual Report to shareholders for 2000 in
               accordance with the consolidation policies set forth therein or
               which would have been so included if it had been a subsidiary of
               the Company as of the date of such consolidated financial
               statements, and each other subsidiary of the Company which is
               included in consolidated financial statements of the Company
               prepared from time to time thereafter.

          (d)  Subsequent to the respective dates as of which information is
               given in the Registration Statement and the Prospectus and prior
               to the Commencement Date or on the Settlement Date, as the case
               may be, except as set forth or contemplated in the Prospectus,
               (i) neither the Company nor any of its consolidated subsidiaries
               has entered into any transaction not in the ordinary course of
               business which is material to the Company and its consolidated
               subsidiaries, considered as a whole; (ii) there has been no
               material adverse change in the properties, business, financial
               condition or results of operations of the Company and its
               consolidated subsidiaries, considered as a whole; and (iii) no
               legal or governmental proceeding, which has or will have
               materially affected the Company or any of its consolidated
               subsidiaries, considered as a whole, or the transactions
               contemplated by this Agreement, has been or will have been
               instituted or threatened.

          (e)  The consummation of the transactions herein contemplated and the
               fulfillment of the terms hereof will not conflict with or result
               in a breach of any of the terms and provisions of, or constitute
               a default under, any indenture,

                                       4
<PAGE>

               mortgage, deed of trust or other agreement or instrument to which
               the Company is a party, or the Restated Certificate of
               Incorporation or By-Laws of the Company as presently in effect,
               or any order, rule or regulation applicable to the Company of any
               court or any federal or state regulatory body or administrative
               agency or other governmental body having jurisdiction over the
               Company or its properties.

          (f)  The Securities Notes have been duly and validly authorized and,
               when issued, authenticated and delivered against payment therefor
               in accordance with the terms of the Indenture and this Agreement,
               will constitute valid and legally binding obligations of the
               Company enforceable in accordance with their terms and entitled
               to the benefits of the Indenture, except as enforcement thereof
               may be limited by applicable bankruptcy, insolvency, moratorium
               and other laws affecting the enforceability of creditors" rights
               and general principles of equity, and will conform to the
               descriptions thereof contained in the Prospectus. The Indenture
               has been duly and validly authorized by the Company and will be a
               valid and legally binding agreement of the Company enforceable in
               accordance with its terms, except as enforcement thereof may be
               limited by applicable bankruptcy, insolvency, moratorium and
               other laws affecting the enforceability of creditors" rights and
               general principles of equity. The Indenture conforms to the
               descriptions thereof in the Prospectus, and is duly qualified
               under the Trust Indenture Act.

          (g)  The Company is not, and upon the issuance and sale of the Notes
               as herein contemplated and the application of the net proceeds
               therefrom as described in the Prospectus will not be, an
               "investment company" within the meaning of the Investment Company
               Act of 1940, as amended (the "Act").

          (h)  The Medium-Term Note Program under which the Notes are issued
               (the "Program"), as well as the Notes, are rated [ ] by Moody"s
               Investors Service, Inc. and [ ] by Standard & Poor"s Ratings
               Services, or such other rating as to which the Company shall have
               most recently notified the Agents pursuant to Section 3(a)
               hereof.

          2.   Solicitations as Agent; Purchases as Principal.
               ----------------------------------------------

          (a)  Solicitations as Agent. On the basis of the representations and
               ----------------------
               warranties herein contained, but subject to the terms and
               conditions herein set forth, each Agent will use its reasonable
               efforts to solicit, as agent, offers to purchase the Notes upon
               the terms and conditions set forth in the Prospectus as then
               amended or supplemented.

               The Company reserves the right, in its sole discretion, to
               instruct the Agents to suspend at any time, for any period of
               time or permanently, the solicitation, as agent, of offers to
               purchase the Notes. Upon receipt of notice from the Company, each
               Agent will forthwith suspend solicitations, as agent, of offers

                                       5
<PAGE>

               to purchase Notes from the Company until such time as the Company
               has advised the Agents that such solicitation may be resumed.
               During the period of time that this Agreement is suspended the
               Company shall not be required to deliver any certificates,
               opinions or letters in accordance with Sections 3(i), (j) and (k)
               hereof; provided, however, that no Agent shall be required to
               resume soliciting offers to purchase Notes until the Company has
               delivered such certificates, opinions or letters as requested by
               such Agent if any of the events described in Section 3(i), (j) or
               (k) hereof have occurred during the period of suspension.

               The Company agrees to pay each Agent, as consideration for the
               sale of any Notes resulting from a solicitation made by it as
               agent, a commission in the form of a discount from the principal
               amount of each Note sold by the Company hereunder as a result of
               such solicitation. With respect to Notes with a term of one year
               to 30 years, such commission will be equal to the following
               percentage of the principal amount of such Note:

                    Term                                      Commission Rate
                    ----                                      ---------------

                    From 1 year to less than 18 months             0.150%

                    From 18 months to less than 2 years            0.200

                    From 2 years to less than 3 years              0.250

                    From 3 years to less than 4 years              0.350

                    From 4 years to less than 5 years              0.450

                    From 5 years to less than 6 years              0.500

                    From 6 years to less than 7 years              0.550

                    From 7 years to less than 10 years             0.600

                    From 10 years to less than 20 years            0.625

                    From 20 years to 30 years                      0.750

               and with respect to Notes with a term in excess of 30 years such
               commission will be negotiated between the Company and the
               applicable Agent at the time of sale. The Agents may reallow any
               portion of the commission payable pursuant hereto to dealers or
               purchasers in connection with the offer and sale of any Notes.
               The Agents are authorized to solicit offers to purchase Notes
               only in the minimum principal amount of $1,000 or any amount in
               excess thereof that is a whole multiple of $1,000 (or in such
               other minimum purchase amounts and multiples thereof as are
               described in a supplement to the Basic

                                       6
<PAGE>

               Prospectus). Each Agent shall communicate to the Company, orally
               or in writing, each offer to purchase Notes received by it as
               agent which in its judgment should be considered by the Company.
               The Company shall have the sole right to accept offers to
               purchase Notes and may reject any offer in whole or in part. Each
               Agent shall have the right to reject any offer to purchase Notes
               that it considers to be unacceptable, and any such rejection
               shall not be deemed a breach of its agreements contained herein.

          (b)  Purchases as Principal. Each sale of Notes to an Agent as
               ----------------------
               principal shall be made in accordance with the terms of this
               Agreement and a separate agreement which will provide for the
               sale of such Notes to such Agent and the purchase and re-offering
               thereof by such Agent. Each such separate agreement (which may
               initially be an oral agreement, to be subsequently confirmed in
               writing) is herein referred to as a "Terms Agreement". Unless the
               context otherwise requires, each reference contained herein to
               "this Agreement" shall be deemed to include any applicable Terms
               Agreement between the Company and an Agent. Each such Terms
               Agreement, whether oral or in writing, shall be with respect to
               such information (as applicable) as is specified in Exhibit A
               hereto. An Agent"s commitment to purchase Notes pursuant to any
               Terms Agreement shall be deemed to have been made on the basis of
               the representations and warranties of the Company herein
               contained and shall be subject to the terms and conditions herein
               set forth. Each Terms Agreement shall specify the principal
               amount of Notes to be purchased pursuant thereto, the maturity
               date thereof, the price to be paid to the Company for such Notes,
               the time and place of delivery of and payment for such Notes (the
               "Settlement Date") and any other relevant terms. An Agent may
               utilize a selling or dealer group in connection with the resale
               of the Notes purchased. Such Terms Agreement shall also specify
               any requirements for officers" certificates, opinions of counsel
               and letters from the independent auditors of the Company pursuant
               to Sections 3 and 4 hereof.

          (c)  Procedures. Each Agent and the Company agree to perform the
               ----------
               respective duties and obligations specifically provided to be
               performed in the Medium-Term Notes Administrative Procedures
               (attached hereto as Exhibit B) (the "Procedures"), as amended
               from time to time. The Procedures may be amended only by written
               agreement of the Company and each Agent; provided that with
               respect to any single issuance of Notes, the Procedures may be
               modified by written agreement of the Company and the Agents
               soliciting as agents the purchase of such Notes (or purchasing as
               principal such Notes pursuant to a Terms Agreement).

          (d)  Delivery. The documents required to be delivered by Section 4 of
               --------
               this Agreement shall be delivered at the office of Gardner,
               Carton & Douglas, counsel to the Agents, at 321 North Clark
               Street, Attn: George C. McKann, Quaker Tower, Chicago, Illinois
               60610, not later than 5:00 p.m. Chicago time,

                                       7
<PAGE>

               on the date hereof, or at such other time and/or place as each
               Agent and the Company may agree upon in writing (the
               "Commencement Date").

          3.     Agreements.  The Company agrees with each Agent that:
                 ----------

          (a)  Prior to the termination of the offering of the Notes pursuant to
               this Agreement, the Company will not file any amendment to the
               Registration Statement or supplement (including the Prospectus)
               to the Basic Prospectus relating to the Notes unless the Company
               has previously furnished to each Agent (or, in the case of
               Prospectus supplements setting out only the interest rate,
               maturity and other terms of Notes ("Pricing Supplements"), the
               Agent that has solicited the applicable offer of Notes), a copy
               thereof for its review and will not file any such proposed
               amendment or supplement to which any Agent (or, in the case of
               Pricing Supplements, the Agent that has solicited the applicable
               offer of Notes) reasonably objects; provided, however, that the
               foregoing requirement shall not apply to any of the Company"s
               periodic filings with the Commission required to be filed
               pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
               or to any Pricing Supplement applicable to Notes sold by the
               Company directly to investors on its own behalf; and provided
               further that without the consent of, but after consultation with,
               the Agents, including the furnishing of drafts thereof, the
               Company may file any such proposed amendment or Prospectus
               Supplement which in the opinion of its counsel it is required by
               law to file. Subject to the foregoing sentence, the Company will
               promptly cause each Prospectus Supplement to be filed with the
               Commission pursuant to Rule 424 and/or Rule 434 under the
               Securities Act. The Company will promptly advise each Agent (i)
               when the Prospectus and any supplement to the Basic Prospectus
               shall have been filed pursuant to Rule 424 and/or Rule 434 under
               the Securities Act; (ii) when any amendment to the Registration
               Statement relating to the Notes shall have become effective;
               (iii) of any request by the Commission for any amendment of the
               Registration Statement or any amendment of or supplement to the
               Prospectus or for any additional information; (iv) of the
               issuance by the Commission of any stop order suspending the
               effectiveness of the Registration Statement or the institution or
               threatening of any proceeding for that purpose; and (v) of the
               receipt by the Company of any notification with respect to the
               suspension of the qualification of the Notes for sale in any
               jurisdiction or the initiation or threatening of any proceeding
               for such purpose; and (vi) any change in the rating assigned by
               any nationally recognized statistical rating organization to the
               Program or any debt securities (including the Notes) of the
               Company, or the public announcement by any nationally recognized
               statistical rating organization that it has under surveillance or
               review, with possible negative implications, its rating of the
               Program or any such debt securities, or the withdrawal by any
               nationally recognized statistical rating organization of its
               rating of the Program or any such debt securities. The Company
               will use its best efforts to prevent the issuance of any such
               stop order and, if issued, to

                                       8
<PAGE>

               obtain as soon as possible the withdrawal thereof. If the Company
               files any amendment to the Registration Statement or any
               supplement to the Basic Prospectus or the Prospectus, which
               filing does not require the consent of the Agents, the Company
               will provide each Agent with a copy of such document promptly
               after the filing thereof, and no Agent shall be obligated to
               solicit offers for the purchase of Notes so long as it is not
               reasonably satisfied with such document.

          (b)  The Company will prepare and file with the Commission, promptly
               upon the request of any Agent, any amendments or supplements to
               the Registration Statement or Prospectus which, in the opinion of
               counsel for the Agents, may be necessary to enable the several
               Agents to continue to solicit offers to purchase the Notes, and
               the Company will use its best efforts to cause any such
               amendments to become effective and any such supplements to be
               filed with the Commission and approved for use by the Agents as
               promptly as possible. If, at any time when a prospectus relating
               to the Notes is required to be delivered under the Securities
               Act, any event relating to or affecting the Company occurs as a
               result of which the Registration Statement or the Prospectus as
               then amended or supplemented would include an untrue statement of
               a material fact, or omit to state any material fact necessary to
               make the statements therein, in the light of the circumstances
               under which they were made, not misleading, or if it is necessary
               at any time to amend or supplement the Registration Statement or
               the Prospectus, as then amended or supplemented, to comply with
               the Securities Act or the Exchange Act or the respective rules
               thereunder, the Company will promptly notify each Agent to
               suspend solicitation of offers to purchase Notes and, if so
               notified by the Company, each Agent shall forthwith suspend such
               solicitation and cease using the Prospectus as then amended or
               supplemented; and if the Company shall decide to amend or
               supplement the Registration Statement or Prospectus as then
               amended or supplemented, it will so advise each Agent promptly by
               telephone (with confirmation in writing) and will prepare and
               cause to be filed promptly with the Commission an amendment or
               supplement to the Registration Statement or Prospectus as then
               amended or supplemented which will include a description of such
               facts or events and/or will correct such statement or omission or
               effect such compliance and will supply such amended or
               supplemented Registration Statement or Prospectus to each Agent
               in such quantities as it may reasonably request; and, if such
               amendment or supplement and any documents, certificates and
               opinions furnished to an Agent pursuant to paragraph (f) below in
               connection with the preparation or filing of such amendment or
               supplement, are satisfactory in all respects to such Agent, upon
               the filing of such amendment or supplement with the Commission or
               effectiveness of an amendment to the Registration Statement such
               Agent will resume the solicitation of offers to purchase Notes
               hereunder. Notwithstanding any other provision of this Section
               3(b), until the distribution of any Notes any Agent may own as
               principal has been completed, if any event

                                       9
<PAGE>

               occurs or condition exists as a result of which it is necessary
               to amend or supplement the Registration Statement or Prospectus
               to make the information therein comply with the Securities Act or
               the rules thereunder or complete or accurate in all material
               respects, the Company agrees to provide such Agent with immediate
               notice by telephone (with confirmation in writing) to cease sales
               of any Notes, and the Company will forthwith prepare and furnish,
               at its own expense, any amendments or supplements to the
               Registration Statement or Prospectus, satisfactory in all
               respects to such Agent, in such quantities as it may reasonably
               request. If such amendment or supplement and any documents,
               certificates and opinions furnished to an Agent pursuant to
               paragraph (f) below in connection with the preparation and filing
               of such amendment or supplement are satisfactory in all respects
               to such Agent, upon the filing of such amendment or supplement to
               the Registration Statement or Prospectus such Agent may resume
               its resale of the Notes as principal.

          (c)  As soon as practicable, but not later than 90 days after the end
               of the 12-month period beginning at the end of the current fiscal
               quarter of the Company, the Company will make generally available
               to its security holders and each Agent an earnings statement
               covering a period of at least 12 months beginning not earlier
               than said effective date which shall satisfy the provisions of
               Section 11(a) of the Securities Act and Rule 158 under the
               Securities Act, and, not later than 45 days after the end of the
               12-month period beginning at the end of each fiscal quarter of
               the Company (other than the last fiscal quarter of any fiscal
               year) during which the effective date of any post-effective
               amendment to the Registration Statement occurs, not later than 90
               days after the end of the fiscal year beginning at the end of
               each last fiscal quarter of any fiscal year of the Company during
               which the effective date of any post-effective amendment to the
               Registration Statement occurs, and not later than 90 days after
               the end of each fiscal year of the Company during which any Notes
               were issued, the Company will make generally available to its
               securityholders an earnings statement covering such 12-month
               period or such fiscal year, as the case may be, that will satisfy
               the provisions of such Section 11(a) and Rule 158.

          (d)  The Company will furnish to each Agent, without charge, three
               conformed copies of the Registration Statement including exhibits
               and materials, if any, incorporated by reference therein and,
               during the period mentioned in Section 3(b) above, as many copies
               of the Prospectus, any documents incorporated by reference
               therein and any supplements and amendments thereto as any Agent
               may reasonably request.

          (e)  The Company will furnish such information and execute such
               instruments as may be required to qualify the Notes for offer and
               sale under the securities or blue sky laws of such jurisdictions
               within the United States as any Agent shall designate, will
               continue such qualifications in effect so long as required for
               distribution and will arrange for the determination of the
               legality of the Notes for purchase by institutional investors.
               The Company shall not be required to

                                       10
<PAGE>

               register or qualify as a foreign corporation nor, except as to
               matters and transactions relating to the offer and sale of the
               Notes, to consent to service of process in any jurisdiction. The
               Company or its designated agent shall submit such reports or
               information as may be required from time to time by applicable
               law, regulations and guidelines promulgated by Japanese
               governmental and regulatory authorities in the case of the issue
               and purchase of, and for so long as there are outstanding any,
               Notes denominated in Japanese yen.

          (f)  During the term of this Agreement, the Company shall furnish to
               each Agent such certificates of officers of the Company relating
               to the business, operations and affairs of the Company and its
               subsidiaries, the Registration Statement, the Basic Prospectus,
               any amendments or supplements thereto, the Indenture, the Notes,
               this Agreement, the Procedures, any Terms Agreement and the
               performance by the Company of its obligations hereunder as such
               Agent may from time to time reasonably request.

          (g)  The Company will, whether or not any sale of Notes is
               consummated, pay all expenses incident to the performance of its
               obligations under this Agreement, including: (i) the preparation
               and filing of the Registration Statement and all amendments
               thereto; (ii) the preparation, issuance and delivery of the
               Notes; (iii) the fees and disbursements of the Company"s
               accountants and of the Trustee and Paying Agent and their
               respective counsel; (iv) the qualification of the Notes under
               securities laws in accordance with the provisions of Section 3(e)
               hereof, including filing fees and the reasonable fees and
               disbursements of counsel to the Agents in connection therewith
               and in connection with the preparation of any Blue Sky
               Memorandum; (v) the printing and delivery to the Agents in
               quantities as hereinabove stated of copies of the Registration
               Statement and all amendments thereto, and of the Basic Prospectus
               and Prospectus and any amendments or supplements thereto
               (including Pricing Supplements); (vi) the printing and delivery
               to the Agents of copies of the Indenture and any Blue Sky
               Memorandum; and (vii) any fees charged by rating agencies for the
               rating of the Notes.

               The Company will also, whether or not any sale of the Notes is
               consummated, reimburse the Agents promptly upon receipt of an
               invoice therefor for the reasonable fees of their counsel, as
               agreed by the Company and the Agents, incurred in connection with
               the preparation of this Agreement and the offering and sale of
               the Notes as well as any reasonable disbursements and out-of-
               pocket expenses incurred by such counsel, as agreed by the
               Company and the Agents.

          (h)  Each acceptance by the Company of an offer for the purchase of
               Notes solicited by an Agent, and each sale of Notes to an Agent
               pursuant to a Terms Agreement, shall be deemed to be an
               affirmation that the representations and warranties of the
               Company contained in this Agreement and in any certificate

                                       11
<PAGE>

               theretofore delivered to such Agent pursuant hereto are true and
               correct in all material respects at the time of such acceptance
               or sale, as the case may be, and an undertaking that such
               representations and warranties will be true and correct in all
               material respects at the time of delivery to the purchaser or his
               agent or to such Agent, of the Notes relating to such acceptance
               or sale, as the case may be, as though made at and as of each
               such time (and it is understood that such representations and
               warranties shall relate to the Registration Statement and the
               Basic Prospectus as amended and supplemented to each such time).

          (i)  Each time the Registration Statement or the Basic Prospectus is
               amended or supplemented (other than by a Pricing Supplement or an
               amendment or supplement providing for a change deemed immaterial
               in the reasonable opinion of the Agents), if so requested by any
               Agent, and each time the Company sells Notes to an Agent pursuant
               to a Terms Agreement, the Company will deliver or cause to be
               delivered forthwith to the relevant Agent or Agents a certificate
               of the Company signed by the President or a Vice President and
               the Chief Financial Officer of the Company or its Treasurer,
               dated the date of the effectiveness of such amendment or filing
               or supplement or sale, as the case may be, in form reasonably
               satisfactory to such Agent or Agents, of the same tenor as the
               certificate referred to in Section 4(e) hereof relating to the
               Registration Statement and the Basic Prospectus as amended and
               supplemented to the time of delivery of such certificate.

          (j)  Each time the Registration Statement or the Basic Prospectus is
               amended or supplemented, if in the reasonable judgment of any
               Agent (or, in the case of a Pricing Supplement, in the reasonable
               judgment of the Agent that has solicited the offer to purchase
               the relevant Notes) the information contained in the amendment or
               supplement is of such nature that an opinion of counsel should be
               furnished, and each time the Company sells Notes to an Agent
               pursuant to a Terms Agreement, if so indicated in the applicable
               Terms Agreement, the Company shall furnish or cause to be
               furnished forthwith to such Agent a written opinion of counsel of
               the Company. Any such opinion shall be dated the date of such
               amendment or supplement or the date of such sale, as the case may
               be, shall be in a form satisfactory to such Agent and shall be of
               the same tenor as the opinion referred to in Section 4(d)(i)
               hereof but modified to relate to the Registration Statement and
               the Basic Prospectus as amended and supplemented to the time of
               delivery of such opinion. In lieu of such opinion, counsel last
               furnishing such an opinion to such Agent may furnish to such
               Agent a letter to the effect that it may rely on such last
               opinion to the same extent as though it were dated the date of
               such letter (except that statements in such last opinion will be
               deemed to relate to the Registration Statement and the Basic
               Prospectus as amended and supplemented to the time of delivery of
               such letter).

                                       12
<PAGE>

                  (k) Each time that the Registration Statement or the Basic
                      Prospectus is amended or supplemented to set forth amended
                      or supplemental financial information or such amended or
                      supplemental information is incorporated by reference in
                      the Registration Statement or the Basic Prospectus, if so
                      requested by any Agent, or each time the Company sells
                      Notes to an Agent pursuant to a Terms Agreement, if so
                      indicated in the applicable Terms Agreement, the Company
                      shall cause its independent auditors forthwith to furnish
                      each Agent or such Agent, as appropriate, with a letter,
                      dated the date of the effectiveness of such amendment or
                      the date of filing of such supplement, or the date of such
                      sale, as the case may be, in a form satisfactory to the
                      recipient, of the same tenor as the letter referred to in
                      Section 4(f) hereof, with regard to the amended or
                      supplemental financial information included or
                      incorporated by reference in the Registration Statement
                      and the Basic Prospectus, as amended or supplemented to
                      the date of such letter.

                  (l) Between the date of any Terms Agreement and the Settlement
                      Date, or such later date as may be specified in such Terms
                      Agreement, with respect to such Terms Agreement, the
                      Company will not, without the prior consent of the Agent
                      which is a party to such Terms Agreement, offer, sell,
                      contract to sell or otherwise dispose of any debt
                      securities of the Company substantially similar in
                      currency, maturity and other material terms to the Notes,
                      other than (i) the Notes that are to be sold pursuant to
                      such Terms Agreement; (ii) debt securities issued for
                      consideration other than cash; and (iii) commercial paper
                      in the ordinary course of business, except as may
                      otherwise be provided in any such Term Agreement.

                  (m) The Company will not issue any Notes except as have been
                      duly authorized by all necessary corporate action on the
                      part of the Company.

                  (n) The Company will not issue any Notes directly to investors
                      or through other agents, dealers or underwriters except in
                      accordance with applicable law.

                  4.     Conditions of the Ob1igations of the Agents. The
                         -------------------------------------------
obligations of each Agent to solicit offers to purchase the Notes as agent of
the Company and to purchase Notes as principal pursuant to any Terms Agreement
will be subject to the accuracy of the representations and warranties on the
part of the Company herein, to the accuracy of the statements of the Company"s
officers made in each certificate furnished pursuant to the provisions hereof,
to the performance by the Company of its obligations hereunder and to the
following additional conditions precedent:

                  (a) No stop order suspending the effectiveness of the
                      Registration Statement, as amended from time to time,
                      shall have been issued, and no proceedings for that
                      purpose shall have been instituted or shall be pending,
                      or, to the knowledge of the Company, shall be contemplated
                      by the Commission.

                                       13
<PAGE>

                  (b) No event, nor any material adverse change in the condition
                      of the Company, financial or otherwise, shall have
                      occurred, nor shall any event exist, which makes untrue or
                      incorrect any material statement or information contained
                      in the Registration Statement or the Prospectus or which
                      is not reflected in the Registration Statement or the
                      Prospectus, but should be reflected therein in order to
                      make the statements or information contained therein not
                      misleading.

                  (c) No Agent shall have advised the Company that the
                      Registration Statement or any prospectus, or any amendment
                      or supplement thereto, contains an untrue statement of
                      fact which, in the opinion of counsel for the Agents, is
                      material, or omits to state a fact which, in the opinion
                      of such counsel, is material and is required to be stated
                      therein or is necessary to make the statements therein not
                      misleading.

                  (d) At the Commencement Date, such Agent shall have received,
                      and at each Settlement Date with respect to any applicable
                      Terms Agreement to which such Agent is a party, if called
                      for by such Terms Agreement, such Agent shall have
                      received:

                      (i)  The opinion, dated as of such date, of Gloria
                           Santona, Vice President, U.S. General Counsel and
                           Secretary, or a Vice President and Assistant General
                           Counsel of the Company, to the effect that:

                           (A)      The Company has been duly incorporated and
                                    is validly existing as a corporation in good
                                    standing under the laws of the State of
                                    Delaware with corporate power and authority
                                    to own its properties and conduct its
                                    business as set forth in the Prospectus.

                           (B)      The Indenture has been duly and validly
                                    authorized, executed and delivered by the
                                    Company and the Trustee, is duly qualified
                                    under the Trust Indenture Act, and is a
                                    valid and legally binding agreement of the
                                    Company enforceable in accordance with its
                                    terms, except as enforcement thereof may be
                                    limited by applicable bankruptcy,
                                    insolvency, moratorium and other laws
                                    affecting the enforceability of creditors'
                                    rights and general principles of equity.

                           (C)      The Notes have been duly and validly
                                    authorized by all necessary corporate action
                                    and, when duly executed and issued on behalf
                                    of the Company, duly authenticated by the
                                    Trustee or the Trustee's authenticating
                                    agent, and duly delivered to the several
                                    purchasers thereof against payment therefor
                                    in accordance with the provisions of this
                                    Agreement, will constitute valid and legally
                                    binding obligations of the Company
                                    enforceable in accordance with their terms
                                    and entitled to all the benefits of the
                                    Indenture, except as enforcement thereof may
                                    be limited by applicable bankruptcy,

                                       14
<PAGE>

                                    insolvency, moratorium and other laws
                                    affecting the enforceability of creditors'
                                    rights and general principles of equity.

                              (D)   The Indenture and the Notes conform as to
                                    legal matters with the statements concerning
                                    them made in the Prospectus, and such
                                    statements accurately set forth the
                                    provisions thereof required to be set forth
                                    in the Prospectus.

                              (E)   This Agreement (and, if the opinion is being
                                    given pursuant to Section 3(j) hereof on
                                    account of the Company having entered into a
                                    Terms Agreement, the applicable Terms
                                    Agreement) has been duly and validly
                                    authorized, executed and delivered by the
                                    Company.

                              (F)   (1) The Registration Statement and any
                                    amendments thereto have become effective
                                    under the Securities Act, and, to the best
                                    of the knowledge of such counsel, no stop
                                    order suspending the effectiveness of the
                                    Registration Statement, as amended, has been
                                    issued and no proceedings for that purpose
                                    have been instituted or are pending or
                                    contemplated under the Securities Act; (2)
                                    the Registration Statement, the Prospectus,
                                    and each amendment thereof or supplement
                                    thereto (except for the financial statements
                                    and other financial data included therein,
                                    as to which such counsel need express no
                                    opinion) comply as to form in all material
                                    respects with the requirements of the
                                    Securities Act and the Exchange Act and the
                                    respective rules thereunder; (3) such
                                    counsel has no reason to believe that either
                                    the Registration Statement or the Prospectus
                                    or any such amendment or supplement,
                                    contains any untrue statement of a material
                                    fact or omits to state a material fact
                                    required to be stated therein or necessary
                                    to make the statements therein not
                                    misleading; the descriptions in the
                                    Registration Statement and Prospectus of
                                    statutes, legal and governmental proceedings
                                    and contracts and other documents are
                                    accurate and fairly present the information
                                    required to be shown; and (4) such counsel
                                    does not know of any legal or governmental
                                    proceedings required to be described in the
                                    Prospectus which are not so described as
                                    required nor of any contracts or other
                                    documents which are required to be described
                                    in the Registration Statement or the
                                    Prospectus or to be filed as exhibits to the
                                    Registration Statement which are not
                                    described and filed as required.

                              (G)   The execution and delivery of this
                                    Agreement, the consummation of the
                                    transactions herein contemplated and the
                                    fulfillment of the terms hereof will not
                                    result in any breach of any of the terms and
                                    provisions of, or constitute a default
                                    under, any indenture, mortgage, deed of
                                    trust or other agreement or instrument to
                                    which,

                                       15
<PAGE>

                                    to the knowledge of such counsel, the
                                    Company is a party, or the Restated
                                    Certificate of Incorporation or By-Laws of
                                    the Company as presently in effect or, to
                                    the knowledge of such counsel, any order,
                                    rule or regulation applicable to the Company
                                    of any court or of any federal or state
                                    regulatory body or administrative agency or
                                    other governmental body having jurisdiction
                                    over the Company or its properties.

                              (H)   No authorization, approval, consent or other
                                    action of any governmental authority or
                                    agency is required in connection with the
                                    sale of the Notes as contemplated by this
                                    Agreement, except such as may be required
                                    under the Securities Act or under state
                                    securities or blue sky laws.

                         It is understood that such counsel may limit his or her
                         opinion to the laws of the United States of America,
                         the laws of the State of Illinois, and the General
                         Corporation Law of the State of Delaware.

                         The opinions set forth in paragraphs (i)(B) and (i)(C)
                         above may be further limited by inclusion of a
                         statement to the effect that insofar as such opinions
                         relate to Notes denominated in a currency other than
                         United States dollars, the effective enforcement of a
                         foreign currency claim in the federal or state courts
                         of the State of New York may be limited by requirements
                         that a claim (or a foreign currency judgment in respect
                         of such a claim) be converted into United States
                         dollars at the rate of exchange prevailing on the
                         judgment date.

                         (ii) The opinion dated as of such date, of Gardner,
                              Carton & Douglas, counsel to you, covering the
                              matters in paragraphs (i)(B), (i)(C), (i)(D),
                              (i)(E) and (i)(F)(3) above, provided that with
                              respect to paragraph (i)(F)(3) above, such counsel
                              may state that their belief is based upon their
                              participation in the preparation of the
                              Registration Statement and the Prospectus and any
                              amendments or supplements thereto (other than
                              documents incorporated by reference) and review
                              and discussion of the contents thereof (including
                              documents incorporated by reference) but is
                              without independent check or verification except
                              as specified.

                         The Company shall have furnished to such counsel such
                         documents as they may reasonably request for the
                         purpose of enabling them to render their opinions. In
                         connection with such opinions, such counsel may rely on
                         the representations or certificates of officers of the
                         Company as to factual matters.

                    (e)  On the Commencement Date, and at each Settlement Date
                         with respect to any Terms Agreement to which such Agent
                         is a party, the Company shall have furnished to such
                         Agent, a certificate of the Company, signed by the
                         President or a Vice President, and the Chief Financial
                         Officer of the Company or its

                                       16
<PAGE>

                         Treasurer, dated as of the Commencement Date or such
                         Settlement Date, to the effect that:

                         (i)       the representations and warranties of the
                                   Company in this Agreement are true and
                                   correct in all material respects on and as of
                                   the date of such certificate, and the Company
                                   has complied in all material respects with
                                   all the agreements and satisfied in all
                                   material respects all the conditions on its
                                   part to be performed or satisfied at or prior
                                   to the date of such certificate;

                         (ii)      no stop order suspending the effectiveness of
                                   the Registration Statement has been issued
                                   and no proceedings for that purpose have been
                                   instituted or are pending or, to the signer"s
                                   knowledge, are contemplated under the
                                   Securities Act; and

                         (iii)     the signers of the certificate have carefully
                                   examined the Registration Statement and the
                                   Prospectus; neither the Registration
                                   Statement, the Prospectus nor any amendment
                                   or supplement thereto includes, as of the
                                   date of such certificate, any untrue
                                   statement of a material fact or omits, as of
                                   such date, to state any material fact
                                   required to be stated therein or necessary to
                                   make the statements therein not misleading;
                                   since the latest respective dates as of which
                                   information is given in the Registration
                                   Statement, there has been no material adverse
                                   change in the financial position, business or
                                   results of operations of the Company and its
                                   consolidated subsidiaries, considered as a
                                   whole, except as set forth in or contemplated
                                   by the Prospectus; and since the effective
                                   date of the Registration Statement, as
                                   amended, no event has occurred which is
                                   required to be set forth in the Prospectus
                                   which has not been so set forth.

                    (f)  On the Commencement Date, and at each Settlement Date
                         with respect to any Terms Agreement to which such Agent
                         is a party, if called for by such Terms Agreement, the
                         Company's independent auditors shall have furnished to
                         such Agent, a letter or letters, dated as of the
                         Commencement Date or such Settlement Date, in form and
                         substance satisfactory to it, confirming that they are
                         independent auditors within the meaning of the
                         Securities Act and the respective applicable published
                         rules and regulations thereunder and containing
                         statements and information of the type ordinarily
                         included in "comfort letters" to underwriters with
                         respect to the financial statements and certain
                         financial information contained or incorporated by
                         reference in the Registration Statement and the
                         Prospectus as then amended or supplemented.

                    (g)  On the Commencement Date and at each Settlement Date
                         with respect to any Terms Agreement to which such Agent
                         is a party, the Company shall have furnished to such
                         Agent such appropriate further certificates and
                         documents as it may reasonably request.

                                       17
<PAGE>

                  5.     Indemnification and Contribution.
                         --------------------------------

                  (a)    The Company will indemnify and hold harmless each Agent
                         and each person, if any, who controls such Agent either
                         within the meaning of the Securities Act or the
                         Exchange Act against any losses, claims, damages or
                         liabilities, joint or several, to which such Agent or
                         such controlling person may become subject, under the
                         Securities Act, the Exchange Act or otherwise, insofar
                         as such losses, claims, damages or liabilities (or
                         actions in respect thereof) arise out of or are based
                         upon any untrue statement or alleged untrue statement
                         of any material fact contained in the Registration
                         Statement or any amendment thereof, the Basic
                         Prospectus or the Prospectus, or any amendment or
                         supplement thereto, or arise out of or are based upon
                         the omission or alleged omission to state therein a
                         material fact required to be stated therein or
                         necessary to make the statements therein not
                         misleading, and will reimburse each Agent and each such
                         controlling person for any legal or other expenses
                         reasonably incurred by such Agent or such controlling
                         person in connection with investigating or defending
                         any such loss, claim, damage, liability or action;
                         provided, however, that the Company will not be liable
                         in any such case to the extent that any such loss,
                         claim, damage or liability arises out of or is based
                         upon an untrue statement or alleged untrue statement or
                         omission or alleged omission made therein in reliance
                         upon and in conformity with written information
                         furnished to the Company by an Agent specifically for
                         use in the preparation thereof; and provided, further,
                         that the foregoing indemnification with respect to the
                         Basic Prospectus or the Prospectus shall not inure to
                         the benefit of any Agent (or any person controlling
                         such Agent) from whom the person asserting any such
                         loss, claim, damage or liability purchased the
                         Securities, if such Agent, if acting as principal in
                         the sale of the Notes to such person or as agent in
                         such sale having solicited such person, failed to send
                         or give copies of the Prospectus, as amended or
                         supplemented, excluding documents incorporated therein
                         by reference, to such person at or prior to the written
                         confirmation of the sale of such Notes to such person
                         in any case where such delivery is required by the
                         Securities Act and the untrue statement or omission of
                         a material fact contained in the Basic Prospectus was
                         corrected in the Prospectus (or the Prospectus as
                         amended or supplemented). This indemnity agreement will
                         be in addition to any liability which the Company may
                         otherwise have.

                    (b)  Each Agent severally, but not jointly, agrees to
                         indemnify and hold harmless the Company, each person,
                         if any, who controls the Company either within the
                         meaning of the Securities Act or the Exchange Act, each
                         of its directors and each of its officers who has
                         signed the Registration Statement, against any losses,
                         claims, damages or liabilities to which the Company,
                         any such controlling person or any such director or
                         officer may become subject, under the Securities Act,
                         the Exchange Act, or otherwise, to the same extent as
                         the foregoing indemnity from the Company to each Agent,
                         but only with reference

                                       18
<PAGE>

                         to written information relating to such Agent furnished
                         to the Company specifically for use in the preparation
                         of the documents referred to in the foregoing
                         indemnity. The Company acknowledges that the statements
                         set forth under the heading "Plan of Distribution"
                         (exclusive of the sixth paragraph thereof) in the
                         Prospectus Supplement dated _______, 2001 relating to
                         the Notes constitute the only information furnished in
                         writing by or on behalf of any Agent for inclusion in
                         the Prospectus, and the Agents confirm that such
                         statements are correct. This indemnity agreement will
                         be in addition to any liability which each such Agent
                         may otherwise have.

                    (c)  Promptly after receipt by an indemnified party under
                         this Section of notice of the commencement of any
                         action, such indemnified party will, if a claim in
                         respect thereof is to be made against the indemnifying
                         party under this Section, notify the indemnifying party
                         in writing of the commencement thereof, but the
                         omission so to notify the indemnifying party will not
                         relieve it from any liability which it may have to any
                         indemnified party otherwise than under this Section. In
                         case any such action is brought against any indemnified
                         party, and it notifies the indemnifying party of the
                         commencement thereof, the indemnifying party will be
                         entitled to participate therein and, to the extent that
                         it may elect by written notice delivered to the
                         indemnified party promptly after receiving the
                         aforesaid notice from such indemnified party, to assume
                         the defense thereof, with counsel satisfactory to such
                         indemnified party; provided, however, that if the
                         defendants in any such action include both the
                         indemnified party and the indemnifying party and the
                         indemnified party shall have reasonably concluded that
                         there may be legal defenses available to it and/or
                         other indemnified parties which are different from or
                         in addition to those available to the indemnifying
                         party, the indemnified party or parties shall have the
                         right to select separate counsel to assume such legal
                         defenses and to otherwise participate in the defense of
                         such action on behalf of such indemnified party or
                         parties. Upon receipt by such indemnified party of
                         notice from the indemnifying party of its election so
                         to assume the defense of such action and approval by
                         the indemnified party of counsel, the indemnifying
                         party will not be liable to such indemnified party
                         under this Section 5 for any legal or other expenses
                         subsequently incurred by such indemnified party in
                         connection with the defense thereof unless (i) the
                         indemnified party shall have employed such counsel in
                         connection with the assumption of legal defenses in
                         accordance with the proviso to the next preceding
                         sentence (it being understood, however, that the
                         indemnifying party shall not be liable for the expenses
                         of more than one separate counsel, approved by the
                         applicable Agent in the case of subparagraph (a),
                         representing the indemnified parties under subparagraph
                         (a) or (b), as the case may be, who are parties to such
                         action); (ii) the indemnifying party shall not have
                         employed counsel satisfactory to the indemnified party
                         to represent the indemnified party within a reasonable
                         time after notice of commencement of the action; or
                         (iii) the indemnifying party has authorized the
                         employment of counsel for the indemnified party at the
                         expense

                                       19
<PAGE>

                         of the indemnifying party; provided further, that, with
                         respect to legal and other expenses incurred by an
                         indemnified party for which an indemnifying party shall
                         be liable hereunder, all such legal fees and expenses
                         shall be reimbursed by the indemnifying party as they
                         are incurred.

                    (d)  In order to provide for just and equitable contribution
                         in circumstances in which the indemnification provided
                         for in paragraph (a) of this Section 5 is due in
                         accordance with its terms but is for any reason held by
                         a court to be insufficient or unavailable, the Company
                         and each Agent participating in the offering of Notes
                         that gave rise to the losses, claims, damages or
                         liabilities (a "Relevant Agent") for which contribution
                         is sought shall severally contribute to the aggregate
                         of such losses, claims, damages and liabilities
                         (including legal or other expenses reasonably incurred
                         in connection with investigating or defending same) to
                         which the Company and one or more Relevant Agents may
                         be subject in such proportion so that each Relevant
                         Agent is responsible for that portion represented by
                         the percentage that the commission rate paid to such
                         Relevant Agent on the sale of Notes sold through it
                         bears to the sum of such commission rate and the
                         purchase price of such Notes sold through such Relevant
                         Agent, and the Company is responsible for the balance;
                         provided, however, that (i) in no case shall any such
                         Relevant Agent be responsible for any amount in excess
                         of the commission rate paid to such Relevant Agent in
                         connection with the sale of such Notes; and (ii) no
                         person guilty of fraudulent misrepresentation (within
                         the meaning of Section 11(f) of the Securities Act)
                         shall be entitled to contribution from any person who
                         was not guilty of such fraudulent misrepresentation.
                         For purposes of this Section 5, each person who
                         controls an Agent within the meaning of either the
                         Securities Act or the Exchange Act shall have the same
                         rights to contribution as such Agent, and each person
                         who controls the Company within the meaning of either
                         the Securities Act or the Exchange Act, each officer of
                         the Company who shall have signed the Registration
                         Statement and each director of the Company shall have
                         the same rights to contribution as the Company, subject
                         in each case to clause (i) of this paragraph (d). Any
                         party entitled to contribution will, promptly after
                         receipt of notice of commencement of any action, suit
                         or proceeding against such party in respect of which a
                         claim for contribution may be made against another
                         party or parties under this paragraph (d), notify such
                         party or parties from whom contribution may be sought,
                         but the omission to so notify such party or parties
                         shall not relieve the party or parties from whom
                         contribution may be sought from any other obligation it
                         or they may have hereunder or otherwise than under this
                         paragraph (d).

                    6.   Restrictions on Offers and Sales of Registered Notes.
                         ----------------------------------------------------
Each Agent represents and agrees that it has not offered or sold and agrees that
it will not offer or sell any Note directly or indirectly in Japan or to
residents of Japan or for the benefit of any Japanese person (which term as used
herein means any person resident in Japan, including any corporation or other
entity organized under the laws of Japan) or to others for reoffering or resale
directly or

                                       20
<PAGE>

indirectly in Japan or to any Japanese person except under circumstances that
will result in compliance with any applicable laws, regulations and ministerial
guidelines of Japan taken as a whole. Furthermore, in connection with the
issuance of Notes denominated in Japanese yen, the Company and each Agent agree
to comply with all applicable laws, regulations and guidelines as amended from
time to time of the Japanese governmental and regulatory authorities.

                    7.   Position of the Agents. In soliciting offers to
                         ----------------------
purchase the Notes, each Agent is acting solely as agent for the Company, and
not as principal. Each Agent shall make reasonable efforts to assist the Company
in obtaining performance by each purchaser whose offer to purchase Notes has
been solicited by it and accepted by the Company, but no Agent shall have any
liability to the Company in the event any such purchase is not consummated for
any reason. Under no circumstances will any Agent be obligated to purchase any
Notes for its own account other than pursuant to, and subject to the conditions
set forth in, any Terms Agreement.

                    8.   Termination. This Agreement may be terminated at any
                         -----------
time either (a) by the Company as to any Agent or (b) by any Agent, insofar as
this Agreement relates to such Agent, upon the giving of written notice of such
termination to the other parties hereto. In the event of such termination with
respect to any Agent, this Agreement shall remain in full force and effect with
respect to any Agent as to which such termination has not occurred. Any Terms
Agreement may be terminated, immediately upon notice to the Company, at any time
prior to the Settlement Date relating to a Terms Agreement if (i) trading in the
Company's common stock shall have been suspended by the Commission or the New
York Stock Exchange for a period of 24 hours or more or trading in securities
generally on the New York Stock Exchange shall have been suspended or materially
limited, in either case to such a degree as would in the reasonable judgment of
the Agent which is party to such Agreement adversely affect the market for the
Notes; (ii) a general moratorium on commercial banking activities in the State
of New York or the United States shall have been declared by Federal
authorities; or or (iii) there has occurred any material outbreak, or material
escalation, of hostilities involving the United States or other national or
international calamity or crisis, of such magnitude and severity in its effect
on the financial markets of the United States, in the reasonable judgment of an
Agent which is party to such Agreement, as to prevent or materially impair the
marketing, or enforcement of contracts for sale, of the Notes. In the event of
termination of this Agreement or any Terms Agreement, no party shall have any
liability to the other parties hereto, except (1) as provided in the first two
sentences of the third paragraph of Section 2(a) (with respect to any
commissions earned by the Agents but not yet paid by the Company at the time of
such termination), Section 3(g), Section 5 and Section 9; and (2) if, at the
time of termination, an Agent shall own any Notes purchased pursuant to a Terms
Agreement entered into prior to the termination of this Agreement with the
intention of reselling them or an offer to purchase any Notes has been accepted
by the Company but the time of delivery to the purchaser or its agent of such
Notes has not occurred, as provided in Sections 3(b) through 3(e), 3(h) through
3(k) and 3(n) hereof; provided that the exception set forth in clause (2) of
this sentence shall be of no further force or effect immediately after the
earlier of (i) resale or delivery, as the case may be, of the Notes referred to
in such clause; and (ii) in the case of Notes purchased pursuant to a Terms
Agreement entered into prior to the termination of this Agreement, a date 270
calendar days from the date of such termination. The

                                       21
<PAGE>

provisions of the last sentence of Section 3(e) and each of Sections 3(g), 5 and
9 hereof shall survive the termination or cancellation of any Terms Agreement.

                    9.   Representations and Indemnities to Survive. The
                         ------------------------------------------
respective agreements, representations, warranties and indemnities of the
Company or its officers and each Agent set forth in or made pursuant to this
Agreement or any Terms Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Agent or the Company
or any of the officers, directors or controlling persons referred to in Section
5 hereof, and will survive delivery of and payment for the Notes.

                    10.  Notices.  All communications hereunder will be in
                         -------
writing and effective only on receipt, and shall be mailed, delivered or sent by
facsimile transmission and confirmed as follows:

                    (i)       if to Merrill Lynch, Pierce, Fenner & Smith
                              Incorporated at Merrill Lynch & Co., Merrill Lynch
                              World Headquarters, North Tower, 4 World Financial
                              Center, 250 Vesey Street, 10th 15/th/ Floor, New
                              York, New York 1028110080, Attention: MTN Product
                              Management;

                    (ii)      if to ABN AMRO Incorporated, at 1325 Avenue of the
                              Americas, 10/th/ Floor, New York, New York 10019;

                    (iii)     if to Banc of America Securities LLC, at Bank of
                              America Corporate Center, 100 North Tryon Street,
                              Charlotte, North Carolina 28255;

                    (iv)      if to Banc One Capital Markets, Inc., at 1 Bank
                              One Plaza, Suite 1L1-0595, 21 South Clark Street,
                              Chicago, Illinois 60670;

                    (v)       if to Barclays Capital Inc., at 222 Broadway, New
                              York, New York 10038, Attention: Syndicate Desk;

                    (vi)      if to Deutsche Banc Alex. Brown Inc., at 31 W.
                              52/nd/ Street, New York, New York 10019;

                    (vii)     if to Fleet Securities, Inc., at 100 Federal
                              Street, Mail Stop MA DE 10012H, Boston,
                              Massachusetts 02110, Attn: Paul E. McCormack;

                    (viii)    if to Goldman, Sachs & Co., at 85 Broad Street,
                              New York, New York 10004, Attention: Medium-Term
                              Note Trading Department;

                    (ix)      if to J.P. Morgan Securities, Inc., at 270 Park
                              Avenue, 8/th/ Floor, New York, New York 10017,
                              Attention: Medium-Term Note Desk;

                    (x)       if to Morgan Stanley & Co. Incorporated, at 1585
                              Broadway, 2/nd/ Floor, New York, New York 10036,
                              Attention: Medium-Term Note Trading Desk;

                                       22
<PAGE>

                    (xi)      if to Salomon Brothers Inc., at Seven World Trade
                              Center, New York, New York 10048, Attention:
                              Medium-Term Note Department; and

                    (xii)     if to the Company, at One McDonald's Plaza, Oak
                              Brook, Illinois 60523, Attention: Treasurer, with
                              a copy to the Controller;

or at such other address as any party may notify to the other parties hereto
from time to time.

                    11.  Successors. This Agreement and any Terms Agreement will
                         ----------
inure to the benefit of and be binding upon the parties hereto and thereto and
the officers, directors and controlling persons referred to in Section 5 hereof,
and their respective successors, assigns, heirs, executors and administrators,
and no other persons will have any right or obligation hereunder.

                    12.  Counterparts.  This Agreement may be signed in any
                         ------------
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.

                    13.  APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE NTERNAL LAWS OF THE STATE OF
ILLINOIS.

                   *                    *                 *

                                       23
<PAGE>

                  If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicates hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and you.

                                       Very truly yours,

                                       McDONALD'S CORPORATION

                                       By:  ____________________________________
                                            Title: Senior Vice President and
                                                   Treasurer

                                       24
<PAGE>

                  The foregoing Agreement is hereby confirmed and accepted as of
the date first written above.

MERRILL LYNCH, PIERCE, FENNER &           DEUTSCHE BANC ALEX. BROWN INC.
SMITH INCORPORATED

By: _________________________             By: _________________________
    Title:                                    Title:

ABN AMRO INCORPORATED                     FLEET SECURITIES, INC.

By: _________________________             By: _________________________
    Title:                                    Title:

BANC OF AMERICA SECURITIES LLC            GOLDMAN, SACHS & CO.

By: _________________________             By: _________________________
    Title:                                    Title:

BANC ONE CAPITAL MARKETS, INC.            J.P. MORGAN SECURITIES INC.

By: _________________________             By: _________________________
    Title:                                    Title:

BARCLAYS CAPITAL INC.                     MORGAN STANLEY & CO. INCORPORATED

By: _________________________             By: _________________________
    Title:                                    Title:

DEUTSCHE BANC ALEX. BROWN INC.            SALOMON BROTHERS INC.

By: _________________________             By: _________________________
    Title:                                    Title:

                                       25
<PAGE>

                                                                       EXHIBIT A


                             FORM OF TERMS AGREEMENT

                             McDonald's Corporation

                           MEDIUM-TERM NOTES, SERIES G

                                 TERMS AGREEMENT

                                                           _______________, 200_


McDonald's Corporation
One McDonald's Plaza
Oak Brook, Illinois 60523

Attention:  Treasurer

Re:  U.S. Distribution Agreement dated ________, 2001

The undersigned agrees to purchase the following principal amount of your
Medium-Term Notes: [Currency/Amount]

                       Initial Public Offering Price:
                       Stated Maturity:
                       Purchase Price:
                       Purchase Date and Time:
                       Settlement Date and Time:
                       Place of Delivery:
                       Form: Book-Entry __________ or
                       Certificated _____________
                       Redeemable by Company: ___Yes ___No

                                      A-1
<PAGE>

                       Redemption Price Schedule:

                                    Date   Price
                                    ----   -----


                       Repayable at option of Holder: ___Yes ___No

                       Repayment Price Schedule:

                                    Date   Price
                                    ----   -----


                       For Fixed Rate Notes:

                       Interest Rate:
                       Interest Payment Dates:
                         (if other  than February 15 and August 15)
                       Regular Record Dates:
                         (if other than February 1 and August 1)


                       For Floating Rate Notes:

                       Base Rate:
                       Initial Interest Rate:
                       Spread:
                       Spread Multiplier:
                       Index Maturity:
                       Interest Reset Period:
                       Interest Reset Dates:
                       Interest Payment Dates:
                       Maximum Interest Rate, if any:
                       Minimum Interest Rate, if any:
                       For Indexed Notes:
                         [specify appropriate terms]
                       For Original Issue Discount Notes:
                         [specify appropriate terms]
                       For Amortizing Notes:
                         [specify amortization schedule]

                       (Other terms)

         The provisions of Sections 1, 2(b), 2(c), 2(d), 3 through 6 and 8
through 13 of the Distribution Agreement and the related definitions are
incorporated by reference herein and shall be deemed to have the same force and
effect as if set forth in full herein.

                                      A-2
<PAGE>

         [The certificates referred to in Section 3(i) of the Distribution
Agreement, the opinion referred to in Section 3(j) of the Distribution Agreement
and the auditors' letter referred to in Section 3(k) of the Distribution
Agreement will be required.]

         [The following opinions, letters, information, certificates and
documents referred to in Section 4 of the Distribution Agreement will be
required:]

         [The lockup period referred to in Section 3(l) of the U.S. Distribution
Agreement shall extend to a date ____ calendar days after the Settlement Date.]

                                                     [NAME OF PURCHASER]

                                                     By: _______________________
                                                     Title:


Accepted as of the date written above:

McDONALD'S CORPORATION

By: _________________________________
Title:

                                      A-3
<PAGE>

                                                                       EXHIBIT B


                  Medium-Term Note Administrative Procedures
                  ------------------------------------------

     Medium-Term Notes, Series G (the "Notes") are to be offered on a continuing
basis by McDonald's Corporation (the "Company"). Each of Merrill Lynch & Co.,
ABN AMRO Incorporated, Banc of America Securities LLC, Banc One Capital Markets,
Inc., Barclays Capital Inc., J.P. Morgan Securities Inc., Deutsche Banc Alex.
Brown Inc., Fleet Securities, Inc., Goldman, Sachs & Co., J.P. Morgan Securities
Inc., Morgan Stanley & Co. Incorporated and Salomon Brothers Inc. as agent (each
an "Agent"), has agreed to solicit offers to purchase the Notes and to purchase
Notes, as principal, for its own account. The Notes are being sold pursuant to a
U.S. Distribution Agreement between the Company and the Agents dated ________,
2001 (the "Agreement"). The Notes will be in registered form and will be issued
under an Indenture dated as of October 19, 1996, between the Company and First
Union National Bank as trustee (the "Trustee"), and any indenture supplemental
thereto. If any provision of these Administrative Procedures limits or conflicts
with any provision of the form of Note attached to these Administrative
Procedures as Annex I hereto, such provision in the form of Note shall be
controlling. The Notes will constitute part of the senior debt of the Company
and will rank equally with all other unsecured and unsubordinated debt of the
Company.

     Each Note will be represented by either a Global Security (as defined
hereinafter) (a "Registered Note") or a certificate delivered to the Holder
thereof or a Person designated by such Holder (a "Certificated Note"). Each
Global Security representing Registered Notes will be delivered to Bank One,
N.A. ("Bank One" or the "DTC Agent"), acting as agent for The Depository Trust
Company or any successor depositary selected by the Company ("DTC", which term,
as used herein, includes any successor depositary selected by the Company), and
will be recorded in the book-entry system maintained by DTC (a "Book-Entry
Note"). Except as set forth in the Basic Prospectus (as defined in the
Agreement), an owner of a Book-Entry Note will not be entitled to receive a
certificate representing such Note.

     The procedures to be followed during, and the specific terms of, the
solicitation of orders by the Agents and the sale as a result thereof by the
Company are explained below. Administrative and record-keeping responsibilities
will be handled for the Company by its Treasury Department. The Company will
advise the Agents, the Paying Agent and the Trustee in writing of those persons
handling administrative responsibilities with whom the Agents, the Paying Agent
and the Trustee are to communicate regarding orders to purchase Notes and the
details of their delivery.

     Administrative procedures and specific terms of the offering are
explained below. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, as adjusted in accordance
with changes in DTC's operating requirements, and Certificated Notes will be
issued in accordance with the administrative procedures set forth in Part II
hereof. Unless otherwise defined herein, terms defined in the Indenture, the
Notes or the Prospectus Supplement relating to the Notes shall be used herein as
therein defined. Notes for which interest is calculated on the basis of a fixed
interest rate, which may be zero, are referred to herein as "Fixed Rate Notes".
Notes for which

                                      B-1
<PAGE>

interest is calculated on the basis of a floating interest rate are referred to
herein as "Floating Rate Notes". To the extent the procedures set forth below
conflict with the provisions of the Notes, the Indenture, DTC's operating
requirements or the Agreement, the relevant provisions of the Notes, the
Indenture, DTC's operating requirements and the Agreement shall control.

     PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES

     In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the DTC Agent will
perform the custodial, document control and administrative functions described
below  for the Registered Notes. The DTC Agent will perform such functions in
accordance with its respective obligations under a Letter of Representations
from the Company and the DTC Agent to DTC dated as of the date hereof and a
Medium-Term Note Certificate Agreement between Bank One and DTC, dated May 26,
1989 and as amended to date, and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement system ("SDFS").

Issuance:                           On any date of settlement (as defined under
- --------                            "Settlement" below) for one or more Fixed
                                    Rate Book-Entry Notes, the Company will
                                    issue a single global security in fully
                                    registered form without coupons (a "Global
                                    Security") representing up to $200,000,000
                                    principal amount of all such Notes that have
                                    the same interest rate, Stated Maturity and
                                    redemption provisions. On any settlement
                                    date for one or more Floating Rate Book-
                                    Entry Notes, the Company will issue a single
                                    Global Security representing up to
                                    $200,000,000 principal amount of all such
                                    Notes that have the same Base Rate, Initial
                                    Interest Rate, Index Maturity, Spread or
                                    Spread Multiplier, Interest Reset Period,
                                    Interest Payment Dates, redemption
                                    provisions, Minimum Interest Rate (if any),
                                    Maximum Interest Rate (if any) and Stated
                                    Maturity. On any settlement date for one or
                                    more Indexed Book-Entry Notes, the Company
                                    will issue a single Global Security
                                    representing up to $200,000,000 principal
                                    amount of all such Notes that have the same
                                    terms (as such terms are identified in the
                                    Pricing Supplement relating to such Notes).
                                    Each Global Security will be dated and
                                    issued as of the date of its authentication
                                    by the Trustee for the Registered Notes
                                    represented by such Global Security. No
                                    Global Security will represent (i) more than
                                    one of a Fixed Rate, Floating Rate and
                                    Indexed Book-Entry Notes; or (ii) any
                                    Certificated Note.



Identification  Numbers:            The Company has arranged with the CUSIP
- -----------------------             Service Bureau of Standard & Poor's (the
                                    "CUSIP Service Bureau") for the reservation
                                    of a series of CUSIP numbers (including
                                    tranche


                                      B-2
<PAGE>

                                    numbers) for the Registered Notes. Such
                                    series consists of approximately 900 CUSIP
                                    numbers and relates to Global Securities
                                    representing Book-Entry Notes and book-entry
                                    medium-term notes issued by the Company with
                                    other series designations. The DTC Agent has
                                    obtained from the CUSIP Service Bureau
                                    written lists of such reserved CUSIP numbers
                                    and caused such lists to be delivered to the
                                    DTC Agent and to DTC. The DTC Agent will
                                    assign CUSIP numbers to Global Securities as
                                    described below under Settlement Procedure
                                    "B". DTC will notify the CUSIP Service
                                    Bureau periodically of the CUSIP numbers
                                    that the DTC Agent has assigned to Global
                                    Securities. The DTC Agent will notify the
                                    Company at any time when fewer than 100 of
                                    the reserved CUSIP numbers remain unassigned
                                    to Global Securities, and, if it deems
                                    necessary, the Company will reserve
                                    additional CUSIP numbers for assignment to
                                    Global Securities. Upon obtaining such
                                    additional CUSIP numbers, the Company shall
                                    deliver a list of such additional CUSIP
                                    numbers to the DTC Agent, as needed, and to
                                    DTC.

Registration:                       Global Securities will be issued only in
- ------------                        fully registered form without coupons and
                                    each Global Security will be registered in
                                    the name of CEDE & Co., as nominee for DTC,
                                    on the securities register for the Notes
                                    (the "Securities Register") maintained under
                                    the Indenture. The beneficial owner of a
                                    Book-Entry Note (or one or more indirect
                                    participants in DTC designated by such
                                    owner) will designate one or more direct
                                    participants in DTC (with respect to such
                                    Note, the "Participants") to act as agent or
                                    agents for such owner in connection with the
                                    book-entry system maintained by DTC, and DTC
                                    will record in book-entry form, in
                                    accordance with instructions provided by
                                    such Participants, a credit balance with
                                    respect to such beneficial owner in such
                                    Note in the account of such Participants.
                                    The ownership interest of such beneficial
                                    owner (or such participants) in such Note
                                    will be recorded through the records of such
                                    Participants or through the separate records
                                    of such Participants and one or more
                                    indirect participants in DTC.

Transfers:                          Transfers of a Book-Entry Note will be
- ----------                          accomplished by book entries made by DTC
                                    and, in turn, by Participants (and in
                                    certain cases, one or more indirect
                                    participants in DTC) acting on behalf of
                                    beneficial transferors and transferees of
                                    such Note.

                                      B-3
<PAGE>

Exchanges:                          The DTC Agent may deliver to DTC and the
- ---------                           CUSIP Service Bureau at any time a written
                                    notice of consolidation (a copy of which
                                    shall be attached to the resulting Global
                                    Security described below) specifying (i) the
                                    CUSIP numbers of two or more Outstanding
                                    Global Securities that represent (A) Fixed
                                    Rate Book-Entry Notes having the same
                                    interest rate, Interest Payment Date,
                                    redemption provisions and Stated Maturity
                                    and for which interest has been paid to the
                                    same date; (B) Floating Rate Book-Entry
                                    Notes having the same Base Rate, Index
                                    Maturity, Spread or Spread Multiplier,
                                    Interest Reset Period, Interest Payment
                                    Dates, redemption and repayment provisions,
                                    Minimum Interest Rate (if any), Maximum
                                    Interest Rate (if any) and Stated Maturity
                                    and for which interest has been paid to the
                                    same date; or (C) Indexed Book-Entry Notes
                                    having the same terms (as such terms are
                                    identified in the Pricing Supplement
                                    relating to such Notes); (ii) a date,
                                    occurring at least 30 days after such
                                    written notice is delivered and at least 30
                                    days before the next Interest Payment Date
                                    for such Book-Entry Notes, on which such
                                    Global Securities shall be exchanged for a
                                    single replacement Global Security; and
                                    (iii) a new CUSIP number to be assigned to
                                    such replacement Global Security. Upon
                                    receipt of such a notice, DTC will send to
                                    its participants (including the DTC Agent) a
                                    written reorganization notice to the effect
                                    that such exchange will occur on such date.
                                    Prior to the specified exchange date, the
                                    DTC Agent will deliver to the CUSIP Service
                                    Bureau a written notice setting forth such
                                    exchange date and the new CUSIP number and
                                    stating that, as of such exchange date, the
                                    CUSIP numbers of the Global Securities to be
                                    exchanged will no longer be valid. On the
                                    specified exchange date, the DTC Agent will
                                    exchange such Global Securities for a single
                                    Global Security bearing the new CUSIP number
                                    and the CUSIP numbers of the exchanged
                                    Global Securities will, in accordance with
                                    CUSIP Service Bureau procedures, be canceled
                                    and not immediately reassigned. Upon such
                                    exchange, the DTC Agent will mark the
                                    predecessor Global Security "canceled", make
                                    appropriate entries in the DTC Agent"s
                                    records and destroy such canceled Global
                                    Security in accordance with the terms of the
                                    Indenture and deliver a certificate of
                                    destruction to the Company. Notwithstanding
                                    the foregoing, if the Global Securities to
                                    be exchanged exceed $200,000,000 in
                                    aggregate principal amount, one Global
                                    Security will be authenticated and issued to
                                    represent each $200,000,000 of principal
                                    amount of the exchanged Global Securities
                                    and an additional

                                      B-4
<PAGE>

                                    Global Security will be authenticated and
                                    issued to represent any remaining principal
                                    amount of such Global Securities (see
                                    "Denominations" below).

Maturities:                         Each Book-Entry Note will mature on a date
- ----------                          not less than one year nor more than 60
                                    years after the settlement date for such
                                    Note (the "Stated Maturity"). Unless
                                    otherwise specified in the applicable
                                    Pricing Supplement, a Floating Rate Book-
                                    Entry Note will mature only on an Interest
                                    Payment Date for such Note.

Denominations:                      Book-Entry Notes will be issued in principal
- -------------                       amounts of $1,000 or any amount in excess
                                    thereof that is an integral multiple of
                                    $1,000. If Book-Entry Notes are denominated
                                    in a Specified Currency other than U.S.
                                    dollars, the denominations of such Notes
                                    will be determined pursuant to the
                                    provisions of the applicable Pricing
                                    Supplement. Global Securities will be
                                    denominated in principal amounts not in
                                    excess of $200,000,000 (or the equivalent
                                    thereof). If one or more Book-Entry Notes
                                    having an aggregate principal amount in
                                    excess of $200,000,000 (or the equivalent
                                    thereof) would, but for the preceding
                                    sentence, be represented by a single Global
                                    Security, then one Global Security will be
                                    authenticated and issued to represent each
                                    $200,000,000 principal amount (or the
                                    equivalent thereof) of such Book-Entry Note
                                    or Notes and an additional Global Security
                                    will be authenticated and issued to
                                    represent any remaining principal amount of
                                    such Book-Entry Note or Notes. In such a
                                    case, each of the Global Securities
                                    representing such Book-Entry Note or Notes
                                    shall be assigned the same CUSIP number.

Interest:                           General. Unless otherwise indicated in the
- --------                            -------
                                    applicable Pricing Supplement, interest, if
                                    any, on each Book-Entry Note will accrue
                                    from the Original Issue Date (or such other
                                    date on which interest otherwise begins to
                                    accrue (if different than the Original Issue
                                    Date)) of the Global Security representing
                                    such Book-Entry Note or from the last day to
                                    which interest has been paid thereon or duly
                                    provided for and will be calculated and paid
                                    in the manner described in such Book-Entry
                                    Note and in the applicable Pricing
                                    Supplement. The first payment of interest on
                                    any Book-Entry Note originally issued
                                    between a Regular Record Date and an
                                    Interest Payment Date will be made on the
                                    next succeeding Interest Payment Date.
                                    Unless otherwise specified therein, each
                                    payment of interest for a Book-Entry Note
                                    will include interest accrued to but
                                    excluding the Interest Payment Date or

                                      B-5
<PAGE>

                                    to but excluding Stated Maturity. Interest
                                    payable at the Stated Maturity of a Book-
                                    Entry Note will be payable to the person to
                                    whom the principal of such Note is payable.
                                    Standard & Poor's will use the information
                                    received in the pending deposit message
                                    described under Settlement Procedure "C"
                                    below in order to include the amount of any
                                    interest payable and certain other
                                    information regarding the related Global
                                    Security in the appropriate daily bond
                                    report published by Standard & Poor's.

                                    Regular Record Dates. Unless otherwise
                                    --------------------
                                    specified in the applicable Pricing
                                    Supplement, the Regular Record Date with
                                    respect to any Interest Payment Date for a
                                    Fixed Rate Book-Entry Note shall be the
                                    February 1 or August 1 (whether or not a
                                    Business Day) immediately preceding such
                                    Interest Payment Date. Unless otherwise
                                    specified in the applicable Pricing
                                    Supplement, the Regular Record Date with
                                    respect to any Interest Payment Date for a
                                    Floating Rate Book-Entry Note shall be the
                                    date (whether or not a Business Day) 15
                                    calendar days immediately preceding such
                                    Interest Payment Date.

                                    Interest Payment Dates on Fixed Rate Book-
                                    ------------------------------------------
                                    Entry Notes. Unless otherwise specified
                                    -----------
                                    pursuant to Settlement Procedure "A" below,
                                    interest payments on Fixed Rate Book-Entry
                                    Notes will be made semiannually on February
                                    15 and August 15 of each year and at Stated
                                    Maturity; provided, however, that if any
                                    Interest Payment Date for a Fixed Rate Book-
                                    Entry Note is not a Business Day, the
                                    payment due on such day shall be made on the
                                    next succeeding Business Day, and no
                                    interest shall accrue on such payment for
                                    the period from and after such Interest
                                    Payment Date; and provided further that in
                                    the case of a Fixed Rate Book-Entry Note
                                    issued between a Regular Record Date and an
                                    Interest Payment Date, the first interest
                                    payment will be made on the Interest Payment
                                    Date following the next succeeding Regular
                                    Record Date.

                                    Interest Payment Dates on Floating Rate
                                    Book-Entry Notes. Unless otherwise
                                    specified, interest payments will be made on
                                    Floating Rate Book-Entry Notes monthly,
                                    quarterly, semiannually or annually. Unless
                                    otherwise specified, interest will be
                                    payable, in the case of Floating Rate Book-
                                    Entry Notes that: reset daily, weekly or
                                    monthly, on the third Wednesday of each
                                    month or on the third Wednesday of March,
                                    June, September and December of each year,
                                    as

                                      B-6
<PAGE>

                                    specified; reset quarterly, on the third
                                    Wednesday of March, June, September and
                                    December of each year; reset semiannually,
                                    on the third Wednesday of each of two months
                                    specified pursuant to Settlement Procedure
                                    "A" below; and reset annually, on the third
                                    Wednesday of the month specified pursuant to
                                    Settlement Procedure "A" below; provided,
                                    however, that if an Interest Payment Date
                                    for a Floating Rate Book-Entry Note would
                                    otherwise be a day that is not a Business
                                    Day with respect to such Floating Rate Book-
                                    Entry Note, such Interest Payment Date will
                                    be the next succeeding Business Day with
                                    respect to such Floating Rate Book-Entry
                                    Note, except in the case of a Floating Rate
                                    Book-Entry Note for which the Base Rate is
                                    LIBOR, if such Business Day is in the next
                                    succeeding calendar month, such Interest
                                    Payment Date will be the immediately
                                    preceding Business Day; and provided
                                    further, that in the case of a Floating Rate
                                    Book-Entry Note issued between a Regular
                                    Record Date and an Interest Payment Date,
                                    the first interest payment will be made on
                                    the Interest Payment Date following the next
                                    succeeding Regular Record Date.

                                    Notice of Interest Payment and Regular
                                    --------------------------------------
                                    Record Dates. On the first Business Day of
                                    ------------
                                    January, April, July and October of each
                                    year, the DTC Agent will deliver to the
                                    Company and DTC a written list of Regular
                                    Record Dates and Interest Payment Dates that
                                    will occur with respect to Book-Entry Notes
                                    during the six-month period beginning on
                                    such first Business Day. Promptly after each
                                    Interest Determination Date for Floating
                                    Rate Book-Entry Notes, Bank One, as
                                    Calculation Agent, will make available to
                                    Standard & Poor's the interest rates
                                    determined on such Interest Determination
                                    Date.

Calculation of Interest:            Fixed Rate Book-Entry Notes. Interest on
- -----------------------             ---------------------------
                                    Fixed Rate Book-Entry Notes (including
                                    interest for partial periods) will be
                                    calculated on the basis of a 360-day year of
                                    twelve 30-day months.

                                    Floating Rate Book-Entry Notes. Interest
                                    ------------------------------
                                    rates on Floating Rate Book-Entry Notes will
                                    be determined as set forth in the form of
                                    Notes. Interest on Floating Rate Book-Entry
                                    Notes, except as otherwise set forth herein,
                                    will be calculated on the basis of actual
                                    days elapsed and a year of 360 days, except
                                    that in the case of a Floating Rate Book-
                                    Entry Note for which the Base Rate is the
                                    Treasury Rate or CMT, interest will be

                                      B-7
<PAGE>

                                  calculated on the basis of the actual number
                                  of days in the year.

                                  Amortizing Book-Entry Notes. Unless otherwise
                                  ---------------------------
                                  indicated in the applicable Pricing
                                  Supplement, interest on Amortizing Notes will
                                  be calculated on the basis of a 360-day year
                                  of twelve 30-day months.

Payments of Principal
- ---------------------
and Interest:                     Payment of Interest Only. Promptly after each
- ------------                      ------------------------
                                  Regular Record Date, the DTC Agent will
                                  deliver to the Company and DTC a written
                                  notice specifying the CUSIP number, the amount
                                  of interest to be paid on each Global Security
                                  on the following Interest Payment Date (other
                                  than an Interest Payment Date coinciding with
                                  Stated Maturity) and the total of such
                                  amounts. DTC will confirm the amount payable
                                  on each Global Security on such Interest
                                  Payment Date by reference to the daily bond
                                  reports published by Standard & Poor's. The
                                  Company will pay to the Paying Agent the total
                                  amount of interest due on such Interest
                                  Payment Date (other than at Stated Maturity),
                                  and the Paying Agent will pay such amount to
                                  DTC, at the times and in the manner set forth
                                  below under "Manner of Payment".

                                  Payments at Stated Maturity. On or about the
                                  ---------------------------
                                  first Business Day of each month, the DTC
                                  Agent will deliver to the Company and DTC a
                                  written list of principal and interest to be
                                  paid on each Global Security maturing in the
                                  following month. The Company, DTC and the DTC
                                  Agent will confirm the amounts of such
                                  principal and interest payments with respect
                                  to each such Global Security on or about the
                                  fifth Business Day preceding the Stated
                                  Maturity of such Global Security. The Company
                                  will pay to the Paying Agent the principal
                                  amount of such Global Security, together with
                                  interest due at such Stated Maturity. The
                                  Paying Agent will pay such amount to DTC at
                                  the times and in the manner set forth below
                                  under "Manner of Payment". Promptly after
                                  payment to DTC of the principal and interest
                                  due at the Stated Maturity of such Global
                                  Security, the Paying Agent will cancel such
                                  Global Security and deliver it to the Company
                                  with an appropriate debit advice.

                                  Manner of Payment. The total amount of any
                                  -----------------
                                  principal and interest due on Global
                                  Securities on any Interest Payment Date or at
                                  Stated Maturity shall be paid by the Company
                                  to the Paying Agent in immediately available
                                  funds no later than

                                      B-8
<PAGE>

                                  9:30 a.m. (New York City time) on such date.
                                  The Company will make such payment on such
                                  Global Securities by instructing the Paying
                                  Agent to withdraw funds from an account
                                  maintained by the Company. The Company will
                                  confirm any such instructions in writing to
                                  the Paying Agent. For Stated Maturity,
                                  redemption and other principal payments, the
                                  Paying Agent will pay, prior to 10:00 a.m.
                                  (New York City time) on such date or as soon
                                  as possible thereafter, by separate wire
                                  transfer (using Fedwire message entry
                                  instructions in a form previously specified by
                                  DTC) to an account at the Federal Reserve Bank
                                  of New York previously specified by DTC, in
                                  funds available for immediate use by DTC, each
                                  payment of principal (together with interest
                                  thereon) due on a Global Security on such
                                  date. Thereafter on such date, DTC will pay,
                                  in accordance with its SDFS operating
                                  procedures then in effect, such amounts in
                                  funds available for immediate use to the
                                  respective Participants in whose names the
                                  Book-Entry Notes represented by such Global
                                  Security are recorded in the book-entry system
                                  maintained by DTC. Payments of interest shall
                                  be made to DTC in same day funds in accordance
                                  with existing arrangements in place between
                                  the DTC Agent and DTC. None of the Company,
                                  the Paying Agent or the DTC Agent shall have
                                  any direct responsibility or liability for the
                                  payment by DTC to such Participants of the
                                  principal of and interest on the Book-Entry
                                  Notes.

                                  If an issue of Notes is denominated in a
                                  currency other than the U.S. dollar, the
                                  Company will make payments of principal and
                                  any interest in the currency in which the
                                  Notes are denominated (the "foreign currency")
                                  or in U.S. dollars. DTC has elected to have
                                  all such payments of principal and interest in
                                  U.S. dollars unless notified by any of its
                                  Participants through which an interest in the
                                  Notes is held that it elects, in accordance
                                  with and to the extent permitted by the
                                  applicable Pricing Supplement and the Note, to
                                  receive such payment of principal or interest
                                  in the foreign currency. On or prior to the
                                  third Business Day after the record date for
                                  payment of interest and twelve days prior to
                                  the date for payment of principal, such
                                  Participant shall notify DTC of (i) its
                                  election to receive all, or the specified
                                  portion, of such payment in the foreign
                                  currency; and (ii) its instructions for wire
                                  transfer of such payment to a foreign currency
                                  account.

                                      B-9
<PAGE>

                                  DTC will notify the applicable Trustee on or
                                  prior to the fifth Business Day after the
                                  record date for payment of interest and ten
                                  days prior to the date for payment of
                                  principal of the portion of such payment to be
                                  received in the foreign currency and the
                                  applicable wire transfer instructions, and the
                                  applicable Trustee shall use such instructions
                                  to pay the Participants directly. If DTC does
                                  not so notify the applicable Trustee, it is
                                  understood that only U.S. dollar payments are
                                  to be made. The applicable Trustee shall
                                  notify DTC on or prior to the second Business
                                  Day prior to payment date of the conversion
                                  rate to be used and the resulting U.S. dollar
                                  amount to be paid per $1,000 face amount. In
                                  the event that the applicable Trustee"s
                                  quotation to convert the foreign currency into
                                  U.S. dollars is not available, the applicable
                                  Trustee shall notify DTC"s Dividend Department
                                  that the entire payment is to be made in the
                                  foreign currency. In such event, DTC will ask
                                  its Participants for payment instructions and
                                  forward such instructions to the applicable
                                  Trustee and the applicable Trustee shall use
                                  such instructions to pay the Participants
                                  directly.

                                  Withholding Taxes. The amount of any taxes
                                  -----------------
                                  required under applicable law to be withheld
                                  from any interest payment on a Book-Entry Note
                                  will be determined and withheld by the
                                  Participant, indirect participant in DTC or
                                  other person responsible for forwarding
                                  payments and materials directly to the
                                  beneficial owner of such Note.

Procedures upon Company's
- -------------------------
Exercise of Optional Redemption:  Company Notice to Trustee and Paying Agent
- -------------------------------   ------------------------------------------
                                  regarding Exercise of Optional Redemption. At
                                  -----------------------------------------
                                  least 45 days prior to the date on which it
                                  intends to redeem a Book-Entry Note, the
                                  Company will notify the Trustee and Paying
                                  Agent that it is exercising such option with
                                  respect to such Book-Entry Note on such date.

                                  Paying Agent Notice to DTC regarding Company's
                                  ----------------------------------------------
                                  Exercise of Optional Redemption. After receipt
                                  -------------------------------
                                  of notice that the Company is exercising its
                                  option to redeem a Book-Entry Note, the
                                  Trustee will, at least 30 days before the
                                  redemption date of such Book-Entry Note, hand
                                  deliver to DTC a notice identifying such Book-
                                  Entry Note by CUSIP number and informing DTC
                                  of the Company's exercise of such option with
                                  respect to such Book-Entry Note.

                                     B-10
<PAGE>

                                  Deposit of Redemption Price. On or before any
                                  ---------------------------
                                  redemption date, the Company shall deposit
                                  with the Paying Agent an amount of money
                                  sufficient to pay the redemption price, plus
                                  interest accrued to such redemption date, for
                                  all the Book-Entry Notes or portions thereof
                                  which are to be repaid on such redemption
                                  date. The Paying Agent will use such money to
                                  repay such Book-Entry Notes pursuant to the
                                  terms set forth in such Notes.

Procedure for Rate Setting
- --------------------------
and Posting:                      The Company and the Agent will discuss from
- -----------
                                  time to time the aggregate principal amount
                                  of, the issuance price of and the interest
                                  rates to be borne by, Book-Entry Notes that
                                  may be sold as a result of the solicitation of
                                  orders by the Agent. If the Company decides to
                                  set prices of, and rates borne by, any Book-
                                  Entry Notes in respect of which the Agent is
                                  to solicit orders (the setting of such prices
                                  and rates to be referred to herein as
                                  "posting") or if the Company decides to change
                                  prices or rates previously posted by it, it
                                  will promptly advise the Agent of the prices
                                  and rates to be posted.

Acceptance and Rejection
- ------------------------
of Offers:                        Unless otherwise instructed by the Company,
- ---------
                                  the Agent will advise the Company promptly by
                                  telephone of all orders to purchase Book-Entry
                                  Notes received by the Agent, other than those
                                  rejected by it in whole or in part in the
                                  reasonable exercise of its discretion. Unless
                                  otherwise agreed by the Company and the Agent,
                                  the Company has the right to accept orders to
                                  purchase Book-Entry Notes and may reject any
                                  such orders in whole or in part.

Confirmation:                     For each order to purchase a Book-Entry Note
- ------------
                                  solicited by the Agent and accepted by or on
                                  behalf of the Company, the Agent will issue a
                                  confirmation to the purchaser, with a copy to
                                  the Company, setting forth the details set
                                  forth above and delivery and payment
                                  instructions.

Settlement:                       The receipt by the Company of immediately
- ----------
                                  available funds in payment for a Book-Entry
                                  Note and the authentication and issuance of
                                  the Global Security representing such Book-
                                  Entry Note shall constitute "settlement" with
                                  respect to such Book-Entry Note, and the date
                                  of such settlement, the "Settlement Date". All
                                  orders accepted by the Company will be settled
                                  on the third Business Day next succeeding the
                                  date of acceptance pursuant to the timetable
                                  for settlement set forth

                                     B-11
<PAGE>

                                  below unless the Company and the purchaser
                                  agree to settlement on another day, which
                                  shall be no earlier than the next Business Day
                                  following the date of sale.

Settlement Procedures:            Settlement Procedures with regard to each
- ---------------------
                                  Book-Entry Note sold by the Company to or
                                  through the Agent, except pursuant to a Terms
                                  Agreement, shall be as follows:

                                    A.   The Agent will advise the Company by
                                         telephone (or by facsimile or other
                                         acceptable written means) that such
                                         Note is a Book-Entry Note and of the
                                         following settlement information:

                                         1.   Principal or face amount.

                                         2.   Series.

                                         3.   Stated Maturity.

                                         4.   In the case of a Fixed Rate Book-
                                              Entry Note, the interest rate and
                                              reset, redemption, repayment and
                                              extension provisions (if any) or,
                                              in the case of a Floating Rate
                                              Book-Entry Note, the Base Rate,
                                              Initial Interest Rate (if known at
                                              such time) Interest Reset Period,
                                              Interest Reset Dates, Index
                                              Maturity, Spread and/or Spread
                                              Multiplier (if any), Minimum
                                              Interest Rate (if any), Maximum
                                              Interest Rate (if any) and reset,
                                              redemption, repayment and
                                              extension provisions (if any).

                                         5.   Interest Payment Dates and the
                                              Interest Payment Period.

                                         6.   Amortization provisions, if any.

                                         7.   Settlement Date and Issue Date, if
                                              different.

                                         8.   Specified Currency.

                                         9.   Denominated Currency, Index
                                              Currency, base exchange rate, and
                                              the determination date, if
                                              applicable.

                                         10.  Price.

                                     B-12
<PAGE>

                                         11.  Agent's commission, determined as
                                              provided in the Agreement.

                                         12.  Whether such Book-Entry Note is an
                                              Original Issue Discount Note and,
                                              if so, the total amount of a OID,
                                              the Yield to Maturity and the
                                              initial accrual period.

                                         13.  Any other terms necessary to
                                              describe the Book-Entry Note.

                                  B.     The Company will advise the relevant
                                         DTC Agent by telephone (confirmed in
                                         writing at any time on the same date),
                                         written telecommunication or electronic
                                         transmission of the information set
                                         forth in Settlement Procedure "A"
                                         above. Each such communication by the
                                         Company shall constitute a
                                         representation and warranty by the
                                         Company to the DTC Agent for such Note,
                                         the Trustee for such Note and the Agent
                                         that (i) such Note is then, and at the
                                         time of issuance and sale thereof will
                                         be, duly authorized for issuance and
                                         sale by the Company; and (ii) such
                                         Note, and the Global Security
                                         representing such Note, will conform
                                         with the terms of the Indenture for
                                         such Note. The DTC Agent will then
                                         assign a CUSIP number to the Global
                                         Security representing such Book-Entry
                                         Note and notify the Agent and the
                                         Company by telephone (confirmed in
                                         writing at any time on the same date),
                                         written telecommunication or electronic
                                         transmission of such CUSIP number as
                                         soon as practicable.

                                  C.     The DTC Agent will enter a pending
                                         deposit message through DTC's
                                         Participant Terminal System, providing
                                         the following Settlement information to
                                         DTC, such Agent, Standard & Poor's and,
                                         upon request, the Trustee:

                                         1.   The information set forth in
                                              Settlement Procedure "A".

                                         2.   Identification as a Fixed Rate
                                              Book-Entry Note or a Floating Rate
                                              Book-Entry Note.

                                         3.   Initial Interest Payment Date for
                                              such Note, number of days by which
                                              such date succeeds

                                     B-13
<PAGE>

                                              the related DTC Record Date and
                                              amount of interest, if known,
                                              payable on such Interest Payment
                                              Date.

                                         4.   Interest Payment Period or
                                              frequency of Interest Payment
                                              Dates.

                                         5.   CUSIP number of the Global
                                              Security representing such Note.

                                         6.   Whether such Global Security will
                                              represent any other Book-Entry
                                              Note (to the extent known at such
                                              time).

                                         7.   The participant account numbers
                                              maintained by DTC on behalf of the
                                              Trustee and the Agent.

                                  D.     To the extent the Company has not
                                         already done so, the Company will
                                         deliver to the Trustee for such Notes a
                                         Global Security in a form that has been
                                         approved by the Company, the Agent and
                                         the Trustee.

                                  E.     Bank One, as Authenticating Agent, will
                                         complete each Book-Entry Note, stamp
                                         the appropriate legend, as instructed
                                         by DTC, if not already set forth
                                         thereon, and authenticate the Global
                                         Security representing such Note.

                                  F.     DTC will credit such Note to the DTC
                                         Agent's participant account at DTC.

                                  G.     The DTC Agent will enter an SDFS
                                         delivery order through DTC's
                                         Participant Terminal System instructing
                                         DTC to (i) debit such Note to the DTC
                                         Agent's participant account; and credit
                                         such Note to such Agent's participant
                                         account; and (ii) debit such Agent's
                                         settlement account and credit the DTC
                                         Agent's settlement account for an
                                         amount equal to the price of such Note
                                         less such Agent's commission. The entry
                                         of such a deliver order shall
                                         constitute a representation and
                                         warranty by the DTC Agent to DTC that
                                         (i) the Global Security representing
                                         such Book-Entry Note has been issued
                                         and authenticated; and (ii) the DTC
                                         Agent is holding such Global Security
                                         pursuant to the

                                     B-14
<PAGE>

                                         Medium-Term Note Certificate Agreement
                                         between the DTC Agent and DTC.

                                  H.     Unless the Agent is purchasing such
                                         Note as principal, the Agent will enter
                                         an SDFS delivery order through DTC's
                                         Participant Terminal System instructing
                                         DTC (i) to debit such Note to such
                                         Agent's participant account and credit
                                         such Note to the participant accounts
                                         of the Participants with respect to
                                         such Note; and (ii) to debit the
                                         settlement accounts of such
                                         Participants and credit the settlement
                                         account of such Agent for an amount
                                         equal to the price of such Note.

                                  I.     Transfers of funds in accordance with
                                         SDFS delivery orders described in
                                         Settlement Procedures "G" and "H" will
                                         be settled in accordance with SDFS
                                         operating procedures in effect on the
                                         settlement date.

                                  J.     The DTC Agent will, upon receipt of
                                         funds from the Agent in accordance with
                                         Settlement Procedure "G", credit to an
                                         account of the Company maintained at
                                         the DTC Agent funds available for
                                         immediate use in the amount transferred
                                         to the DTC Agent in accordance with
                                         Settlement Procedure "G".

                                  K.     Such Agent will confirm the purchase of
                                         such Note to the purchaser either by
                                         transmitting to the Participants with
                                         respect to such Note a confirmation
                                         order or orders through DTC's
                                         institutional delivery system or by
                                         mailing a written confirmation to such
                                         purchaser.

                                  L.     Monthly, the DTC Agent will send to the
                                         Company a statement setting forth the
                                         principal amount of Registered Notes
                                         Outstanding as of the date of such
                                         statement and setting forth a brief
                                         description of any sales of which the
                                         Company has advised the DTC Agent but
                                         which have not yet been settled.

Settlement Procedures Timetable:         For sales by the Company of Book-Entry
- -------------------------------
                                         Notes solicited by an Agent and
                                         accepted by the Company (except
                                         pursuant to a Terms Agreement) for
                                         settlement on the first Business Day
                                         after the sale

                                     B-15
<PAGE>

                                 date, Settlement Procedures "A" through "K" set
                                 forth above shall be completed as soon as
                                 possible but not later than the respective
                                 times (New York City time) set forth below:

                                 Settlement

                                 Procedure     Time

                                 A             11:00 a.m. on the sale date
                                 B             12:00 Noon on the sale date
                                 C             2:00 p.m. on the sale date
                                 D             3:00 p.m. on day before
                                               Settlement Date
                                 E             9:00 a.m. on Settlement Date
                                 F             10:00 a.m. on Settlement Date
                                 G-H           2:00 p.m. on Settlement Date
                                 I             4:00 p.m. on Settlement Date
                                 J-K           5:00 p.m. on Settlement Date

                                 If a sale is to be settled more than one
                                 Business Day after the sale date, Settlement
                                 Procedures "A", "B" and "C" shall be completed
                                 as soon as practicable but not later than 11:00
                                 a.m., 12:00 Noon and 2:00 p.m., respectively,
                                 on the first Business Day after the sale date.
                                 If the Initial Interest Rate for a Floating
                                 Rate Book-Entry Note has not been determined at
                                 the time that Settlement Procedure "A" is
                                 completed, Settlement Procedures "B" and "C"
                                 shall be completed as soon as such rate has
                                 been determined but no later than 12:00 Noon
                                 and 2:00 p.m., respectively, on the second
                                 Business Day before the settlement date.
                                 Settlement Procedure "I" is subject to
                                 extension in accordance with any extension of
                                 Fedwire closing deadlines and in the other
                                 events specified in SDFS operating procedures
                                 in effect on the settlement date.

                                 If settlement of a Book-Entry Note is
                                 rescheduled or canceled, the DTC Agent will
                                 deliver to DTC through DTC's Participant
                                 Terminal System, a cancellation message to such
                                 effect by no later than 5:00 p.m. on the
                                 Business Day immediately preceding the
                                 scheduled settlement date.

                                     B-16
<PAGE>

          Failure to Settle:       If settlement of a Book-Entry Note is
          -----------------
                                   rescheduled and the DTC Agent for such Note
                                   has not entered an SDFS deliver order with
                                   respect to a Book-Entry Note pursuant to
                                   Settlement Procedure "G", after receiving
                                   notice from the Company or the Agent, such
                                   DTC Agent shall deliver to DTC, through DTC's
                                   Participant Terminal System, as soon as
                                   practicable, a withdrawal message instructing
                                   DTC to debit such Book-Entry Note to such DTC
                                   Agent's participant account. DTC will process
                                   the withdrawal message, provided that such
                                   DTC Agent's participant account contains a
                                   principal amount of the Global Security
                                   representing such Book-Entry Note that is at
                                   least equal to the principal amount to be
                                   debited. If a withdrawal message is processed
                                   with respect to all the Book-Entry Notes
                                   represented by a Global Security, the Trustee
                                   for the Notes represented by such Global
                                   Security will mark such Global Security
                                   "canceled", make appropriate entries in such
                                   Trustee"s records and destroy the canceled
                                   Global Security in accordance with the
                                   Indenture and deliver a certificate of
                                   destruction to the Company. The CUSIP number
                                   assigned to such Global Security shall, in
                                   accordance with CUSIP Service Bureau
                                   procedures, be canceled and not immediately
                                   reassigned. If a withdrawal message is
                                   processed with respect to one or more, but
                                   not all, of the Book-Entry Notes represented
                                   by a Global Security, the DTC Agent for such
                                   Book-Entry Notes will exchange such Global
                                   Security for two Global Securities, one of
                                   which shall represent such Book-Entry Notes
                                   and shall be canceled immediately after
                                   issuance and the other of which shall
                                   represent the other Book-Entry Notes
                                   previously represented by the surrendered
                                   Global Security and shall bear the CUSIP
                                   number of the surrendered Global Security.

                                   If the purchase price for any Book-Entry Note
                                   is not timely paid to the Participants with
                                   respect to such Note by the beneficial
                                   purchaser thereof (or a Person, including an
                                   indirect participant in DTC, acting on behalf
                                   of such purchaser), such Participants and, in
                                   turn, the Presenting Agent may enter SDFS
                                   deliver orders through DTC's

                                     B-17
<PAGE>

                                        Participant Terminal System reversing
                                        the orders entered pursuant to
                                        Settlement Procedures "H" and "G",
                                        respectively. Thereafter, the DTC Agent
                                        for such Book-Entry Note will deliver
                                        the withdrawal message and take the
                                        related actions described in the
                                        preceding paragraph. If such failure
                                        shall have occurred for any reason other
                                        than a default by the Agent in the
                                        performance of its obligations hereunder
                                        and under the Agreement, then the
                                        Company will reimburse the Agent for the
                                        loss of the use of the funds during the
                                        period when they were credited to the
                                        account of the Company.

                                        Notwithstanding the foregoing, upon any
                                        failure to settle with respect to a
                                        Book-Entry Note, DTC may take any
                                        actions in accordance with its SDFS
                                        operating procedures then in effect. In
                                        the event of a failure to settle with
                                        respect to one or more, but not all, of
                                        the Book-Entry Notes to have been
                                        represented by a Global Security, the
                                        DTC Agent for such Book-Entry Note or
                                        Notes will provide, in accordance with
                                        Settlement Procedures "E" and "G", for
                                        the authentication and issuance of a
                                        Global Security representing the other
                                        Book-Entry Notes to have been
                                        represented by such Global Security and
                                        will make appropriate entries in its
                                        records.

Procedure for Rate Changes;
- --------------------------
Preparation of Pricing Supplements:     The Company and the Agents will
- ----------------------------------
                                        discuss from time to time the rates to
                                        be borne by Registered Notes that may be
                                        sold as a result of the solicitation of
                                        offers by any Agent. If any offer to
                                        purchase a Registered Note is accepted
                                        by the Company, the Company will prepare
                                        a Pricing Supplement reflecting the
                                        terms of such Note and will arrange to
                                        have the Pricing Supplement filed with
                                        the Commission in accordance with the
                                        applicable paragraph of Rule 424(b)
                                        under the Securities Act and will supply
                                        by facsimile transmission or by
                                        overnight express for delivery by 11:00
                                        a.m. on the Business Day next following
                                        the date of acceptance one copy thereof
                                        (or additional copies if requested) to
                                        each Agent which presented the order
                                        (each, a "Presenting Agent") at each
                                        address listed below and one copy to the
                                        Trustee. The relevant Agent will cause a
                                        Prospectus and Pricing Supplement to

                                     B-18
<PAGE>

                              be delivered to the purchaser of the Registered
                              Note.

                              Copies of Pricing Supplements shall be sent to:

                              if Merrill Lynch & Co. is the Presenting Agent:

                              Merrill Lynch & Co. - Tritech Services
                              44B Colonial Drive
                              Piscataway, New Jersey 08854
                              Attn: Prospectus Operations/Nachman Kimerling
                              Telephone: (732) 885-2768
                              Facsimile: (732) 885-2774/5/6

                              Merrill Lynch & Co.
                              Merrill Lynch, Pierce, Fenner & Smith Incorporated
                              Merrill Lynch World Headquarters
                              4 World Financial Center,
                              North Tower, 15/th/ Floor
                              New York, New York 10080
                              Attn:  MTN Product Management
                              Telephone: (212) 449-7476
                              Facsimile: (212) 449-2234







                              if ABN AMRO Incorporated is the Presenting Agent:

                              ABN AMRO Incorporated
                              181 West Madison, 17/th/ Floor
                              Chicago, Illinois 60602
                              Attn:  Janet Mundell
                              Telephone: (312) 904-7846
                              Facsimile: (312) 904-4058

                              if Banc of America Securities LLC is the
                              Presenting Agent:

                                     B-19
<PAGE>

                              Banc of America Securities LLC
                              Bank of America Corporate Center
                              100 North Tyson Street
                              Charlotte, North Carolina 28255
                              Attn: MTN Product Management
                              Telephone: (704) 386-9690
                              Facsimile: (704) 388-9939

                              if Banc One Capital Markets, Inc. is the
                              Presenting Agent:

                              Banc One Capital Markets, Inc.
                              1 Bank One Plaza
                              Suite 1L1-0595
                              21 South Clark Street
                              Chicago, Illinois 60670-0595
                              Attn:  Investment Grade Securities
                              Telephone: (312) 732-4645
                              Facsimile: (312) 732-4773

                              if Barclays Capital Inc. is the Presenting Agent:

                              Barclays Capital Inc.
                              222 Broadway
                              New York, New York 10038
                              Attn: Syndicate Desk
                              Telephone: (212) 412-2663
                              Facsimile: (212) 412-1623





                              if Deutsche Banc Alex. Brown Inc. is the
                              Presenting Agent:

                              Deutsche Banc Alex. Brown Inc.
                              31 West 52/nd/ Street
                              3/rd/ Floor
                              Debt Capital Markets
                              New York, New York 10019
                              Attn: Josh Witz
                              Telephone: (212) 469-8493
                              Facsimile: (212) 469-7505

                              if Fleet Securities, Inc. is the Presenting Agent:

                                     B-20
<PAGE>

                              Fleet Securities, Inc.
                              100 Federal Street
                              Mail Stop MA DE 10012H
                              Boston, Massachusetts 02110
                              Attn: Paul E. McCormack
                              Telephone: (617) 434-8686
                              Facsimile: (617) 434-3122

                              if Goldman, Sachs & Co. is the Presenting Agent:

                              Goldman, Sachs & Co.
                              85 Broad Street
                              Medium-Term Note Trading Department
                              New York, New York 10004
                              Attn: Karen Robertson
                              Telephone: (212) 902-8401
                              Facsimile: (212) 902-0658

                              if J.P. Morgan Securities, Inc. is the Presenting
                              Agent:

                              J.P. Morgan Securities, Inc.
                              270 Park Avenue
                              8/th/ Floor
                              New York, New York 10017
                              Attn: Medium-Term Note Desk
                              Telephone: (212) 834-4421
                              Facsimile: (212) 834-6081

                              if Morgan Stanley & Co. Incorporated is the
                              Presenting Agent:

                              Morgan Stanley & Co. Incorporated
                              1585 Broadway
                              2/nd/ Floor
                              New York, New York 10036
                              Attn:  Medium-Term Note Trading Desk
                              Telephone: (212) 761-1248
                              Facsimile: (212) 761-0780

                              if Salomon Brothers Inc is the Presenting Agent:

                              Salomon Smith Barney
                              Brooklyn Army Terminal
                              140 58/th/ Street
                              8/th/ Floor

                                     B-21
<PAGE>

                              Brooklyn, New York 11220
                              Attn: Diane Graham
                              Telephone: (212) 921-8475
                              Facsimile: (718) 921-8472

Suspension of Solicitation;
- --------------------------
Amendment or Supplement:      Subject to the Company"s representations,
- -----------------------
                              warranties and covenants contained in the
                              Agreement, the Company may instruct the Agents to
                              suspend solicitation of purchases at any time, for
                              any period of time or permanently. Upon receipt of
                              notice from the Company, the Agents will forthwith
                              suspend solicitation until such time as the
                              Company has advised it that solicitation of
                              purchases may be resumed.

                              If the Company decides to amend or supplement the
                              Registration Statement or the Prospectus, it will
                              promptly advise the Agents and the Trustee and
                              will furnish each Agent and Trustee with the
                              proposed amendment or supplement in accordance
                              with the terms of the Agreement. The Company will
                              mail to the Commission for filing therewith any
                              supplement to the Prospectus (including any
                              Pricing Supplement), provide each Agent with
                              copies of any supplement (or, in the case of a
                              Pricing Supplement, provide each relevant Agent
                              with copies of such Pricing Supplement), and
                              confirm to each Agent that such supplement has
                              been mailed for filing with the Commission (or, in
                              the case of a Pricing Supplement, confirm such
                              information with each relevant Agent).

                              In the event that at the time the Company suspends
                              solicitation of purchases there shall be any
                              orders outstanding for settlement, the Company
                              will promptly advise the relevant Agent and the
                              DTC Agent whether such orders may be settled and
                              whether copies of the Prospectus as in effect at
                              the time of the suspension may be delivered in
                              connection with the settlement of such orders. The
                              Company will have the sole responsibility for such
                              decision and for any arrangements which may be
                              made in the event that the Company determines that

                                     B-22
<PAGE>

                                   such orders may not be settled or that copies
                                   of such Prospectus may not be so delivered.

Delivery of Prospectus:            A copy of the Prospectus and a Pricing
- ----------------------
                                   Supplement relating to a Book-Entry Note must
                                   accompany or precede the earlier of (i) the
                                   written confirmation of a sale sent to an
                                   investor or other purchaser or its agent; and
                                   (ii) the delivery of Notes to an investor or
                                   other purchaser or its agent the purchase of
                                   such Note and payment of such Note by its
                                   purchaser. Subject to the second preceding
                                   paragraph, each Agent will deliver a
                                   Prospectus and Pricing Supplement as herein
                                   described with respect to each Book-Entry
                                   Note sold by it. The Company will make such
                                   delivery if such Note is sold directly by the
                                   Company to a purchaser (other than an Agent).

Authenticity of Signatures:        The Company will cause the Trustee and the
- --------------------------
                                   Authenticating Agent (if other than the
                                   Trustee) to furnish each Agent from time to
                                   time with the specimen signatures of each of
                                   the Trustee's or Authenticating Agent's
                                   officers, employees or agents who have been
                                   authorized by the Trustee to authenticate
                                   Notes, but no Agent will have any obligation
                                   or liability to the Company or the Trustee in
                                   respect of the authenticity of the signature
                                   of any officer, employee or agent of the
                                   Company, the Trustee or the Authenticating
                                   Agent on any Note.

Trustee Not to Risk Funds:         Nothing herein shall be deemed to require
- -------------------------
                                   the in connection with any payment to the
                                   Company, DTC, the Agent or the purchaser, it
                                   being understood by all parties that payments
                                   made by the Trustee to the Company, DTC, the
                                   Agent or the purchaser shall be made only to
                                   the extent that funds are provided to the
                                   Trustee for such purpose.

Payment of Selling Commissions
- ------------------------------
and Expenses:                      The Company agrees to pay each Agent a
- ------------
                                   commission as set forth in the Agreement in
                                   the form of a discount equal to the
                                   percentage of the principal amount of each
                                   Note sold by the Company as a result of a
                                   solicitation made by such Agent.

                                     B-23
<PAGE>

           PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES

Issuance:                              Each Certificated Note will be dated and
- --------
                                       issued as of the date of its
                                       authentication by the applicable Trustee.
                                       Each Certificated Note will bear an
                                       Original Issue Date, which will be (i)
                                       with respect to an original Certificated
                                       Note (or any portion thereof), its
                                       original issuance date (which will be the
                                       settlement date); and (ii) with respect
                                       to any Certificated Note (or portion
                                       thereof) issued subsequently upon
                                       transfer or exchange of a Certificated
                                       Note or in lieu of a destroyed, lost or
                                       stolen Certificated Note, the Original
                                       Issue Date of the predecessor
                                       Certificated Note, regardless of the date
                                       of authentication of such subsequently
                                       issued Certificated Note.

Maturities:                            Each Certificated Note will have a
- ----------
                                       maturity from date of issue of not less
                                       than one year and not more than 60 years.
                                       Unless otherwise specified in the
                                       applicable Pricing Supplement, a Floating
                                       Rate Certificated Note will mature only
                                       on an Interest Payment Date for such
                                       Note.

Currency:                              The currency denomination with respect to
- --------
                                       any Certificated Note and the payment of
                                       principal, premium (if any) and interest
                                       (if any) with respect to any such
                                       Certificated Note, shall be as set forth
                                       therein and in the applicable Pricing
                                       Supplement.

Denominations:                         Unless otherwise specified in the
- -------------
                                       denominated in U.S. dollars will be
                                       issued only in minimum denominations of
                                       $1,000 and any larger amount that is an
                                       integral multiple of $1,000. In the case
                                       of a Certificated Note having a Specified
                                       Currency other than U.S. dollars, the
                                       minimum denomination and other authorized
                                       denominations shall be set forth in the
                                       applicable Pricing Supplement and in such
                                       Certificated Note.

Registration:                          Each Certificated Note will be issued
- ------------
                                       in fully registered definitive form.


Transfers and Exchanges:               A Certificated Note may be presented for
- -----------------------
                                       transfer or exchange at the corporate
                                       trust office of the Trustee.

                                     B-24
<PAGE>

                                       Certificated Notes will be exchangeable
                                       for Certificated Notes having identical
                                       terms but different authorized
                                       denominations without service charge.
                                       Certificated Notes will not be
                                       exchangeable for Book-Entry Notes.

Interest:                              General.  Unless otherwise indicated in
- --------                               -------
                                       the applicable Pricing Supplement,
                                       interest, if any, on each Certificated
                                       Note will accrue from the Original Issue
                                       Date (or such other date on which
                                       interest otherwise begins to accrue (if
                                       different from the Original Issue Date))
                                       of such Note for the first interest
                                       period or the last date to which interest
                                       has been paid, if any, for each
                                       subsequent interest period, on such Note,
                                       and will be calculated and paid in the
                                       manner and on the dates described in such
                                       Note and in the Prospectus, as
                                       supplemented by the applicable Pricing
                                       Supplement. Unless otherwise specified
                                       therein, each payment of interest on a
                                       Certificated Note will include interest
                                       accrued to but excluding the Interest
                                       Payment Date.

                                       Regular Record Dates. Unless otherwise
                                       --------------------
                                       specified in the applicable Pricing
                                       Supplement, the Regular Record Date with
                                       respect to any Interest Payment Date for
                                       a Fixed Rate Certificated Note shall,
                                       unless otherwise specified, be the
                                       February 1 or August 1 (whether or not a
                                       Business Day) immediately preceding such
                                       Interest Payment Date. Unless otherwise
                                       specified in the applicable Pricing
                                       Supplement, the Regular Record Date with
                                       respect to any Interest Payment Date for
                                       a Floating Rate Certificated Note shall
                                       be the date (whether or not a Business
                                       Day) 15 calendar days immediately
                                       preceding such Interest Payment Date.

                                       Interest Payment Dates on Fixed Rate
                                       ------------------------------------
                                       Certificated Notes. Unless otherwise
                                       ------------------
                                       specified pursuant to Settlement
                                       Procedure "A" below, interest payments on
                                       Fixed Rate Certificated Notes will be
                                       made semiannually on February 15 and
                                       August 15 of each year and at Stated
                                       Maturity; provided, however, that if any
                                       Interest Payment Date for a Fixed Rate
                                       Book-Entry Note is not a Business Day,
                                       the payment due on such day shall be made
                                       on the next succeeding Business Day, and
                                       no interest shall accrue on such

                                     B-25
<PAGE>

                                       payment for the period from and after
                                       such Interest Payment Date; and provided
                                       further, that in the case of a Fixed Rate
                                       Certificated Note issued between a
                                       Regular Record Date and an Interest
                                       Payment Date, the first interest payment
                                       will be made on the Interest Payment Date
                                       following the next succeeding Regular
                                       Record Date.

                                       Interest Payment Dates on Floating Rate
                                       ---------------------------------------
                                       Certificated Notes. Unless otherwise
                                       ------------------
                                       specified, interest payments will be made
                                       on Floating Rate Certificated Notes
                                       monthly, quarterly, semiannually or
                                       annually. Unless otherwise specified,
                                       interest will be payable, in the case of
                                       Floating Rate Certificated Notes that:
                                       reset daily, weekly or monthly, on the
                                       third Wednesday of each month or on the
                                       third Wednesday of March, June, September
                                       and December of each year, as specified;
                                       reset quarterly, on the third Wednesday
                                       of March, June, September and December of
                                       each year; reset semiannually, on the
                                       third Wednesday of each of two months
                                       specified pursuant to Settlement
                                       Procedure "A" below; and reset annually,
                                       on the third Wednesday of the month
                                       specified pursuant to Settlement
                                       Procedure "A" below; provided, however,
                                       that if an Interest Payment Date for a
                                       Floating Rate Certificated Note would
                                       otherwise be a day that is not a Business
                                       Day with respect to such Floating Rate
                                       Certificated Note, such Interest Payment
                                       Date will be the next succeeding Business
                                       Day with respect to such Floating Rate
                                       Certificated Note, except in the case of
                                       a Floating Rate Certificated Note for
                                       which the Base Rate is LIBOR, if such
                                       Business Day is in the next succeeding
                                       calendar month, such Interest Payment
                                       Date will be the immediately preceding
                                       Business Day; and provided further, that
                                       in the case of a Floating Rate
                                       Certificated Note issued between a
                                       Regular Record Date and an Interest
                                       Payment Date, the first interest payment
                                       will be made on the Interest Payment Date
                                       following the next succeeding Regular
                                       Date.

Calculation of Interest:               Fixed Rate Certificated Notes. Interest
- -----------------------                -----------------------------
                                       on Fixed Rate Certificated Notes
                                       (including interest for

                                     B-26
<PAGE>

                                       partial periods) will be calculated on
                                       the basis of a 360-day year of twelve 30-
                                       day months.

                                       Floating Rate Certificated Notes.
                                       --------------------------------
                                       Interest rates on Floating Rate
                                       Certificated Notes will be determined as
                                       set forth in the form of Notes. Interest
                                       on Floating Rate Certificated Notes,
                                       except as otherwise set forth herein,
                                       will be calculated on the basis of actual
                                       days elapsed and a year of 360 days,
                                       except that in the case of a Floating
                                       Rate Certificated Note for which the Base
                                       Rate is the Treasury Rate or CMT Rate,
                                       interest will be calculated on the basis
                                       of the actual number of days in the year.

Amortizing Certificated Notes:         Unless otherwise indicated in the
- -----------------------------
                                       applicable Pricing Supplement, interest
                                       on Amortizing Notes will be calculated on
                                       the basis of a 360-day year of twelve 30-
                                       day months.

Payments of Principal and Interest:    The Trustee will pay the principal
- ----------------------------------
                                       amount of each Certificated Note at
                                       Stated Maturity or upon redemption upon
                                       presentation and surrender of such Note
                                       to the Trustee. Such payment, together
                                       with payment of interest due at Stated
                                       Maturity or upon redemption of such Note,
                                       will be made in funds available for
                                       immediate use by the Trustee and in turn
                                       by the Holder of such Note. Certificated
                                       Notes presented to the Trustee at Stated
                                       Maturity or upon redemption for payment
                                       will be canceled and destroyed by the
                                       Trustee, and a certificate of destruction
                                       will be delivered to the Company. All
                                       interest payments on a Certificated Note
                                       (other than interest due at Stated
                                       Maturity or upon redemption) will be made
                                       by check drawn on the Trustee (or another
                                       person appointed by the Trustee) and
                                       mailed by the Trustee to the person
                                       entitled thereto as provided in such Note
                                       and the Indenture; provided, however,
                                       that the Holder of $10,000,000 or more of
                                       Notes having the same Interest Payment
                                       Dates will, upon written request prior to
                                       the Regular Record Date in respect of an
                                       Interest Payment Date, be entitled to
                                       receive payment by wire transfer of
                                       immediately available funds. Following
                                       each Regular Record Date, the Trustee
                                       will furnish the Company with a list of
                                       interest payments to be

                                     B-27
<PAGE>

                                       made on the following Interest Payment
                                       Date for each Certificated Note and in
                                       total for all Certificated Notes.
                                       Interest at Stated Maturity or upon
                                       redemption will be payable to the person
                                       to whom the payment of principal is
                                       payable. The Trustee will provide monthly
                                       to the Company lists of principal and
                                       interest, to the extent ascertainable, to
                                       be paid on Certificated Notes maturing or
                                       to be redeemed in the next month.

                                       Withholding Taxes. The amount of any
                                       -----------------
                                       taxes required under applicable law to be
                                       withheld from any interest payment on a
                                       Certificated Note will be determined and
                                       withheld by the Trustee.

                                       The Company will be responsible for
                                       withholding taxes on interest paid on
                                       Certificated Notes as required by
                                       applicable law.

Procedure for Rate Setting
- --------------------------
and Posting:                           The Company and the Agent will discuss
- -----------
                                       from time to time the aggregate principal
                                       amount of, the issuance price of, and the
                                       interest rates to be borne by, Notes that
                                       may be sold as a result of the
                                       solicitation of orders by the Agent. If
                                       the Company decides to set prices of, and
                                       rates borne by, any Notes in respect of
                                       which the Agent is to solicit orders (the
                                       setting of such prices and rates to be
                                       referred to herein as "posting") or if
                                       the Company decides to change prices or
                                       rates previously posted by it, it will
                                       promptly advise the Agent of the prices
                                       and rates to be posted.

Redemption:                            The applicable Pricing Supplement will
- ----------
                                       set forth all terms, if any, relating to
                                       the redemption of Notes prior to Stated
                                       Maturity.


Acceptance and Rejection
- ------------------------
of Offers:                             Unless otherwise instructed by the
- ---------
                                       Company, the Agent will advise the
                                       Company promptly by telephone of all
                                       orders to purchase Certificated Notes
                                       received by the Agent, other than those
                                       rejected by it in whole or in part in the
                                       reasonable exercise of its discretion.
                                       Unless otherwise agreed by the Company
                                       and the Agent, the Company has

                                     B-28
<PAGE>

                                       the sole right to accept orders to
                                       purchase Certificated Notes and may
                                       reject any such orders in whole or in
                                       part. Before accepting any order to
                                       purchase a Certificated Note to be
                                       settled in less than three Business Days,
                                       the Company shall verify that the Trustee
                                       for such Certificated Note will have
                                       adequate time to prepare and authenticate
                                       such Note.

Settlement:                            The receipt by the Company of
- ----------
                                       immediately available funds in exchange
                                       for an authenticated Certificated Note
                                       delivered to the Agent and the Agent's
                                       delivery of such Certificated Note
                                       against receipt of immediately available
                                       funds shall, with respect to such
                                       Certificated Note, constitute
                                       "settlement". All orders accepted by the
                                       Company will be settled on the third
                                       Business Day next succeeding the date of
                                       acceptance pursuant to the timetable for
                                       settlement set forth below, unless the
                                       Company and the purchaser agree to
                                       settlement on another day, which shall be
                                       no earlier than the next Business Day
                                       following the date of sale.

Details for Settlement:                Settlement Procedures with regard to
- ----------------------
                                       each Certificated Note sold by the
                                       Company to or through the Agent, as agent
                                       (except pursuant to a Terms Agreement),
                                       shall be as follows:

                                       A.    The Agent will advise the Company
                                             by telephone or by facsimile
                                             transmission (or other acceptable
                                             written means) that such Note is a
                                             Certificated Note and of the
                                             following settlement information,
                                             in time for the Trustee for such
                                             Certificated Note to prepare and
                                             authenticate the required Note:

                                             1.   Name in which such
                                                  Certificated Note is to be
                                                  registered ("Registered
                                                  Owner").

                                             2.   Address of the Registered
                                                  Owner and address for payment
                                                  of principal and interest.

                                             3.   Taxpayer identification number
                                                  of the Registered Owner (if
                                                  available).

                                     B-29
<PAGE>

                                             4.   Principal or face amount.

                                             5.   Series.

                                             6.   Stated Maturity.

                                             7.   In the case of a Fixed Rate
                                                  Certificated Note, the
                                                  Interest Rate and reset
                                                  provisions (if any) or, in the
                                                  case of a Floating Rate
                                                  Certificated Note, the Base
                                                  Rate, Initial Interest Rate
                                                  (if known at such time),
                                                  Interest Reset Period,
                                                  Interest Reset Dates, Index
                                                  Maturity, Spread and/or Spread
                                                  Multiplier (if any), Minimum
                                                  Interest Rate (if any),
                                                  Maximum Interest Rate (if any)
                                                  and reset provisions (if any).

                                             8.   Interest Payment Dates and the
                                                  Interest Payment Period.

                                             9.   Specified Currency.

                                             10.  Denominated Currency, Index
                                                  Currency, Base Exchange Rate
                                                  and the Determination Date, if
                                                  applicable.

                                             11.  Redemption, repayment,
                                                  amortization or extension
                                                  provisions, if any.

                                             12.  Settlement date.

                                             13.  Price (including currency).

                                             14.  Agent's commission, if any,
                                                  determined as provided in the
                                                  Agreement.

                                             15.  Whether such Certificated Note
                                                  an Original Issue Discount
                                                  Note, and, if so, the total
                                                  amount of OID and the Yield to
                                                  Maturity and the initial
                                                  accrual period.

                                     B-30
<PAGE>

                                             16.  Any other terms necessary to
                                                  describe the Certificated
                                                  Note.

                                             Such Agent will advise the Company
                                             of the foregoing information for
                                             each sale made by it in time for
                                             the Trustee's authenticating agent,
                                             including the Trustee itself if no
                                             authenticating agent is appointed
                                             (the "Authenticating Agent"), to
                                             prepare the required Certificated
                                             Notes. If the Company rejects an
                                             offer, the Company will promptly
                                             notify the relevant Agent.

                                        B.   The Company will advise the
                                             relevant Trustee by telephone
                                             (confirmed in writing at any time
                                             on the sale date), written
                                             telecommunication or electronic
                                             transmission of the information set
                                             forth in Settlement Procedure "A"
                                             above and the name of the
                                             Presenting Agent.

                                        C.   The Company will deliver to the
                                             relevant Trustee a pre-printed
                                             four-ply packet for such
                                             Certificated Note, which packet
                                             will contain the following
                                             documents in forms that have been
                                             approved by Company, the Agents and
                                             the Trustee:

                                             1.   Certificated Note with
                                                  customer confirmation.

                                             2.   Stub One - For Trustee.

                                             3.   Stub Two - For Agent.

                                             4.   Stub Three - For Company.

                                        D.   The Trustee will complete such
                                             Certificated Note and will
                                             authenticate such Certificated Note
                                             and deliver it (with the
                                             confirmation) and Stubs One and Two
                                             to the Agent, and the Agent will
                                             acknowledge receipt of the Note by
                                             stamping or otherwise marking Stub
                                             One and returning it to the
                                             Trustee. Such delivery will be made
                                             only against such acknowledgment of
                                             receipt and evidence

                                     B-31
<PAGE>

                                             that instructions have been given
                                             by the Agent for payment to such
                                             account as the Company shall have
                                             specified in funds available for
                                             immediate use, of an amount equal
                                             to the price of such Certificated
                                             Note less the Agent's commission.
                                             In the event that the instructions
                                             given by the Agent for payment to
                                             the account of the Company are
                                             revoked, the Company will as
                                             promptly as possible wire transfer
                                             to the account of the Agent an
                                             amount of immediately available
                                             funds equal to the amount of such
                                             payment made.

                                        E.   Unless the Agent purchased the Note
                                             as Principal, the Agent will
                                             deliver such Certificated Note
                                             (with the confirmation) to the
                                             customer against payment in
                                             immediately payable funds. The
                                             Agent will obtain the
                                             acknowledgment of receipt of such
                                             Certificated Note by retaining Stub
                                             Two.

                                        F.   The Trustee will send Stub Three to
                                             the Company's Treasury Department
                                             by first-class mail. Periodically,
                                             the Authenticating Agent will also
                                             send to the Company's Treasury
                                             Department a statement to the
                                             Company setting forth the principal
                                             amount of the Notes outstanding as
                                             of that date after giving effect to
                                             such transaction.

Settlement Procedures Timetable:        For orders of Certificated Notes
- -------------------------------

                                        solicited by the Agent, as agent, and
                                        accepted by the Company, Settlement
                                        Procedures "A" through "F" set forth
                                        above shall be completed on or before
                                        the respective times (New York City
                                        time) set forth below:

                                        Settlement Procedure    Time
                                        --------------------    ----

                                        A                       2:00 P.M. on the
                                                                day before the
                                                                Settlement Date.

                                     B-32
<PAGE>

                                        B                       On the day two
                                                                Business Days
                                                                before the
                                                                Settlement Date.

                                        C                       2:15 P.M. two
                                                                Business Days
                                                                before the
                                                                Settlement Date.

                                        D                       2:15 P.M. on the
                                                                Settlement Date.

                                        E                       3:00 P.M. on the
                                                                Settlement Date.

                                        F                       5:00 P.M. on the
                                                                Settlement Date.

Confirmation:                           Each Agent shall, for each Certificated
- ------------
                                        Note offer received by it and accepted
                                        by the Company, issue a confirmation to
                                        the purchaser, with a copy to the
                                        Company, setting forth such of the
                                        details set forth above as is deemed
                                        appropriate by such Agent.

Note Delivery and Cash Payment:         Upon instructions from the
- ------------------------------
                                        Company, the Authenticating Agent will
                                        deliver the Certificated Notes to the
                                        relevant Agent (for the benefit of the
                                        purchaser).

                                        Delivery by the Authenticating Agent of
                                        the Certificated Notes will be made in
                                        accordance with paragraph D of the
                                        Details for Settlement.

Failure to Settle:                      If a purchaser fails to accept delivery
- -----------------
                                        of and make payment for any Certificated
                                        Note, the Agent will notify the Company
                                        and the Trustee by telephone and return
                                        such Note to the Trustee. Upon receipt
                                        of such notice, the Company will
                                        immediately wire transfer to the account
                                        of the Agent an amount equal to the
                                        amount previously credited thereto in
                                        respect of such Note. Such wire transfer
                                        will be made on the settlement date, if
                                        possible, and in any event not later
                                        than the Business Day following the
                                        settlement date. If the failure shall
                                        have occurred for any reason other than
                                        a default by the Agent in the
                                        performance of its obligations hereunder
                                        and under the Agreement with the
                                        Company, then the Company will reimburse
                                        the Agent or the Trustee, as
                                        appropriate, on an equitable basis for
                                        its loss of the use of the funds during
                                        the period when they were credited to
                                        the account of the Company.

                                     B-33
<PAGE>

                                        Immediately upon receipt of the
                                        Certificated Note in respect of which
                                        such failure occurred, the Trustee will
                                        mark such Note "canceled", make
                                        appropriate entries in the Trustee's
                                        records and send such Note to the
                                        Company.

Maturity:                               At Stated Maturity, the principal
- --------
                                        amount of each Note will be payable in
                                        immediately available funds provided
                                        that the Trustee or other paying agent
                                        receives the Certificated Note and
                                        appropriate payment information in
                                        writing. Certificated Notes presented to
                                        any paying agent or the Trustee will be
                                        destroyed by the Trustee.

Procedure for Rate Changes:             The Company and the Agents will discuss
- --------------------------
                                        from time to time the rates to be borne
                                        by Certificated Notes that may be sold
                                        as a result of the solicitation of
                                        offers by any Agent. If any offer to
                                        purchase a Certificated Note is accepted
                                        by the Company, the Company will prepare
                                        a Pricing Supplement reflecting the
                                        terms of such Certificated Note and will
                                        arrange to have the Pricing Supplements
                                        filed with the Commission in accordance
                                        with the applicable paragraph of Rule
                                        424(b) under the Securities Act and will
                                        supply by facsimile transmission or by
                                        overnight express one copy for delivery
                                        by 11:00 a.m. on the Business Day next
                                        following the date of acceptance one
                                        copy thereof (or additional copies if
                                        requested) to each Agent which presented
                                        the order (each, a Presenting Agent") at
                                        each address listed below and one copy
                                        to the Trustee. The relevant Agent will
                                        cause a Prospectus and Pricing
                                        Supplement to be delivered to the
                                        purchaser of the Certificated Note.

                                        Copies of Pricing Supplements shall be
                                        sent to:

                                        if Merrill Lynch & Co. is the Presenting
                                        Agent:

                                        Merrill Lynch & Co. - Tritech Services
                                        44B Colonial Drive
                                        Piscataway, New Jersey 08854
                                        Attn: Prospectus Operations/Nachman
                                               Kimerling
                                        Telephone:   (732) 885-2768
                                        Facsimile:   (732) 885-2774/5/6

                                     B-34
<PAGE>

                            Merrill Lynch & Co.
                            Merrill Lynch, Pierce, Fenner & Smith Incorporated
                            Merrill Lynch World Headquarters
                            4 World Financial Center,
                            North Tower, 15/th/ Floor
                            New York, New York 10080
                            Attn: MTN Product Management
                            Telephone: (212) 449-7476
                            Facsimile: (212) 449-2234

                            if ABN AMRO Incorporated is the Presenting
                            Agent:

                            ABN AMRO Incorporated
                            181 West Madison, 17/th/ Floor
                            Chicago, Illinois 60602
                            Attn:  Janet Mundell
                            Telephone: (312) 904-7846
                            Facsimile: (312) 904-4058



                            if Banc of America Securities LLC is the Presenting
                            Agent:

                            Banc of America Securities LLC
                            Bank of America Corporate Center
                            100 North Tyson Street
                            Charlotte, North Carolina 28255
                            Attn:  MTN Product Management
                            Telephone: (704) 386-9690
                            Facsimile: (704) 388-9939

                            if Banc One Capital Markets, Inc. is the Presenting
                            Agent:

                            Banc One Capital Markets, Inc.
                            1 Bank One Plaza
                            Suite 1L1-0595
                            21 South Clark Street
                            Chicago, Illinois 60670-0595
                            Attn:  Investment Grade Securities
                            Telephone: (312) 732-4645
                            Facsimile: (312) 732-4773

                                     B-35
<PAGE>

                         if Barclays Capital Inc. is the Presenting Agent:

                         Barclays Capital Inc.
                         222 Broadway
                         New York, New York 10038
                         Attn: Syndicate Desk
                         Telephone: (212) 412-2663
                         Facsimile: (212) 412-1623



                         if Deutsche Banc Alex. Brown Inc. is the Presenting
                         Agent:

                         Deutsche Banc Alex. Brown Inc.
                         31 West 52/nd/ Street
                         3/rd/ Floor
                         Debt Capital Markets
                         New York, New York 10019
                         Attn: Josh Witz
                         Telephone: (212) 469-8493
                         Facsimile: (212) 469-7505

                         if Fleet Securities, Inc. is the Presenting
                         Agent:

                         Fleet Securities, Inc.
                         100 Federal Street
                         Mail Stop MA DE 10012H
                         Boston, Massachusetts 02110
                         Attn: Paul E. McCormack
                         Telephone: (617) 434-8686
                         Facsimile: (617) 434-3122

                         if Goldman, Sachs & Co. is the Presenting
                         Agent:

                         Goldman, Sachs & Co.
                         85 Broad Street
                         Medium-Term Note Trading Department
                         New York, New York 10004
                         Attn: Karen Robertson
                         Telephone: (212) 902-8401
                         Facsimile: (212) 902-0658

                                     B-36
<PAGE>

                              if J.P. Morgan Securities, Inc. is the Presenting
                              Agent:

                              J.P. Morgan Securities, Inc.
                              4 New York Plaza
                              Ground Floor Receiving Window
                              New York, New York 10041
                              Attn: Salvatore Giallanza
                              Telephone: (212) 623-3104
                              Facsimile: (212) 623-2659

                              if Morgan Stanley & Co. Incorporated is the
                              Presenting Agent:

                              Morgan Stanley & Co. Incorporated
                              1585 Broadway
                              2/nd/ Floor
                              New York, New York 10036
                              Attn: Medium-Term Note Trading Desk
                              Telephone: (212) 761-1248
                              Facsimile: (212) 761-0780

                              if Salomon Brothers Inc is the Presenting Agent:

                              Salomon Smith Barney
                              Brooklyn Army Terminal
                              154 58/th/ Street
                              8/th/ Floor
                              Brooklyn, New York 11220
                              Attn: Diane Graham
                              Telephone: (212) 921-8475
                              Facsimile: (718) 921-8472

Suspension of Solicitation;
- --------------------------
Amendment or Supplement:      The Company may instruct the Agents to suspend
- -----------------------       solicitation of purchases at any time. Upon
                              receipt of notice from the Company, the Agents
                              will forthwith suspend solicitation until such
                              time as the Company has advised them that
                              solicitation of purchases may be resumed.

                              If the Company decides to amend or supplement the
                              Registration Statement or the Prospectus, it will
                              promptly advise the Agents and the Trustee and
                              will furnish each Agent and Trustee with the
                              proposed amendment or supplement in accordance
                              with the

                                     B-37
<PAGE>

                                        terms of the Agreement. The Company will
                                        mail to the Commission for filing
                                        therewith any supplement to the
                                        Prospectus (including any Pricing
                                        Supplement), provide each Agent with
                                        copies of any supplement (or, in the
                                        case of a Pricing Supplement, provide
                                        each relevant Agent with copies of such
                                        Pricing Supplement), and confirm to each
                                        Agent that such supplement has been
                                        mailed for filing with the Commission
                                        (or, in the case of a Pricing
                                        Supplement, confirm such information
                                        with each relevant Agent).

                                        In the event that at the time the
                                        Company suspends solicitation of
                                        purchases there shall be any orders
                                        outstanding for settlement, the Company
                                        will promptly advise the relevant Agent
                                        and the Trustee whether such orders may
                                        be settled and whether copies of the
                                        Prospectus as in effect at the time of
                                        the suspension may be delivered in
                                        connection with the settlement of such
                                        orders. The Company will have the sole
                                        responsibility for such decision and for
                                        any arrangements which may be made in
                                        the event that the Company determines
                                        that such orders may not be settled or
                                        that copies of such Prospectus may not
                                        be so delivered.

    Authenticity of Signatures:         The Company will cause  the Trustee and
    --------------------------          the Authenticating  Agent (if other than
                                        the Trustee) to furnish each Agent from
                                        time to time with the specimen
                                        signatures of each of the Trustee's or
                                        Authenticating Agent's officers,
                                        employees or agents who have been
                                        authorized by the Trustee to
                                        authenticate Notes, but no Agent will
                                        have any obligation or liability to the
                                        Company or the Trustee in respect of the
                                        authenticity of the signature of any
                                        officer, employee or agent of the
                                        Company, the Trustee or the
                                        Authenticating Agent on any Note.

Trustee Not to Risk Funds:              Nothing herein shall be deemed to
- -------------------------               require the Trustee to risk or expend
                                        its own funds in connection with any
                                        payment to the Company, the Agent or the
                                        purchaser, it being understood by all
                                        parties that payments made by the
                                        Trustee to the Company, the Agent or the
                                        purchaser shall be made only to the
                                        extent that funds are provided to the
                                        Trustee for such purpose.

                                     B-38
<PAGE>

Payment of Selling Commissions
- ------------------------------
and Expenses:                           The Company agrees to pay each Agent a
- ------------                            commission as set forth in the Agreement
                                        in the form of a discount equal to the
                                        percentage of the principal amount of
                                        each Note sold by the Company as a
                                        result of a solicitation made by such
                                        Agent.

                                     B-39
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.(C)
<SEQUENCE>4
<FILENAME>dex4c.txt
<DESCRIPTION>FORM OF SUPPLEMENTAL INDENTURE NO. 6
<TEXT>

<PAGE>

                                                                    Exhibit 4(c)



            -------------------------------------------------------

                          SUPPLEMENTAL INDENTURE NO. 6

                                    BETWEEN

                             McDONALD'S CORPORATION

                                      AND

                           FIRST UNION NATIONAL BANK
                                    Trustee

                      ------------------------------------

                           Dated as of ________, 2001

                      ------------------------------------

                SUPPLEMENTAL TO SENIOR DEBT SECURITIES INDENTURE
                          DATED AS OF OCTOBER 19, 1996

            -------------------------------------------------------
<PAGE>

                             McDONALD'S CORPORATION
                          SUPPLEMENTAL INDENTURE NO. 6
                         Dated as of ___________, 2001
                                   Series of
                          Medium-Term Notes, Series G
                                 $1,500,000,000


     Supplemental Indenture No. 6, dated as of __________, 2001, between
McDONALD'S CORPORATION, a corporation organized and existing under the laws of
the State of Delaware (hereinafter sometimes referred to as the "Company"), and
FIRST UNION NATIONAL BANK, a national banking association, authorized to accept
and execute trusts (hereinafter sometimes referred to as the "Trustee"),

                                  WITNESSETH:

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

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

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

            NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

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

                                  ARTICLE ONE
                      RELATION TO INDENTURE; DEFINITIONS.

     SECTION 1.01.  This Supplemental Indenture No. 6 constitutes an integral
part of the Indenture.

     SECTION 1.02.  (a)  For all purposes of this Supplemental Indenture No. 6,
except as otherwise expressly provided or unless the context otherwise requires,
all capitalized terms used and not defined herein shall have the meanings
assigned to them in the Indenture or in Exhibits A and B hereto.
<PAGE>

     (b)  All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this Supplemental
Indenture No. 6; and

     (c)  The terms "hereof," "herein," "hereto," "hereunder" and "herewith"
refer to this Supplemental Indenture No. 6.

                                  ARTICLE TWO
                         THE SERIES OF DEBT SECURITIES

     SECTION 2.01.  (a) There shall be a series of Debt Securities issuable in
registered form (the "Notes") limited to an aggregate initial public offering
price or purchase price of $1,500,000,000, or the equivalent thereof in one or
more foreign currencies, including the Euro, as designated by the Company (the
"Specified Currency").  The Notes shall be designated the "Medium-Term Notes,
Series G, Due from 1 Year to 60 Years from Date of Issue".

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

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

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

          (a)  the principal amount and Specified Currency for such Note (and,
     if the Specified Currency is other than U.S. dollars, certain other terms
     relating to such Note and such Specified Currency, including the authorized
     denominations of such Note); (b) whether such Note is a Fixed Rate Note,
     Floating Rate Note or an Indexed Note (as defined below) as to which
     interest is determined by reference to an Index; (c) the price (expressed
     as a percentage of the aggregate principal amount thereof) at which such
     Note will be issued (the "Issue Price"); (d) the date on which such Note
     will be issued (the "Original Issue Date"); (e) the date on which such Note
     will mature (the "Stated Maturity"); (f) if such Note is a Fixed Rate Note,
     the rate per annum at which such Note will bear interest, if any, and the
     dates on which interest will be payable if other than February 15 and
     August 15 (each an "Interest Payment Date"); (g) if such Note is a Floating
     Rate Note, the Base Rate, the Initial Interest Rate, the Interest Reset
     Period, the Interest Payment Dates, the Maximum Interest Rate, if any, the
     Minimum Interest Rate, if any, the Spread or Spread Multiplier, if

                                       3
<PAGE>

     any (all as defined in Sections 2.02 and 2.06 herein), and any other terms
     relating to the particular method of calculating the interest rate for such
     Note; (h) whether such Note is an Original Issue Discount Note; (i) if such
     Note is an Indexed Note, the manner in which the principal amount of the
     Note payable at Stated Maturity and/or the interest amount payable will be
     determined (other than as described in Section 2.07 hereof); (j) whether
     such Note may be redeemed at the option of the Company, or repaid at the
     option of the Holder, prior to Stated Maturity and, if so, the provisions
     (other than the redemption and prepayment provisions specified in Sections
     2.02 hereof) relating to such redemption or repayment, including, in the
     case of an Original Issue Discount Note, Indexed Note or Amortizing Note
     (as defined below), the information necessary to determine the amount due
     upon redemption or repayment; (k) if such Note is an Amortizing Note,
     information necessary to determine the repayment schedule, including the
     manner in which payments thereon will be applied to interest and the
     reduction of unpaid principal; and (l) any other terms of such Note not
     inconsistent with the provisions of the Indenture.

     SECTION 2.04. Bank One Trust Company, N.A., One Bank One Plaza, Chicago,
Illinois, is hereby initially appointed as Authenticating Agent, Registrar,
Paying Agent and Calculation Agent with respect to the Notes.

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

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

     (b)  Unless otherwise specified in an Indexed Note, interest on such
Indexed Note will be payable by the Company based on the amount designated
therein as the "Face

                                       4
<PAGE>

Amount" of such Indexed Note. Such Indexed Note will describe whether the
principal amount of such Indexed Note that would be payable upon redemption or
repayment prior to Stated Maturity will be the Face Amount of such Indexed Note,
the Indexed Principal Amount of such Indexed Note at the time of redemption or
repayment, or another amount described in such Indexed Note.

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

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

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

          (b)  The Company may make payment of any Defaulted Interest in any
     other lawful manner not inconsistent with the requirements of any
     securities exchange on which the Notes may be listed, and upon such notice
     as may be required by such

                                       5
<PAGE>

     exchange, if, after notice given by the Company to the Trustee of the
     proposed payment pursuant to this clause, such payment shall be deemed
     practicable by the Trustee.

          (c)  Subject to the foregoing provisions of this Section, each Note
     delivered under this Supplemental Indenture No. 6 upon transfer of or in
     exchange for or in lieu of any other Note shall carry the rights to
     interest accrued and unpaid, and to accrue, which were carried by such
     other Note.

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

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

                                 ARTICLE THREE
                                 MISCELLANEOUS.

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

     SECTION 3.02. This Supplemental Indenture No. 6 shall be construed in
connection with and as a part of the Indenture.

     SECTION 3.03. (a) If any provision of this Supplemental Indenture No. 6
limits, qualifies or conflicts with another provision of the Indenture required
to be included in indentures qualified under the Trust Indenture Act of 1939 (as
in effect on the date of this Supplemental Indenture No. 6) by any of the
provisions of Sections 310 to 317, inclusive, of the Trust Indenture Act of
1939, such required provisions shall control.

     (b)  In case any one or more of the provisions contained in this
Supplemental Indenture No. 6 or in the Notes issued hereunder should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected, impaired, prejudiced or disturbed thereby.

     SECTION 3.04. Whenever in this Supplemental Indenture No. 6 either of the
parties hereto is named or referred to, this shall be deemed to include the
successors or assigns of such party, and all the covenants and agreements in
this Supplemental Indenture No. 6 contained by or on behalf of the Company or by
or on behalf of the Trustee shall bind and inure to the benefit of the
respective successors and assigns of such parties, whether so expressed or not.
Nothing in this Supplemental Indenture No. 6 or the Notes, expressed or implied,
shall give to any Person, other than the parties hereto, their successors
hereunder

                                       6
<PAGE>

and the Holders of the Notes, any benefit or any legal or equitable right,
remedy or claim under this Supplemental Indenture No. 6.

     SECTION 3.05.  (a) This Supplemental Indenture No. 6 may be executed in any
number of counterparts, each of which so executed shall be deemed an original,
but all such counterparts shall together constitute but one and the same
instrument.

     (b)  The descriptive headings of the several Articles of this Supplemental
Indenture No. 6 were formulated, used and inserted herein for convenience only
and shall not be deemed to affect the meaning or construction of any of the
provisions hereof.

                                       7
<PAGE>

     IN WITNESS WHEREOF, McDONALD'S CORPORATION has caused this Supplemental
Indenture No. 6 to be signed, acknowledged and delivered by its President,
Executive Vice President and Chief Financial Officer or Senior Vice President
and Treasurer and its corporate seal to be affixed hereunto and the same to be
attested by its Secretary or Assistant Secretary, and FIRST UNION NATIONAL BANK,
as Trustee, has caused this Supplemental Indenture No. 6 to be signed,
acknowledged and delivered by one of its Vice Presidents, and its seal to be
affixed hereunto and the same to be attested by one of its Authorized Officers,
all as of the day and year first written above.



                                        McDONALD'S CORPORATION

[CORPORATE SEAL]
                                        By: ___________________________________
                                            Michael D. Richard
                                            Senior Vice President and Treasurer


Attest:

_____________________________
Secretary


                                        FIRST UNION NATIONAL BANK,
                                        as Trustee

[CORPORATE SEAL]
                                        By: ____________________________________
                                            Vice President



Attest:

_____________________________
Authorized Officer

                                       8
<PAGE>

STATE OF ILLINOIS   )
                    ) SS:
COUNTY OF DuPAGE    )



     On the ______ day of ________________________, in the year two thousand
one, before me appeared Michael D. Richard to me personally known, who, being by
me duly sworn, did say that he resides in Chicago, Illinois, that he is a Senior
Vice President and Treasurer of McDONALD'S CORPORATION, one of the corporations
described in and which executed the above instrument; that he knows the seal of
said corporation, that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.



_____________________________
Notary Public

                                       9
<PAGE>

STATE OF PENNSYLVANIA    )
                         ) SS:
COUNTY OF                )



     On the ______ day of __________________________, in the year two thousand
one, before me appeared ____________________ to be personally known, who, being
by me duly sworn, did say that he resides at
___________________________________________, that he is a Vice President of
FIRST UNION NATIONAL BANK, one of the corporations described in and which
executed the above instrument; that he knows the seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation; and that he
signed his name thereto by like authority.



__________________________________
Notary Public

                                       10
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.(D)
<SEQUENCE>5
<FILENAME>dex4d.txt
<DESCRIPTION>FORM OF SERIES G FIXED RATE REGISTERED NOTE
<TEXT>

<PAGE>

SERIES G FIXED RATE NOTE                                            EXHIBIT 4(d)

REGISTERED                                                      PRINCIPAL AMOUNT

No.                         McDONALD'S CORPORATION
                          MEDIUM-TERM NOTE, SERIES G
                              (FIXED RATE)                      CUSIP

               Due From One Year To 60 Years From Date Of Issue


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

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

Issue Price:  %                                             Original Issue Date:

Interest Rate:  %                                           Stated Maturity:

Specified Currency:
          (Applicable only if other than U.S. dollars)

          Option to Receive Payments in Specified Currency:   [_] Yes    [_] No
               (Applicable only if Specified Currency is
               other than U.S. dollars)

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

Method of Payment of Principal:
               (Applicable only if other than immediately available funds)

Interest Payment Dates:
               (Applicable only if other than February 15 and August 15 of each
               year)

Regular Record Dates:
               (Applicable only if other than February 1 and August 1 of each
               year)

Optional Redemption:

          Optional Redemption Dates:
          Redemption Prices:

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

          [_] Other:

Sinking Fund: Not Applicable

              Sinking Fund Dates:

              Sinking Fund Amounts:

Amortizing Note:  [_] Yes    [_] No

Amortizing Schedule:


Optional Repayment:

              Optional Repayment Dates:

              Optional Repayment Prices:

Original Issue Discount Note:

              Total Amount of OID:

              Yield to Stated Maturity:

              Initial Accrual Period OID:
<PAGE>

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

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

                                      F-2
<PAGE>

          If this Note is a Certificated Note, payments of interest in U.S.
dollars (other than interest payable at Maturity) will be made by check mailed
to the address of the Person entitled thereto as such address shall appear on
the Debt Security Register on the applicable Regular Record Date, provided that,
                                                                  --------
if the Holder hereof is the Holder of U.S.$10,000,000 (or the equivalent thereof
in a Specified Currency other than U.S. dollars determined as provided on the
reverse hereof) or more in aggregate principal amount of Notes of like tenor and
term, such U.S. dollar interest payments will be made by wire transfer of
immediately available funds, but only if appropriate wire transfer instructions
have been received in writing by the Paying Agent not less than 15 calendar days
prior to the applicable Interest Payment Date.  Simultaneously with any election
by the Holder hereof to receive payments in respect hereof in the Specified
Currency (if other than U.S. dollars), such Holder shall provide appropriate
wire transfer instructions to the Paying Agent and all such payments will be
made by wire transfer of immediately available funds to an account maintained by
the payee with a bank located outside the United States.  Unless otherwise
specified on the face hereof, the principal hereof and any premium and interest
hereon payable at Maturity will be paid in immediately available funds upon
surrender of this Note at the Place of Payment.  If this Note is a Global
Security, beneficial owners of interest herein will be paid in accordance with
DTC's and its participants' procedures in effect from time to time.

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

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

                                      F-3
<PAGE>

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

Dated:  ________________

                                             McDONALD'S CORPORATION


                                             By:____________________________
                                                Senior Vice President and
                                                Treasurer

ATTEST:


By:__________________________
   Secretary


                    TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Dated:  ________________


                                             FIRST UNION NATIONAL BANK,
                                                  as Trustee

                                             BANK ONE TRUST COMPANY, N.A.,
                                                  as Authenticating Agent

                                             By:____________________________
                                                  Authorized Signatory

                                      F-4
<PAGE>

                            McDONALD'S CORPORATION
                          MEDIUM-TERM NOTE, SERIES G
                                 (FIXED RATE)


          This Note is one of a series of duly authorized issue of debentures,
notes or other evidences of indebtedness of the Company (the "Debt Securities")
of a series hereinafter specified, all issued or to be issued in one or more
series under a Senior Debt Securities Indenture, dated as of October 19, 1996
(herein called the "Indenture"), between the Company and First Union National
Bank, as trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture) to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Debt Securities and of the terms upon which the
Debt Securities are, and are to be, authenticated and delivered.  The Debt
Securities may be issued in one or more series, which different series may be
issued in various currencies, may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if any) at different
rates, may be subject to different redemption provisions (if any), may be
subject to different sinking, purchase or analogous funds (if any), may be
subject to different covenants and Events of Default and may otherwise vary as
in the Indenture provided.  This Debt Security is one of the series designated
on the face hereof, limited in aggregate initial public offering price or
purchase price of up to U.S.$1,500,000,000 or the equivalent thereof in one or
more foreign or composite currencies, including the Euro, subject to reduction
as a result of the sale of other Debt Securities.  The U.S. dollar equivalent of
the public offering price or purchase price of Notes denominated in a foreign or
composite currency will be determined by an agent designated by the Company,
which initially shall be Bank One Trust Company, N.A. (the "Paying Agent"), on
the basis of the noon buying rate in The City of New York for cable transfers in
foreign currencies as certified for customs purposes by the Federal Reserve Bank
of New York (the "Market Exchange Rate") for such currencies on the applicable
trade dates.

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

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

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

                                      R-1
<PAGE>

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

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

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

          Except as set forth below, if any payment in respect hereof is
required to be made in a Specified Currency other than U.S. dollars and such
currency is unavailable to the Company due to the imposition of exchange
controls or other circumstances beyond the Company's control or is no longer
used by the government of the country issuing such currency (unless otherwise
replaced by the Euro) or for the settlement of transactions by public
institutions of or within the international banking community, then such payment
shall be made in U.S. dollars until such currency is again available to the
Company or so used.  The amount so payable in such foreign currency shall be
converted into U.S. dollars on the basis of the

                                      R-2
<PAGE>

most recently available Market Exchange Rate for such currency or as otherwise
indicated on the face hereof. Any payment made under such circumstances in U.S.
dollars will not constitute an Event of Default under the Indenture.

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

          (i)  in such manner and subject to such procedures as the Issuer shall
     determine to be consistent with existing or anticipated market practice for
     the redenomination into Euros of debt obligations issued in the Euromarkets
     (whether denominated in such Specified Currency or otherwise) which are
     held in international clearing systems ("euromarket debt obligations"); or

          (ii) if no such determination as set out in clause (i) above is made,
     the Issuer shall convert the nominal Specified Currency amount of each Note
     of such series into Euros by using the Fixed Conversion Rate (as defined
     below) and rounding the resultant figure to the nearest cent (with 0.005 of
     a Euro being rounded upwards) (the "Redenominated Amount") and the Notes of
     the same series denominated in such Specified Currency shall be replaced
     either (1) by the Notes of the same series equal in value to the
     Redenominated Amount, denominated in Euros, each with a denomination of one
     cent; or (2) if the international clearing systems in which the Notes are
     then cleared and settled do not then accept for clearance and settlement
     redenominated euromarket debt obligations, each with a denomination of one
     cent, by Notes of the same series equal in value to the Redenominated
     Amount, denominated in Euros, each with a denomination of one Euro. Any
     balance remaining from a redenomination in accordance with clause (2) above
     shall be paid by way of cash adjustment. Such cash adjustment shall be
     payable in Euros on the Redenomination Date to, or to the order of, the
     Holders of the Notes of such series in a manner substantially similar to
     that provided herein for the payment of interest on the Notes.

          Despite the above procedures, the Issuer may, solely at its option and
without the consent of the Holders of the Notes or a series or the need to amend
the Indenture, upon the giving of not less than 30 days' irrevocable notice
thereof in accordance with the terms hereof (which notice shall set forth the
manner in which such further redenomination shall be

                                      R-3
<PAGE>

effected), elect that, with effect from the Redenomination Date for such series
or such later Interest Payment Date as it may specify (the "Specified Date"),
the denominations of the Notes of such series shall be one cent (if applicable),
Euro 1, Euro 10, Euro 100, Euro 1,000, Euro 10,000, Euro 100,000 and Euro
1,000,000; provided, however, that in no event shall the minimum denominations
of such Notes after the Redenomination Date with respect thereto be lower than
the equivalent of any minimum denominations of such Notes required by law,
regulation or market practice. If the Issuer so elects, the then-existing Euro-
denominated Notes of a series ("Original Euro Notes") shall be exchangeable for
Notes of such new denomination ("New Euro Notes") having the same aggregate
nominal amount as the Original Euro Notes so exchanged, in accordance with
procedures to be set forth in the relevant notice of redenomination.

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

          If the Notes of a series are to be consolidated with Other Securities
(as defined below) by reference to the same Interest Payment Date as a
redenomination of the Notes of such series into Euros or to an Interest Payment
Date following the Interest Payment Date by reference to which the Notes of such
series are redenominated in Euros, the provisions below concerning consolidation
of Notes shall apply with effect from the Consolidation Date (as defined below)
for such consolidation.

          Unless and until the Notes of a series redenominated in accordance
with the provisions hereof are to be consolidated with Other Securities in
accordance with the provisions below concerning consolidation of Notes, the
interest accrual basis and the provisions of the Notes of such series relating
to the source and determination of such interest accrual basis that shall apply
to such Notes from, and including, the Interest Payment Date falling on or
immediately prior to the Redenomination Date shall be (i) the interest accrual
basis and such provisions which applied to such Notes prior to such
redenomination, unless such interest accrual basis is and/or such provisions are
inconsistent with the then-existing or anticipated market practice for Euro-
denominated debt obligations issued in the euromarkets with fixed rate or
floating rate interest payments (as the case may be) of frequencies identical or
substantially similar to the frequency of interest payments under such Notes,
based, in the case of floating interest rate payments, on the reference rate
applicable to such Notes prior to the Redenomination Date and held in
international clearing systems as determined by the Issuer or (ii) if the
interest accrual basis which applied to such Notes prior to the

                                      R-4
<PAGE>

Redenomination Date is and/or such provisions are so inconsistent, the interest
accrual basis and/or the provisions of the Notes of such series relating to the
source and determination of such interest accrual basis, as the case may be,
which is consistent with the then-existing or anticipated market practice for
Euro-denominated debt obligations issued in the euromarkets with fixed rate or
floating rate interest payments (as the case may be) of frequencies identical or
substantially similar to the frequency of interest payments under such Notes,
based, in the case of floating interest rate payments, on the reference rate
applicable to such Notes (adjusted as aforesaid) and held in international
clearing systems as determined by the Issuer.

          The Issuer may, with the consent of the Trustee, and without the need
to obtain the consent of the Holder of any Note, make any changes or additions
to the terms of the Notes of a series which (i) the Issuer or the Trustee
believes are necessary or appropriate to facilitate the implementation of the
practical aspects of this section as they relate to such Notes in the context of
the introduction of the Euro or (ii) correct any clear error or any ambiguity or
correct or supplement any defective provisions described herein and which
changes or additions the Issuer and the Trustee believe are not materially
prejudicial to the interests of the Holders of the Notes of such series.  Any
such change or addition shall be binding on the Issuer, the Holders of the Notes
of such series, the Trustee, the Paying Agents and any other agent of the
Issuer.  The Issuer shall promptly give Holders notice of any such change or
addition.

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

          "EMU Date" means the day on which the third stage of EMU has started
or events have occurred which have substantially the same effects and which
result in substantially the same consequences as the effects and consequences of
the start of third stage of EMU as contemplated by the Maastricht Treaty in
effect as of the date of the Indenture;

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

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

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

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

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

                                      R-5
<PAGE>

          If (i) the principal of and any interest and premium (if any) on the
Notes of a series is payable in any Specified Currency other than U.S. dollars
and (ii) after the EMU Date, the Currency Country has become a Participating
Member State, then, subject to the provisions below, the Issuer may, without the
consent of the Holders of such Notes or the need to execute a supplemental
indenture to the Indenture, on any Interest Payment Date after the EMU Date (as
defined above) has occurred (or if that day is not a business day in any
location(s) which is or are determined by the Issuer to be necessary or
appropriate for the consolidation of the Notes of such series, the next
following day which is a business day in such location(s)) (each a
"Consolidation Date"), and on the giving of not less than 30 days' notice prior
to the Interest Payment Date falling on or immediately prior to the relevant
Consolidation Date in accordance with the terms hereof (which notice shall
detail the manner in which consolidation shall be effected), consolidate the
Notes of such series with one or more series of Other Securities, provided,
however, (i) that such consolidation may only be carried out if the Notes of
such series and the Other Securities to be consolidated have been redenominated
in Euros on or before the Interest Payment Date falling on or immediately prior
to the relevant Consolidation Date (if not already so denominated), and (ii)
that no Event of Default under the Notes of such series or other event which,
with the giving of notice or the passage of time or both, would be an Event of
Default under the Notes of such series, or any similar event under the terms of
such Other Securities, has occurred and is continuing.

          "Other Securities" means, at any time, any one or more series of other
Notes or other notes or bonds of the Issuer which (i) are issued pursuant to the
Indenture or an indenture supplemental thereto and have the same or
substantially the same terms and conditions (as then in effect and which have
not lapsed), and the benefit of the same rights, as the Notes of a series (other
than in relation to the currency of original denomination and/or the
denomination and/or the terms and conditions of Notes of such series relating to
business days or interest accrual bases and/or the stock exchange(s) (if any) on
which such other Notes or other notes or bonds are listed and/or the clearing
systems through which such other Notes or other notes or bonds are cleared and
settled and/or redenomination into Euros and/or notices) and (ii) have been
designated by the Issuer as falling within clause (i) above and remain so
designated.

          The Issuer may exercise its right referred to above if it determines
that the Notes of a series and Other Securities which it proposes to consolidate
(collectively, the "Consolidating Securities") will, with effect from the date
of their consolidation, (i) be cleared and settled on an interchangeable basis
with the same securities identification numbers through the main clearing
systems through which the Notes of such series and the relevant Other Securities
were cleared and settled immediately prior to consolidation unless on the date
of such proposed consolidation it will be impossible to so clear and settle the
Consolidating Securities in one or more of such main clearing systems, in which
case the Consolidating Securities need not so clear and settle through such
unavailable clearing system(s) unless it would be materially prejudicial to the
Holders of the Notes of such series who hold their Notes through such clearing
system(s) and (ii) if either the Notes of such series or the relevant Other
Securities were listed on any European stock exchange on which debt obligations
issued in the

                                      R-6
<PAGE>

Euromarkets are customarily listed immediately prior to the consolidation
contemplated hereby, be listed on at least one such exchange.

          Notwithstanding the preceding paragraph, the definitions of Business
Day and Market Day that shall apply to a Note for payments on or in respect of
such Note following consolidation thereof shall be (A) business day and market
day definitions for fixed or floating rate (as applicable) Euro-denominated debt
obligations issued in the Euromarkets and held in international clearing systems
which are consistent with existing or anticipated market practice as determined
by the Issuer, or (B) the component business days included in the Business Day
and Market Day which applied to such Note and the business day and market day
definitions which applied to the relevant Other Securities for payments thereon
or in respect thereof prior to consolidation or (C) if the Issuer would be
unable to make payments on such Note on the date that payment is expressed to be
due if (B) above were to apply, such other business day and market day
definitions as are determined by the Issuer.

          The interest accrual basis and the provisions of the Notes of a series
relating to the source and determination of such interest accrual basis that
shall apply to the Notes of such series consolidated in accordance with the
provisions hereof from, and including, the Interest Payment Date falling on or
immediately prior to the Consolidation Date shall remain the same if the Other
Securities which have been consolidated with such Notes had the same interest
accrual basis and the same such provisions prior to such consolidation as
applies to such Notes.  If such Other Securities do not have such same interest
accrual basis and/or the same such provisions, then notwithstanding the
provisions above concerning redenomination of Notes, the interest accrual basis
and/or the provisions of the Notes of such series relating to the source and
determination of such interest accrual basis, as the case may be, that shall
apply to such Notes from, and including, the Interest Payment Date falling on or
immediately prior to such Consolidation Date shall be (i) the interest accrual
basis and/or such provisions which applied to such Notes prior to their
consolidation, unless such interest accrual basis is and/or such provisions are
inconsistent with the then-existing or anticipated market practice for Euro-
denominated debt obligations issued in the Euromarkets with fixed rate or
floating rate interest payments (as the case may be) of frequencies identical or
substantially similar to the frequency of interest payments thereunder and held
in international clearing systems, as determined by the Issuer, or (ii) if the
interest accrual basis which applied to such Notes prior to their consolidation
is and/or such provisions are so inconsistent, the interest accrual basis and/or
the provisions of the Notes of such series relating to the source and
determination of such interest accrual basis, as the case may be, which is
consistent with the then-existing or anticipated market practice for Euro-
denominated debt obligations issued in the Euromarkets with fixed rate or
floating rate interest payments (as the case may be) of frequencies identical or
substantially similar to the frequency of interest payments hereunder and held
in international clearing systems, as determined by the Issuer.

          On a consolidation pursuant to the provisions hereof, the Issuer may
without the need to obtain the consent of Holders of the affected Notes, alter
the nominal amounts in which such Notes are denominated as a result of any
previous redenomination of such Notes.

                                      R-7
<PAGE>

          Upon any consolidation of the Notes of a series represented by a
Global Note with any series of Other Securities so represented, the Issuer may
change the depositary(ies) which hold(s) the Notes of such series and/or the
relevant Other Securities either physically or on behalf of the clearing
system(s) through which the Notes of such series and/or the relevant Other
Securities are held and/or issue a replacement Global Note or Global Notes
representing such Notes.  Notes of series represented by Certificated Notes must
be exchanged for Notes represented by a Global Note prior to any consolidation
hereunder.  If such exchange is not possible pursuant to the terms of such
Notes, no such consolidation of such Notes with Other Securities represented by
a Global Note may take place.

          The Issuer undertakes to the Holders of the Notes of a series
consolidated in accordance with the provisions hereof that, following a
consolidation of the Notes of such series with a series of Other Securities, it
shall, in dealing with the Holders of the Notes of such series, have regard to
the interests of such Holders and the Holders of the relevant Other Securities
alike.

          The Issuer may, with the consent of the Trustee, and without the need
to obtain the consent of the Holders of any Note, make any changes or additions
to the terms of the Notes of a series which (i) the Issuer or the Trustee
believes are necessary or appropriate to facilitate the implementation of the
practical aspects of this section as they relate to such Notes in the context of
the relevant consolidation or (ii) correct any manifest error or any ambiguity
or correct or supplement any defective provisions described herein, and which
changes or additions the Issuer and the Trustee believe are not materially
prejudicial to the interests of the Holders of the Notes of such series.  Any
such change or addition shall be binding on the Issuer, the Holders of the Notes
of such series, the Trustee, the Paying Agents and any other agent of the
Issuer.  Any change or addition shall be considered to be made by operation of
the terms of the relevant Notes.  The Issuer shall promptly give notice of any
such change or addition.

          Except as provided in the Note or in the Pricing Supplement with
respect to the redenomination of the Notes of a series into Euros or the
consolidation of a series of Notes with other series of Notes upon or subsequent
to such conversion, the occurrence or non-occurrence of an EMU Event (as defined
below) or the entry into force of any law, regulation, directive or order
requiring redenomination or consolidation to be undertaken on terms different
than those described herein, will not have the effect of altering any term of,
or discharging or excusing performance under, the Indenture or Notes nor give
the Issuer, the Trustee or the Holder of such Notes, the right unilaterally to
alter or terminate the Indenture or Notes or give rise to any Event of Default
or otherwise be the basis for any acceleration, early redemption, rescission,
notice, repudiation, adjustment or renegotiation of the terms of the Indenture
or Notes.  The occurrence or non-occurrence of an EMU Event will be considered
to occur automatically pursuant to the terms of the Notes. For purposes hereof,
"EMU Event" means any event associated with EMU in the European Community,
including, without limitation, each (and any combination) of (i) the fixing of
exchange rates between the currency of a Participating Member State and the Euro
or between the currencies of Participating Members States; (ii) the introduction
of the Euro as lawful currency in a

                                      R-8
<PAGE>

Participating Member State; (iii) the withdrawal from legal tender of any
currency that, before the introduction of the Euro, was lawful currency in any
of the Participating Member States; or (iv) the disappearance or replacement of
a relevant rate option or other price source for the national currency of any
participating Member State, or the failure of the agreed sponsor (or a successor
sponsor) to publish or display a relevant rate, index, price, page or screen.

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

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

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

          Notwithstanding anything herein to the contrary, if this Note is an
Original Issue Discount Note, the amount payable in the event of redemption or
repayment prior to the

                                      R-9
<PAGE>

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

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

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

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

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

                                     R-10
<PAGE>

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

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

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

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

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

                                     R-11
<PAGE>

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

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

                                     R-12
<PAGE>

                                 ABBREVIATIONS


The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
<TABLE>
<S>                                           <C>                                 <C>
TEN COM -as tenants in common                 UNIF GIFT MIN ACT-  _________                              Custodian
TEN ENT -as tenants by the entireties                                             ________  (Cust) _______  (Minor)
JT ENT  -as joint tenants with right of                                           Under Uniform Gifts to Minors Act
         survivorship and not as tenants
         in common                                                                _________________________________
                                                                                                            (State)
</TABLE>

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

     ______________________________________________________________________

                           OPTION TO ELECT REPAYMENT

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

____________________________________________________________


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

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

     For this Option to Elect Repayment to be effective, this Note with the
Option to Elect Repayment duly completed must be received by the Company within
the relevant time period set forth above at its office or agency in the Borough
of Manhattan, the City and State of New York, located initially at the office of
the Registrar at Bank One Trust Company, N.A./First Chicago Trust Company of New
York, 14 Wall Street - 8th Floor, Window 2, New York, New York 10005, Attention:
Corporate Trust Administration.


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

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

 Please Insert Social Security or Other
   Identifying Number of Assignee

____________________________________________________________

____________________________________________________________
Please Print or Typewrite Name and Address of Assignee

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

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


Dated:_____________________       ____________________________
                                  Signature


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

                                     R-13
<PAGE>

Document #: 134551v1

                                     R-14
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.(E)
<SEQUENCE>6
<FILENAME>dex4e.txt
<DESCRIPTION>FORM OF SERIES G FLOATING RATE REGISTERED NOTE
<TEXT>

<PAGE>

SERIES G FLOATING RATE NOTE                                         Exhibit 4(e)

REGISTERED                                                      PRINCIPAL AMOUNT

NO.                          McDONALD'S CORPORATION
                           MEDIUM-TERM NOTE, SERIES G
                                (FLOATING RATE)                            CUSIP

               Due from One Year to 60 Years from Date of Issue

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


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

<TABLE>
<S>                      <C>                      <C>
Issue Price:             %                        Original Issue Date:

Initial Interest Rate:   %                        Stated Maturity:

Specified Currency:
     (Applicable only if other than U.S. dollars)

     Option to Receive Payments in Specified Currency:     [_]   Yes    [_]   No
          (Applicable only if Specified Currency is other than U.S. dollars and if this Note is not a Book-Entry Note)

Method of Payment of Principal:
     (Applicable only if other than immediately available funds)

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

Base Rate:  [_] CD Rate   [_] CMT Rate  [_] Commercial Paper   [_] Federal Funds Rate  [_] LIBOR  [_] Treasury Rate  [_] Prime Rate
            [_] Other (see attached)

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

If Base Rate is LIBOR, specify:        LIBOR Reuters:                Designated LIBOR Page:                LIBOR Telerate:

Interest Reset Period:                 Index Currency:                                         Index Maturity:

Interest Reset Dates:
     (Applicable only if other than as described on the reverse hereof)

Interest Payment Dates:

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

Spread Multiplier:                                                                             Spread (+/-):

Maximum Interest Rate:                                                                         Minimum Interest Rate:

Optional Redemption:

     Optional Redemption Dates:

     Redemption Prices:

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

        [_]    Other:

Sinking Fund:                                                                                  Amortizing Note:
     Sinking Fund Dates:                                                                            Amortization Schedule:
     Sinking Fund Amounts:

Optional Repayment:                                                                            Original Issue Discount Note:
     Optional Repayment Dates:                                                                      Total Amount of OID:
     Optional Repayment Prices:                                                                     Yield to Stated Maturity:
                                                                                                    Initial Accrual Period OID:
</TABLE>
<PAGE>

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

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

                                      F-2
<PAGE>

circumstances beyond the Company's control, then the Holder hereof may not so
elect to receive payments in the Specified Currency, and any such outstanding
election shall be automatically suspended, and payments shall be in U.S.
dollars, until the Company determines that the Specified Currency is again
available to the Company for making such payments.

     If this Note is a Certificated Note, payments of interest in U.S. dollars
(other than interest payable at Maturity) will be made by check mailed to the
address of the Person entitled thereto as such address shall appear on the Debt
Security Register on the applicable Regular Record Date, provided that, if the
                                                         --------
Holder hereof is the Holder of U.S.$10,000,000 (or the equivalent thereof in a
Specified Currency other than U.S. dollars determined as provided on the reverse
hereof) or more in aggregate principal amount of Notes of like tenor and term,
such U.S. dollar interest payments will be made by wire transfer of immediately
available funds, but only if appropriate wire transfer instructions have been
received in writing by the Paying Agent not less than 15 calendar days prior to
the applicable Interest Payment Date.  Simultaneously with any election by the
Holder hereof to receive payments in respect hereof in the Specified Currency
(if other than U.S. dollars), such Holder shall provide appropriate wire
transfer instructions to the Paying Agent and all such payments will be made by
wire transfer of immediately available funds to an account maintained by the
payee with a bank located outside the United States.  Unless otherwise specified
on the face hereof, the principal hereof and any premium and interest hereon
payable at Maturity will be paid in immediately available funds upon surrender
of this Note at the Place of Payment.  If this Note is a Global Security,
beneficial owners of interest herein will be paid in accordance with DTC's and
its participants' procedures in effect from time to time.

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

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

                                      F-3
<PAGE>

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

Dated:___________

                                        McDONALD'S CORPORATION


                                        By:___________________________________
                                           Senior Vice President and Treasurer

ATTEST:

By:_____________________________
   Secretary


                    TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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


Dated:___________

                                        FIRST UNION NATIONAL BANK,
                                             as Trustee

                                        BANK ONE TRUST COMPANY, N.A.,
                                             as Authenticating Agent

                                        By:________________________________
                                             Authorized Signatory

                                      F-4
<PAGE>

                            McDONALD'S CORPORATION
                          MEDIUM-TERM NOTE, SERIES G
                                (FLOATING RATE)

     This Note is one of a series of duly authorized issue of debentures, notes
or other evidences of indebtedness of the Company (the "Debt Securities") of a
series hereinafter specified, all issued or to be issued in one or more series
under a Senior Debt Securities Indenture, dated as of October 19, 1996 (herein
called the "Indenture"), between the Company and First Union National Bank, as
trustee (the "Trustee", which term includes any successor Trustee under the
Indenture) to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Debt Securities and of the terms upon which the Debt Securities are, and are
to be, authenticated and delivered.  The Debt Securities may be issued in one or
more series, which different series may be issued in various currencies, may be
issued in various aggregate principal amounts, may mature at different times,
may bear interest (if any) at different rates, may be subject to different
redemption provisions (if any), may be subject to different sinking, purchase or
analogous funds (if any), may be subject to different covenants and Events of
Default and may otherwise vary as in the Indenture provided.  This Debt Security
is one of the series designated on the face hereof, limited in aggregate initial
public offering price or purchase price of up to U.S.$1,500,000,000 or the
equivalent thereof in one or more foreign or composite currencies, including the
Euro, subject to reduction as a result of the sale of other Debt Securities.
The U.S. dollar equivalent of the public offering price or purchase price of
Notes denominated in a foreign or composite currency will be determined by an
agent designated by the Company, which initially shall be Bank One Trust
Company, N.A. (the "Paying Agent"), on the basis of the noon buying rate in New
York City for cable transfers in foreign currencies as certified for customs
purposes by the Federal Reserve Bank of New York (the "Market Exchange Rate")
for such currencies on the applicable trade dates.

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

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

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

     If the Specified Currency is other than U.S. dollars, the amount of any
U.S. dollar payment to be made in respect hereof will be determined by the
Paying Agent based on the highest firm bid quotation expressed in U.S. dollars
received by the Paying Agent as of 11:00

                                      R-1
<PAGE>

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

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

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

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

                                      R-2
<PAGE>

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

          (i)  in such manner and subject to such procedures as the Issuer shall
     determine to be consistent with existing or anticipated market practice for
     the redenomination into Euros of debt obligations issued in the Euromarkets
     (whether denominated in such Specified Currency or otherwise) which are
     held in international clearing systems ("euromarket debt obligations"); or

          (ii) if no such determination as set out in clause (i) above is made,
     the Issuer shall convert the nominal Specified Currency amount of each Note
     of such series into Euros by using the Fixed Conversion Rate (as defined
     below) and rounding the resultant figure to the nearest cent (with 0.005 of
     a Euro being rounded upwards) (the "Redenominated Amount") and the Notes of
     the same series denominated in such Specified Currency shall be replaced
     either (1) by the Notes of the same series equal in value to the
     Redenominated Amount, denominated in Euros, each with a denomination of one
     cent; or (2) if the international clearing systems in which the Notes are
     then cleared and settled do not then accept for clearance and settlement
     redenominated euromarket debt obligations, each with a denomination of one
     cent, by Notes of the same series equal in value to the Redenominated
     Amount, denominated in Euros, each with a denomination of one Euro. Any
     balance remaining from a redenomination in accordance with clause (2) above
     shall be paid by way of cash adjustment. Such cash adjustment shall be
     payable in Euros on the Redenomination Date to, or to the order of, the
     Holders of the Notes of such series in a manner substantially similar to
     that provided herein for the payment of interest on the Notes.

     Despite the above procedures, the Issuer may, solely at its option and
without the consent of the Holders of the Notes or a series or the need to amend
the Indenture, upon the giving of not less than 30 days' irrevocable notice
thereof in accordance with the terms hereof (which notice shall set forth the
manner in which such further redenomination shall be effected), elect that, with
effect from the Redenomination Date for such series or such later Interest
Payment Date as it may specify (the "Specified Date"), the denominations of the
Notes of such series shall be one cent (if applicable), Euro 1, Euro 10, Euro
100, Euro 1,000, Euro 10,000, Euro 100,000 and Euro 1,000,000; provided,
however, that in no event shall the

                                      R-3
<PAGE>

minimum denominations of such Notes after the Redenomination Date with respect
thereto be lower than the equivalent of any minimum denominations of such Notes
required by law, regulation or market practice. If the Issuer so elects, the
then-existing Euro-denominated Notes of a series ("Original Euro Notes") shall
be exchangeable for Notes of such new denomination ("New Euro Notes") having the
same aggregate nominal amount as the Original Euro Notes so exchanged, in
accordance with procedures to be set forth in the relevant notice of
redenomination.

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

     If the Notes of a series are to be consolidated with Other Securities (as
defined below) by reference to the same Interest Payment Date as a
redenomination of the Notes of such series into Euros or to an Interest Payment
Date following the Interest Payment Date by reference to which the Notes of such
series are redenominated in Euros, the provisions below concerning consolidation
of Notes shall apply with effect from the Consolidation Date (as defined below)
for such consolidation.

     If a Note redenominated in accordance with this section is a Floating Rate
Security, the rate of interest that shall apply to such Note from, and
including, the Interest Payment Date falling on or immediately prior to the
Redenomination Date shall be (i) the interest rate which applied to such Note
prior to the redenomination, with "Euros" substituted for the Specified Currency
specified for such Note, unless such interest rate is inconsistent with the
then-existing or anticipated market practice for Euro-denominated Euromarket
debt obligations with floating rate interest payments of frequencies identical
or substantially similar to the frequency of interest payments hereunder and
held in international clearing systems, as determined by the Issuer, or (ii) if
such interest rate is so inconsistent, the interest rate which is consistent
with the then-existing or anticipated market practice for Euro-denominated
Euromarket debt obligations and held in international clearing systems, in each
case with such interest rate equal to the interest rate applicable hereto
(adjusted as aforesaid) plus or minus any spread indicated in the Pricing
Supplement for such Notes, as determined by the Issuer.

     Unless and until the Notes of a series redenominated in accordance with the
provisions hereof are to be consolidated with Other Securities in accordance
with the provisions below concerning consolidation of Notes, the interest
accrual basis and the provisions of the Notes of such series relating to the
source and determination of such interest accrual basis that shall apply to such
Notes from, and including, the Interest Payment Date falling on or immediately

                                      R-4
<PAGE>

prior to the Redenomination Date shall be (i) the interest accrual basis and
such provisions which applied to such Notes prior to such redenomination, unless
such interest accrual basis is and/or such provisions are inconsistent with the
then-existing or anticipated market practice for Euro-denominated debt
obligations issued in the euromarkets with fixed rate or floating rate interest
payments (as the case may be) of frequencies identical or substantially similar
to the frequency of interest payments under such Notes, based, in the case of
floating interest rate payments, on the reference rate applicable to such Notes
prior to the Redenomination Date and held in international clearing systems as
determined by the Issuer or (ii) if the interest accrual basis which applied to
such Notes prior to the Redenomination Date is and/or such provisions are so
inconsistent, the interest accrual basis and/or the provisions of the Notes of
such series relating to the source and determination of such interest accrual
basis, as the case may be, which is consistent with the then-existing or
anticipated market practice for Euro-denominated debt obligations issued in the
euromarkets with fixed rate or floating rate interest payments (as the case may
be) of frequencies identical or substantially similar to the frequency of
interest payments under such Notes, based, in the case of floating interest rate
payments, on the reference rate applicable to such Notes (adjusted as aforesaid)
and held in international clearing systems as determined by the Issuer.

     The Issuer may, with the consent of the Trustee, and without the need to
obtain the consent of the Holder of any Note, make any changes or additions to
the terms of the Notes of a series which (i) the Issuer or the Trustee believes
are necessary or appropriate to facilitate the implementation of the practical
aspects of this section as they relate to such Notes in the context of the
introduction of the Euro or (ii) correct any clear error or any ambiguity or
correct or supplement any defective provisions described herein and which
changes or additions the Issuer and the Trustee believe are not materially
prejudicial to the interests of the Holders of the Notes of such series.  Any
such change or addition shall be binding on the Issuer, the Holders of the Notes
of such series, the Trustee, the Paying Agents and any other agent of the
Issuer.  The Issuer shall promptly give notice of any such change or addition.

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

     "EMU Date" means the day on which the third stage of EMU has started or
events have occurred which have substantially the same effects and which result
in substantially the same consequences as the effects and consequences of the
start of third stage of EMU as contemplated by the Maastricht Treaty in effect
as of the date of the Indenture;

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

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

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

                                      R-5
<PAGE>

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

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

     If (i) the principal of and any interest and premium (if any) on the Notes
of a series is payable in any Specified Currency other than U.S. dollars and
(ii) after the EMU Date, the Currency Country has become a Participating Member
State, then, subject to the provisions below, the Issuer may, without the
consent of the Holders of such Notes or the need to amend the Indenture, on any
Interest Payment Date after the EMU Date (as defined above) has occurred (or if
that day is not a business day in any location(s) which is or are determined by
the Issuer to be necessary or appropriate for the consolidation of the Notes of
such series, the next following day which is a business day in such location(s))
(each a "Consolidation Date"), and on the giving of not less than 30 days'
notice prior to the Interest Payment Date falling on or immediately prior to the
relevant Consolidation Date in accordance with the terms hereof (which notice
shall detail the manner in which consolidation shall be effected), consolidate
the Notes of such series with one or more series of Other Securities, provided,
however, (i) that such consolidation may only be carried out if the Notes of
such series and the Other Securities to be consolidated have been redenominated
in Euros on or before the Interest Payment Date falling on or immediately prior
to the relevant Consolidation Date (if not already so denominated), and (ii)
that no Event of Default under the Notes of such series or other event which,
with the giving of notice or the passage of time or both, would be an Event of
Default under the Notes of such series, or any similar event under the terms of
such Other Securities, has occurred and is continuing.

     "Other Securities" means, at any time, any one or more series of other
Notes or other notes or bonds of the Issuer which (i) are issued pursuant to the
Indenture or an indenture supplemental thereto and have the same or
substantially the same terms and conditions (as then in effect and which have
not lapsed), and the benefit of the same rights, as the Notes of a series (other
than in relation to the currency of original denomination and/or the
denomination and/or the terms and conditions of Notes of such series relating to
business days or interest accrual bases and/or the stock exchange(s) (if any) on
which such other Notes or other notes or bonds are listed and/or the clearing
systems through which such other Notes or other notes or bonds are cleared and
settled and/or redenomination into Euros and/or notices) and (ii) have been
designated by the Issuer as falling within clause (i) above and remain so
designated.

     The Issuer may exercise its right referred to above if it determines that
the Notes of a series and Other Securities which it proposes to consolidate
(collectively, the "Consolidating Securities") will, with effect from the date
of their consolidation, (i) be cleared and settled on an interchangeable basis
with the same securities identification numbers through the main clearing
systems through which the Notes of such series and the relevant Other Securities
were cleared and settled immediately prior to consolidation unless on the date
of such proposed consolidation it will be impossible to so clear and settle the
Consolidating Securities in one or

                                      R-6
<PAGE>

more of such main clearing systems, in which case the Consolidating Securities
need not so clear and settle through such unavailable clearing system(s) unless
it would be materially prejudicial to the Holders of the Notes of such series
who hold their Notes through such clearing system(s) and (ii) if either the
Notes of such series or the relevant Other Securities were listed on any
European stock exchange on which debt obligations issued in the Euromarkets are
customarily listed immediately prior to the consolidation contemplated hereby,
be listed on at least one such exchange.

     Notwithstanding the preceding paragraph, the definitions of Business Day
and Market Day that shall apply to a Note for payments on or in respect of such
Note following consolidation thereof shall be (A) business day and market day
definitions for fixed or floating rate (as applicable) Euro-denominated debt
obligations issued in the Euromarkets and held in international clearing systems
which are consistent with existing or anticipated market practice as determined
by the Issuer, or (B) the component business days included in the Business Day
and Market Day which applied to such Note and the business day and market day
definitions which applied to the relevant Other Securities for payments thereon
or in respect thereof prior to consolidation or (C) if the Issuer would be
unable to make payments on such Note on the date that payment is expressed to be
due if (B) above were to apply, such other business day and market day
definitions as are determined by the Issuer.

     The interest accrual basis and the provisions of the Notes of a series
relating to the source and determination of such interest accrual basis that
shall apply to the Notes of such series consolidated in accordance with the
provisions hereof from, and including, the Interest Payment Date falling on or
immediately prior to the Consolidation Date shall remain the same if the Other
Securities which have been consolidated with such Notes had the same interest
accrual basis and the same such provisions prior to such consolidation as
applies to such Notes.  If such Other Securities do not have such same interest
accrual basis and/or the same such provisions, then notwithstanding the
provisions above concerning redenomination of Notes, the interest accrual basis
and/or the provisions of the Notes of such series relating to the source and
determination of such interest accrual basis, as the case may be, that shall
apply to such Notes from, and including, the Interest Payment Date falling on or
immediately prior to such Consolidation Date shall be (i) the interest accrual
basis and/or such provisions which applied to such Notes prior to their
consolidation, unless such interest accrual basis is and/or such provisions are
inconsistent with the then-existing or anticipated market practice for Euro-
denominated debt obligations issued in the Euromarkets with fixed rate or
floating rate interest payments (as the case may be) of frequencies identical or
substantially similar to the frequency of interest payments thereunder and held
in international clearing systems, as determined by the Issuer, or (ii) if the
interest accrual basis which applied to such Notes prior to their consolidation
is and/or such provisions are so inconsistent, the interest accrual basis and/or
the provisions of the Notes of such series relating to the source and
determination of such interest accrual basis, as the case may be, which is
consistent with the then-existing or anticipated market practice for Euro-
denominated debt obligations issued in the Euromarkets with fixed rate or
floating rate interest payments (as the case may be) of frequencies identical or
substantially similar to the frequency of interest payments hereunder and held
in international clearing systems, as determined by the Issuer.

                                      R-7
<PAGE>

     On a consolidation pursuant to the provisions hereof, the Issuer may
without the need to obtain the consent of Holders of the affected Notes, alter
the nominal amounts in which such Notes are denominated as a result of any
previous redenomination of such Notes.

     Upon any consolidation of the Notes of a series represented by a Global
Note with any series of Other Securities so represented, the Issuer may change
the depositary(ies) which hold(s) the Notes of such series and/or the relevant
Other Securities either physically or on behalf of the clearing system(s)
through which the Notes of such series and/or the relevant Other Securities are
held and/or issue a replacement Global Note or Global Notes representing such
Notes.  Notes of series represented by Certificated Notes must be exchanged for
Notes represented by a Global Note prior to any consolidation hereunder.  If
such exchange is not possible pursuant to the terms of such Notes, no such
consolidation of such Notes with Other Securities represented by a Global Note
may take place.

     The Issuer undertakes to the Holders of the Notes of a series consolidated
in accordance with the provisions hereof that, following a consolidation of the
Notes of such series with a series of Other Securities, it shall, in dealing
with the Holders of the Notes of such series, have regard to the interests of
such Holders and the Holders of the relevant Other Securities alike.

     The Issuer may, with the consent of the Trustee, and without the need to
obtain the consent of the Holders of any Note, make any changes or additions to
the terms of the Notes of a series which (i) the Issuer or the Trustee believes
are necessary or appropriate to facilitate the implementation of the practical
aspects of this section as they relate to such Notes in the context of the
relevant consolidation or (ii) correct any manifest error or any ambiguity or
correct or supplement any defective provisions described herein, and which
changes or additions the Issuer and the Trustee believe are not materially
prejudicial to the interests of the Holders of the Notes of such series.  Any
such change or addition shall be binding on the Issuer, the Holders of the Notes
of such series, the Trustee, the Paying Agents and any other agent of the
Issuer.  Any such change or addition shall be considered to be made by operation
of the terms of the relevant Notes.  The Issuer shall promptly give notice of
any such change or addition.

     Except as provided in the Note or in the Pricing Supplement with respect to
the redenomination of the Notes of a series into Euros or the consolidation of a
series of Notes with other series of Notes upon or subsequent to such
conversion, the occurrence or non-occurrence of an EMU Event (as defined below)
or the entry into force of any law, regulation, directive or order requiring
redenomination or consolidation to be undertaken on terms different than those
described herein, will not have the effect of altering any term of, or
discharging or excusing performance under, the Indenture or Notes, nor give the
Issuer, the Trustee or the Holder of such Notes, the right unilaterally to alter
or terminate the Indenture or Notes or give rise to any Event of Default or
otherwise be the basis for any acceleration, early redemption, rescission,
notice, repudiation, adjustment or renegotiation of the terms of the Indenture
or Notes.  The occurrence or non-occurrence of an EMU Event will be considered
to occur automatically pursuant to the terms of the Notes.  For purposes hereof,
"EMU Event" means any event associated with EMU in the European Community,
including, without

                                      R-8
<PAGE>

limitation, each (and any combination) of (i) the fixing of exchange rates
between the currency of a Participating Member State and the Euro or between the
currencies of Participating Members States; (ii) the introduction of the Euro as
lawful currency in a Participating Member State; (iii) the withdrawal from legal
tender of any currency that, before the introduction of the Euro, was lawful
currency in any of the Participating Member States; or (iv) the disappearance or
replacement of a relevant rate option or other price source for the national
currency of any participating Member State, or the failure of the agreed sponsor
(or a successor sponsor) to publish or display a relevant rate, index, price,
page or screen.

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

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

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

                                      R-9
<PAGE>

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

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

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

     The interest rate hereon will be reset daily, weekly, monthly, quarterly,
semiannually or annually (such period being the "Interest Reset Period"
specified on the face hereof, and the first day of each Interest Reset Period
being an "Interest Reset Date").  Unless otherwise specified on the face hereof,
the Interest Reset Dates will be, if this Note resets daily, each Business Day;
if this Note (unless this Note is a Treasury Rate Note) resets weekly, Wednesday
of each week; if this Note is a Treasury Rate Note that resets weekly, Tuesday
of each week (except as provided below under "Determination of Treasury Rate");
if this Note resets monthly, the third Wednesday of each month; if this Note
resets quarterly, the third Wednesday of March, June, September and December of
each year; if this Note resets semiannually, the third Wednesday of each of the
two months of each year specified on the face hereof; and if this Note resets
annually, the third Wednesday of one month of each year specified on the

                                     R-10
<PAGE>

face hereof. If an Interest Reset Date would otherwise be a day that is not a
Business Day, such Interest Reset Date shall be postponed to the next succeeding
Business Day, except that, if the Base Rate specified on the face hereof is
LIBOR and such Business Day is in the next succeeding calendar month, such
Interest Reset Date shall be the immediately preceding Business Day.

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

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

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

                                     R-11
<PAGE>

such payment for the period from and after Maturity to the date of such payment
on the next succeeding Business Day.

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

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

Determination of CD Rate

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

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

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

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

                                     R-12
<PAGE>

     Maturity in an amount that is representative for a single transaction in
     that market at that time, or

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

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

Determination of Commercial Paper Rate

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

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

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

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

                                     R-13
<PAGE>

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

     "Money Market Yield" shall be a yield calculated in accordance with the
following formula:

     Money Market Yield =        D  x  360  x  100
                            ----------------------
                                  360 - (D x M)

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

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

Determination of Federal Funds Rate

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

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

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

                                     R-14
<PAGE>

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

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

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

Determination of LIBOR

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

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

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

                                     R-15
<PAGE>

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

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

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

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

     "Calculation Date" pertaining to LIBOR shall be the LIBOR Determination
Date.

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

                                     R-16
<PAGE>

     "Index Currency" means the currency (including composite currencies)
specified on the face hereof as the currency for which LIBOR shall be
calculated.  If no such currency is specified on the face hereof, the Index
Currency shall be U.S. dollars.

     "Principal Financial Center" will generally be the capital city of the
country of the specified Index Currency, except that with respect to Australian
dollars, Deutsche marks, Dutch guilders, U.S. dollars, Italian lire, Swiss
francs and Euro, the Principal Financial Center shall be Sydney, Frankfurt,
Amsterdam, The City of New York, Milan, Zurich and Brussels, respectively.

Determination of Treasury Rate

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

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

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

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

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

          (5) if the rate referred to in clause (4) is not so published by 3:00
     P.M., New York City time, on the related Calculation Date, the rate on the
     Treasury Rate

                                     R-17
<PAGE>

     Determination Date of the applicable Treasury Bills as published in H.15
     Daily Update, or another recognized electronic source used for the purpose
     of displaying the applicable rate, under the caption "U.S. Government
     Securities/Treasury Bills/Secondary Market", or

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

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

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

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

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

                Bond Equivalent Yield  =      D x N       x 100
                                         ----------------
                                            360-(D x M)

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

                                     R-18
<PAGE>

Determination of Prime Rate

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

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

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

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

          (4) if fewer than four rates referred to in clause (3) are so
     published by 3:00 P.M., New York City time, on the related Calculation
     Date, the "Prime Rate" will be the rate calculated by the Calculation Agent
     on the Prime Rate Determination Date as the arithmetic mean of the prime
     rates or base lending rates quoted on the basis of the actual number of
     days in the year divided by a 360-day year as of the close of business on
     such Prime Rate Determination Date by three major banks (which may include
     the agents or their affiliates) in The City of New York selected by the
     Calculation Agent, or

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

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

                                     R-19
<PAGE>

Determination of CMT Rate

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

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

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

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

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

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

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

                                     R-20
<PAGE>

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

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

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

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

     (2) if CMT Telerate Page is 7052:

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

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

                                     R-21
<PAGE>

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

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

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

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

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

                                     R-22
<PAGE>

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

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

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

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

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

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

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

                                     R-23
<PAGE>

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

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

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

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

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

     The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than 66 2/3% in aggregate principal
amount of each series of the Debt Securities at the time outstanding (as defined
in the Indenture) to be affected (each series voting as a class), evidenced as
in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the Holders of the Debt Securities of all such series; provided,
                                                                 --------
however, that no such supplemental indenture shall, among other things, (i)
- -------
extend the fixed maturity of any Debt Security, or reduce the rate or extend the
time of payment of interest thereon, or reduce the principal amount or premium
if any, thereon, or make the principal thereof, or premium if any, or interest,
if any, thereon payable in any coin or currency other than that hereinabove
provided, without the consent of the Holder of each Debt Security so affected or
reduce the amount of principal of an Original Issue Discount Security that would
be due and payable upon acceleration of maturity thereof, or (ii) reduce the
aforesaid percentage of Debt Securities the Holders of which are required to
consent to any such supplemental indenture, without the consent of Holders of
each Debt Security so affected.  The Indenture also contains provisions

                                     R-24
<PAGE>

permitting the Holders of a majority in aggregate principal amount of the Notes
at the time Outstanding, as defined in the Indenture, on behalf of the Holders
of all the Notes, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences.  Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Notes issued upon the transfer hereof or in exchange therefor or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note or upon any Note issued upon the transfer hereof or in exchange therefor or
in lieu hereof.

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

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

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

                                     R-25
<PAGE>

                                 ABBREVIATIONS


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

<TABLE>
<S>                                           <C>                  <C>
TEN COM -as tenants in common                 UNIF GIFT MIN ACT-   _______Custodian _____________________________________
TEN ENT  -as tenants by the entireties                                                   ________ (Cust) ________ (Minor)
JT ENT   -as joint tenants with right of                                                Under Uniform Gifts to Minors Act
          survivorship and not as tenants
          in common                                                                ______________________________ (State)

                             Additional abbreviations may also be used though not in the above list
                           ____________________________________________________________________________
</TABLE>

                               OPTION TO ELECT REPAYMENT

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

____________________________________________________________


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

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

        For this Option to Elect Repayment to be effective, this Note with the
Option to Elect Repayment duly completed must be received by the Company within
the relevant time period set forth above at its office or agency in the Borough
of Manhattan, the City and State of New York, located initially at the office of
the Registrar at Bank One Trust Company, N.A./First Chicago Trust Company of New
York, 14 Wall Street - 8th Floor, Window 2, New York, New York 10005, Attention:
Corporate Trust Administration.


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

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

 Please Insert Social Security or Other
   Identifying Number of Assignee

________________________________________________________________


________________________________________________________________
Please Print or Typewrite Name and Address of Assignee

________________________________________________________________
the within Instrument of McDONALD'S CORPORATION and all rights thereunder,
hereby does irrevocably constitute and appoint

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


Dated:  __________________     _________________________________________________
                                                    Signature


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

                                     R-26
<PAGE>

                                     R-27
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5
<SEQUENCE>7
<FILENAME>dex5.txt
<DESCRIPTION>OPINION & CONSENT OF GLORIA SANTONA
<TEXT>

<PAGE>

                                   Exhibit 5


                                  May 2, 2001


Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549

RE:  McDonald's Corporation
     Registration Statement on Form S-3

Ladies and Gentlemen:

     In my capacity as Vice President, U.S. General Counsel and Secretary of
McDonald's Corporation (the "Company"), a Delaware corporation, I have
supervised and participated in the legal proceedings and matters relating to the
registration under the Securities Act of 1933, as amended (the "Securities Act")
of $1,500,000,000 in proposed maximum aggregate offering price of Debt
Securities to be issued under a Senior Debt Securities Indenture or a
Subordinated Debt Securities Indenture (the "Indentures"), as supplemented,
between the Company and First Union National Bank, as trustee (the "Trustee"),
all as more fully described in the registration statement on Form S-3 to which
this opinion is an exhibit (the "Registration Statement").

     I am an attorney licensed to practice law in the State of Illinois and my
opinion is expressly limited to the laws of the State of Illinois, the General
Corporation Law of the State of Delaware and the federal laws of the United
States of America.

     I advise you that in my opinion:

     1. The Company is a corporation duly organized and existing under and by
virtue of the laws of the State of Delaware and has adequate corporate powers to
own and operate its property and to transact the business in which it is
engaged.

     2. The Indentures have been duly authorized by all necessary corporate
action of the Company and have been duly executed and delivered by the Company.

     3. When (a) the Registration Statement has become effective under the
Securities Act, and provided no stop order shall have been issued by the
Securities and Exchange Commission relating thereto, and (b) the Debt Securities
are qualified for sale (or exempt) under the securities laws of the states in
which they are offered for sale, then upon the execution of any indenture or
indentures supplemental to the Indentures, and the issuance and sale of the Debt
<PAGE>

Page 2

Securities in conformance with the provisions of the applicable Indenture, as
supplemented, and in the manner and on the terms set forth in the Registration
Statement, the Debt Securities will be, when sold, duly authorized, legally
issued, fully paid, non-assessable and binding obligations of the Company,
entitled to all of the benefits of the applicable Indenture, as supplemented,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforceability of creditor's rights generally
and by the effect of general principles of equity, regardless of whether
enforceability is considered in a proceeding at law or in equity.

     I am aware that I am named in the Registration Statement as counsel for the
Company and hereby consent to such use of my name.

                               Very truly yours,

                               /s/ Gloria Santona

                               Gloria Santona
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.(A)
<SEQUENCE>8
<FILENAME>dex23a.txt
<DESCRIPTION>CONSENT OF ERNST & YOUNG LLP
<TEXT>

<PAGE>

                                                                   Exhibit 23(a)


                        CONSENT OF INDEPENDENT AUDITORS



We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of McDonald's
Corporation for the registration of $1,500,000,000 of debt securities and to the
incorporation by reference therein of our report dated January 24, 2001, with
respect to the consolidated financial statements of McDonald's Corporation
included in its Annual Report on Form 10-K for the year ended December 31, 2000,
filed with the Securities and Exchange Commission.


                                                            /s/ERNST & YOUNG LLP


Chicago, Illinois
May 2, 2001
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25
<SEQUENCE>9
<FILENAME>dex25.txt
<DESCRIPTION>STMT. OF ELIGIBILITY & QUALIFICATION ON FORM T-1
<TEXT>

<PAGE>

                                                                      Exhibit 25

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM T-1

      STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                   CORPORATION DESIGNATED TO ACT AS TRUSTEE

    CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT
                             TO SECTION 305(b)(2)

                           FIRST UNION NATIONAL BANK
              (Exact Name of Trustee as Specified in its Charter)

                                  22-1147033
                     (I.R.S. Employer Identification No.)

                2 FIRST UNION CENTER, CHARLOTTE, NORTH CAROLINA
                   (Address of Principal Executive Offices)

                                  28288-0201
                                  (Zip Code)

                           FIRST UNION NATIONAL BANK
                            123 SOUTH BROAD STREET
                            PHILADELPHIA, PA 19109
                   ATTENTION: CORPORATE TRUST ADMINISTRATION
                                (215) 670-6300
           (Name, address and telephone number of Agent for Service)

                            MCDONALD'S CORPORATION
              (Exact Name of Obligor as Specified in its Charter)

                                   DELAWARE
        (State or other jurisdiction of Incorporation or Organization)

                                  36-2361282

                     (I.R.S. Employer Identification No.)


                   ONE MCDONALD'S PLAZA, OAK BROOK, ILLINOIS
                   (Address of Principal Executive Offices)

                                     60523
                                  (Zip Code)

                                DEBT SECURITIES

           Application relates to all securities registered pursuant
                to the delayed offering registration statement
                        (Title of Indenture Securities)
<PAGE>

1. General information.

Furnish the following information as to the trustee:

a) Name and address of each examining or supervisory authority to which it is
subject:
   Comptroller of the Currency
   United States Department of the Treasury
   Washington, D.C.  20219

   Federal Reserve Bank
   Richmond, Virginia 23219

   Federal Deposit Insurance Corporation
   Washington, D.C.  20429

b) Whether it is authorized to exercise corporate trust powers.

   Yes.


2. Affiliations with obligor.

   If the obligor is an affiliate of the trustee, describe each such
   affiliation.

   None.


3. Voting securities of the trustee.

   Furnish the following information as to each class of voting securities of
the trustee:

   Not applicable - see answer to Item 13.


4. Trusteeships under other indentures.

   If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:

   Not applicable - see answer to Item 13.


5. Interlocking directorates and similar relationships with the obligor or
underwriters.

   If the trustee or any of the directors or executive officers of the trustee
is a director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.

   Not applicable - see answer to Item 13.
<PAGE>

6. Voting securities of the trustee owned by the obligor or its
   officials.

   Furnish the following information as to the voting securities of the trustee
owned beneficially by the obligor and each director, partner, and executive
officer of the obligor:

   Not applicable - see answer to Item 13.


7. Voting securities of the trustee owned by underwriters or their officials.

   Furnish the following information as to the voting securities of the trustee
owned beneficially by each underwriter for the obligor and each director,
partner, and executive officer of each such underwriter:

   Not applicable - see answer to Item 13.


8. Securities of the obligor owned or held by the trustee.

   Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for obligations in default by the
trustee:

   Not applicable - see answer to Item 13.


9. Securities of underwriters owned or held by the trustee.

   If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter any
of which are so owned or held by the trustee:

   Not applicable - see answer to Item 13.


10. Ownership or holdings by the trustee of voting securities of certain
affiliates or security holders of the obligor.

    If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting stock of the obligor or
(2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person:

    Not applicable - see answer to Item 13.


11. Ownership or holdings by the trustee of any securities of a person owning 50
percent or more of the voting securities of the obligor.
<PAGE>

    If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of the
trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such person
any of which are so owned or held by the trustee:

    Not applicable - see answer to Item 13.


12. Indebtedness of the obligor to the trustee.

    Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:

    Not applicable - see answer to Item 13.


13. Defaults by the obligor.

    (a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.

    None.

    (b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.

    None

14. Affiliations with the underwriters.

    If any underwriter is an affiliate of the trustee, describe each such
affiliation.

    Not applicable - see answer to Item 13.


15. Foreign trustee.

    Identify the order or rule pursuant to which the trustee is authorized to
act as sole trustee under indentures qualified or to be qualified under the Act.

    Not applicable - trustee is a national banking association organized under
the laws of the United States.


16. List of Exhibits.

    List below all exhibits filed as part of this statement of eligibility.
<PAGE>

     ___ 1. Copy of Articles of Association of the trustee as now in effect.*


     ___ 2. Copy of the Certificate of the Comptroller of the Currency dated
         March 4, 1998, evidencing the authority of the trustee to transact
         business. **

     ___ 3. Copy of the Certification of Fiduciary Powers of the trustee by the
         Office of the Comptroller of the Currency dated April 7, 1999.***

      X  4. Copy of existing by-laws of the trustee.
     ---

     ___ 5. Copy of each indenture referred to in Item 4, if the obligor is in
         default.
               - Not Applicable.

      X  6. Consent of the trustee required by Section 321(b) of the Act.
     ---

      X  7. Copy of report of condition of the trustee at the close of
     ---
         business on December 31, 2000, published pursuant to the requirements
         of its supervising authority.


     ___ 8. Copy of any order pursuant to which the foreign trustee is
         authorized to act as sole trustee under indentures qualified or to be
         qualified under the Act.
               - Not Applicable

     ___ 9. Consent to service of process required of foreign trustees pursuant
         to Rule 10a-4 under the Act.
               - Not Applicable

________________________

                    *Previously filed with the Securities and Exchange
Commission on March 16, 1998 as an Exhibit to Form T-1 in connection with
Registration Statement Number 333-47985, ** and filed with the Securities and
Exchange Commission on July 15, 1998 as an Exhibit to Form T-1 in connection
with Registration Statement Number 333-59145, *** and filed with the Securities
and Exchange Commission on May 20, 1999 in connection with Registration
Statement Number 333-78927 and incorporated herein by reference.



                                     NOTE
     The trustee disclaims responsibility for the accuracy or completeness of
information contained in this Statement of Eligibility and Qualification not
known to the trustee and not obtainable by it through reasonable investigation
and as to which information it has obtained from the obligor and has had to rely
or will obtain from the principal underwriters and will have to rely.
<PAGE>

                                   SIGNATURE


Pursuant to the requirements of the Trust Indenture Act of 1939,the trustee,
First Union National Bank, a national banking association organized and existing
under the laws of the United States of America, has duly caused this Statement
of Eligibility and Qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Philadelphia and the Commonwealth
of Pennsylvania, on the 27/th/ day of April, 2001.


                                             First Union National Bank



                                             By: /s/John H. Clapham
                                                 -------------------
                                                 John H. Clapham
                                                 Vice President
<PAGE>

                                                                       Exhibit 4



                                  BY-LAWS OF

                           FIRST UNION NATIONAL BANK

                                 Charter No. 1


                            Effective June 20, 2000
<PAGE>

                                  BY-LAWS OF

                           FIRST UNION NATIONAL BANK


                                   ARTICLE I

                           Meetings of Shareholders
                           ------------------------

     Section 1.1 Annual Meeting. The annual meeting of the shareholders for the
     --------------------------
election of directors and for the transaction of such other business as may
properly come before the meeting shall be held on the third Tuesday of April in
each year, commencing with the year 1998, except that the Board of Directors
may, from time to time and upon passage of a resolution specifically setting
forth its reasons, set such other date for such meeting during the month of
April as the Board of Directors may deem necessary or appropriate; provided,
however, that if an annual meeting would otherwise fall on a legal holiday, then
such annual meeting shall be held on the second business day following such
legal holiday. The holders of a majority of the outstanding shares entitled to
vote which are represented at any meeting of the shareholders may choose persons
to act as Chairman and as Secretary of the meeting.

     Section 1.2 Special Meetings. Except as otherwise specifically provided by
     ----------------------------
statute, special meetings of the shareholders may be called for any purpose at
any time by the Board of Directors or by any three or more shareholders owning,
in the aggregate, not less than ten percent of the stock of the Association.
Every such special meeting, unless otherwise provided by law, shall be called by
mailing, postage prepaid, not less than ten days prior to the date fixed for
such meeting, to each shareholder at his address appearing on the books of the
Association, a notice stating the purpose of the meeting.

     Section 1.3 Nominations for Directors. Nominations for election to the
     -------------------------------------
Board of Directors may be made by the Board of Directors or by any stockholder
of any outstanding class of capital stock of the bank entitled to vote for the
election of directors. Nominations, other than those made by or on behalf of the
existing management of the bank, shall be made in writing and shall be delivered
or mailed to the President of the Bank and to the Comptroller of the Currency,
Washington, D. C., not less than 14 days nor more than 50 days prior to any
meeting of stockholders called for the election of directors, provided however,
that if less than 21 days' notice of such meeting is given to shareholders, such
nomination shall be mailed or delivered to the President of the Bank and to the
Comptroller of the Currency not later than the close of business on the seventh
day following the day on which the notice of meeting was mailed. Such
notification shall contain the following information to the extent known to the
notifying shareholder: (a) the name and address of each proposed nominee; (b)
the principal occupation of each proposed nominee; (c) the total number of
shares of capital stock of the bank that will be voted for each proposed
nominee; (d) the name and residence address of the notifying shareholder; and
(e) the number of shares of capital stock of the bank owned by the notifying
shareholder. Nominations not made in accordance herewith may, in his discretion,
be disregarded by the chairman of the meeting, and upon his instructions, the
vote tellers may disregard all votes cast for each such nominee.

     Section 1.4 Judges of Election. The Board may at any time appoint from
     ------------------------------
among the shareholders three or more persons to serve as Judges of Election at
any meeting of shareholders;

                                       8
<PAGE>

to act as judges and tellers with respect to all votes by ballot at such meeting
and to file with the Secretary of the meeting a Certificate under their hands,
certifying the result thereof.

     Section 1.5 Proxies. Shareholders may vote at any meeting of the
     -------------------
shareholders by proxies duly authorized in writing, but no officer or employee
of this Association shall act as proxy. Proxies shall be valid only for one
meeting, to be specified therein, and any adjournments of such meeting. Proxies
shall be dated and shall be filed with the records of the meeting.

     Section 1.6 Quorum. A majority of the outstanding capital stock,
     ------------------
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law; but less than a quorum may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Association.

                                  ARTICLE II

                                   Directors
                                   ---------

     Section 2.1 Board of Directors. The Board of Directors (hereinafter
     ------------------------------
referred to as the "Board"), shall have power to manage and administer the
business and affairs of the Association. Except as expressly limited by law, all
corporate powers of the Association shall be vested in and may be exercised by
said Board.

     Section 2.2 Number. The Board shall consist of not less than five nor more
     ------------------
than twenty-five directors, the exact number within such minimum and maximum
limits to be fixed and determined from time to time by resolution of a majority
of the full Board or by resolution of the shareholders at any meeting thereof;
provided, however, that a majority of the full Board of Directors may not
increase the number of directors to a number which, (1) exceeds by more than two
the number of directors last elected by shareholders where such number was
fifteen or less, and (2) to a number which exceeds by more than four the number
of directors last elected by shareholders where such number was sixteen or more,
but in no event shall the number of directors exceed twenty-five.

     Section 2.3 Organization Meeting. The Secretary of the meeting upon
     --------------------------------
receiving the certificate of the judges, of the result of any election, shall
notify the directors-elect of their election and of the time at which they are
required to meet at the Main Office of the Association for the purpose of
organizing the new Board and electing and appointing officers of the Association
for the succeeding year. Such meeting shall be held as soon thereafter as
practicable. If, at the time fixed for such meeting, there shall not be a quorum
present, the directors present may adjourn the meeting from time to time, until
a quorum is obtained.

     Section 2.4 Regular Meetings. Regular meetings of the Board of Directors
     ----------------------------
shall be held at such place and time as may be designated by resolution of the
Board of Directors. Upon adoption of such resolution, no further notice of such
meeting dates or the places or times thereof shall be required. Upon the failure
of the Board of Directors to adopt such a resolution, regular meetings of the
Board of Directors shall be held, without notice, on the third Tuesday in
February, April, June, August, October and December, commencing with the year
1997, at the main office or at such other place and time as may be designated by
the Board of Directors. When any regular meeting of the Board would otherwise
fall on a holiday, the meeting shall be held on the next business day unless the
Board shall designate some other day.

                                       9
<PAGE>

     Section 2.5 Special Meetings.  Special meetings of the Board of Directors
     ----------------------------
may be called by the President of the Association, or at the request of three
(3) or more directors.  Each member of the Board of Directors shall be given
notice stating the time and place, by telegram, letter, or in person, of each
such special meeting.

     Section 2.6 Quorum.  A majority of the directors shall constitute a quorum
     ------------------
at any meeting, except when otherwise provided  by law; but a less number may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice.

     Section 2.7 Vacancies.  When any vacancy occurs among the directors, the
     ---------------------
remaining members of the Board, in accordance with the laws of the United
States, may appoint a director to fill such vacancy at any regular meeting of
the Board, or at a special meeting called for that purpose.

     Section 2.8 Advisory Boards.  The Board of Directors may appoint  Advisory
     ---------------------------
Boards for each of the states in which the Association conducts operations.
Each such Advisory Board shall consist of as many persons as the Board of
Directors may determine.  The duties of each Advisory Board shall be to consult
and advise with the Board of Directors and senior officers of the Association in
such state with regard to the best interests of the Association and to perform
such other duties as the Board of Directors may lawfully delegate.
The senior officer in such state, or such officers as directed by such senior
officer, may appoint advisory boards for geographic regions within such state
and may consult with the State Advisory Boards prior to such appointments.

                                  ARTICLE III

                            Committees of the Board
                            -----------------------

     Section 3.1  The Board of Directors, by resolution adopted by a majority of
     -----------
the number of directors fixed by these By-Laws, may designate two or more
directors to constitute an Executive Committee and other committees, each of
which, to the extent authorized by law and provided in such resolution, shall
have and may exercise all of the authority of the Board of Directors and the
management of the Association.  The designation of any committee and the
delegation thereto of authority shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility or liability imposed
upon it or any member of the Board of Directors by law.  The Board of Directors
reserves to itself alone the power to act on (1) dissolution, merger or
consolidation, or disposition of substantially all corporate property, (2)
designation of committees or filling vacancies on the Board of Directors or on a
committee of the Board (except as hereinafter provided), (3) adoption, amendment
or repeal of By-laws, (4) amendment or repeal of any resolution of the Board
which by its terms is not so amendable or repealable, and (5) declaration of
dividends, issuance of stock, or recommendations to stockholders of any action
requiring stockholder approval.

     The Board of Directors or the Chairman of the Board of Directors of the
    Association may change the membership of any committee at any time, fill
  vacancies therein, discharge any committee or member thereof either with or
      without cause at any time, and change at any time the authority and
                     responsibility of any such committee.

     A majority of the members of any committee of the Board of Directors may
fix such committee's rules of procedure.  All action by any committee shall be
reported to the Board of Directors at a meeting succeeding such action, except
such actions as the Board may not require

                                       10
<PAGE>

to be reported to it in the resolution creating any such committee. Any action
by any committee shall be subject to revision, alteration, and approval by the
Board of Directors, except to the extent otherwise provided in the resolution
creating such committee; provided, however, that no rights or acts of third
parties shall be affected by any such revision or alteration.

                                  ARTICLE IV

                            Officers and Employees
                            ----------------------

     Section 4.1 Officers.  The officers of the Association may be a Chairman of
     --------------------
the Board, a Vice Chairman of the Board, one or more Chairmen or Vice Chairmen
(who shall not be required to be directors of the Association), a President, one
or more Vice Presidents, a Secretary, a Cashier or Treasurer, and such other
officers, including officers holding similar or equivalent titles to the above
in regions, divisions or functional units of the Association, as may be
appointed by the Board of Directors.  The Chairman of the Board and the
President shall be members of the Board of Directors.  Any two or more offices
may be held by one person, but no officer shall sign or execute any document in
more than one capacity.

     Section 4.2 Election, Term of Office, and Qualification.  Each officer
     -------------------------------------------------------
shall be chosen by the Board of Directors and shall hold office until the annual
meeting of the Board of Directors held next after his election or until his
successor shall have been duly chosen and qualified, or until his death, or
until he shall resign, or shall have been disqualified, or shall have been
removed from office.

     Section 4.2(a) Officers Acting as Assistant Secretary.  Notwithstanding
     -----------------------------------------------------
Section 1 of these By-laws, any Senior Vice President, Vice President, or
Assistant Vice President shall have, by virtue of his office, and by authority
of the By-laws, the authority from time to time to act as an Assistant Secretary
of the Bank, and to such extent, said officers are appointed to the office of
Assistant Secretary.

     Section 4.3 Chief Executive Officer.  The Board of Directors shall
     -----------------------------------
designate one of its members to be the President of this Association, and the
officer so designated shall be an ex officio member of all committees of the
Association except the Examining Committee, and its Chief Executive Officer
unless some other officer is so designated by the Board of Directors.

     Section 4.4 Duties of Officers.  The duties of all officers shall be
     ------------------------------
prescribed by the Board of Directors.  Nevertheless,  the Board of Directors may
delegate to the Chief Executive Officer the authority to prescribe the duties of
other officers of the corporation not inconsistent with law, the charter, and
these By-laws, and to appoint other employees, prescribe their duties, and to
dismiss them.  Notwithstanding such delegation of authority, any officer or
employee also may be dismissed at any time by the Board of Directors.

     Section 4.5 Other Employees.  The Board of Directors may appoint from time
     ---------------------------
to time such tellers, vault custodians, bookkeepers, and other clerks, agents,
and employees as it may deem advisable for the prompt and orderly transaction of
the business of the Association, define their duties, fix the salary to be paid
them, and dismiss them.  Subject to the authority of the Board of Directors, the
Chief Executive Officer or any other officer of the Association authorized by
him, may appoint and dismiss all such tellers, vault custodians, bookkeepers and
other clerks, agents, and employees, prescribe their duties and the conditions
of their employment, and from time to time fix their compensation.

                                       11
<PAGE>

     Section 4.6 Removal and Resignation.  Any officer or employee of the
     -----------------------------------
Association may be removed either with or without cause by the Board of
Directors.  Any employee other than an officer elected by the Board of Directors
may be dismissed in accordance with the provisions of the preceding Section 4.5.
Any officer may resign at any time by giving written notice to the Board of
Directors or to the Chief Executive Officer of the Association.  Any such
resignation shall become effective upon its being accepted by the Board of
Directors, or the Chief Executive Officer.

                                   ARTICLE V

                               Fiduciary Powers
                               ----------------

     Section 5.1 Capital Management Group.  There shall be an area of this
     ------------------------------------
Association known as the Capital Management Group which shall be responsible for
the exercise of the fiduciary powers of this Association.  The Capital
Management Group shall consist of four service areas: Fiduciary Services, Retail
Services, Investments and Marketing.  The Fiduciary Services unit shall consist
of personal trust, employee benefits, corporate trust and operations.  The
General Office for the Fiduciary Services unit shall be located in Charlotte,
N.C., with City Trust Offices located in such cities within the State of North
Carolina as designated by the Board of Directors.

     Section 5.2 Trust Officers.  There shall be a General Trust Officer of this
     --------------------------
Association whose duties shall be to manage, supervise and direct all the
activities of the Capital Management Group.  Further, there shall be one or more
Senior Trust Officers designated to assist the General Trust Officer in the
performance of his duties.  They shall do or cause to be done all things
necessary or proper in carrying out the business of the Capital Management Group
in accordance with provisions of applicable law and regulation.


     Section 5.3 General Trust Committee.  There shall be a General Trust
     ------------------------------------
Committee composed of not less than four (4) members of the Board of Directors
or officers of this Association who shall be appointed annually, or from time to
time, by the Board of Directors of this Association.  Each member shall serve
until his successor is appointed.  The Board of Directors or the Chairman of the
Board may change the membership of the General Trust Committee at any time, fill
any vacancies therein, or discharge any member thereof with or without cause at
any time.  The General Trust Committee shall counsel and advise on all matters
relating to the business or affairs of the Capital Management Group and shall
adopt overall policies for the conduct of the business of the Capital Management
Group, including, but not limited to: general administration, investment
policies, new business development, and review for approval of major assignments
of functional responsibilities.  The General Trust Committee shall appoint the
members of the following subcommittees: the Investment Policy Committee,
Personal Trust Administration Committee, Account Review Committee, and Corporate
and Institutional Accounts Committee.  The General Trust Committee shall meet at
least quarterly or as called for by its Chairman or any three (3) members of the
Committee.  A quorum shall consist of three (3) members.  In carrying out its
responsibilities, the General Trust Committee shall review the fiduciary
activities of the Capital Management Group and may assign the administration and
performance of any fiduciary powers or duties to any officers or employees of
the Capital Management Group or to the Investment Policy Committee, Personal
Trust Administration Committee, Account Review Committee, or Corporate and
Institutional Accounts Committee, or other committees it may designate.  One of
the methods to be used in the review process will be the scrutiny of the Reports
of Examination by the Office of the Comptroller of the Currency and the reports
of the Audit Division of First Union Corporation, as they relate to the
activities of the Capital Management Group.  The Chairman of the General Trust
Committee

                                       12
<PAGE>

shall be appointed by the Chairman of the Board of Directors. The Chairman of
the General Trust Committee shall cause to be recorded in appropriate minutes
all actions taken by the Committee. The minutes shall be signed by its
Secretary, approved by its Chairman and submitted to the Board of Directors at
its next regularly scheduled meeting following a meeting of the General Trust
Committee. The Board of Directors retains responsibility for the proper exercise
of this Association's fiduciary powers.

     Section 5.4 Investment Policy Committee.  There shall be an Investment
     ----------------------------------------
Policy Committee composed of not less than seven (7) officers and/or employees
of this Association, who shall be appointed annually or from time to time by the
General Trust Committee.  Each member shall serve until his or her successor is
appointed.  Meetings shall be called by the Chairman or by any two (2) members
of the Committee.  A quorum shall consist of five (5) members.  The Investment
Policy Committee shall exercise such fiduciary powers and perform such duties as
may be assigned to it by the General Trust Committee.  All actions taken by the
Investment Policy Committee shall be recorded in appropriate minutes, signed by
the Secretary thereof, approved by its Chairman, and submitted to the General
Trust Committee at its next ensuing regular meeting for its review and
approval."

     Section 5.5 Personal Trust Administration Committee.  There shall be a
     ----------------------------------------------------
Personal Trust Administration Committee composed of not less than five (5)
officers and/or employees of this Association, who shall be appointed annually
or from time to time by the General Trust Committee.  Each member shall serve
until his or her successor is appointed.  Meetings shall be called by the
Chairman or by any three (3) members of the Committee.  A quorum shall consist
of three (3) members.  The Personal Trust Administration Committee shall
exercise such fiduciary powers and perform such duties as may be assigned to it
by the General Trust Committee.  All actions taken by the Personal Trust
Administration Committee shall be recorded in appropriate minutes, signed by the
Secretary thereof, approved by its Chairman, and submitted to the General Trust
Committee at its next ensuing regular meeting for its review and approval."

     Section 5.6 Account Review Committee.  There shall be an Account Review
     -------------------------------------
Committee composed of not less than four (4) officers and/or employees of this
Association, who shall be appointed annually or from time to time by the General
Trust Committee.  Each member shall serve until his or her successor is
appointed.  Meetings shall be called by the Chairman or by any two (2) members
of the Committee.  A quorum shall consist of three (3) members.  The Account
Review Committee shall exercise such fiduciary powers and perform such duties as
may be assigned to it by the General Trust Committee.  All actions taken by the
Account Review Committee shall be recorded in appropriate minutes, signed by the
Secretary thereof, approved by its Chairman, and submitted to the General Trust
Committee at its next ensuing regular meeting for its review and approval."

     Section 5.7 Corporate and Institutional Accounts Committee.  There shall be
     -----------------------------------------------------------
a Corporate and Institutional Accounts Committee composed of not less than five
(5) officers and/or employees of this Association, who shall be appointed
annually or from time to time by the General Trust Committee.  Each member shall
serve until his or her successor is appointed.  Meetings shall be called by the
Chairman or by any two (2) members of the Committee.  A quorum shall consist of
three (3) members.  The Corporate and Institutional Accounts Committee shall
exercise such fiduciary powers and perform such duties as may be assigned to it
by the General Trust Committee.  All actions taken by the Corporate and
Institutional Accounts Committee shall be recorded in appropriate minutes,
signed by the Secretary thereof, approved by its Chairman, and submitted to the
General Trust Committee at its next ensuing regular meeting for its review and
approval."

                                       13
<PAGE>

                                  ARTICLE VI

                         Stock and Stock Certificates
                         ----------------------------

     Section 6.1 Transfers.  Shares of stock shall be transferable on the books
     ---------------------
of the Association, and a transfer book shall be kept in which all transfers of
stock shall be recorded.  Every person becoming a shareholder by such transfer
shall, in proportion to his shares, succeed to all rights and liabilities of the
prior holder of such shares.

     Section 6.2 Stock Certificates.  Certificates of stock shall bear the
     ------------------------------
signature of the Chairman, the Vice Chairman, the President, or a Vice President
(which may be engraved, printed, or impressed), and shall be signed manually or
by facsimile process by the Secretary, Assistant Secretary, Cashier, Assistant
Cashier, or any other officer appointed by the Board of Directors for that
purpose, to be known as an Authorized Officer, and the seal of the Association
shall be engraved thereon.  Each certificate shall recite on its face that the
stock represented thereby is transferable only upon the books of the Association
properly endorsed.


                                  ARTICLE VII

                                Corporate Seal
                                --------------

     Section 7.1  The President, the Cashier, the Secretary, or any Assistant
     -----------
Cashier, or Assistant Secretary, or other officer thereunto designated by the
Board of Directors shall have authority to affix the corporate seal to any
document requiring such seal, and to attest the same.  Such seal shall be
substantially in the following form.


                                 ARTICLE VIII

                           Miscellaneous Provisions
                           ------------------------

     Section 8.1 Fiscal Year.  The fiscal year of the Association shall be the
     -----------------------
calendar year.

     Section 8.2 Execution of Instruments.  All agreements, indentures,
     ------------------------------------
mortgages, deeds, conveyances, transfers, certificates, declarations, receipts,
discharges, releases, satisfactions, settlements, petitions, notices,
applications, schedules, accounts, affidavits, bonds, undertakings, proxies, and
other instruments or documents may be signed, executed, acknowledged, verified,
delivered or accepted in behalf of the Association by the Chairman of the Board,
the Vice Chairman of the Board, any Chairman or Vice Chairman, the President,
any Vice President or Assistant Vice President, the Secretary or any Assistant
Secretary, the Cashier or Treasurer or any Assistant Cashier or Assistant
Treasurer, or any officer holding similar or equivalent titles to the above in
any regions, divisions or functional units of the Association, or, if in
connection with the exercise of fiduciary powers of the Association, by any of
said officers or by any Trust Officer or Assistant Trust Officer (or equivalent
titles); provided, however, that where required, any such instrument shall be
attested by one of said officers other than the officer executing such
instrument.  Any such instruments may also be executed, acknowledged, verified,
delivered or

                                       14
<PAGE>

accepted in behalf of the Association in such other manner and by such other
officers as the Board of Directors may from time to time direct. The provisions
of this Section 8.2 are supplementary to any other provision of these By-laws.

     Section 8.3 Records.  The Articles of Association, the By-laws, and the
     -------------------
proceedings of all meetings of the shareholders, the Board of Directors,
standing committees of the Board, shall be recorded in appropriate minute books
provided for the purpose.  The minutes of each meeting shall be signed by the
Secretary, Cashier, or other officer appointed to act as Secretary of the
meeting.

                                  ARTICLE IX

                                    By-laws
                                    -------

     Section 9.1 Inspection.  A copy of the By-laws, with all amendments
     ----------------------
thereto, shall at all times be kept in a convenient place at the Head Office of
the Association, and shall be open for inspection to all shareholders, during
banking hours.

     Section 9.2 Amendments.  The By-laws may be amended, altered or repealed,
     ----------------------
at any regular or special meeting of the Board of Directors, by a vote of a
majority of the whole number of Directors.

                                       15
<PAGE>

                                   Exhibit A
                                   ---------


                           First Union National Bank
                                   Article X
                               Emergency By-laws



     In the event of an emergency declared by the President of the United States
or the person performing his functions, the officers and employees of this
Association will continue to conduct the affairs of the Association under such
guidance from the directors or the Executive Committee as may be available
except as to matters which by statute require specific approval of the Board of
Directors and subject to conformance with any applicable governmental directives
during the emergency.

                       OFFICERS PRO TEMPORE AND DISASTER

     Section 1.  The surviving members of the Board of Directors or the
Executive Committee shall have the power, in the absence or disability of any
officer, or upon the refusal of any officer to act, to delegate and prescribe
such officer's powers and duties to any other officer, or to any director, for
the time being.

     Section 2.  In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of this
Association by its directors and officers as contemplated by these By-laws, any
two or more available members of the then incumbent Executive Committee shall
constitute a quorum of that Committee for the full conduct and management of the
affairs and business of the Association in accordance with the provisions of
Article II of these By-laws; and in addition, such Committee shall be empowered
to exercise all of the powers reserved to the General Trust Committee under
Section 5.3 of Article V hereof.  In the event of the unavail- ability, at such
time, of a minimum of two members of the then incumbent Executive Committee, any
three available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Association in
accordance with the foregoing provisions of this section.  This By-law shall be
subject to implementation by resolutions of the Board of Directors passed from
time to time for that purpose, and any provisions of these By-laws (other than
this section) and any resolutions which are contrary to the provisions of this
section or to the provisions of any such implementary resolutions shall be
suspended until it shall be determined by an interim Executive Committee acting
under this section that it shall be to the advantage of this Association to
resume the  conduct and management of its affairs and business under all of the
other provisions of these By-laws.

                              Officer Succession

     BE IT RESOLVED, that if consequent upon war or warlike damage or disaster,
the Chief Executive Officer of this Association cannot be located by the then
acting Head Officer or is unable to assume or to continue normal executive
duties, then the authority and duties of the Chief Executive Officer shall,
without further action of the Board of Directors, be automatically assumed by
one of the following persons in the order designated:

     Chairman

                                       16
<PAGE>

     President
     Division Head/Area Administrator - Within this officer class, officers
     shall take seniority on the basis of length of service in such office or,
     in the event of equality, length of service as an officer of the
     Association.

     Any one of the above persons who in accordance with this resolution assumes
the authority and duties of the Chief Executive Officer shall continue to serve
until he resigns or until five-sixths of the other officers who are attached to
the then acting Head Office decide in writing he is unable to perform said
duties or until the elected Chief Executive Officer of this Association, or a
person higher on the above list, shall become available to perform the duties of
Chief Executive Officer of the Association.

     BE IT FURTHER RESOLVED, that anyone dealing with this Association may
accept a certification by any three officers that a specified individual is
acting as Chief Executive Officer in accordance with this resolution; and that
anyone accepting such certification may continue to consider it in force until
notified in writing of a change, said notice of change to carry the signatures
of three officers of the Association.

                              Alternate Locations

          The offices of the Association at which its business shall be
     conducted shall be the main office thereof in each city which is designated
     as a City Office (and branches, if any), and any other legally authorized
     location which may be leased or acquired by this Association to carry on
     its business. During an emergency resulting in any authorized place of
     business of this Association being unable to function, the business
     ordinarily conducted at such location shall be relocated elsewhere in
     suitable quarters, in addition to or in lieu of the locations heretofore
     mentioned, as may be designated by the Board of Directors or by the
     Executive Committee or by such persons as are then, in accordance with
     resolutions adopted from time to time by the Board of Directors dealing
     with the exercise of authority in the time of such emergency, conducting
     the affairs of this Association. Any temporarily relocated place of
     business of this Association shall be returned to its legally authorized
     location as soon as practicable and such temporary place of business shall
     then be discontinued.

                              Acting Head Offices

          BE IT RESOLVED, that in case of and provided because of war or warlike
     damage or disaster, the General Office of this Association, located in
     Charlotte, North Carolina, is unable temporarily to continue its functions,
     the Raleigh office, located in Raleigh, North Carolina, shall automatically
     and without further action of this Board of Directors, become the "Acting
     Head Office of this Association";

          BE IT FURTHER RESOLVED, that if by reason of said war or warlike
     damage or disaster, both the General Office of this Association and the
     said Raleigh Office of this Association are unable to carry on their
     functions, then and in such case, the Asheville Office of this Association,
     located in Asheville, North Carolina, shall, without further action of this
     Board of Directors, become the "Acting Head Office of this Association";
     and if neither the Raleigh Office nor the Asheville Office can carry on
     their functions, then the Greensboro Office of this Association, located in
     Greensboro, North Carolina, shall, without further action of this Board of
     Directors, become the "Acting Head Office of this Association"; and if
     neither the Raleigh Office, the Asheville Office, nor the Greensboro Office
     can carry on their functions, then the Lumberton Office of this

                                       17
<PAGE>

     Association, located in Lumberton, North Carolina, shall, without further
     action of this Board of Directors, become the "Acting Head Office of this
     Association". The Head Office shall resume its functions at its legally
     authorized location as soon as practicable.

                                       18
<PAGE>

                                                                       EXHIBIT 6





                            CONSENT OF THE TRUSTEE



  Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939, and in connection with the proposed issue of McDonald's Corporation Debt
Securities, First Union National Bank, hereby consents that reports of
examinations by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.



                                         FIRST UNION NATIONAL BANK


                                         By: /s/ John H. Clapham
                                             -------------------
                                             John H. Clapham
                                             Vice President



Philadelphia, Pennsylvania

April 27, 2001

                                       19
<PAGE>

                              REPORT OF CONDITION
                                                                       EXHIBIT 7

  Consolidating domestic and foreign subsidiaries of the First Union National
  Bank, Charlotte, North Carolina, at the close of business on December 31, 2000
  published in response to call made by Comptroller of the Currency, under title
  12, United States Code, Section 161.  Charter Number 22693 Comptroller of the
  Currency.

<TABLE>
<CAPTION>
  Statement of Resources and Liabilities
                                              ASSETS
                                                                  Thousand of Dollars
                                                                  -------------------
  <S>                                                             <C>
  Cash and balance due from depository institutions:
   Noninterest-bearing balances and currency and coin.............     10,052,000
   Interest bearing balances......................................      3,207,000
  Securities......................................................      /////////
   Held-to-maturity securities....................................      1,529,000
   Available-for-sale securities..................................     46,184,000
  Federal funds sold and securities purchases to resell...........      6,010,000
  Loans and lease financing receivables:
   Loans and leases, net of unearned income.......................    131,252,000
   LESS: Allowance for loan and lease losses......................      1,706,000
   LESS: Allocated transfer risk reserve..........................              0
   Loans and leases, net of unearned income, allowance, and
   reserve........................................................    129,546,000
  Trading assets..................................................     16,578,000
  Premises and fixed assets (including capitalized leases)........      2,849,000
  Other real estate owned.........................................         91,000
  Investment in unconsolidated subsidiaries and associated........     //////////
  companies.......................................................        264,000
  Customer's liability to this bank on acceptances outstanding....        873,000
  Intangible assets...............................................      2,791,000
  Other assets....................................................     11,863,000
  Total assets....................................................    231,837,000

                                               LIABILITIES
  Deposits:
     In domestic offices..........................................    134,399,000
       Noninterest-bearing........................................     21,026,000
       Interest-bearing...........................................    113,373,000
     In foreign offices, Edge and Agreement subsidiaries,
     and IBFs.....................................................     12,567,000
       Noninterest-bearing........................................         48,000
       Interest-bearing...........................................     12,519,000
  Federal funds purchased and securities sold under agreements
   to repurchase..................................................     21,452,000
  Demand notes issued to the U.S. Treasury........................        979,000
  Trading liabilities.............................................      9,919,000
  Other borrowed money:...........................................      /////////
     With a remaining maturity of one year or less................     14,559,000
     With a remaining maturity of more than 1 year thru 3 yrs.....      4,649,000
     With a maturity of more than three years.....................      2,928,000
  Not applicable..................................................       ////////
  Bank's liability on acceptances executed and outstanding........        879,000
  Subordinated notes and debentures...............................      5,992,000
  Other liabilities...............................................      8,310,000
  Total liabilities...............................................    216,633,000
  Not applicable..................................................    ///////////
</TABLE>

                                       20
<PAGE>

<TABLE>
<CAPTION>
                                 EQUITY CAPITAL
<S>                                                                   <C>
Perpetual preferred stock and related surplus.....................        161,000
Common Stock......................................................        455,000
Surplus...........................................................     13,306,000
Undivided profits and capital reserves............................      1,467,000
Net unrealized holding gains (losses) on available-for-sale
  securities......................................................       (178,000)
Accumulated net gains (loses on cash flow hedges..................              0
Cumulative foreign currency translation adjustments...............         (7,000)
Total equity capital..............................................     15,204,000
Total liabilities and equity capital..............................    231,837,000
</TABLE>

                                       21
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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