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<SEC-DOCUMENT>0000950131-02-002609.txt : 20020710
<SEC-HEADER>0000950131-02-002609.hdr.sgml : 20020710
<ACCEPTANCE-DATETIME>20020710171751
ACCESSION NUMBER:		0000950131-02-002609
CONFORMED SUBMISSION TYPE:	S-3
PUBLIC DOCUMENT COUNT:		9
FILED AS OF DATE:		20020710

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:		1933 Act
		SEC FILE NUMBER:	333-92212
		FILM NUMBER:		02700427

	BUSINESS ADDRESS:	
		STREET 1:		ONE MCDONALD'S PLZ
		CITY:			OAK BROOK
		STATE:			IL
		ZIP:			60523
		BUSINESS PHONE:		6306233000

	MAIL ADDRESS:	
		STREET 1:		ONE MCDONALD PLAZA
		CITY:			OAK BROOK
		STATE:			IL
		ZIP:			60523
</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 July 10, 2002

                                           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)
<TABLE>
<CAPTION>
                        Delaware                    36-2361282
            <S>                               <C>
              (State or other jurisdiction       (I.R.S. Employer
            of incorporation or organization) Identification Number)
</TABLE>
         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
                            Senior Vice President,
                         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:
                              Edward F. Petrosky
                        Sidley Austin Brown & Wood LLP
                              787 Seventh Avenue
                           New York, New York 10019
                                (212) 839-5300
   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
                               Amount        Maximum      Aggregate
  Title of Each Class of        to be     Offering Price  Offering       Amount of
Securities to be Registered Registered(3) Per Unit(1)(2) Price(1)(2)  Registration Fee
<S>                         <C>           <C>            <C>          <C>
- --------------------------------------------------------------------------------------
      Debt Securities...... $684,239,130       100%      $684,239,130     $62,950
- --------------------------------------------------------------------------------------
</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 $684,239,130.
                               -----------------
   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 JULY 10, 2002
Prospectus Supplement
(To prospectus, dated         , 2002)

                                 $684,239,130
                            McDonald's Corporation
                          Medium-Term Notes, Series H
                Due from 1 Year to 60 Years from Date of Issue

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

   We may use this prospectus supplement to offer Medium-Term Notes, Series H,
with a total initial public offering price of up to $684,239,130 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.

   . Fixed or floating interest rate.

   . 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 $683,212,771 and $679,107,337 of the proceeds from
the sale of the notes after paying the agent's commissions of between
$1,026,359 and $5,131,793. 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
         BNP PARIBAS
           Deutsche Bank Securities
             Fleet Securities, Inc.
               Goldman, Sachs & Co.
                 JPMorgan
                   Morgan Stanley
                     Salomon Smith Barney
                       Scotia Capital
                         SG Cowen
                           SunTrust Robinson Humphrey
                             Westdeutsche Landesbank Girozentrale, London Branch

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

         The date of this prospectus supplement is             , 2002.

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                 Page
                                                                 ----
           <S>                                                   <C>
                             Prospectus Supplement

           Risk Factors.........................................  S-2
           Capitalization.......................................  S-4
           Important Currency Information.......................  S-5
           Description of Notes.................................  S-5
           Special Provisions Relating to Foreign Currency Notes S-21
           United States Tax Considerations..................... S-24
           Plan of Distribution................................. S-29
           Glossary............................................. S-31
           Validity of the Notes................................ S-34

                                   Prospectus
           McDonald's Corporation...............................    2
           Use of Proceeds......................................    3
           Selected Consolidated Financial Data.................    4
           Description of Debt Securities.......................    6
           Plan of Distribution.................................   11
           Legal Matters........................................   11
           Experts..............................................   11
</TABLE>

   You should rely only on the information contained or incorporated by
reference in this prospectus supplement, the accompanying prospectus and any
pricing supplement. Neither we nor any agent has authorized any other person to
provide you with different or additional information. If anyone provides you
with different or additional information, you should not rely on it. Neither we
nor any agent is making an offer to sell the Notes in any jurisdiction where
the offer or sale is not permitted. You should assume that the information
contained or incorporated by reference in this prospectus supplement, the
accompanying prospectus and any pricing supplement is accurate only as of the
date on the front cover of the applicable document. Our business, financial
condition, results of operations and prospects may have changed since that date.

   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

                                      S-2

<PAGE>

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 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.
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 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.

Our Credit Ratings May Not Reflect All Risks of an Investment in the Notes

   The credit ratings of our medium-term note program may not reflect the
potential impact of all risks related to structure and other factors on any
trading market for, or trading value of, your notes. In addition, real or
anticipated changes in our credit ratings will generally affect any trading
market for, or trading value of, your notes.

                                CAPITALIZATION

   The following table sets forth the capitalization of the Company and its
consolidated subsidiaries at
March 31, 2002.

<TABLE>
<CAPTION>
                                                                 March 31,
                                                                    2002
                                                                ------------
                                                                Outstanding
                                                                ------------
                                                                (in millions
                                                                  of U.S.
                                                                  dollars)
   <S>                                                          <C>
   Short-term debt, including current portion of long-term debt  $   566.0
   Long-term debt, less current portion........................    8,417.4
   Shareholders' equity........................................    9,576.9

                                                                 ---------
   Total capitalization(1).....................................  $18,560.3

                                                                 =========
</TABLE>
- --------
(1) At March 31, 2002, we had 3.5 billion authorized shares of common stock,
    with $.01 par value, of which 1,660.6 million were issued and 1,272.0
    million were outstanding. There has been no material change in our
    consolidated capitalization since March 31, 2002.

                                      S-4

<PAGE>

                        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 single 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
$684,239,130 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
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 notes must be made in the currency of a country
that adopts the Euro, then we may redenominate all of those notes into Euros by
giving holders notice of the redenomination as described under "Description of
Notes--Redenomination" below.

   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.

   Unless otherwise specified in the applicable pricing supplement, the notes
will be denominated in, and payments of principal, premium, if any, and/or
interest, if any, in respect thereof will be made in, United States dollars.
The notes also may be denominated in, and payments of principal, premium, if
any, and/or interest, if any, in respect thereof may be made in, one or more
foreign currencies. See "Special Provisions Relating to

                                      S-5

<PAGE>

Foreign Currency Notes--Payment of Principal, Premium, if any, and Interest, if
any." The currency in which a note is denominated (or, if that currency is no
longer legal tender for the payment of public and private debts in the country
issuing that currency or, in the case of Euro, in the member states of the
European Union that have adopted the single currency in accordance with the
Treaty establishing the European Community, as amended by the Treaty on
European Union, the currency which is then legal tender in the related country
or in the adopting member states of the European Union, as the case may be) is
referred to as the "specified currency" with respect to the particular note.
References to "United States dollars", "U.S. dollars" or "$" are to the lawful
currency of the United States of America (the "United States").

   You will be required to pay for your notes in the specified currency. At the
present time, there are limited facilities in the United States for the
conversion of U.S. dollars into foreign currencies and vice versa, and
commercial banks do not generally offer non-U.S. dollar checking or savings
account facilities in the United States. The agent from or through which a
foreign currency note is purchased may be prepared to arrange for the
conversion of U.S. dollars into the specified currency in order to enable you
to pay for your foreign currency note, provided that you make a request to that
agent on or prior to the fifth Business Day preceding the date of delivery of
the particular foreign currency note, or by any other day determined by that
agent. Each conversion will be made by an agent on the terms and subject to the
conditions, limitations and charges as that agent may from time to time
establish in accordance with its regular foreign exchange practices. You will
be required to bear all costs of exchange in respect of your foreign currency
note. See "Special Provisions Relating to Foreign Currency Notes."
   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 principal or interest 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.

   Notes with different variable terms other than interest rates may also be
offered concurrently to different investors. We may, from time to time, change
interest rates or formulas and other terms of notes, but no change of terms
will affect any note we have previously issued or as to which we have accepted
an offer to purchase.

                                      S-6

<PAGE>

   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 of principal of, and premium, if any, and interest, if
any, on book-entry notes through the Trustee to DTC. See "--Book-Entry System."
If the note is a certificated security, 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. If the note is a global security, beneficial owners
will be paid in accordance with DTC's and its participants' procedures.

   Book-entry notes may be transferred or exchanged only through DTC. See "--
Book-Entry System." Registration of transfer or exchange of certificated notes
will be made at the office or agency maintained by the Trustee for this purpose
in the Borough of Manhattan, The City of New York, currently the corporate
trust office of the Trustee. No service charge will be imposed for any such
registration of transfer or exchange of notes, but we may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith (other than certain exchanges not involving any
transfer).

   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.

   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.

   For information on payment of principal and interest of foreign currency
notes, see "--Special Provisions Relating to Foreign Currency Notes."

                                      S-7

<PAGE>

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 have appointed 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;

    (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

                                      S-8

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    (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.

   Unless otherwise specified on the applicable pricing supplement, 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.

   Unless otherwise specified on the applicable pricing supplement, 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 pricing 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.

                                      S-9

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   References below to information services include any successor information
services.

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 U.S. dollar
   certificates of deposit of the particular Index Maturity as published in
   H.15 Daily Update, or other recognized electronic source used for the
   purpose of displaying the applicable rate, under the caption "CDs (secondary
   market)", or

      (3) if the rate referred to in clause (2) is not so published by 3:00
   P.M., New York City time, on 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 or, if none, the initial interest rate.

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 of the Index Maturity specified in the applicable pricing
   supplement 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 shall be 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 of the particular Index Maturity specified in the
   applicable pricing supplement placed for industrial issuers whose bond
   rating is "AA", or the equivalent, from a nationally recognized statistical
   rating organization, or

                                     S-10

<PAGE>

      (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 or, if none, the initial interest
   rate.

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 Moneyline Telerate (or any successor
   service) on page 120 (or any other page as may replace the specified page on
   that service) ("Moneyline Telerate Page 120"), or

      (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 U.S. dollar federal funds as published in H.15 Daily Update, or
   such other recognized electronic source used for the purpose of displaying
   the applicable rate, under the caption "Federal Funds (Effective)", or

      (3) if the rate referred to in clause (2) is not so published by 3:00
   P.M., New York City time, on the related Calculation Date, the rate on the
   particular Interest Determination Date shall be 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, or, if none, the initial interest
   rate.

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. 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 in the pricing
supplement. If LIBOR is indexed to the offered rate for U.S. dollar deposits,
"LIBOR" shall be determined by the calculation agent as described below.

   "LIBOR" means:

      (1) if "LIBOR Moneyline Telerate" is specified in the applicable pricing
   supplement or if neither "LIBOR Reuters" nor "LIBOR Moneyline 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 designated on the Interest
   Determination Date, that appears on the Designated 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 or the offered rate, if the
   Designated LIBOR Page by its terms provides only for a single rate,
   calculated by the calculation agent, for deposits in the LIBOR Currency
   having the Index Maturity designated in the pricing supplement, that appear
   on the Designated 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 Designated
   LIBOR Page as specified in clause (1) or (2), as applicable,

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<PAGE>

   the arithmetic mean 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 the agents or their respective affiliates), 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

      (4) if fewer than two offered quotations referred to in clause (3) are
   provided as requested, the arithmetic mean calculated by the calculation
   agent 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 the agents or their affiliates), in
   that Principal Financial Center selected by the calculation agent for loans
   in the LIBOR Currency to leading European banks, having the Index Maturity
   specified in the pricing supplement 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 (the "Auction") held on the Treasury Rate
   Determination Date 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 Moneyline
   Telerate (or any successor service) on page 56 (or any other page as may
   replace that page on that service) ("Moneyline Telerate Page 56") or page 57
   (or any other page as may replace that page on that service) ("Moneyline
   Telerate Page 57"), or

      (2) if the rate referred to in clause (1) is not so published by 3:00
   P.M., New York City time, on the related Calculation Date, 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 Treasury Rate Determination Date of the
   applicable Treasury Bills as published in H.15(519) under the caption "U.S.
   Government Securities/Treasury Bills/Secondary Market," or

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

      (6) if the rate referred to in clause (5) is not so published by 3:00
   P.M., New York City time, on the related Calculation Date, the rate on the
   Treasury Rate Determination Date calculated by the calculation

                                     S-12

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   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 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 Treasury Rate
   Determination Date, or if none, the initial interest rate.

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 the particular 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 on the particular Interest 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 the particular Interest 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 in effect on the particular Interest
   Determination Date or, if none, the initial interest rate.

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 Moneyline 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
       Moneyline Telerate (or any successor service) on page 7051 (or any other
       page as may replace the specified page on that service) ("Moneyline
       Telerate Page 7051"), for the particular Interest Determination Date, or

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

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<PAGE>

          (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 mean of
       the secondary market bid prices at approximately 3:30 P.M., New York
       City time, on that Calculation 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 or, if none, the initial interest rate.

      (2) if CMT Moneyline 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
       Moneyline Telerate (or any successor service) (on page 7052 or any other
       page as may replace the specified page on that service) ("Moneyline
       Telerate Page 7052"), for the week or month, as applicable, ended
       immediately preceding the week or month, as applicable, in which the
       particular Interest Determination Date falls, or

          (b) if the rate referred to in clause (a) does not so appear on
       Moneyline Telerate Page 7052 by 3:00 P.M., New York City time, on the
       related Calculation Date, the percentage equal to the one-week or
       one-month, as specified 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

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<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 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

          (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 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 calculated by the calculation agent shall 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
       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 of the number of years that is the next highest to
       the Index Maturity specified in the applicable pricing supplement and a
       remaining term to maturity closest to that Index Maturity and in an
       amount of at least $10 million, or

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

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

                                     S-15

<PAGE>

   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;

    (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 are to be made in a foreign 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 those notes into
Euros (whether or not any other similar debt securities 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 tranche of notes, the election to redenominate
will have effect, as follows:

    1. each denomination will be deemed to be denominated in such amount of
       Euro as is equivalent to its denomination or the amount of interest so
       specified in the relevant foreign currency at the fixed conversion rate
       adopted by the Council of the European Union for the relevant foreign
       currency, rounded down to the nearest Euro 0.01;

    2. after the redenomination date, all payments in respect of those notes,
       other than payments of interest in respect of periods commencing before
       the redenomination date, will be made solely in Euro as though
       references in those notes to the relevant foreign currency were to Euro.
       Payments will be made in Euro by credit or transfer to a Euro account
       (or any other account to which Euro may be credited or transferred)
       specified by the payee, or at the option of the payee, by a Euro cheque;

    3. if those notes are notes which bear interest at a fixed rate and
       interest for any period ending on or after the redenomination date is
       required to be calculated for a period of less than one year, it will be
       calculated on the basis of the applicable fraction specified in the
       applicable pricing supplement;

    4. if those notes are notes which bear interest at a floating rate, the
       applicable pricing supplement will specify any relevant changes to the
       provisions relating to interest; and

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

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
       another designated currency;

                                     S-16

<PAGE>

    (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.

   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

                                     S-17

<PAGE>

    (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.

Information Relating to DTC

   The following is based on information furnished by DTC:

   DTC will act as securities depository for the book-entry notes. The
book-entry notes will be issued as fully registered securities registered in
the name of Cede & Co. (DTC's partnership nominee). One fully registered global
note will be issued for each issue of book-entry notes, each in the aggregate
principal amount of such issue, and will be deposited with DTC. If, however,
the aggregate principal amount of any issue exceeds $500,000,000, one global
note will be issued with respect to each $500,000,000 of principal amount and
an additional global note will be issued with respect to any remaining
principal amount of such issue.

   DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, 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 holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants of DTC ("Direct Participants")
include securities brokers and dealers (including the agents), banks, trust
companies, clearing corporations and certain other organizations. DTC is owned
by a number of its Direct Participants and by the New York Stock Exchange,
Inc., the American Stock Exchange Inc., and the National Association of
Securities Dealers, Inc. Access to DTC's system is also available to others
such as securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Securities and Exchange Commission.

   Purchases of book-entry notes under DTC's system must be made by or through
Direct Participants, which will receive a credit for such book-entry notes on
DTC's records. The ownership interest of each actual purchaser of each
Book-Entry Note represented by a global note ("Beneficial Owner") is in turn to
be recorded on the records of Direct Participants and Indirect Participants.
Beneficial Owners will not receive written confirmation from DTC of their
purchase, but Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the Direct Participants or Indirect Participants through which
such Beneficial Owner entered into the transaction. Transfers of ownership
interests in a global note representing book-entry notes are to be accomplished
by entries made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners of a global note representing book-entry notes will
not receive certificated notes representing their ownership interests therein,
except in the event that use of the book-entry system for such book-entry notes
is discontinued.

   To facilitate subsequent transfers, all global notes representing book-entry
notes which are deposited with, or on behalf of, DTC are registered in the name
of DTC's nominee, Cede & Co. The deposit of global notes with, or on behalf of,
DTC and their registration in the name of Cede & Co. effect no change in
beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of
the global notes representing the book-entry notes; DTC's records reflect only
the identity of the Direct Participants to whose accounts such book-entry notes
are credited, which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on behalf of
their customers.

   Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.

                                     S-18

<PAGE>

   Neither DTC nor Cede & Co. will consent or vote with respect to the global
notes representing the book-entry notes. Under its usual procedures, DTC mails
an Omnibus Proxy to the Company as soon as possible after the applicable record
date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to
those Direct Participants to whose accounts the book-entry notes are credited
on the applicable record date (identified in a listing attached to the Omnibus
Proxy).

   Principal, premium, if any, and/or interest, if any, payments on the global
notes representing the book-entry notes will be made in immediately available
funds to DTC. DTC's practice is to credit Direct Participants' accounts on the
applicable payment date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive payment
on such date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name", and will be the responsibility of such Participant and not of DTC, the
Trustee or us, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal, premium, if any, and/or
interest, if any, to DTC is the responsibility of the Company and the Trustee,
disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct Participants and Indirect
Participants.

   If applicable, redemption notices shall be sent to Cede & Co. If less than
all of the book-entry notes of like tenor and terms are being redeemed, DTC's
practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.

   A Beneficial Owner will give notice of any option to elect to have its
book-entry notes repaid by us, through its Participant, to the Trustee, and
will effect delivery of the applicable book-entry notes by causing the Direct
Participant to transfer the Participant's interest in the global note or notes
representing such book-entry notes, on DTC's records, to the Trustee. The
requirement for physical delivery of book-entry notes in connection with a
demand for repayment will be deemed satisfied when the ownership rights in the
global note or notes representing such book-entry notes are transferred by
Direct Participants on DTC's records.

   DTC may discontinue providing its services as securities depository with
respect to the book-entry notes at any time by giving reasonable notice to us
or the Trustee. Under such circumstances, in the event that a successor
securities depository is not obtained, certificated notes are required to be
printed and delivered.

   We may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depository). In that event, certificated
notes will be printed and delivered.

   The laws of some states may require that certain purchasers of securities
take physical delivery of securities in definitive form. Such limits and such
laws may impair the ability to own, transfer or pledge beneficial interests in
global notes.

   The information in this section concerning DTC and DTC's system has been
obtained from sources that we believe to be reliable, but neither we nor any
agent takes any responsibility for the accuracy thereof.

Clearstream Luxembourg and Euroclear Systems

   Investors may elect to hold interests in book-entry notes through either DTC
(in the United States) or Clearstream Banking, societe anonyme ("Clearstream
Luxembourg") or Euroclear Bank S.A./N.V., as operator of the Euroclear System
("Euroclear") (in Europe) if they are participants of those systems, or
indirectly, through organizations that are participants in those systems.
Clearstream Luxembourg and Euroclear will hold interests on behalf of their
participants through customers' securities accounts in Clearstream Luxembourg's
and Euroclear's names on the books of their respective depositaries, which in
turn will hold such interests in customers' securities accounts in the
depositaries' names on the books of DTC. At the present time, Citibank,

                                     S-19

<PAGE>

N.A. acts as the U.S. depositary for Clearstream Luxembourg and JPMorgan Chase
Bank acts as U.S. depositary for Euroclear (in such capacities as the "U.S.
Depositaries"). Beneficial interests in the global securities will be held in
denominations of $1,000 and integral multiples thereof. Except as set forth
below or in the accompanying prospectus, the global security may be
transferred, in whole but not in part, only to another nominee of DTC or to a
successor of DTC or its nominee.

   Clearstream Luxembourg has advised us that it is incorporated under the laws
of Luxembourg as a professional depositary. Clearstream Luxembourg holds
securities for its participating organizations ("Clearstream Luxembourg
Participants") and facilitates the clearance and settlement of securities
transactions between Clearstream Luxembourg Participants through electronic
book-entry changes in accounts of Clearstream Luxembourg Participants, thereby
eliminating the need for physical movement of certificates. Clearstream
Luxembourg provides to Clearstream Luxembourg Participants, among other things,
services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Clearstream Luxembourg interfaces with domestic markets in several countries.
As a professional depositary, Clearstream Luxembourg is subject to regulation
by the Luxembourg Monetary Institute. Clearstream Luxembourg Participants are
recognized financial institutions around the world, including underwriters,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations and may include the agents or their affiliates.
Indirect access to Clearstream Luxembourg is also available to others, such as
banks, brokers, dealers and trust companies that clear through, or maintain a
custodial relationship with, a Clearstream Luxembourg Participant either
directly or indirectly.

   Distributions with respect to notes held beneficially through Clearstream
Luxembourg will be credited to cash accounts of Clearstream Luxembourg
Participants in accordance with its rules and procedures, to the extent
received by the U.S. Depositary for Clearstream Luxembourg.

   Euroclear has advised us that it was created in 1968 to hold securities for
participants of Euroclear ("Eur-oclear Participants") and to clear and settle
transactions between Euroclear Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic markets in
several countries. Euroclear is operated by Euroclear Bank S.A./N.V., as
operator of the Euroclear System (the "Euroclear Operator"), under contract
with Euroclear Clearance Systems S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are
accounts with the Euroclear Operator, not the Cooperative. The Cooperative
establishes policy for Euroclear on behalf of Euroclear Participants. Euroclear
Participants include banks (including central banks), securities brokers and
dealers and other professional financial intermediaries and may include the
agents or their affiliates. Indirect access to Euroclear is also available to
other firms that clear through or maintain a custodial relationship with a
Euroclear Participant, either directly or indirectly.

   Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear system, and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities
and cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of, or relationship with, persons
holding through Euroclear Participants.

   Distributions with respect to notes held beneficially through Euroclear will
be credited to the cash accounts of Euroclear Participants in accordance with
the Terms and Conditions, to the extent received by the U.S. Depositary of
Euroclear.

                                     S-20

<PAGE>

Global Clearance and Settlement Procedures

   Initial settlement for the notes will be made in immediately available
funds. Secondary market trading between Participants will occur in the ordinary
way in accordance with DTC's rules. Secondary market trading between
Clearstream Luxembourg Participants and/or Euroclear Participants will occur in
the ordinary way in accordance with the applicable rules and operating
procedures of Clearstream Luxembourg and Euroclear and will be settled using
the procedures applicable to conventional eurobonds in immediately available
funds.

   Cross-market transfers between persons holding directly or indirectly
through DTC on the one hand, and directly or indirectly through Clearstream
Luxembourg or Euroclear Participants, on the other, will be effected within DTC
in accordance with DTC's rules on behalf of the relevant European international
clearing system by its U.S. Depositary; however, such cross-market transactions
will require delivery of instructions to the relevant European international
clearing system by the counterparty in such system in accordance with its rules
and procedures and within its established deadlines (European time). The
relevant European international clearing system will, if the transaction meets
its settlement requirements, deliver instructions to its U.S. Depositary to
take action to effect final settlement on its behalf by delivering or receiving
notes in DTC, and making or receiving payment in accordance with normal
procedures. Clearstream Luxembourg Participants and Euroclear Participants may
not deliver instructions directly to their respective U.S. Depositories.

   Because of time-zone differences, credits of notes received in Clearstream
Luxembourg or Euroclear as a result of a transaction with a Participant will be
made during subsequent securities settlement processing and dated the business
day following DTC settlement date. Such credits, or any transactions in the
notes settled during such processing, will be reported to the relevant
Euroclear Participants or Clearstream Luxembourg Participants on that business
day. Cash received in Clearstream Luxembourg or Euroclear as a result of sales
of notes by, or through a Clearstream Luxembourg Participant or a Euroclear
Participant to a Participant will be received with value on the business day of
settlement in DTC but will be available in the relevant Clearstream Luxembourg
or Euroclear cash account only as of the business day following settlement in
DTC.

   Although DTC, Clearstream Luxembourg and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of securities among
participants of DTC, Clearstream Luxembourg and Euroclear, they are under no
obligation to perform or continue to perform such procedures and such
procedures may be discontinued at any time.

             SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES

General

   Unless otherwise specified in the applicable pricing supplement, foreign
currency notes will not be sold in, or to residents of, the country issuing the
specified currency. The information set forth in this prospectus supplement is
directed to prospective purchasers who are United States residents and, with
respect to foreign currency notes, is by necessity incomplete. We and the
agents disclaim any responsibility to advise prospective purchasers who are
residents of countries other than the United States with respect to any matters
that may affect the purchase, holding or receipt of payments of principal of,
and premium, if any, and interest, if any, on, their foreign currency notes.
These purchasers should consult their own financial and legal advisors with
regard to these risks. See "Risk Factors--Foreign Currency Notes Are Subject to
Exchange Rate and Exchange Control Risks."

Payment of Principal, Premium, if any, and Interest, if any

   Unless otherwise specified in the applicable pricing supplement, we are
obligated to make payments of principal of, and premium, if any, and interest,
if any, on, a foreign currency note in the specified currency. Any amounts so
payable by us in the specified currency will be converted by the exchange rate
agent named in the applicable pricing supplement (the "exchange rate agent")
into United States dollars for payment to the registered holders thereof unless
otherwise specified in the applicable pricing supplement or a registered holder
elects, in the manner described below, to receive these amounts in the
specified currency.

                                     S-21

<PAGE>

   Any United States dollar amount to be received by a registered holder of a
foreign currency note will be based on the highest bid quotation in The City of
New York received by the Exchange Rate Agent at approximately 11:00 A.M., New
York City time, on the second Business Day preceding the applicable payment
date from three recognized foreign exchange dealers (one of whom may be the
exchange rate agent) selected by the exchange rate agent and approved by us for
the purchase by the quoting dealer of the specified currency for United States
dollars for settlement on that payment date in the aggregate amount of the
specified currency payable to all registered holders of foreign currency notes
scheduled to receive United States dollar payments and at which the applicable
dealer commits to execute a contract. All currency exchange costs will be borne
by the registered holders of foreign currency notes by deductions from any
payments. If three bid quotations are not available, payments will be made in
the specified currency.

   Registered holders of foreign currency notes may elect to receive all or a
specified portion of any payment of principal, premium, if any, and/or
interest, if any, in the specified currency by submitting a written request to
the Trustee at its corporate trust office in The City of New York on or prior
to the applicable record date or at least fifteen calendar days prior to the
maturity, as the case may be. This written request may be mailed or hand
delivered or sent by cable, telex or other form of facsimile transmission. This
election will remain in effect until revoked by written notice delivered to the
Trustee on or prior to a record date or at least fifteen calendar days prior to
the maturity, as the case may be. Registered holders of foreign currency notes
to be held in the name of a broker or nominee should contact their broker or
nominee to determine whether and how an election to receive payments in the
specified currency may be made.

   Unless otherwise specified in the applicable pricing supplement, if the
specified currency is other than United States dollars, a Beneficial Owner of a
global security which elects to receive payments of principal, premium, if any,
and/or interest, if any, in the specified currency must notify the Participant
through which it owns its interest on or prior to the applicable record date or
at least fifteen calendar days prior to the maturity, as the case may be, of
its election. The applicable Participant must notify the depositary of its
election on or prior to the third Business Day after the applicable record date
or at least twelve calendar days prior to the maturity, as the case may be, and
the depositary will notify the Trustee of that election on or prior to the
fifth Business Day after the applicable record date or at least ten calendar
days prior to the maturity, as the case may be. If complete instructions are
received by the Participant from the applicable Beneficial Owner and forwarded
by the Participant to the depositary, and by the depositary to the Trustee, on
or prior to such dates, then the applicable Beneficial Owner will receive
payments in the specified currency.

   We will make payments of the principal of, and premium, if any, and/or
interest, if any, on, foreign currency notes which are to be made in United
States dollars in the manner specified herein with respect to notes denominated
in United States dollars. See "Description of Notes--General." We will make
payments of interest, if any, on foreign currency notes which are to be made in
the specified currency on an Interest Payment Date other than the maturity by
check mailed to the address of the registered holders of their foreign currency
notes as they appear in the Security Register, subject to the right to receive
these interest payments by wire transfer of immediately available funds under
the circumstances described under "Description of Notes--General." We will make
payments of principal of, and premium, if any, and/or interest, if any, on,
foreign currency notes which are to be made in the specified currency on the
maturity by wire transfer of immediately available funds to an account with a
bank designated at least fifteen calendar days prior to the maturity by the
applicable registered holder, provided the particular bank has appropriate
facilities to make these payments and the particular foreign currency note is
presented and surrendered at the office or agency maintained by the Trustee for
this purpose in the Borough of Manhattan, The City of New York, in time for the
Trustee to make these payments in accordance with its normal procedures.

Availability of Specified Currency

   If the specified currency for foreign currency notes is not available for
any required payment of principal, premium, if any, and/or interest, if any,
due to the imposition of exchange controls or other circumstances

                                     S-22

<PAGE>

beyond our control, we will be entitled to satisfy our obligations to the
registered holders of these foreign currency notes by making payments in United
States dollars on the basis of the Market Exchange Rate, computed by the
exchange rate agent, on the second Business Day prior to the particular payment
or, if the Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate.

   The "Market Exchange Rate" for a specified currency other than United States
dollars means the noon dollar buying rate in The City of New York for cable
transfers for the specified currency as certified for customs purposes (or, if
not so certified, as otherwise determined) by the Federal Reserve Bank of New
York.

   All determinations made by the exchange rate agent shall be at its sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on the registered holders of the foreign currency notes.

Judgments

   Under current Illinois law, a state court in the State of Illinois may, at
the request of the claimant, render a judgment in respect of a foreign currency
note in the specified currency. Any such judgment made in the specified
currency would be payable in that currency or, at the option of the payor, in
the amount of United States dollars which would purchase that currency as of
the banking day next preceding the date on which the money is paid to the
claimant. Accordingly, registered holders of foreign currency notes may be
subject to exchange rate fluctuations between the date of the calculation of
the amount due under a foreign currency judgment (if paid in United States
dollars) and the date of payment. A non-Illinois state court may not follow the
same rules and procedures with respect to payments and conversions of foreign
currency judgments.

   We will indemnify the registered holder of any note against any loss
incurred by that holder as a result of any judgment or order being given or
made for any amount due under the particular note and that amount due being
paid by us (whether due to the requirements of a judgment or order or
otherwise) in a currency (the "Judgment Currency") other than the specified
currency, and as a result of any variation between:

       the rate of exchange at which the specified currency amount is converted
       into the Judgment Currency for the purpose of calculation of the payment
       of the amount due; and

       the rate of exchange at which the registered holder, on the date of
       payment of that judgment or order, is able to purchase the specified
       currency with the amount of the Judgment Currency actually received.

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,
and, in each case, as specified in the applicable pricing supplement.

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 causing the Trustee or the paying agent to mail notice
of redemption to the holders at least 30 but not more than 60 days before the
redemption date. 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.

                                     S-23

<PAGE>

   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 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 or other risks 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.

   This section deals only with notes that are due to mature 30 years or less
from the date on which they are issued. The United States federal income tax
consequences of owning notes that are due to mature more than 30 years from
their date of issue will be discussed in the applicable pricing supplement.

   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.

                                     S-24

<PAGE>

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 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.

                                     S-25

<PAGE>

   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.

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

                                     S-26

<PAGE>

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 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.

                                     S-27

<PAGE>

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 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.

                                     S-28

<PAGE>

   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.

   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 backup withholding tax
(currently at a rate of 30%) 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 on a continuing basis for sale to or through the
agents. The agents, individually or in a syndicate, may purchase notes, as
principal, from us from time to time for resale to investors and other
purchasers at varying prices relating to prevailing market prices at the time
of resale as determined by the applicable agent or, if so specified in the
applicable pricing supplement, for resale at a fixed offering price. However,
we may agree with an agent for that agent to utilize its reasonable efforts on
an agency basis on our behalf to solicit offers to purchase notes at 100% of
the principal amount thereof, unless otherwise specified in the applicable
pricing supplement. We will pay a commission to an agent, ranging from .150% to
...750% of the principal amount of each note, depending upon its stated maturity,
sold through that agent as our agent. We will negotiate commissions with
respect to notes with stated maturities in excess of 30 years that are sold
through an agent as our agent at the time of the related sale. The following
table describes the potential proceeds we will receive but does not include
expenses, including reimbursement of certain of the agents' expenses, payable
by us which we estimate to be $342,950:

                                     S-29

<PAGE>

<TABLE>
<CAPTION>
                          Agents' Commissions and
          Price to Public        Discounts           Proceeds to the Company
          --------------- ------------------------ ----------------------------
 <S>      <C>             <C>                      <C>
 Per Note      100%            .150% to .750%           99.850% to 99.250%
 Total...  $684,239,130   $1,026,359 to $5,131,793 $683,212,771 to $679,107,337
</TABLE>

   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. We reserve the right to withdraw, cancel
or modify the offer made hereby without notice and may reject offers in whole
or in part (whether placed directly by us or through an agent). Each agent will
have the right, in its discretion reasonably exercised, to reject in whole or
in part any offer to purchase notes received by it on an agency basis.

   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.

   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, from time
to time, make a market in the notes, but are not obligated to do so and may
discontinue any market-making at any time without notice.

   The agents may, from time to time, purchase and sell notes in the secondary
market, but the agents are not obligated to do so, and there can be no
assurance that a secondary market for the notes will develop or be maintained
or that there will be liquidity in the secondary market if one develops.

   In connection with an offering of notes purchased by one or more agents as
principal on a fixed public offering price basis, the applicable agents will be
permitted to engage in certain transactions that stabilize the price of notes.
These transactions may consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of notes. If those agents create a short
position in notes, i.e., if they sell notes in an amount exceeding the amount
referred to in the applicable pricing supplement, they may reduce that short
position by purchasing notes in the open market. In general, purchases of notes
for the purpose of stabilization or to reduce a short position could cause the
price of notes to be higher than it might be in the absence of these type of
purchases.

   Neither we nor any agent makes any representation or prediction as to the
direction or magnitude of any effect that the transactions described in the
immediately preceding paragraph may have on the price of notes. In addition,
neither we nor any agent makes any representation that the agents will engage
in any such transactions or that such transactions, once commenced, will not be
discontinued without notice.
   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.

   Westdeutsche Landesbank Girozentrale, London Branch, is not a registered
broker-dealer in the United States. Notes offered in this prospectus supplement
and underwritten by Westdeutsche Landesbank Girozentrale, London Branch, will
be sold only outside the United States in transactions not requiring it to
register as a broker-dealer under United States laws. Westdeutsche Landesbank
Girozentrale, London Branch's identification as an agent in this prospectus
supplement should not be deemed to be an offer by it to sell notes in the
United States or a solicitation of an offer by persons in the United States to
buy notes from it.

   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

                                     S-30

<PAGE>

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.

   In the ordinary course of its business, the agents and their affiliates have
engaged, and may in the future engage, in investment and commercial banking
transactions with us and certain of our affiliates, for which they were, and
may be, paid customary fees and expenses.

                                   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 calendar 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 calendar 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 calendar 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.

      "Treasury Rate"--the earlier of (1) the tenth calendar 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.

                                     S-31

<PAGE>

      "Federal Funds Rate"--the earlier of (1) the tenth calendar 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.

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

   "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 LIBOR Page" means either (a) if "LIBOR Reuters" is specified in
the applicable pricing supplement, the display on the Reuters Monitor Money
Rates Service, or any successor service, for the purpose of displaying the
London interbank rates of major banks for the applicable LIBOR Currency, or (b)
if "LIBOR Moneyline Telerate" is specified in the applicable pricing supplement
or neither "LIBOR Reuters" nor "LIBOR Moneyline Telerate" is specified as the
method for calculating LIBOR, the display on the Moneyline Telerate Service, or
any successor service, for the purpose of displaying the London interbank rates
of major banks for the applicable LIBOR 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), available through
the world-wide-web site of the Board of Governors of the Federal Reserve System
at http://www.federalreserve.gov/releases/h15/update, or any successor site or
publication.

   "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.
   "London Business Day" means a day on which banking institutions are open for
business (including dealings in LIBOR Currency) in London.

   "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.

                                     S-32

<PAGE>

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

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

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

   "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 Union that
adopts the Euro in accordance with the Treaty of Rome.

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

   "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.

   "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.

                                     S-33

<PAGE>

   "Trustee" means Wachovia Bank, National Association (formerly, First Union
National Bank) or its successor.

                             VALIDITY OF THE NOTES

   The validity of the notes will be passed upon for the agents by Sidley
Austin Brown & Wood LLP, New York, New York.

                                     S-34

<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 JULY 10, 2002

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 $684,239,130, 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
currency, and payments on debt securities may be made in U.S. dollars or a
foreign 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             , 2002.

<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 located 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: Boston
Market, Chipotle and Donatos Pizzeria. In addition, we have a minority interest
in Pret A Manger. 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 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 March 31, 2002, 29,163
McDonald's restaurants existed worldwide, of which 13,148 were located in the
United States and 16,015 in 120 other countries. Additionally, 1,029
restaurants existed that operate under the other restaurant concepts,
substantially all of which are located in the United States. An additional 324
restaurants, which are comprised of quick-service hamburger restaurants and
other restaurant concepts, were under construction at March 31, 2002, including
230 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

                                      2

<PAGE>

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 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,
       2001;

   (b) Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2002;
       and

    (c)Our Current Reports on Form 8-K filed as of January 25, February 14,
       April 22 and June 17, 2002.

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 our brand 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.

                                      3

<PAGE>

                     SELECTED CONSOLIDATED FINANCIAL DATA

   The following summary sets forth selected consolidated financial data for
the Company and its subsidiaries for the three months ended March 31, 2002 and
2001 and for each of the years in the five-year period ended December 31, 2001.
The selected consolidated financial data for the five years ended December 31,
2001 have been derived from the Company's consolidated financial statements,
which have been audited by Ernst & Young LLP, independent auditors. Income
statement data for the three-month periods ended March 31, 2002 and 2001, and
balance sheet data as of March 31, 2002 and March 31, 2001, are derived from
the unaudited consolidated financial statements and include, in the opinion of
management, all normal recurring adjustments necessary to present fairly the
data for such periods. The operating results for the three-months ended March
31, 2002 are not necessarily indicative of the results you can expect for the
full fiscal year ending December 31, 2002. The following summary should be read
in conjunction with the consolidated financial statements of the Company and
the notes thereto included in the documents incorporated herein by reference.
See "McDonald's Corporation--Where to Get More Information".

<TABLE>
<CAPTION>
                                          Quarters Ended
                                             March 31,                      Years Ended December 31,
                                       ------------------    -------------------------------------------------------
                                          2002       2001         2001         2000       1999       1998     1997
                                       -------    -------    -------        -------    -------    -------    -------
                                             (U.S. dollars in millions, except per share of Common Stock data)
<S>                                    <C>        <C>        <C>            <C>        <C>        <C>        <C>

Systemwide sales (unaudited) (1)...... $ 9,698    $ 9,650    $40,630        $40,181    $38,491    $35,979    $33,638
                                       =======    =======    =======        =======    =======    =======    =======
Income statement data:
Total revenues........................ $ 3,597    $ 3,512    $14,870        $14,243    $13,259    $12,421    $11,409
Income before provision for income
  taxes and cumulative effect of
  accounting change...................     537(2)     556      2,330(3)       2,882      2,884      2,307(5)   2,407
Income before cumulative effect of
  accounting change...................     352(2)     378      1,637(3)       1,977      1,948      1,550(5)   1,642
Net income............................     253(2)     378(4)   1,637(3),(4)   1,977(4)   1,948(4)   1,550(5)   1,642
                                       =======    =======    =======        =======    =======    =======    =======
Balance sheet data:
Shareholders' equity at end of period. $ 9,577    $ 8,931    $ 9,488        $ 9,204    $ 9,639    $ 9,465    $ 8,852
Total debt at end of period...........   8,983      8,560      8,918          8,474      7,252      7,043      6,463
Total assets at end of period.........  22,196     21,449     22,535         21,684     20,983     19,784     18,242
                                       =======    =======    =======        =======    =======    =======    =======
Per share of Common Stock:
Income before cumulative effect of
  accounting change................... $  0.28(2) $  0.29    $  1.27(3)     $  1.49    $  1.44    $  1.14(5) $  1.17
Net income............................    0.20(2)    0.29       1.27(3)        1.49       1.44       1.14(5)    1.17
Income before cumulative effect of
  accounting change--diluted..........    0.27(2)    0.29       1.25(3)        1.46       1.39       1.10(5)    1.15
Net income--diluted...................    0.20(2)    0.29(4)    1.25(3),(4)    1.46(4)    1.39(4)    1.10(5)    1.15
Dividends declared....................      --         --       0.23           0.22       0.20       0.18       0.16
                                       =======    =======    =======        =======    =======    =======    =======
Other data:
Ratio of earnings to fixed charges (6)    4.31       4.02       4.11           5.39       5.76       4.82       5.16
                                       =======    =======    =======        =======    =======    =======    =======
</TABLE>

                                      4

<PAGE>

- --------

(1) Systemwide sales represent sales by all Company-operated, franchised and
    affiliated restaurants.

(2) Includes $43 million of non-cash asset impairment charges, primarily
    related to the impairment of assets in existing restaurants in Chile and
    other Latin American markets and the closing of 32 underperforming
    restaurants in Turkey, as a result of continued economic weakness.

(3) Includes special items primarily related to the U.S. business
    reorganization and other global change initiatives, and the closing of 163
    underperforming restaurants in international markets, partly offset by a
    gain on the initial public offering of McDonald's Japan, for a net pretax
    expense of $253 million ($143 million after tax or $0.11 per share).

(4) Effective January 1, 2002, the Company adopted Statement of Financial
    Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets.
    SFAS No. 142 indicates that goodwill (and intangible assets deemed to have
    indefinite lives) will no longer be amortized but will be subject to annual
    impairment tests. As a result of the first of required goodwill impairment
    tests, the Company recorded a non-cash charge of $99 million after tax
    ($0.07 per share) in the first quarter for the cumulative effect of this
    change. First quarter 2001 pro-forma net income, adjusted for the
    non-amortization provisions of SFAS No. 142, was $385 million ($0.29 per
    share). Pro-forma net income for the full year 2001, 2000 and 1999 was
    approximately $1,667 million ($1.27 per share--diluted), $2,003 million
    ($1.48 per share--diluted) and $1,968 million ($1.40 per share--diluted),
    respectively.

(5) Includes $162 million of costs related to the introduction of the "Made For
    You" food preparation system and a $160 million special charge related to a
    home office productivity initiative for a pretax total of $322 million
    ($219 million after tax or $0.16 per share).

(6) 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.

                                      5

<PAGE>

                        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 Wachovia Bank, National
Association (formerly, 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 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, or the method of determining 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;

                                      6

<PAGE>

    (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.

   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 service 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:

                                      7

<PAGE>

    (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.

   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 March 31, 2002, our aggregate amount of senior indebtedness was
approximately $8.8 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

                                      8

<PAGE>

    (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);

   (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)

                                      9

<PAGE>

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)

   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

                                      10

<PAGE>

                             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.

   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 Senior Vice President, 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, 2001, 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.

                                      11

<PAGE>

================================================================================

                                 $684,239,130

                            McDonald's Corporation

[LOGO] McDonald's

                               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
                                  BNP PARIBAS
                           Deutsche Bank Securities
                            Fleet Securities, Inc.
                             Goldman, Sachs & Co.
                                   JPMorgan
                                Morgan Stanley
                             Salomon Smith Barney
                                Scotia Capital
                                   SG Cowen
                          SunTrust Robinson Humphrey
              Westdeutsche Landesbank Girozentrale, London Branch

                                           , 2002

================================================================================

<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 $ 62,950
          Fees and expenses of accountants...................   40,000
          Fees and expenses of counsel.......................   75,000
          Fees and expenses of Trustee and agents............   30,000
          Printing and engraving expenses....................   50,000
          Rating agency fees.................................   75,000
          Miscellaneous......................................   10,000
                                                              --------
             Total........................................... $342,950
                                                              ========
</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>
<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 Wachovia Bank,
      National Association, as Trustee (including form of Senior Debt Security).*
  (b) Form of Subordinated Debt Securities Indenture between McDonald's Corporation and Wachovia Bank,
        National Association, as Trustee (including form of Subordinated Debt Security).*
  (c) Form of Supplemental Indenture No. 7 between McDonald's Corporation and Wachovia Bank, National
        Association, as Trustee.
  (d) Form of Series H Fixed Rate Registered Note.
  (e) Form of Series H Floating Rate Registered Note.
 5    Opinion and consent of Gloria Santona, Senior Vice President, 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, Senior Vice President, 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 Wachovia Bank, National Association, 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, 2001, and is incorporated herein by
   reference.

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.

                                     II-2

<PAGE>

      (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 9th day
of July, 2002.

                                          MCDONALD'S CORPORATION

                                                 /S/  MATTHEW H. PAULL
                                          By_________________________________
                                              Matthew H. Paull Executive Vice
                                               President and Chief Financial
                                                          Officer

   Each person whose signature appears below constitutes and appoints Matthew
H. Paull, 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 9th day of July, 2002.

          Signature                        Title
          ---------                        -----
      /S/  HALL ADAMS, JR.
- ------------------------------
         Hall Adams, Jr.       Director
     /S/  EDWARD A. BRENNAN
- ------------------------------
         Edward A. Brennan     Director
                               Chairman and Chief Executive
        /S/  JACK M. GREENBERG Officer--
- ------------------------------
         Jack M. Greenberg       McDonald's Corporation and
                               Director
      /S/  ENRIQUE HERNANDEZ,
             JR.
- ------------------------------
      Enrique Hernandez, Jr.   Director
        /S/  JEANNE P. JACKSON
- ------------------------------
         Jeanne P. Jackson     Director
        /S/  DONALD G. LUBIN
- ------------------------------
          Donald G. Lubin      Director

                                     II-4

<PAGE>

          Signature                        Title
          ---------                        -----
       /S/  WALTER E. MASSEY   Director
- -----------------------------
         Walter E. Massey
      /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
        /S/  ROGER W. STONE
- -----------------------------
           Roger W. Stone      Director
           /S/  ROBERT N.
          THURSTON
- -----------------------------
         Robert N. Thurston    Director
         /S/  FRED L. TURNER
- -----------------------------
          Fred L. Turner       Senior Chairman and Director
                               Executive Vice President and
        /S/  MATTHEW H. PAULL  Chief Financial
- -----------------------------
          Matthew H. Paull       Officer
                               Senior Vice President and
        /S/  DAVID M. POJMAN   Corporate Controller
- -----------------------------
           David M. Pojman

                                     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 Wachovia Bank,
              National Association, as Trustee (including form of Senior Debt Security).*
     (b)    Form of Subordinated Debt Securities Indenture between McDonald's Corporation and
              Wachovia Bank, National Association, as Trustee (including form of Subordinated Debt
              Security).*
     (c)    Form of Supplemental Indenture No. 7 between McDonald's Corporation and Wachovia Bank,
              National Association, as Trustee.
     (d)    Form of Series H Fixed Rate Registered Note.
     (e)    Form of Series H Floating Rate Registered Note.
       5    Opinion and consent of Gloria Santona, Senior Vice President, 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, Senior Vice President, 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 Wachovia Bank, National Association,
            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, 2001, and is incorporated herein by
   reference.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.A
<SEQUENCE>3
<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. 7 to be dated as of _______, 2002 (collectively, the "Indenture"),
between the Company and Wachovia Bank, National Association (formerly, 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 2001 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 Underwriters will endeavor to make such arrangements and, as
compensation therefor, the Company will pay

                                       3

<PAGE>

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, enforceability 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 P.M. 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
     the Company has furnished you a copy for your review prior to filing, and
     the Company will not file any

                                       4

<PAGE>

     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 will arrange for the determination of the
     legality of the Securities for purchase by institutional investors.

                                       5

<PAGE>

     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 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, Senior Vice President,
          General Counsel and Secretary, or a Vice President and Associate
          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 does
          such counsel know 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 Sidley Austin Brown & Wood LLP,
     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 to the Company, at any time at or prior to
the Closing Date 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

                                       9

<PAGE>

which is party to such Agreement materially adversely affect the market for the
Notes or a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States or with respect to
Clearstream or Euroclear systems in Europe; (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 any 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 make it impracticable or inadvisable to market the Notes or to enforce
contracts for the sale of the Notes.

     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,
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) and the Final

                                       10

<PAGE>

Prospectus (as amended or supplemented) so corrected was delivered to such
Underwriter a reasonable amount of time in advance of the delivery of such
written confirmation. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.

     (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.

                                       11

<PAGE>

     (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 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

                                       12

<PAGE>

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.

     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

                                                   _______________________, 2002

[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
______________, 2002, (the "Delivery Date"), $ ______________principal amount of
the Company's (the "Securities") offered by the Company's Final Prospectus dated
____________, 2002, 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 _________, 2002, 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 A.M. 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>4
<FILENAME>dex1b.txt
<DESCRIPTION>FORM OF DISTRIBUTION AGREEMENT
<TEXT>
<PAGE>

                                                                    Exhibit 1(b)

                             McDonald's Corporation

                               U.S.$1,975,000,000

                           Medium-Term Notes, Series H

                 Due from 1 Year to 60 Years from Date of Issue

                           U.S. DISTRIBUTION AGREEMENT

                                                                    July  , 2002

Merrill Lynch, Pierce, Fenner & Smith     Goldman, Sachs & Co.
        Incorporated                      85 Broad Street
4 World Financial Center, 15/th/ Floor    New York, New York 10004
New York, New York 10080
                                          J.P. Morgan Securities Inc.
ABN AMRO Incorporated                     270 Park Avenue, 7/th/ Floor
55 E. 52nd Street                         New York, New York 10017
New York, New York 10055
                                          Morgan Stanley & Co. Incorporated
Banc of America Securities LLC            1585 Broadway, 2/nd/ Floor
Bank of America Corporate Centre          New York, New York 10020
100 North Tryon Street
Charlotte, North Carolina 28255           Salomon Smith Barney Inc.
                                          388 Greenwich Street
Banc One Capital Markets, Inc.            New York, New York 10013
1 Bank One Plaza
Suite IL1-0595                            Scotia Capital (USA) Inc.
21 South Clark Street                     1 Liberty Plaza, 25/th/ Floor
Chicago, Illinois 60670                   165 Broadway
                                          New York, New York 10006
Barclays Capital Inc.
222 Broadway                              SG Cowen
New York, New York 10038                  1221 Avenue of the Americas
                                          New York, New York 10020
BNP Paribas Securities Corp.
787 Seventh Avenue                        SunTrust Capital Markets, Inc.
New York, New York 10019                  303 Peachtree Street N.E. 23/rd/ Floor
                                          Atlanta, GA 30308
Deutsche Bank Securities Inc.
31 W. 52/nd/ Street                       Westdeutsche Landesbank Girozentrale,
New York, New York 10019                  London Branch
                                          Woolgate Exchange
Fleet Securities, Inc.                    25 Basinghall Street
100 Federal Street                        London EC2V 5HA, England
Boston, Massachusetts 02110

<PAGE>

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 Notes, Series H 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. $1,975,000,000 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 Wachovia Bank, National Association (formerly known
as 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

<PAGE>

               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 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

                                       2

<PAGE>

               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 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 2001 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

                                       3

<PAGE>

               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 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

                                       4

<PAGE>

               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
               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 15 years              0.625

                                       5

<PAGE>

                    From 15 years to less than 20 years            0.700

               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 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

                                       6

<PAGE>

               "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 Sidley Austin
               Brown & Wood llp, Attn.: Edward F. Petrosky, Esq., 875 Third
               Avenue, New York, New York 10022, not later than 5:00 P.M. New
               York time, 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

                                       7

<PAGE>

               institution or threatening of any proceeding for that purpose;
               (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
               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

                                       8

<PAGE>

               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 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

                                       9

<PAGE>

               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 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

                                       10

<PAGE>

          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 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

                                       11

<PAGE>

          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).

     (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.

                                       12

<PAGE>

     (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 Obligations 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.

     (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, Senior
               Vice President, General Counsel and Secretary, or a Vice
               President and Associate 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

                                       13

<PAGE>

                    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, 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

                                       14

<PAGE>

                    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; (4) 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
                    (5) 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, 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

                                       15

<PAGE>

          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 Sidley Austin Brown & Wood
                LLP, 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 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
                all material respects all the conditions on its part to be
                in 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

                                       16

<PAGE>

               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.

     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

                                       17

<PAGE>

          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 delivery of the written confirmation of the sale of such
          Notes to such person in any case where such delivery is required by
          the Securities Act, 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) and the Prospectus (as
          amended or supplemented) so corrected was delivered to such Agent a
          reasonable amount of time in advance of the delivery of such written
          confirmation. 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 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 July , 2002 relating to the Notes constitute the only
          information furnished in writing 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

                                       18

<PAGE>

          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 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

                                       19

<PAGE>

          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 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.

                                       20

<PAGE>

          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 materially adversely affect the
market for the Notes or a material disruption has occurred in commercial banking
or securities settlement or clearance services in the United States or with
respect to Clearstream or Euroclear systems in Europe; (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 any 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 make it impracticable or inadvisable to market the Notes or to enforce
contracts for the 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
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.   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, Pierce, Fenner & Smith Incorporated, 4 World
                    Financial Center, 15/th/ Floor, New York, New York 10080,
                    Attention: Global Transaction Management Group;

                                       21

<PAGE>

          (ii)      if to ABN AMRO Incorporated, at 55 E. 52nd Street, New York,
                    New York 10055; Attention: Legal Department

          (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 IL1-0595, 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 BNP Paribas Securities Corp., at 787 Seventh Avenue,
                    New York, New York 10019, Attention: Syndicate Desk, Tel:
                    212-841-3435 Facsimile: 212- 841-3930;

          (vii)     if to Deutsche Bank Securities Inc., at 31 W. 52/nd/ Street,
                    New York, New York 10019;

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

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

          (x)       if to J.P. Morgan Securities Inc., at 270 Park Avenue, 7/th/
                    Floor, New York, New York 10017, Attention: Transaction
                    Execution Group;

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

          (xii)     if to Salomon Smith Barney Inc., at 388 Greenwich Street,
                    New York, New York 10013, Attention: Medium-Term Note
                    Department; Phone: (212) 816-5831; Facsimile: (212) 816-0949

          (xiii)    if to Scotia Capital (USA) Inc., at 1 Liberty Plaza, 25/th/
                    Floor, 165 Broadway, New York, New York, 10006, Attention:
                    C/O Investment Grade Debt, Syndicate Desk;

          (xiv)     if to SG Cowen, at 1221 Avenue of the Americas, New York,
                    New York 10020, Attention: Debt Capital Markets;

          (xv)      if to SunTrust Capital Markets, Inc., at 303 Peachtree
                    Street N.E. 23/rd/ Floor, Atlanta, GA 30308;

                                       22

<PAGE>

          (xvi)     if to Westdeutsche Landesbank Girozentrale, London Branch,
                    Woolgate Exchange, 25 Basinghall Street, London EC2V 5HA,
                    England, Attention: MTN- Desk, Primary Markets; with a copy
                    to Westdeutsche Landesbank, New York Branch, at 1211 Avenue
                    of the Americas, New York, New York 10020, Attention:
                    Primary Markets/Bond Origination; and

          (xvii)    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.

          10.  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.

          11.  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.

          12.  APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE INTERNAL 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 &               GOLDMAN, SACHS & CO.
SMITH INCORPORATED
                                              By:_________________________
By:_________________________                     Title:
   Title:
                                              J.P. MORGAN SECURITIES INC.
ABN AMRO INCORPORATED
                                              By:_________________________
By:_________________________                     Title:
   Title:
                                              MORGAN STANLEY & CO.
BANC OF AMERICA SECURITIES LLC                INCORPORATED

By:_________________________                  By:_________________________
   Title:                                        Title:

BANC ONE CAPITAL MARKETS, INC.                SALOMON SMITH BARNEY INC.

By:_________________________                  By:_________________________
   Title:                                        Title:

BARCLAYS CAPITAL INC.                         SCOTIA CAPITAL (USA) INC.

By:_________________________                  By:_________________________
   Title:                                        Title:

BNP PARIBAS SECURITIES CORP.                  SG COWEN

By:_________________________                  By:_________________________
   Title:                                        Title:

DEUTSCHE BANK SECURITIES INC.                 SUNTRUST CAPITAL MARKETS, INC.

By:_________________________                  By:_________________________
   Title:                                        Title:

DEUTSCHE BANK SECURITIES INC.                 WESTDEUTSCHE LANDESBANK
                                              GIROZENTRALE, LONDON BRANCH,
By:_________________________
   Title:                                     By:_________________________
                                                 Title:
FLEET SECURITIES, INC.

By:_________________________
   Title:

                                       25

<PAGE>

                                                                       EXHIBIT A

                             FORM OF TERMS AGREEMENT

                             McDonald's Corporation

                           MEDIUM-TERM NOTES, SERIES H

                                 TERMS AGREEMENT

                                                           _______________, 200_



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

Attention:  Treasurer

Re:  U.S. Distribution Agreement dated July   , 2002

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 H (the "Notes") are to be offered on a continuing
basis by McDonald's Corporation (the "Company"). Each of Merrill Lynch, Pierce,
Fenner & Smith Incorporated, ABN AMRO Incorporated, Banc of America Securities
LLC, Banc One Capital Markets, Inc., Barclays Capital Inc., BNP Paribas
Securities Corp., Deutsche Bank Securities Inc., Fleet Securities, Inc.,
Goldman, Sachs & Co., J.P. Morgan Securities Inc., Morgan Stanley & Co.
Incorporated, Salomon Smith Barney Inc., Scotia Capital (USA) Inc., SG Cowen,
SunTrust Capital Markets, Inc. and Westdeutsche Landesbank Girozentrale, London
Branch, 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 July , 2002 (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 Wachovia Bank, National Association (formerly, 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.

                                      B-1

<PAGE>

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 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 $500,000,000 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 $500,000,000
                    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 $500,000,000 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.

                                      B-2

<PAGE>


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

                                       B-3

<PAGE>

                    in certain cases, one or more indirect participants in DTC)
                    acting on behalf of beneficial transferors and transferees
                    of such Note.

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

                                      B-4

<PAGE>

                    Company. Notwithstanding the foregoing, if the Global
                    Securities to be exchanged exceed $500,000,000 in aggregate
                    principal amount, one Global Security will be authenticated
                    and issued to represent each $500,000,000 of principal
                    amount of the exchanged Global Securities and an additional
                    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 $500,000,000 (or the equivalent thereof). If one
                    or more Book-Entry Notes having an aggregate principal
                    amount in excess of $500,000,000 (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 $500,000,000
                    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-

                                      B-5

<PAGE>

                       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 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.

                                      B-6

<PAGE>

                            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
                            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

                                      B-7

<PAGE>

                            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
                            Rate, interest will be 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

                                      B-8

<PAGE>

                            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 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

                                      B-9

<PAGE>

                            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.

                            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
                            Trustee and Paying Agent that it

                                      B-10

<PAGE>

                            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.

                            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.

                                      B-11

<PAGE>

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 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).

                                      B-12

<PAGE>

                              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.

                              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 repre senting such Book-Entry Note
                              and notify the Agent and the Company by telephone

                                      B-13

<PAGE>

                              (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
                                   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.

                                      B-14

<PAGE>

                       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
                              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".

                                      B-15

<PAGE>

                       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 providing 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 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

                                      B-16

<PAGE>

                              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.

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

                                      B-17

<PAGE>

                              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
                              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

                                      B-18

<PAGE>

                              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 be delivered to the
                              purchaser of the Registered Note.

                              Copies of Pricing Supplements shall be sent to:

                              if Merrill Lynch, Pierce, Fenner & Smith
                              Incorporated is the Presenting Agent:

                              Merrill Lynch Production Technologies
                              4 Corporate Place
                              Piscataway, New Jersey 08854
                              Attn: Prospectus Operations/Diane Walker
                              Telephone:     (732) 878-6536
                              Facsimile:     (732) 878-6481/6547
                              Email:         mtnsuppl@na2.us.ml.com

                              with a copy to:

                              Merrill Lynch, Pierce, Fenner & Smith Incorporated
                              4 World Financial Center, 15/th/ Floor
                              New York, New York 10080
                              Attn:  Global Transaction Management Group

                                      B-19

<PAGE>

                              Telephone:     (212) 449-7476
                              Facsimile:     (212) 449-2234



                              if ABN AMRO Incorporated is the Presenting Agent:

                              ABN AMRO Incorporated
                              55 E. 52/nd/ Street
                              New York, New York 10055
                              Attn:  Teodoro Diangson
                              Telephone:     (212) 409-7281
                              Facsimile:     (212) 409-7423

                              if Banc of America Securities LLC is the
                              Presenting Agent:

                              Banc of America Securities LLC
                              Bank of America Corporate Center
                              100 North Tryon 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 IL1-0595
                              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

                                      B-20

<PAGE>

                              Facsimile:   (212) 412-1623


                              with a copy to:

                              Barclays Capital
                              c/o ADP Prospectus
                              55 Mercedes Way
                              Bay 1-7
                              Edgewood, NY 11717
                              Attn: Nicole Fratangelo
                              Telephone:   (631) 254-7129
                              Facsimile:   (631) 254-7140


                              if BNP Paribas Securities Corp. is the Presenting
                              Agent:

                              BNP Paribas Securities Corp.
                              787 Seventh Avenue
                              New York, New York 10019
                              Attn: Syndicate Desk
                              Telephone:   (212) 841-3435
                              Facsimile:   (212) 841-3930


                              if Deutsche Bank Securities Inc. is the Presenting
                              Agent:

                              Deutsche Bank Securities 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

                                      B-21

<PAGE>

                              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 Smith Barney Inc. is the Presenting
                              Agent:

                              Salomon Smith Barney Inc.
                              Brooklyn Army Terminal
                              140 58/th/ Street

                                      B-22

<PAGE>

                              8/th/ Floor
                              Brooklyn, New York  11220
                              Telephone:   (718) 765-6725
                              Facsimile:   (718) 765-6734

                              if Scotia Capital (USA) Inc. is the Presenting
                              Agent:

                              Scotia Capital (USA) Inc.
                              1 Liberty Plaza, 25/th/ Floor
                              165 Broadway
                              New York, New York 10006
                              Attn: Steve Janicek
                              Telephone:   (212) 225-5501
                              Facsimile:   (212) 225-5285

                              if SG Cowen is the Presenting Agent:

                              SG Cowen
                              1221 Avenue of the Americas, 7/th/
                              Floor
                              New York, New York 10020
                              Attn: Colleen Wall - Debt Capital
                              Markets
                              Telephone:   (212) 278-5022
                              Facsimile:   (212) 278-5099

                              if SunTrust Capital Markets, Inc.
                              is the Presenting Agent:

                              SunTrust Capital Markets, Inc.
                              303 Peachtree Street N.E. 23/rd/
                              Floor
                              Atlanta, GA 30308
                              Attn: Lara McGinty
                              Telephone:   (404) 532-0770
                              Facsimile:   (404) 588-7005

                              if Westdeutsche Landesbank Girozentrale, London
                              Branch is the Presenting Agent:

                              Westdeutsche Landesbank
                              Girozentrale, London Branch
                              Woolgate Exchange
                              25 Basinghall Street
                              London EC2V 5HA, England
                              Attn:  MTN-Desk, Primary Markets

                                      B-23

<PAGE>

                              Telephone:  44-202-020-3314
                              Facsimile:  44-207-020-3360

                              with a copy to:

                              Westdeutsche Landesbank, New York
                              Branch
                              1211 Avenue of the Americas
                              New York, New York 10020
                              Attn: Primary Markets/Bond
                              Origination
                              Telephone: (212) 597-8533
                              Facsimile: (212) 597-5427


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
                              file with the Commission 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 filed 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

                                      B-24

<PAGE>

                              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
                              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
                              Trustee to risk or expend its own funds 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.

                                      B-25

<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.

            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 applicable
                                   Pricing Supplement, Certificated Notes
                                   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

                                      B-26

<PAGE>

                                   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. 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.

                                      B-27

<PAGE>

                                   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 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

                                      B-28

<PAGE>

                                   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 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

                                      B-29

<PAGE>

                                   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 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

                                      B-30

<PAGE>

                              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 the sole right to accept orders to
                              purchase ertificated 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:

                                      B-31

<PAGE>

                              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).

                                   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

                                      B-32

<PAGE>

                                        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.

                                   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

                                      B-33

<PAGE>

                                   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 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.

                                      B-34

<PAGE>

                              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                             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).

                                      B-35

<PAGE>

                              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. 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

                                      B-36

<PAGE>

                              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 Pierce, Fenner & Smith
                              Incorporated is the Presenting Agent:

                              Merrill Lynch Production
                              Technologies
                              4 Corporate Place
                              Piscataway, New Jersey 08854
                              Attn: Prospectus Operations/Diane
                              Walker
                              Telephone:   (732) 878-6536
                              Facsimile:   (732) 878-6481/6547

                              with a copy to:

                              Merrill Lynch, Pierce, Fenner & Smith
                                   Incorporated
                              4 World Financial Center, 15/th/
                              Floor
                              New York, New York 10080
                              Attn: Global Transaction Management Group
                              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

                                      B-37

<PAGE>

                              if Banc of America Securities LLC is the
                              Presenting Agent:

                              Banc of America Securities LLC
                              Bank of America Corporate Center
                              100 North Tryon 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 IL1-0595
                              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 BNP Paribas Securities Corp. is the Presenting
                              Agent:

                              BNP Paribas Securities Corp.
                              787 Seventh Avenue
                              New York, New York 10019
                              Attn:  Syndicate Desk
                              Telephone:   (212) 841-3435
                              Facsimile:   (212) 841-3930

                                      B-38

<PAGE>

                              if Deutsche Bank Securities Inc. is the Presenting
                              Agent:

                              Deutsche Bank Securities 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

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

                              J.P. Morgan Securities Inc.
                              1 Chase Plaza Level 5B
                              New York, New York 10005
                              Attn: Gary Saheed
                              Telephone:   (212) 552-5558
                              Facsimile:   (212) 552-5319

                                      B-39

<PAGE>

                              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 Smith Barney Inc. is the Presenting
                              Agent:

                              Salomon Smith Barney Inc.
                              Brooklyn Army Terminal
                              154 58/th/ Street
                              8/th/ Floor
                              Brooklyn, New York 11220
                              Telephone:   (718) 765-6725
                              Facsimile:   (718) 765-6734

                              if Scotia Capital (USA) Inc. is the Presenting
                              Agent:

                              Scotia Capital (USA) Inc.
                              1 Liberty Plaza, 25/th/ Floor
                              165 Broadway
                              New York, New York 10006
                              Attn: Steve Janicek
                              Telephone:   (212) 225-5501
                              Facsimile:   (212) 225-5285

                              if SG Cowen is the Presenting Agent:

                              SG Cowen
                              1221 Avenue of the Americas, 7/th/
                              Floor
                              New York, New York 10020
                              Attn: Colleen Wall - Debt Capital Markets
                              Telephone:   (212) 278-5022
                              Facsimile:   (212) 278-5099

                              if SunTrust Capital Markets, Inc. is the
                              Presenting Agent:

                                      B-40

<PAGE>

                                    SunTrust Capital Markets, Inc.
                                    303 Peachtree Street N.E. 23/rd/ Floor
                                    Atlanta, GA 30308
                                    Attn: Lara McGinty
                                    Telephone:     404-532-0770
                                    Facsimile:     404-588-7005

                                    if Westdeutsche Landesbank Girozentrale,
                                    London Branch is the Presenting Agent:

                                    Westdeutsche Landesbank Girozentrale, London
                                    Branch
                                    Woolgate Exchange
                                    25 Basinghall Street
                                    London EC2V 5HA, England
                                    Attn:  MTN-Desk, Primary Markets
                                    Telephone: 44-202-020-3314
                                    Facsimile: 44-207-020-3360

                                    with a copy to:

                                    Westdeutsche Landesbank
                                    New York Branch
                                    1211 Avenue of the Americas
                                    New York, New York 10020
                                    Attn: Primary Markets/Bond
                                    Origination
                                    Telephone:     (212) 597-8533
                                    Facsimile:     (212) 597-5427


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 terms of the Agreement. The Company will
                                    file

                                      B-41

<PAGE>

                                    with the Commission 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 filed 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-42

<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-43

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.C
<SEQUENCE>5
<FILENAME>dex4c.txt
<DESCRIPTION>FORM OF SUPPLEMENTAL INDENTURE NO. 7
<TEXT>
<PAGE>

                                                                    Exhibit 4(c)




           _________________________________________________________

                          SUPPLEMENTAL INDENTURE NO. 7

                                       BY

                                       AND

                                     BETWEEN

                             McDONALD'S CORPORATION

                                       AND

                       WACHOVIA BANK, NATIONAL ASSOCIATION
                     (formerly, First Union National Bank),
                                   as Trustee

                                ________________

                                Dated, [ ], 2002

                                ________________

                SUPPLEMENTAL TO SENIOR DEBT SECURITIES INDENTURE
                          DATED, AS OF OCTOBER 19, 1996

            _________________________________________________________

<PAGE>

                             McDONALD'S CORPORATION
                          SUPPLEMENTAL INDENTURE NO. 7
                                Dated, [ ], 2002
                                    Series of
                           Medium-Term Notes, Series H
                                 $1,975,000,000

          Supplemental Indenture No. 7, dated [ ], 2002, by and between
McDONALD'S CORPORATION, a corporation organized and existing under the laws of
the State of Delaware (hereinafter sometimes referred to as the "Company"), and
WACHOVIA BANK, NATIONAL ASSOCIATION (formerly, First Union National Bank, a
national banking association), authorized to accept and execute trusts
(hereinafter sometimes referred to as the "Trustee"),

                              W I T N E S S E T H:

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

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

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

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

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

                                   ARTICLE ONE
                       RELATION TO INDENTURE; DEFINITIONS

          SECTION 1.01. This Supplemental Indenture No. 7 constitutes an
integral part of the Indenture.

          SECTION 1.02. (a) For all purposes of this Supplemental Indenture No.
7, 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. 7; and

          (c)  The terms "hereof," "herein," "hereto," "hereunder" and
"herewith" refer to this Supplemental Indenture No. 7.

                                   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 $1,975,000,000, 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 H, 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 H
Fixed Rate Note or the form of Series H 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

                                       3

<PAGE>

          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 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

                                       4

<PAGE>

(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 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

                                       5

<PAGE>

          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 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. 7 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. 7 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.
7 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. 7) 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. 7 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.

                                       6

<PAGE>

          SECTION 3.04. Whenever in this Supplemental Indenture No. 7 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. 7 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. 7 or the Notes, expressed or implied,
shall give to any Person, other than the parties hereto, their successors
hereunder and the Holders of the Notes, any benefit or any legal or equitable
right, remedy or claim under this Supplemental Indenture No. 7.

          SECTION 3.05. (a) This Supplemental Indenture No. 7 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. 7 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. 7 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 WACHOVIA BANK,
NATIONAL ASSOCIATION, as Trustee, has caused this Supplemental Indenture No. 7
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



                                         WACHOVIA BANK,
                                         NATIONAL ASSOCIATION
                                         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 two, 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 two, 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 WACHOVIA
BANK, NATIONAL ASSOCIATION 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>6
<FILENAME>dex4d.txt
<DESCRIPTION>FORM OF SERIES H FIXED RATE REGISTERED NOTE
<TEXT>
<PAGE>

                                                                    Exhibit 4(d)

SERIES H FIXED RATE NOTE

REGISTERED                                                      PRINCIPAL AMOUNT

No.                       McDONALD'S CORPORATION
                        MEDIUM-TERM NOTE, SERIES H
                               (FIXED RATE)                                CUSIP

          Due From 1 Year To 60 Years From Date Of Issue

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

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

Issue Price:   %                        Original Issue Date:

Interest Rate: %                        Stated Maturity:

Specified Currency:
     (Applicable only if other than U.S. dollars)

     Option to Receive Payments in Specified Currency: [_]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:

         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, Canadian dollars,
U.S. dollars, Swiss francs and Euro, the Principal Financial Center shall be
Sydney, Toronto, The City of New York, Zurich and London, respectively.

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

          If this Note is a Certificated Note, payments of interest in U.S.
dollars (other than interest payable at Maturity) will be made by check mailed
to the address of the Person entitled thereto as such address shall appear on
the Debt Security Register on the applicable Regular Record Date, provided that,
if the Holder hereof is the Holder of U.S.$10,000,000 (or the equivalent thereof
in a

                                      F-2

<PAGE>

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:    ________________

                                       WACHOVIA BANK, NATIONAL ASSOCIATION
                                          as Trustee

                                       BANK ONE TRUST COMPANY, N.A.,
                                          as Authenticating Agent

                                       By:________________________________
                                          Authorized Signatory

                                      F-4

<PAGE>

                             McDONALD'S CORPORATION
                           MEDIUM-TERM NOTE, SERIES H
                                  (FIXED RATE)

This Note is one of a single series of duly authorized issue of debentures,
notes or other evidences of indebtedness of the Company (the "Debt Securities")
of a single series hereinafter specified, all issued or to be issued in one or
more series under a Senior Debt Securities Indenture, dated as of October 19,
1996 (herein called the "Indenture"), between the Company and Wachovia Bank, Nat
ional Association (formerly, First Union National Bank), as trustee (herein call
ed 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.$1,975,000,000 or the
equivalent thereof in one or more foreign 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 foreign 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

                                       R-2

<PAGE>

into U.S. dollars on the basis of the most recently available Market Exchange
Rate for such currency or as otherwise indicated on the face hereof. Any payment
made under such circumstances in U.S. dollars will not constitute an Event of
Default under the Indenture.

If the principal of and any interest and premium, if any, on the Notes 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 Company may, solely at
its option and without the consent of the Holders of such Notes or the need to
amend the Indenture, on any Interest Payment Date after the date on which such
country has become a Participating Member State has occurred, (such Interest
Payment Date, a "Redenomination Date"), redenominate all of those Notes into
Euros upon the giving of not less than 30 days' notice thereof in accordance
with the terms of such Notes, which notice shall set forth the manner in which
such redenomination shall be effected. If the Company elects to redenominate a
tranche of Notes, the election to redenominate will have effect as follows:

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

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

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

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

               The definitions of Business Day and Market Day that shall apply
to the Notes for payments on or in respect thereof following any redenomination
thereof and for all other purposes under the Notes and under the Indenture shall
be (A) business day and

                                       R-3

<PAGE>

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

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

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

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

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

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

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

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

               Except as provided in the Note or in the Pricing Supplement with
respect to the redenomination of the Notes into Euros, the occurrence or
non-occurrence of an EMU Event (as defined below) or the entry into force of any
law, regulation, directive or order requiring redenomination to be undertaken on
terms different than those described herein, will not have the effect of
altering any term of, or discharging or excusing performance under, the
Indenture or Notes nor give the

                                       R-4

<PAGE>

Company, the Trustee or the Holder of such Notes, the right unilaterally to
alter or terminate the Indenture or Notes or give rise to any Event of Default
or otherwise be the basis for any acceleration, early redemption, rescission,
notice, repudiation, adjustment or renegotiation of the terms of the Indenture
or Notes. The occurrence or non-occurrence of an EMU Event will be considered to
occur automatically pursuant to the terms of the Notes. For purposes hereof,
"EMU Event" means any event associated with EMU in the European Community,
including, without limitation, each (and any combination) of (i) the fixing of
exchange rates between the currency of a Participating Member State and the Euro
or between the currencies of Participating Members States; (ii) the introduction
of the Euro as lawful currency in a Participating Member State; (iii) the
withdrawal from legal tender of any currency that, before the introduction of
the Euro, was lawful currency in any of the Participating Member States; or (iv)
the disappearance or replacement of a relevant rate option or other price source
for the national currency of any participating Member State, or the failure of
the agreed sponsor (or a successor sponsor) to publish or display a relevant
rate, index, price, page or screen.

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

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

                                       R-5

<PAGE>

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 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.

                                       R-6

<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.

          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

                                       R-7

<PAGE>

and upon all future Holders of this Note and of any Notes issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent or waiver is made upon this Note or upon any Note
issued upon the transfer hereof or in exchange therefor or in lieu hereof.

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

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

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

                                       R-8

<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-9

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.E
<SEQUENCE>7
<FILENAME>dex4e.txt
<DESCRIPTION>FORM OF SERIES H FLOATING RATE REGISTERED NOTE
<TEXT>
<PAGE>

SERIES H FLOATING RATE NOTE                                         Exhibit 4(e)

REGISTERED                                                      PRINCIPAL AMOUNT

NO.                        NO. McDONALD'S CORPORATION
                           MEDIUM-TERM NOTE, SERIES H
                                 (FLOATING RATE)                           CUSIP

                Due from 1 Year to 60 Years from Date of Issue

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

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

<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 Moneyline Telerate Page:

If Base Rate is LIBOR, specify:      LIBOR Reuters:      Designated LIBOR Page:     LIBOR Moneyline Telerate:

Interest Reset Period:               LIBOR Currency:                                          Index Maturity:

Interest Reset Dates:
    (Applicable only if other than as described on the reverse hereof)

Interest Payment Dates:

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

Spread Multiplier:                                                                          Spread (+/-):

Maximum Interest Rate:                                                                       Minimum Interest Rate:
</TABLE>

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:

<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, U.S. dollars, Swiss francs and Euro, the Principal Financial
Center shall be Sydney, The City of New York, Zurich and Brussels, respectively.
"London Business Day" means a day on which banking institutions are open for
business (including dealings in the LIBOR Currency) in London.

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

                                      F-2

<PAGE>

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:______________

                                         WACHOVIA BANK, NATIONAL ASSOCIATION,
                                            as Trustee

                                         BANK ONE TRUST COMPANY, N.A.,
                                            as Authenticating Agent

                                         By:____________________________________
                                            Authorized Signatory

                                       F-4

<PAGE>

                             MCDONALD'S CORPORATION
                           MEDIUM-TERM NOTE, SERIES H
                                 (FLOATING RATE)

     This Note is one of a single series of duly authorized issue of
debentures, notes or other evidences of indebtedness of the Company (the "Debt
Securities") of a single series hereinafter specified, all issued or to be
issued in one or more series under a Senior Debt Securities Indenture, dated as
of October 19, 1996 (herein called the "Indenture"), between the Company and
Wachovia Bank, National Association (formerly, First Union National Bank), as
trustee (the "Trustee", which term includes any successor Trustee under the
Indenture) to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Debt Securities and of the terms upon which the Debt Securities are, and are
to be, authenticated and delivered. The Debt Securities may be issued in one or
more series, which different series may be issued in various currencies, may be
issued in various aggregate principal amounts, may mature at different times,
may bear interest (if any) at different rates, may be subject to different
redemption provisions (if any), may be subject to different sinking, purchase or
analogous funds (if any), may be subject to different covenants and Events of
Default and may otherwise vary as in the Indenture provided. This Debt Security
is one of the series designated on the face hereof, limited in aggregate initial
public offering price or purchase price of up to U.S.$1,975,000,000 or the
equivalent thereof in one or more foreign 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 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

                                       R-1

<PAGE>

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

         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

                                      R-2

<PAGE>

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 Company may, solely at
its option and without the consent of the Holders of such Notes or the need to
amend the Indenture, on any Interest Payment Date after the date on which such
country has become a Participating Member State has occurred, (such Interest
Payment Date, a "Redenomination Date"), redenominate all of those Notes into
Euros upon the giving of not less than 30 days' notice thereof in accordance
with the terms of such Notes, which notice shall set forth the manner in which
such redenomination shall be effected. If the Company elects to redenominate a
series of Notes, the election to redenominate will have effect as follows:

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

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

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

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

         The definitions of Business Day and Market Day that shall apply to the
Notes for payments on or in respect thereof following any redenomination thereof
and for all other purposes under the Notes and under the Indenture shall be (A)
business day and market day definitions for fixed or floating rate (as
applicable) Euro-denominated debt obligations issued in the Euromarkets and held
in international clearing systems which are consistent with existing or
anticipated market practices as determined by the

                                      R-3

<PAGE>

Company or (B) if no such Business Day and Market Day definitions are so
determined, the definitions of Business Day and Market Day which applied to such
Notes before redenomination or (C) if the Company would be unable to make
payments on the Notes on the date that payment is expressed to be due if (B)
above were to apply, such other business day and market day definitions as are
determined by the Company.

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

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

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

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

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

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

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

         Except as provided in the Note or in the Pricing Supplement with
respect to the redenomination of the Notes into Euros, the occurrence or
non-occurrence of an EMU Event (as defined below) or the entry into force of any
law, regulation, directive or order requiring redenomination to be undertaken on
terms different than those described herein, will not have the effect of
altering any term of, or discharging or excusing performance under, the
Indenture or Notes, nor give the Company, the Trustee or the Holder of such
Notes, the right unilaterally to alter or terminate the Indenture or Notes or
give rise to any Event of Default or otherwise be the basis for any
acceleration, early redemption, rescission, notice, repudiation, adjustment or
renegotiation of the terms of the Indenture or Notes. The occurrence or
non-occurrence of an EMU Event will be

                                      R-4

<PAGE>

considered to occur automatically pursuant to the terms of the Notes. For
purposes hereof, "EMU Event" means any event associated with EMU in the European
Union, including, without limitation, each (and any combination) of (i) the
fixing of exchange rates between the currency of a Participating Member State
and the Euro or between the currencies of Participating Members States; (ii) the
introduction of the Euro as lawful currency in a Participating Member State;
(iii) the withdrawal from legal tender of any currency that, before the
introduction of the Euro, was lawful currency in any of the Participating Member
States; or (iv) the disappearance or replacement of a relevant rate option or
other price source for the national currency of any participating Member State,
or the failure of the agreed sponsor (or a successor sponsor) to publish or
display a relevant rate, index, price, page or screen.

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

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


                                      R-5

<PAGE>

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

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

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

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

         The interest rate hereon will be reset daily, weekly, monthly,
quarterly, semiannually or annually (such period being the "Interest Reset
Period" specified on the face hereof, and the first day of each Interest Reset
Period being an "Interest Reset Date"). Unless otherwise specified on the face
hereof, the Interest Reset Dates will be, if this Note resets daily, each
Business Day; if this Note (unless this Note is a Treasury Rate Note) resets
weekly, Wednesday of each week; if this Note is a Treasury Rate Note that

                                       R-6

<PAGE>

resets weekly, Tuesday of each week (except as provided below under
"Determination of Treasury Rate"); if this Note resets monthly, the third
Wednesday of each month; if this Note resets quarterly, the third Wednesday of
March, June, September and December of each year; if this Note resets
semiannually, the third Wednesday of each of the two months of each year
specified on the face hereof; and if this Note resets annually, the third
Wednesday of one month of each year specified on the face hereof. If an Interest
Reset Date would otherwise be a day that is not a Business Day, such Interest
Reset Date shall be postponed to the next succeeding Business Day, except that,
if the Base Rate specified on the face hereof is LIBOR and such Business Day is
in the next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day.

     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

                                       R-7

<PAGE>

succeeding calendar month, such Interest Payment Date shall be the immediately
preceding Business Day.

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

     The Company has appointed and entered into an agreement with an agent (a
"Calculation Agent") to calculate the interest rates on Floating Rate Notes.
Unless otherwise specified on the face hereof, 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 U.S. dollar certificates of deposit of the particular Index
     Maturity as published in H.15 Daily Update, or other recognized electronic
     source used for the purpose of displaying the applicable rate, under the
     caption "CDs (secondary market)", or

          (3) if the rate referred to in clause (2) is not so published by 3:00
     P.M., New York City time, on such Calculation Date, then the "CD Rate" for
     such Interest Reset Period will be calculated by the Calculation Agent as
     the arithmetic

                                       R-8

<PAGE>

     mean of the secondary market offered rates as of 10:00 A.M., New York City
     time, on such CD Rate Determination Date, of three leading nonbank dealers
     in negotiable U.S. dollar certificates of deposit in The City of New York
     (which may include the agents or their affiliates) selected by the
     Calculation Agent for negotiable U.S. dollar certificates of deposit of
     major United States money market banks (in the market for negotiable U.S.
     certificates of deposit) with a remaining maturity closest to the
     particular Index Maturity in an amount that is representative for a single
     transaction in that market at that time, or

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

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

Determination of Commercial Paper Rate

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

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

          (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

                                       R-9

<PAGE>

     arithmetic mean of the offered rates as of 11:00 A.M., New York City time,
     on such Commercial Paper Rate Determination Date of three leading dealers
     of U.S. dollar commercial paper in The City of New York (which may include
     the agents or their affiliates) selected by the Calculation Agent for
     commercial paper of the Index Maturity specified on the face hereof placed
     for industrial issuers whose bond rating is "AA", or the equivalent, from a
     nationally recognized statistical rating organization, or

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

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

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

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

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

Determination of Federal Funds Rate

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

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

     (2) if the rate referred to in clause (1) does not so appear on Moneyline
     Telerate Page 120 or is not so published by 3:00 P.M., New York City time,
     on

                                      R-10

<PAGE>

     the Calculation Date (as defined below) pertaining to such Federal Funds
     Rate Determination Date, the "Federal Funds Rate" for such Interest Reset
     Period shall be the rate on such Federal Funds Rate Determination Date for
     U.S. dollar federal funds as published in H.15 Daily Update, or such other
     recognized electronic source used for the purpose of displaying the
     applicable rate, under the caption "Federal Funds (Effective)", or

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

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

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

Determination of LIBOR

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

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

                                      R-11

<PAGE>

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

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

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

                  (5) if the banks so selected by the Calculation Agent are not
         quoting as mentioned in clause (4), LIBOR determined as of such LIBOR
         Determination Date will be LIBOR in effect on such LIBOR Determination
         Date.
<TABLE>
<S>      <C>
         "Calculation Date" pertaining to LIBOR shall be the LIBOR Determination Date.
</TABLE>

                                      R-12

<PAGE>

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

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

         "Principal Financial Center" will be the capital city of the country
of the specified currency or LIBOR Currency, except that with respect to
Australian dollars, Canadian dollars, U.S. dollars, Swiss francs and Euro, the
Principal Financial Center shall be Sydney, Toronto, The City of New York,
Zurich and (solely in the case of LIBOR Currency) London, 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 Moneyline Telerate (or any
         successor service) on page 56 (or any other page as may replace that
         page on that service) ("Moneyline Telerate Page 56") or page 57 (or any
         other page as may replace that page on that service) ("Moneyline
         Telerate Page 57"), or

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

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

                                      R-13

<PAGE>

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

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

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

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

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

                                      R-14

<PAGE>

                             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.

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

                                      R-15

<PAGE>

        Prime Rate in effect on such Prime Rate Determination Date, or, if none,
        the Initial Interest Rate.

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

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

Determination of CMT Rate

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

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

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

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

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

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

                                      R-16

<PAGE>

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

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

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

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

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

         (2) if CMT Moneyline Telerate Page is 7052:

                                      R-17

<PAGE>

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

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

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

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

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

                                      R-18

<PAGE>

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

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

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

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

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

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

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

                                      R-19

<PAGE>

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

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

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

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

         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.

                                      R-20

<PAGE>

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

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

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

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

                                      R-21

<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:

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

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

                            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-22

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5
<SEQUENCE>8
<FILENAME>dex5.txt
<DESCRIPTION>OPINION AND CONSENT OF GLORIA SANTONA
<TEXT>
<PAGE>

                                                                       Exhibit 5





                                  July 10, 2002



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 Senior Vice President, 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 $1,975,000,000 in proposed maximum aggregate offering price of Debt
Securities to be issued under a Senior Debt Securities Indenture or a
Subordinated Debt Securities Indenture (collectively, the "Indentures"), as
supplemented, by and between the Company and Wachovia Bank, National Association
(formerly, First Union National Bank), as trustee (the "Trustee"), all as more
fully described in the registration statement on Form S-3 (the "Registration
Statement") to which this opinion is an exhibit.

         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. The General Corporation Law of the State of Delaware
includes the statutory provisions contained therein, all applicable provisions
of the Delaware Constitution and reported judicial decisions interpreting these
laws.

         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.

<PAGE>

         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
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. I also consent to the
filing of this opinion letter as Exhibit 5 to the Registration Statement.

                                            Very truly yours,

                                            /s/Gloria Santona

                                            Gloria Santona

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.A
<SEQUENCE>9
<FILENAME>dex23a.txt
<DESCRIPTION>CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
<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 $684,239,130 of debt securities and to the
incorporation by reference therein of our report dated January 24, 2002, 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, 2001,
filed with the Securities and Exchange Commission.


/s/ Ernst & Young LLP




Chicago, Illinois
July 9, 2002

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25
<SEQUENCE>10
<FILENAME>dex25.txt
<DESCRIPTION>WACHOVIA BANK 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)

                       WACHOVIA BANK, NATIONAL ASSOCIATION
               (Exact Name of Trustee as Specified in its Charter)

                                   22-1147033
                      (I.R.S. Employer Identification No.)

                301 S. COLLEGE STREET, CHARLOTTE, NORTH CAROLINA
                    (Address of Principal Executive Offices)

                                   28288-0630
                                   (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.)

                                MCDONALD'S PLAZA
                               OAK BROOK, ILLINOIS
                    (Address of Principal Executive Offices)

                                     605523
                                   (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.

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:

<PAGE>

   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.

   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.

<PAGE>

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.

<PAGE>

  List below all exhibits filed as part of this statement of eligibility.

__  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 27, 2002, 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 March 27, 2002.*

__  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
- ---    March 31, 2002, 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 April 11,
2002 as an Exhibit to Form T-1 in connection with Registration Statement Number
333-86036,

                                      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,
Wachovia Bank, National Association, 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 9th day of July, 2002.

                                          WACHOVIA BANK, NATIONAL ASSOCIATION


                                          By: /s/ Ednora G. Linares
                                              Ednora G. Linares
                                              Vice President

<PAGE>

                                                                     Exhibit T-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, Wachovia Bank, National Association, 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.

                                       WACHOVIA BANK, NATIONAL ASSOCIATION

                                       By:  /s/ Ednora G. Linares
                                            Ednora G. Linares
                                            Vice President

Philadelphia, Pennsylvania

July 9, 2002

<PAGE>

                                                                     EXHIBIT T-7

                               REPORT OF CONDITION

Consolidating domestic and foreign subsidiaries of the First Union National
Bank, at the close of business on March 31, 2002, published in response to call
made by Comptroller of the Currency, under title 12, United States Code, Section
161. Charter Number 1 Comptroller of the Currency.

Statement of Resources and Liabilities

<TABLE>
<S>                                                                              <C>
                                     ASSETS

                               Thousand of Dollars
Cash and balance due from depository institutions:
   Noninterest-bearing balances and currency and coin........................      8,227,000
   Interest-bearing balances.................................................      4,256,000
Securities...................................................................      /////////
   Hold-to-maturity securities...............................................              0
   Available-for-sale securities.............................................     47,671,000
Federal funds sold and securities purchased under agreements.................      2,911,000
          to resell .........................................................      4,439,000
Loans and lease financing receivables:
          Loan and leases held for sale......................................      7,102,000
          Loan and leases, net of unearned income.....  115,198,000
          LESS: Allowance for loan and lease losses...    2,247,000
          LESS: Allocated transfer risk reserve.......            0
          Loans and leases, net of unearned income, allowance, and
          reserve............................................................    112,951,000
Trading Assets...............................................................     18,180,000
Premises and fixed assets (including capitalized leases).....................      2,566,000
Other real estate owned......................................................         87,000
Investment in unconsolidated subsidiaries and associated.....................     //////////
companies....................................................................        492,000
Customer's liability to this bank on acceptances outstanding.................        874,000
Intangible assets............................................................
       Goodwill..............................................................      2,253,000
Other intangible Assets......................................................        325,000
Other assets.................................................................     14,563,000

                   Total assets..............................................    226,897,000

                                   LIABILITIES

Deposits:
          In domestic offices................................................    130,068,000
            Noninterest-bearing.............................   20,202,000
            Interest-bearing................................  109,866,000
          In foreign offices, Edge and Agreement subsidiaries,
          and IBFs...........................................................     10,718,000
            Noninterest-bearing.............................       28,000
            Interest-bearing................................   10,690,000
Federal funds purchased in domestic offices                                        2,491,000
</TABLE>


<PAGE>

Securities sold under agreements to repurchase                        19,052,000

Trading liabilities................................................   13,593,000
Other borrowed money...............................................   18,549,000
Bank's liability on acceptances executed and outstanding...........      877,000
Subordinated notes and debentures..................................    5,993,000
Other liabilities..................................................    8,516,000
Total liabilities..................................................  209,857,000
Minority Interest in consolidated subsidiaries.....................      977,000


                                 EQUITY CAPITAL

Perpetual preferred stock and related surplus......................            0
Common Stock.......................................................      455,000
Surplus............................................................   13,462,000
Retained Earnings..................................................    2,052,000
Accumulated other comprehensive income.............................       94,000
Other Equity Capital components....................................            0
Total equity capital...............................................   16,063,000
Total liabilities and equity capital...............................  226,897,000


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
