Excess Benefit And Deferred Bonus Plan

Exhibit 10(b). McDonald' s Excess Benefit and Deferred Bonus Plan

Section 1. Introduction

1.1 The Plan. McDonald' s Corporation (the " Company" ) has adopted the McDonald' s Excess Benefit and Deferred Bonus Plan (the " Plan" ), as set forth herein, as a successor plan to the McDonald' s Corporation Supplemental Profit Sharing and Savings Plan (the " Supplemental Plan" ). The Supplemental Plan was amended in response to the enactment of Section 409A of the Internal Revenue Code of 1986, as amended (the " Code" ) to suspend deferrals into that plan for years after 2004. The Plan is effective as of January 1, 2005.

1.2 Purposes and Features of Plan.

(a) The purposes of the Plan are (i) to provide a select group of employees with the opportunity to elect to defer compensation under the " Deferred Bonus Feature" of the Plan, and (ii) to provide a select group of employees who participate in the McDonald' s Corporation Profit Sharing and Savings Plan or the McDonald' s Ventures 401(k) Plan (each, a " Profit Sharing Plan" ) with deferred compensation under the " Excess 401(k) Contributions Feature" of the Plan in excess of the maximum amount of 401(k) contributions and matching employer contributions that may be contributed on their behalf under the applicable Profit Sharing Plan, absent the Limits described in Section 3.2(b) below.

(b) The " Participants" in each feature of the Plan will be a select group of management or highly compensated employees of the Company or an Adopting Subsidiary. The Participants in the Deferred Bonus Feature are described in Section 2 below. The " Participants" in the Excess 401(k) Contributions Feature are described in Section 3 below. 1.3 Administration. The Plan shall be administered by a committee of three officers of the Company (the " Committee" ), the members of which shall be appointed from time to time by the Compensation Committee of the Board of Directors of the Company (the " Compensation Committee" ). The Committee shall have the powers set forth in the Plan and the power to interpret its provisions. Any decisions of the Committee shall be final and binding on all persons with regard to the Plan.

1.4 Compliance with Section 409A. The Plan is intended to comply with the requirements of Section 409A of the Code and regulations, rulings and other guidance issued thereunder (collectively, " Section 409A" ), and shall be interpreted and administered accordingly. Notwithstanding any other provision of this Plan, no acceleration of payment of Accounts that is not permitted by Section 409A shall be permitted, and no action, amendment or termination of the Plan shall be effective to the extent that it would cause the Plan to violate the requirements of Section 409A.

1.5 Defined Terms. Capitalized terms used in this Plan that are not defined herein have the same meaning as the same term in the applicable Profit Sharing Plan. An index of terms defined in the Plan is attached as Exhibit A to the Plan.


Section 2. Deferred Bonus Feature: Participation and Deferral Elections

2.1 Eligibility and Participation. Subject to the conditions and limitations of the Plan, an individual shall be eligible to participate in the Deferred Bonus Feature of the Plan for a calendar year (a " Deferred Bonus Eligible Employee" ) if, on the Election Due Date for such year, the individual is an employee of the Company who is in the Senior Direction Compensation Band of the Company or above (or an employee of an Adopting Subsidiary who is in a comparable compensation band). Any Deferred Bonus Eligible Employee who makes a Bonus Deferral Election as described in Section 2.2 below and in accordance with the requirements of Sections 2.3 and 4 below shall become a Participant, and shall remain a Participant until the entire balance of the Participant' s Account is distributed.

2.2 Deferral Elections. Subject to Sections 2.3 and 4 below:

(a) Any Deferred Bonus Eligible Employee may make an election (a " Bonus Deferral Election" ) to defer receipt of all or any portion (in 1% increments) of the compensation that he or she may receive in a particular year under the McDonald' s Target Incentive Plan, any successor annual bonus plan of the Company, or any annual bonus plan of an Adopting Subsidiary, in which the Deferred Bonus Eligible Employee participates (collectively, the " Annual Bonus Plan" ) to the extent permitted by Section 2.3 below.

(b) No other forms of compensation, including, but not limited to exit bonuses, severance bonuses or pro-rated annual bonuses paid under the Executive Retention Plan may be deferred under the Deferred Bonus Feature of the Plan.


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2.3 Rules for Bonus Deferral Elections. Bonus Deferral Elections shall be made in accordance with Section 4 below. The first Bonus Deferral Elections permitted under this Plan shall be with respect to bonuses under the Annual Bonus Plan that are earned in 2004 and to be paid in the first quarter of 2005; provided, that such Bonus Deferral Elections shall be void to the extent they are do not comply with the requirements of Code Section 409A, unless the Company amends or modifies the Plan and/or Participants' Bonus Deferral Elections in a manner that causes the Plan and Participants' Bonus Deferral Elections to comply with the requirements of Code Section 409A pursuant to Section 9.1 below.


Section 3. Excess 401(k) Contributions Feature of Plan: Participation and Deferral Elections

3.1 Eligibility and Participation. Subject to the conditions and limitations of the Plan, an individual shall be eligible to participate in the Excess 401(k) Contributions Feature of the Plan (an " Excess 401(k) Contributions Eligible Employee" ) for a calendar year (the " Specified Year" ) if:

(a) the individual is an active participant in one of the Profit Sharing Plans as of the first day of the Specified Date; (b) on the Election Due Date for such Specified Year, the individual is either (i) an employee of the Company in the Direction Compensation Band of the Company or above (or an employee of an Adopting Subsidiary in a comparable compensation band); and

(c) the individual has annualized compensation determined as of a date within the calendar year preceding the Specified Year as determined by the Committee (the " Compensation Determination Date" ) in an amount that exceeds the applicable dollar amount in effect under Code Section 414(q)(1)(B)(i) for the year preceding the Specified Year. An employee' s annualized compensation shall equal the sum of the employee' s annual base salary as of the Compensation Determination Date plus the employee' s annual bonus received under an Annual Bonus Plan in the year that includes the Compensation Determination Date (in each case determined without regard to the employee' s elective deferrals under this Plan, a Profit Sharing Plan or otherwise).

Any Excess 401(k) Contributions Eligible Employee who makes an Excess 401(k) Contributions Deferral Election in accordance with the requirements of Sections 3.3 and 4 below and who is thereafter credited with amounts pursuant to Section 3.2 below, shall become a Participant, and shall remain a Participant until the entire balance of the Participant' s Account is distributed. 3.2 Benefits.

(a) Each Excess 401(k) Contributions Eligible Employee who makes an Excess 401(k) Contributions Deferral Election for a Specified Year shall receive as credits to his or her Account, as provided in Section 5.1 below, an amount equal to the excess of (i) to the amount of 401(k) contributions and the associated matching employer contributions that would be allocated to his or her accounts under the applicable Profit Sharing Plan for the Specified Year if the Limits (as defined in Section 3.2(b) below) did not apply, over (ii) the amount of 401(k) contributions and the associated matching employer contributions actually allocated to his or her accounts under the applicable Profit Sharing Plan for the Specified Year.


If an Excess 401(k) Contributions Eligible Employee has made a Bonus Deferral Election under Section 2 for a Specified Year, (i) for purposes of determining the amount of 401(k) contributions that would have been allocated to his or her accounts under the applicable Profit Sharing Plan for the Specified Year if the Limits did not apply, his or compensation will not include the portion of any bonus for the Specified Year that was deferred pursuant to his or her Bonus Deferral Election for such Specified Year; and (ii) for purposes of determining the amount of matching employer contributions that would have been allocated to his or her accounts under the applicable Profit Sharing Plan for the Specified Year if the Limits did not apply, his or her compensation will be determined without regard to his or her Bonus Deferral Election for such Specified Year.

(b) For purposes of this Plan, the " Limits" means the limitations imposed on the maximum amount of elective contributions and matching contributions that may be contributed on behalf of the Excess 401(k) Contributions Eligible Employee under the applicable Profit Sharing Plan in which he or she participates as a result of the application of the maximum aggregate contributions imposed under Code Section 415, the maximum amount of compensation that may be taken into account under Code Section 401(a)(17) and the maximum amount of elective deferrals imposed under Code Section 402(g).

3.3 Rules for Excess 401(k) Contributions Deferral Election. An Excess 401(k) Contributions Deferral Eligible Employee shall receive the benefits provided for in Section 3.2 for a Specified Year only if he or she makes an election (an " Excess 401(k) Contributions Deferral Election" ) in accordance with Section 4 below to participate in the Excess 401(k) Feature of the Plan and to make 401(k) contributions under the applicable Profit Sharing Plan for the Specified Year. The first Specified Year under this Plan shall be the 2005 calendar year.


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Section 4. Rules for Deferral Elections

4.1 Timing for Deferral Elections. All Bonus Deferral Elections and Excess 401(k) Contributions Deferral Elections (collectively the " Deferral Elections" ) must be returned to the Committee no later than the date specified for such year by the Committee (the " Election Due Date" ), but in no event later than the latest date permitted by Section 409A. Each Deferral Election shall apply only to the year with respect to which it is made, and shall be irrevocable by the Participant and the Company as to that year, except as specifically provided in this Plan.

4.2 Tax Withholding and Other Special Rules. Notwithstanding any other provision of the Plan, an individual' s Deferral Election may not cause an individual' s cash compensation, payable after taking into account the Deferral Election and all other applicable deductions and withholdings, to be less than zero dollars. If an individual' s Deferral Election, after giving effect to all other applicable deductions and withholdings (including the tax withholding required pursuant to Section 6.4), would cause the amount of cash compensation payable to such individual to be less than zero dollars, the Committee shall reduce the amount of compensation deferred pursuant to the individual' s Deferral Election to the extent necessary to ensure that his or her cash compensation for each payroll period is not reduced below zero dollars.

Section 5. Accounts

5.1 Accounts.

(a) A bookkeeping account shall be established in each Participant' s name (an " Account" ). The Account of each individual who is a Participant in both the Deferred Bonus Feature and the Excess 401(k) Contributions Feature of the Plan shall be divided into two subaccounts, one representing the amounts credited to the Participant' s Account pursuant to Section 2 above of the Plan, and the other representing the amounts cre ...