NOTES TO FINANCIAL STATEMENTS
December 31, 2019 and 2018
NOTE 1 - DESCRIPTION OF PLAN
General: The
McDonalds 401k Plan (the Plan) is administered by a committee of officers (the Administrative Committee) appointed by the Chief Executive Officer of McDonalds Corporation (the Company or McDonalds). Fiduciary Counselors
oversees the McDonalds Common Stock Fund and the McDonalds ESOP Stock Fund under the Plan. Participants should refer to the Summary Plan Description and Prospectus for a complete description and up-to-date information. The Plan was amended in April 2019 to indicate the Administrative Committee is appointed by the Chief People Officer.
Eligibility: In order to participate in the 401(k) feature of the Plan, all eligible employees must be at least 21 years of age, have a valid Social
Security number, and be on the U.S. payroll of the Company or a participating employer. For purposes of the eligibility and contribution description below, the term Company includes McDonalds Corporation and all participating
employers.
Restaurant management employees and staff employees, (including part-time staff employees) are eligible to make 401(k) contributions, up to
50% of eligible compensation, beginning the first day of the month after completing one full calendar month of employment. Vice Presidents and above, crew employees and interns are eligible to make 401(k) contributions after one year of eligibility
service as defined by the Plan document. Restaurant management employees, who are not contributing to the Plan, are enrolled automatically at a 1% contribution level as soon as they have completed one year of service and attained age 21. Matching
contributions are provided to eligible employees after one year of eligibility service as defined by the Plan document.
Contributions: Each year,
participants may contribute up to 50% of their eligible pre-tax annual compensation, as defined by the Plan subject to Internal Revenue Service (the IRS) annual limits. Highly compensated employees under IRS
rules are not able to make 401(k) contributions in their second calendar year of employment until the first of the month on or after they complete one anniversary year with at least 1,000 hours of service under the Plan.
Participants who have attained age 50 before the end of the Plan year are eligible to make catch-up contributions
subject to IRS limits, and in addition, may contribute more than 50% if payroll tax and other withholding requirements are met. In accordance with Plan procedures, participants may roll over money into the Plan if it is from a: Qualified Plan,
Section 403(b) tax-sheltered annuity plan, Section 457 deferred compensation plan of a state or local government entity, SIMPLE 401(k) plan, Section 403(a) annuity plan, Traditional IRA, SIMPLE
IRA with at least two years participation, IRA set up to receive a distribution from an eligible employer plan or Federal thrift plan under section 7701(j).
Participants direct the investment of their contributions and Company contributions into various investment options offered by the Plan. The investment funds
under the Plan are the Growth Fund, Income Fund, Inflation Strategy Fund, Capital Preservation Fund, Large Cap Equity Index Fund, Small & Mid Cap Equity Index Fund, International Equity Index Fund, Bond Index Fund, Index Retirement Income
Fund, Index 2010 Retirement Solutions Fund, Index 2015 Retirement Solutions Fund, Index 2020 Retirement Solutions Fund, Index 2025 Retirement Solutions Fund, Index 2030 Retirement Solutions Fund, Index 2035 Retirement Solutions Fund, Index 2040
Retirement Solutions Fund, Index 2045 Retirement Solutions Fund, Index 2050 Retirement Solutions Fund, Index 2055 Retirement Solutions Fund, Index 2060 Retirement Solutions Fund, McDonalds Common Stock Fund, and the McDonalds ESOP Stock
Fund. No more than 20% of a participants future 401(k) contributions may be invested in the McDonalds Common Stock Fund.
The Company matches
(after one year of eligibility service and attainment of age 21) $1 for every $1 of contributions to the Plan, up to a maximum of 6% of eligible compensation (as defined by the Plan). Prior to July 2018, ESOP shares, to the extent available, were
used to make matching contributions.
A true-up calculation will be performed at the end of each
calendar year and will be posted to participant accounts in January of the following year.