Fill and Sign the Mcdonalds Corporation Target Incentive Plan Effective Form

APPENDIX A McDONALD & COMPANY INVESTMENTS, INC. 1992 RESTRICTED STOCK BONUS PLAN 1. Name and Purpose. 1.1 The name of this plan is the McDonald & Company Investments, Inc. 1992 Restricted Stoc k Bonus Plan. The Plan is created, adopted and will be maintained by McDonald & Company Investments, Inc. (herein referred to as the "Parent Corporation") to further the growth, success and interest of the Parent Corporation, McDonald & Company Securities, Inc. (herein referred t o as the "Corporation") and the stockholders of the Parent Corporation by enabling employees of the Corporation who receive an Incentive Bonus, as defined in Section 3.3 below, to acquire shares of common stock of the Parent Corporation ("Shares") under the terms and conditions of and in accordance with this Plan, thereby increasing their direct involvement in the success of the Corporation. 2. Administration of the Plan. 2.1 This Plan shall be administered by the Compensation Committee (the "Committe e") of the Board of Directors of the Parent Company which shall consist of at least three direct ors, each-of whom shall be a "disinterested person" within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934 and any successor to such rule ("Rule 16b-3"). The Committee may, from time to time, designate one or more persons or agents to carry out any or a ll of its administrative duties hereunder; provided that none of the duties required to be performed by the Committee under Rule 16b-3 or Section 2.3 of the Plan may be delegated to any other person. 2.2 The Plan shall be administered and operated on the same annual accounting period as the Parent Corporation (herein referred to as the "plan year"), which presently is either the fi fty-two (52) or fifty-three (53) week period ending on the last Friday of each March. The first plan yea r will be deemed to have commenced March 30, 1991 and to have ended March 27, 1992. In the event that the Parent Corporation changes its annual accounting period, the plan year shal l automatically change and the Committee may make such adjustments to the operation of the Plan as appropriate to reflect any short plan years, adjustments to the dates that Shares are awarded or that restrictions lapse hereunder or any other adjustments that may be appropriate to reflect the change in the plan year. 2.3 The Committee shall interpret the Plan, and to the extent and in the m anner contemplated herein. it shall exercise the discretion granted to it. The Committee shall issue from time to time such rules and interpretations as in its judgment are necessary in order to administe r the Plan effectively. The Committee shall have the exclusive right in its sole discre tion to determine the number of Shares awarded to each participant, to determine the price or prices at whic h Shares shall be awarded to each participant, to determine the time or times when Sha res may be awarded and to prescribe the form, which shall be consistent with this Plan, of the instrum ents evidencing any award and issuance under this Plan and the legend, if any, to be affixed to the certificates representing Shares issued under this Plan. 3. Eligible Employees and Participation.3.1 Any employee of the Corporation shall be eligible to participate in the Plan if he satisfies all of the following conditions: (a) he has been awarded an Incentive Bonus, as defined in Section 3.3 below, for the plan year or any portion of the plan year; (b) he has not attained age fifty-nine (59) on the first day of the relevant plan year; (c) he does not own at least 100,000 Shares on the first day of the relevant plan year; and (d) he was not employed at the Gradison Division during the plan year. Notwithstanding anything in paragraph (c) above to the contrary, an employee shall participate in the Plan for the first plan year ending March 27, 1992 even if he owns 100,000 or .more Shares on March 30, 1991. 3.2 No member of the Board of Directors of the Parent Corporation, unless he is also an employee of the Corporation, and no member of the Committee, shall be eligible to participate in the Plan. 3.3 The words "Incentive Bonus" shall mean a bonus paid to an employee under the Incentive Compensation Program as adopted and operated by the Chairman and President of the Parent Corporation and as such program may be amended from time to time. 3.4 In the event an employee would not participate in the Plan as a result of sati sfying either of the conditions specified in paragraphs (b) or (c) in Section 3.1 above, such an employee may elect to participate in the Plan for a plan year in which such conditions apply i f he delivers a written election to participate to the Committee within sixty (60) days aft er the beginning of the plan year. Such an election shall be irrevocable for the plan year. The Shares awa rded to such an employee shall be subject to the same terms and conditions hereunder as if the e mployee did not satisfy such conditions. 3.5 All of the Shares beneficially owned by an employee or his spouse, beneficially owned by or held for the benefit of his children or grandchildren who are under the age of nineteen (19) or held for the benefit of the employee under any qualified retirement plan maintaine d by the Parent Corporation or ' the Corporation including but not limited to the McDonald & Company Securities, Inc. Employees' Profit Sharing Trust and Plan and the McDonald & Company Investments, Inc. Employees' Stock Ownership Trust and Plan, shall be included in determining whether the employee satisfies the condition set forth in paragraph (c) of Section 3.1 above . Shares subject to an unexercised stock option granted to the employee shall not be inc luded in such determination. For purposes of this Section, and except as provided in the immediat ely preceding sentence, a person's "beneficial ownership" of Shares shall be determined in accor- dance with the provisions of Rule 16a-1 (a) (2) promulgated under the Securities Exchange Act of 1934 and any successor to such rule.3.6 Subject to approval by the Board of Directors of the Parent Corporation, the Committee shall have the specific right to amend the Plan to include any class of employees that are excluded under paragraph (d) of Section 3.1 above upon such terms and conditions as deemed appropriate by the Committee. 4. Stock Portion of Incentive Bonus. 4.1 The number of Shares that shall be awarded to a participant shall be determined by dividing the Stock Portion of a Participant's Incentive Bonus by the Adjusted Purchase Price of one Share. The Stock Portion of a Participant's Incentive Bonus shall be determined under the following chart according to the Participant's Incentive Bonus amount: Incentive Bonus Amount Stock Portion of Bonus Over But Not Over $0 $ 25,000 $0 $25,000 $ 50,000 $0 plus 10% of amount over $25,000 $50,000 $100,000 $2,500 plus 15% of amount over $50,000 $100,000 $150,000 $10,000 plus 20% of amount over $100,000 $150,000 $20,000 plus 25% of amount over $150,000 4.2 The Stock Portion of a Participant's Incentive Bonus shall be determined for each Incent ive Bonus paid with respect to a plan year by aggregating the amount of the current Incentive Bonus together with all the Incentive Bonuses previously paid with respect to such plan year to determine the stock portion for the current Incentive Bonus. 4.3 Notwithstanding anything in the Plan to the contrary, the Stock Portion of a Participant's Incentive Bonus payable with respect to the first plan year ending March 27, 1992 shall apply only to the Incentive Bonus payable on or about June 1, 1992 in an amount that shall not be greater than the lesser of (a) or (b): (a) the amount of the Incentive Bonus payable on or about June 1, 1992; or (b) one-half (1/2) of the total amount of all Incentive Bonuses payable with respect to the plan year ending on March 27, 1992. 4.4 The Adjusted Purchase Price for one Share shall be determined by calculating the ave rage closing price of one Share for the five (5) trading day period ending on the last day of the m onth immediately preceding the month that includes the date in which payment of the Incentive Bonus is actually made to the participant, and multiplying such average price by ninet y-five percent (95%). 4.5 No fractional Shares shall be awarded under the Plan. In the event that the determination of the number of Shares that a participant is entitled to under the Plan results in a fractional Share, such participant shall be entitled to the number of whole Shares that results from rounding up such determination to the next larger whole Share. 5. Shares Subject to the Plan. 5.1 The Shares which may be awarded and issued to employees under this Plan shall be made available, at the discretion of the Board of Directors, either from authorized and unissued Shares of the Parent Corporation or from Shares reacquired by the Parent Corporation, including Shares purchased in the open market. 5.2 Shares issued to employees under this Plan shall be subject to the terms, conditi ons and restrictions specified in Section 6 and to such other terms, conditions and restrictions as the Committee in its discretion may provide. 5.3 Subject to the provisions of the succeeding paragraphs of this Section 5, the aggregate number of Shares which may be issued under this Plan shall not exceed 600,000 Shares. 5.4 If Shares issued under this Plan shall be reacquired by the Parent Corporation pursuant to the provisions of Section 6 hereof, such Shares shall again become available for issue under this Plan. 5.5 In the event that the outstanding Shares shall be changed by reason of share splits or combinations, recapitalization or reorganizations, or share dividends, the number of Shares and the class or classes of securities which may thereafter be issued under this Plan may be appropriately adjusted as determined by the Committee so as to reflect such change. 6. Transfer Restrictions . All Shares issued to participants under this Plan shall be subject to the following restrictions: 6.1 The Shares shall not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated (and any such sale, transfer or other disposition, pledge or other hypothecation being hereinafter referred to as "to dispose of" or a "disposition") as long as the Parent Corporation has the right to a return of the Shares as hereinafter provided in this Section 6. 6.2 The obligation not to dispose of Shares acquired under this Plan and the right of the Parent Corporation to a return of such Shares pursuant to this Section 6 (such obligation and right being hereinafter in this Section referred to collectively as the "restrictions") shall l apse as to all Shares issued at any one time on the earliest of (a) the second (2nd) anniversary of the June 1st immediately following the end of the plan year for which such Shares were awarded; (b) the June 1st immediately following the participant's attainment of age fifty-nine (59); (c) a change in control that occurs with respect to the Parent Company; (d) the termination of the Pl an; or (e) the expiration of the Parent Corporation's right to a return of such Shares. 6.3 In the event that a participant's employment with the Corporation shall terminate for any reason other than death or total disability prior to the earliest of (a) the second (2nd) anniversary of the June lst immediately following the end of the plan year for which such Shares were awarded; (b) the June lst immediately following the participant's attainment of age fifty-nine (59); (c) a change in control that occurs with respect to the Parent Company; or (d) the termination of the Plan, the participant shall immediately forfeit any right hereunder to receive Shares for which the restrictions imposed hereunder have not lapsed. The Corporation shall cause the Shares that are forfeited to be returned to the Parent Corporation. Such Shares shall cease to be issued and outstanding and shall become treasury shares. 6.4 In the event that a participant's employment with the Corporation shall terminate by reason of death or total disability prior to the earliest of (a) the second (2nd) anniversary of the June 1st immediately following the end of the plan year for which such Shares were awarded; (b) the June 1st immediately following the participant's attainment of age fifty-nine (59); (c) a change in control that occurs with respect to the Parent Company; or (d) the termination of the Plan, then the restrictions imposed on such Shares by this Section 6 shall lapse and be of no further force and effect. 6.5 Notwithstanding the above, in the event an employee who is age 59 elects to parti cipate in the Plan pursuant to Section 3.4 above, the restrictions imposed on the Shares of such a participant shall not lapse because such participant has attained age 59 but shall lapse only upon the occurrence of any of the other provisions-set forth above. 6.6 The Committee, in its sole discretion, shall decide whether a change in cont rol has occurred. If the Committee shall decide that a change in con ' trol has occurred it shall issue written notice to participants of such fact and shall issue all Shares which have become unrestrict ed to participants as soon as possible after such notice. In determining whether a change in cont rol has occurred, the Committee shall consider, but shall not be limited to, the occurrenc e of the following events: (i) the first purchase of Shares pursuant to a tender offer or exchange (other than a tender offer or exchange by the Parent Corporation) for all or part of the Parent Corporation's common stock of any- class or any securities convertible into such common stock; (ii) the receipt by the Parent Corporation of a Schedule 13D or other advice indicating that a person i§ the "beneficial owner" (as that term is defined in Rule 13d-3 under the Securit ies Exchange Act of 1934) of twenty percent (20%) or more of the Parent Corporation's Shares of common stock calculated as provided in paragraph (d) of said Rule 13d-3; (iii) the date of approval by shareholders of the Parent Corporation of an agreement providing for any consolidation or merger of the Parent Corporation or the Corporation in which the Parent Corporation or the Corporation will not be the continuing or surviving corporation or pursuant to which shares of capital stock, of any class or any securities convertible into such ca pital stock, of the Parent Corporation would be converted into cash, securities, or other property, other than a merger of the Parent Corporation in which the holders of shares of all classes of the Parent Corporation's common stock immediately prior to the merger would have the same proportion of ownership of common stock of the surviving corporation immediately after the merger; (iv) the date of the approval by shareholders of the Parent Corporation of any sale, lease, exchange, or other transfi~r (in one transaction or a series of related transactions) of all or substa:ntially all the assets of the Parent Corporation or the Corporation; or (v) the adoption of any plan or proposal for the liquidation (but not a partial liquidation) or dissolution of the Parent Corporation or the Corporation. 6.7 The Committee may require any employee to whom Shares are issued to execute and liver to the Parent Corporation a stock power in blank with respect to the Shares issued and may re quire that the Parent Corporation retain possession of the certificates for Shares with respect to which the restrictions have not lapsed. Notwithstanding retention of certificates by the Parent Corporation, the employee in whose name certificates are issued shall have all right s (including dividend and voting rights) with respect to the Shares represented by such certificates, subjec t to the terms, conditions and restrictions specified under this Plan, and the Shares repre sented by such certificates shall be considered as issued and outstanding for all purposes. 7. Other Restrictions . 7.1 The Committee may impose such other restrictions on any Shares awarded pursuant to t he Plan as it may deem advisable, including, without limitation, restrictions under t he Securities Act of 1933, as amended, under the requirements of any stock exchange upon which such Shares are then listed and under any state blue sky or securities laws applicable to such Shares. 8. Escrow or Legend. 8.1 In order to enforce the restrictions imposed upon Shares issued hereunder, the Committee also may require any participant to enter into an Escrow Agreement providing that the certificates representing Shares issued pursuant to this Plan shall remain in the physica l custody of any escrow holder until any or all of the restrictions imposed pursuant to this Plan have terminated. In addition, the Committee may cause a legend or legends to be plac ed on any certificates representing Shares issued pursuant to this Plan, which legend or legends shall make appropriate reference to the various restrictions imposed hereunder. 9. Amendments. 9.1 This Plan may be amended at any time by the Board of Directors of the Parent Corpora tion, provided, that if this Man shall have been approved by the stockholders of the Parent Corporation no such amendment shall increase the maximum number of Shares that may be issued pursuant to this Plan, except pursuant to Section 5 hereof, without the further approval of such stockholders; and provided further, that no amendment to this Plan shall modify or impai r the rights of participants who have been awarded Shares, or who have been granted the right to an award of Shares hereunder prior to any such amendment. 10. Duration. 10.1 This Plan shall become 'effective upon its adoption by the Board of Directors for the Pla n Year ended March 27, 1992 and shall terminate on June 2, 1998 or such earlier date as may be determined by the Board of Directors; provided, however, that the Plan shall terminate and all awards of Shares under the Plan shall be revoked if, within 12 months of the date of its adoption by the Board of Directors, the Plan does not receive the approval of a majority of the outstanding Shares present in person or by proxy and entitled to vote at a meeting of stockholders of t he Parent Corporation. Notwithstanding the foregoing sentence. the Committee's right to award any new Shares shall terminate immediately after the last award of Shares with re spect to the plan year ending in 1996. 11. Withholding. 11. 1 Before the Parent Corporation releases Shares to an employee pursuant to the Plan after the lapse of all of the restrictions imposed under Section 6, the Committee may require that the employee make such provision, or furnish the Parent Corporation with such authorization, as the Committee in its sole discretion determines necessary or desirable so that the Parent Corporation may satisfy its obligations, under applicable income tax laws, to withhold for incom e or other taxes due upon or incident to such lapse of restrictions. Unless otherwise determined by the Committee, employees shall be permitted to elect (hereinafter an "Elect ion") with respect to the receipt of Shares upon lapse of Plan restrictions either: (a) to have the Parent Corporation withhold, from the Shares to be received by such employee, such number of whole Shares, or (b) to surrender to the Parent Corporation such number of whole Shares previously acquired by such employee, other than Shares as to which the restriction of Section 6 under the Plan have not lapsed, which, when valued at their aggregate fair market value on the date that rece ipt of Shares under the Plan is first taxable for federal income tax purposes (the "Tax Date"), constitute (i) the number of whole Shares having a fair market value nearest to, but at least equal to, the amount sufficient to satisfy the Parent Corporation's withholding obligation with respect to incom e realized by such employee on the Tax Date with respect to receipt of his Shares (the "Minimum Withholding Amount"); (ii) the number of whole Shares having a fair market value nearest the amount sufficient to satisfy the employee's aggregate maximum federal, state and loc al income tax liability with respect to income realized by such employee on the Tax Da te with respect to receipt of his Shares (the "Maximum Withholding Amount"), or (iii) such other number of whole Shares having a fair market value approximately equal to any amount specified by t he Committee or permitted by the Committee to be specified by the employee, provided that such amount is not in excess of the Maximum Withholding Amount and such amount, together with any cash paid by or on behalf of the employee, is at least equal to the Minimum Withholding Amount. No employee may make such an Election if such employee has previously filed a n election under Section 83(b) of the Internal Revenue Code in connection with the receipt of the Shares under the Plan. 11.2 An Election by an employee who is not subject to Section 16(b) of the Securitie s Exchange Act of 1934 may be made at any time, provided the appropriate form is received by the Parent Corporation prior to the Tax Date pertaining to such Shares, and such election may be c hanged or revoked by the employee at any time prior to the Tax Date. The restrictions of Se ction 11.3 shall not apply to such an employee. 11.3 Any Election by an employee who is subject to Section 16(b) shall meet the following requirements: (a) The Election, once made, shall be irrevocable. (b) The Election (i) may not be made with respect to any Shares within six months after the award of such Shares (except that this limitation will not apply in the event death or disability of the employee occurs prior to the expiration of the six-month period); (ii) must be made prior to the Tax Date; and (iii) must be made, and delivery of the appropriate form received by the Parent Corporation, either during one of the ten business-day periods beginning on the third business day following the date of release of the Parent Corporation's quarterly or annual summary statement of sales and earnings and ending on the twelfth business day following such date, or at least six months prior to the Tax Date for receipt of Shares as to which such Election applies. (c) The Committee shall have sole discretion to consent to or disapprove any Election made by such employee and, if the Committee disapproves such an Ele ction, the Committee shall request prior to the release of such Shares to which the disapproved Election applies that the employee furnish the Parent Corporation with an amount in cash or authorization to obtain such an amount sufficient to satisfy the Parent Corporation's income tax withholding obligation with respect to the lapse of restrictions on such Shares. The Committee by resolution may approve in advance specified classes of Electi ons, whether by a given employee or category of employees, or by type of Election, provided such resolution expressly reserves to the Committee the right both to disapprove any individual Election and to revoke or modify its advance approval of any such class of Elections. 11.4 The Committee may adopt such rules, forms and procedures as it considers necessary or desirable to implement this Section 11, which rules, forms and procedures shall be applied uniformly to all employees similarly situated. 12. Beneficiary Designation. 12.1 Unless an employee has designated a beneficiary in accordance with the provisions of t he following sentence, any Shares that become unrestricted and payable on account of the de ath of an employee shall be paid to the person or persons in the first of the following classes i n which there are any survivors of such employee: (a) his or her spouse at the time of death; (b) his or her issue per stirpes; (c) his or her parents; and (d) the executor- or administrator of his or her estate. Instead of having any Shares that become payable on account of an employee's death paid to a beneficiary as determined above, an employee may sign a document designating a beneficiary or beneficiaries to receive such Shares and filing such designation with the Corporation. McDonald & Company Investments, Inc. 6/26/92