“Annual Incentive Award” means an annual performance bonus determined under this Plan.

2.1Eligibility 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 (a “Deferred Bonus Eligible Employee”) with respect to the annual performance-based incentive compensation (an “Annual Bonus”) that he or she may receive for a particular performance year (the “Bonus Accrual 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”) if:

“Target Annual Bonus” means, with respect to any Participant, the Participant’s target bonus opportunity under the Company’s annual incentive plan applicable to the Participant.

“Bonus Target” means the amount of Annual Cash Incentive

“Incentive Compensation” means annual cash bonus and any Award.

Employee shall be promptly paid a lump sum payment equal to one times her current annual base salary plus one times the higher of the most recent annual bonus paid to her under the Annual Incentive Program or her target bonus amount as of the date immediately prior to the change in control under the Annual Incentive Program;

TIP. “TIP” means McDonald’s Target Incentive Plan or any annual bonus plan that replaces the Target Incentive Plan.

During the Initial Period, your annual base salary will be $1,450,000, your target annual cash bonus award will be $2,500,000, the target value of your annual long-term incentive awards will be $10,250,000 and in no case will your annual base salary, annual bonus target, annual bonus payment, target value of your annual long-term incentive award or annual long-term incentive award be less than that paid or granted by the Company to Christopher Kubasik (assuming you remain employed for the full fiscal year in respect of which such bonus or award is earned).1 To the extent that normal annual compensation review cycles occur prior to Closing, the Company may (but is not required to) adjust your compensation elements to amounts not exceeding the contemplated levels in the preceding sentence.

Salary and Bonus Severance. Participants shall receive salary and bonus severance payment equal to 100% of the sum of # the Participant’s Base Salary, plus # the Participant’s Target Annual Incentive Payment (with both Base Salary and Target Annual Incentive Payment being determined without regard to any decrease in such Base Salary or Target Annual Incentive Payment that would constitute a basis for a Good Reason Resignation).

STIP Bonus. “STIP Bonus” means the annual cash bonus paid under the Company’s annual performance bonus program, including any successor or replacement plan or program. A STIP Bonus may be paid under the Target Corporation Executive Officer Cash Incentive Plan, or any successor or replacement plan. STIP Bonus does not include any other type of bonus paid to an Officer, such as a signing or retention bonus.