<PAGE>
==============================================================================
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
---------------
[x] Filed by the Registrant
[_] Filed by a Party other than the Registrant
<TABLE>
<CAPTION>
Check the Appropriate Box:
<S> <C>
[_] Preliminary Proxy Statement [_] Confidential. For use of the Commission
[x] Definitive Proxy Statement Only (as permitted by Rule 14a-b (e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
</TABLE>
BRAZIL FAST FOOD CORP.
(Name of Registrant as Specified in Its Charter)
___________________________
(Name of Person filing Proxy Statement, if other than Registrant)
------------
Payment of Filing Fee (check the appropriate box):
[x] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------
[_] Fee paid previously with preliminary materials:
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
_________________________________________
2) Form, Schedule or Registration Statement No.:
___________________
3) Filing Party:
___________________________________________________
4) Date Filed:
_____________________________________________________
Copies of all communications to:
IRA ROXLAND, Esq.
Cooperman, Levitt, Winikoff, Lester & Newman, P.C.
800 Third Avenue
New York, New York 10022
(212) 688-7000
================================================================================
<PAGE>
BRAZIL FAST FOOD CORP.
LOGO PRAIA DO FLAMENGO
c10 200-22O. ANDAR
CEP 22210-030
RIO DE JANEIRO, BRAZIL
----------------
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 29, 1998
----------------
To the Stockholders of
Brazil Fast Food Corp.:
Notice is Hereby Given that the Annual Meeting of Stockholders (the "Special
Meeting") of Brazil Fast Food Corp., a Delaware corporation (the "Company"),
will be held at the Rio Atlantica Hotel (Buzios Salon-Floor C), Avenida
Atlantica, 2964, Copacabana, Rio de Janeiro, Brazil, on Friday, May 29, 1998
at the hour of 10:00 A.M., for the following purposes:
1. To elect six directors of the Company for the ensuing year.
2. To amend the Company's 1992 Stock Option Plan to increase the number
of shares of Common Stock available for grant thereunder from 500,000
to 1,000,000.
3. To consider and vote upon a proposal to amend the Company's
Certificate of Incorporation to increase the number of shares of the
Company's Common Stock authorized thereunder from 20,000,000 to
40,000,000.
4. To transact such other business as may properly come before the
Meeting.
Only stockholders of record at the close of business on April 17, 1998 are
entitled to notice of and to vote at the Meeting or any adjournment thereof.
Rogerio Carlos Lamim Braz
Secretary
Rio de Janeiro, Brazil
April 20, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY,
AND PROMPTLY RETURN IT IN THE PRE-ADDRESSED ENVELOPE PROVIDED FOR THAT
PURPOSE. ANY STOCKHOLDER MAY EVOKE HIS PROXY AT ANY TIME BEFORE THE MEETING
BY GIVING WRITTEN NOTICE TO SUCH EFFECT, BY SUBMITTING A SUBSEQUENTLY DATED
PROXY OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
<PAGE>
BRAZIL FAST FOOD CORP.
PRAIA DO FLAMENGO
200-22O. ANDAR
CEP 22210-030
RIO DE JANEIRO, BRAZIL
----------------
PROXY STATEMENT
----------------
This Proxy Statement is being mailed on or about April 20, 1998 to all
stockholders of record at the close of business on April 17, 1998 (the "Record
Date") in connection with the solicitation by the Board of Directors (the
"Board") of Brazil Fast Food Corp. (the "Company") of Proxies for the Annual
Meeting of Stockholders (the "Meeting") to be held on May 29, 1998. Proxies
will be solicited by mail, and all expenses of preparing and soliciting such
Proxies will be paid by the Company. All Proxies duly executed and received by
the persons designated as proxy therein will be voted on all matters presented
at the Meeting in accordance with the specifications given therein by the
person executing such Proxy or, in the absence of specified instructions, will
be voted for the named nominees to the Board and in favor of the proposals to
amend the Company's 1992 Stock Option Plan and to increase the Company's
authorized shares of Common Stock. The Board does not know of any other matter
that may be brought before the Meeting but, in the event that any other matter
should come before the Meeting or any nominee should not be available for
election, the persons named as proxy will have authority to vote all Proxies
not marked to the contrary in their discretion as they deem advisable. Any
stockholder may revoke his Proxy at any time before the Meeting by written
notice to such effect received by the Company at the address set forth above.
Attn: Corporate Secretary, by delivery of a subsequently dated Proxy or by
attending the Meeting and voting in person.
The total number of shares of the Company's Common Stock outstanding as of
the Record Date was 12,304,484. The Common Stock is the only class of
securities of the Company entitled to vote, each share being entitled to one
non-cumulative vote. Only stockholders of record as of the close of business
on the Record Date will be entitled to vote. A majority of the shares of
Common Stock outstanding and entitled to vote, or 6,152,243 shares, must be
present at the Meeting in person or by proxy in order to constitute a quorum
for the transaction of business. Abstentions and broker nonvotes will be
counted for purposes of determining the presence or absence of a quorum for
the transaction of business. Assuming the presence of a quorum, a vote of a
majority of the shares of Common Stock present and voting, in person or by
proxy, at the Meeting is required to pass upon each of the matters presented,
except that the proposal to amend the Company's Certificate of Incorporation
requires the affirmative vote of holders of a majority of all outstanding
shares of Common Stock entitled to vote at the Meeting.
Abstentions will be counted in tabulations of the votes cast on each of the
proposals presented at the Meeting, whereas broker nonvotes will not be
counted for purposes of determining whether a proposal has been approved.
"Broker nonvotes" are proxies received from brokers who, in the absence of
specific voting instructions from beneficial owners of shares held in
brokerage name, have declined to vote such shares in those instances where
discretionary voting by brokers is permitted.
A list of stockholders entitled to vote at the meeting will be available at
the Company's offices, Praia do Flamengo, 200-22o. Andar, CEP 22210-030, Rio
de Janeiro, Brazil, for a period of ten days prior to the Meeting and at the
Meeting itself for examination by any stockholder.
<PAGE>
ELECTION OF DIRECTORS
Six directors are to be elected at the Meeting to serve for a term of one
year or until their respective successors are elected and qualified.
INFORMATION CONCERNING NOMINEES
The following table sets forth the position and offices presently held with
the Company by each nominee, his age and his tenure as a director.
<TABLE>
<CAPTION>
POSITIONS AND OFFICES PRESENTLY DIRECTOR
NAME AGE HELD WITH THE COMPANY SINCE
---- --- ------------------------------- --------
<S> <C> <C> <C>
Omar Carneiro da Cunha........... 51 Chairman of the Board 1996
Chief Executive Officer and
Peter van Voorst Vader........... 44 Director 1996
Ian S. Barnett................... 43 Director 1996
Lawrence Burstein................ 55 Director 1996
Jose Ricardo Bosquet Bomeny...... 56 Director 1996
Carlos Gustavo Perret Simas...... 28 Director 1997
</TABLE>
Omar Carneiro da Cunha is a founding principal of Bond Consultoria
Empresarial S/C Ltda., a Brazilian business consultancy ("Bond Consultoria").
He is also an international strategy consultant for AT&T Brazil, having served
as its Chief Executive Officer from September 1995 to December 1997. From 1967
until 1994, Mr. Carneiro da Cunha held a variety of positions with Shell
Brasil S.A. and its affiliates including serving as President of Shell Brasil
S.A. from 1992 until 1994. Mr. Carneiro da Cunha received a B.A. in Economics
from the University of Political and Economical Sciences of Rio de Janeiro and
a degree in Finance Administration from Fundacao Getulio Vargas.
Peter J.F. van Voorst Vader has been Chief Executive Officer of the Company
since March 1996. Prior thereto and from 1995, he was an independent business
consultant. From 1992 until 1995, Mr. van Voorst Vader was a Retail Sales
Manager for Shell Nederland Verkoopmaatschapppij B.V., overseeing the
operations of 800 gas stations. From 1985 until 1992, Mr. van Voorst Vader
held several positions with Shell Brazil including Sales Promotion Manager,
Marketing Communications Manager and Retail Development Manager. From 1983
until 1985, he was employed by Shell International Petroleum Company as a
Regional Brand and Communications Assistant for Africa, the Middle East, the
Far East and South America. From 1980 to 1983, Mr. van Voorst Vader was a
Commercial Assistant for Shell Italia. Mr. van Voorst Vader received a B.S. in
Hotel Management from both the Hogere Hotel School in The Hague, Holland and
Florida International University. Mr. van Voorst Vader also has a Masters
Degree in International Business from Florida International University.
Ian S. Barnett is a founder of Heptagon Investments Limited and has been a
director of such concern since February 1992. Between January 1991 and
February 1992, Mr. Barnett was a private investor. From September 1986 to
January 1991, Mr. Barnett was employed by UBS (Securities) Ltd. (now UBS
Ltd.), the investment banking entity of Union Bank of Switzerland in London,
where he developed corporate finance activity in the Nordic countries. From
June 1979 until August 1985, Mr. Barnett was with the Toronto-Dominion Bank,
where he held a number of positions in the Bank's Latin American Division,
including business development throughout Latin America. Mr. Barnett is a
graduate of Queen's University, Canada, and received an MBA from INSEAD,
Fontainebleau, France.
Lawrence Burstein is and since March 1996 has been President, a director and
the principal shareholder of Unity Venture Capital Associates Ltd., a private
investment banking firm. He is also President, a director and principal
shareholder of Unity First Acquisition Corp., a publicly held "blank check"
company presently seeking to effect a Business Combination. Mr. Burstein, who
was also President of the Company from its inception until March 1996, is a
director of three other public companies, being, respectively, CAS Medical
Systems, Inc. engaged in the manufacture and marketing of blood pressure
monitors and other medical products principally for the neonatal market, The
MNI Group Inc., engaged in the marketing of specially formulated health foods
and THQ, Inc., a developer of electronic game cartridges. Mr. Burstein
received an LL.B. from Columbia Law School.
2
<PAGE>
Jose Ricardo Bosquet Bomeny founded BigBurger Ltda. ("BigBurger") in 1975
and was its President until its acquisition by the Company in July 1996. He
currently owns another fast food business, which is non-competitive with the
business of the Company, as well a six gas stations and two parking lots.
Carlos Gustavo Perret Simas has been a partner of Banco Icatu S.A. since
1994, being originally responsible for the Research Department of Icatu and
currently one of the partners responsible for the Investment Banking Division
of Icatu. Between 1991 and 1994, Mr. Simas held a variety of positions of
increasing responsibility at Banco Icatu. Prior thereto, he was employed by
BNDES, the Brazilian National Development Bank. Mr. Simas holds a degree in
Economics from PUC-Rio. Mr. Simas is the designee of AIG Latin America Equity
Partners, Ltd. ("AIGLAEP").
Pursuant to the terms of a Stockholders' Agreement dated as of August 11,
1997 (the "Stockholders' Agreement") among AIGLAEP, the Company and all of its
current executive officers and directors and certain of their affiliates
(collectively, the "Management Group"), each of such persons have agreed to
vote their respective shares of the Company's Common Stock to elect as
directors of the Company, respectively, two designees of Shampi Investments
A.E.C. (Messrs. Carneiro da Cunha and van Voorst Vader), two designees of Mr.
Burstein and certain other former executive officers and directors of the
Company (Messrs. Barnett and Burstein), one designee of BigBurger Ltda. (Mr.
Bomeny) and one designee of AIGLAEP (Mr. Simas). Under certain circumstances,
AIGLAEP may designate additional directors. See "Change of Control
Arrangements" and "Security Ownership of Certain Beneficial Owners and
Management--Stockholders' Agreement."
Incumbent directors stand for election at the Company's Annual Meeting of
Stockholders and will serve until their successors are duly elected and
qualified.
IDENTIFICATION OF EXECUTIVE OFFICERS
(Excludes executive officers who are also directors).
<TABLE>
<CAPTION>
NAME AGE POSITION PRINCIPAL OCCUPATION
---- --- -------- --------------------
Rogerio Carlos Lamim Braz 37 President President and Chief
Executive Officer of the
Company since 1994. From
1993 to 1994, Mr. Braz was
the Latin American
Operations Director for
Pepsico Foods
International (Kentucky
Fried Chicken Division).
From 1980 until 1993, Mr.
Braz held a variety of
positions with Bob's,
including manager trainee,
store manager, area
manager, operations
general manager,
franchising national
manager and human
resources director. Mr.
Braz has an agronomy
engineering degree from
Don Diniz Agricultural
University in Portugal.
<C> <C> <C> <S>
Carlos Henrique da Silva Rego 28 Vice President-- Joined the Company as
Finance and Chief Chief Financial Officer in
Financial Officer February 1998. Prior
thereto and from 1994, he
was Financial Controller
of Castrol Brasil Ltda., a
subsidiary of Burhma
Castrol Plc. Mr. Rego
previously held a variety
of positions with Pepsico
Inc., including Finance
Manager for Latin America.
Mr. Rego holds a B.A. in
Accounting and an MBA from
the Universidade Federal
do Rio de Janeiro.
</TABLE>
Executive officers are elected annually by the Board to hold office until
the first meeting of the Board following the next annual meeting of
stockholders and until their successors are chosen and qualified.
INFORMATION CONCERNING THE BOARD
The Board held four meetings during the year ended December 31, 1997. All
then incumbent directors attended 100% of such meetings.
The Compensation Committee of the Board is charged with reviewing and
recommending to the Board compensation programs for the Company's executive
officers and key employees. The Compensation Committee, which is currently
composed of Messrs. Carneiro da Cunha, van Voorst Vader and Bomeny, met on one
occasion during 1997, with all of its members in attendance.
The Audit Committee of the Board is charged with the review of the
activities of the Company's independent auditors (including, but not limited
to, fees, services and scope of audit). The Audit Committee is presently
composed of Messrs. Carneiro da Cunha and van Voorst Vader, the latter serving
in an ex officio, non-voting capacity. The Audit Committee met on one occasion
during 1997, with all of its members in attendance.
3
<PAGE>
DIRECTORS' COMPENSATION
Directors receive no cash compensation for attending Board meetings other
than reimbursement of reasonable expenses incurred in attending such meetings.
The Company compensates its directors on an annual basis for their services
through grants of options to acquire shares of the Company's Common Stock,
exercisable at the prevailing market price of the Company's Common Stock on
the respective grant dates, with the next such grants scheduled to be made on
the date of the Meeting. See "Executive Compensation."
PROPOSED AMENDMENT TO 1992 STOCK PLAN
The 1992 Stock Option Plan (the "1992 Plan") was amended by the Board of
Directors on March 23, 1998 to increase the number of shares of Common Stock
available for grant thereunder from 500,000 to 1,000,000, subject to the
approval of the Company's stockholders. The Company believes that it has been
successful in the past in attracting and retaining qualified employees,
officers and directors in part because of its ability to offer such persons
options to purchase Common Stock. The Company believes that the increase in
the number of shares reserved for issuance pursuant to the 1992 Plan is
necessary for the Company to continue to attract and retain qualified
employees, officers and directors.
The 1992 Plan provides for its administration by the Board or by a stock
option committee (the "Committee") appointed by the Board. The Board or the
Committee, as appropriate, has discretionary authority (subject to certain
restrictions) to determine the individuals to whom and the times at which
options will be granted and the number of shares subject to such options. The
Board or the Committee may interpret the provisions of the 1992 Plan and may
prescribe, amend and rescind rules and regulations relating thereto.
The purchase price of shares of Common Stock subject to an Incentive Stock
Option (within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code")), under the 1992 Plan may not be less than the
fair market value of the shares on the date upon which such option is granted.
In addition, in the case of an optionee who is also more than a 10%
stockholder of the Company, the purchase price of the shares may not be less
than 110% of the fair market value of the shares on the date upon which such
option is granted. Further, the aggregate fair market value (determined as of
the date of the option grant) of shares of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by the holder of
the option during any calendar year may not exceed $100,000. The option price
of non-qualified options granted under the 1992 Plan ("Non-Qualified Options")
is determined by the Board or the Committee, as appropriate, in its absolute
discretion at the time of grant, but shall in no event be less than the
minimum legal consideration required. In addition, option grants at less than
fair market value are intended to qualify as performance-based compensation
under Section 162(m) of the Code, and shall be exercisable only upon the
attainment of pre-established, objective performance goals.
The 1992 Plan is open to participation by employees, including officers of
the Company or of any subsidiary of the Company, as well as by non-employee
directors of, or consultants to the Company or any subsidiary of the Company.
At the Record Date, there were approximately seven Company employees
(including three executive officers) as well as five non-employee Company
directors eligible to participate in the 1992 Plan.
Assuming approval of the proposed amendment to the 1992 Plan and after
giving effect thereto, there would be 1,000,000 shares of Common Stock
available for issuance under the 1992 Plan, of which, as of the Record Date,
465,000 shares would be reserved for then issued and outstanding options.
BOARD RECOMMENDATION
The affirmative vote of the holders of a majority of the shares of Common
Stock of the Company present and voting in person or by proxy at the Meeting
is required for approval of this proposal. The Board recommends a vote FOR
such proposal.
4
<PAGE>
PROPOSAL TO AMEND CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED CAPITALIZATION
The Board has approved an amendment to the Company's Certificate of
Incorporation to increase the number of shares of Common Stock which the
Company shall be authorized to issue from 20,000,000 to 40,000,000. The Board
believes such action to be in the best interest of the Company so as to make
additional shares available for future employee benefit programs, possible
acquisitions and financings and other corporate purposes. The additional
shares of Common Stock may be issued from time to time as the Board may
determine without further action by the Company's Stockholders. With the
exception of issuances of Common Stock upon future exercises of options
granted pursuant to the Company's stock option plan, as well as upon future
exercises of other outstanding options and common stock purchase warrants, no
issuances of any additional shares of Common Stock authorized by the proposed
amendment is presently contemplated. The Company does not currently have any
agreements, arrangements or understandings with respect to any acquisition,
financing, stock split or dividend.
Stockholders do not currently possess, nor upon the adoption of the proposed
amendment will acquire, preemptive rights which would entitle such persons, as
a matter of right, to subscribe for the purchase of any securities of the
Company.
A broker who holds shares in street name will not be entitled to vote on the
amendment to the Company's Certificate of Incorporation without instructions
from the beneficial owner. This inability to vote is referred to as a broker
nonvote. Abstentions and broker nonvotes will be counted for purposes of
determining the existence of a quorum at the Meeting. However, since this
proposal requires the affirmative vote of at least a majority of the shares of
Common Stock outstanding as of the Record Date, abstentions and broker
nonvotes will have the effect of a negative vote with respect to such
proposal, but not as to the other proposals to be considered at the Meeting.
Stockholders are urged to mark the boxes on the proxy card to indicate how
their shares will be voted.
BOARD RECOMMENDATION
The affirmative vote of the holders of a majority of the shares of Common
Stock of the Company is required for approval of this proposal. The Board
unanimously recommends a vote FOR this proposal.
5
<PAGE>
EXECUTIVE COMPENSATION
Set forth below is the aggregate compensation for services rendered in all
capacities to the Company during the years ended December 31, 1997, 1996 and
1995 by its Chief Executive Officer and each of its two most highly
compensated executive officers whose compensation exceeded $100,000 during the
year ended December 31, 1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------ -------------------- ---------
OTHER RESTRICTED LONG TERM ALL
NAME AND FISCAL ANNUAL STOCK NUMBER OF INCENTIVE OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
- ----------------------- ------ -------- -------- ------------ ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Peter van Voorst Vader 1997 $120,000 $ -- -- 150,000(2) -- $ --
Chief Executive Officer 1996 $114,750 $ -- -- -- -- $ --
1995 $ -- $ -- -- -- -- $ --
Rogerio Carlos 1997 $198,000 $ -- -- 120,000(2) -- $ --
Lamin Braz 1996 $140,466 $ -- -- -- -- $ --
President 1995 $ -- $ -- -- -- -- $ --
Marcos Bastos Rocha(1) 1997 $134,400 $ -- -- 35,000(2) -- $ --
Vice President 1996 $ 90,553 $ -- -- -- -- $20,000
1995 $ -- $ -- -- -- -- $ --
</TABLE>
- --------
(1) Ceased to be employed by the Company in January 1998.
(2) See "--Option Grants in Last Fiscal Year" and "Report on Option
Repricing."
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERCENT
OF TOTAL
NUMBER OF OPTIONS
SHARES GRANTED TO GRANT
UNDERLYING EMPLOYEES EXERCISE DATE
OPTIONS IN FISCAL OR BASE EXPIRATION PRESENT
NAME GRANTED YEAR PRICE (S/SH) DATE VALUE(1)
---- ---------- ---------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C>
Peter van Voorst Vader.. 150,000(2) 33.7% $3 1/4(2) 3/19/01 $
17,500 $3 1/4 6/6/02 $
Rogerio Carlos Lamim
Braz................... 120,000(2) 24.1% $3 1/4(2) 3/19/01 $
</TABLE>
- --------
(1) The fair value of each option grant is estimated on the date of grant
using the Black Scholes option pricing model with the following weighted
average assumptions used for grants in 1997; risk free interest rate of
6.35%; no expected dividend yield; expected lives of 5 years; and expected
stock price volatility of 76%.
(2) Represents options granted in 1996 that were repriced in 1997. See "Report
on Option Repricing."
6
<PAGE>
Set forth below is further information with respect to unexercised options
held by the Company's executive officers to purchase the Company's Common
Stock:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES SECURITIES UNDERLYING IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT DECEMBER 31, 1997 AT DECEMBER 31, 1997
ON VALUE -------------------------------- -------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------- -------- -------------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Peter van Voorst Vader.. -- -- 135,000 50,000 -- --
Rogerio Carlos Lamim
Braz................... -- -- 60,000 60,000 -- --
Marcos Bastos Rocha..... -- -- 15,000 20,000 -- --
</TABLE>
REPORT ON OPTION REPRICING
Grants of options to acquire shares of the Company's Common Stock are
utilized by the Company as an employment incentive to recruit and retain
persons necessary for the development and financial success of the Company. In
June 1997, as a result of the decrease in the market price of the Company's
Common Stock during the preceding 12 months and recognizing that previously
granted stock options had lost much of their value in motivating employees
(including the named executive officers) to remain with the Company and share
in its overall financial goals, the Board approved the repricing of 385,000
options, including 305,000 options granted to the named executive officers
("Old Options"). Such repricing was effected by granting new options ("New
Options") at an exercise price of $3.25 per share, which was the fair market
value of the Company's Common Stock on June 6, 1997, in exchange for the Old
Options, whose respective exercise prices ranged from $4.81 to $5.16 per
share. The New Options are identical in all respects to the Old Options but
for exercise price. By repricing the Old Options, the Company intended to
reward key employees who held Old Options, including the named executive
officers, for their contributions to the Company.
The following table summarizes all repricings of options held by any
executive officer of the Company during the Company's last ten years:
TEN-YEAR OPTION REPRICING
<TABLE>
<CAPTION>
LENGTH OF
MARKET ORIGINAL
NUMBER OF PRICE EXERCISE OPTION TERM
SECURITIES OF STOCK PRICE AT REMAINING AT
UNDERLYING AT TIME TIME OF DATE OF
DATE OPTIONS NEW OF REPRIC- REPRICING NEW REPRICING
NAME AND OF REPRICED OR # OF ING OR OR AMEND- EXERCISE OR AMENDMENT
POSITION REPRICING AMENDED(#) OPTIONS AMENDMENT($) MENT($) PRICE($) (MONTHS)
- -------- --------- ----------- ------- ------------ --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Peter van Voorst Vader.. 6/6/97 150,000 150,000 $3.25 $5.16 $3.25 45
Chief Executive Officer
Rogerio Carlos Lamim
Braz................... 6/6/97 120,000 120,000 $3.25 $5.16 $3.25 45
President
Marcos Bastos Rocha..... 6/6/97 35,000 35,000 $3.25 $4.81 $3.25 46
Vice President--Finance
</TABLE>
EMPLOYMENT AGREEMENTS
Mr. van Voorst Vader is party to an employment agreement with the Company,
which commenced on March 19, 1996 and is scheduled to expire in June 1999,
which calls for him to serve as the Company's Chief Executive Officer at a
current salary of $120,000 per annum, with provision for annual bonuses based
upon future results of operations, in such amounts, if any, as may be
determined from time to time at the discretion of the Board.
Mr. Braz also entered into an employment agreement with the Company on March
19, 1996, which calls for him to serve as the Company's President and Chief
Operating Officer through June 1999 at a current salary of $198,000 per annum.
The agreement also provides that Mr. Braz may receive annual bonuses based
upon future results of operations, the amounts, if any, to be determined at
the discretion of the Board.
7
<PAGE>
Mr. Rego (see "Election of Directors--Identification of Executive Officers")
is a party to an employment agreement with the Company that affords him
current compensation of $124,800 per annum. This employment agreement, which
commenced on February 8, 1998 and is scheduled to expire on February 1, 2001
contains a discretionary bonus provision substantially identical to those
contained in the respective employment agreements of Messrs. van Voorst Vader
and Braz. In addition, Mr. Rego received options to acquire an aggregate of
15,000 shares of the Company's Common Stock, exercisable on a cumulative basis
to the extent of 5,000 shares on February 8, 1999, 2000 and 2001,
respectively. The exercise price of these options, which will expire on the
earlier of February 1, 2002, or the termination of Mr. Rego's employment, was
$3.25 (the market price of the Company's Common Stock on February 8, 1998).
CHANGE OF CONTROL ARRANGEMENTS
The employment arrangements between the Company and each of its three
executive officers provide that if the Company terminates the employment of
any of them, other than for cause, following a change of control, or any such
person voluntarily terminates such employment within 180 days subsequent to a
change of control, the Company shall be obligated to pay to such person an
amount of money equal to 2.9 times his base amount (a term defined in the
Internal Revenue Code of 1986, as amended (the "Code"), which essentially is
such person's annualized compensation).
Further, all options, warrants and other rights to acquire securities of the
Company theretofore granted by the Company to any such persons and outstanding
upon a change of control shall fully vest and become immediately exercisable
thereupon.
Change of control is defined under the aforementioned employment
arrangements as either (i) the acquisition by a person or group of persons
acting in concert of 20% or more beneficial ownership of the Company's Common
Stock or (ii) the commencement or announcement of an intention to make a
tender or exchange offer for 30% or more beneficial ownership of the Company's
Common Stock or (iii) the acquisition by a person or group of persons acting
in concert of 10% or more beneficial ownership of the Company's Common Stock,
when such person's ownership interest is deemed by the Board to have a
material adverse impact on the business or prospects of the Company.
The Stockholders' Agreement, among other matters, affords AIGLAEP and
certain of its transferees the right to designate one member of the Board.
AIGLAEP also is afforded the right to nominate additional directors which,
under certain circumstances, may enable AIGLAEP to designate directors
constituting a majority of the Board (through an expansion of the Board and
the filling of vacancies created by the resignation of certain directors
serving at such time) if the Company does not attain certain operating goals.
The Stockholders' Agreement requires the Management Group to take any and all
action, including voting their respective shares of Common Stock, to cause the
nominee(s) designated by AIGLAEP to be elected to the Board. See "Security
Ownership of Certain Beneficial Owners and Management--Stockholders'
Agreement."
REPORT ON EXECUTIVE COMPENSATION
The Company has a compensation committee charged with reviewing and
recommending to the Board compensation programs for the Company's executive
officers. See "Election of Directors--Information Concerning the Board."
Compensation Philosophy
The Company believes that executive compensation should:
. provide motivation to achieve goals by tying executive compensation
to Company performance, as well as affording recognition of individual
performance.
. provide compensation reasonably comparable to that offered by other
companies in a similar industry, and
. align the interests of executive officers with the long-term
interests of the Company's stockholders through the award of equity
purchase opportunities.
8
<PAGE>
The Company's compensation plan is designed to encourage and balance the
attainment of short-term operational goals, as well as the implementation and
realization of long-term strategic initiatives. As greater responsibilities
are assumed by an executive officers, a larger portion of compensation is "at
risk."
This philosophy is intended to apply to all management, including the
Company's Chief Executive Officer, Peter van Voorst Vader.
Compensation Program
The Company's executive compensation program has two major components: base
salary and long-term equity incentives.
The Company seeks to position total compensation at or near the median
levels of other companies in a similar industry in Brazil.
Individual performance reviews are generally conducted annually. Increases
in 1997 were based on an individual's sustained performance and the
achievement of the Company's revenue, income and earnings per share goals. The
Company does not assign specific weighing factors when measuring performance;
rather, subjective judgment and discretion is exercised in light of the
Company's overall compensation philosophy.
Base salary is determined by evaluation individual responsibility and
performance.
The Board believes that executive officers who are in a position to make a
substantial contribution to the long-term success of the Company and to build
stockholder value should have a significant equity stake in the Company's on-
going success. Accordingly, one of the company's principal motivation methods
has been the award of stock options. In addition to financial benefits to
executive officers, if the price of the Company's Common Stock during the term
of any such option increases beyond such options exercise price, the program
also creates an incentive for executive officers to remain with the Company
since options generally vest and become exercisable over several years and the
first increment is not exercisable until one year after the date of grant.
Chief Executive Officer Compensation
Peter van Voorst Vader's compensation is determined substantially in
conformity with the compensation philosophy, discussed above, that is
applicable to all of the Company's executive officers. Performance is measured
against predefined financial, operational and strategic objectives.
In establishing Mr. van Voorst Vader's base salary, the Board took into
account both corporate and individual achievements.
Mr. van Voorst Vader's performance objectives included quantitative goals
related to increasing revenues and earnings per share. His goals also included
significant qualitative objectives such as evaluating acquisition
opportunities.
In measuring Mr. van Voorst Vader's performance against these goals, the
Board took note of the fact that Venbo's system-wide sales for the year ended
December 31, 1997 reflected approximate increases of 12% and 25% over 1996 and
1995 levels, respectively. Note was also taken of the quarter to quarter
reduction in 1997 operating losses. In addition, under Mr. van Voorst Vader's
leadership, the Company increased its total points of sale from 78 in April
1996, when Mr. Van Voorst Vader became the Company's Chief Executive Officer,
to 148 at the end of 1997, thereby positioning the Company as the second
largest hamburger fast food restaurant chain in Brazil in terms of revenues.
9
<PAGE>
Tax Considerations
Section 162(m) of the Code generally limits the deductibility of
compensation in excess of $1 million paid to the chief executive officer and
the four most highly compensated officers. Certain performance-based
compensation is excluded by Section 162(m)(4)(C) of the Code in determining
whether the $1 million cap applies. Currently, the total compensation,
including salary, bonuses and excludable stock options for any of the named
executives does not exceed this limit. If in the future this regulation
becomes applicable to the Company, the Board will not necessarily limit
executive compensation to that which is deductible, but will consider
alternatives to preserving the deductibility of compensation payments and
benefits to the extent consistent with its overall compensation objectives and
philosophy.
Summary
The Board, through its Compensation Committee, will continue to review the
Company's compensation programs to assure such programs are consistent with
the objective of increasing stockholder value.
THE BOARD OF DIRECTORS
OMAR CARNEIRO DA CUNHA, CHAIRMAN
PETER VAN VOORST VADER
IAN BARNETT
LAWRENCE BURSTEIN
JOSE RICARDO BOSQUET BOMENY
CARLOS GUSTAVO PERRET SIMAS
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the year ended December 31, 1997, the following officers participated
in discussions concerning executive officer compensation: Peter van Voorst
Vader, Rogerio Carlos Lamim Braz and Marcos Bastos Rocha. Each of the named
persons did not participate in discussions concerning his own compensation.
All options, warrants and other rights to acquire securities of the company
held by the Company's directors shall fully vest and become immediately
exercisable following a change of control.
10
<PAGE>
PERFORMANCE GRAPH
The following graphs shows the cumulative total return to stockholders from
April 8, 1994 (the date of the Company's initial public offering of its equity
securities) through December 31, 1997 with the cumulative total return of the
Standard and Poor's 500 Stock Index and the Standard and Poor's Restaurants
Index during the same period. This presentation assumes that $100 was invested
on April 8, 1994, and that all dividends were reinvested.
CUMULATIVE TOTAL RETURN TO STOCKHOLDERS
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Total Return Analysis
- ------------------------------------------------------------------------------
4/8/94 12/30/94 12/29/95 12/31/96 12/31/97
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Brazil Fast Food Corp. $100.00 $100.71 $118.38 $ 82.35 $ 70.59
- ------------------------------------------------------------------------------
S&P 500 $100.00 $104.93 $144.31 $177.42 $236.60
- ------------------------------------------------------------------------------
S&P Restaurants $100.00 $ 99.46 $149.18 $147.40 $158.27
- ------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as of the Record Date, based on
information obtained from the persons named below, with respect to the
beneficial ownership of the Company's Common Stock held by (i) each person
known by the Company to be the owners of more than 5% of its outstanding
shares of Common Stock, (ii) each director and (iii) all executive officers
and directors as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE APPROXIMATE
OF BENEFICIAL PERCENTAGE
NAME AND ADDRESS OWNERSHIP(1) OF CLASS
- ---------------- ----------------- -----------
<S> <C> <C>
AIG Latin America Equity Partners, Ltd. ...... 1,765,500(2) 14.05%
80 Pine Street
New York, NY 10016
Peter van Voorst Vader........................ 587,450(3) 4.72%
Prudente de Moraes
1933/703
Ipanema 22420-043
Rio de Janeiro, Brazil
Ian S. Barnett................................ 46,111 *%
c/o Heptagon Securities Ltd.
Broughton House
6-8 Sackville Street
London W1X 1DD
United Kingdom
Lawrence Burstein............................. 393,889(4) 3.17%
245 Fifth Avenue
New York, NY 10016
Omar Carneiro da Cunha........................ 515,950(5) 4.18%
c/o Bond Consultoria
Empresarial S/C Ltda.
Praia do Flamengo
200-22o. Andar
CEP 22210-030
Rio de Janeiro, Brazil
Jose Ricardo Bosquet Bomeny................... 1,555,000(6) 12.60%
c/o BigBurger Ltda.
Rua Lauro Muller
116/2005
Rio de Janeiro, Brazil
Carlos Gustavo Perret Simas................... -0-(7) *%
Av. Presidente Wilson
231-9o
Rio de Janeiro, Brazil
All executive officers and directors as a 3,163,400(2)-(7) 25.02%
group (8 persons)............................
</TABLE>
- --------
*Less than 1%.
12
<PAGE>
(1) As used herein, beneficial ownership means the sole or shared power to
vote or direct the voting of a security or the sole or shared power to
invest or dispose or direct the investment or disposition of a security.
Except as otherwise indicated, all persons named herein have (i) sole
voting power and investment power with respect to their shares of the
Company's Common Stock, except to the extent that authority is shared by
spouses under applicable law, and (ii) record and beneficial ownership
with respect to their shares of the Company's Common stock. With respect
to each stockholder, includes any shares issuable upon exercise of all
options and warrants held by such stockholder that are currently
exercisable or will become exercisable within 60 days of the Record Date.
(2) Includes options to acquire 8,750 shares issued to Mr. Simas but assigned
by him to AIGLAEP. See Note (7) below.
(3) Includes 426,450 shares owned by Shampi Investments A.E.C., ("Shampi"),
L.G. Smith Boulevard, Punta Brabo, Oranjstad, Aruba of which Mr. van
Voorst Vader is the sole shareholder.
(4) Includes 44,444 shares owned by members of Mr. Burstein's family. Mr.
Burstein disclaims any voting or investment power over these shares.
(5) Includes 12,500 shares owned by Bond Consultoria; also includes 453,450
shares owned by Seaview Ventures Group Inc. ("Seaview"), The Creque
Building, P.O. Box 116, Road Town, Tortola, British Virgin Islands. Mr.
Carneiro da Cunha, together with Mr. van Voorst Vader, are the sole
shareholders of Bond Consultoria.
(6) Includes 1,520,000 shares owned by BigBurger of which Mr. Bomeny is a
principal shareholder.
(7) Excludes 1,756,750 shares owned by AIGLAEP; also excludes 8,750 options to
acquire shares issued to Mr. Simas but assigned by him to AIGLAEP. Mr.
Simas, who disclaims voting or investment power over all of these
securities, serves as AIGLAEP's designee upon the Company's Board of
Directors. See "Election of Directors."
STOCKHOLDERS' AGREEMENT
The Stockholders' Agreement among AIGLAEP, the Company and the Management
Group provides that such persons shall vote their respective shares of the
Company's Common Stock to elect as directors of the Company, respectively, two
designees of Shampi, two designees of Mr. Burstein and certain other former
executive officers and directors of the Company, one designee of BigBurger and
one designee of AIGLAEP. See "Change of Control Arrangements."
COMPLIANCE WITH SECTION 16(A) OF SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons
who own more than 10% of the Company's Common Stock, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Officers, directors and greater than 10% stockholders are required by
SEC rule to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no such forms were
required for those persons, the Company believes that during the year ended
December 31, 1997, all filing requirements applicable to officers, directors
and greater than 10% beneficial owners were complied with except that each
officer and director (other than Mr. Simas) was not timely in filing monthly
report of two transactions, respectively.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 1999 Annual
Meeting of Stockholders pursuant to the provisions of Rule 14a-8, promulgated
under the Exchange Act, must be received by the Company's offices in Rio de
Janeiro, Brazil by January 30, 1999 for inclusion in the Company's proxy
statement and form of proxy relating to such meeting.
13
<PAGE>
BRAZIL FAST FOOD CORP.
PRAIA DO FLAMENGO
200-22O. ANDAR
CEP 22210-030
RIO DE JANEIRO, BRAZIL
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Peter van Voorst Vader, Rogerio Carlos
Lamim Braz and Lawrence Burstein as Proxies, each with the power to appoint his
substitute, and hereby authorizes them, and each of them, to represent and vote,
as designated on the reverse side hereof, all the shares of Common Shares of
Brazil Fast Food Corp. ("the Company") held of record by the undersigned on
April 17, 1998, at the Annual Meeting of Stockholders to be held on Friday, May
29, 1998 or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2 AND 3.
(To Be Signed on Reverse Side)
- -------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FOR all nominees WITHHOLD
listed at right (except AUTHORITY
as marked to the to vote for all nominees
contrary at right) listed at right Nominees: Omar Carneiro da Cunha
1. Election of Peter van Voorst Vader
Directors: [_] [_] Ian S. Barnett
Lawrence Burstein
(INSTRUCTION: To withhold authority to vote for any individual Jose Ricardo Bosquet
nominee, strike such nominee's name from the list at right) Bomeny
Carlos Gustavo Perret
Simas
</TABLE>
FOR AGAINST ABSTAIN
2. To consider and vote upon a proposal to
increase the number of shares in the 1992 [_] [_] [_]
Stock Plan from 500,000 to 1,000,000
3. To consider and vote upon a proposal to
amend the Company's Certificate of
Incorporation to increase the number of [_] [_] [_]
shares of Common Stock authorized
thereunder from 20,000,000 to
40,000,000.
4. To transact such other business as may properly come before the Meeting.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
<TABLE>
<CAPTION>
<S> <C>
SIGNATURE_____________________ DATE ____________________ _________________________ DATE_____________
Signature If Held Jointly
</TABLE>
NOTE: Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by the President or
other authorized officer. If a partnership, please sign in partnership
name by an authorized person.
