<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
Tel: (212) 688-7000
Fax: (212) 755-2839
================================================================================
<PAGE>
BRAZIL FAST FOOD CORP.
[LOGO OF BOB'S Av. Brasil, 6431--Bonsucesso
BRAZIL FAST CEP 21040-360
FOOD CORP.] Rio de Janeiro, Brazil
----------------
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 25, 1999
----------------
To the Stockholders of
Brazil Fast Food Corp.:
Please note that our annual meeting of stockholders will be held at our
corporate headquarters at Av. Brasil, 6431--Bonsucesso, CEP 21040-360, Rio de
Janeiro, Brazil on Friday, June 25, 1999 at 10:00 a.m., for the following
purposes:
1. To elect six directors for the ensuing year.
2. To consider and vote upon a proposal to amend the Company's
Certificate of Incorporation to effectuate a one-for-four reverse
split of the Company's common stock.
3. To transact such other business as may properly come before the
Meeting.
Only stockholders of record at the close of business on May 28, 1999 are
entitled to notice of and to vote at the meeting or any adjournment thereof.
Carlos Henrique da Silva Rego
Secretary
Rio de Janeiro, Brazil
June 1, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY, WHICH IS SOLICITED BY OUR BOARD OF DIRECTORS, AND PROMPTLY
RETURN IT IN THE PRE-ADDRESSED ENVELOPE PROVIDED FOR THAT PURPOSE. YOU MAY
REVOKE YOUR 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.
Av. Brasil, 6431--Bonsucesso
CEP 21040-360
Rio de Janeiro, Brazil
----------------
PROXY STATEMENT
----------------
This Proxy Statement is being mailed on or about June 1, 1999 to all record
owners of shares of our common stock as of the close of business on May 28,
1999 in connection with the solicitation by our board of directors of proxies
for our annual meeting of stockholders to be held on June 25, 1999. Proxies
will be solicited by mail, and all expenses of preparing and soliciting such
proxies will be paid by us. All proxies properly executed and received by the
persons named as proxy will be voted on all matters presented at the meeting
in accordance with your specifications as set forth in the proxy or, in the
absence of specified instructions, will be voted for the named nominees to the
board and in favor of the proposal to amend our Certificate of Incorporation
to effectuate a one-for-four reverse split of our common stock. We do 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. You may revoke your proxy at any time before the meeting by
. written notice to such effect received by us at the address set forth
above, Attn: Corporate Secretary
. by delivery of a subsequently dated proxy.
. by attending the meeting and voting in person.
There were 12,943,679 shares of our common stock outstanding as of May 28,
1999. Our common stock is our only class of securities entitled to vote, each
share being entitled to one non-cumulative vote. A majority of the shares of
common stock outstanding and entitled to vote, or 6,471,840 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. The presence of a quorum and a vote of a majority
of the shares of common stock present and voting, in person or by proxy, is
required to pass upon the election of our board, and the affirmative vote of
holders of a majority of all outstanding shares of common stock entitled to
vote at the meeting is required to pass upon the proposal to amend our
Certificate of Incorporation.
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.
Only stockholders of record as of the close of business on May 28, 1999
will be entitled to vote. A list of stockholders entitled to vote at the
meeting will be available at our offices for a period of ten days prior to the
meeting and at the meeting itself for examination by any stockholder.
Unless otherwise specified, all references in this proxy statement to (i)
"reais," the "real" or "R$" are to the Brazilian real (singular), or to the
Brazilian reais (plural), the legal currency of Brazil, and (ii) "U.S.
dollars" or "$" to United States dollars. On May 26, 1999, one real equaled
0.5872 U.S. dollars.
1
<PAGE>
ELECTION OF DIRECTORS
All of our current directors are up for reelection this year to serve for an
additional term of one year or until their respective successors are elected
and qualified.
Information Concerning Nominees
The following table sets forth each director's
. position and offices presently held
. age
. tenure as a director
<TABLE>
<CAPTION>
Position and offices presently Director
Name Age held with the company since
---- --- ------------------------------ --------
<S> <C> <C> <C>
Omar Carneiro da Cunha.. 52 Chairman of the Board 1996
Peter van Voorst Vader.. 45 President, Chief Executive Officer and Director 1996
Ian S. Barnett.......... 44 Director 1996
Lawrence Burstein....... 56 Director 1996
Jose Ricardo Bosquet
Bomeny................. 57 Director 1996
Carlos Gustavo Perret
Simas.................. 29 Director 1997
</TABLE>
Omar Carneiro da Cunha is a founding principal of Bond Consultoria
Empresarial S/C Ltda., a Brazilian business consultancy. 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 our chief executive officer since
March 1996. Prior to that date 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 UTBS Ltd., which was then known as
UTBS (Securities) 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 which has
2
<PAGE>
recently announced its intention to merge with GraphOn Corporation, a
privately owned software developer. Mr. Burstein, who was also our president
from our 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.
Jose Ricardo Bosquet Bomeny founded BigBurger Ltda. in 1975 and was its
president until we acquired this company in July 1996. He currently owns
another fast food business, which is not competitive with our business, as
well as 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 its research department and currently
one of the partners responsible for its investment banking division. 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.
Under the terms of a stockholders' agreement dated as of August 11, 1997
among AIG Latin America Equity Partners, Ltd. and all of our current executive
officers and directors and certain of their affiliates, each of these persons
have agreed to vote their respective shares of our common stock to elect as
directors, 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.
Identification of our Executive Officers
(Excludes executive officers who are also directors).
<TABLE>
<CAPTION>
Name Age Position Biography
---- --- -------- ---------
<C> <C> <C> <S>
Carlos Henrique da Silva Rego 36 Vice President--Finance Our chief financial officer
and Chief Financial since February 1998. Prior to
Officer this date 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 our board to hold office until
the first meeting of our board following the next annual meeting of
stockholders and until their successors are chosen and qualified.
Information Concerning our Board
Our board held six meetings during the year ended December 31, 1998. All
then incumbent directors attended 100% of such meetings.
Our board's compensation committee is charged with reviewing and
recommending to our board compensation programs for our executive officers and
key employees. The compensation committee, which is
3
<PAGE>
currently composed of Messrs. Carneiro da Cunha, van Voorst Vader and
Burstein, held three meetings during the year ended December 31, 1998, with
all of its members in attendance.
Our board's audit committee is charged with the review the activities of our
independent auditors, including, but not limited to, fees, services and scope
of audit. The audit committee is presently composed of Messrs. Carneiro da
Cunha, van Voorst Vader and Burstein, with Mr. van Voorst Vader serving in an
ex officio, non-voting capacity. The audit committee held one meeting during
the year ended December 31, 1998, with all of its members in attendance.
Directors' Compensation
Directors receive no cash compensation for attending board meetings other
than reimbursement of reasonable expenses incurred in attending such meetings.
We compensate our directors on an annual basis for their services through
grants of options to acquire shares of our common stock, exercisable at the
prevailing market price of the our common stock on the respective grant dates,
with the next such grants scheduled to be made on the date of the meeting.
PROPOSAL TO AMEND CERTIFICATE OF INCORPORATION TO EFFECTUATE
A ONE-FOR-FOUR REVERSE SPLIT OF THE COMPANY'S COMMON STOCK
On March 29, 1999 our board adopted a resolution, subject to stockholder
approval, to amend our Certificate of Incorporation to implement a one-for-
four reverse split of our common stock. The effect of the proposed reverse
split will be that the total number of shares of our common stock held by each
stockholder will be automatically converted into that number of whole shares
of common stock equal to the number of shares of common stock owned
immediately prior to the reverse split divided by four adjusted, as described
below, for any fractional shares. For example, a stockholder owning 100 shares
of common stock will, after effecting the reverse split, own 25 shares of
common stock (100 / 4 = 25).
If the proposal is adopted by our stockholders, each stockholder's
percentage ownership interest and proportional voting power will remain
unchanged, except for minor differences resulting from adjustments for
fractional shares. Your rights and privileges as holders of common sock will
be substantially unaffected by the adoption of this proposal.
No certificates or script representing fractional shares of our common stock
will be issued to stockholders because of the reverse split. All fractional
shares for one-half share or more will be increased to the next higher whole
number of shares and all fractional shares of less than one-half share will be
decreased to the next lower whole number of shares.
Reasons for the Proposed Reverse Split
Our shares of common stock are listed on the NASDAQ SmallCap Market. Over
the past several months, the market price of our common stock has consistently
been quoted at less than $1.00 per share. NASDAQ Rule 4310(c)(4) requires that
we maintain a minimum bid price in excess of $1.00 per share in order to
continue the listing of our common sock on the NASDAQ SmallCap Market.
We believe that if the reverse split is approved by our stockholders at the
meeting, and the reverse split is implemented, then our shares of common stock
will have a minimum bid price in excess of $1.00 per share.
If the reverse split is not approved by our stockholders and if the market
price of our common stock continues to be less than $1.00 per share, it is
likely that our shares of common stock will be delisted from the NASDAQ
SmallCap Market. In such event, we expect our shares will be traded in the
over-the-counter market.
4
<PAGE>
We anticipate that they will be quoted on the OTC Bulletin Board, an NASD
sponsored and operated inter-dealer automated quotation system for equity
securities, as well as in the NQB Pink Sheets.
The OTC Bulletin Board was introduced as an alternative to "pink sheet"
trading of over-the-counter securities. Although we believe that the OTC
Bulletin Board has been recognized by the brokerage community as an acceptable
alternative to the NQB Pink Sheets, we cannot assure stockholders that the
liquidity and prices of our common stock in the secondary market will not be
adversely affected.
Further, trading in our shares would be subject to the requirements of the
SEC's penny stock rules. These rules require the delivery prior to any penny
stock transaction of a disclosure schedule explaining the penny stock market
and all associated risks and impose various sales practice requirements on
broker-dealers who sell penny stocks to persons other than established
customers and accredited investors, which are generally defined as
institutions or an investor with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 together with the spouse. For these
types of transactions the broker-dealer must make a special suitability
determination for the purchaser and have received the purchaser's written
consent to the transaction prior to sale, In addition, broker-dealers must
disclose commissions payable to both the broker-dealer and the registered
representative and current quotations for the securities they offer. The
additional burdens imposed upon broker-dealers by such requirements may
discourage broker-dealers from effecting transactions in our common stock,
which could severely limit its market price and liquidity.
Implementation of the Proposed Reverse Split
The reverse split will be implemented by amending present Article IV of our
Certificate of Incorporation to add a provision substantially similar to the
following:
"At 5:00 p.m., E.D.T., on the date of the filing of this Certificate of
Amendment to the Certificate of Incorporation, all outstanding shares of
Common Stock held by each holder of record on such date shall be
automatically combined at the rate of one-for-four without any further
action on the part of the holders thereof or this Corporation. No
fractional shares will be issued. All fractional shares for one-half share
or more shall be increased to the next higher whole number of shares and
all fractional shares of less than one-half share shall be decreased to the
next lower whole number of shares, respectively."
Assuming the reverse split is approved by our stockholders, an appropriate
amendment to our Certificate of Incorporation will be filed with the Delaware
Secretary of State, and the reverse split will become effective as of 5:00
p.m., E.D.T., on the date of such filing. All shares of our common stock held
by stockholders of record will be converted at 5:00 p.m., E.D.T., on such date
without any further action on our part or that of our stockholders, into that
number of whole shares of new common stock equal to the number of shares owned
immediately prior to the reverse split divided by four, adjusted for any
fractional shares.
Principal Effects of the Proposed Reverse Split
Stockholders have no right under Delaware law or under our Certificate of
Incorporation or by-laws to dissent from the reverse split, or to dissent from
the rounding to the nearest whole share of any fractional share resulting from
the reverse split in lieu of issuing fractional shares.
On the effective date of the reverse split, the interest of each stockholder
of record who owns fewer than two shares of our common stock will be
terminated, and he or she will have no right to vote as a stockholder or share
in our assets or any of our future earnings.
We had an authorized capitalization as of May 28, 1999 of 40,000,000 shares
of common stock. Our authorized capital stock will not be reduced or otherwise
affected by the reverse split. The number of issued and outstanding shares of
our common stock as of May 28, 1999 was 12,943,679. Based on our best
estimates, the aggregate number of shares of common stock that will be issued
and outstanding following the reverse split will be 3,235,290.
5
<PAGE>
As of May 28, 1999, there were outstanding options expiring at various dates
through February 2006 to purchase an aggregate of 758,850 shares of our common
stock at exercise prices ranging from US$.719 per share to US $3.25 per share.
These options, which were issued pursuant to our stock option plan, are
subject to adjustment in the event of a change in capitalization, such as a
reverse split, so that following the reverse split the number of shares of
common stock issuable upon exercise of outstanding options and the number of
shares of common stock available for grant will be reduced to 189,713, and the
exercise price of each outstanding option is expected to be approximately four
times the current exercise price.
As of May 28, 1999, there were outstanding warrants expiring at various
dates through October 31, 2002 to purchase an aggregate of 5,661,000 shares of
our common stock at exercise prices ranging from US$4.00 per share to US$7.92
per share. These warrants are subject to adjustment in the event of a change
in capitalization, such as a reverse split, so that following the reverse
split the number of shares of common stock issuable upon exercise of
outstanding warrants will be reduced to 1,415,250 and the exercise price of
each outstanding warrant is expected to be approximately four times the
current exercise price.
The following table illustrates
. the principal effects of the proposed reverse split and decrease in
outstanding common stock
. the principal effects of the proposed reverse split upon certain of our
financial data,
assuming no additional shares of common stock are issued prior to the reverse
split effective date as a result of the exercise of any options or warrants:
<TABLE>
<CAPTION>
Immediately Prior to
Proposed Reverse After Proposed
Split Reverse Split(1)
-------------------- ----------------
<S> <C> <C>
Common Stock:
Authorized............................. 40,000,000 40,000,000
Issued................................. 12,943,679 3,235,920(2)
Reserved for:
Exercise of outstanding options...... 758,950 189,713
Options available for grant.......... 241,050 810,287
Exercise of outstanding warrants..... 5,661,000 1,415,250
Par value.............................. $.0001 $ .0001
</TABLE>
<TABLE>
<CAPTION>
As of
December 31, As Adjusted for
1998 Reverse Split(1)
------------ ----------------
<S> <C> <C>
Certain Financial Data (in thousands, except
share amounts):
Stockholders' equity:
Common Stock............................... R$ 1 R$ 1
Additional paid-in capital................. 46,226 46,226
Accumulated deficit........................ (25,902) (25,902)
Accumulated comprehensive loss............. (328) (328)
--------- ---------
Total stockholders' equity................... R$ 19,997 R$ 19,997
========= =========
Book value per share......................... R$ 1.55 R$ 6.20
========= =========
Net income (loss) per share.................. R$ (1.13) R$ (4.52)
========= =========
</TABLE>
- --------
(1) Subject to further non-material adjustment for the elimination of
fractional shares.
(2) Rounded up to next whole number.
The reduction in the number of issued and outstanding shares of our common
stock caused by the reverse split is expected to increase the market price of
our common stock, thus making our common stock eligible for continued listing
on the Nasdaq SmallCap Market. The expected increased price level may also
encourage
6
<PAGE>
interest and trading in our common stock and possibly promote greater
liquidity for our shareholders, although such liquidity could be adversely
affected by the reduced number of shares of our common stock outstanding after
the reverse split.
There can be no assurance that the market price of our common stock after
the proposed reverse split will be four time the market price per pre-reverse
split share, that such price will either exceed or remain in excess of our
common stock's current market price or that our common stock will be re-
eligible for trading on Nasdaq. Further, there can be no assurance that the
market for our common stock will improve after the proposed reverse split or
that we will continue to satisfy all of the other NASDAQ requirements to
continue the listing of our common stock on the NASDAQ SmallCap Market.
Our common stock is currently registered under Section 12(g) of the Exchange
Act and as a result, we are subject to the periodic reporting and other
requirements of the Exchange Act. The proposed reverse split will not affect
the registration of our common stock under the Exchange Act.
If approved, the reverse split will result in some stockholders owning "odd-
lots" of less than 100 shares of common stock. Brokerage commissions and other
costs of transactions in odd-lots are generally somewhat higher than the costs
of transactions in "round-lots" of even multiples of 100 shares.
Exchange of Stock Certificates
If the proposal is adopted, you will be required to exchange your stock
certificates for new certificates representing post-reverse split shares of
our common stock. Stockholders of record on June 25, 1999 will be furnished
the necessary materials and instructions for the surrender and exchange of
share certificates at the appropriate time by our transfer agent. You will not
have to pay a transfer fee or other fee in connection with the exchange of
certificates. You should not submit any certificates until requested to do so.
Federal Income Tax Consequences
The following description of federal income tax consequences is based on the
Internal Revenue Code, applicable Treasury Regulations, judicial authority and
current administrative rulings and practices as in effect on the date of this
proxy statement. This discussion is for general information only and does not
discuss consequences which may apply to special classes of taxpayers, such as
non-U.S. citizens, non-resident aliens, broker-dealers or insurance companies.
You are urged to consult your own tax advisors to determine the particular
consequences which may affect you.
The exchange of shares of our common stock for shares of post-reverse split
common stock will not result in recognition of gain or loss. The holding
period of the shares of our common stock will include the stockholder's
holding period for the shares of pre-reverse split common stock exchanged,
provided that such shares were held as a capital asset. The adjusted basis of
the shares of post-reverse split common stock will be the same as the adjusted
basis of the shares of pre-reverse split common stock exchanged.
Recommendation and Vote
The affirmative vote of the holders of a majority of all of the outstanding
shares of our common stock is required for approval of this proposal. Our
board recommends a vote FOR this proposal.
7
<PAGE>
EXECUTIVE COMPENSATION
Set forth below is the aggregate compensation that we paid for services
rendered in all capacities to us during the years ended December 31, 1998,
1997 and 1996 by our chief executive officer and by our only other executive
officer during the year ended December 31, 1998.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term Compensation
------------------------------
Annual Compensation Awards Payouts
--------------------------- -------------------- ---------
Long
Restricted Term
Name and Fiscal Other Annual Stock Number of Incentive All Other
Principal Position Year Salary Bonus Compensation Awards Options Payouts Compensation
------------------ ------ -------- ----- ------------ ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Peter van Voorst Vader 1998 $116,000 -- -- -- 17,500 -- --
....................... 1997 $120,000 -- -- -- 150,000 -- --
Chief Executive Officer 1996 $114,750 -- -- -- -- --
Carlos Henrique Rego ... 1998 $116,000 -- -- -- 15,000 -- --
Vice President Finance
</TABLE>
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Number of Percent of
Shares Total Options Exercise Grant
Underlying Granted to or Base Date
Options Employees in Price Expiration Present
Name Granted Fiscal Year (S/SH) Date Value
---- ---------- ------------- -------- ---------- -------
<S> <C> <C> <C> <C> <C>
Peter van Voorst Vader..... 17,500 100.0% $2.52 5/29/03 (1)
</TABLE>
- --------
(1) Present value is estimated on the date of grant using the Black Scholes
option pricing model with the following weighted average assumptions used
for grants in 1998; risk free interest rate of 5.07%; no expected dividend
yield; expected lives of 5 years; and expected stock price volatility of
50%.
Set forth below is further information with respect to unexercised options
held by our executive officers to purchase our common stock:
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
<TABLE>
<CAPTION>
Number of Unexercised
Number of Securities Underlying Options Value of Unexercised
Shares at December 31, 1998 In-the-Money Options
Acquired on Value --------------------------------- -------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- --------------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Peter van Voorst Vader.. -- -- 152,000 50,000 -- --
</TABLE>
Employment Agreements
Mr. van Voorst Vader is party to an employment agreement with us, which is
scheduled to expire in February 2002, which calls for him to serve as our
chief executive officer at a current salary of R$141,600 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
our board.
Mr. Rego is party to an employment agreement with us, which is scheduled to
expire on February 1, 2002, which calls for him to serve as our vice-
president-finance and chief financial officer at a current salary of R$147,600
per annum. This employment agreement contains a discretionary bonus provision
substantially identical to those contained in Mr. van Voorst Vader's
employment agreement.
Change of Control Arrangements
Our employment arrangements with our two executive officers provide that if
we terminate the employment of either 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, we shall have to pay to
such person an
8
<PAGE>
amount of money equal to 2.9 times his base amount (a term defined in the
Internal Revenue Code, which essentially is such person's annualized
compensation).
Further, all options, warrants and other rights to acquire our securities we
previously granted to any such persons and outstanding upon a change of
control shall fully vest and become immediately exercisable.
Change of control is defined as either (i) the acquisition by a person or
group of persons acting in concert of 20% or more beneficial ownership of our
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 our common
stock or (iii) the acquisition by a person or group of persons acting in
concert of 10% or more beneficial ownership of our common stock, when such
person's ownership interest is deemed by our Board to have a material adverse
impact on our business or prospects.
The stockholders' agreement discussed in the section entitled "Election of
Directors", among other matters, affords AIGLAEP and certain of its
transferees the right to designate one member of our 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 our board, such as through an expansion of our board and the
filling of vacancies created by the resignation of certain directors serving
at such time, if we do not attain certain operating goals. The stockholders'
agreement requires the other parties to the stockholders' agreement 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 our Board.
Report on Executive Compensation
We have a compensation committee charged with reviewing and recommending to
our board compensation programs for our executive officers.
Compensation Philosophy
We believe 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 our stockholders through the award of equity purchase
opportunities.
Our 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 officer, a larger portion of his compensation is "at risk."
This philosophy is intended to apply to all management, including Peter van
Voorst Vader, our Chief Executive Officer.
Compensation Program
Our executive compensation program has two major components: base salary and
long-term equity incentives.
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We seek 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 1998 were based on an individual's sustained performance and the
achievement of our revenue, income and earnings per share goals. We do not
assign specific weighing factors when measuring performance; rather,
subjective judgment and discretion is exercised in light of our overall
compensation philosophy.
Base salary is determined by evaluation individual responsibility and
performance.
Our board believes that executive officers who are in a position to make a
substantial contribution to long-term success and to build stockholder value
should have a significant equity stake in our on-going success. Accordingly,
one of our principal motivation methods has been the award of stock options.
In addition to financial benefits to executive officers, if the price of our
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 us 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 our executive officers. Performance is measured against
pre-defined financial, operational and strategic objectives.
In establishing Mr. van Voorst Vader's base salary, our 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, our
board took note of the fact that our system-wide sales for the year ended
December 31, 1998 reflected approximate increases of 7%, 30% and 58% over
1997, 1996 and 1995 levels, respectively. Note was also taken of the quarter
to quarter reduction in 1998 operating losses. In addition, under Mr. van
Voorst Vader's leadership, we increased our total retail outlets from 78 in
April 1996, when Mr. Van Voorst Vader became our chief executive officer, to
160 at the end of 1998.
Tax Considerations
Section 162(m) of the Internal Revenue 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 us, our 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
Our board, through its compensation committee, will continue to review our
compensation programs to assure such programs are consistent with the
objective of increasing stockholder value.
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<PAGE>
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, 1998, Messrs. van Voorst Vader and Rego
participated in discussions concerning executive officer compensation. Each of
the named persons did not participate in discussions concerning his own
compensation.
Performance Graph
The following graphs shows the cumulative total return to stockholders from
April 8, 1994, the date of our initial public offering of our equity
securities through December 31, 1998 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
[GRAPHIC]
- ----------------------------------------------------------------------------
Total Return Analysis
4/8/94 12/31/94 12/29/95 12/30/96 12/31/97 12/31/98
- ----------------------------------------------------------------------------
Brazil Fast
Food Corp. $100.00 $100.71 $118.35 $ 82.35 $ 70.59 $ 16.18
- ----------------------------------------------------------------------------
S&P 500 $100.00 $104.93 $144.31 $177.42 $236.60 $304.21
- ----------------------------------------------------------------------------
S&P Restaurants $100.00 $ 99.46 $149.18 $147.40 $158.27 $248.03
- ----------------------------------------------------------------------------
11
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of May 28, 1999, based on
information obtained from the persons named below, with respect to the
beneficial ownership of our common stock held by
. each person known by us to be the owners of more than 5% of our
outstanding shares of common stock
. each director
. all executive officers and directors as a group
<TABLE>
<CAPTION>
Amount and Approximate
Nature of Percentage
Beneficial of
Name and Address of Beneficial Owner Ownership (1) Class
------------------------------------ ------------ -----------
<S> <C> <C>
AIG Latin America Equity Partners, Ltd.
80 Pine Street
New York, NY 10016.............................. 1,783,000(2) 13.75%
Peter Van Voorst Vader
Prudente de Moraes
1933/703
Ipanema 22420-043
Rio de Janeiro, Brazil.......................... 675,500(3) 5.13%
Ian S. Barnett
c/o Heptagon Securities Ltd.
Broughton House
608 Sackville Street London W1X 1DD
United Kingdom.................................. 63,611 *
Lawrence Burstein
245 Fifth Avenue
New York, NY 10016.............................. 411,389(4) 3.14%
Omar Carneiro da Cunha
c/o Bond Consultoria
Empresarial S/C Ltda.
Rua Voluntarios da Patria
89 Sala 604
Botatogo-RJ
Brazil 22210-00................................. 563,980(5) 4.37%
Jose Ricardo Bosquet Bomeny
c/o Big Burger Ltda.
Rua Lauro Muller
116/2005
Rio de Janeiro, Brazil.......................... 1,572,500(6) 12.02%
Carlos Gustavo Perret Simas
Av. Presidente Wilson
231-9o
Rio de Janeiro, Brazil -- (7) *
All executive officers and directors as a group
(8 persons)..................................... 5,074,980(2)-(7) 37.35%
</TABLE>
- --------
* Less than 1%
(1) 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, we believe that all named persons have sole voting power and
investment power with respect to their shares, except to the extent that
authority is shared by spouses under applicable law, and record and
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<PAGE>
beneficial ownership with respect to their shares. Also includes any
shares issuable upon exercise of options and warrants that are currently
exercisable or that will become exercisable within 60 days of April 28,
1999.
(2) Includes options to acquire 26,250 shares issued to Mr. Simas but
assigned by him to AIGLAEP. See Note (7) below.
(3) Includes 426,450 shares owned by 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 476,450
shares owned by Seaview Ventures Group Inc., The Creque Building, P.O.
Box 116, Road Town, Tortola, British Virgin Islands. Mr. Cameiro 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 26,250 options
to acquire shares issued to Mr. Simas but assigned by him to AIGLAIEP.
Mr. Simas, who disclaims voting or investment power over all of these
securities, serves as AIGLAEP's designee upon our board of directors.
Stockholders' Agreement
The stockholders' agreement discussed above provides that the parties to the
agreement shall vote their respective shares of our common stock to elect to
our board, respectively, two designees of Shampi, two designees of Mr.
Burstein and certain other of our former executive officers and directors, one
designee of BigBurger and one designee of AIGLAEP.
COMPLIANCE WITH SECTION 16(A) OF SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our officers and directors, and persons who own more than 10% of our common
stock, to file reports of ownership and changes in ownership with the SEC.
Officers, directors and greater than 10% stockholders are required by SEC rule
to furnish us 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, we believe that during the year ended December 31,
1998, all filing requirements applicable to officers, directors and greater
than 10% beneficial owners were complied with except that Mr. Rego was not
timely in filing his initial report of ownership and each officer and director
(other than Mr. Simas) was not timely in filing his monthly report of two
transactions, respectively.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at our year 2000 annual
meeting of stockholders pursuant to the provisions of Rule 14a-8, promulgated
under the Exchange Act, must be received by our offices in Rio de Janeiro,
Brazil by January 30, 2000 for inclusion in our proxy statement and form of
proxy relating to such meeting.
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<PAGE>
BRAZIL FAST FOOD CORP.
Av. Brasil, 6431-Bonsucesso
CEP 21040-360
RIO DE JANEIRO, BRAZIL
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Peter van Voorst Vader, Carlos Henrique da
Silva Rego 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
May 28, 1999 at the Annual Meeting of Stockholders to be held on Friday, June
25, 1999 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 and 2.
(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>
2. To consider and vote upon a proposal to
amend the Company's Certificate of
Incorporation to effectuate a one-for-four [_] [_] [_]
reverse split of the Company's
common stock.
3. 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.
