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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[_]TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-23278
Brazil Fast Food Corp.
(Exact name of registrant as specified in its charter)
Delaware 13-3688737
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
N/A
Av. Brasil (Zip Code)
6431--Bonsucesso
CEP 21040-360
Rio de Janeiro, Brazil
(Address of principal executive
offices)
55-21-560-5090
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Name of each exchange
Title of each class on which registered
------------------- ---------------------
<S> <C>
-- --
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Class A Redeemable Common Stock Purchase Warrants,
Class B Redeemable Common Stock Purchase Warrants
(Title of Class)
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Identification of Directors
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.
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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 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.
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.
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Identification of 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.
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ITEM 11. 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>
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(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%.
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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 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.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of April 30, 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>
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* 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
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their shares, except to the extent that authority is shared by spouses under
applicable law, and record and 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.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant had duly caused this report or amendment thereto to be signed on its
behalf by the undersigned thereunto dully authorized.
BRAZIL FAST FOOD CORP.
---------------------
Registrant
/s/ PETER VAN VOORST VADER
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Peter Van Voorst Vader
President and CEO
Dated: April 30, 1999 (Principal Executive Officer)
/s/ CARLOS HENRIQUE da SILVA REGO
-------------------------------
Carlos Henrique da Silva Rego
Chief Financial Officer
Dated: April 30, 1999 (Principal Financial and
Accounting Officer)
9
