This is an English translation of a document
that was written in the Portuguese language
--------------------------------------------
Exhibit 99.1
Capitalization and Administrative Restructuring Intentions Protocol
("Protocol"), in the form below:
By and between the parties that have signed at the end of this instrument
("Parties"),
Whereas:
a) The Parties are stockholders of Brazil Fast Food Corporation
("BFFC"), controller of Venbo Comercio de Alimentos Ltda.
("Venbo"), or are intended to invest in stock of BFFC
b) The Parties agree that the following measures must be taken
imperatively and urgently:
(i) Inject resources into Venbo, by means of a prior increase of
BFFC capital;
(ii) Proceed with certain modifications in Venbo's
administration, and, therefore, adjust the composition of
the BFFC Board of Directors;
(iii)In order to avoid that Venbo's situation becomes
unsustainable, immediately place resources at Venbo's
disposal, even before proceeding with the administrative and
legal measures intended to perfect and consolidate the
agreement reached between the Parties.
c) Xxxxxxx Xxxxxxxxx Bomeny, or the physical person or company that
he may nominate, and CCC Empreendimentos e Participacoes Ltda.
(jointly "Investors"), hereby accept the advancement of the
resources referred-to in item b (i) above, in the assumption and
confidence that this instrument's stipulations will be complied
with and implemented by the Parties;
d) The Parties, exercising their right to vote in BFFC, as well as
through their influence with the BFFC Board of Directors and
Venbo's administration, will adopt all the measures, and they
will sign all the agreements and documents required for the legal
execution of the agreements made herein,
They hereby resolve to:
1. Capitalization.
1.1 The Investors, in the proportion of half each, and upon subscription
of the shares regulated below, agree to provide BFFC will capital, for
the subsequent injection of resources into Venbo, in the amount of
R$5,000,000.00 (five million Reais), during the first provision, and,
for the second provision, the amount that corresponds to R$ 850,000.00
(eight hundred and fifty thousand regulated below, agree to provide
BFFC will capital, for the subsequent injection of resources into
Venbo, in the amount of R$5,000,000.00 (five million Reais), during
the first provision, and, for the second provision, the amount in
Reais that corresponds to US$ 850,000.00 (eight hundred and fifty
thousand US Dollars) at the time of the second provision, to be
converted using the exchange rate equivalent to the PTAX average rate
for commercial Dollars, established by the Banco Central do Brasil.
1.2 In order to comply with the stipulations in item 1.1 above, there will
be two provisions, as follows:
1.2.1First provision: BFFC, exercising its legal statutory
prerogatives, will issue, in favor of the Investors, within 10
days of each provision or advancement of resources, a total of
2,5000,000 common shares, half for each Investor and in
proportion with the incoming recourses, at the subscription price
of r$ 2.00 (two Reais) per pair, for a total of R$ 5,000,000.00
(five million Reais).
1.2.2Second provision: Within 30 days of the first provision, or the
last installment of the first provision, regulated in item 1.2.1,
complying with the proportions stipulated in this item, as
regulated in 1.3 below, BFFC will issue 850,000 common shares, at
the subscription price per pair in Reais corresponding to US$
1.00 (one US Dollar),
1.3 In view of Venbo's urgent necessity, and on BFFC's account and order,
the Investors will directly advance Venbo, within 48 hours, the amount
mentioned in item 1.2.1 above, in the amount of R$ 2,000,000.00 (two
million Reais), and the remaining balance will be of R$ 3,000,000.00
(three million Reais) to be paid within 30 days of the advance
installment: the Investors may, at their own discretion, advance other
provision amounts regulated in the items 1.2.1 and 1.2.2 above.
2. Quorum in the Annual Stockholders Meeting or in the Board of Directors
Meetings (according to each agency's jurisdiction).
2.1 The Parties agree that the majority of the votes held by the Parties
will decide the direction of the Parties' vote in the BFFC Annual
Stockholders Meetings regarding the following matters:
a) Increasing the authorized capital stock;
b) Reducing the capital stock, redemption and amortization of stock;
c) Creation/issue of any class of shares or conversion;
d) BFFC modification and administrative structure, including in
terms of (i) number of members on the Board of Directors and the
Direction, and (ii) procedures and criteria for electing their
respective members; and
e) Broadening or reducing BFFC's company purpose;
f) Creation or alteration of the obligatory dividend;
g) Dissolution, liquidation, composition with creditors or
bankruptcy, or any other voluntary or court-ordered financial
restructuring procedures or processes;
h) Incorporation, by BFFC, of other companies or part of the
property of other companies, fusion, transformation, split or any
other form of partnership restructuring;
i) Going private, public or private issue of any securities,
including benefiting parties, debentures or subscription bonuses;
j) Approval of BFFC business investment plans, "Business Plan" and
their possible alterations, as well as annual and semi-annual
budgets, and their possible alterations;
k) Acquisition, disposition, liquidation, disposal, transference or
burdening of any nature of any property that is part of the
permanent asssets in an amount greater or equivalent in Reais,
isolated or cumulative, to US$ 50,000.00 (fifty thousand US
Dollars).
l) BFFC's association, in any manner, with other companies,
including the formation of consortiums, creation of subsidiaries,
as well as participation in other companies;
m) BFFC entering into any contract or transaction, of any nature,
with either of the Parties, or any company, directly or
indirectly controlled by BFFC, or company that holds, directly or
indirectly, majority shares in BFFC;
n) Signing any agreement, document, instrument related to
investments, loans, granting of guarantees of any nature
benefiting either of the Parties, and the assuming of any
obligations in BFFC's name that exceed, in Reais, isolated or
cumulative, US$ 50,000.00 (fifty thousand US Dollars);
o) Acquisition, amortization or redemption by BFFC of shares it
issued, as well as the acquisition of shares to cancel or reserve
in the treasury, and their later resale;
p) Approval of share option plans for administrators, employees or
third parties, and the attribution to third parties (including
administrators and employees) in BFFC profit or income sharing;
q) Instituting of any administrative or legal proceedings,
instituting of arbitration proceedings or another form settling
extra-judicial litigation, or BFFC contesting litigation that
involves an amount over or equivalent in Reais, isolated or
cumulative, to US$ 50,000.00 (fifty thousand US Dollars);
r) Approval of BFFC's financial statements and the annual Directors'
reports;
s) Adoption of strategies by BFFC before any governmental agencies
and possible changes of position;
t) Deliberation and voting on any matter in any company in which
BFFC holds stock.
2.2 In order to comply with the stipulations in item 2.1 above, BFFC's
stockholders that are Parties in this Protocol will meet beforehand, a
minimum of 10 days prior to the BFFC Annual Stockholders Meeting, in
order to decide in which direction to vote in this meeting.
2.3 BFFC's issue of shares of any kind or class, subscription bonus,
option, debentures or any securities, as well as the establishment of
negotiations, accords or treaties on any level relating to possible
third party interests in the subscription or purchase of said
securities, will depend o the deliberations described in item 2.1 of
the above heading.
3. Board of Directors.
3.1 Following the integral capitalization regulated in the items 1.1 and
1.3 above, the Parties will exercise their right to vote in BFFC so
that the 5 members of the Board of Directors, the right to nomination
of which is held by the Parties, under the terms of the Stockholders
Agreement signed on August 11, 1997, are elected according to
stockholders' following nomination:
a) Bigburger Ltda. - 1 position
b) Investors - 2 positions (however they jointly nominate)
c) Xxxx Xxxxxxxx xx Xxxxx - 1 position
d) Xxxxxxxx Xxxxxxxx - 1 position
3.2 The Chairman of the Board of Directors ("Chairman") will be nominated
as stipulated in item 2.1 above, and will hold the casting vote,
meaning that his/her vote will prevail in the event of a tie during
the voting on matters submitted to the Board of Directors'
deliberation.
4. Venbo Administration.
4.1 BFFC will contract, in Venbo's name, the services of Xx. Xxxxxxx
Xxxxxxxxxx Bomeny and/or the company connected to him, for a period of
two years, upon the established remuneration of, (i) exclusively in
terms of the first year of service, 20,000 common shares per month,
and (ii) for during the second year, the amount in Reais that they
agree upon, according to Venbo's usual standards, with the conditional
payment of 260,000 common shares, the latter subject to attaining
certain goals, as described in section A of this Protocol.
4.1.1In order to permit the adequate performing of services, Xx.
Xxxxxxx Xxxxxxxxxx Bomeny will be nominated Venbo's non-statutory
Director-Superintendent, with the prerogatives and
responsibilities pertaining to the sectors attributed to him and
under his responsibility, duly listed in the flow chart in Annex
B of this Protocol, and detailed in an internal system to be
elaborated and approved by the majority referred-to in item 2.1
above.
4.2 Xx. Xxxxx Xxx Xxxxxx Vader ("Xxxxx") commits himself to remain in the
positions he holds in BFFC and Venbo for at least one more year as of
this date, and may only be dismissed upon deliberation taken as per
item 2.1 above.
4.3 Without loss to the stipulations in item 4.2 above, Xxxxx xxx resign
from his functions as long as he justifies his decision based on
specific acts and deliberations by Venbo's Direction that he considers
to be violators of the law.
5. Definitive Execution.
5.1 In order for all the measures stipulated in this Protocol to be
carried out, the Parties are bound to sign all the agreements and
documents, and take all the measures required, such as, example,
stockholders agreements, subscription agreements, consultancy and
assessory service agreements and any others that may be necessary.
6. Strict legality.
6.1 All acts, actions, deliberations and measures, of a partnership or
administrative nature, to be adopted by BFFC and Venbo by the Parties,
in accordance with the stipulations contained in this Protocol, will
only be demandable if there is no violation to the applicable laws and
the rights of third parties, especially regarding rights deriving from
the Stockholders Agreement signed on August 11, 1997.
Now, therefore, the parties hereto sign this instrument in 4 (four) copies of
equal form and content, before the two undersigned witnesses.
Rio de Janeiro, May 15, 2002.
------------------------------------- -------------------------------------
Brazil Fast Food Corporation Bigburger Ltda.
------------------------------------- -------------------------------------
CCC Empreend. E Part. Ltda Xxxxxxx Xxxxxxxxxx Bomeny
------------------------------------- -------------------------------------
Xxxx Xxxxxxxx xx Xxxxx Seaview Venture Group
------------------------------------- -------------------------------------
Xxxxx xxx Xxxxxx Xxxxx Xxxxxx Investments A.E.C.
------------------------------------- -------------------------------------
Xxxx Xxxxxxx Xxxxxxx Bomeny Xxxxxxxx Xxxxxxxx
Witnesses:
1. ___________________________________
2. ___________________________________
ANNEX A
GOALS MENTIONED IN CLAUSE 4.1
For the effects of clause 4.1, the following goals agreed-to herein must be
achieved by the end of the new administration's fiscal first year.
1. Reduction of 15% (fifteen percent) in the total sum of the financial debt
standing on the date of the signing of the Protocol. This reduction
signifies ending the new administration's first fiscal year with a total
debt of less than 19 (nineteen) million Reais.
2. The positive Operating Cash Balance should reach, by the last month of the
period stipulated for the goals, the cumulative amount of R$ 4,500,000.00
(four million, fine hundred thousand Reais). This concept if referred-to in
the financial documents issued by VENBO's present administration, as
Operating Cash Balance.
3. A reduction of 15% (fifteen percent) of the Administrative Expenses
(concept in accordance with the nomenclature currently used by BFFC's Board
of Directors, including Franchise and Sales expenses) by the last month of
the new administration's first fiscal year, in reference to the last month
of a full calendar year of the present administration.
EXCEPTIONS. The goals described above will expire, to the effects of clause 4.1
in the Protocol of which this Annex A is an integral part, if one of the events
below is confirmed during the new administration's first year:
a) If the Real is devaluated, in reference to the US Dollar, by more than 10%
(ten percent) of the currency value on the date that the protocol was
signed, and if this continues for a period of over 3 (three) consecutive
months.
b) If the SELIC interest rates go beyond the point of 18.5% percent per annum
for a period of over 3 (three) consecutive months.
c) If the monthly retail index average published by the IBGE, calculated based
on the 12 (twelve) months of the new administration, falls more than two
percentage points in reference to the average of the last 12 (twelve)
months of the present administration.
In the event that any of the events described above occurs, new goals must then
be agreed-to for the new one-year period of the new administration. Should the
parties not arrive at an agreement by the first month of this new period, the
matter must be submitted to a decision by the BFFC Board of Directors.
