Burger King 2012 Annual Report Download - page 28

Table of Contents
Environmental conditions relating to prior, existing or future restaurants or restaurant sites, including franchised sites, may have a material adverse
effect on us. Moreover, the adoption of new or more stringent environmental laws or regulations could result in a material environmental liability to us and the
current environmental condition of the properties could be harmed by tenants or other third parties or by the condition of land or operations in the vicinity of
our properties.


We have outsourced certain administrative functions, including account payment and receivable processing, to a third-party service provider. We also
outsource certain information technology support services and benefit plan administration, and may outsource other functions in the future to achieve cost
savings and efficiencies. If the service providers to which we outsource these functions do not perform effectively, we may not be able to achieve the expected
cost savings and may have to incur additional costs in connection with such failure to perform. Depending on the function involved, such failures may also
lead to business disruption, transaction errors, processing inefficiencies, the loss of sales and customers, the loss of or damage to intellectual property through
security breach, and the loss of sensitive data through security breach or otherwise. Any such damage or interruption could have a material adverse effect on
our business, cause us to face significant fines, customer notice obligations or costly litigation, harm our reputation with our customers or prevent us from
paying our suppliers or employees or receiving payments on a timely basis.


We are approximately 70% owned by 3G, which in turn is controlled by 3G Capital. As a result 3G Capital has the power to elect all of the members of
our board of directors and effectively has control over major decisions regardless of whether other shareholders believe that any such decisions are in their own
best interests. The interests of 3G Capital as equity holder may conflict with the interests of the other shareholders. 3G Capital may have an incentive to
increase the value of its investment or cause us to distribute funds at the expense of our financial condition and affect our ability to make payments on our
indebtedness. In addition, 3G Capital may have an interest in pursuing acquisitions, divestitures, financings, capital expenditures or other transactions that it
believes could enhance its equity investments even though such transactions might involve risks to other stakeholders. 3G Capital is in the business of
making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. In addition,
this significant concentration of share ownership may adversely affect the trading price for our Common Stock because investors often perceive disadvantages
in owning stock in companies with a concentrated stockholder base.
Our amended and restated certificate of incorporation provides that the doctrine of corporate opportunity does not apply with respect to 3G, or any of our
directors, in a manner that would prohibit them from investing or participating in competing businesses. To the extent they invest in such other businesses, 3G
may have differing interests from our other stockholders.


3G owns, in the aggregate, more than 50% of the total voting power of our common stock and, as a result, we are a controlled company under the New
York Stock Exchange corporate governance standards. As a controlled company, we are exempt from certain of the New York Stock Exchange corporate
governance requirements, including the requirements:
• that a majority of our board of directors consist of independent directors, as defined under the rules of the New York Stock Exchange;
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Source: Burger King Worldwide, Inc., 10-K, February 22, 2013 Powered by Morningstar® Document Research℠
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