Burger King 2013 Annual Report Download - page 25

Table of Contents
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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.
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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;
• that we have a corporate governance and nominating committee that is composed entirely of independent directors with a written charter addressing
the committee’s purpose and responsibilities; and
• that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s
purpose and responsibilities.
Accordingly, for so long as we are a controlled company, holders of our common stock will not have the same protections afforded to stockholders of
companies that are subject to all of the New York Stock Exchange corporate governance requirements.
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The market price for our common stock may fluctuate significantly in response to a number of factors, many of which we cannot control, including
those described under “Risk Factors – Risks Related to Our Business”, and the following:
• changes in the economic or capital markets conditions that could affect valuations of the Company or fast food companies in general;
• changes in financial estimates by any securities analysts who follow our common stock, our failure to meet these estimates or failure of those
analysts to initiate or maintain coverage of our common stock;
• downgrades by any securities analysts who follow our common stock;
• future sales of our common stock by our officers, directors and significant stockholders;
• global economic, legal, regulatory factors unrelated to our performance;
• announcements by us or our competitors of significant changes in product offerings, contracts, acquisitions, joint ventures or capital
commitments; and
• changes in key personnel.
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Source: Burger King Worldwide, Inc., 10-K, February 21, 2014 Powered by Morningstar® Document Research℠
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