Filed Pursuant to Rule 424(b)(1)
Registration No. 333-150648

15,000,000 Shares

 

 

Burger King Holdings, Inc.

 

Common Stock

 

 

The selling stockholders named in this prospectus supplement are offering 15,000,000 shares of our common stock. We will not receive any proceeds from the sale of our common stock by the selling stockholders.

 

Our common stock is listed on the New York Stock Exchange under the symbol “BKC”. On May 5, 2008, the closing price of our common stock, as reported by the NYSE Consolidated Tape, was $28.46 per share.

 

Investing in our common stock involves risks. You should carefully consider the risks described under the “Risk Factors” section of this prospectus supplement beginning on page S-7, our filings with the Securities and Exchange Commission (“SEC”) and the accompanying prospectus.

 

Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus supplement. Any representation to the contrary is a criminal offense.

 

Goldman, Sachs & Co. has agreed to purchase the common stock from the selling stockholders at a price of $27.41 per share which will result in $411,150,000 of proceeds to the selling stockholders.

 

Goldman, Sachs & Co. may offer the common stock in transactions in the over-the-counter market or through negotiated transactions at market prices or at negotiated prices.

 

 

 

The underwriters expect to deliver the shares against payment in New York, New York on
May 8, 2008.

 

Goldman, Sachs & Co.

 

Prospectus Supplement dated May 5, 2008

(To Prospectus dated May 5, 2008)

TABLE OF CONTENTS

 

Prospectus Supplement

 

 

Prospectus

 

 

You should rely only on the information contained in, or incorporated by reference into, this prospectus supplement, the accompanying prospectus and any additional prospectus supplements or free writing prospectuses, if necessary, relating to this offering. We have not authorized anyone to provide you with information that is different. This prospectus supplement is not an offer to sell or solicitation of an offer to buy these shares of common stock in any circumstances under which the offer or solicitation is unlawful. You should not assume that the information we have included in this prospectus supplement or the accompanying prospectus is accurate as of any date other than the date of this prospectus supplement or the accompanying prospectus or that any information we have incorporated by reference is accurate as of any date other than the date of the document incorporated by reference regardless of the time of delivery of this prospectus supplement or of any such shares of our common stock.

 

This document is in two parts. The first part is this prospectus supplement, which adds, updates and changes information contained in the accompanying prospectus and the information incorporated by reference. The second part is the accompanying prospectus, which gives more general information, some of which may not apply to this offering of shares of common stock. To the extent the information contained in this prospectus supplement differs or varies from the information contained in the accompanying prospectus or any document incorporated by reference, the information in this prospectus supplement shall control.

 

At varying places in this prospectus supplement and the accompanying prospectus, we refer you to other sections of the documents for additional information by indicating the caption heading of the other sections. The page on which each principal caption included in this prospectus supplement and the accompanying prospectus can be found is listed in the Table of contents on the preceding page. All cross-references in this prospectus supplement are to captions contained in this prospectus supplement and not in the accompanying prospectus, unless otherwise stated.

 

No dealer, sales person or other person is authorized to give any information or to represent anything not contained in this prospectus supplement or the accompanying prospectus. You must not rely on any unauthorized information or representations. The selling stockholders are offering to sell, and seeking offers to buy, shares of our common stock only where those offers and sales are permitted.

 

In this prospectus supplement, we rely on and refer to information regarding the restaurant industry, the quick service restaurant segment and the fast food hamburger restaurant category that has been prepared by the industry research firm NPD Group, Inc. (which prepares and disseminates Consumer Reported Eating Share Trends, or CREST data) or compiled from market research reports, research analyst reports and other publicly available information. All industry and market data that are not cited as being from a specified source are from internal analyses based upon data available from noted sources or other proprietary research and analysis.

 

PROSPECTUS SUMMARY

	•	seventeen consecutive quarters of positive system-wide comparable sales growth, our best comparable sales growth trend in more than a decade, including comparable sales growth of 5.8% for the third quarter of fiscal 2008;
	•	sixteen consecutive quarters of positive comparable sales growth in the United States and Canada, including comparable sales growth of 5.4% for the third quarter of fiscal 2008;
	•	all time high annual revenues in fiscal 2007 of $2.2 billion, a 9% increase from the prior year, and revenues of $1.8 billion for the nine months ended March 31, 2008, a 10% increase from the same period in the prior year;
	•	all time high average restaurant sales, or ARS, of $1.27 million system-wide for the twelve-month period ended March 31, 2008 and $1.36 million for Company restaurants for the same period;
	•	continued acceleration of worldwide restaurant growth with 254 net new restaurants during the twelve-month period ended March 31, 2008;
	•	award-winning advertising and promotion programs focused on our core customers;
	•	a robust pipeline of new products that generated sales of more than $5 billion in the past three years;
	•	all time high guest satisfaction scores in fiscal 2007 and for the first nine months of fiscal 2008, as well as record speed of service and cleanliness scores;
	•	introduction of the BK tm Breakfast Value Menu, the first such offering in the FFHR category, and continued improvement in extending hours of operations;
	•	reduction in debt of $177 million since July 1, 2006 to $821 million as of March 31, 2008; and
	•	net income up 24% to $139 million and diluted earnings per share up 23% to $1.01 per share for the nine months ended March 31, 2008, compared to the same period in the prior year.

	•	Distinctive brand with global platform:  We believe that our Burger King and Whopper brands are two of the most widely-recognized consumer brands in the world. We have one of the largest restaurant networks in the world, with 11,455 restaurants operating in 70 countries

		and U.S. territories, of which 4,266 are located in our international markets. During fiscal 2007 and the first nine months of fiscal 2008, our franchisees opened restaurants in five new international markets: Japan, Indonesia, Poland, Egypt and Colombia. We believe that the demand for new international franchise restaurants is growing and that our global platform will allow us to leverage our established infrastructure to significantly increase our international restaurant count with limited incremental investment or expense.

	•	Attractive business model:  Approximately 90% of our restaurants are franchised, which is a higher percentage than our major competitors in the fast food hamburger restaurant category. We believe that our franchise restaurants will generate a consistent profitable royalty stream to us, with minimal ongoing capital expenditures or incremental expense by us. We also believe this will provide us with significant cash flow to reinvest in growing our brand and enhancing shareholder value. Although we believe that this restaurant ownership mix is beneficial to us, it also presents a number of drawbacks, such as our limited control over franchisees and limited ability to facilitate changes in restaurant ownership.
	•	Innovative marketing campaigns, creative advertising and strategic sponsorships:  We utilize our successful marketing, advertising and sponsorships to drive sales and generate restaurant traffic. In the first quarter of fiscal 2008, our U.S. television advertisements were among both the top 5 best recalled and the top 5 best liked new restaurant ads airing nationally, according to advertising industry researcher IAG. In addition, our television advertising made IAG’s monthly “Top 10 New Ads” lists (published by the magazine Ad Age) a total of five times in calendar year 2007, one of less than a dozen national advertisers across all categories to have that many mentions. We are also reaching out to a broad spectrum of restaurant guests with mass appeal entertainment sponsorships, such as Microsoft’s popular videogame franchise, Halo 3tm, movie tie-ins such as The Simpsonstm Movie and Indiana Jonestm and the Kingdom of the Crystal Skulltm and interactive proprietary content in mobile gaming such as the recently launched “BK City”. Additionally, as evidence of the popular relevance of our brand and products, our Whopper Freakout campaign became its own pop culture content, with the most popular YouTube user-generated parody attracting over 1.2 million views, together with over 120 other videos emulating Burger King commercial content. The strong appeal of this campaign, and its commensurate media coverage, made these ads some of the best-recalled ever according to IAG.
	•	Experienced management team:  We have a seasoned management team with significant relevant experience. John Chidsey, our Chief Executive Officer, has extensive experience in managing franchised and branded businesses, including the Avis Rent-A-Car and Budget Rent-A-Car systems, Jackson Hewitt Tax Services and PepsiCo. Russell Klein, our President, Global Marketing, Strategy and Innovation, has more than 29 years of retail and consumer marketing experience, including at 7-Eleven Inc. Ben Wells, our Chief Financial Officer, has 31 years of finance experience, including at Compaq Computer Corporation and British Petroleum. In addition, other members of our management team have worked at Frito Lay, McDonald’s, Pillsbury, Taco Bell and Wendy’s. The core of our management team has been working together since 2004.

	•	Drive further sales growth:  We remain focused on achieving our comparable sales and average restaurant sales targets and potential. Essential components of this strategy are:

	•	Enhancing the guest experience — our key guest satisfaction and operations metrics were at all-time highs in fiscal 2007 and for the first nine months of fiscal 2008 and we intend to further improve these metrics;

	•	Reducing hours of operation gap — we have implemented initiatives to reduce the gap between our hours of operation and those of our competitors, which we believe will increase comparable sales and average restaurant sales in U.S. restaurants; and
	•	Increasing emphasis on our Company restaurant reimaging program — we believe that increased capital expenditures dedicated to our Company restaurant reimaging program, consisting of remodels and rebuilds, will result in higher sales and traffic in these restaurants and yield strong cash on cash returns.

	•	Enhance restaurant profitability:  We believe that significant opportunities exist to enhance restaurant profitability by better utilizing our fixed cost base, and continuing to explore ways to reduce variable costs. For example, in the United States and Canada the recent installation of the new flexible batch broiler has reduced energy consumption in Company restaurants.
	•	Expand our large international platform:  We intend to leverage our substantial international infrastructure to expand our franchise network and restaurant base. Internationally we are much smaller than our largest competitor, and, therefore, we believe we have significant growth opportunities. We have developed a detailed global development plan to accelerate worldwide growth over the next five years. We expect to focus our expansion plans on (1) under-penetrated markets where we already have an established presence, such as Germany, Spain and Mexico; (2) markets in which we have a small presence, but which we believe offer significant development opportunities, such as Brazil, China and Italy; and (3) financially attractive new markets such as Japan and Indonesia, where our new franchisees have recently opened restaurants, and countries in the Middle East, Eastern Europe and the Mediterranean region. For example, we believe that our successful entry into Brazil where in three years we have recruited eight new franchisees and opened 43 restaurants in 19 cities validates the opportunities that exist for us in rapidly developing international markets.
	•	Accelerate our new restaurant development and expansion:   The expansion of our restaurant network and an increase in the number of new restaurants are key ingredients in our growth plan. We expect that most of our new restaurant growth will come from franchisees. Consequently, our restaurant and development strategy focuses on ensuring that franchisees in each of our markets have the resources and incentives to grow. First, we have focused on providing our franchisees with a development process that is streamlined, financially flexible and capital-efficient. As part of this strategy, we developed new, smaller restaurant designs that reduce the level of capital investment required, while also addressing a change in consumer preference from dine-in to drive-thru. These smaller restaurant models reduce average building costs by approximately 25% and are anticipated to reduce utility and other operating expenses. We are also actively pursuing co-branding and site sharing programs to reduce initial investment expense. Second, we are engaging in proactive portfolio management, including closures of under-performing restaurants and strategic acquisitions of franchise restaurants as well as refranchisings of company restaurants, to ensure that each of the markets is strategically aligned with our financial and development objectives.
	•	Employ innovative marketing strategies and expand product offerings:  We intend to continue to employ innovative and creative marketing strategies to increase our restaurant traffic and comparable sales. We intend to launch new products to fill gaps in our breakfast, dessert and snack menu offerings, offer more choices to our guests and enhance the price/value proposition of our products with offerings such as the BK Value Menu and the BK Breakfast Value Menu (the first national breakfast value menu in the FFHR category). In addition, we intend to roll-out several new and limited time offer products during the remainder of fiscal 2008.

Common stock offered by the selling stockholders		15,000,000 shares
Common stock to be outstanding after this offering		134,806,013 shares(1)
Voting Rights		One vote per share.
Use of Proceeds		We will not receive any of the proceeds from the sale of our common stock by the selling stockholders.
New York Stock Exchange Symbol		BKC
Risk Factors		You should carefully consider the risks described under the “Risk Factors” section of this prospectus supplement beginning on page S-7, our filings with the SEC and the accompanying prospectus.

 

 

(1)  This amount reflects the number of shares of common stock outstanding as of May 1, 2008. Excludes 7.1 million shares of our common stock issuable upon the exercise of non-qualified stock options or the settlement of restricted stock and restricted stock unit awards, performance-based restricted stock and performance-based restricted stock unit awards and deferred stock unit awards outstanding as of March 31, 2008, of which options to purchase 2.1 million shares were exercisable and approximately 82,000 deferred stock units were vested but not yet settled. In addition, as of March 31, 2008, (i) 1.0 million shares of our common stock remain to be awarded under the Burger King Holdings, Inc. Equity Incentive Plan and (ii) 5.5 million shares of our common stock remain to be awarded under the Burger King Holdings, Inc. 2006 Omnibus Incentive Plan. As of May 1, 2008, we had not granted any equity awards in the fourth quarter of fiscal 2008.

 

Investing in our common stock involves risks. You are urged to read and consider the risk factors relating to an investment in our Company as described in our Annual Report on Form 10-K for the fiscal year ended June 30, 2007 and our Quarterly Reports on Form 10-Q that we have filed with the SEC or may subsequently file with the SEC, all of which are incorporated by reference into this prospectus supplement, and the accompanying prospectus. These risks comprise all the material risks of which we are aware; however, these risks and uncertainties may not be the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also adversely affect our business or financial performance. If any of these events or developments described below or incorporated by reference into this prospectus supplement actually occurred, our business, financial condition or results of operations would likely suffer. In that case, the trading price of our common stock would likely decline, and you would lose all or part of your investment in our common stock.

 

In addition to current and historical information, this prospectus supplement and the documents incorporated by reference into this prospectus supplement contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which are set forth below or identified in each of the documents incorporated by reference, relate to our expectations and beliefs regarding our future operations, prospects, potential products, services, developments and business strategies. These statements can, in some cases, be identified by the use of terms such as “may”, “will”, “should”, “could”, “would”, “intend”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “project”, “potential”, or “continue” or the negative of such terms or other comparable terminology. Forward-looking statements contained in this prospectus supplement include, but are not limited to, (i) our beliefs regarding demand for international franchise restaurants, our intent to expand our international platform and the financial and operational impact of such expansion, (ii) our beliefs and expectations regarding franchise restaurants, including their impact on our financial metrics, their growth potential, and the factors that will result in financially stronger operators throughout our franchise base, (iii) our expectations regarding the impact of guest satisfaction and the increase in hours of operations on our sales growth, (iv) our expectation that our company restaurant reimaging program will result in higher sales and traffic and yield strong cash on cash returns, (v) our belief that significant opportunities exist to enhance restaurant profitability, (vi) our intent to accelerate new restaurant development and expansion; and (vii) our intention to continue to employ innovative marketing strategies and expand our product offerings and the impact of these initiatives. These forward-looking statements are only predictions based on our current expectations and projections about future events.

 

Important factors could cause our actual results, level of activity, performance or achievements to differ materially from those expressed or implied by these forward looking statements. These factors include those risk factors set forth in filings with the SEC, including our annual and quarterly reports, and the following:

 

 

 

 

These risks are not exhaustive and may not include factors which could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

 

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We do not undertake any responsibility to update any of these forward-looking statements to conform our prior statements to actual results or revised expectations.

 

We will not receive any proceeds from the sale of our common stock by the selling stockholders.

 

The selling stockholders are private equity funds controlled by the sponsors. In the aggregate, the selling stockholders own approximately 43% of our outstanding common stock, and each of the sponsors controls private equity funds owning in the aggregate more than 5% of our outstanding common stock. A total of 15,000,000 shares of our common stock are being sold by the selling stockholders using this prospectus supplement.

 

The table below sets forth certain information, as of May 1, 2008, regarding the beneficial ownership of our common stock by each selling stockholder, including the name of each selling stockholder, the number of shares beneficially owned by each selling stockholder, and the maximum number of shares that may be offered for sale by such selling stockholder pursuant to this prospectus supplement.

 

The number of shares beneficially owned by each selling stockholder is determined in accordance with the rules promulgated by the SEC and generally includes voting or investment power over the shares. The information does not necessarily indicate beneficial ownership for any other purpose. Under the SEC rules, the number of shares of common stock deemed outstanding includes shares issuable upon conversion of other securities, as well as the exercise of options or the settlement of restricted stock units held by the respective person or group that may be exercised or settled on or within 60 days of May 1, 2008. For purposes of calculating each person’s or group’s percentage ownership, shares of common stock issuable pursuant to stock options and restricted stock units exercisable or settleable on or within 60 days of May 1, 2008 are included as outstanding and beneficially owned for that person or group but are not treated as outstanding for the purpose of computing the percentage ownership of any other person or group.

 

To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.

 

For a discussion of material relationships with the selling stockholders, see “Principal and Selling Stockholders — Certain Relationships” in the accompanying prospectus.

 

 

 

 

The selling stockholders are offering the shares of common stock described in this prospectus supplement. We and the selling stockholders have entered into an underwriting agreement with the underwriter. Subject to the terms and conditions of the underwriting agreement, the selling stockholders have agreed to sell to the underwriter, and the underwriter has agreed to purchase, all of the shares of common stock offered hereby.

 

The underwriter may receive from purchasers of the shares normal brokerage commissions in amounts agreed with such purchasers.

 

We estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discounts and commissions, will be approximately $343,000.

 

Internet distributions will be allocated by the underwriter to the selling group members that may make Internet distributions on the same basis as other allocations.

 

The underwriter and its affiliates have, from time to time, performed, and may in the future perform, various financial advisory and commercial and investment banking services for the company and its subsidiaries, for which they received or will receive customary fees and expenses. For a discussion of material relationships with the selling stockholders, see “Principal and selling stockholders — Certain Relationships”. in the accompanying prospectus.

 

We have agreed that, subject to certain exceptions, we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act of 1933, as amended (the “Securities Act”) relating to, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, without the prior written consent of the underwriter for a period of 90 days after the pricing date. Notwithstanding the foregoing, if (1) during the last 17 days of the 90-day restricted period, we issue an earnings release or material news or a material event relating to our company occurs; or (2) prior to the expiration of the 90-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 90-day period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

 

All of our directors and executive officers and certain other equity holders, including the selling stockholders, have entered into lock-up agreements with the underwriter prior to the commencement of this offering pursuant to which each of these persons or entities, for a period of 90 days after the pricing date, have agreed that they will not, without the prior written consent of the underwriter, (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock (including, without limitation, common stock which may be deemed to be beneficially owned by such persons in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant) or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the common stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of common stock or such other securities, in cash or otherwise, subject to certain exceptions, including sales made in this offering and, with respect to certain directors and executive officers, transfers made to us for purchase and/or withholding of common stock in connection with the settlement of previously awarded restricted stock, restricted stock units or options pursuant to our equity incentive plans and award agreements in an amount equal to all applicable withholding taxes due in respect to such awards, transfers made pursuant to a previously entered into plan that complies with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and, transfers made 30 days or later after

the closing date that do not in the aggregate for each person exceed 20% of the aggregate number of shares held by such person, including shares pursuant to vested and unexercised options, vested restricted stock, vested restricted stock units and vested deferred stock units under the Equity Incentive Plan or the 2006 Omnibus Incentive Plan. Notwithstanding the foregoing, if (1) during the last 17 days of the 90-day restricted period, we issue an earnings release or material news or a material event relating to our company occurs; or (2) prior to the expiration of the 90-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 90-day period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

 

We and the selling stockholders have agreed to indemnify the underwriter against certain liabilities, including liabilities under the Securities Act.

 

Our common stock is listed on the New York Stock Exchange under the symbol “BKC”.

 

In connection with this offering, the underwriter may engage in stabilizing transactions, which involves making bids for, purchasing and selling shares of common stock in the open market for the purpose of preventing or retarding a decline in the market price of the common stock while this offering is in progress. These stabilizing transactions may include making short sales of the common stock, which involves the sale by the underwriter of a greater number of shares of common stock than it is required to purchase in this offering, and purchasing shares of common stock on the open market to cover positions created by short sales. Short sales may be “covered” shorts, which are short positions in an amount not greater than the shares referred to above, or may be “naked” shorts, which are short positions in excess of that amount. The underwriter may close out any covered short position by purchasing shares in the open market. In making this determination, the underwriter will consider, among other things, the price of shares available for purchase in the open market. A naked short position is more likely to be created if the underwriter is concerned that there may be downward pressure on the price of the common stock in the open market that could adversely affect investors who purchase in this offering. To the extent that the underwriter creates a naked short position, it will purchase shares in the open market to cover the position.

 

The underwriter has advised us that, pursuant to Regulation M of the Securities Act, it may also engage in other activities that stabilize, maintain or otherwise affect the price of the common stock.

 

These activities, as well as other purchases by the underwriter for its own account, may have the effect of raising or maintaining the market price of the common stock or preventing or retarding a decline in the market price of the common stock, and, as a result, the price of the common stock may be higher than the price that otherwise might exist in the open market. If the underwriter commences these activities, it may discontinue them at any time. The underwriter may carry out these transactions on the New York Stock Exchange, in the over-the-counter market or otherwise.

 

The underwriter has represented that (i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any common stock in circumstances in which Section 21(1) of the FSMA does not apply to us and (ii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.

 

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), the underwriter has represented and agreed that with effect from and including the date on which the European Union Prospectus Directive (the “EU Prospectus Directive”) is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of common stock to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been

approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the EU Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of shares to the public in that Relevant Member State at any time:

 

 

For the purposes of this provision, the expression an “offer of shares to the public” in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied in that Member State by any measure implementing the EU Prospectus Directive in that Member State and the expression EU Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

 

The shares may not be offered or sold by means of any document other than to persons whose ordinary business is to buy or sell shares or debentures, whether as principal or agent, or in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32) of Hong Kong, and no advertisement, invitation or document relating to the shares may be issued, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made thereunder.

 

This prospectus supplement has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus supplement and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

 

Where the shares are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the shares under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant

person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.

 

The securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the “FIEL”) and the underwriter has agreed that it will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the FIEL and any other applicable laws, regulations and ministerial guidelines of Japan.

 

Because, prior to this offering, the Goldman Sachs Funds, affiliates of Goldman, Sachs & Co., own in excess of 10% of the issued and outstanding shares of our common stock, under Rule 2720 of the Financial Industry Regulatory Authority (“FINRA”) (“Rule 2720”), Goldman Sachs & Co. may be deemed to be our “affiliate” and may be deemed to have a conflict of interest under Rule 2720. When a FINRA member with a conflict of interest participates as an underwriter in a public offering, the FINRA rules generally require that the public offering price may be no higher than that recommended by a “qualified independent underwriter” as defined by FINRA. Because a bona fide independent market (as defined in Rule 2720 of the FINRA) exists for our shares of common stock, a qualified independent underwriter is not required to be appointed; however, the offering will be conducted in accordance with all other applicable provisions of the FINRA rules.

 

The validity of the shares of common stock offered hereby will be passed upon for us by Holland & Knight LLP, Miami, Florida, and certain legal matters will be passed upon for the underwriters by Cleary Gottlieb Steen & Hamilton LLP, New York, New York. Cleary Gottlieb Steen & Hamilton LLP has in the past provided legal services to us and the sponsors and may in the future continue to provide legal services to us and the sponsors. In addition, Cleary Gottlieb Steen & Hamilton LLP currently provides legal services to the sponsors.

 

The consolidated financial statements of Burger King Holdings, Inc and subsidiaries as of June 30, 2007 and 2006, and for each of the years in the three-year period ended June 30, 2007, and management’s assessment of the effectiveness of internal control over financial reporting as of June 30, 2007 have been incorporated by reference herein in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.

 

The audit report of KPMG LLP covering the June 30, 2007, consolidated financial statements refers to changes in the accounting for defined benefit pension and other postretirement plans and a change in method of accounting for share-based payments in fiscal 2007.

 

We file current, quarterly and annual reports, proxy statements and other information required by the Exchange Act with the SEC. You may read and copy any of these filed documents at the SEC’s public reference room located at 100 F Street, N.E., Room 1580, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our SEC filings are also available to the public from the SEC’s Internet site at http://www.sec.gov.

Our website is http://www.bk.com (which is not intended to be an active hyperlink in this prospectus supplement). We make available free of charge on our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, proxy statements and other information as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The information contained on, connected to or that can be accessed via our website is not part of this prospectus supplement.

 

We have filed with the SEC a Registration Statement on Form S-3 under the Securities Act with respect to the shares of common stock offered by this prospectus supplement. This prospectus supplement, which constitutes a part of that Registration Statement, does not include all the information contained in that Registration Statement and its exhibits. For further information with respect to us and our common stock, you should consult the Registration Statement and its exhibits.

 

The SEC allows us to “incorporate by reference” the information we file with it, which means that we can disclose important information to you by referring you to documents containing that information. The information incorporated by reference is considered to be part of this prospectus supplement, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the following documents filed by us with the SEC:

 

 

 

 

 

 

We will provide to you without charge a copy of all documents incorporated by reference into this prospectus supplement, including any exhibits to such documents that are specifically incorporated by reference in those documents. You may request copies by writing or telephoning us at our Investor Relations Department, Burger King Holdings, Inc., 5505 Blue Lagoon Drive, Miami, Florida 33126, telephone number (305) 378-7696 or by e-mailing us at Investor@whopper.com.

 

Statements contained in this prospectus supplement concerning the provisions of any documents are necessary summaries of those documents, and each statement is qualified in its entirety by reference to the copy of the document filed with the SEC. The Registration Statement and any of its amendments, including exhibits filed as a part of the Registration Statement or an amendment to the Registration Statement, are available for inspection and copying as described above.

 

PROSPECTUS

 

 

15,000,000 Shares of Common Stock

 

 

Burger King Holdings, Inc.

 

 

This prospectus relates to 15,000,000 shares of common stock, par value $0.01 per share, of Burger King Holdings, Inc. All of the shares being offered hereby will be sold by or for the benefit of the selling stockholders identified on page 15 of this prospectus. We will not receive any proceeds from the sale of the shares.

 

The selling stockholders may offer and sell the shares from time to time, in public or private transactions, through underwriters, dealers or agents or directly to one or more purchasers in fixed price offerings, in negotiated transactions, at market prices prevailing at the time of sale or at prices related to market prices. See “Plan of Distribution” starting on page 23 of this prospectus for more information.

 

Our common stock is listed on the New York Stock Exchange under the symbol “BKC.” On May 2, 2008, the closing price of our common stock as reported on the NYSE Consolidated Tape was $28.00 per share.

 

This prospectus describes the general manner in which the shares of our common stock may be offered or sold by the selling stockholders. If necessary, the specific manner in which shares of our common stock may be offered and sold will be described in a prospectus supplement.

 

Investing in our common stock involves risks. You should carefully consider the risks described under the “Risk Factors” section of this prospectus beginning on page 2, our filings with the Securities and Exchange Commission (“SEC”) and any applicable prospectus supplement.

 

Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

 

May 5, 2008

 

Table of contents

 

 

 

You should rely only on the information contained in, or incorporated by reference into, this prospectus and any prospectus supplements or free writing prospectuses, if necessary, relating to such offering. We have not authorized anyone to provide you with information that is different. This prospectus is not an offer to sell or solicitation of an offer to buy these shares of common stock in any circumstances under which the offer or solicitation is unlawful. You should not assume that the information we have included in this prospectus or any prospectus supplement or free writing prospectus is accurate as of any date other than the date of this prospectus or the relevant prospectus supplement or free writing prospectus, as the case may be, or that any information we have incorporated by reference is accurate as of any date other than the date of the document incorporated by reference regardless of the time of delivery of this prospectus, a prospectus supplement, a free writing prospectus or of any shares of our common stock.

 

No dealer, sales person or other person is authorized to give any information or to represent anything not contained in this prospectus or any prospectus supplement. You must not rely on any unauthorized information or representations. This prospectus and any prospectus supplement are an offer to sell only the securities specifically offered by it, but only under circumstances and in jurisdictions where it is lawful to do so.

 

Prospectus summary

 

You should carefully consider the following risks related to investing in our shares of common stock and all of the other information set forth in, or incorporated by reference into, this prospectus (including the risks set forth below and under “Risk factors” in our annual report on Form 10-K for the fiscal year ended June 30, 2007 filed with the SEC on September 7, 2007 and in our quarterly reports on Form 10-Q, each of which we incorporate herein by reference) before deciding to invest in shares of our common stock. The following risks, and the risks incorporated by reference into this prospectus and any prospectus supplement, comprise all the material risks of which we are aware; however, these risks and uncertainties may not be the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also adversely affect our business or financial performance. If any of the events or developments described below or incorporated by reference into this prospectus or any prospectus supplement actually occurred, our business, financial condition or results of operations would likely suffer. In that case, the trading price of our common stock would likely decline, and you would lose all or part of your investment in our common stock.

 

Risks related to investing in our stock

 

The price of our common stock may be volatile and you may not be able to sell your shares at or above the offering price.

 

We completed our initial public offering in May 2006. An active and liquid public market for our common stock may not continue to develop or be sustained. Since our initial public offering, the price of our common stock, as reported by the New York Stock Exchange, has ranged from a low of $12.41 on August 1, 2006 to a high of $29.19 on December 24, 2007. Some specific factors that may have a significant effect on the market price of our common stock include:

 

 

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Due to the potential volatility of our stock price, we may therefore be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from our business.

 

Our current principal stockholders may continue to own a significant amount of our voting stock and have certain contractual rights to appoint directors after this offering, which will allow them to control substantially all matters requiring stockholder approval.

 

As of the date of this prospectus, the private equity funds controlled by the sponsors together beneficially own approximately 43% of our outstanding common stock. In addition, we expect that six of our 13 directors will continue to be representatives of the private equity funds controlled by the sponsors and that each sponsor will retain the right to nominate two directors, subject to reduction and elimination as the stock ownership percentage of the private equity funds controlled by the applicable sponsor declines. In addition, with respect

to each committee of our board other than the audit committee, each sponsor will retain the right to appoint at least one director to each committee, for sponsor directors to constitute a majority of the membership of each committee and for the chairman of each committee to be a sponsor director until the private equity funds controlled by the sponsors collectively own less than 30% of our outstanding common stock. As a result, these private equity funds will continue to have significant influence over our decision to enter into any corporate transaction and may have the ability to prevent any transaction that requires the approval of stockholders, regardless of whether or not other stockholders believe that such transaction is in their own best interests. Such concentration of voting power could have the effect of delaying, deterring or preventing a change of control or other business combination that might otherwise be beneficial to our stockholders. For more information, see the description of our shareholders’ agreement with the private equity funds controlled by the sponsors in the “Principal and Selling Stockholders–Certain relationships” section of this prospectus.

 

Until November 19, 2007, we were a “controlled company” within the meaning of the New York Stock Exchange rules and we may continue to rely on exemptions from certain corporate governance requirements that provide protection to stockholders of other companies during the one-year transition period.

 

Since November 19, 2007, the private equity funds controlled by the sponsors have collectively owned less than 50% of the total voting power of our common stock, and we have no longer been a “controlled company” under the New York Stock Exchange, or NYSE, corporate governance listing standards. The NYSE rules require that each of our compensation committee and our nominating and corporate governance committee has only independent directors by November 19, 2008. During the transition period, from November 19, 2007 through November 19, 2008, we are entitled to continue utilizing certain exemptions under the NYSE standards that free us from these requirements. For that portion of the transition period that we use these “controlled company” exemptions, you will not have the same protection afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements. At this time, our board has made independence determinations with respect to a majority of our board and a majority of the members of each of our compensation committee and our nominating and corporate governance committee.

 

Your percentage ownership in us may be diluted by future issuances of capital stock, which could reduce your influence over matters on which stockholders vote.

 

Our board of directors has the authority, without action or vote of our stockholders, to issue all or any part of our authorized but unissued shares of common stock, including shares issuable upon the exercise of options, or shares of our authorized but unissued preferred stock. Issuances of common stock or voting preferred stock would reduce your influence over matters on which our stockholders vote, and, in the case of issuances of preferred stock, would likely result in your interest in us being subject to the prior rights of holders of that preferred stock.

 

Future sales of our common stock, or the perception that such sales might occur, may cause the market price of shares of our common stock to decline.

 

Sales of a substantial number of shares of our common stock, or the perception that such sales might occur, following an offering, could cause the market price of our common stock to decline. The shares of our common stock outstanding prior to such an offering will be eligible for sale in the public market at various times in the future. In connection with any offering, we, all of our executive officers, directors and each of the sponsors may agree not to sell any shares of our common stock for a specified period after the pricing date. However once the lock-up has expired these shares would be eligible to be sold in the public market, subject to the securities laws. The terms of any lock-up agreements will be described in the applicable prospectus supplement.

A “change in control,” as defined in our senior secured credit facility, would be an event of default of the facility.

 

Under our senior secured credit facility, a “change in control” occurs if any person or group, other than the private equity funds controlled by the sponsors, acquires more than (1) 25% of our equity value and (2) the equity value controlled by the sponsors. A change in control is an event of default under our senior secured credit facility. The sponsors currently control, in the aggregate, approximately 43% of our equity value, and it would be possible for another person or group to effect a “change in control” without our consent. If a change in control were to occur, the banks would have the ability to terminate any commitments under the facility and/or accelerate all amounts outstanding. We may not be able to refinance such outstanding commitments on commercially reasonable terms, or at all. If we were not able to pay such accelerated amounts, the banks under the senior secured credit facility would have the right to foreclose on the stock of BKC and certain of its subsidiaries.

 

Provisions in our certificate of incorporation could make it difficult for a third party to acquire us and could discourage a takeover and adversely affect existing stockholders.

 

Our certificate of incorporation authorizes our board of directors to issue up to 10,000,000 shares of preferred stock and to determine the powers, preferences, privileges, rights, including voting rights, qualifications, limitations and restrictions on those shares, without any further vote or action by our stockholders. The rights of the holders of shares of our common stock will be subject to, and may be adversely affected by, the rights of the holders of any shares of our preferred stock that may be issued in the future. The issuance of preferred shares could have the effect of delaying, deterring or preventing a change in control and could adversely affect the voting power or economic value of your shares.

 

In addition to current and historical information, this prospectus and the documents incorporated by reference into this prospectus contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which are set forth below or identified in each of the documents incorporated by reference, relate to our and expectations and beliefs regarding our future operations, prospects, potential products, services, developments and business strategies. These statements can, in some cases, be identified by the use of terms such as “may”, “will”, “should”, “could”, “would”, “intend”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “project”, “potential”, or “continue” or the negative of such terms or other comparable terminology. Forward-looking statements contained in this prospectus include, but are not limited to, our beliefs and expectations regarding our franchise restaurants, including their impact on our financial metrics and the strategic advantage that we derive from our ownership mix, our expectations regarding the control that the sponsors will continue to exercise after this offering, and our expectation that our cash flow will continue to strengthen. These forward-looking statements are only predictions based on our current expectations and projections about future events. Important factors could cause our actual results, level of activity, performance or achievements to differ materially from those expressed or implied by these forward looking statements. These factors include those risk factors set forth in filings with the SEC, including our annual and quarterly reports, and the following:

 

 

 

These risks are not exhaustive and may not include factors which could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

 

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We do not undertake any responsibility to update any of these forward-looking statements to conform our prior statements to actual results or revised expectations.

 

The proceeds from the sale of the common stock offered pursuant to this prospectus are solely for the account of the selling stockholders. We will not receive any proceeds from these sales. See “Principal and Selling Stockholders”.

 

Our common stock has been listed on the New York Stock Exchange under the symbol “BKC” since May 18, 2006. Prior to that time, there was no public market for our common stock. The following table sets forth for the periods indicated the high and low sales prices of our common stock on the New York Stock Exchange.

 

 

 

 

A recent reported closing price for our common stock is set forth on the cover page of this prospectus. The Bank of New York Mellon is the transfer agent and registrar for our common stock. On May 1, 2008, we had 200 holders of record of our common stock.

 

Although we do not have a dividend policy, we have elected to pay the following quarterly cash dividends because we have generated strong cash flow over the past year, and we expect our cash flow to continue to strengthen.

 

 

On February 21, 2006, we paid an aggregate cash dividend of $367 million to holders of record of our common stock on February 9, 2006. At the same time, we paid a compensatory make-whole payment of $33 million to holders of our options and restricted stock unit awards, primarily members of senior management. This compensatory make-whole payment was recorded as compensation expense in the third quarter of fiscal 2006. We did not declare or pay any cash dividends on our common stock during the fiscal year ended June 30, 2005.

 

The terms of our credit facility limit our ability to pay cash dividends in certain circumstances. In addition, because we are a holding company, our ability to pay cash dividends on shares of our common stock may be limited by restrictions on our ability to obtain sufficient funds through dividends from our subsidiaries, including the restrictions under our credit facility. Subject to the foregoing, the payment of cash dividends in the future, if any, will be at the discretion of our board of directors and will depend upon such factors as earnings levels, capital requirements, our overall financial condition and any other factors deemed relevant by our board of directors.

 

The following table sets forth our capitalization as of March 31, 2008. This table should be read in conjunction with “Management’s discussion and analysis of financial condition and results of operations” included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 and the unaudited condensed consolidated financial statements and notes thereto incorporated by reference into this prospectus.

 

 

 

On December 13, 2002, we acquired BKC through private equity funds controlled by the sponsors. In this prospectus, unless the context otherwise requires, all references to “we”, “us” and “our” refer to Burger King Holdings, Inc. and its subsidiaries, including BKC, for all periods subsequent to our December 13, 2002 acquisition of BKC. All references to our “predecessor” refer to BKC and its subsidiaries for all periods prior to the acquisition, which operated under a different ownership and capital structure. In addition, the acquisition was accounted for under the purchase method of accounting and resulted in purchase accounting allocations that affect the comparability of results of operations between periods before and after the acquisition.

 

The following tables present selected consolidated financial and other data for us for each of the periods indicated. The selected historical financial data as of June 30, 2003, 2004, 2005, 2006 and 2007 and for the period December 13, 2002 to June 30, 2003, and for the fiscal years ended June 30, 2004, 2005, 2006 and 2007 have been derived from our audited financial statements and the notes thereto. The selected historical financial data for our predecessor for the period July 1, 2002 to December 12, 2002 have been derived from the audited consolidated financial statements and notes thereto of our predecessor. The combined financial data for the combined fiscal year ended June 30, 2003 have been derived from the audited consolidated financial statements and notes thereto of our predecessor and us. The combined financial data have not been audited on a combined basis, do not comply with generally accepted accounting principles and are not intended to represent what our operating results would have been if the acquisition of BKC had occurred at the beginning of the period. The selected historical financial data as of March 31, 2007 and 2008 and for the nine months ended March 31, 2007 and 2008 have been derived from our unaudited condensed consolidated financial statements and the notes thereto incorporated by reference into this prospectus. The other operating data for the fiscal years ended June 30, 2005, 2006 and 2007 and for the nine months ended March 31, 2007 and 2008 have been derived from our internal records.

 

The selected consolidated financial and other operating data presented below contain all normal recurring adjustments that, in the opinion of management, are necessary to present fairly our financial position and results of operations as of and for the periods presented. The selected historical consolidated financial and other operating data included below and elsewhere in this prospectus are not necessarily indicative of future results. The information presented below should be read in conjunction with the “Management’s discussion and analysis of financial condition and results of operations” set forth in our annual and quarterly reports and our audited and unaudited condensed consolidated financial statements and related notes and other financial information, all of which is incorporated by reference into this prospectus.

 

 

  * Not meaningful

 

 

 

 

 

 

 

 

 

 

The selling stockholders are private equity funds controlled by the sponsors. In the aggregate, the selling stockholders own approximately 43% of our outstanding common stock, and each of the sponsors controls private equity funds owning in the aggregate more than 5% of our outstanding common stock. A total of 15,000,000 shares of our common stock are covered for possible sale by the selling stockholders using this prospectus.

 

The table below sets forth certain information as of May 1, 2008, regarding the beneficial ownership of our common stock by:

 

 

As of May 1, 2008, our outstanding equity securities consisted of 134,806,013 shares of common stock.

The number of shares beneficially owned by each stockholder is determined in accordance with the rules promulgated by the SEC and generally includes voting or investment power over the shares. The information does not necessarily indicate beneficial ownership for any other purpose. Under the SEC rules, the number of shares of common stock deemed outstanding includes shares issuable upon conversion of other securities, as well as the exercise of options or the settlement of restricted stock units held by the respective person or group that may be exercised or settled on or within 60 days of May 1, 2008. For purposes of calculating each person’s or group’s percentage ownership, shares of common stock issuable pursuant to stock options and restricted stock units exercisable or settleable on or within 60 days of May 1, 2008 are included as outstanding and beneficially owned for that person or group but are not treated as outstanding for the purpose of computing the percentage ownership of any other person or group.

 

The address for each listed stockholder, unless otherwise indicated, is: c/o Burger King Holdings, Inc., 5505 Blue Lagoon Drive, Miami, Florida 33126. To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. We have prepared the information in the table regarding the selling stockholders based on information given to us by, or on behalf of, the selling stockholders, before the date of this prospectus. Information about the selling stockholders may change from time to time. Any changed information given to us by the selling stockholders will be set forth in prospectus supplements or amendments to this prospectus if and when necessary.

 

Our registration of the shares covered by this prospectus does not necessarily mean that any of the selling stockholders will sell all or any portion of the shares of common stock covered by this prospectus. The selling stockholders may offer and sell all or a portion of their respective shares from time to time, but are under no obligation to offer or sell any of the shares. Because the selling stockholders may sell, transfer or otherwise dispose of all, some or none of the shares of our common stock covered by this prospectus, we cannot determine the number of such shares that will be sold, transferred or otherwise disposed of by the selling stockholders, or the amount or percentage of shares of our common stock that will be held by the selling stockholders upon termination of any particular offering. See “Plan of distribution”. For purposes of the table below, we assume that the selling stockholders will sell all their shares of common stock covered by this prospectus.