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Uno Restaurant Corp · PRER14A · On 6/27/01

Filed On 6/27/01 1:21pm ET · SEC File 1-09573 · Accession Number 912057-1-521405

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 6/27/01  Uno Restaurant Corp               PRER14A                1:215                                    Merrill Corp/FA

Revised Preliminary Proxy Solicitation Material · Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRER14A     Revised Preliminary Proxy Solicitation Material      215  1,206K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Access to Information Acquisition or Disposition of Assets Adjournments Alternatives to the Merger Amendments Anticipated Accounting Treatment of Merger Appraisal Rights Article I Article Ii Article Iii Article Iv Article V Article Vii Article Viii Background of the Merger Business Cautionary Statement Concerning Forward-Looking Information Certain Regulatory Matters Certain Relationships and Related Transactions Certain Risks in the Event of Bankruptcy Certificate of Incorporation, Bylaws and Directors and Officers of Uno as the Surviving Corporation Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Common Stock Common Stock Purchase Information Conditions to the Merger Conduct of Business Pending the Merger Consolidated Balance Sheets Consolidated Statements of Cash Flows Consolidated Statements of Income Consolidated Statements of Shareholders' Equity Consumer Product Sales Continuing Stockholders, The Conversion of Common Stock Cost of Food and Beverages Depreciation and amortization Determination of the Fairness of the Merger by Parent, Newco and the Affiliate Stockholders Directors and Executive Officers of the Registrant Dividends Effective Time of Merger Effects of the Merger Estimated Fees and Expenses of the Merger Executive Compensation Executive Officers of the Registrant Exhibits and Reports on Form 8-K Exhibits, Financial Statement Schedules, and Reports on Form 8-K Expense Reimbursement Expenses of Proxy Solicitation Fair Value Federal Income Tax Consequences Financial Statements and Exhibits Financial Statements and Supplementary Data Forward Looking Information; Certain Projections Franchise Income Future Stockholder Proposals General General and administrative Indemnification and Insurance Independent Auditors Interest and Other Expense Interests of the Continuing Stockholders in the Merger Labor and Benefits Legal Proceedings Limited Solicitation of Potential Acquirors Litigation Challenging the Merger Management's Discussion and Analysis of Financial Condition and Results of Operations Market and Market Price Market for Registrant's Common Equity and Related Stockholder Matters Market Information Matters to be Considered at the Special Meeting Merger Agreement, The Merger Financing Merger, The Net Income No Solicitation Notes to Consolidated Financial Statements Number of Stockholders Occupancy Costs Operating Income Opinion of Financial Advisor to the Special Committee Other Information Other Operating Costs Participants, The Payment For Shares Pre-Opening Costs Properties Provision for Income Taxes Proxies; Revocation Purchases by Parent and Newco and Their Directors and Executive Officers Purchases by the Continuing Stockholders Purchases by Uno Purpose and Structure of the Merger Quantitative and Qualitative Disclosure About Market Risks Questions and Answers About the Merger Quorum Reasons for the Board of Directors' Determination Reasons for the Special Committee's Determination Recent Transactions Recommendation of the Board of Directors; Fairness of the Merger Record Date and Voting Information Report of Independent Auditors Representations and Warranties Restaurant Sales Risks that the Merger Will Not Be Completed Security Ownership of Certain Beneficial Owners and Management Selected Financial Data Special Factors Special Meeting, The Stock Option Plans Submission of Matters to A Vote of Security Holders Summary Term Sheet Table of Contents Termination of the Merger Agreement The Continuing Stockholders The Merger The Merger Agreement The Participants The Special Meeting Transfer of Shares Treatment of Stock Options Uno Acquisition Corp Uno Restaurant Corporation Uno Restaurant Corporation Selected Historical Financial Data Uno Restaurant Holdings Corporation Uno Stockholder Approval Waiver Where Stockholders Can Find More Information
1	1st Page
"	Uno Restaurant Corporation
6	Table of Contents
8	Summary Term Sheet
11	Questions and Answers About the Merger
17	Cautionary Statement Concerning Forward-Looking Information
18	Uno Restaurant Corporation Selected Historical Financial Data
20	Market and Market Price
"	Market Information
"	Number of Stockholders
"	Dividends
22	The Special Meeting
"	General
"	Matters to be Considered at the Special Meeting
23	Record Date and Voting Information
24	Quorum
"	Proxies; Revocation
"	Expenses of Proxy Solicitation
"	Adjournments
"	Appraisal Rights
25	The Participants
"	Uno Restaurant Holdings Corporation
"	Uno Acquisition Corp
26	The Continuing Stockholders
27	Special Factors
"	Background of the Merger
39	Recommendation of the Board of Directors; Fairness of the Merger
40	Reasons for the Special Committee's Determination
44	Reasons for the Board of Directors' Determination
45	Determination of the Fairness of the Merger by Parent, Newco and the Affiliate Stockholders
47	Forward Looking Information; Certain Projections
61	Opinion of Financial Advisor to the Special Committee
73	Limited Solicitation of Potential Acquirors
"	Purpose and Structure of the Merger
74	Alternatives to the Merger
75	Effects of the Merger
77	Risks that the Merger Will Not Be Completed
"	Interests of the Continuing Stockholders in the Merger
81	Stock Option Plans
84	Certain Risks in the Event of Bankruptcy
"	Merger Financing
90	Estimated Fees and Expenses of the Merger
91	Federal Income Tax Consequences
92	Anticipated Accounting Treatment of Merger
"	Certain Regulatory Matters
96	Litigation Challenging the Merger
97	The Merger Agreement
"	The Merger
"	Effective Time of Merger
"	Certificate of Incorporation, Bylaws and Directors and Officers of Uno as the Surviving Corporation
"	Conversion of Common Stock
98	Payment For Shares
"	Transfer of Shares
"	Treatment of Stock Options
"	Uno Stockholder Approval
99	Indemnification and Insurance
"	Representations and Warranties
101	Conduct of Business Pending the Merger
"	No Solicitation
102	Access to Information
"	Conditions to the Merger
103	Waiver
104	Termination of the Merger Agreement
105	Expense Reimbursement
106	Amendments
107	Common Stock Purchase Information
"	Purchases by Uno
"	Purchases by the Continuing Stockholders
"	Purchases by Parent and Newco and Their Directors and Executive Officers
"	Recent Transactions
109	Independent Auditors
"	Future Stockholder Proposals
"	Where Stockholders Can Find More Information
114	Article I
119	Article Ii
122	Article Iii
124	Article Iv
126	Article V
131	Article Vii
133	Article Viii
147	Item 1. Business
160	Executive Officers of the Registrant
161	Item 2. Properties
162	Item 3. Legal Proceedings
"	Item 4. Submission of Matters to A Vote of Security Holders
163	Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
"	Common Stock
164	Item 6. Selected Financial Data
166	Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
167	Restaurant Sales
"	Consumer Product Sales
"	Franchise Income
"	Cost of Food and Beverages
"	Labor and Benefits
"	Occupancy Costs
"	Other Operating Costs
"	Pre-Opening Costs
168	Operating Income
"	Interest and Other Expense
"	Provision for Income Taxes
"	Net Income
173	Item 7a. Quantitative and Qualitative Disclosure About Market Risks
"	Item 8. Financial Statements and Supplementary Data
"	Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
174	Item 10. Directors and Executive Officers of the Registrant
"	Item 11. Executive Compensation
"	Item 12. Security Ownership of Certain Beneficial Owners and Management
"	Item 13. Certain Relationships and Related Transactions
175	Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
180	Report of Independent Auditors
183	Consolidated Statements of Shareholders' Equity
184	Consolidated Statements of Cash Flows
185	Notes to Consolidated Financial Statements
199	Consolidated Balance Sheets
200	Consolidated Statements of Income
204	General and administrative
"	Depreciation and amortization
209	Fair Value
"	Item 5. Other Information
210	Item 6. Exhibits and Reports on Form 8-K
213	Item 2. Acquisition or Disposition of Assets
"	Item 7. Financial Statements and Exhibits

PRER14A 1st Page of 215 TOC Top Previous Next Bottom Just 1st
Sponsored Ads...

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. 2)

[Download Table]

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED
BY RULE 14A-6(E)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-12

UNO RESTAURANT CORPORATION
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)

Payment of Filing Fee (Check the appropriate box):

[Download Table]

/ / No fee required.
/X/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
Common Stock
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
4,560,275
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
$9.75
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
$44,462,681
----------------------------------------------------------
(5) Total fee paid:
$8,893
----------------------------------------------------------

/ / Fee paid previously with preliminary materials.

/X/ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.

(1) Amount Previously Paid:
$8,893
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
Schedule 14A (File No. 5-39163)
----------------------------------------------------------
(3) Filing Party:
Uno Restaurant Corporation
----------------------------------------------------------
(4) Date Filed:
April 27, 2001 and June 6, 2001
----------------------------------------------------------

PRER14A 2nd Page of 215 TOC 1st Previous Next Bottom Just 2nd

[LOGO]

UNO RESTAURANT CORPORATION
100 CHARLES PARK ROAD
WEST ROXBURY, MASSACHUSETTS 02132

June , 2001

DEAR STOCKHOLDERS:

You are cordially invited to attend a special meeting of stockholders of Uno
Restaurant Corporation ("Uno"), to be held on , 2001, at 10:00 a.m. local
time, at the offices of Brown, Rudnick, Freed & Gesmer located at One Financial
Center, Boston, MA 02111.

At the special meeting, you will be asked to consider and vote upon a
proposal to adopt and approve the Agreement and Plan of Merger, dated as of
April 19, 2001, among Uno, Uno Restaurant Holdings Corporation ("Parent") and
Uno Acquisition Corp. ("Newco"). Aaron D. Spencer, our chairman and majority
stockholder, formed and is currently the sole stockholder of Parent. Newco is a
wholly owned subsidiary of Parent.

Under the merger agreement, Newco will be merged with and into Uno, with Uno
as the surviving corporation. Upon completion of the merger, each issued and
outstanding share of Uno common stock not owned by Parent will be entitled to
receive $9.75 per share in cash, without interest. Prior to the merger,
Mr. Spencer, Mr. Spencer's two adult children, Mark Spencer and Lisa Cohen, and
Uno Associates, a general partnership owned 80% by Mr. Spencer and 10% by each
of Mark Spencer and Lisa Cohen (collectively, the "Spencer Group"), will
contribute substantially all their shares of Uno common stock in exchange for
shares of capital stock of Parent. Parent will not be entitled to receive the
$9.75 per share merger consideration.

After the merger, Uno will continue its operations as a privately held
company. Parent will be the sole stockholder of Uno as the surviving
corporation. Current stockholders of Uno, other than the Spencer Group and four
key executive officers of Uno, Craig S. Miller, Paul W. MacPhail, Alan M. Fox
and Robert M. Vincent (collectively, the "Management Group"), will not
participate in any future earnings and growth of Uno as the surviving
corporation. The Spencer Group and the Management Group (collectively referred
to as the "Continuing Stockholders") will own all of the equity in Parent. Uno
stock option holders will continue as holders of options to purchase shares of
common stock of Uno as the surviving corporation. After the merger, Uno may, but
has not yet decided to, offer to repurchase and cancel outstanding stock options
of Uno as the surviving corporation.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THIS TRANSACTION, PASSED UPON THE
FAIRNESS OR MERITS OF THIS TRANSACTION, OR PASSED UPON THE ACCURACY OR ADEQUACY
OF THE DISCLOSURE IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Details of the merger and the merger agreement are discussed in the enclosed
proxy statement, the forepart of which includes a summary of the terms of the
merger and certain questions and answers relating to the proposed transaction. A
copy of the merger agreement is attached as Exhibit A to the proxy statement.

PRER14A 3rd Page of 215 TOC 1st Previous Next Bottom Just 3rd

The board of directors of Uno formed a special committee of independent
directors who are not officers or employees of Uno, to evaluate, negotiate and,
if appropriate, recommend the merger and the merger agreement.

The board of directors, acting in part on the unanimous recommendation of
the special committee of directors, has approved the merger and the merger
agreement. The board of directors and special committee believe that the terms
of the merger and the merger agreement are fair to, and in the best interest of,
Uno stockholders, other than the Continuing Stockholders.

In reaching their decision, the board of directors and the special committee
considered, among other factors, the written opinion of Adams, Harkness &
Hill Inc., the special committee's financial advisor. Based upon and subject to
the considerations and limitations set forth in their opinion, Adams,
Harkness & Hill concluded that the $9.75 per share cash consideration to be
received in the merger by the stockholders of Uno is fair, from a financial
point of view, to the stockholders of Uno other than the Continuing
Stockholders. Not earlier than five days prior to the stockholders meeting,
Adams, Harkness & Hill will deliver an updated opinion to the special committee.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS OF UNO VOTE "FOR"
THE ADOPTION AND APPROVAL OF THE MERGER AGREEMENT.

The affirmative vote of a majority of the outstanding shares of Uno common
stock is required to adopt and approve the merger agreement. While not required
by the Delaware General Corporation Law, Uno's restated certificate of
incorporation, as amended, or Uno's amended and restated bylaws, the merger also
is conditioned upon the affirmative vote of the holders of a majority of shares
of common stock held by stockholders other than the Continuing Stockholders.
This condition may be waived with the approval of Parent, Newco, Uno and the
special committee of the board of directors.

Stockholders of Uno will be entitled to appraisal rights under Delaware law
in connection with the merger as described in the accompanying proxy statement.

IT IS VERY IMPORTANT TO US THAT YOUR SHARES BE REPRESENTED AT THE SPECIAL
MEETING, WHETHER OR NOT YOU PLAN TO ATTEND PERSONALLY. THEREFORE, YOU SHOULD
COMPLETE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT AS SOON AS POSSIBLE IN
THE ENCLOSED POSTAGE PAID ENVELOPE. THIS WILL ENSURE THAT YOUR SHARES ARE
REPRESENTED AT THE SPECIAL MEETING.

The accompanying notice of meeting and proxy statement explain the merger
and the merger agreement and provide specific information concerning the special
meeting of stockholders. Please read these materials carefully.

Sincerely,
/s/ Craig S. Miller
Craig S. Miller, President and Chief
Executive Officer

This proxy statement is dated , 2001 and is first being mailed
to stockholders on or about , 2001.

PRER14A 4th Page of 215 TOC 1st Previous Next Bottom Just 4th

UNO RESTAURANT CORPORATION
100 CHARLES PARK ROAD
WEST ROXBURY, MASSACHUSETTS 02132

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON , 2001

Notice is hereby given that a special meeting of the stockholders of Uno
Restaurant Corporation ("Uno") will be held on , 2001 at 10:00 a.m. local
time at the offices of Brown, Rudnick, Freed & Gesmer located at One Financial
Center, Boston, MA 02111 for the following purposes:

1. To consider and vote upon a proposal to adopt and approve the Agreement
and Plan of Merger dated as of April 19, 2001, among Uno Restaurant Holdings
Corporation ("Parent"), Uno Acquisition Corp., ("Newco"), and Uno, pursuant to
which Newco will be merged with and into Uno with Uno being the surviving
corporation and each stockholder of Uno other than Parent will be entitled to
receive $9.75 per share in cash, without interest, for each share of Uno common
stock in accordance with and subject to the terms and conditions contained in
the merger agreement. The merger agreement is more fully described in the
accompanying proxy statement and a copy of the merger agreement is attached as
Exhibit A to the accompanying proxy statement.

2. To consider, act upon and transact such other matters as may properly
come before the special meeting or any adjournments or postponements thereof.

The affirmative vote of a majority of the outstanding shares of Uno common
stock is required to adopt and approve the merger agreement and the transactions
contemplated thereby, including the merger. While not required by the Delaware
General Corporation Law, Uno's restated certificate of incorporation, as
amended, or Uno's amended and restated bylaws, unless waived by the parties, the
merger also is conditioned upon the affirmative vote of a majority of shares of
common stock held by stockholders other than Aaron D. Spencer, Uno Associates,
Mark Spencer and Lisa Cohen and four key executive officers of Uno, Craig S.
Miller, Paul W. MacPhail, Alan M. Fox and Robert M. Vincent, each of whom will
continue to own an indirect equity interest in Uno as the surviving corporation
through their ownership of the equity of Parent.

YOUR BOARD OF DIRECTORS, BASED IN PART UPON THE UNANIMOUS RECOMMENDATION OF
A SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS, RECOMMENDS THAT YOU VOTE "FOR"
ADOPTION AND APPROVAL OF THE MERGER AGREEMENT.

The board of directors has fixed the close of business on June 19, 2001 as
the record date for determining the stockholders entitled to notice of and to
vote at the special meeting and any adjournments or postponements thereof. Only
holders of record of shares of Uno common stock at the close of business on the
record date are entitled to notice of and to vote at the special meeting.

If the merger agreement is adopted and approved by the stockholders at the
special meeting and the merger is completed, any stockholder (1) who files with
Uno before the taking of the vote on the adoption and approval of the merger
agreement a written demand stating that he or she intends to seek appraisal for
his or her shares of common stock if the merger is completed and (2) whose
shares are not voted in favor of the merger agreement will have the right to
seek appraisal of his or her shares of common stock within 120 days after the
date a certificate of merger is filed with the Secretary of State of the State
of Delaware. Uno and any stockholder seeking an appraisal shall have the rights
and duties and shall follow the procedures set forth in Section 262 of the
Delaware General Corporation Law, a copy of which is attached as Exhibit B to
the accompanying proxy statement. See the section entitled "Special
Factors--Appraisal Rights" in the proxy statement for more information.

PRER14A 5th Page of 215 TOC 1st Previous Next Bottom Just 5th

YOUR VOTE IS VERY IMPORTANT REGARDLESS OF HOW MANY SHARES OF UNO COMMON
STOCK YOU OWN. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, YOU ARE
REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY WITHOUT DELAY IN THE
ENCLOSED POSTAGE PAID ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO
ITS EXERCISE. IF YOU ARE PRESENT AT THE SPECIAL MEETING OR ANY ADJOURNMENTS
THEREOF, YOU MAY REVOKE YOUR PROXY AND VOTE PERSONALLY ON THE MATTERS PROPERLY
BROUGHT BEFORE THE SPECIAL MEETING.

By Order of the Board of Directors
/s/ GEORGE W. HERZ II
George W. Herz II
Secretary

West Roxbury, Massachusetts
, 2001

PRER14A 6th Page of 215 TOC 1st Previous Next Bottom Just 6th

TABLE OF CONTENTS

[Download Table]

SUMMARY TERM SHEET.......................................... 1
QUESTIONS AND ANSWERS ABOUT THE MERGER...................... 4
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
INFORMATION............................................... 10
UNO RESTAURANT CORPORATION SELECTED HISTORICAL FINANCIAL
DATA...................................................... 11
MARKET AND MARKET PRICE..................................... 13
Market Information........................................ 13
Number of Stockholders.................................... 13
Dividends................................................. 13
THE SPECIAL MEETING......................................... 15
General................................................... 15
Matters to be Considered at the Special Meeting........... 15
Record Date and Voting Information........................ 16
Quorum.................................................... 17
Proxies; Revocation....................................... 17
Expenses of Proxy Solicitation............................ 17
Adjournments.............................................. 17
Appraisal Rights.......................................... 17
THE PARTICIPANTS............................................ 18
Uno Restaurant Corporation................................ 18
Uno Restaurant Holdings Corporation....................... 18
Uno Acquisition Corp...................................... 18
The Continuing Stockholders............................... 19
SPECIAL FACTORS............................................. 20
Background of the Merger.................................. 20
Recommendation of the Board of Directors; Fairness of the
Merger.................................................. 32
Determination of the Fairness of the Merger by Parent,
Newco and the Affiliate Stockholders.................... 38
Forward Looking Information; Certain Projections.......... 40
Opinion of Financial Advisor to the Special Committee..... 54
Purpose and Structure of the Merger....................... 66
Alternatives to the Merger................................ 67
Effects of the Merger..................................... 68
Risks that the Merger Will Not Be Completed............... 70
Interests of the Continuing Stockholders in the Merger.... 70
Certain Risks in the Event of Bankruptcy.................. 77
Merger Financing.......................................... 77
Estimated Fees and Expenses of the Merger................. 83
Federal Income Tax Consequences........................... 84
Anticipated Accounting Treatment of Merger................ 85
Certain Regulatory Matters................................ 85
Appraisal Rights.......................................... 86
Litigation Challenging the Merger......................... 89
THE MERGER AGREEMENT........................................ 90
The Merger................................................ 90
Effective Time of Merger.................................. 90
Certificate of Incorporation, Bylaws and Directors and
Officers of Uno as the Surviving Corporation............ 90

PRER14A 7th Page of 215 TOC 1st Previous Next Bottom Just 7th

[Download Table]

Conversion of Common Stock................................ 90
Payment For Shares........................................ 91
Transfer of Shares........................................ 91
Treatment of Stock Options................................ 91
Uno Stockholder Approval.................................. 91
Indemnification and Insurance............................. 92
Representations and Warranties............................ 92
Conduct of Business Pending the Merger.................... 94
No Solicitation........................................... 94
Access to Information..................................... 95
Conditions to the Merger.................................. 95
Waiver.................................................... 96
Termination of the Merger Agreement....................... 97
Expense Reimbursement..................................... 98
Amendments................................................ 99
COMMON STOCK PURCHASE INFORMATION........................... 100
Purchases by Uno.......................................... 100
Purchases by the Continuing Stockholders.................. 100
Purchases by Parent and Newco and Their Directors and
Executive Officers...................................... 100
Recent Transactions....................................... 100
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT................................................ 101
INDEPENDENT AUDITORS........................................ 102
FUTURE STOCKHOLDER PROPOSALS................................ 102
WHERE STOCKHOLDERS CAN FIND MORE INFORMATION................ 102

Exhibit A Agreement and Plan of Merger dated as of
April 19, 2001 among Uno, Parent and Newco..... A-1
Exhibit B Section 262 of Delaware General Corporation
Law....................................................... B-1
Exhibit C Fairness Opinion of Adams, Harkness &
Hill Inc. dated April 4, 2001............................. C-1
Exhibit D Information relating to the directors and
executive officers of Uno, the Continuing
Stockholders, Parent and Newco and the
principals of Uno Associates................... D-1
Exhibit E Annual Report on Form 10-K for the fiscal year
ended October 1, 2000.......................... E-1
Exhibit F Quarterly Report on Form 10-Q for the fiscal
quarter ended April 1, 2001.................... F-1
Exhibit G Current Report on Form 8-K dated May 29,
2001........................................... G-1

PRER14A 8th Page of 215 TOC 1st Previous Next Bottom Just 8th

SUMMARY TERM SHEET

This summary term sheet briefly describes the material terms of the proposed
merger of Uno with Newco and may not contain all of the information that is
important to you. We urge you to read this entire proxy statement carefully,
including the exhibits. The term "Newco" refers to Uno Acquisition Corp. and the
term "Parent" refers to Uno Restaurant Holdings Corporation.

- THE MERGER. Uno has entered into a merger agreement that provides for the
merger of Uno with a newly formed corporation, Newco, controlled by Aaron D.
Spencer, our chairman and majority stockholder. Following the merger, Uno will
cease to be a publicly held company. See "The Merger Agreement" beginning on
page 90.

- PAYMENT. In the merger, all shares of Uno common stock other than those held
by Parent will be converted into the right to receive $9.75 in cash, without
interest. Only stockholders who do not properly elect to seek appraisal rights
under Delaware law will be entitled to receive the merger consideration. See
"The Merger Agreement" beginning on page 90.

- UNO. Uno Restaurant Corporation owns and operates 113 and franchises 68
casual dining, full-service restaurants operating primarily under the name
Pizzeria Uno ... Chicago Bar & Grill. Uno also distributes branded and
non-branded, Chicago-style deep-dish pizza, calzones, and other pizza products.
Uno's common stock is listed on the New York Stock Exchange under the symbol
"UNO." The board of directors of Uno, based in part on the unanimous
recommendation of the special committee, has unanimously determined that the
terms of the merger agreement and the merger are fair to, and in the best
interests of, Uno stockholders, other than Aaron D. Spencer, Uno's chairman and
majority stockholder, Mr. Spencer's two adult children, Mark Spencer and Lisa
Cohen, Uno Associates, a general partnership owned 80% by Mr. Spencer and 10% by
each of Mark Spencer and Lisa Cohen, and by four key executive officers of Uno,
Craig S. Miller, Paul W. MacPhail, Alan M. Fox and Robert M. Vincent (the
"Continuing Stockholders"). The board of directors recommends the adoption and
approval of the merger agreement by Uno stockholders. See "The Participants"
beginning on page 18 and "Special Factors--Recommendation of the Board of
Directors; Fairness of the Merger" beginning on page 32.

- PARENT. Uno Restaurant Holdings Corporation is a newly organized Delaware
corporation currently owned by Mr. Spencer. Immediately following the merger,
Parent will be owned by the Continuing Stockholders. Parent will be the sole
stockholder of Uno as the surviving corporation. Parent, Uno Associates and
Mr. Spencer, Craig S. Miller, Paul W. MacPhail, Alan M. Fox and Robert M.
Vincent, believe that the merger is fair to the stockholders of Uno other than
the Continuing Stockholders. See "The Participants" beginning on page 18 and
"Special Factors--Determination of the Fairness of the Merger by Parent, Newco
and the Affiliate Stockholders" beginning on page 38.

- NEWCO. Uno Acquisition Corp. is a newly organized Delaware corporation wholly
owned by Uno Restaurant Holdings Corporation, Parent. Newco was formed solely
for the purpose of engaging in the merger transaction. Newco believes that the
merger is fair to the stockholders of Uno other than the Continuing
Stockholders. See "The Participants" beginning on page 18.

- SPECIAL COMMITTEE. Uno's board of directors formed a special committee of
directors to evaluate, negotiate and, if appropriate, recommend the merger and
the terms of the merger agreement with Parent and Newco. The special committee
consists solely of independent directors who are not officers or employees of
Uno and who have no financial interest in the completion of the merger different
from Uno stockholders and option holders generally. The members of the special
committee are Tamara P. Davis, chairman of the special committee, John T.
Gerlach, Kenneth D. Hill and James J. Kerasiotes. See "Special
Factors--Background of the Merger" beginning on page 20 and "--Recommendation of
the Board of Directors; Fairness of the Merger" beginning on page 32.

PRER14A 9th Page of 215 TOC 1st Previous Next Bottom Just 9th

- OPINION OF FINANCIAL ADVISOR. In deciding to approve the terms of the merger
agreement and the merger, one factor the board of directors and the special
committee considered was the opinion of the special committee's financial
advisor, Adams, Harkness & Hill Inc. Adams, Harkness & Hill concluded that the
consideration to be received pursuant to the merger agreement is fair, from a
financial viewpoint, to the Uno stockholders, other than the Continuing
Stockholders. The complete Adams, Harkness & Hill opinion, including applicable
limitations and assumptions, describes the basis for the opinion and is attached
as Exhibit C to this proxy statement. See "Special Factors--Opinion of Financial
Advisor to the Special Committee" beginning on page 54.

- STOCKHOLDER VOTE. You are being asked to consider and vote upon a proposal to
adopt and approve the merger agreement. Under Delaware law, the merger
agreement must be adopted and approved by the affirmative vote of a majority of
the outstanding shares of our common stock. In addition, the merger is
conditioned upon the adoption and approval of the merger agreement by the
holders of a majority of the outstanding shares of Uno common stock other than
those held by Parent and the Continuing Stockholders. This condition to the
merger may be waived with the approval of Parent, Newco, Uno and the special
committee of the board of directors. A total of 4,195,309 shares of Uno common
stock, or approximately 38% of the total number of issued and outstanding
shares, are held by stockholders other than Parent and the Continuing
Stockholders. See "The Special Meeting--Record Date and Voting Information"
beginning on page 16; and "The Merger Agreement--Conditions to the Merger"
beginning on page 95.

- VOTING AGREEMENT. The Continuing Stockholders have agreed to vote all of
their shares of Uno common stock in favor of the adoption and approval of the
merger agreement. They hold 6,811,118 shares of common stock or approximately
62% of the total number of issued and outstanding shares of Uno common stock.
See "Special Factors--Interests of the Continuing Stockholders in the Merger"
beginning on page 70.

- ADDITIONAL INTERESTS OF THE CONTINUING STOCKHOLDERS. The Continuing
Stockholders, through their ownership of Parent, will continue to have an
equity interest in Uno and will participate in any future earnings and growth of
Uno. Certain Continuing Stockholders also will receive cash for some of their
shares of Uno common stock. Mark Spencer and Lisa Cohen will receive $9.75 per
share in cash for 50,000 shares of Uno common stock held by each of them. The
four key executive officers of Uno will receive $9.75 per share in cash for an
aggregate of 43,948 shares held by them. In addition, the Cheryl Spencer
Memorial Foundation, a charitable foundation of which Mr. Spencer is trustee,
will receive $9.75 per share in cash for 221,018 shares of Uno common stock held
by it. The Continuing Stockholders also will enjoy certain benefits in the
merger transaction not enjoyed by Uno's stockholders generally. See "Special
Factors--Interests of the Continuing Stockholders in the Merger" beginning on
page 70.

- TREATMENT OF STOCK OPTIONS. Uno stock option holders, other than the
Continuing Stockholders who are officers of Uno, will continue as holders of
options to purchase shares of common stock of Uno as the surviving corporation.
After the merger, Uno may, but has not decided to, offer to repurchase and
cancel outstanding stock options of Uno as the surviving corporation. Most of
the options to purchase shares of Uno common stock held by the Continuing
Stockholders who are officers of Uno will be cancelled, and the Continuing
Stockholders who are officers of Uno will receive options to purchase preferred
stock in Parent. See "Special Factors--Interests of the Continuing Stockholders
in the Merger" beginning on page 70; and "The Merger Agreement--Treatment of
Stock Options" beginning on page 91.

- MERGER FINANCING. Uno, Parent and Newco estimate that $47.0 million will be
necessary to complete the merger and pay related fees and expenses. Uno,
Parent and Newco expect this amount to be funded through a combination of new
senior credit facilities in the amount of $75 million with a syndicate of banks
led by Fleet National Bank and SunTrust Bank and sales and leasebacks of a

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portfolio of Pizzeria Uno Chicago Bar & Grill restaurants and related properties
in the amount of approximately $37 million. These financings will also be used
for working capital and to refinance Uno's existing $55 million senior credit
facility. In the sale and leaseback transactions, an unrelated third party has
purchased properties from Uno for approximately $25 million, and leased the
properties back to Uno, and Mr. Spencer will purchase properties from Uno for
approximately $12 million, and will lease the properties back to Uno. Uno is
using the proceeds from the sale and leaseback transactions to reduce the
outstanding amount under its $55 million senior credit facility. As a result,
Uno's senior credit facility will provide most of the funds required to finance
the merger. See "Special Factors--Merger Financing" beginning on page 77.
Mr. Spencer has guaranteed to Uno the obligations of Parent and Newco under the
merger agreement, and the fees payable by Parent and Newco to the banks and a
portion of the expense reimbursement and indemnification obligations of Parent,
Newco and Uno under the commitment letter for the $75 million senior credit
facility. Mr. Spencer's guaranty is limited to $4,875,000 and may be satisfied
by Mr. Spencer either in cash or with up to 500,000 shares of his Uno common
stock which will be deemed to have a value equal to $9.75 per share. See
"Special Factors--Estimated Fees and Expenses of the Merger" beginning on page
83.

- CONDITIONS. The merger is subject to the satisfaction of numerous conditions,
including the receipt of the financing described above and no material adverse
change in Uno or Mr. Spencer's health. See "The Merger Agreement--Conditions to
the Merger" beginning on page 95 for a discussion of additional conditions to
the merger.

- TERMINATION OF THE MERGER AGREEMENT. The parties may agree to terminate the
merger agreement at any time before the merger. In addition, the merger
agreement may be terminated for a number of other reasons. See "The Merger
Agreement--Termination of the Merger Agreement" beginning on page 97.

- TAX CONSEQUENCES. Generally, the merger will be taxable for U.S. federal
income tax purposes. You will recognize taxable gain or loss in the amount of
the difference between $9.75 and your adjusted tax basis for each share of Uno
common stock that you own. The Continuing Stockholders will have different tax
consequences from the merger. See "Special Factors--Federal Income Tax
Consequences" beginning on page 84.

- AFTER THE MERGER. Upon completion of the merger, Uno as the surviving
corporation will be a privately held corporation, wholly owned by Parent.
There will be no public market for shares of Uno common stock and the shares of
common stock will cease to be traded on the New York Stock Exchange. See
"Special Factors--Effects of the Merger" beginning on page 68 and "--Interests
of the Continuing Stockholders in the Merger" beginning on page 70.

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QUESTIONS AND ANSWERS ABOUT THE MERGER

Q: WHAT AM I BEING ASKED TO VOTE UPON? (see page 15)

A: You are being asked to consider and vote upon a proposal to adopt and
approve the merger agreement. Under the merger agreement, Newco will be merged
with and into Uno, with Uno as the surviving corporation. Newco is a newly
formed Delaware corporation, wholly owned by Parent. Parent is a newly formed
Delaware corporation currently owned by Aaron D. Spencer. If the merger
agreement is adopted and approved by the stockholders and the merger is
completed, Uno will no longer be a publicly held corporation. Mr. Spencer, Mark
Spencer, Lisa Cohen and Uno Associates (collectively referred to as the "Spencer
Group"), and four key executive officers of Uno, Craig S. Miller, Paul W.
MacPhail, Alan M. Fox and Robert M. Vincent (collectively referred to as the
"Management Group"), will indirectly, through their ownership of Parent, own all
of the equity interest in Uno as the surviving corporation. The Spencer Group
and the Management Group are collectively referred to in this proxy statement as
the "Continuing Stockholders."

Q: WHAT WILL I RECEIVE IN THE MERGER? (see page 15)

A: Upon completion of the merger, each issued and outstanding share of Uno
common stock, other than those shares held by Parent, will be converted into the
right to receive $9.75 in cash, without interest.

Q: WHAT KIND OF PREMIUM TO THE PRICE OF UNO COMMON STOCK IS IMPLIED BY THE
MERGER CONSIDERATION? (see page 34)

A: The merger consideration represents a (i) premium of approximately 33.4%
over the $7.31 closing sale price for Uno's common stock as traded on the New
York Stock Exchange on October 24, 2000, the last trading day before Uno
announced the Continuing Stockholders' initial offer to take Uno private by
purchasing all of the outstanding shares of common stock at a price of $8.75 per
share, (ii) a premium of approximately 52.8% over the average closing sale price
per share of $6.38 during the one week preceding the initial announcement to
take Uno private, and (iii) a premium of approximately % over the $ closing
sale price for Uno's common stock as traded on the New York Stock Exchange on
June , 2001.

Q: WHAT WILL HAPPEN TO MY STOCK OPTIONS? (see pages 74 and 91)

A: The holders of options to purchase shares of Uno common stock held by
individuals other than Mr. Spencer and the Management Group will continue as
holders of options to purchase shares of common stock of Uno as the surviving
corporation. After the merger, Uno may, but has not yet decided to, offer to
repurchase and cancel the outstanding stock options of Uno as the surviving
corporation. If it does, Mr. Miller intends to sell to Uno options to purchase
approximately 82,500 shares of his Uno common stock. In the event that Uno
decides not to repurchase the outstanding options, or if Uno does offer to do
so, but a holder chooses not to accept the offer, option holders who, after the
merger, choose to exercise their options to acquire shares of Uno common stock
will be limited as to how they may dispose of their shares. Upon completion of
the merger, Uno will apply to terminate the registration of its common stock
under the Securities Exchange Act of 1934, as amended, and if such application
is accepted, Uno will no longer be subject to the reporting requirements of that
Act. Because there will not be current information regarding Uno available to
the general public, option holders who exercise their options will be required
to hold their shares for a minimum of two years before they may sell them
pursuant to Rule 144(k) of the Securities Act of 1933. In addition, because Uno
will be a privately held corporation after the merger, and its shares will not
be regularly traded in the public market, it will be difficult for any option
holder who exercises his or her options to sell the shares acquired.

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Q: WHY WAS THE SPECIAL COMMITTEE FORMED? (see page 70)

A: The Continuing Stockholders will indirectly, through their ownership of
Parent, own all of the outstanding shares of Uno common stock immediately
following completion of the merger. Accordingly, our board of directors believed
that a special committee of independent directors who are not officers or
employees of Uno and who have no financial interest in the merger different from
Uno stockholders generally, other than as Uno stock option holders, should be
formed to evaluate, negotiate and, if appropriate, recommend the merger and the
terms of the merger agreement.

Q: WHY IS THE BOARD OF DIRECTORS RECOMMENDING THAT I VOTE IN FAVOR OF THE
MERGER AGREEMENT? (see page 32)

A: Based in part upon the unanimous recommendation of the special committee,
the board of directors of Uno determined that the terms of the merger agreement
and the merger are fair to, and in the best interests of, Uno stockholders other
than the Continuing Stockholders. The board of directors, based in part on the
unanimous recommendation of the special committee, recommends that you vote for
the adoption and approval of the merger agreement. Mr. Spencer, Craig S. Miller
and Paul W. MacPhail abstained from the determination of the board of directors.

Q: WHAT ARE THE CONSEQUENCES OF THE MERGER TO PRESENT MEMBERS OF MANAGEMENT AND
THE BOARD OF DIRECTORS? (see page 71)

A: It is expected that, in general, all members of Uno's current management
will continue as management of Uno as the surviving corporation. In addition, it
is expected that Mr. Spencer, Craig S. Miller, Paul W. MacPhail, Alan M. Fox and
Robert M. Vincent will be the only directors of Uno as the surviving
corporation. The members of the special committee and James F. Carlin, each of
whom is currently a non-employee director of Uno, will not serve as directors or
executive officers of Uno as the surviving corporation. Like all other Uno
stockholders, members of management and the board of directors will be entitled
to receive $9.75 per share in cash for each of their shares of Uno common stock,
other than the shares that the Spencer Group will contribute to Parent in
exchange for equity interests in Parent. Options held by management and the
board of directors of Uno (other than Mr. Spencer and the Management Group) will
continue as options to purchase shares of common stock of Uno as the surviving
corporation. Options held by Mr. Spencer and members of the Management Group
will be cancelled, and Mr. Spencer and the Management Group will receive options
to purchase an equity interest in Parent. Immediately following completion of
the merger, the Continuing Stockholders will own 100% of the equity interest in
Parent and Parent will own 100% of the outstanding common stock of Uno as the
surviving corporation. In addition, Parent may, but has not yet decided to,
issue options to purchase shares of preferred stock in Parent to additional key
employees of Uno upon the cancellation of their options to purchase shares of
Uno common stock.

Q: IS THE MERGER SUBJECT TO THE SATISFACTION OF ANY CONDITIONS? (see page 95)

A: Yes. Before completion of the merger, a number of closing conditions must be
satisfied or waived. A condition to the obligations of each party to complete
the merger is the requirement that the merger agreement be adopted and approved
by a majority of the outstanding shares of Uno common stock held by persons
other than the Continuing Stockholders. This condition only can be waived by all
parties (requiring, in the case of Uno's waiver, the approval of the special
committee). The conditions to the obligations of Parent and Newco to complete
the merger, which can only be waived by Parent and Newco, include, among others,
obtaining all financing necessary to complete the merger, obtaining necessary
governmental and third party consents and approvals, the accuracy of Uno's
representations and warranties, Uno's compliance in all material respects with
its obligations under the merger agreement, the exercise of appraisal rights by
the holders of not more than 5% of the outstanding shares of Uno common stock,
the absence of a material adverse change in Uno's business, the absence

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of claims which would prevent the completion of the merger, and the absence of a
material adverse change in the health of Mr. Spencer. The conditions to the
obligations of Uno to complete the merger, which can only be waived by Uno with
the written approval of the special committee, include the compliance in all
material respects by Parent and Newco with its respective obligations under the
merger agreement, the receipt of a bring down fairness opinion of Adams,
Harkness & Hill and the absence of any claims which would prevent the completion
of the merger.

Q: WHEN DO YOU EXPECT THE MERGER TO BE COMPLETED? (see page 90)

A: Uno, Parent and Newco are working toward completing the merger as quickly as
possible. If the merger agreement is adopted and approved and the other
conditions to the merger are satisfied or waived, the merger is expected to be
completed promptly after the special meeting.

Q: CAN THE MERGER AGREEMENT BE TERMINATED PRIOR TO THE COMPLETION OF THE
MERGER? (see page 97)

A: Yes. The parties may agree to terminate the merger agreement at any time
before the merger is completed. In addition, the merger agreement may be
terminated:

- by either Parent or Uno if the merger is not completed on or before
September 30, 2001;

- by Parent if the Uno board of directors or the special committee withdraws
or modifies its recommendation in a manner adverse to Parent or Newco or
publicly takes a position materially inconsistent with its approval or
recommendation of the merger, or the Uno board of directors or the special
committee approves, endorses or recommends another acquisition proposal;

- by the non-breaching party if the other party breaches any of its
representations, warranties or covenants in the merger agreement;

- by either Parent or Uno in the event a claim, action, suit or
investigation is threatened or instituted that could reasonably be
expected to prevent or rescind the merger or have a material adverse
effect on Uno or Parent;

- by either Parent or Uno if a court or governmental authority issues a
non-appealable final order, decree or ruling or takes any other action
which permanently restrains, enjoins or prohibits the merger; or

- by Uno if Uno receives an acquisition proposal that the special committee
concludes, based on the advice of a nationally recognized investment
banking firm, is a superior proposal and the special committee determines
in good faith, in consultation with outside counsel, that it is advisable
to accept the new acquisition proposal in order to comply with its
fiduciary duties.

Q. WHAT HAPPENS IF THE MERGER AGREEMENT IS TERMINATED PRIOR TO THE COMPLETION
OF THE MERGER? (see page 98)

A. Generally, if the merger agreement is terminated, other than for the reasons
described below, there will be no liability on the part of Uno, Parent or Newco
or any of their affiliates, directors, officers, employers or stockholders.
However, no party will be relieved from liability for willful breaches of the
merger agreement. Prior to the execution of the merger agreement, Uno separately
agreed to reimburse $100,000 of the expenses of the Continuing Stockholders
incurred prior to March 1, 2001 in connection with their going private proposal
regardless of whether the merger agreement is terminated. In the event the
merger agreement is terminated for one of the reasons described below, Uno will
be required to reimburse Parent and Newco for one of the following amounts
depending on the reason why the merger agreement is terminated. First, if the
reason for the termination of the merger agreement is not within the reasonable
control of the stockholders of Parent, Uno must reimburse Parent for up to an
additional $500,000 of Parent's and Newco's reasonable expenses. Second, Uno
will

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reimburse up to $1,500,000 of Parent's and Newco's expenses if the merger
agreement is terminated because (1) the special committee or the board of
directors fails to recommend approval of the merger agreement or modifies its
recommendation in a manner adverse to Parent or Newco, (2) a claim or suit is
threatened or instituted that could prevent or rescind the merger or have a
material adverse effect on Uno or Parent or (3) the special committee discusses
a proposal by a third party to acquire more than 10% and less than 50% of the
outstanding common stock of Uno, the third party acquires shares of Uno's common
stock and the merger agreement is not approved by the holders of a majority of
the shares of common stock held by stockholders other than the Continuing
Stockholders at the special meeting. Finally, in the event that the merger
agreement is terminated by Uno because the special committee accepts a superior
proposal, Uno will pay Parent a termination fee of $1,500,000 and will reimburse
up to $1,500,000 of Parent's and Newco's expenses.

Q: WHAT WILL HAPPEN TO THE MARKET FOR UNO'S COMMON STOCK AFTER THE MERGER? (see
page 68)

A: At the effective time of the merger, trading in Uno's common stock on the
New York Stock Exchange will cease and there will no longer be a public market
for Uno's common stock. Price quotations for Uno's common stock will no longer
be available and the registration of Uno's common stock under the Securities
Exchange Act of 1934, as amended, will be terminated.

Q: WHAT ARE THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER? (see
page 84)

A: The receipt of cash for shares of Uno common stock in the merger will be a
taxable transaction for U.S. federal income tax purposes and also may be a
taxable transaction under applicable state, local, foreign or other tax laws.
Generally, you will recognize gain or loss equal to the difference between $9.75
per share and your tax basis for the shares of common stock that you owned
immediately before completion of the merger. For U.S. federal income tax
purposes, this gain or loss generally will be a capital gain or loss if you held
the shares of common stock as a capital asset.

TAX MATTERS ARE VERY COMPLICATED AND THE TAX CONSEQUENCES OF THE MERGER TO YOU
WILL DEPEND ON THE FACTS OF YOUR OWN SITUATION. YOU ARE URGED TO CONSULT YOUR
OWN TAX ADVISOR WITH RESPECT TO YOUR OWN INDIVIDUAL TAX CONSEQUENCES AS A RESULT
OF THE MERGER.

Q: WHEN AND WHERE IS THE SPECIAL MEETING? (see page 15)

A: The special meeting of Uno stockholders will be held at 10:00 a.m. local
time on , 2001, at the offices of Brown, Rudnick, Freed & Gesmer located
at One Financial Center, Boston, MA 02111.

Q: WHO CAN VOTE ON THE MERGER AGREEMENT? (see page 16)

A: Holders of Uno common stock at the close of business on June 19, 2001, the
record date for the special meeting, may vote in person or by proxy at the
special meeting.

Q: WHAT VOTE IS REQUIRED TO ADOPT AND APPROVE THE MERGER AGREEMENT? (see
page 16)

A: The merger agreement must be adopted and approved by the affirmative vote of
at least a majority of the outstanding shares of Uno common stock. The
Continuing Stockholders have agreed to vote their shares of Uno common stock in
favor of the adoption and approval of the merger agreement unless the board of
directors or the special committee withdraws its recommendation of the merger or
if the merger agreement is terminated. The Continuing Stockholders hold
6,811,118 shares of Uno common stock, constituting 62% of the total number of
issued and outstanding shares. The affirmative vote of the shares held by the
Continuing Stockholders is sufficient under Delaware law to adopt and approve
the merger agreement. In order to give the unaffiliated stockholders a vote on
the merger agreement, although not required by the Delaware General Corporation
Law, Uno's restated certificate of incorporation, as amended, or Uno's amended
and restated bylaws, the merger agreement requires

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that a majority of the shares held by stockholders other than the Continuing
Stockholders adopt and approve the merger agreement. This requirement may be
waived with the approval of Parent, Newco, Uno and the special committee of the
board of directors. In the event a majority of the shares held by stockholders
other than the Continuing Stockholders do not adopt and approve the merger
agreement and this requirement is not waived, the merger will not be completed
and the merger agreement will be terminated. The stockholders other than the
Continuing Stockholders hold a total of 4,195,309 shares of Uno common stock.

Q: WHAT DO I NEED TO DO NOW? (see page 15)

A: You should read this proxy statement carefully, including the exhibits
accompanying this proxy statement and the documents incorporated by reference
into this proxy statement, and consider how the merger affects you. Then, please
mark your vote on your proxy card and date, sign and mail it in the enclosed,
postage paid return envelope as soon as possible so that your shares can be
voted at the special meeting.

Q: WHAT HAPPENS IF I DO NOT RETURN A PROXY CARD? (see page 16)

A: The failure to return your proxy card will have the same effect as voting
against the merger agreement.

Q: MAY I VOTE IN PERSON? (see page 17)

A: Yes. You may attend the special meeting of Uno stockholders and vote your
shares in person whether or not you sign and return your proxy card. If your
shares are held of record by a broker, bank or other nominee and you wish to
vote at the meeting, you must obtain a proxy from the broker, bank or other
nominee.

Q: MAY I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY CARD? (see
page 17)

A: Yes. You may change your vote at any time before your proxy card is voted at
the special meeting. You can do this in one of three ways. First, you can send a
written notice to the Secretary of Uno at Uno's executive offices located at 100
Charles Park Road, West Roxbury, MA 02132, stating that you would like to revoke
your proxy. Second, you can complete and submit a new proxy card. Third, you can
attend the meeting and vote in person. Your attendance alone will not revoke
your proxy. If you have instructed a broker to vote your shares, you must follow
the directions you receive from your broker to change those instructions.

Q: IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER VOTE MY
SHARES FOR ME? (see page 16)

A: No. Your broker will not be able to vote your shares without instructions
from you. You should instruct your broker to vote your shares by following the
procedures provided to you by your broker.

Q: SHOULD I SEND IN MY STOCK CERTIFICATES NOW? (see page 17)

A: No. After the merger is completed, you will receive written instructions for
exchanging your shares of Uno common stock for a cash payment of $9.75 per
share, without interest.

Q: DO I HAVE A RIGHT TO SEEK AN APPRAISAL OF MY SHARES? (see pages 17 and
86-88)

A: Yes. If you wish, you may seek an appraisal of the fair value of your
shares, but only if you comply with all requirements of Delaware law as
described on pages 86 through 88 and in Exhibit B of this proxy statement. Based
on the determination of the Delaware Court of Chancery, the appraised fair

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value of your shares of Uno common stock, which will be paid to you if you seek
an appraisal, may be more than, less than or equal to the $9.75 per share to be
paid in the merger.

Q: IS THERE ANY LITIGATION CHALLENGING THE MERGER? (see page 89)

A: Yes. On October 25, 2000, Bruce Cox filed a class action complaint in the
Court of Chancery of the State of Delaware for New Castle County against Uno,
Mr. Spencer and each of the current directors of Uno. The complaint alleges that
the directors breached their fiduciary duties to the plaintiff because
Mr. Spencer and certain members of senior management of Uno timed a proposed
acquisition of the outstanding shares of Uno in order to freeze out Uno's public
stockholders and to capture for themselves Uno's future potential without paying
an adequate or fair price to Uno's public stockholders. The plaintiff seeks to
have the action maintained as a class action, to have the defendants enjoined
from proceeding with or closing the proposed transaction and to recover
unspecified costs of the action. The class is alleged to include all public
shareholders of Uno, excluding the defendants and their affiliates. Uno has
filed a motion to dismiss on the basis of ripeness and intends to defend
vigorously against the complaint.

Q: WHO CAN HELP ANSWER MY QUESTIONS? (see page 102)

A: The information provided above in question and answer format is for your
convenience only and is merely a summary of the information contained in this
proxy statement. You should carefully read this entire proxy statement,
including the exhibits and the documents incorporated by reference. If you would
like additional copies, without charge, of this proxy statement or if you have
questions about the merger, including the procedures for voting your shares, you
should contact:

Uno Restaurant Corporation
100 Charles Park Road
West Roxbury, MA 02132
Telephone: (617) 323-9200
Attn: George W. Herz II, Secretary

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

This proxy statement includes and incorporates by reference statements that
are not historical facts. These forward-looking statements are based on Uno's
current estimates and assumptions and, as such, involve uncertainty and risk.
Forward-looking statements include the information concerning Uno's possible or
assumed future results of operations and also include those preceded or followed
by the words "anticipates," "believes," "could," "estimates," "expects,"
"intends," "may," "should," "plans," "targets" and/or similar expressions.

The forward-looking statements are not guarantees of future performance, and
actual results may differ materially from those contemplated by these
forward-looking statements. In addition to the factors discussed elsewhere in
this proxy statement, other factors that could cause actual results to differ
materially include changes in the cost of food and labor, the performance of any
restaurants, particularly new restaurants, adverse weather conditions, the
effect of health and regulatory developments, the loss of key personnel,
competitive factors, potential liabilities associated with long-term leases,
changes in consumer tastes and eating habits, Uno's ability to execute its
business strategy, fluctuations in inventory and general and administrative
expenses, and general economic conditions, especially economic conditions in the
areas in which Uno's restaurants are concentrated. In addition, Uno's plans for
new restaurant locations and timing of openings depend upon, among other things,
the negotiation of acceptable lease or purchase terms, timely project
development and restaurant construction, obtaining appropriate regulatory and
governmental permits and approvals, management of costs, and the hiring,
training and retraining of skilled management. These and other factors are
discussed in the documents that are incorporated by reference into this proxy
statement. Except to the extent required under the federal securities laws, Uno
does not intend to update or revise the forward-looking statements to reflect
circumstances arising after the date of the preparation of the forward-looking
statements. Uno is not entitled to rely on the safe harbor protection of the
Private Securities Litigation Reform Act of 1995 with respect to the
forward-looking statements contained in this proxy statement.

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UNO RESTAURANT CORPORATION SELECTED HISTORICAL FINANCIAL DATA

Uno's selected historical financial data presented below as of and for the
five fiscal years ended October 1, 2000 are derived from the audited
consolidated financial statements of Uno and its subsidiaries. Data as of and
for the twenty-six week periods ended April 2, 2000 and April 1, 2001 have been
derived from unaudited consolidated financial statements of Uno. Interim
operating results are not necessarily indicative of the results that may be
achieved for the entire year. The following selected historical financial data
should be read in conjunction with Uno's most recent Annual Report on Form 10-K
and Quarterly Report on Form 10-Q, which are incorporated by reference in, and
are included in, this proxy statement as Exhibit E and Exhibit F, respectively.

[Enlarge/Download Table]

TWENTY-SIX
FISCAL YEAR ENDED WEEKS ENDED
---------------------------------------------------- -------------------
SEPT. 29 SEPT. 28 SEPT. 27 OCT. 3 OCT. 1 APRIL 2 APRIL 1
1996 1997 1998 1999 2000 2000 2001
-------- -------- -------- -------- -------- -------- --------
(53 WEEKS)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

INCOME STATEMENT DATA:
REVENUES
Restaurant sales.................................. $159,581 $164,389 $177,343 $198,560 $213,715 $99,529 $113,711
Consumer product sales............................ 8,351 9,115 9,384 10,568 11,772 5,630 6,086
Franchise income.................................. 4,209 4,516 4,549 5,105 5,683 2,648 2,907
-------- -------- -------- -------- -------- ------- --------
172,141 178,020 191,276 214,233 231,170 107,807 122,704
COSTS AND EXPENSES
Cost of food and beverages........................ 44,064 43,994 48,567 54,683 57,679 26,971 31,004
Labor and benefits................................ 51,868 54,183 58,139 64,700 70,922 33,296 39,363
Occupancy costs................................... 26,339 27,045 27,988 29,199 30,974 14,962 17,484
Other operating costs............................. 14,323 15,244 17,148 17,739 19,468 8,928 10,408
General and administrative........................ 12,155 13,384 13,661 16,629 19,521 8,510 9,983
Depreciation and amortization..................... 12,964 12,469 12,183 12,702 13,098 6,494 6,888
Pre-opening costs................................. 1,567 823 938 594 2,137 868 587
Special charges................................... 3,937 4,000 -- -- 8,588 -- --
-------- -------- -------- -------- -------- ------- --------
167,217 171,142 178,624 196,246 222,387 100,029 115,717
-------- -------- -------- -------- -------- ------- --------
OPERATING INCOME.................................... 4,924 6,878 12,652 17,987 8,783 7,778 6,987
INTEREST AND OTHER EXPENSE.......................... 2,481 2,827 3,661 3,139 3,019 1,382 2,097
-------- -------- -------- -------- -------- ------- --------
INCOME BEFORE INCOME TAXES.......................... 2,443 4,051 8,991 14,848 5,764 6,396 4,890
Provision for income taxes.......................... 757 1,378 2,968 5,048 1,729 2,175 1,675
-------- -------- -------- -------- -------- ------- --------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE.............................. 1,686 2,673 6,023 9,800 4,035 4,221 3,215
Cumulative effect of change in accounting principle
for pre-opening costs, net of income tax benefit
of $313........................................... -- -- 636 -- -- -- --
-------- -------- -------- -------- -------- ------- --------
NET INCOME.......................................... $ 1,686 $ 2,673 $ 5,387 $ 9,800 $ 4,035 $ 4,221 $ 3,215
======== ======== ======== ======== ======== ======= ========
NET INCOME PER COMMON SHARE:
Income before cumulative effect of change in
accounting principle.............................. $ 0.12 $ 0.20 $ 0.50 $ 0.87 $ 0.36 $ 0.37 $ 0.29
Cumulative effect of change in accounting
principle......................................... -- -- (0.05) -- -- -- --
-------- -------- -------- -------- -------- ------- --------
Basic net income per common share................... $ 0.12 $ 0.20 $ 0.45 $ 0.87 $ 0.36 $ 0.37 $ 0.29
======== ======== ======== ======== ======== ======= ========
Diluted net income per common share................. $ 0.12 $ 0.20 $ 0.45 $ 0.84 $ 0.34 $ 0.35 $ 0.28
======== ======== ======== ======== ======== ======= ========
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic............................................. 13,963 13,146 11,960 11,313 11,162 11,303 10,987
======== ======== ======== ======== ======== ======= ========
Diluted........................................... 14,032 13,209 12,025 11,610 11,844 12,077 11,286
======== ======== ======== ======== ======== ======= ========

Certain amounts in prior fiscal years have been reclassified to permit
comparison.

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Franchised restaurants that have been upgraded and redesigned to conform
with, or opened as, Uno's Pizzeria Uno ... Chicago Bar & Grill concept are
included in the table below for all periods presented. Franchised restaurants
that have not been upgraded and redesigned are included under the caption
"Other" for all periods presented. The information under average annual
restaurant sales and comparable restaurant sales change, under the caption
"Other", only includes those franchised restaurants that have not been upgraded
and redesigned. The table does not include quick-service units, Uno's Su Casa
Mexican restaurant in Chicago or Uno's former Bay Street Grill restaurants.

[Enlarge/Download Table]

TWENTY-SIX
FISCAL YEAR ENDED WEEKS ENDED
------------------------------------------------------ -------------------
SEPT. 29 SEPT. 28 SEPT. 27 OCT. 3 OCT. 1 APRIL 2 APRIL 1
1996 1997 1998 1999 2000 2000 2001
-------- -------- -------- ---------- -------- -------- --------
(53 WEEKS)
(AMOUNTS IN THOUSANDS, EXCEPT NUMBER OF RESTAURANTS
AND PER SHARE DATA)

OPERATING DATA:
NUMBER OF RESTAURANTS
FULL-SERVICE PIZZERIA UNO ... CHICAGO BAR & GRILL
Company-owned............................... 86 92 94 98 110 103 112
Franchised.................................. 35 39 42 47 55 52 61
OTHER
Company-owned............................... 6 5 3 1 1 1 1
Franchised.................................. 32 30 24 18 13 16 12
-------- -------- -------- -------- -------- -------- --------
TOTAL AT END OF PERIOD...................... 159 166 163 164 179 172 186
======== ======== ======== ======== ======== ======== ========
SYSTEM-WIDE RESTAURANT SALES
FULL-SERVICE PIZZERIA UNO ... CHICAGO BAR & GRILL
Company-owned............................... $151,178 $160,045 $174,716 $196,353 $211,626 $ 50,039 $ 57,890
Franchised.................................. 60,816 68,861 75,338 92,447 104,564 25,305 30,285
OTHER
Company-owned............................... 8,403 4,344 2,627 2,207 1,723 343 347
Franchised.................................. 35,273 33,986 30,212 25,687 16,648 4,070 3,105
-------- -------- -------- -------- -------- -------- --------
TOTAL....................................... $255,670 $267,236 $282,893 $316,694 $334,561 $ 79,757 $ 91,627
======== ======== ======== ======== ======== ======== ========
AVERAGE ANNUAL RESTAURANT SALES
FULL-SERVICE PIZZERIA UNO ... CHICAGO BAR & GRILL
Company-owned............................... $ 1,846 $ 1,818 $ 1,854 $ 1,972 $ 2,052 -- --
Franchised.................................. 1,819 1,858 1,881 2,002 2,071 -- --
OTHER
Franchised.................................. 1,223 1,199 1,207 1,132 1,297 -- --
COMPARABLE RESTAURANT SALES CHANGE
FULL-SERVICE PIZZERIA UNO ... CHICAGO BAR & GRILL
Company-owned............................... (1.3)% (1.7)% 1.3% 6.1% 3.0% 3.5% 3.8%
Franchised.................................. (1.1)% 0.7% 1.8% 5.0% 1.9% 2.1% 0.4%
OTHER
Franchised.................................. (1.0)% (2.9)% (5.1)% (5.5)% (1.8)% (3.9)% (3.1)%

BALANCE SHEET DATA:
Total assets................................ $135,065 $143,732 $143,195 $149,612 $168,476 $159,729 $172,391
Long-term debt, net of current portion...... 37,085 42,516 38,676 31,612 50,900 41,774 51,773
Capital lease obligations, net of current
portion................................... 1,056 867 666 489 453 454 451
Treasury stock.............................. 10,653 19,877 22,616 26,826 33,237 31,002 33,237
Total shareholders' equity.................. 77,136 70,880 73,669 80,979 81,714 82,786 85,148

The book value per share of Uno common stock as of April 1, 2001 was $7.63
per share. The ratio of earnings to fixed charges for the fiscal years ended
October 3, 1999 and October 1, 2000 and for the fiscal quarter ended April 1,
2001 was 5.25, 2.43 and 3.28, respectively.

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MARKET AND MARKET PRICE

MARKET INFORMATION

Uno's common stock is listed on the New York Stock Exchange under the symbol
"UNO." The table below sets forth the range of high and low sales prices on the
New York Stock Exchange for the period from September 28, 1998 to June 26, 2001,
adjusted for a 10% stock dividend declared on November 30, 1999 and paid on
December 23, 1999 to stockholders of record on December 13, 1999:

[Download Table]

COMMON STOCK PRICE
-------------------
HIGH LOW
-------- --------

FISCAL YEAR ENDED OCTOBER 3, 1999
First Quarter........................................... $ 6.648 $5.284
Second Quarter.......................................... $ 7.614 $6.136
Third Quarter........................................... $ 7.955 $6.250
Fourth Quarter.......................................... $13.466 $8.011

FISCAL YEAR ENDED OCTOBER 1, 2000
First Quarter........................................... $11.125 $9.602
Second Quarter.......................................... $12.563 $9.563
Third Quarter........................................... $12.438 $9.875
Fourth Quarter.......................................... $12.625 $6.625

FISCAL YEAR ENDING SEPTEMBER 30, 2001
First Quarter........................................... $ 8.500 $6.063
Second Quarter.......................................... $ 9.450 $8.000
Third Quarter (through June 26, 2001)................... $ 9.500 $8.800
------- ------

The closing sale price for shares of Uno's common stock on the New York
Stock Exchange on October 24, 2000, the last trading day before Uno announced
the Continuing Stockholders' initial offer to take Uno private by purchasing all
of the outstanding shares of common stock at a price of $8.75 per share, was
$7.31 per share. The average closing sale price per share of Uno common stock
was $6.38 during the one week preceding the initial announcement to take Uno
private. The closing sale price per share of Uno common stock on February 27,
2001, the last trading day before Uno announced the agreement with the
Continuing Stockholders to take Uno private at $9.75 per share, was $8.00 per
share. On April 19, 2001, the last full trading day before the public
announcement of the signing of the merger agreement, the high and low sales
prices of Uno common stock as reported on the New York Stock Exchange were $9.42
and $9.38 per share, respectively, and the closing sale price on that date was
$9.38 per share. On June , 2001, the last practicable trading day for which
information was available prior to the date of the first mailing of this proxy
statement, the closing price per share of Uno common stock as reported on the
New York Stock Exchange was $ . Stockholders should obtain a current market
quotation for Uno common stock before making any decision with respect to the
merger.

NUMBER OF STOCKHOLDERS

As of June 4, 2001, there were issued and outstanding 11,006,427 shares of
Uno common stock and approximately 1,511 beneficial owners of Uno's common
stock.

DIVIDENDS

Uno has never declared or paid cash dividends on its common stock and does
not plan to pay any cash dividends in the foreseeable future. Uno's current
policy is to retain all of its earnings to finance its future development and
growth. Uno may reconsider this policy from time to time in light of

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conditions then existing, including its earnings performance, financial
condition and capital requirements. Uno is subject to various financial and
operating covenants, including limitations on the payment of cash dividends
under its $55 million credit facility.

Uno will be subject to financial and operating covenants, including
limitations on the payment of cash dividends, under the proposed $75 million
credit facility anticipated to provide part of the financing for the merger and
refinancing of Uno's current $55 million credit facility. See "Special
Factors--Merger Financing" beginning on page 77.

On November 30, 1999, Uno's board of directors declared a 10% stock dividend
on the outstanding shares of common stock. The stock dividend was paid on
December 23, 1999 to stockholders of records as of December 13, 1999.

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THE SPECIAL MEETING

GENERAL

This proxy statement is being furnished to Uno stockholders as part of the
solicitation of proxies by the Uno board of directors for use at the special
meeting of stockholders to be held at the offices of Brown, Rudnick, Freed &
Gesmer located at One Financial Center, Boston, MA 02111 on ,
2001, beginning at 10:00 a.m. local time, and at any adjournments or
postponements thereof. This proxy statement is accompanied by a form of proxy
for use at the special meeting.

At the special meeting, the stockholders will be asked to consider and vote
upon a proposal to adopt and approve the Agreement and Plan of Merger, dated as
of April 19, 2001, among Uno, Uno Restaurant Holdings Corporation, a Delaware
corporation ("Parent") and Uno Acquisition Corp., a Delaware corporation
("Newco"), pursuant to which Newco will be merged with and into Uno, with Uno
being the surviving corporation.

This proxy statement and the accompanying form of proxy are being mailed to
stockholders on or about June , 2001.

MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING

At the special meeting, the stockholders will be asked to consider and vote
upon a proposal to adopt and approve the merger agreement. If the requisite
votes in favor of the proposal are obtained and certain other conditions are
satisfied or, where permissible, waived, Newco will be merged with and into Uno
with Uno being the surviving corporation. At the effective time of the merger,
each share of common stock of Uno issued and outstanding immediately prior to
the filing of a certificate of merger with the Secretary of State of the State
of Delaware will be converted into the right to receive $9.75 in cash, without
interest, except for:

- shares of Uno common stock held by Parent, which will be converted into an
equal number of shares of the surviving corporation;

- shares for which appraisal rights have been perfected properly under
Section 262 of the Delaware General Corporation Law, which will be
entitled to receive the consideration provided for by the Delaware General
Corporation Law; and

- shares held by Uno in treasury, which will be canceled without payment.

Like all other Uno stockholders, members of management (including the
Management Group) and the board of directors will be entitled to receive $9.75
per share in cash for each of their shares of Uno common stock held by them at
the time of the merger. Options to purchase shares of Uno common stock, other
than options held by Mr. Spencer and the Management Group, will continue as
options to purchase shares of common stock of Uno as the surviving corporation.
After the merger, Uno may, but has not yet decided to, offer to repurchase and
cancel outstanding stock options of Uno as the surviving corporation. If it
does, Mr. Miller intends to sell to Uno options to purchase approximately 82,500
shares of his Uno common stock. Options held by Mr. Spencer and the remaining
options held by the Management Group will be cancelled and Mr. Spencer and the
Management Group will receive options to purchase shares of preferred stock of
Parent. In addition, Parent may, but has not yet decided to, issue options to
purchase shares of preferred stock of Parent to additional key employees of Uno
upon the cancellation of their options to purchase shares of Uno common stock.

Immediately prior to the merger, Mr. Spencer, Mark Spencer, Lisa Cohen and
Uno Associates will contribute substantially all of their shares of Uno common
stock to Parent in exchange for shares of preferred stock of Parent. Mark
Spencer and Lisa Cohen will each retain 50,000 shares of Uno common stock and
will be entitled to receive $9.75 per share in cash for the 50,000 shares of Uno
common stock retained by each of them. The Management Group will be entitled to
receive $9.75 per share in cash for an aggregate of 43,948 shares held by them.
In addition, 221,018 shares held by the Cheryl Spencer Memorial Foundation, a
charitable foundation of which Mr. Spencer is trustee, will not be exchanged for
an equity interest in Parent and will be entitled to receive $9.75 per share.

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Uno does not expect a vote to be taken at the special meeting on any matter
other than the proposal to adopt and approve the merger agreement and, if
necessary, a vote to adjourn or postpone the meeting. However, if any other
matters are properly presented at the special meeting for consideration, the
holders of the proxies will have discretion to vote on these matters in
accordance with their best judgment. Uno is soliciting proxies to grant
discretionary authority to vote in favor of adjournment or postponement of the
special meeting.

RECORD DATE AND VOTING INFORMATION

Only holders of record of common stock at the close of business on June 19,
2001 will be entitled to notice of and to vote at the special meeting. At the
close of business on June 19, 2001, there were outstanding and entitled to vote
11,006,693 shares of Uno common stock. A list of the Uno stockholders will be
available for review at Uno's executive offices during regular business hours
for a period of 10 days before the special meeting. Each holder of record of
common stock on the record date will be entitled to one vote for each share
held.

All votes will be tabulated by the inspector of elections appointed for the
special meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Brokers who hold shares in street name for
clients typically have the authority to vote on "routine" proposals when they
have not received instructions from beneficial owners. However, absent specific
instructions from the beneficial owner of the shares, brokers are not allowed to
exercise their voting discretion with respect to the adoption and approval of
non-routine matters, such as the merger agreement. Proxies submitted without a
vote by the brokers on these matters are referred to as "broker non-votes."
Abstentions and broker non-votes are counted for purposes of determining whether
a quorum exists at the special meeting.

The affirmative vote of a majority of the outstanding shares of common stock
entitled to vote at the special meeting is required to adopt and approve the
merger agreement. The Continuing Stockholders have agreed to vote all of the
shares of Uno common stock held by them, aggregating 6,811,118 shares, for
adoption and approval of the merger agreement. The shares of Uno common stock
held by the Continuing Stockholders constituted 62% of the total number of
shares outstanding on the record date. In addition, although not required by the
Delaware General Corporation Law, Uno's restated certificate of incorporation,
as amended, or Uno's amended and restated bylaws, the merger agreement requires
the affirmative vote of a majority of shares of common stock held by
stockholders other than the Continuing Stockholders. This requirement may be
waived with the approval of Parent, Newco, Uno and the special committee of the
board of directors. The stockholders other than the Continuing Stockholders held
4,195,309 shares of Uno common stock as of the record date.

Because the affirmative vote of a majority of all outstanding shares of Uno
common stock as well as a majority of the outstanding shares of Uno common stock
held by stockholders other than the Continuing Stockholders is required in order
to approve the merger agreement, abstentions and broker non-votes will have the
same effect as votes "AGAINST" adoption and approval of the merger agreement.

With the exception of broker non-votes, the treatment of which is discussed
above, each share of Uno common stock represented by a proxy properly executed
and received by Uno in time to be voted at the special meeting and not revoked
will be voted in accordance with the instructions indicated on such proxy and,
if no instructions are indicated, will be voted "FOR" the proposal to adopt and
approve the merger agreement. All proxies "FOR" such matter, including proxies
on which no instructions are indicated, other than broker non-votes, may, at the
discretion of the proxy holder, be voted "FOR" discretionary authority to vote
in favor of any motion to adjourn or postpone the special meeting to another
time and/or place for the purpose of soliciting additional proxies or otherwise.
Any proxy that is voted against discretionary authority to vote in favor of any
motion to adjourn or postpone the special meeting will not be voted in favor of
any such adjournment or postponement.

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QUORUM

The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Uno common stock entitled to vote at the special meeting
is necessary to constitute a quorum for the transaction of business at the
special meeting.

PROXIES; REVOCATION

Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of Uno at Uno's executive offices located at 100 Charles Park Road,
West Roxbury, MA 02132, a written notice of revocation or a duly executed proxy
bearing a later date, or it may be revoked by attending the special meeting and
voting in person. Attendance at the special meeting will not, by itself, revoke
a proxy. Furthermore, if a stockholder's shares are held of record by a broker,
bank or other nominee and the stockholder wishes to vote at the meeting, the
stockholder must obtain a proxy from the record holder.

EXPENSES OF PROXY SOLICITATION

Uno will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
and any additional information furnished to stockholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and
custodians holding in their names shares of common stock beneficially owned by
others for forwarding to these beneficial owners. Uno may reimburse persons
representing beneficial owners of common stock for their costs of forwarding
solicitation materials to such beneficial owners. Original solicitation of
proxies by mail may be supplemented by telephone, telegram or personal
solicitation by directors, officers or other regular employees of Uno. No
additional compensation will be paid to directors, officers or other regular
employees for their services.

ADJOURNMENTS

Although it is not expected, the special meeting may be adjourned for the
purpose of soliciting additional proxies. Any adjournment of the special meeting
may be made without notice, other than by an announcement made at the special
meeting, by approval of the holders of a majority of the outstanding shares of
Uno common stock present in person or represented by proxy at the special
meeting, whether or not a quorum exists. Uno is soliciting proxies to grant
discretionary authority in favor of adjournment or postponement of the special
meeting. In particular, discretionary authority may be exercised if the purpose
of the adjournment or postponement is to provide additional time to solicit
additional votes to adopt and approve the merger agreement and the merger. The
Continuing Stockholders who hold a majority of the shares of Uno will be
entitled to control a vote to adjourn or postpone the meeting for the purpose of
soliciting additional proxies from the other stockholders of Uno to obtain
majority approval to adopt and approve the merger agreement. The Continuing
Stockholders will vote to adjourn or postpone the meeting depending upon the
circumstances at the time. It is likely that the Continuing Stockholders will
vote to adjourn or postpone the meeting if they believe that they will be able
to obtain the additional votes necessary to obtain approval by the holders of a
majority of the shares of Uno common stock held by persons other than the
Continuing Stockholders to adopt and approve the merger agreement. It is
unlikely that the Continuing Stockholders will vote to adjourn or postpone the
meeting if they do not believe that they will be able to obtain the additional
necessary votes.

APPRAISAL RIGHTS

Stockholders who do not vote in favor of adoption and approval of the merger
agreement, and who otherwise comply with the applicable statutory procedures of
the Delaware General Corporation Law summarized elsewhere in this proxy
statement, will be entitled to seek appraisal of the value of their Uno common
stock as set forth in Section 262 of the Delaware General Corporation Law. See
"Special Factors--Appraisal Rights."

PLEASE DO NOT SEND IN STOCK CERTIFICATES AT THIS TIME. IN THE EVENT THE
MERGER IS COMPLETED, UNO WILL DISTRIBUTE INSTRUCTIONS REGARDING THE PROCEDURES
FOR EXCHANGING UNO STOCK CERTIFICATES FOR THE $9.75 PER SHARE CASH PAYMENT.

PRER14A 25th Page of 215 TOC 1st Previous Next Bottom Just 25th

THE PARTICIPANTS

UNO RESTAURANT CORPORATION
100 Charles Park Road
West Roxbury, Massachusetts 02132
(617) 323-9200

Uno Restaurant Corporation owns and operates 113 and franchises 68 casual
dining, full-service restaurants operating primarily under the name Pizzeria Uno
... Chicago Bar & Grill. The restaurants feature Uno's signature Chicago-style,
deep-dish pizza and a selection of baked, grilled and sauteed entrees, including
gourmet thin crust pizza, pasta, fajitas, ribs, steak and chicken, as well as a
variety of appetizers, salads, sandwiches and desserts. Company-owned
restaurants are located primarily in major metropolitan markets from New England
to Virginia, as well as Florida, Chicago and Denver, and franchised restaurants
are located throughout the United States and Puerto Rico as well as Seoul, South
Korea, Lahor, Pakistan and Dubai, United Arab Emirates. Uno also operates a
consumer products business that distributes Uno's branded and non-branded,
Chicago-style deep-dish pizza, calzones, and other pizza products in hotels,
movie theater chains, supermarkets, food courts and airports.

A more detailed description of Uno's business and financial results is
contained in Uno's most recent Annual Report on Form 10-K for the fiscal year
ended October 1, 2000 and Uno's Quarterly Report on Form 10-Q for the fiscal
quarter ended April 1, 2001, each of which is incorporated by reference into and
is included with this proxy statement as Exhibit E and Exhibit F, respectively.
See also "Where Stockholders Can Find More Information." Information about the
directors and executive officers of Uno is set forth in Exhibit D to this proxy
statement.

UNO RESTAURANT HOLDINGS CORPORATION
100 Charles Park Road
West Roxbury, Massachusetts 02132
(617) 323-9200

Parent is Uno Restaurant Holdings Corporation, a newly organized Delaware
corporation formed and currently owned by Aaron D. Spencer. The stockholders of
Parent immediately following the merger will be Mr. Spencer, Mr. Spencer's two
adult children, Mark Spencer and Lisa Cohen, Uno Associates, a general
partnership owned 80% by Mr. Spencer and 10% by each of Mark Spencer and Lisa
Cohen (collectively, the "Spencer Group"), and four key executive officers of
Uno, Craig S. Miller, Paul W. MacPhail, Alan M. Fox and Robert M. Vincent
(collectively, the "Management Group"). The Spencer Group and the Management
Group are collectively referred to in this proxy statement as the "Continuing
Stockholders." The Spencer Group will own preferred stock of Parent. The
Management Group will own shares of common stock of Parent or options to
purchase shares of common stock of Parent. Mr. Spencer and Management Group will
hold options to purchase shares of preferred stock of Parent. Information about
the directors and executive officers of Parent is set forth in Exhibit D to this
proxy statement.

UNO ACQUISITION CORP.
100 Charles Park Road
West Roxbury, Massachusetts 02132
(617) 323-9200

Newco is Uno Acquisition Corp., a newly organized Delaware corporation
formed and wholly owned by Uno Restaurant Holdings Corporation. Newco was formed
solely for the purpose of engaging in the transactions contemplated by the
merger agreement. Information about the directors and executive officers of
Newco is set forth in Exhibit D to this proxy statement.

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THE CONTINUING STOCKHOLDERS

Immediately prior to the merger, Aaron D. Spencer and Uno Associates will
contribute their shares of Uno common stock to Parent in exchange for shares of
preferred stock of Parent. Immediately prior to the merger, Mark Spencer and
Lisa Cohen will contribute all of their shares of Uno common stock in exchange
for shares of preferred stock of Parent other than an aggregate of 50,000 shares
of Uno common stock held by each of them, which will be converted into the right
to receive $9.75 per share in cash, without interest. In addition, the
Management Group will purchase shares of common stock of Parent for nominal
consideration or will receive options to purchase shares of common stock of
Parent and, with Mr. Spencer, will cancel their options to purchase shares of
Uno common stock and receive options to purchase shares of preferred stock of
Parent, with the exception of Mr. Miller, who intends to sell to Uno as the
surviving corporation options to purchase approximately 82,500 shares of Uno
common stock in the event that Uno as the surviving corporation offers to
repurchase and cancel outstanding options of Uno. Immediately following the
merger, the Continuing Stockholders will hold, indirectly through their
ownership of Parent, 100% of the outstanding shares of common stock of Uno as
the surviving corporation. The Continuing Stockholders have interests that are
different from, or in addition to, your interests as an Uno stockholder
generally. See "Special Factors--Interests of the Continuing Stockholders in the
Merger." Information about the Continuing Stockholders is set forth in
Exhibit D to this proxy statement.

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SPECIAL FACTORS

BACKGROUND OF THE MERGER

In the opinion of Uno's board of directors and management, Uno's public
market valuation has been constrained due to Uno's small market capitalization,
limited public float, relatively low trading volume, limited research coverage
from securities analysts, and inability to generate the type of rapid revenue
and unit growth generally expected by the public equity markets. During the last
several years, various other external factors emerged that the board of
directors and management believe have further constrained Uno's share price
within a very narrow range. These factors included a general weakness in
valuations for public restaurant companies and a dramatic investor shift toward
Internet-related and other high technology companies.

In response to factors limiting Uno's market valuation, the board of
directors authorized Uno to conduct a Dutch Auction tender offer in July 1997,
under which it purchased 1,207,624 shares at a price of $7.00 per share, and
authorized a second Dutch Auction tender offer in September 1998, under which it
purchased 274,721 shares at a price of $7.00 per share. From July 1997 through
June 2000, Uno purchased in the two Dutch Auction tender offers, in open market
and in privately negotiated transactions an aggregate of 3,089,465 shares of
common stock of Uno at prices ranging from $5.875 per share to $10.00 per share,
or a weighted average price of $7.39 per share (all purchases subsequent to
November 30, 1999 reflect the 10% stock dividend discussed below). Uno has not
purchased any shares of its common stock since June 29, 2000.

At a meeting held on February 23, 1999, the board of directors of Uno
received at its request a report from BancBoston Robertson Stephens, an
investment banking firm, analyzing possible strategic options to maximize
stockholder value. Among the options discussed were acquiring other restaurant
concepts and companies to increase the size of Uno, selling Uno, continuing as a
public company and pursuing a going private transaction. After the presentation,
the board of directors discussed the advantages and disadvantages of each option
presented. Mr. Spencer, chairman of Uno, emphasized to the board of directors
that the process of seeking to sell Uno could have a serious detrimental effect
on Uno if the sale was not completed. Also, based upon the information provided
by BancBoston Robertson Stephens, Mr. Spencer emphasized that in his capacity as
the majority stockholder of Uno he would not anticipate the range of prices
likely to be offered for Uno to be acceptable to him. He suggested, instead,
that the board of directors entertain a proposal from Mr. Spencer and
unspecified members of management to take Uno private at a price of $10.00 per
share ($9.09 after giving effect to a subsequent 10% stock dividend).
Mr. Spencer concluded that a going private transaction would benefit the public
stockholders and would address the issues that Uno had to deal with as a public
entity. After being advised by Uno's outside counsel of its duties and
responsibilities, the board of directors advised Mr. Spencer that it would
consider a formal proposal from a management group led by Mr. Spencer and formed
a special committee of the board of directors to consider and respond to any
such proposal. The management group consisted of Mr. Spencer, Craig S. Miller,
Paul W. MacPhail, Alan M. Fox, Robert M. Vincent and Robert M. Brown.

On April 14, 1999, Uno announced that a special committee of independent
directors, composed of James F. Carlin, John T. Gerlach and Stephen J. Sweeney
had been formed to consider available options for enhancing stockholder value
and that the special committee had engaged BancBoston Robertson Stephens to
assist it. Mr. Gerlach was appointed chairman of the special committee. On
April 20, 1999, Mr. Spencer and his management group retained BNY Capital
Markets, Inc. as a financial adviser to assist them with respect to the proposed
going private transaction.

In late April 1999, Mr. Spencer received an unsolicited communication from a
third party expressing an interest in discussing a possible acquisition of Uno
at a price of approximately $14.00 ($12.75 after giving effect to a subsequent
10% stock dividend) per share in cash, subject to due diligence, execution of a
definitive agreement and securing financing. The third party was a direct

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competitor of Uno. The communication also set forth that the potential price per
share was predicated upon certain stated financial assumptions as of March 31,
1999. The financial assumptions were EBITDA of $30 million, net debt of
$31 million and real estate that could be readily sold for $40 million and
leased back for approximately $3.2 million annually. Each of these assumptions
about Uno were inaccurate. Management believed that if and when the third party
was apprised of its inaccurate assumptions, it would lower its potential price.
Management also did not believe that the third party would be able to finance
successfully the possible transaction. Management reached this conclusion on the
basis of its understanding that the third party already had a significant amount
of debt from a recent acquisition and the assumption identified in the inquiry
relating to the capacity of Uno's real estate to support financing, suggesting
that the third party would finance the acquisition with Uno's real estate.
Management did not believe that Uno's real estate alone could support the
financing necessary for the acquisition. Mr. Spencer discussed the communication
from the third party with Mr. Gerlach. Based upon management's view that the
third party would be unlikely to finance and complete successfully the
transaction as proposed, Mr. Spencer and the special committee decided not to
pursue discussions with the third party. This decision also was based on the
fact that the third party was a direct competitor of Uno, and therefore,
management believed it would be unwise to allow the third party to conduct a due
diligence investigation of Uno when the likelihood of a successful transaction
at $14 ($12.75 after giving effect to a subsequent stock dividend) per share was
suspect.

In late May 1999, Mr. Spencer concluded and advised the board of directors
that Mr. Spencer and his management group did not want to proceed with a going
private transaction and decided to turn their efforts toward maximizing
stockholder value by remaining a public company and refocusing Uno's efforts on
accelerating expansion of new restaurants. The special committee then terminated
the engagement of its financial advisor and Mr. Spencer and his management group
terminated the engagement of their financial advisor.

In May 1999, Uno's business fundamentals were strong. Based upon activities
of other restaurant companies, Mr. Spencer and his management group believed
that the capital markets might be receptive to an equity offering by Uno.
Additionally, several institutional research analysts suggested to management
that they would commence research coverage of Uno. Consequently, Mr. Spencer and
his management group decided not to proceed with a going private transaction,
but rather to pursue a growth strategy which included raising capital in a
public offering of common stock.

On September 9, 1999, Uno filed a registration statement with the Securities
and Exchange Commission for the underwritten public offering of two million
shares of common stock of Uno, of which one million shares were to be sold by
Uno, 900,000 shares were to be sold by Mr. Spencer and 100,000 shares were to be
sold by the Cheryl Spencer Memorial Foundation, a charitable foundation of which
Mr. Spencer is the trustee. Uno could not complete the public offering because
of a deterioration in the public markets generally. Subsequently, on
October 18, 1999, Uno announced that it was withdrawing this offering.

On November 30, 1999, Uno declared a 10% stock dividend on shares of Uno
common stock. The stock dividend was paid on December 23, 1999 to stockholders
of record as of December 13, 1999.

On August 31, 2000, Uno announced earnings below analyst expectations and
recorded a pre-tax charge of $8.6 million related to asset impairment and store
closing costs. Following these announcements the public trading price of Uno's
common stock declined. Specifically, on August 31, 2000, the closing sale price
of Uno's common stock was $9.688 per share and on September 1, 2000, the closing
sale price of Uno's common stock was $8.125 per share.

At a meeting of the board of directors on October 6, 2000, Mr. Spencer
advised the board of directors that he and members of management consisting of
Craig S. Miller, Robert M. Brown, Alan M. Fox and Robert M. Vincent again wanted
to pursue a going private transaction. Mr. Brown ceased to be a member of this
management group in March 2001 and Paul W. MacPhail joined the

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Management Group on October 20, 2000. Mr. Spencer expressed the view that
because of Uno's size and liquidity, Uno's intrinsic value would never be fully
recognized by the public trading markets, citing as support that prior to the
September 2000 earnings announcement Uno's common stock price had not reflected
Uno's strong operating performance. He also briefly described his plans to
finance the transaction and the unsuccessful public offering in September and
October of 1999. After receiving advice from Uno's outside counsel as to its
duties and responsibilities, the board of directors appointed a special
committee, composed of five independent directors, Tamara P. Davis, James J.
Kerasiotes, John T. Gerlach, Kenneth D. Hill and James F. Carlin (Mr. Carlin
later resigned from the special committee because scheduling conflicts prevented
his attendance at meetings), and authorized it to engage a financial advisor and
separate counsel. The special committee appointed Ms. Davis chairman of the
special committee. On October 17, 2000, the special committee retained the law
firm of Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden, Arps") to act as its
legal advisor.

On October 16, 2000, Mr. Spencer, on behalf of the Continuing Stockholders,
stated in writing to Tamara P. Davis, on behalf of the special committee, the
intention of the Continuing Stockholders to make a tender offer, subject to
receipt of financing, for all of the outstanding shares of Uno common stock not
owned by the Continuing Stockholders at a price which represented a premium to
the current market price for the shares. The closing price of Uno's common stock
on the New York Stock Exchange on October 13, 2000 (the previous trading day)
was $6.375. Because the Continuing Stockholders believed that their efforts
would result in the ability of Uno's public stockholders to receive an
attractive price for their shares but that there could be no assurance that a
transaction could be completed, the Continuing Stockholders requested, as a
condition of making any proposal, that Uno reimburse under all circumstances
their out-of-pocket expenses in connection with formulating and implementing the
contemplated offer.

On October 18, 2000, the special committee proposed that it would reimburse
$100,000 of expenses only if a transaction approved by the special committee was
successfully completed. The Continuing Stockholders replied to the special
committee on October 20, 2000 reiterating their desire to proceed with a
transaction that would offer the public stockholders a price for their shares
that the Continuing Stockholders believed would be fair. The Continuing
Stockholders stated again that they would require reimbursement of their
expenses as a condition to proceeding with a transaction but proposed that
reimbursement at this point could be capped at $100,000 and should be limited to
those expenses incurred with respect to discussions with the special committee
to determine a fair price.

A telephonic meeting of the board of directors was held on October 24, 2000.
In addition to the members of the board of directors, attending the meeting were
Robert M. Vincent, Chief Financial Officer of Uno; Constantine Alexander, Esq.,
of Nutter, McClennen & Fish, LLP ("Nutter, McClennen"), counsel to the
Continuing Stockholders; and representatives of Skadden, Arps. Mr. Spencer gave
a preliminary status report regarding the continued interest of the Continuing
Stockholders in pursuing a going private transaction. He reviewed the status of
his discussions with the various possible sources of financing being considered
for the going private transaction. Mr. Spencer then distributed a letter and a
draft press release containing a description of the Continuing Stockholders'
proposal and reported that he believed financing could be obtained. The proposal
stated that an entity to be funded by the Continuing Stockholders would make a
cash tender offer for all shares of Uno common stock not owned by the Continuing
Stockholders at a price of $8.75 per share. The offer was conditioned upon
receipt of financing, ownership of at least 90% of Uno's outstanding shares of
common stock upon completion of the tender offer and other conditions.

At this board meeting, the board of directors approved new indemnification
agreements for all directors and certain officers who are not also directors, as
well as the compensation to be paid to members of the special committee for
their service on the special committee. The terms of the indemnification
agreements, which are not materially different from the indemnification
agreements

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previously executed by the directors and executive officers, are described under
the heading "--Interests of the Continuing Stockholders in the Merger;
Indemnification."

The board of directors determined that each member of the special committee
would receive $1,000 for each special committee meeting attended, regardless of
whether any proposed transaction was entered into or completed. The board of
directors also determined that Ms. Tamara P. Davis, chairman of the special
committee, would receive an additional $15,000 fee for the first 100 hours of
her time spent in connection with the performance of her responsibilities and
duties as chairman of the special committee. Thereafter, Ms. Davis would receive
$150 per hour.

Immediately following the meeting of the board of directors, the special
committee met with its legal counsel and Messrs. Spencer, Miller, Vincent and
Alexander at the offices of Skadden, Arps in Boston. After discussing the
Continuing Stockholders' proposal, Messrs. Spencer, Miller, Vincent and
Alexander left the meeting and the special committee discussed the Continuing
Stockholders' proposal in detail. After full consideration, the special
committee approved the Continuing Stockholders' request for reimbursement of up
to $100,000 of expenses in order to increase the likelihood that the Continuing
Stockholders would submit a definitive proposal that would be beneficial to
stockholders. The special committee also approved a press release announcing the
formation of the special committee and the Continuing Stockholders' proposal for
a management led buyout of Uno's public stockholders at a price of $8.75 per
share in cash.

On October 25, 2000, Uno issued a press release announcing the Continuing
Stockholders' proposed $8.75 per share tender offer. It read, in part, as
follows:

Boston, Massachusetts, October 25, 2000--Uno Restaurant Corporation
(NYSE:UNO) announced today that Aaron D. Spencer, chairman and principal
stockholder, and certain members of senior management have submitted a
proposal to Uno's board of directors to acquire all of the outstanding
shares of common stock currently not owned by them, which represents
approximately 38% of Uno's outstanding shares of common stock. This proposal
contemplates a cash tender offer price of $8.75 per share. The proposal
states that any offer will be subject to a number of conditions, including
receipt of financing on terms satisfactory to the offeror and ownership by
the offeror of at least 90% of the company's outstanding shares following
the purchase of shares pursuant to the tender offer.

The board has appointed a special committee of outside directors led by
Tamara P. Davis to conduct a review of the proposal. Uno does not plan to
make any further public comment regarding the proposal other than to
announce whether or not a transaction will proceed. There can be no
assurance that the proposal will lead to the commencement of any tender
offer.

During the following week, the special committee interviewed several
investment banking firms to act as its independent financial advisor. After full
consideration of relevant factors, including the advisor's (i) experience and
knowledge of Uno's industry and the markets it operates in, (ii) experience with
transactions of the type being contemplated, (iii) the lack of any previous
business relationship with Uno or Mr. Spencer and (iv) the structure and amount
of compensation to be paid to the advisor, the special committee selected Adams,
Harkness & Hill, Inc. and authorized Adams, Harkness & Hill to begin a financial
review of Uno.

On November 29, 2000, the special committee met with its financial advisor
at the offices of Uno in West Roxbury. Also present by telephone were
representatives of Skadden, Arps. At the request of the special committee,
representatives of Adams, Harkness & Hill reviewed their firm's preliminary work
and financial analysis of the proposal by the Continuing Stockholders. That work
included a review of historical and projected operating results and related
business and financial information of Uno as developed by management, and the
application of several analytical methodologies to that data. The
representatives of Adams, Harkness & Hill then reviewed with the special
committee their

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summary of preliminary work and analysis and, responded to numerous questions by
the special committee. Adams, Harkness & Hill also informed the special
committee that at this early point in the discussion of a transaction, its work
was preliminary and it was not yet in a position to deliver a written report to
the special committee. See "--Opinion of Financial Advisor to the Special
Committee" for a detailed description of the final analysis performed.

Upon the completion of the Adams, Harkness & Hill presentation and following
a full discussion, the special committee concluded that Ms. Davis should report
to the board of directors that, based on a review of information received to
date, the special committee had determined that it would need more information
from Uno, including any and all financial information that had been provided to
other third parties and Mr. Spencer's financing sources, in order to evaluate
fully the proposal and that such information should be delivered to the special
committee and its financial and legal advisors. While the special committee
expected that it would seek to negotiate for a substantially higher price, it
also determined that it did not want to discourage an offer at $8.75 per share,
or foreclose the possibility of the special committee recommending to the public
stockholders an offer at $8.75 per share, because the tender offer proposed by
the Continuing Stockholders at $8.75 per share might ultimately prove to be the
best option available to Uno.

Adams, Harkness & Hill met with members of the Management Group and
Mr. Spencer on November 30, 2000 and on December 7, 2000. Ms. Davis attended the
meeting with management on November 30, 2000, but did not attend the meeting
with management on December 7, 2000. At the meeting on November 30, 2000,
Ms. Davis reported to Mr. Spencer and the Management Group that the special
committee wanted to solicit the interest of a limited number of strategic and
financial parties to make a competing acquisition proposal. Ms. Davis encouraged
Mr. Spencer to consider such a potential third party transaction. Mr. Spencer
indicated that he would consider transactions involving a third party sale of
Uno and approved of the proposed solicitation of interest as long as the special
committee and its advisors conducted their discussions in a confidential manner.

Adams, Harkness & Hill recommended that the special committee perform a
market test to elicit interest in Uno beyond the interest expressed by
Mr. Spencer and the Management Group. The special committee approached
Mr. Spencer with the concept of a market test and he agreed that it was
appropriate with certain conditions. He urged the special committee to limit the
market test to ten potential acquirors to be identified by Adams, Harkness &
Hill so that management and employees would not be distracted by numerous
inquiries and potential press coverage that might have a negative impact on the
operations of Uno. Adams, Harkness & Hill submitted to the special committee a
list of potential strategic and financial acquirors that it deemed potentially
would have the most interest in and ability to complete a transaction with Uno.
The special committee advised Mr. Spencer that it would be contacting ten
entities (six potential strategic buyers and four potential financial buyers).
Adams, Harkness & Hill selected the entities to contact based on their ability
to complete a transaction of this size and their expertise and experience in the
restaurant industry.

On December 1, 2000, the board of directors met by telephone and authorized
the special committee to conduct a confidential market test. Later that day, the
special committee met by telephone with its legal counsel and financial advisors
and authorized Adams, Harkness & Hill to conduct a confidential market test. On
December 18, 2000, Adams, Harkness & Hill commenced a confidential market test
to determine whether there was any third-party interest in acquiring all the
shares of Uno common stock at a price higher than that proposed by the
Continuing Stockholders.

Between December 18, 2000 and January 4, 2001, Adams, Harkness & Hill
contacted six national restaurant chains as potential strategic buyers and four
financial investors as potential financial buyers. When contacted, these parties
were informed that Adams, Harkness & Hill was acting on behalf of the special
committee of a publicly traded restaurant company that was contacting a limited
list of potential buyers and that if they were interested in pursuing a
transaction, a non-disclosure agreement would be

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sent naming and describing Uno. Of the six strategic investors contacted, none
had an interest in pursuing the opportunity and no information was sent. Of the
four financial investors, three expressed an interest in a transaction with
Mr. Spencer. These interested parties signed the non-disclosure agreement and
were sent an information package. The information package contained only
publicly available information. This information consisted of Securities and
Exchange Commission filings, press releases and other publicly available
information. None of these parties expressed further interest at a price higher
than $8.75 per share. However, the three potential financial buyers separately
stated they would only consider being an additional equity participant with the
Continuing Stockholders in the proposed going private transaction and would not
make independent offers.

On January 4, 2001, the special committee met by telephone with its legal
counsel and financial advisors. At the outset of the meeting, Mr. Carlin
resigned from the special committee due to scheduling conflicts that had
prevented him from attending all of the meetings of the special committee.
Mr. Carlin excused himself from the remainder of the meeting. The special
committee's financial advisors then reviewed the substance of their meetings
with Mr. Spencer and members of the Management Group and the results of their
confidential market test. Representatives of Adams, Harkness & Hill reviewed the
state of the capital markets since November 29, 2000 and updated their financial
analysis of the Continuing Stockholders' proposal. Adams, Harkness & Hill
informed the special committee that the availability of financing for going
private transactions was becoming more limited. However, Mr. Spencer's financing
ability appeared strong. In addition, Adams, Harkness & Hill informed the
special committee that Uno's projected EBITDA and cash flow appeared to continue
to support a higher valuation for Uno. Adams, Harkness & Hill concluded that
based upon their financial analysis, the special committee should seek to
increase the per share price offered by the Continuing Stockholders. The special
committee then authorized Ms. Davis, to meet later that day with Adams,
Harkness & Hill, Mr. Spencer and members of the Management Group for the purpose
of negotiating a higher price.

As authorized, later that day, Ms. Davis and the representatives of Adams,
Harkness & Hill met with Mr. Spencer, Mr. Miller, Mr. Vincent and their counsel,
Nutter McClennen. They discussed the results of Adams Harkness & Hill's due
diligence investigation of Uno, Adams Harkness & Hill's analysis of the
restaurant industry, the Continuing Stockholders' offer, the preliminary
financing terms being considered by the Continuing Stockholders and
presentations by Mr. Spencer and the Management Group regarding Uno's operations
and prospects. Ms. Davis and Adams, Harkness & Hill summarized the results of
Adams, Harkness & Hill's market test. Ms. Davis and Adams, Harkness & Hill
explained the view of Adams, Harkness & Hill that the $8.75 per share price
offered by the Continuing Stockholders was not fair to Uno's stockholders from a
financial point of view and that a price in excess of $10.00 per share would be
appropriate. Mr. Spencer asked for time to develop a response.

On January 12, 2001, Ms. Davis and Adams, Harkness & Hill met again with
Mr. Spencer, Mr. Miller, Mr. Vincent and Nutter McClennen. At that meeting,
Mr. Miller made a formal presentation regarding current industry operating
fundamentals, including declining consumer confidence and increased energy and
labor costs, Uno's historical enterprise value and comparable store sales
performance, and transactions involving the acquisition of minority interests.
Mr. Spencer then indicated that capital market uncertainties and the state of
Uno's business would justify a price of less than $8.75 per share if the
Continuing Stockholders were making a new proposal and if the Continuing
Stockholders were making an initial proposal at this time, the Continuing
Stockholders would offer a price of less than $8.75 per share. Nevertheless,
Mr. Spencer stated that the Continuing Stockholders were willing to increase
their offer price to $9.00 per share, and he indicated that they were unwilling
to raise their price higher. Mr. Spencer also stated that the Continuing
Stockholders now desired to proceed by means of a cash merger rather than a cash
tender offer so that most financing commitment fees would be paid upon
completion of the merger and not in advance of a

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tender offer. Ms. Davis and Adams, Harkness & Hill reiterated that a higher
price was warranted. Furthermore, Ms. Davis reported that the special committee
would require that any proposal would have to be approved by the affirmative
vote of a majority of disinterested stockholders.

On January 15, 2001, the special committee met by telephone with Skadden,
Arps and Adams, Harkness & Hill. Ms. Davis, reported the results of her meetings
with Mr. Spencer and the Management Group. Following this report, the special
committee discussed Uno's latest operating results and various factors
indicating that future operating results might deteriorate, including the
increasing cost of electricity in many of the markets in which Uno operates, as
well as increasing labor costs in tight labor markets. The special committee
also considered declines in the prices of certain restaurant stocks and the
effect on Uno's common stock price if the Continuing Stockholders' proposal were
withdrawn or rejected by the special committee. Adams, Harkness & Hill
representatives reiterated that, on a preliminary study, their financial
analysis still supported a valuation in excess of $9.00 per share. The Adams,
Harkness & Hill representatives then left the meeting and the special
committee's legal counsel answered questions for the special committee about its
fiduciary duties and the applicable fair price, fair process standards. After
further discussion by the special committee and its advisors of Uno's
circumstances and valuation parameters by the special committee and its
advisors, the special committee authorized Ms. Davis to meet with Mr. Spencer to
emphasize that the special committee required a further increase in the proposed
price.

On January 16, 2001, at a meeting with Ms. Davis, the Continuing
Stockholders submitted a revised written offer to the special committee
increasing the offer price to $9.00 per share and changing the structure of the
transaction from a cash tender offer to a cash merger. Further, the revised
proposal required the merger to be approved not only by the holders of a
majority of the outstanding Uno common stock, as required by Delaware law, but
also by the holders of a majority of the shares not owned or controlled by the
Continuing Stockholders. This stockholder approval requirement could be waived
only with the consent of the Continuing Stockholders and the special committee.
The revised offer was also subject to receipt of financing and other conditions
which the Continuing Stockholders regarded as customary. Finally, the revised
offer was subject to the requirement that Uno reimburse the Continuing
Stockholders' expenses in the transaction if the transaction was not completed
for any reason other than a breach of the merger agreement by the entity to be
formed by the Continuing Stockholders for purposes of effecting the merger.

At the January 16, 2001 meeting, Ms. Davis strongly suggested that the
Continuing Stockholders consider additional financing sources for the proposed
going private transaction. The special committee understood at that time that
the Continuing Stockholders had only considered obtaining financing from Fleet
National Bank and SunTrust Bank, Uno's existing senior lenders. The special
committee considered the possibility that debt financing might be available to
the Continuing Stockholders on more favorable terms from another party. The
special committee believed that if the Continuing Stockholders were able to
obtain financing on more favorable terms, the Continuing Stockholders might
offer a higher price for Uno's common stock. Conversely, Mr. Spencer and the
Management Group believed that they had available sufficient financing for the
transaction on favorable terms.

Mr. Spencer then reviewed several topics with Ms. Davis, including
Mr. Spencer's desire to retain and improve current management. Mr. Spencer also
noted that while Uno's current five-year projections could imply a valuation
higher than $9.00 per share, as a result of recent developments in the economy,
there was considerable uncertainty about whether those projections could be met.
Mr. Spencer then stated that the Continuing Stockholders would not increase the
$9.00 per share offer price. Ms. Davis urged the Continuing Stockholders to
increase the price, noting that the public stockholders include employees. She
also emphasized that the special committee firmly believed that a higher price
was justified. Mr. Spencer then indicated that the Continuing Stockholders'
$9.00 per share offer price was not negotiable.

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On January 17, 2001, the special committee met by telephone with its legal
counsel and financial advisors. The special committee first considered the
information received from the Continuing Stockholders detailing the terms of
their proposed financing for the transaction. Ms. Davis then reported on her
meeting with Mr. Spencer and the Continuing Stockholders' revised offer
stipulating a cash merger at $9.00 per share.

Next, the special committee discussed at length the present circumstances
surrounding the Continuing Stockholders' offer, including indications of a
deterioration of the capital markets, indications that Uno's performance might
be less than earlier anticipated and the fact that the confidential market test
conducted by Adams, Harkness & Hill did not generate any third-party interest in
pursuing an acquisition of Uno.

The special committee then asked Adams, Harkness & Hill to assess the
Continuing Stockholders' offer at $9.00 per share and asked Adams, Harkness &
Hill whether the proposed financial terms were fair to Uno's public
stockholders. The special committee then asked Skadden, Arps to assess the
proposed closing conditions contained in Mr. Spencer's letter. Based on the
information provided by Adams, Harkness & Hill and Skadden, Arps, the special
committee could then assess all the facts, circumstances, proposed terms and
conditions and decide how to proceed.

From January 16 to January 30, 2001, members of the special committee and
the Continuing Stockholders discussed the revised offer several times by
telephone. During these discussions, the special committee refused to accept the
revised offer and asked that the price be raised to at least $10.00 per share.
During the period of these discussions, Mr. Spencer reported to the special
committee that he had been contacted by a financial buyout firm, which was one
of the four potential financial buyers contacted by Adams, Harkness & Hill
during its confidential market test. In a letter addressed to Mr. Spencer, the
financial buyout firm expressed a willingness only to join in the Continuing
Stockholders' offer and if the price to be paid for the public stockholders'
shares was in the range of $8.75 per share to $9.25 per share. Mr. Spencer
immediately delivered a copy of the letter to the special committee. Because
this party was only interested in participating in Mr. Spencer's offer, the
special committee did not have additional contact with this financial buyout
firm. (Following the February 28, 2001 board meeting, the day on which the
Continuing Stockholders tentatively agreed to take Uno private at $9.75 per
share, the financial buyout firm indicated to Mr. Spencer that it was not
interested in participating in a transaction at $9.75 per share.)

On January 29, 2001, the special committee met with its financial advisors
and legal counsel at the offices of Adams, Harkness & Hill in Boston. The
special committee discussed with Skadden, Arps the fact that Adams, Harkness &
Hill could not opine that the proposed $9.00 per share cash merger price would
be fair to the public stockholders from a financial point of view. Skadden, Arps
then advised the special committee as to the legal implications of this fact.
After full discussion, the special committee concluded that it would not proceed
with the Continuing Stockholders' proposal if Adams, Harkness & Hill did not
consider $9.00 per share to be fair to the public stockholders. Representatives
of Adams, Harkness & Hill then joined the meeting.

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Representatives of Adams, Harkness & Hill presented and reviewed in detail
their analysis of the Continuing Stockholders' proposed $9.00 per share cash
merger price. Their analysis included a review of the trading prices and volume
of shares traded of Uno common stock during the period commencing from
January 1, 1999 through January 26, 2001. The analysis then compared the stock
performance of Uno with the S&P SmallCap Index and the Peer Group for the period
commencing January 1, 2000 through January 26, 2001. Adams, Harkness & Hill also
compared various financial information of the Peer Group with Uno, including
market capitalization, enterprise value, revenues, gross profit, EBITDA, EBIT,
net income and earnings per share. Adams, Harkness & Hill then analyzed
precedent transactions, the premiums paid in such transactions and the multiples
implied by such precedent transactions. The analysis concluded with a review of
discounted cash flow for Uno for the period 2001 through 2005. See "--Opinion of
the Financial Advisor to the Special Committee" for a more detailed description
of the final analysis performed. Representatives of Adams, Harkness & Hill also
responded to many questions from the special committee throughout the
presentation and discussion. The special committee agreed to inform the
Continuing Stockholders that Adams, Harkness & Hill was unable to opine that the
proposed $9.00 per share cash price was fair to Uno's public stockholders from a
financial point of view and, therefore, the special committee would not
recommend the Continuing Stockholders' offer to the board of directors in its
current form.

Later that afternoon on January 29, 2001, Ms. Davis informed Mr. Spencer by
telephone that Adams, Harkness & Hill was not able to opine that the proposed
$9.00 per share cash price was fair to the public stockholders from a financial
point of view. With the Management Group present on the telephone, Mr. Spencer
responded that the Continuing Stockholders were ready to issue a press release
announcing that they were withdrawing their proposed offer. In the alternative,
he was prepared to ask the special committee and Adams, Harkness & Hill if a
$9.50 per share price would be fair to the public stockholders from a financial
point of view. Ms. Davis reported to the special committee that the rejection of
the $9.00 per share price had led to the possibility of a proposed price
increase.

On January 30, 2001, Mr. Vincent telephoned Ms. Davis to inform her that
Uno's management would be revising its projections downward in light of Uno's
first quarter performance and invited her to meet to review such projections
with the Management Group. After conferring with Skadden, Arps, Ms. Davis
responded to Mr. Vincent on January 30, 2001 that if the Continuing Stockholders
had a formal offer to make, they should submit it to the special committee along
with supporting information. The special committee would then consider any such
offers and information.

By letter dated February 1, 2001, Mr. Spencer sent the special committee and
its legal and financial advisors 22 pages of additional material, including
revised projections. In his letter, Mr. Spencer advised the special committee of
certain recent developments that would affect the Continuing Stockholders'
ability to increase their offer price, including changes in the financial credit
markets, a failure in a major franchise relationship, revised franchise
development forecasts and revised financial projections that suggested more
modest performance than previously forecast. The Continuing Stockholders did not
increase the $9.00 per share offer at this time.

On February 5, 2001, the special committee met by telephone with its legal
counsel and financial advisors to consider Mr. Spencer's letter and the events
since the special committee's last meeting on January 29, 2001. Skadden, Arps
first advised the committee as to its duties and responsibilities in light of
the new information from the Continuing Stockholders, and answered questions
from the special committee. After full discussion of its duties and
responsibilities and the new materials from the Continuing Stockholders, the
special committee agreed that Mr. Spencer's February 2, 2001 letter did not
present any meaningful change of circumstance that warranted consideration.

Adams, Harkness & Hill then joined the meeting and informed the special
committee that the new material received with Mr. Spencer's February 2, 2001
letter, when considered in connection with Adams, Harkness & Hill's financial
analysis, increased their confidence that a $9.00 per share price was

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not in the range of values supported by their financial methodology and did not
provide a basis for a change in opinion.

Ms. Davis then noted that according to Mr. Spencer, the Continuing
Stockholders were prepared to engage Tucker Anthony Incorporated ("Tucker
Anthony") to review the Continuing Stockholders' offer, to assist the Continuing
Stockholders in their discussions and negotiations with the special committee by
preparing financial and industry background information and to assist them in
their analysis of whether or not to revise their offer. Ms. Davis also reported
that the Continuing Stockholders were not going to solicit financial buyers to
join the Continuing Stockholders.

The special committee discussed these developments and determined that if
the Continuing Stockholders chose to add Tucker Anthony as an additional
financial resource to improve the offer price, then that would be welcome; but
if Tucker Anthony were merely to add financial analytical capability, such
additional financial analysis was not needed by the special committee.

The special committee authorized Ms. Davis to inform Mr. Spencer that the
February 2, 2001 materials did not change its conclusion regarding the fairness
of the $9.00 per share price and that additional financial resources would be
welcome, but additional analysis of the $9.00 per share price was not needed or
useful. The Continuing Stockholders retained Tucker Anthony to assist them in
their analysis of whether or not to revise their offer.

Following the meeting, Ms. Davis informed Mr. Spencer of the special
committee's position. Mr. Spencer responded that the Continuing Stockholders
were inclined to issue a press release withdrawing their offer, but that they
would, for the moment, continue evaluating the current situation and consider
whether or not the Continuing Stockholders could revise their offer.

From February 1 through February 24, 2001, there were numerous
communications among the Continuing Stockholders and their representatives and
the special committee and its legal and financial advisors. During this period,
Mr. Spencer orally advised the special committee that the highest price the
Continuing Stockholders were prepared to pay was $9.50 per share. Tucker Anthony
provided Adams, Harkness & Hill with analyses involving direct comparisons with
other minority interest transactions and discussed discounted cash flow and
leveraged buy-out analyses of value. Tucker Anthony believed that these analyses
demonstrated that a price of $9.50 per share would be fair to the public
stockholders from a financial point of view. The special committee responded to
Tucker Anthony because Tucker Anthony had been engaged by the Continuing
Stockholders to provide them with financial advice and, therefore, the special
committee determined that the best way to advance negotiations towards a
beneficial transaction would be to respond to Tucker Anthony's statements. The
special committee's position during this period continued to be that it could
not recommend a price of less than $10.00 per share.

On February 24, 2001, the special committee met by telephone with its legal
counsel and financial advisors. Skadden, Arps informed the special committee
that in separate telephone calls to each of the committee members, Skadden, Arps
had relayed messages from Adams, Harkness & Hill that Adams, Harkness & Hill was
in the process of continuing its financial assessment of the Continuing
Stockholders' stated intent to offer up to $9.50 per share. Adams, Harkness &
Hill reported to the special committee that it had spoken with Tucker Anthony
regarding the fairness of an offer of $9.50 per share. Skadden, Arps reported
that it had discussed with the Continuing Stockholders' counsel Delaware law
concerning the determination of a fair price.

The special committee then discussed the need for Adams, Harkness & Hill to
inform the special committee of its current opinion of whether a $9.50 cash
price was fair to the public stockholders.

Adams, Harkness & Hill then joined the meeting and reviewed their recent
activity. Under their current financial analysis, Adams, Harkness & Hill could
not recommend a $9.50 per share price, but the deterioration in capital markets
and questions about Uno's current store performance required

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further assessment. Adams, Harkness & Hill informed the special committee that
it would update its analysis for developments in Uno's same store sales growth
figures for the weeks since December 31, 2000 over the upcoming weekend and
respond to the special committee's request for an updated analysis at that time.
Adams, Harkness & Hill did not deliver a written report to the special committee
at this meeting. The special committee agreed to reconvene by telephone on
February 26, 2001.

On February 26, 2001, the special committee met by telephone with its legal
counsel and financial advisors. Adams, Harkness & Hill began by reviewing same
store sales results for the period January 1, 2001 to the present, stating that
they were consistent with management's model. The special committee asked
various questions of Adams, Harkness & Hill, including how Uno's results
compared with those of its competitors during the same period.

The special committee resumed its meeting later that day, and Adams,
Harkness & Hill reported that Uno's recent same store sales growth figures were
consistent with their historic relationship and with comparable companies' same
store sales growth. See "--Opinion of the Financial Advisor to the Special
Committee" for a more detailed description of the final analysis performed.
Adams, Harkness & Hill then responded to additional questions from the special
committee.

After a full discussion of the Adams, Harkness & Hill financial analysis,
the special committee asked Adams, Harkness & Hill to inform it whether, in
light of the updated circumstances, Adams, Harkness & Hill could opine that
$9.50 per share was a fair price. Based on all its work and in light of current
circumstances, Adams, Harkness & Hill reported that a $9.75 per share price
would be fair to the public stockholders, and that, in light of recent same
store sales figures, Adams, Harkness & Hill still could not conclude that $9.50
per share was fair. Adams, Harkness & Hill also noted that the Continuing
Stockholders' term sheet from their prospective lenders continued to limit the
financing to a price not to exceed $10.00 per share, which supported an offer
price higher than $9.50 per share. After further discussion, the special
committee determined to request to meet with Mr. Spencer in person and as the
full special committee prior to Uno's annual meeting of the board of directors
and annual meeting of stockholders on February 28, 2001. At that meeting, the
special committee would inform Mr. Spencer that it could not recommend a $9.50
per share price.

On February 28, 2001, the special committee met with Mr. Spencer before
Uno's board of directors meeting and before Uno's annual meeting of
stockholders. The special committee informed him that it could not recommend a
$9.50 per share price, that Adams, Harkness & Hill did not consider it fair to
the public stockholders, and that the Continuing Stockholders should raise the
price or end discussions. Mr. Spencer stated that the Continuing Stockholders
did not want to propose more than $9.50 per share and excused himself from the
meeting to discuss the special committee's position with the Management Group.

During the board of directors meeting, Mr. Spencer separately asked
Ms. Davis whether the special committee would likely change its mind if the
Continuing Stockholders were to increase their offer. Ms. Davis, without
informing Mr. Spencer whether the special committee would respond favorably to
any lesser price, informed Mr. Spencer that the special committee would not
support any price less than $9.75 per share. Mr. Spencer responded that the
Continuing Stockholders would increase their proposed offer price to $9.75 per
share in cash, subject to certain conditions, including that Uno agree to
reimburse the Continuing Stockholders' expenses in the event that the proposed
transaction did not close.

The special committee accepted the Continuing Stockholders' price of $9.75
per share, but not the expense reimbursement proposal. The special committee
responded with a counter proposal that the Continuing Stockholders' reimbursable
expenses would be capped at $350,000 if the transaction was not completed and
that reimbursement would be made only if the transaction failed to close for
reasons that were outside the control or influence of the Continuing
Stockholders. After further discussion, the special committee increased the
amount of the expense reimbursement to $500,000 and reached

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agreement with Mr. Spencer on the other conditions of the Continuing
Stockholders' offer. These conditions included the receipt of sufficient
financing and that there be no material adverse change in Uno or any litigation
arising in connection with the transaction.

On February 28, 2001, Uno announced at its annual meeting of stockholders
and issued a press release that the special committee and the Continuing
Stockholders had reached tentative agreement on a going private transaction at a
price of $9.75 per share in cash for all shares of Uno common stock not already
owned by the Continuing Stockholders. The press release stated that the
transaction would proceed as a merger and would be subject to execution of a
definitive merger agreement, approval by Uno's board of directors and
stockholders, including approval by the holders of a majority of the shares not
owned or controlled by the Continuing Stockholders, receipt of financing, and
customary closing conditions.

During the negotiations taking place between Mr. Spencer and the special
committee from January 17, 2001 through the end of February 2001, Mr. Spencer
and the Continuing Stockholders realized that, given the unyielding negotiating
position taken by the special committee, the Continuing Stockholders would have
to make concessions to the special committee in an effort to complete the
transaction. Although there was no change in circumstances in Uno's business,
operations or prospects which led to the offer of a higher price, Mr. Spencer
and the Continuing Stockholders decided to raise the price offered to the public
stockholders in an effort to reach agreement with the special committee. As
described above, the negotiations ultimately led to the $9.75 per share price
offered to the Uno public stockholders.

During March and early April 2001, Mr. Spencer, the Management Group and
Nutter, McClennen, counsel to the Continuing Stockholders, and members of the
special committee and Skadden, Arps, counsel to the special committee, had
lengthy negotiations concerning the definitive merger agreement and related
documents and exchanged numerous drafts of the merger agreement reflecting their
negotiations. During this period, the special committee met with its advisors to
discuss the various drafts in detail and to formulate responses.

On April 2, 2001, the special committee and Skadden, Arps met with
Mr. Spencer, the Management Group and Nutter McClennen to negotiate several
remaining issues in the merger agreement.

On April 3, 2001, numerous issues remained unresolved after further
negotiations, however, the Continuing Stockholders instructed Nutter McClennen
to accept virtually all of the special committees' terms, leaving only three
remaining issues: (i) the capitalization of Parent, (ii) the responsibility for
payment of bank commitment fees for Uno's proposed credit agreement (a portion
of which would be used to fund the merger consideration) and (iii) the
circumstances under which the Continuing Stockholders' expenses would be
reimbursed in the event the merger did not close and the maximum amount to be
reimbursed.

On April 4, 2001, prior to a special meeting of the board of directors, the
special committee met with Skadden, Arps and Adams, Harkness & Hill to review
the latest draft of the merger agreement reflecting the Continuing Stockholders'
proposals to resolve all remaining issues with respect to the proposed merger
transaction and to receive the opinion of Adams, Harkness & Hill. At this
meeting Adams, Harkness & Hill gave a detailed presentation regarding the
financial aspects of the proposed merger agreement. A summary of the
presentation appears under the heading "--Opinion of the Financial Advisor to
the Special Committee." Adams, Harkness & Hill delivered its opinion to the
special committee that the consideration to be received by the stockholders was
fair from a financial point of view. The special committee separately determined
that in return for the agreement that Mr. Spencer would personally fund
one-third of the bank commitment fees, the special committee would accept the
Continuing Stockholders' proposals on capitalization of Parent and the
circumstances under which the Continuing Stockholders' expenses would be
reimbursed in the event the merger did

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not close and the maximum amount to be reimbursed. If Mr. Spencer accepted this
offer, the special committee determined that it would approve the draft merger
agreement and recommend that the full board of directors of Uno approve the
merger agreement.

The special committee then invited Mr. Spencer to join the meeting and
informed him that it would require him to personally fund one-third of the bank
commitment fees required in connection with the refinancing of Uno's existing
credit facility and the financing for the going private transaction.
Mr. Spencer agreed to the special committee's proposal and the special committee
resolved to approve the draft merger agreement and recommend that the full board
of directors of Uno approve the merger agreement.

Following the special committee meeting, the board of directors of Uno met.
Counsel to the special committee, counsel to the Continuing Stockholders and
counsel to Uno were also present. Ms. Davis gave a report of the special
committee and concluded with the special committee's recommendation that the
board of directors approve the merger agreement. Adams, Harkness & Hill then
made a presentation regarding the financial aspects of the proposed merger
agreement. Adams, Harkness & Hill summarized its opinion to the special
committee with respect to the fairness, from a financial point of view, of the
consideration to be received by the public stockholders described under "Opinion
of Financial Advisor to the Special Committee." Skadden, Arps, counsel to the
special committee, and Brown, Rudnick, Freed & Gesmer, counsel to Uno, gave
presentations regarding the legal terms and conditions of the merger agreement.
Lengthy discussion followed each presentation and the financial and legal
advisors answered questions raised by the board of directors.

Following that discussion, the board of directors, based on the presentation
by Adams, Harkness & Hill regarding its opinion to the special committee, the
recommendation of the special committee and on the other factors described
herein under "--Recommendation of the Board of Directors; Fairness of the
Merger," and "Reasons for the Board of Directors Determination" approved the
merger agreement in substantially the form submitted to the board of directors
and authorized the appropriate officers of Uno to execute and deliver final
documents on behalf of Uno. The board of directors also approved the sale and
leaseback transaction with U.S. Realty Advisors, LLC, the sale and leaseback
transactions with Mr. Spencer, amendments to Uno's $55 million credit facility
with Fleet National Bank and SunTrust Bank to permit the sale and leaseback
transactions, and the $75 million credit facility with Fleet National Bank and
SunTrust Bank to replace the existing $55 million credit facility. Mr. Spencer,
Mr. Miller and Mr. MacPhail abstained from the vote approving the merger
agreement and the related matters because they have interests in the merger that
are different from Uno stockholders generally.

From April 4, 2001 to April 19, 2001, Uno completed the schedules to the
merger agreement, and on April 19, 2001, the merger agreement, was executed by
the parties, and Uno issued a press release announcing the signing of the merger
agreement.

RECOMMENDATION OF THE BOARD OF DIRECTORS; FAIRNESS OF THE MERGER

The special committee of the board of directors has unanimously determined
that the terms of the merger agreement and the merger are fair to, and in the
best interests of, Uno stockholders other than the Continuing Stockholders. The
special committee unanimously recommended to the board of directors that the
merger agreement be adopted and approved. The special committee considered a
number of factors, as more fully described above under "--Background of the
Merger" and as described below under "--Reasons for the Special Committee's
Determination," in making its recommendation. The board of directors, acting in
part upon the recommendation of the special committee, unanimously determined,
with Mr. Spencer, Mr. Miller and Mr. MacPhail abstaining, that the terms of the
merger agreement and the proposed merger are fair to, and in the best interests
of, Uno stockholders other than the Continuing Stockholders. The board of
directors, based in part on the

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unanimous recommendation of the special committee, recommends that Uno
stockholders vote FOR the adoption and approval of the merger agreement.

REASONS FOR THE SPECIAL COMMITTEE'S DETERMINATION

In recommending adoption and approval of the merger agreement and the merger
to the board of directors, the special committee considered a number of factors
that they believe supported their recommendation, including:

- the merger will provide Uno stockholders a premium for their shares
compared to the market price of Uno's common stock, as set forth in the
analysis of Adams, Harkness & Hill; the special committee accepted the
analysis of Adams, Harkness & Hill with respect to current and historical
prices of Uno's common stock and considered the premium paid in relation
to the current and historical prices, as set forth in the analysis of
Adams, Harkness & Hill; the special committee concluded that the
substantial premium over the price of Uno's common stock prior to the
announcement of the transaction of $6.25 on October 23, 2000 supported its
determination to recommend the transaction;

- the special committee drew on its knowledge of the business, financial
results and prospects of Uno, as well as the special committee's knowledge
of the restaurant industry generally that committee members had developed
in their time as members of the full board of directors of Uno as well as
their outside business experiences; specifically, the special committee
considered the potential for growth through new store openings, and the
views expressed by Adams, Harkness & Hill and management of Uno regarding
the financial condition, results of operations, business and prospects of
Uno, including the prospects of Uno if it were to remain publicly owned;
the special committee did not consider the improvement in Uno's cash
position and cash generated from operations as disclosed in Uno's
Quarterly Report on Form 10-Q for the fiscal quarter ended April 2, 2001
because this information was not available at the time of the special
committee's determination, but Adams, Harkness & Hill will take that
information into account in considering whether it can provide a bring
down fairness opinion to the special committee prior to the closing of the
transaction; the special committee considered the fact that Uno's
projections that forecast earnings per share increasing significantly over
the next several years when assessing such improvements in revenue and
earnings as incorporated in the discounted cash flow analysis done by
Adams, Harkness & Hill and discussed such projections as one factor that
affected the evaluation of the transaction by the special committee; the
special committee concluded that these collective insights about Uno's
prospects supported its determination to recommend the transaction;

- Mr. Spencer's controlling equity interest in Uno would likely deter
potential strategic and financial third party buyers in light of
Mr. Spencer's stated intention that he is not interested in selling his
interest without a premium substantially higher than implied by the $9.75
per share price; the special committee concluded that this deterrent
effect supported its determination to recommend the transaction;

- the special committee's conclusion that because the transaction had been
publicly announced for a long period of time and no additional buyers had
indicated an interest in an alternate transaction and none of the parties
contacted by the special committee had indicated an interest in an
alternate transaction, it was unlikely that any party other than the
Continuing Stockholders, Parent and Newco would propose and complete a
transaction that was more favorable than the merger to Uno and its
stockholders; the special committee concluded that the lack of additional
buyers at a higher price supported its determination to recommend the
transaction;

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- the limitations Uno suffered and would likely continue to suffer as a
public company, including its limited trading volume resulting from the
significant ownership interest held by Mr. Spencer and the other
Continuing Stockholders, the lack of institutional sponsorship and
coverage by institutional research analysts, the inability to raise
capital in the public markets to finance further growth and increase the
public float resulting from Uno's inability to generate the type of rapid
revenue and unit growth expected by the public markets, and the expenses
of compliance with the reporting requirements of a public company, all of
which adversely affect the trading market in, and the value of, Uno's
common stock; the special committee concluded that these limitations
imposed on Uno as a public company supported its determination to
recommend the transaction;

- the negotiations with respect to the merger consideration that, among
other things, led to an increase in the Continuing Stockholders' offer
from $8.75 per share of Uno common stock to $9.75 per share of Uno common
stock, and the belief of the members of the special committee that $9.75
per share was the highest price that the Continuing Stockholders would
agree to pay; the opinion of Adams, Harkness & Hill, as discussed below,
provides that, as of the date of such opinion, the $9.75 per share
consideration to be received in the merger is fair from a financial point
of view to the stockholders other than the Continuing Stockholders; the
special committee concluded that its ability to increase the offer and
Adams, Harkness & Hill's opinion both supported its determination to
recommend the transaction;

- the $9.75 per share to be paid to stockholders other than Parent in the
merger represents (i) a premium of approximately 33.4% over the $7.13
closing sale price for the shares of common stock on the New York Stock
Exchange on October 24, 2000, the last trading day before Uno announced
the Continuing Stockholders' initial offer to take Uno private by
purchasing all of the outstanding shares of common stock at a price of
$8.75 per share and (ii) a premium of approximately 52.8% over the average
closing sale price per share of $6.38 during the one week preceding the
Continuing Stockholders' initial announcement to take Uno private; the
special committee concluded that the size of the premium supported its
determination to recommend the transaction;

- the presentations of Adams, Harkness & Hill at various special committee
meetings and its final presentation at the April 4, 2001 meeting,
including the opinion of Adams, Harkness & Hill, based on and subject to
the limitations, assumptions and qualifications set forth in its opinion,
as to the fairness, from a financial point of view, of the merger
consideration to the holders of Uno common stock (other than the
Continuing Stockholders); see "Opinion of Financial Advisor to the Special
Committee", and a copy of the opinion of Adams, Harkness & Hill attached
as Exhibit C to the proxy statement; the special committee concluded that
the financial analysis of Adams, Harkness & Hill supported its
determination to recommend the transaction;

- the presentations by Adams, Harkness & Hill regarding management's
earnings projections; Adams, Harkness & Hill advised the special committee
that its discounted cash flow analysis of such projections indicated a
valuation range of $4.57 to $11.54 per share, that the $9.75 price per
share to be paid in the merger is within that range, and that the
discounted cash flow analysis was one of the factors relied upon by Adams,
Harkness & Hill in rendering its fairness opinion; see "--Opinion of
Financial Advisor to the Special Committee"; the special committee
concluded that the financial analysis of Adams, Harkness & Hill supported
its determination to recommend the transaction;

- the financing proposal received by the Continuing Stockholders, Parent and
Newco for the merger from Fleet National Bank and SunTrust Bank, as well
as the planned sales and leaseback transactions with U.S. Realty Advisors,
LLC and with Mr. Spencer, which the special committee believes reasonably
supports the Continuing Stockholders', Parent's and Newco's ability to
meet their financing obligations pursuant to the merger agreement; the
special committee concluded that the viability of Mr. Spencer's financing
for the transaction supported its determination to recommend the
transaction;

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- cash will be paid to the Uno stockholders (other than Parent) in the
merger, eliminating any uncertainties in valuing the merger consideration
to be received by the Uno stockholders (other than Parent); the special
committee concluded that the certainty of value provided by the use of
cash consideration supported its determination to recommend the
transaction;

- the merger agreement permits the board of directors to consider
unsolicited competing acquisition proposals that are, or are reasonably
likely to lead to, proposals superior to the merger, as described in "The
Merger Agreement--No Solicitation"; the special committee concluded that
its ability to consider other proposals supported its determination to
recommend the transaction;

- Delaware law entitles Uno stockholders who do not vote in favor of the
merger who file a written objection with Uno to obtain the "fair value" of
their shares and otherwise follow the procedures prescribed by Delaware
law, as determined by a court, if the merger is completed; See
"--Appraisal Rights;" the special committee concluded that the
availability of other remedies for dissatisfied stockholders supported its
determination to recommend the transaction;

- the special committee's judgment that it was unlikely for Uno stockholders
to realize in excess of $9.75 per share due to the current and prospective
environment in which Uno operates, and more particularly, the difficulty
that Uno would have in the future competing against larger, more
aggressive competitors with greater capital resources; the special
committee concluded that the unlikely prospects for a higher trading price
for Uno shares if it remained a public company supported its determination
to recommend the transaction; and

- the special committee's judgment, in view of Uno's prospects, as well as
Adams, Harkness & Hill's discussions with a number of possible acquirors,
none of whom expressed an interest to acquire Uno at a price higher than
$9.75 per share, that it was unlikely that one or more strategic or
financial buyers would be willing to pay a price for Uno equal to or
greater than $9.75 per share in cash and that the Continuing Stockholders,
whose approval would be essential to a proposed sale of Uno, might not be
prepared to support a sale of Uno at any price unless substantially higher
than $9.75 per share; the special committee concluded that the lack of
likely higher offers supported its determination to recommend the
transaction.

The special committee also determined that the merger is procedurally fair
because among other things:

- the Uno board of directors established a special committee to consider and
negotiate the merger agreement;

- the special committee was composed of independent directors who are not
officers or employees of Uno and have no financial interest in the merger
different from Uno stockholders generally other than their ownership of
stock options;

- the special committee was given exclusive and unlimited authority to,
among other things, evaluate, negotiate and recommend the terms of any
proposed transactions;

- the special committee retained and received advice from its own
independent legal counsel and financial advisors in evaluating,
negotiating and recommending the terms of the merger agreement;

- Adams, Harkness & Hill rendered an opinion concerning the fairness, from a
financial point of view, of the consideration to be received by the
stockholders (other than the Continuing Stockholders) in the merger;

- the price of $9.75 per share and the other terms and conditions of the
merger agreement resulted from active and lengthy negotiations between the
special committee and its

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representatives, on the one hand, and the Continuing Stockholders and
their representatives on the other hand;

- under Delaware law, Uno stockholders have a right to demand appraisal of
their shares;

- the special committee and the board of directors required that the merger
agreement be approved by the affirmative vote of the holders of at least a
majority of the shares of Uno common stock held by stockholders other than
the Continuing Stockholders; this requirement is waivable, but only with
the consent of the special committee; the special committee specifically
negotiated its right to approve the waiver of this requirement; and

- neither after public disclosure of the Continuing Stockholders' initial
$8.75 per share proposal on October 25, 2000 nor during the course of
Uno's efforts to find a potential acquiror throughout the month of
December 2000 did any other party express any interest in acquiring Uno at
a valuation exceeding $9.75.

The special committee also considered a variety of risks and other
potentially negative factors concerning the merger. All of the material risks
and potentially negative factors considered by the special committee were as
follows:

- the obligation of the Continuing Stockholders, Parent and Newco to
complete the merger is conditioned upon financing being made available to
Parent and Newco, as discussed in "--Merger Financing," and Parent and
Newco may not secure financing for a variety of reasons, including reasons
beyond the control of Uno;

- if the merger is not completed under circumstances further discussed in
"The Merger Agreement--Termination of the Merger Agreement," Uno may be
required to reimburse Parent specified expenses;

- the cash consideration received by a stockholder generally will be taxable
to the stockholder in an amount equal to the excess of $9.75 over the
stockholder's tax basis in the stockholder's shares of Uno common stock;

- the Continuing Stockholders have potential conflicts of interest,
including equity interests and continued employment in Uno as the
surviving corporation; see "--Interests of the Continuing Stockholders in
the Merger"; and

- following the merger, Uno stockholders, other than the Continuing
Stockholders and holders of stock options of Uno as the surviving
corporation will cease to participate in any future earnings growth of Uno
or benefit from any increase in the value of Uno.

The special committee did not consider the 21.9% premium that the merger
consideration represents over the $8.00 per share closing sale price for Uno's
common stock on February 27, 2001, the last trading day prior to the
announcement that the parties had agreed to take Uno private at $9.75 per share,
to be relevant in its determination. The special committee believed that the
price of Uno's common stock on February 27, 2001 already reflected the
October 25, 2000 announcement to take Uno private at $8.75 per share.

The special committee did not ask Uno to attempt to determine the
liquidation value of Uno and gave little consideration to the book value of
Uno's assets of $83,738,000, or $7.63 per share, as of December 31, 2000,
because it believed that those measures of asset value would be considerably
less than the merger consideration of $9.75 per Uno share and Uno's going
concern value. The special committee's belief regarding liquidation value was
based upon their understanding of the restaurant industry and their general
business knowledge that liquidation sales generally result in proceeds
substantially less than the sale of a going concern business. Based upon the
various analyses of value by Adams, Harkness & Hill, the special committee
concluded that the liquidation value and book value

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were not materially relevant to the market value of Uno's business. While the
special committee reviewed with Adams, Harkness & Hill its various financial
analyses and reviewed with officers of Uno its historical and projected results,
the special committee did not independently generate its own separate financial
analysis of the merger.

In reaching its determination, the special committee did not consider the
purchases made by Uno in the past two years. No Continuing Stockholder made any
purchases of Uno common stock during the last two years other than by way of
exercise of stock options. The special committee did not view the purchases by
Uno during the past two years as relevant to a determination of fairness.

The special committee also did not consider any firm offers of which Uno was
aware during the preceding two years in connection with any proposed transaction
to acquire Uno because, to Uno's knowledge, no such offers had been received.
The special committee was aware that in late April 1999, Mr. Spencer received an
unsolicited communication from a third party expressing an interest in
discussing a possible acquisition of Uno at a price of approximately $14.00
($12.75 after giving effect to a subsequent 10% stock dividend) per share in
cash. The inquiry was subject to due diligence, execution of a definitive
agreement and securing financing. The communication also set forth that the
potential price per share was predicated on certain financial assumptions. As
described above in the section entitled "--Background of the Merger," these
assumptions about Uno were inaccurate. The special committee agreed with
management's conclusion at that time that the third party would be unable to
finance the potential transaction and that it would lower its potential price
upon learning of its inaccurate assumptions. Consequently, the special committee
did not consider this as a firm offer. See "--Background of the Merger."

After considering these factors, the special committee concluded that the
positive factors relating to the merger outweighed the negative factors. Because
of the variety of factors considered, the special committee did not find it
practicable to quantify or otherwise assign relative weights to, and did not
make specific assessments of, the specific factors considered in reaching its
determination. However, individual members of the special committee may have
assigned different weights to various factors. The determination of the special
committee was made after consideration of all of the factors together.

REASONS FOR THE BOARD OF DIRECTORS' DETERMINATION

The board of directors of Uno consists of eight directors, four of whom
serve on the special committee. At the April 4, 2001 meeting of the board of
directors, the special committee, with its legal and financial advisers
participating, reported to the other members of the board of directors on the
course of its negotiations with the Continuing Stockholders, Parent, Newco and
their legal counsel, its review of the merger agreement and the related
financing requirements and the factors it took into account in reaching its
determination that the merger is fair to, and in the best interests of, Uno
stockholders other than the Continuing Stockholders. In view of the wide variety
of factors considered in its evaluation of the merger, the board of directors
did not find it practicable to quantify or otherwise assign relative weights to,
and did not make specific assessments of, the specific factors considered in
reaching its determination. Rather, the board of directors based its position on
the totality of the information presented and considered. In considering the
determination of the special committee, the board of directors believed that the
analysis of the special committee was reasonable and adopted the special
committee's conclusion and the analysis underlying the conclusion.

The board of directors also considered the financial and managerial
resources and future prospects of Parent and Newco. It considered the financial
projections delivered to Adams, Harkness & Hill, Uno's historic ability to
access equity and debt capital, and the ability to continue to attract and
retain management with equity incentives which historically have not proven to
be valuable for Uno's management. The board of directors also considered the
possible effects on the business of Uno and its subsidiaries and on the
employees, customers, suppliers and creditors of Uno and its subsidiaries and
the effects on the community in which Uno's facilities are located.

PRER14A 45th Page of 215 TOC 1st Previous Next Bottom Just 45th

FAIRNESS OF THE MERGER TO STOCKHOLDERS OTHER THAN THE CONTINUING
STOCKHOLDERS

The board of directors believes that the merger agreement and the merger are
substantively and procedurally fair to, and in the best interests of, Uno
stockholders other than the Continuing Stockholders for all of the reasons set
forth above under "--Recommendation of the Board of Directors; Fairness of the
Merger--Reasons for the Special Committee's Determination" and "--Reasons for
the Board of Directors' Determination." In addition, with respect to procedural
fairness, the board of directors established a special committee, consisting of
four independent directors of Uno, none of whom is an officer or employee of Uno
or has an interest in the merger different from that of Uno stockholders
generally other than as holders of Uno stock options. The merger consideration
of $9.75 in cash per share was the highest price the Continuing Stockholders
indicated they were willing to pay following extensive negotiations between the
special committee and the Continuing Stockholders and their representatives.

In reaching these conclusions, the board of directors considered it
significant that:

- no member of the special committee has an interest in the merger different
from that of Uno stockholders generally other than as holders of Uno stock
options; and

- the special committee retained its own financial and legal advisors who
have extensive experience with transactions similar to the merger and who
assisted the special committee in evaluating the merger and in negotiating
with the Continuing Stockholders.

Adams, Harkness & Hill was retained to advise the special committee as to
the fairness, from a financial point of view, of the proposal received from the
Continuing Stockholders, Parent and Newco. Adams, Harkness & Hill reached the
conclusion expressed in its written opinion dated April 4, 2001 that, subject to
the considerations and limitations set forth in the opinion, the merger is fair,
from a financial point of view, to the stockholders of Uno other than the
Continuing Stockholders.

THE BOARD OF DIRECTORS, BASED IN PART ON THE UNANIMOUS RECOMMENDATION OF THE
SPECIAL COMMITTEE, RECOMMENDS THAT UNO STOCKHOLDERS VOTE IN FAVOR OF THE
PROPOSAL TO ADOPT AND APPROVE THE MERGER AGREEMENT. The recommendation of the
board of directors was made after consideration of all the material factors,
both positive and negative, as described above.

Mr. Spencer, Mr. Miller and Mr. MacPhail, each of whom is a Continuing
Stockholder and a current director of Uno, each abstained from voting on the
proposal to adopt and approve the merger agreement. The remaining five directors
voted unanimously to adopt and approve the merger agreement.

DETERMINATION OF THE FAIRNESS OF THE MERGER BY PARENT, NEWCO AND THE AFFILIATE
STOCKHOLDERS

The rules of the Securities and Exchange Commission require Parent, Newco,
and Mr. Spencer, Uno Associates and the Management Group (the "Affiliate
Stockholders") to express their belief as to the fairness of the merger to the
stockholders (other than the Continuing Stockholders). Parent, Newco and the
Affiliate Stockholders did not participate in the deliberations of the special
committee regarding or receive advice from Adams, Harkness & Hill as to the
fairness to the stockholders of the merger.

Parent, Newco, and the Affiliate Stockholders believe that the merger is
substantively fair to the stockholders of Uno other than the Continuing
Stockholders. Parent, Newco and the Affiliate Stockholders based their belief on
the following factors:

- the current and historical market prices for shares of Uno common stock;

- the fact that the $9.75 per share to be paid to stockholders other than
Parent in the merger represents (i) a premium of approximately 33.4% over
the $7.31 closing sale price for the shares

PRER14A 46th Page of 215 TOC 1st Previous Next Bottom Just 46th

of common stock on the New York Stock Exchange on October 24, 2000, the
last trading day before Uno announced the Continuing Stockholders' initial
offer to take Uno private by purchasing all of the outstanding shares of
common stock at a price of $8.75 per share, and (ii) a premium of
approximately 52.8% over the average closing sale price per share of $6.38
during the one week preceding the Continuing Stockholders' initial
announcement to take Uno private;

- the fact that the special committee determined that the merger is fair to,
and in the best interests of, Uno and the stockholders (other than the
Continuing Stockholders) and the special committee's recommendation that
the stockholders vote to adopt and approve the merger agreement; while
Parent, Newco and the Affiliate Stockholders considered the special
committee's determination and recommendation, they did not rely upon the
special committee's analysis;

- the fact that the special committee received the Adams, Harkness & Hill
fairness opinion; Parent, Newco and the Affiliate Stockholders, however,
did not rely upon the analysis of Adams, Harkness & Hill;

- the Affiliate Stockholders' knowledge of the business, financial
condition, results of operations and prospects of Uno, and knowledge of
the restaurant industry generally;

- the extensive negotiations between the special committee and the
Continuing Stockholders, Parent and Newco;

- the measures taken by the board of directors to ensure the procedural
fairness of the transaction, including the formation of the special
committee;

- advice received by the Affiliate Stockholders, Parent and Newco, from
Tucker Anthony, a financial advisor retained by Mr. Spencer that a price
of $9.50 per share would be fair to the public stockholders of Uno from a
financial point of view; this advice was based upon financial analyses
performed by Tucker Anthony that involved direct comparisons with other
transactions, and discounted cash flow and leveraged buy-out analyses; the
direct comparisons included analyses of historical stock trading,
comparable minority buy-out transactions, comparable companies trading and
precedent acquisitions; and

- their own knowledge of Uno's business and prospects, the financial
information and projections available in Uno's filings with the Securities
and Exchange Commission or otherwise included in this proxy statement, and
the condition of the restaurant industry.

Parent, Newco, and the Affiliate Stockholders did not assign relative
weights to these factors. Rather, they viewed their position as being based on
the totality of the information presented to and considered by them, except that
particular emphasis was placed on the receipt and acceptance by the special
committee of the Adams, Harkness & Hill fairness opinion.

During the price negotiations between the Continuing Stockholders and the
special committee, Mr. Spencer indicated that he would not be interested in
selling all of his shares of Uno common stock unless he received a price per
share substantially greater than $9.75 a share. Mr. Spencer made this statement
because as the founding and majority stockholder of Uno, he believed that he
should be able to receive a control premium for the sale of all of his shares.
Notwithstanding this belief, Mr. Spencer believes that the merger consideration
of $9.75 per share is fair to the stockholders of Uno other than the Continuing
Stockholders.

Parent, Newco, and the Affiliate Stockholders believe that the merger is
procedurally fair to the stockholders of Uno other than the Continuing
Stockholders because of the measures taken by the special committee and the
board of directors to ensure the procedural fairness of the transaction,
including the formation of the special committee, the retention of legal and
financial advisors by the

PRER14A 47th Page of 215 TOC 1st Previous Next Bottom Just 47th

special committee and the extensive nature of the negotiations between special
committee and the Continuing Stockholders, Parent and Newco.

The foregoing constitute all the material factors considered by the
Affiliate Stockholders, Parent and Newco in making their respective fairness
determination. The Affiliate Stockholders, Parent and Newco did not consider
whether the merger consideration constitutes fair value in relation to the
liquidation value of Uno and gave little consideration to the book value of Uno
because they believed that those measures of asset value were not relevant to
the market value of Uno's business. In reaching their determination, Parent,
Newco, and the Affiliate Stockholders also did not consider the purchases made
by Uno in the past two years. No Affiliate Stockholder made any purchases of Uno
common stock during the last two years other than by way of stock option
exercises. The special committee did not, and Parent, Newco and the Affiliate
Stockholders also did not, view these purchases by Uno in the past two years as
material or relevant to a determination of fairness. Uno did not receive any
firm offers to acquire Uno during the past two years. Uno did receive a
communication from a third party in April 1999, but for the reasons described
under "Special Factors--Background of the Merger", Uno did not consider this
inquiry a firm offer. See also, "Recommendation of the Board of Directors;
Fairness of the Merger--Reasons for the Special Committee's Determination."
Consequently, Parent, Newco and the Affiliate Stockholders also did not consider
any firm offers.

Other than the recommendations of the special committee and the board of
directors that the stockholders vote in favor of the adoption and approval of
the merger agreement, no other person filing the Schedule 13E-3 with the
Securities and Exchange Commission has made any recommendation with respect to
the merger.

Uno, Parent, Newco and the Affiliate Stockholders have not made any
provision in connection with the merger to grant unaffiliated stockholders of
Uno access to Uno's corporate records, or to obtain counsel or appraisal
services at the expense of Uno, Parent, Newco or the Affiliate Stockholders.

FORWARD LOOKING INFORMATION; CERTAIN PROJECTIONS

Uno does not, as a matter of course, make public projections as to future
sales, earnings or other results. However, in connection with the merger, Uno's
management prepared and provided to the special committee, Adams, Harkness &
Hill and Fleet National Bank N.A., the projections, which are summarized below
under the caption "Projections Prepared by Uno" for the five fiscal years ending
October 2, 2005.

In the view of Uno's management, the projections were prepared on a
reasonable basis, reflect the best currently available estimates and judgments,
and present, to the best of the knowledge and belief of Uno's management, the
expected course of action and the expected future performance of Uno. Neither
Uno's independent accountants, nor any other independent accountants have
compiled, examined or reviewed these projections. No independent accountants
have expressed any opinion or other form of assurance with respect to these
projections or their achievability, and Uno's independent accountants assume no
responsibility for, and disclaim any association with, these projections.

The projections included herein in one case assume that the merger has
occurred (the "Merger Projections"), and in the other case assume that the
merger does not occur (the "Going Concern Projections"). The projections were
initially prepared by management as of November 21, 2000 and November 22, 2000.
On January 31, 2001 and February 2, 2001, management revised the projections in
light of Uno's performance in the first quarter of fiscal 2001. The primary
difference between the assumptions used in the Merger Projections and those used
in the Going Concern Projections is the incurrence of a $75 million senior
credit facility that will be used to finance a portion of the merger
consideration, to refinance Uno's existing indebtedness to Fleet National Bank
and SunTrust Bank, and for working capital. Management does not intend at this
time to update the projections.

PRER14A 48th Page of 215 TOC 1st Previous Next Bottom Just 48th

The projections below are or involve forward-looking statements and are
based upon a variety of assumptions, including Uno's ability to achieve
strategic goals, objectives and targets over the applicable periods. These
assumptions involve judgments with respect to future economic, competitive and
regulatory conditions, financial market conditions and future business
decisions, all of which are difficult or impossible to predict accurately and
many of which are beyond Uno's control. Many important factors, in addition to
those discussed elsewhere in this proxy statement, could cause Uno's results to
differ materially from those expressed or implied by the forward-looking
statements. These factors include Uno's competitive environment, Uno's ability
to open new restaurants on a timely basis and the performance of those
restaurants, economic and other market conditions in which Uno operates and
matters affecting business generally, all of which are difficult to predict and
many of which are beyond Uno's control. Accordingly, there can be no assurance
that the projections are indicative of Uno's future performance or that actual
results will not differ materially from those in the projections set forth
below. See "Cautionary Statement Regarding Forward-Looking Statements." Uno is
not entitled to rely on the safe harbor protection of the Private Securities
Litigation Reform Act of 1995 with respect to the forward looking statements
contained in these projections.

In light of the uncertainties inherent in projections of any kind, the
inclusion of these projections in this proxy statement should not be regarded as
a representation by Uno, the board of directors of Uno, the special committee,
or any of their advisors, agents or representatives that these projections will
prove to be correct.

PRER14A 49th Page of 215 TOC 1st Previous Next Bottom Just 49th

UNO RESTAURANT CORPORATION
GOING CONCERN PROJECTIONS PREPARED AS OF NOVEMBER 22, 2000
INCOME STATEMENT

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

[Enlarge/Download Table]

53 WKS
--------
ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL FORECAST
1996 1997 1998 1999 2000 2001
-------- -------- -------- -------- -------- --------

REVENUES
Restaurant sales................. 159,581 164,389 177,343 198,560 213,715 246,854
Consumer product sales........... 8,351 9,115 9,384 10,568 11,772 13,796
Franchise income................. 4,209 4,516 4,549 5,105 5,683 6,377
-------- -------- -------- -------- -------- --------
172,141 178,020 191,276 214,233 231,170 267,027
COSTS AND EXPENSES
Cost of food and beverages....... 44,064 43,994 48,567 54,683 57,679 67,077
Labor and benefits............... 51,868 54,183 58,139 64,700 70,922 84,275
Occupancy costs.................. 26,339 27,045 27,988 29,199 30,974 36,391
Other operating costs............ 14,323 15,244 17,148 17,739 19,468 23,198
General and administrative....... 12,155 13,384 13,661 16,629 19,521 20,862
Depreciation and amortization.... 12,964 12,469 12,183 12,702 13,098 14,161
Pre-opening costs................ 1,567 823 938 594 2,137 1,440
Special charges.................. 3,937 4,000 0 0 8,588 0
-------- -------- -------- -------- -------- --------
167,217 171,142 178,624 196,246 222,387 247,404
OPERATING INCOME................... 4,924 6,878 12,652 17,987 8,783 19,623
INTEREST AND OTHER EXPENSE......... 2,481 2,827 3,661 3,139 3,019 2,938

INCOME BEFORE INCOME TAXES......... 2,443 4,051 8,991 14,848 5,764 16,684
Provision for income taxes....... 757 1,378 2,968 5,048 1,729 5,748
-------- -------- -------- -------- -------- --------
INCOME BEFORE CUMULATIVE EFFECT.... 1,686 2,673 6,023 9,800 4,035 10,937
Cumulative effect................ 636
--------
NET INCOME......................... 1,686 2,673 5,387 9,800 4,035 10,937
======== ======== ======== ======== ======== ========
WEIGHTED-AVERAGE SHARES
OUTSTANDING...................... 14,032 13,209 12,025 11,610 11,844 11,516
Earnings Per Share................. $ 0.12 $ 0.20 $ 0.45 $ 0.84 $ 0.34 $ 0.95
======== ======== ======== ======== ======== ========

PROJECTIONS
-----------------------------------------
2002 2003 2004 2005
-------- -------- -------- --------

REVENUES
Restaurant sales................. 268,356 287,302 306,598 327,523
Consumer product sales........... 15,176 16,693 18,363 20,199
Franchise income................. 7,614 9,461 11,164 13,399
-------- -------- -------- --------
291,146 313,457 336,125 361,121
COSTS AND EXPENSES
Cost of food and beverages....... 73,048 78,346 83,841 89,746
Labor and benefits............... 91,389 98,307 105,425 113,171
Occupancy costs.................. 40,062 42,766 45,596 48,695
Other operating costs............ 25,236 27,083 29,253 31,475
General and administrative....... 21,500 22,616 24,089 25,901
Depreciation and amortization.... 15,443 16,617 17,818 19,124
Pre-opening costs................ 900 900 900 1,050
Special charges.................. 0 0 0 0
-------- -------- -------- --------
267,579 286,634 306,923 329,161
OPERATING INCOME................... 23,566 26,823 29,202 31,961
INTEREST AND OTHER EXPENSE......... 1,640 642 (569) (1,599)
INCOME BEFORE INCOME TAXES......... 21,926 26,181 29,771 33,560
Provision for income taxes....... 7,554 9,019 10,256 11,561
-------- -------- -------- --------
INCOME BEFORE CUMULATIVE EFFECT.... 14,373 17,162 19,515 21,999
Cumulative effect................

NET INCOME......................... 14,373 17,162 19,515 21,999
======== ======== ======== ========
WEIGHTED-AVERAGE SHARES
OUTSTANDING...................... 11,516 11,516 11,516 11,516
Earnings Per Share................. $ 1.25 $ 1.49 $ 1.69 $ 1.91
======== ======== ======== ========

ASSUMPTIONS APPLICABLE TO INCOME STATEMENT, BALANCE SHEET AND STATEMENT OF CASH
FLOWS:

- the completion of a $26.0 million sale and leaseback transaction, the
proceeds of which are used to repay term loans and fund, in conjunction with
internally generated cash flow, a company growth rate of six to nine new
restaurants per year;

- a franchise growth rate of 12 to 20 new restaurants per year, based on
existing development agreements and letters of intent with current and
potential franchisees;

- a growth rate in consumer product sales of ten percent per year, based on an
analysis of the historical growth over the past ten years; and

- no new indebtedness.

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UNO RESTAURANT CORPORATION
GOING CONCERN PROJECTIONS PREPARED AS OF NOVEMBER 22, 2000
BALANCE SHEET

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

[Enlarge/Download Table]

53 WKS
-------- PROJECTIONS
ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL FORECAST --------------------
1996 1997 1998 1999 2000 2001 2002 2003
-------- -------- -------- -------- -------- -------- -------- --------

Cash 1,828 1,486 2,030 752 788 724 844 3,963
Accounts receivable, net........... 2,032 2,823 1,784 2,398 3,530 3,245 3,291 3,661
Inventories........................ 2,333 2,326 2,296 2,436 2,497 2,935 3,135 3,357
Prepaid expenses................... 1,857 1,758 815 1,757 1,999 2,461 3,130 3,422
------- ------- ------- ------- ------- -------- -------- --------
Total current assets............... 8,050 8,393 6,925 7,343 8,814 9,365 10,400 14,404
Property, equipment and leaseholds,
net.............................. 120,510 125,357 125,323 128,746 141,992 125,159 129,426 131,154
Deferred income taxes.............. 3,613 6,599 7,450 10,020 14,132 16,117 16,923 17,769
Liquor licenses and other assets... 2,892 3,383 3,497 3,503 3,538 4,571 4,615 4,636
------- ------- ------- ------- ------- -------- -------- --------
135,065 143,732 143,195 149,612 168,476 155,213 161,364 167,964
======= ======= ======= ======= ======= ======== ======== ========
Accounts payable................... 6,009 6,966 6,589 7,798 9,851 10,312 10,659 11,089
Accrued expenses................... 5,033 7,563 7,949 8,668 8,459 7,740 8,430 9,028
Accrued compensation and taxes..... 2,187 2,641 2,666 3,369 2,889 3,039 3,480 3,727
Income taxes payable............... 1,581 2,076 995 2,914 558 1,680 2,799 3,608
Current portion of long-term
debt............................. 178 3,132 4,081 4,075 3,953 263 287 313
------- ------- ------- ------- ------- -------- -------- --------
Total current liabilities.......... 14,988 22,378 22,280 26,824 25,710 23,034 25,655 27,764
Long-term debt, net of current
portion.......................... 37,085 42,516 38,676 31,612 50,900 27,883 16,470 3,287
Capital lease obligations, net of
current.......................... 1,056 867 666 489 453 449 446 442
Other liabilities.................. 4,800 7,091 7,904 9,708 9,699 11,196 11,769 12,286

Shareholders equity:
Common Stock....................... 137 138 138 154 158 157 157 157
Additional paid-in capital......... 53,509 53,803 53,944 55,648 58,755 58,755 58,755 58,755
Retained earnings.................. 34,143 36,816 42,203 52,003 56,038 66,975 81,347 98,509
Treasury Stock..................... (10,653) (19,877) (22,616) (26,826) (33,237) (33,237) (33,237) (33,237)
------- ------- ------- ------- ------- -------- -------- --------
Total shareholders' equity......... 77,136 70,880 73,669 80,979 81,714 92,651 107,023 124,185
------- ------- ------- ------- ------- -------- -------- --------
135,065 143,732 143,195 149,612 168,476 155,213 161,364 167,964
======= ======= ======= ======= ======= ======== ======== ========

PROJECTIONS
--------------------
2004 2005
-------- --------

Cash 22,728 42,770
Accounts receivable, net........... 4,022 4,465
Inventories........................ 3,582 3,827
Prepaid expenses................... 3,735 4,078
-------- --------
Total current assets............... 34,067 55,139
Property, equipment and leaseholds,
net.............................. 131,919 133,821
Deferred income taxes.............. 18,657 19,590
Liquor licenses and other assets... 4,657 4,681
-------- --------
189,301 213,232
======== ========
Accounts payable................... 11,294 11,492
Accrued expenses................... 9,666 10,366
Accrued compensation and taxes..... 3,990 4,279
Income taxes payable............... 4,102 4,625
Current portion of long-term
debt............................. 341 373
-------- --------
Total current liabilities.......... 29,395 31,135
Long-term debt, net of current
portion.......................... 2,950 2,582
Capital lease obligations, net of
current.......................... 437 432
Other liabilities.................. 12,818 13,385
Shareholders equity:
Common Stock....................... 157 157
Additional paid-in capital......... 58,755 58,755
Retained earnings.................. 118,024 140,023
Treasury Stock..................... (33,237) (33,237)
-------- --------
Total shareholders' equity......... 143,700 165,699
-------- --------
189,301 213,232
======== ========

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UNO RESTAURANT CORPORATION
GOING CONCERN PROJECTIONS PREPARED AS OF NOVEMBER 22, 2000
STATEMENT OF CASH FLOWS

(AMOUNTS IN THOUSANDS)

[Enlarge/Download Table]

OPERATIONS:
NET INCOME......................... 1,686 2,673 5,387 9,800 4,035 10,937 14,373 17,162
DEPRECIATION AND AMORTIZATION...... 13,064 12,573 12,292 12,823 13,233 14,161 15,443 16,617
DEFERRED TAXES..................... (2,462) (2,986) (851) (2,570) (4,112) (1,985) (806) (846)
DEFERRED RENT/OTHER................ 4,625 4,612 849 559 9,545 (525) 431 386
WORKING CAPITAL.................... 1,617 3,216 764 4,414 (2,304) 1,386 1,782 1,306
------- ------- ------- ------- ------- ------- ------- -------
OPERATIONS................... 18,530 20,088 18,441 25,026 20,397 23,974 31,223 34,625

INVESTING:
CAPITAL EXPENDITURES (Net of
dispositions).................... (22,746) (19,697) (12,141) (16,192) (35,954) (23,043) (19,468) (18,108)
INVESTMENT IN JOINT VENTURE........ 0 0 0 0 0 0 0 0
OTHER (capitalized interest)....... 0 0 0 0 0 (285) (242) (238)
------- ------- ------- ------- ------- ------- ------- -------
INVESTING.................... (22,746) (19,697) (12,141) (16,192) (35,954) (23,328) (19,710) (18,346)

FINANCING:
EQUITY............................. 76 295 127 1,556 2,523 (0) 0 (0)
TERM/SECURED NOTES................. (3,404) 0 25,640 (3,680) (3,680) (18,280) 0 0
MET LIFE MORTGAGE NOTES............ 0 4,979 (183) (200) (218) (238) (260) (283)
NEW SENIOR DEBT.................... 0 0 0 0 0 0 0 0
NOTE PAYABLE--BANK, NET............ 15,513 3,217 (28,360) (3,165) 23,205 (8,158) (11,129) (12,874)
CAPITAL LEASE OBLIGATIONS.......... 0 0 (189) (202) (177) (36) (3) (4)
SALE/LEASEBACK FUNDING............. 0 0 0 0 0 26,000 0 0
TREASURY STOCK..................... (7,753) (9,224) (2,791) (4,421) (6,060) 0 0 0
------- ------- ------- ------- ------- ------- ------- -------
FINANCING.................... 4,739 (733) (5,756) (10,112) 15,593 (711) (11,392) (13,161)

CASH CHANGE........................ 523 (342) 544 (1,278) 36 (65) 121 3,119
BEGINNING CASH..................... 1,305 1,828 1,486 2,030 752 788 724 845
------- ------- ------- ------- ------- ------- ------- -------
ENDING CASH........................ 1,828 1,486 2,030 752 788 724 845 3,963
======= ======= ======= ======= ======= ======= ======= =======

PROJECTIONS
--------------------
2004 2005
-------- --------

OPERATIONS:
NET INCOME......................... 19,515 21,999
DEPRECIATION AND AMORTIZATION...... 17,818 19,124
DEFERRED TAXES..................... (888) (933)
DEFERRED RENT/OTHER................ 393 409
WORKING CAPITAL.................... 823 810
------- -------
OPERATIONS................... 37,661 41,409
INVESTING:
CAPITAL EXPENDITURES (Net of
dispositions).................... (18,342) (20,753)
INVESTMENT IN JOINT VENTURE........ 0 0
OTHER (capitalized interest)....... (241) (272)
------- -------
INVESTING.................... (18,582) (21,026)
FINANCING:
EQUITY............................. (0) 0
TERM/SECURED NOTES................. 0 0
MET LIFE MORTGAGE NOTES............ (309) (337)
NEW SENIOR DEBT.................... 0 0
NOTE PAYABLE--BANK, NET............ (0) 0
CAPITAL LEASE OBLIGATIONS.......... (4) (4)
SALE/LEASEBACK FUNDING............. 0 0
TREASURY STOCK..................... 0 0
------- -------
FINANCING.................... (314) (342)
CASH CHANGE........................ 18,765 20,042
BEGINNING CASH..................... 3,963 22,728
------- -------
ENDING CASH........................ 22,728 42,770
======= =======

PRER14A 52nd Page of 215 TOC 1st Previous Next Bottom Just 52nd

UNO RESTAURANT CORPORATION
GOING CONCERN PROJECTIONS PREPARED AS OF JANUARY 31, 2001
INCOME STATEMENT

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

[Enlarge/Download Table]

ACTUAL
1996
--------

REVENUES
Restaurant sales................. 159,581
Consumer product sales........... 8,351
Franchise income................. 4,209
-------
172,141
COSTS AND EXPENSES
Cost of food and beverages....... 44,064
Labor and benefits............... 51,868
Occupancy costs.................. 26,339
Other operating costs............ 14,323
General and administrative....... 12,155
Depreciation and amortization.... 12,964
Pre-opening costs................ 1,567
Special charges.................. 3,937
-------
167,217
OPERATING INCOME................... 4,924
INTEREST AND OTHER EXPENSE......... 2,481

INCOME BEFORE INCOME TAXES......... 2,443
Provision for income taxes....... 757
-------
INCOME BEFORE CUMULATIVE EFFECT.... 1,686
Cumulative effect................
NET INCOME......................... 1,686
=======
WEIGHTED-AVERAGE SHARES
OUTSTANDING...................... 14,032
Earnings Per Share................. $ 0.12
=======

53 WKS
------
ACTUAL ACTUAL ACTUAL ACTUAL FORECAST
1997 1998 1999 2000 2001
-------- -------- -------- -------- --------

REVENUES
Restaurant sales................. 164,389 177,343 198,560 213,715 241,099
Consumer product sales........... 9,115 9,384 10,568 11,772 13,051
Franchise income................. 4,516 4,549 5,105 5,683 5,954
------- ------- ------- ------- -------
178,020 191,276 214,233 231,170 260,104
COSTS AND EXPENSES
Cost of food and beverages....... 43,994 48,567 54,683 57,679 65,375
Labor and benefits............... 54,183 58,139 64,700 70,922 82,688
Occupancy costs.................. 27,045 27,988 29,199 30,974 36,424
Other operating costs............ 15,244 17,148 17,739 19,468 22,984
General and administrative....... 13,384 13,661 16,629 19,521 20,645
Depreciation and amortization.... 12,469 12,183 12,702 13,098 13,645
Pre-opening costs................ 823 938 594 2,137 1,122
Special charges.................. 4,000 0 0 8,588 0
------- ------- ------- ------- -------
171,142 178,624 196,246 222,387 242,884
OPERATING INCOME................... 6,878 12,652 17,987 8,783 17,220
INTEREST AND OTHER EXPENSE......... 2,827 3,661 3,139 3,019 2,708
INCOME BEFORE INCOME TAXES......... 4,051 8,991 14,848 5,764 14,512
Provision for income taxes....... 1,378 2,968 5,048 1,729 4,934
------- ------- ------- ------- -------
INCOME BEFORE CUMULATIVE EFFECT.... 2,673 6,023 9,800 4,035 9,578
Cumulative effect................ 636
-------
NET INCOME......................... 2,673 5,387 9,800 4,035 9,578
======= ======= ======= ======= =======
WEIGHTED-AVERAGE SHARES
OUTSTANDING...................... 13,209 12,025 11,610 11,844 11,285
Earnings Per Share................. $ 0.20 $ 0.45 $ 0.84 $ 0.34 $ 0.85
======= ======= ======= ======= =======

PROJECTIONS
-----------------------------------------
2002 2003 2004 2005
-------- -------- -------- --------

REVENUES
Restaurant sales................. 262,633 281,464 300,642 321,452
Consumer product sales........... 14,356 15,792 17,371 19,108
Franchise income................. 7,210 8,897 10,187 11,751
------- ------- ------- -------
284,199 306,153 328,200 352,311
COSTS AND EXPENSES
Cost of food and beverages....... 71,334 76,576 82,011 87,856
Labor and benefits............... 89,844 96,737 103,829 111,551
Occupancy costs.................. 41,382 44,227 47,200 50,453
Other operating costs............ 25,042 26,896 29,068 31,294
General and administrative....... 21,500 22,598 24,031 25,779
Depreciation and amortization.... 14,790 15,951 17,139 18,431
Pre-opening costs................ 900 900 900 1,050
Special charges.................. 0 0 0 0
------- ------- ------- -------
264,791 283,885 304,178 326,414
OPERATING INCOME................... 19,408 22,268 24,022 25,897
INTEREST AND OTHER EXPENSE......... 718 272 (750) (1,576)
INCOME BEFORE INCOME TAXES......... 18,690 21,996 24,772 27,474
Provision for income taxes....... 6,355 7,479 8,422 9,341
------- ------- ------- -------
INCOME BEFORE CUMULATIVE EFFECT.... 12,335 14,518 16,350 18,133
Cumulative effect................

NET INCOME......................... 12,335 14,518 16,350 18,133
======= ======= ======= =======
WEIGHTED-AVERAGE SHARES
OUTSTANDING...................... 11,285 11,285 11,285 11,285
Earnings Per Share................. $ 1.09 $ 1.29 $ 1.45 $ 1.61
======= ======= ======= =======

ASSUMPTIONS APPLICABLE TO INCOME STATEMENT, BALANCE SHEET AND STATEMENT OF CASH
FLOWS:

- a company growth rate of six to eight new restaurants per year;

- a franchise growth rate of ten to 14 new restaurants per year, based on
existing development agreements and letters of intent with current and
potential franchisees;

- a growth rate in consumer product sales of ten percent per year based on an
analysis of the historical growth over the past ten years;

- the completion of $35.0 million in sale and leaseback transactions, the
proceeds of which are used to repay term loans; and

- no new indebtedness.

PRER14A 53rd Page of 215 TOC 1st Previous Next Bottom Just 53rd

UNO RESTAURANT CORPORATION
GOING CONCERN PROJECTIONS PREPARED AS OF JANUARY 31, 2001
BALANCE SHEET

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

[Enlarge/Download Table]

53 WKS
-------- PROJECTIONS
ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL FORECAST -------------------
1996 1997 1998 1999 2000 2001 2002 2003
-------- -------- -------- -------- -------- -------- -------- --------

Cash............................... 1,828 1,486 2,030 752 788 724 824 9,463
Accounts receivable, net........... 2,032 2,823 1,784 2,398 3,530 3,045 3,166 3,522
Inventories........................ 2,333 2,326 2,296 2,436 2,497 2,935 3,068 3,288
Prepaid expenses................... 1,857 1,758 815 1,757 1,999 2,111 3,095 3,388
------- ------- ------- ------- ------- -------- -------- --------
Total current assets............... 8,050 8,393 6,925 7,343 8,814 8,815 10,153 19,661
Property, equipment and leaseholds,
net.............................. 120,510 125,357 125,323 128,746 141,992 114,471 119,334 121,677
Deferred income taxes.............. 3,613 6,599 7,450 10,020 14,132 14,565 15,293 16,058
Liquor licenses and other assets... 2,892 3,383 3,497 3,503 3,538 4,571 4,616 4,638
135,065 143,732 143,195 149,612 168,476 142,423 149,396 162,035
======= ======= ======= ======= ======= ======== ======== ========
Accounts payable................... 6,009 6,966 6,589 7,798 9,851 10,312 10,567 11,003
Accrued expenses................... 5,033 7,563 7,949 8,668 8,459 8,140 8,359 8,958
Accrued compensation and taxes..... 2,187 2,641 2,666 3,369 2,889 3,039 3,451 3,698
Income taxes payable............... 1,581 2,076 995 2,914 558 1,680 2,260 2,991
Current portion of long-term
debt............................. 178 3,132 4,081 4,075 3,953 263 287 313
------- ------- ------- ------- ------- -------- -------- --------
Total current liabilities.......... 14,988 22,378 22,280 26,824 25,710 23,433 24,923 26,964

Long-term debt, net of current
portion.......................... 37,085 42,516 38,676 31,612 50,900 15,211 7,755 3,287
Capital lease obligations, net of
current.......................... 1,056 867 666 489 453 449 446 442
Other liabilities.................. 4,800 7,091 7,904 9,708 9,699 11,846 12,455 13,008

Shareholders' equity:
Common Stock....................... 137 138 138 154 158 157 157 157
Additional paid-in capital......... 53,509 53,803 53,944 55,648 58,755 58,945 58,945 58,945
Retained earnings.................. 34,143 36,816 42,203 52,003 56,038 65,616 77,952 92,469
Treasury Stock..................... (10,653) (19,877) (22,616) (26,826) (33,237) (33,237) (33,237) (33,237)
------- ------- ------- ------- ------- -------- -------- --------
Total shareholders' equity......... 77,136 70,880 73,669 80,979 81,714 91,482 103,818 118,335
------- ------- ------- ------- ------- -------- -------- --------
135,065 143,732 143,195 149,612 168,476 142,423 149,396 162,035
======= ======= ======= ======= ======= ======== ======== ========

PROJECTIONS
-------------------
2004 2005
-------- --------

Cash............................... 24,507 40,108
Accounts receivable, net........... 3,821 4,176
Inventories........................ 3,512 3,756
Prepaid expenses................... 3,701 4,044
-------- --------
Total current assets............... 35,542 52,085
Property, equipment and leaseholds,
net.............................. 123,070 125,614
Deferred income taxes.............. 16,861 17,704
Liquor licenses and other assets... 4,659 4,683
180,132 200,086
======== ========
Accounts payable................... 11,214 11,416
Accrued expenses................... 9,597 10,297
Accrued compensation and taxes..... 3,962 4,251
Income taxes payable............... 3,369 3,736
Current portion of long-term
debt............................. 341 373
-------- --------
Total current liabilities.......... 28,482 30,074
Long-term debt, net of current
portion.......................... 2,950 2,582
Capital lease obligations, net of
current.......................... 437 432
Other liabilities.................. 13,577 14,182
Shareholders' equity:
Common Stock....................... 157 157
Additional paid-in capital......... 58,945 58,945
Retained earnings.................. 108,819 126,951
Treasury Stock..................... (33,237) (33,237)
-------- --------
Total shareholders' equity......... 134,685 152,817
-------- --------
180,132 200,086
======== ========

PRER14A 54th Page of 215 TOC 1st Previous Next Bottom Just 54th

UNO RESTAURANT CORPORATION
GOING CONCERN PROJECTIONS PREPARED AS OF JANUARY 31, 2001
STATEMENT OF CASH FLOWS

(AMOUNTS IN THOUSANDS)

[Enlarge/Download Table]

53 WKS
------ PROJECTIONS
ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL FORECAST -------------------
1996 1997 1998 1999 2000 2001 2002 2003
-------- -------- -------- -------- -------- -------- -------- --------

OPERATIONS:
NET INCOME......................... 1,686 2,673 5,387 9,800 4,035 9,578 12,335 14,518
DEPRECIATION AND AMORTIZATION...... 13,064 12,573 12,292 12,823 13,233 13,645 14,790 15,951
DEFERRED TAXES..................... (2,462) (2,986) (851) (2,570) (4,112) (197) (566) (603)
DEFERRED RENT/OTHER................ 4,625 4,612 849 559 9,545 (110) 303 259
WORKING CAPITAL.................... 1,617 3,216 764 4,414 (2,304) 2,336 327 1,254
------- ------- ------- ------- ------- ------- ------- -------
OPERATIONS....................... 18,530 20,088 18,441 25,026 20,397 25,252 27,189 31,380

INVESTING:
CAPITAL EXPENDITURES (Net of
dispositions).................... (22,746) (19,697) (12,141) (16,192) (35,954) (20,864) (19,418) (18,058)
INVESTMENT IN JOINT VENTURE........ 0 0 0 0 0 0 0 0
OTHER (capitalized interest)....... 0 0 0 0 0 (260) (235) (237)
------- ------- ------- ------- ------- ------- ------- -------
INVESTING........................ (22,746) (19,697) (12,141) (16,192) (35,954) (21,124) (19,652) (18,295)

FINANCING:
EQUITY............................. 76 295 127 1,556 2,523 190 0 (0)
TERM/SECURED NOTES................. (3,404) 0 25,640 (3,680) (3,680) (18,280) 0 0
MET LIFE MORTGAGE NOTES............ 0 4,979 (183) (200) (218) (238) (260) (283)
NEW SENIOR DEBT.................... 0 0 0 0 0 0 0 0
NOTE PAYABLE--BANK, NET............ 15,513 3,217 (28,360) (3,165) 23,205 (20,829) (7,172) (4,159)
CAPITAL LEASE OBLIGATIONS.......... 0 (189) (202) (177) (36) (3) (4)
SALE/LEASEBACK FUNDING............. 0 0 0 0 0 35,000 0 0
TREASURY STOCK..................... (7,753) (9,224) (2,791) (4,421) (6,060) 0 0 0
------- ------- ------- ------- ------- ------- ------- -------
FINANCING........................ 4,739 (733) (5,756) (10,112) 15,593 (4,193) (7,436) (4,446)

CASH CHANGE........................ 523 (342) 544 (1,278) 36 (65) 101 8,639
BEGINNING CASH..................... 1,305 1,828 1,486 2,030 752 788 724 824
------- ------- ------- ------- ------- ------- ------- -------
ENDING CASH........................ 1,828 1,486 2,030 752 788 724 824 9,463
======= ======= ======= ======= ======= ======= ======= =======

PROJECTIONS
-------------------
2004 2005
-------- --------

OPERATIONS:
NET INCOME......................... 16,350 18,133
DEPRECIATION AND AMORTIZATION...... 17,139 18,431
DEFERRED TAXES..................... (641) (681)
DEFERRED RENT/OTHER................ 268 287
WORKING CAPITAL.................... 773 749
------- -------
OPERATIONS....................... 33,889 36,918
INVESTING:
CAPITAL EXPENDITURES (Net of
dispositions).................... (18,292) (20,703)
INVESTMENT IN JOINT VENTURE........ 0 0
OTHER (capitalized interest)....... (240) (272)
------- -------
INVESTING........................ (18,532) (20,975)
FINANCING:
EQUITY............................. 0 (0)
TERM/SECURED NOTES................. 0 0
MET LIFE MORTGAGE NOTES............ (309) (337)
NEW SENIOR DEBT.................... 0 0
NOTE PAYABLE--BANK, NET............ (0) (0)
CAPITAL LEASE OBLIGATIONS.......... (4) (4)
SALE/LEASEBACK FUNDING............. 0 0
TREASURY STOCK..................... 0 0
------- -------
FINANCING........................ (313) (342)
CASH CHANGE........................ 15,044 15,601
BEGINNING CASH..................... 9,463 24,508
------- -------
ENDING CASH........................ 24,508 40,109
======= =======

PRER14A 55th Page of 215 TOC 1st Previous Next Bottom Just 55th

UNO RESTAURANT CORPORATION
MERGER PROJECTIONS PREPARED AS OF NOVEMBER 21, 2000
INCOME STATEMENT
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

[Enlarge/Download Table]

REVENUES
Restaurant Sales................. 159,581 164,389 177,343 198,560 213,715 246,854 266,117 280,486
Consumer product sales........... 8,351 9,115 9,384 10,568 11,772 13,796 15,176 16,693
Franchise income................. 4,209 4,516 4,549 5,105 5,683 6,377 7,614 9,461
------- ------- ------- ------- ------- ------- ------- -------
172,141 178,020 191,276 214,233 231,170 267,027 288,907 306,641
COSTS AND EXPENSES
Cost of food and beverages....... 44,064 43,994 48,567 54,683 57,679 67,077 72,479 76,612
Labor and benefits............... 51,868 54,183 58,139 64,700 70,922 84,275 90,660 96,076
Occupancy costs.................. 26,339 27,045 27,988 29,199 30,974 37,651 41,516 43,643
Other operating costs............ 14,323 15,244 17,148 17,739 19,468 23,198 25,049 26,512
General and administrative....... 12,155 13,384 13,661 16,629 19,521 20,862 21,500 22,698
Depreciation and amortization.... 12,964 12,469 12,183 12,702 13,098 13,696 14,850 15,761
Pre-opening costs................ 1,567 823 938 594 2,137 1,440 600 600
Special charges.................. 3,937 4,000 0 0 8,588 0 0 0
------- ------- ------- ------- ------- ------- ------- -------
167,217 171,142 178,624 196,246 222,387 248,199 266,654 281,903
OPERATING INCOME................... 4,924 6,878 12,652 17,987 8,783 18,828 22,253 24,738
INTEREST AND OTHER EXPENSE......... 2,481 2,827 3,661 3,139 3,019 9,029 5,926 4,780
INCOME BEFORE INCOME TAXES......... 2,443 4,051 8,991 14,848 5,764 9,799 16,327 19,958
Provision for income taxes......... 757 1,378 2,968 5,048 1,729 3,375 5,625 6,876
------- ------- ------- ------- ------- ------- ------- -------
INCOME BEFORE CUMULATIVE EFFECT.... 1,686 2,673 6,023 9,800 4,035 6,423 10,702 13,083
Cumulative effect.................. 636
-------
NET INCOME......................... 1,686 2,673 5,387 9,800 4,035 6,423 10,702 13,083
------- ------- ------- ------- ------- ------- ------- -------
WEIGHTED-AVERAGE SHARES
OUTSTANDING...................... 14,032 13,209 12,025 11,610 11,844 7,159 7,159 7,159
Earnings Per Share................. $ 0.12 $ 0.20 $ 0.45 $ 0.84 $ 0.34 $ 0.90 $ 1.49 $ 1.83
------- ------- ------- ------- ------- ------- ------- -------

PROJECTIONS
------------------------------
2004 2005 2006
-------- -------- --------

REVENUES
Restaurant Sales................. 295,121 311,265 332,226
Consumer product sales........... 18,363 20,199 22,219
Franchise income................. 11,164 13,399 15,667
------- ------- -------
324,648 344,863 370,112
COSTS AND EXPENSES
Cost of food and beverages....... 80,919 85,607 91,678
Labor and benefits............... 101,655 107,810 115,606
Occupancy costs.................. 45,888 48,394 51,709
Other operating costs............ 28,283 30,093 32,322
General and administrative....... 23,778 25,228 27,273
Depreciation and amortization.... 16,696 17,727 19,045
Pre-opening costs................ 600 750 1,200
Special charges.................. 0 0 0
------- ------- -------
297,819 315,609 338,832
OPERATING INCOME................... 26,829 29,254 31,279
INTEREST AND OTHER EXPENSE......... 3,149 1,516 (145)
INCOME BEFORE INCOME TAXES......... 23,680 27,738 31,424
Provision for income taxes......... 8,158 9,556 10,825
------- ------- -------
INCOME BEFORE CUMULATIVE EFFECT.... 15,522 18,182 20,599
Cumulative effect..................

NET INCOME......................... 15,522 18,182 20,599
------- ------- -------
WEIGHTED-AVERAGE SHARES
OUTSTANDING...................... 7,159 7,159 7,159
Earnings Per Share................. $ 2.17 $ 2.54 $ 2.88
------- ------- -------

ASSUMPTIONS APPLICABLE TO INCOME STATEMENT, BALANCE SHEET AND STATEMENT OF CASH
FLOWS:

- a company growth rate of six to nine new restaurants per year;

- a franchise growth rate of 12 to 20 new restaurants per year, based on
existing development agreements and letters of intent with current and
potential franchisees;

- a growth rate in consumer product sales of ten percent per year based on an
analysis of the historical growth over the past ten years;

- the incurrence of indebtedness of $60.0 million in term loans and a
$20.0 million revolving line of credit, replacing Uno's current credit
facility and the completion of a $47.9 million equity buyback transaction;
and

- the completion of $41.0 million in sale and leaseback transactions.

PRER14A 56th Page of 215 TOC 1st Previous Next Bottom Just 56th

UNO RESTAURANT CORPORATION
MERGER PROJECTIONS PREPARED AS OF NOVEMBER 21, 2000
BALANCE SHEET

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

[Enlarge/Download Table]

Cash............................... 1,828 1,486 2,030 752 788 724 838 5,179
Accounts receivable, net........... 2,032 2,823 1,784 2,398 3,530 2,795 3,291 3,661
Inventories........................ 2,333 2,326 2,296 2,436 2,497 2,935 3,109 3,277
Prepaid expenses................... 1,857 1,758 815 1,757 1,999 2,111 3,124 3,359
------- ------- ------- ------- ------- -------- -------- --------
Total current assets............... 8,050 8,393 6,925 7,343 8,814 8,565 10,362 15,477

Property, equipment and leaseholds,
net.............................. 120,510 125,357 125,323 128,746 141,992 110,657 108,402 105,132
Deferred income taxes.............. 3,613 6,599 7,450 10,020 14,132 16,117 16,923 17,769
Liquor licenses and other assets... 2,892 3,383 3,497 3,503 3,538 4,571 4,598 4,611
------- ------- ------- ------- ------- -------- -------- --------
135,065 143,732 143,195 149,612 168,476 139,911 140,284 142,990
======= ======= ======= ======= ======= ======== ======== ========
Accounts payable................... 6,009 6,966 6,589 7,798 9,851 10,312 10,844 10,930
Accrued expenses................... 5,033 7,563 7,949 8,668 8,459 9,240 8,419 8,898
Accrued compensation and taxes..... 2,187 2,641 2,666 3,369 2,889 3,339 3,475 3,673
Income taxes payable............... 1,581 2,076 995 2,914 558 2,180 2,531 2,750
Current portion of long-term
debt............................. 178 3,132 4,081 4,075 3,953 9,863 11,137 12,163
------- ------- ------- ------- ------- -------- -------- --------
Total current liabilities.......... 14,988 22,378 22,280 26,824 25,710 34,934 36,407 38,415

Long-term debt, net of current
portion.......................... 37,085 42,516 38,676 31,612 50,900 54,095 41,781 28,912
Capital lease obligations, net of
current.......................... 1,056 867 666 489 453 449 446 442
Other liabilities.................. 4,800 7,091 7,904 9,708 9,699 11,196 11,711 12,200

Shareholders' equity:
Common Stock....................... 137 138 138 154 158 157 157 157
Additional paid-in capital......... 53,509 53,803 53,944 55,648 58,755 58,755 58,755 58,755
Retained earnings.................. 34,143 36,816 42,203 52,003 56,038 62,461 73,163 86,246
Treasury Stock..................... (10,653) (19,877) (22,616) (26,826) (33,237) (82,137) (82,137) (82,137)
------- ------- ------- ------- ------- -------- -------- --------
Total shareholders' equity......... 77,136 70,880 73,669 80,979 81,714 39,237 49,939 63,022
------- ------- ------- ------- ------- -------- -------- --------
135,065 143,732 143,195 149,612 168,476 139,911 140,284 142,990
======= ======= ======= ======= ======= ======== ======== ========

PROJECTIONS
------------------------------
2004 2005 2006
-------- -------- --------

Cash............................... 11,877 18,030 30,192
Accounts receivable, net........... 4,022 4,465 4,929
Inventories........................ 3,448 3,637 3,881
Prepaid expenses................... 3,604 3,879 4,238
-------- -------- --------
Total current assets............... 22,952 30,010 43,240
Property, equipment and leaseholds,
net.............................. 101,897 100,830 105,775
Deferred income taxes.............. 18,657 19,590 20,570
Liquor licenses and other assets... 4,623 4,640 4,664
-------- -------- --------
148,130 155,070 174,250
======== ======== ========
Accounts payable................... 10,983 11,042 11,214
Accrued expenses................... 9,399 9,960 10,692
Accrued compensation and taxes..... 3,880 4,111 4,414
Income taxes payable............... 3,263 3,822 4,330
Current portion of long-term
debt............................. 13,191 3,723 9,832
-------- -------- --------
Total current liabilities.......... 40,717 32,658 40,482
Long-term debt, net of current
portion.......................... 15,725 12,007 2,180
Capital lease obligations, net of
current.......................... 437 432 427
Other liabilities.................. 12,706 13,248 13,836
Shareholders' equity:
Common Stock....................... 157 157 157
Additional paid-in capital......... 58,755 58,755 58,755
Retained earnings.................. 101,769 119,951 140,549
Treasury Stock..................... (82,137) (82,137) (82,137)
-------- -------- --------
Total shareholders' equity......... 78,545 96,727 117,325
-------- -------- --------
148,130 155,070 174,250
======== ======== ========

PRER14A 57th Page of 215 TOC 1st Previous Next Bottom Just 57th

UNO RESTAURANT CORPORATION
MERGER PROJECTIONS PREPARED AS OF NOVEMBER 21, 2000
STATEMENT OF CASH FLOWS

(AMOUNTS IN THOUSANDS)

[Enlarge/Download Table]

OPERATIONS:
NET INCOME......................... 1,686 2,673 5,387 9,800 4,035 6,423 10,703 13,083
DEPRECIATION AND AMORTIZATION...... 13,064 12,573 12,292 12,823 13,233 13,696 14,850 15,761
DEFERRED TAXES..................... (2,462) (2,986) (851) (2,570) (4,112) (1,749) (644) (684)
DEFERRED RENT/OTHER................ 4,625 4,612 849 559 9,545 (760) 227 205
WORKING CAPITAL.................... 1,617 3,216 764 4,414 (2,304) 4,486 (1,384) 316
------- ------- ------- ------- ------- ------- -------- --------
OPERATIONS....................... 18,530 20,088 18,441 25,026 20,397 22,095 23,752 28,681
------- ------- ------- ------- ------- ------- -------- --------
INVESTING:
CAPITAL EXPENDITURES (Net of
dispositions).................... (22,746) (11,697) (12,141) (16,192) (35,954) (23,043) (12,428) (12,330)
INVESTMENT IN JOINT VENTURE........ 0 0 0 0 0 0 0 0
OTHER (capitalized interest)....... 0 0 0 0 0 (318) (167) (162)
------- ------- ------- ------- ------- ------- -------- --------
INVESTING........................ (22,746) (11,697) (12,141) (16,192) (35,954) (23,360) (12,595) (12,492)
------- ------- ------- ------- ------- ------- -------- --------
FINANCING:
EQUITY............................. 76 295 127 1,556 2,523 0 (0) 0
TERM/SECURED NOTES................. (3,404) 0 25,640 (3,680) (3,680) (18,280) 0 0
MET LIFE MORTGAGE NOTES............ 0 4,979 (183) (200) (218) (238) (260) (283)
NEW SENIOR DEBT.................... 0 0 0 0 0 57,925 (9,600) (10,850)
NOTE PAYABLE--BANK, NET............ 15,513 3,217 (28,360) (3,165) 23,205 (30,271) (1,180) (710)
CAPITAL LEASE OBLIGATIONS.......... -- (189) (202) (177) (36) (3) (4)
SALE/LEASEBACK FUNDING............. 0 0 0 0 0 41,000 0 0
TREASURY STOCK..................... (7,753) (9,224) (2,791) (4,421) (6,060) (48,900) 0 0
------- ------- ------- ------- ------- ------- -------- --------
FINANCING........................ 4,739 (733) (5,756) (10,112) 15,593 1,200 (11,043) (11,847)
------- ------- ------- ------- ------- ------- -------- --------
CASH CHANGE........................ 523 (342) 544 (1,278) 36 (65) 114 4,342
BEGINNING CASH..................... 1,305 1,828 1,486 2,030 752 788 724 838
------- ------- ------- ------- ------- ------- -------- --------
ENDING CASH........................ 1,828 1,486 2,030 752 788 724 838 5,180
======= ======= ======= ======= ======= ======= ======== ========

PROJECTIONS
------------------------------
2004 2005 2006
-------- -------- --------

OPERATIONS:
NET INCOME......................... 15,522 18,182 20,598
DEPRECIATION AND AMORTIZATION...... 16,696 17,727 19,045
DEFERRED TAXES..................... (726) (771) (818)
DEFERRED RENT/OTHER................ 213 231 258
WORKING CAPITAL.................... 616 635 792
-------- -------- -------
OPERATIONS....................... 32,321 36,004 39,876
-------- -------- -------
INVESTING:
CAPITAL EXPENDITURES (Net of
dispositions).................... (13,286) (16,444) (23,680)
INVESTMENT IN JOINT VENTURE........ 0 0 0
OTHER (capitalized interest)....... (174) (216) (311)
-------- -------- -------
INVESTING........................ (13,460) (16,660) (23,990)
-------- -------- -------
FINANCING:
EQUITY............................. (0) (0) (0)
TERM/SECURED NOTES................. 0 0 0
MET LIFE MORTGAGE NOTES............ (309) (337) (368)
NEW SENIOR DEBT.................... (11,850) (12,850) (3,350)
NOTE PAYABLE--BANK, NET............ 0 (0) (0)
CAPITAL LEASE OBLIGATIONS.......... (4) (4) (5)
SALE/LEASEBACK FUNDING............. 0 0 0
TREASURY STOCK..................... 0 0 0
-------- -------- -------
FINANCING........................ (12,163) (13,192) (3,723)
-------- -------- -------
CASH CHANGE........................ 6,697 6,152 12,163
BEGINNING CASH..................... 5,180 11,877 18,030
-------- -------- -------
ENDING CASH........................ 11,877 18,030 30,192
======== ======== =======

PRER14A 58th Page of 215 TOC 1st Previous Next Bottom Just 58th

UNO RESTAURANT CORPORATION
MERGER PROJECTIONS PREPARED AS OF FEBRUARY 2, 2001
INCOME STATEMENT

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

[Enlarge/Download Table]

53 WKS PROJECTIONS
-------- -------------------
ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL FORECAST
1996 1997 1998 1999 2000 2001 2002 2003
-------- -------- -------- -------- -------- -------- -------- --------

REVENUES
Restaurant sales................. 159,581 164,389 177,343 198,560 213,715 241,099 263,757 279,118
Consumer product sales........... 8,351 9,115 9,384 10,568 11,772 13,051 14,356 15,792
Franchise income................. 4,209 4,516 4,549 5,105 5,683 5,954 7,210 8,897
------- ------- ------- ------- ------- ------- ------- -------
172,141 178,020 191,276 214,233 231,170 260,104 285,323 303,807

COSTS AND EXPENSES
Cost of food and beverages....... 44,064 43,994 48,567 54,683 57,679 65,375 71,620 75,979
Labor and benefits............... 51,868 54,183 58,139 64,700 70,922 82,688 90,212 95,965
Occupancy costs.................. 26,339 27,045 27,988 29,199 30,974 36,424 41,550 43,852
Other operating costs............ 14,323 15,244 17,148 17,739 19,468 22,984 25,138 26,696
General and administrative....... 12,155 13,384 13,661 16,629 19,521 20,645 21,500 22,424
Depreciation and amortization.... 12,964 12,469 12,183 12,702 13,098 13,645 14,854 15,817
Pre-opening costs................ 1,567 823 938 594 2,137 1,122 1,050 300
Special charges.................. 3,937 4,000 0 0 8,588 0 0 0
------- ------- ------- ------- ------- ------- ------- -------
167,217 171,142 178,624 196,246 222,387 242,884 265,923 281,034

OPERATING INCOME................... 4,924 6,878 12,652 17,987 8,783 17,220 19,400 22,773
INTEREST AND OTHER EXPENSE......... 2,481 2,827 3,661 3,139 3,019 8,458 6,558 5,726

INCOME BEFORE INCOME TAXES......... 2,443 4,051 8,991 14,848 5,764 8,762 12,842 17,047
Provision for income taxes......... 757 1,378 2,968 5,048 1,729 2,979 4,366 5,796
------- ------- ------- ------- ------- ------- ------- -------
INCOME BEFORE CUMULATIVE EFFECT.... 1,686 2,673 6,023 9,800 4,035 5,783 8,476 11,251
Cumulative effect.................. 636
-------
NET INCOME......................... 1,686 2,673 5,387 9,800 4,035 5,783 8,476 11,251
======= ======= ======= ======= ======= ======= ======= =======
WEIGHTED-AVERAGE SHARES
OUTSTANDING...................... 14,032 13,209 12,025 11,610 11,844 7,159 7,159 7,159
Earnings Per Share................. $ 0.12 $ 0.20 $ 0.45 $ 0.84 $ 0.34 $ 0.81 $ 1.18 $ 1.57
======= ======= ======= ======= ======= ======= ======= =======

PROJECTIONS
------------------------------

2004 2005 2006
-------- -------- --------

REVENUES
Restaurant sales................. 291,447 307,506 328,381
Consumer product sales........... 17,371 19,108 21,019
Franchise income................. 10,187 11,751 13,254
------- ------- -------
319,005 338,365 362,654
COSTS AND EXPENSES
Cost of food and beverages....... 79,671 84,306 90,320
Labor and benefits............... 100,794 106,930 114,714
Occupancy costs.................. 45,759 48,276 51,607
Other operating costs............ 28,276 30,087 32,325
General and administrative....... 23,412 24,816 26,637
Depreciation and amortization.... 16,613 17,632 18,935
Pre-opening costs................ 600 750 1,200
Special charges.................. 0 0 0
------- ------- -------
295,125 312,797 335,738
OPERATING INCOME................... 23,880 25,569 26,916
INTEREST AND OTHER EXPENSE......... 4,103 2,636 1,231
INCOME BEFORE INCOME TAXES......... 19,777 22,932 25,685
Provision for income taxes......... 6,724 7,797 8,733
------- ------- -------
INCOME BEFORE CUMULATIVE EFFECT.... 13,053 15,135 16,952
Cumulative effect..................

NET INCOME......................... 13,053 15,135 16,952
======= ======= =======
WEIGHTED-AVERAGE SHARES
OUTSTANDING...................... 7,159 7,159 7,159
Earnings Per Share................. $ 1.82 $ 2.11 $ 2.37
======= ======= =======

ASSUMPTIONS APPLICABLE TO INCOME STATEMENT, BALANCE SHEET AND STATEMENT OF CASH
FLOWS:

- a company growth rate of four to six new restaurants per year;

- a franchise growth rate of ten to 14 new restaurants per year based on
existing development agreements and letters of intent with current and
potential franchisees;

- a growth rate in consumer product sales of ten percent per year based on an
analysis of the historical growth over the past ten years; and

- the completion of $35.0 million in sale and leaseback transactions, the
incurrence of $75.0 million in new senior indebtedness and the completion of
a $47.9 million equity buyback transaction.

PRER14A 59th Page of 215 TOC 1st Previous Next Bottom Just 59th

UNO RESTAURANT CORPORATION
MERGER PROJECTIONS PREPARED AS OF FEBRUARY 2, 2001
BALANCE SHEET

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

[Enlarge/Download Table]

Cash............................... 1,828 1,486 2,030 752 788 724 827 790
Accounts receivable, net........... 2,032 2,823 1,784 2,398 3,530 3,045 3,166 3,522
Inventories........................ 2,333 2,326 2,296 2,436 2,497 2,935 3,082 3,261
Prepaid expenses................... 1,857 1,758 815 1,757 1,999 2,111 3,112 3,344
------- ------- ------- ------- ------- -------- -------- --------
Total current assets............... 8,050 8,393 6,925 7,343 8,814 8,815 10,187 10,916

Property, equipment and leaseholds,
net.............................. 120,510 125,357 125,323 128,746 141,992 114,472 119,677 115,027
Deferred income taxes.............. 3,613 6,599 7,450 10,020 14,132 14,565 15,293 16,058
Liquor licenses and other assets... 2,892 3,383 3,497 3,503 3,538 4,571 4,625 4,634
------- ------- ------- ------- ------- -------- -------- --------
135,065 143,732 143,195 149,612 168,476 142,424 149,782 146,636
======= ======= ======= ======= ======= ======== ======== ========

Accounts payable................... 6,009 6,966 6,589 7,798 9,851 10,312 10,613 10,892
Accrued expenses................... 5,033 7,563 7,949 8,668 8,459 8,140 8,394 8,867
Accrued compensation and taxes..... 2,187 2,641 2,666 3,369 2,889 3,039 3,465 3,661
Income taxes payable............... 1,581 2,076 995 2,914 558 1,680 1,365 2,318
Current portion of long-term
debt............................. 178 3,132 4,081 4,075 3,953 6,812 8,452 9,478
------- ------- ------- ------- ------- -------- -------- --------
Total current liabilities.......... 14,988 22,378 22,280 26,824 25,710 29,983 32,289 35,216

Long-term debt, net of current
portion.......................... 37,085 42,516 38,676 31,612 50,900 60,358 56,299 38,471
Capital lease obligations, net of
current.......................... 1,056 867 666 489 453 449 446 442
Other liabilities.................. 4,800 7,091 7,904 9,708 9,699 11,846 12,485 12,994

Shareholders' equity:
Common Stock....................... 137 138 138 154 158 157 157 157
Additional paid-in capital......... 53,509 53,803 53,944 55,648 58,755 58,945 58,945 58,945
Retained earnings.................. 34,143 36,816 42,203 52,003 56,038 61,821 70,297 81,548
Treasury Stock..................... (10,653) (19,877) (22,616) (26,826) (33,237) (81,137) (81,137) (81,137)
------- ------- ------- ------- ------- -------- -------- --------
Total shareholders' equity......... 77,136 70,880 73,669 80,979 81,714 39,787 48,263 59,514
------- ------- ------- ------- ------- -------- -------- --------
135,065 143,732 143,195 149,612 168,476 142,424 149,782 146,636
======= ======= ======= ======= ======= ======== ======== ========

PROJECTIONS
------------------------------
2004 2005 2006
-------- -------- --------

Cash............................... 765 6,064 12,016
Accounts receivable, net........... 3,821 4,176 4,539
Inventories........................ 3,405 3,593 3,837
Prepaid expenses................... 3,562 3,834 4,190
-------- -------- --------
Total current assets............... 11,553 17,667 24,582
Property, equipment and leaseholds,
net.............................. 113,218 112,727 118,263
Deferred income taxes.............. 16,861 17,704 18,589
Liquor licenses and other assets... 4,646 4,663 4,687
-------- -------- --------
146,279 152,762 166,121
======== ======== ========
Accounts payable................... 10,881 10,941 11,109
Accrued expenses................... 9,312 9,869 10,592
Accrued compensation and taxes..... 3,844 4,074 4,373
Income taxes payable............... 2,690 3,119 3,493
Current portion of long-term
debt............................. 10,506 5,788 14,548
-------- -------- --------
Total current liabilities.......... 37,233 33,790 44,115
Long-term debt, net of current
portion.......................... 22,506 16,723 2,180
Capital lease obligations, net of
current.......................... 437 432 427
Other liabilities.................. 13,536 14,116 14,745
Shareholders' equity:
Common Stock....................... 157 157 157
Additional paid-in capital......... 58,945 58,945 58,945
Retained earnings.................. 94,601 109,736 126,688
Treasury Stock..................... (81,137) (81,137) (81,137)
-------- -------- --------
Total shareholders' equity......... 72,566 87,702 104,654
-------- -------- --------
146,279 152,762 166,121
======== ======== ========

PRER14A 60th Page of 215 TOC 1st Previous Next Bottom Just 60th

UNO RESTAURANT CORPORATION
MERGER PROJECTIONS PREPARED AS OF FEBRUARY 2, 2001
STATEMENT OF CASH FLOWS

(AMOUNTS IN THOUSANDS)

[Enlarge/Download Table]

OPERATIONS:
NET INCOME......................... 1,686 2,673 5,387 9,800 4,035 5,783 8,476 11,251
DEPRECIATION AND AMORTIZATION...... 13,064 12,573 12,292 12,823 13,233 13,645 14,854 15,817
DEFERRED TAXES..................... (2,462) (2,986) (851) (2,570) (4,112) (197) (566) (603)
DEFERRED RENT/OTHER................ 4,625 4,612 849 559 9,545 (110) 324 229
WORKING CAPITAL.................... 1,617 3,216 764 4,414 (2,304) 2,336 (502) 1,242
------- ------- ------- ------- ------- ------- ------- -------
OPERATIONS..................... 18,530 20,088 18,441 25,026 20,397 21,457 22,585 27,936
------- ------- ------- ------- ------- ------- ------- -------
INVESTING:
CAPITAL EXPENDITURES (Net of
dispositions).................... (22,746) (11,697) (12,141) (16,192) (35,954) (20,864) (19,767) (11,009)
INVESTMENT IN JOINT VENTURE........ 0 0 0 0 0 0 0 0
OTHER (capitalized interest)....... 0 0 0 0 0 (261) (292) (158)
------- ------- ------- ------- ------- ------- ------- -------
INVESTING...................... (22,746) (11,697) (12,141) (16,192) (35,954) (21,125) (20,059) (11,168)
------- ------- ------- ------- ------- ------- ------- -------
FINANCING:
EQUITY............................. 76 295 127 1,556 2,523 190 (0) 0
TERM/SECURED NOTES................. (3,404) 0 25,640 (3,680) (3,680) (18,280) 0 0
MET LIFE MORTGAGE NOTES............ 0 4,979 (183) (200) (218) (238) (260) (283)
NEW SENIOR DEBT.................... 0 0 0 0 0 53,643 (6,492) (8,265)
NOTE PAYABLE--BANK, NET............ 15,513 3,217 (28,360) (3,165) 23,205 (22,776) 4,333 (8,254)
CAPITAL LEASE OBLIGATIONS.......... (0) (0) (189) (202) (177) (36) (3) (4)
SALE/LEASEBACK FUNDING............. 0 0 0 0 0 35,000 0 0
TREASURY STOCK..................... (7,753) (9,224) (2,791) (4,421) (6,060) (47,900) 0 0
------- ------- ------- ------- ------- ------- ------- -------
FINANCING...................... 4,739 (733) (5,756) (10,112) 15,593 (397) (2,422) (16,806)
------- ------- ------- ------- ------- ------- ------- -------
CASH CHANGE........................ 523 (342) 544 (1,278) 36 (65) 104 (38)
BEGINNING CASH..................... 1,305 1,828 1,486 2,030 752 788 724 828
------- ------- ------- ------- ------- ------- ------- -------
ENDING CASH........................ 1,828 1,486 2,030 752 788 724 828 790
======= ======= ======= ======= ======= ======= ======= =======

PROJECTIONS
------------------------------
2004 2005 2006
-------- -------- --------

OPERATIONS:
NET INCOME......................... 13,053 15,135 16,952
DEPRECIATION AND AMORTIZATION...... 16,613 17,632 18,935
DEFERRED TAXES..................... (641) (681) (723)
DEFERRED RENT/OTHER................ 249 269 298
WORKING CAPITAL.................... 446 592 748
------- ------- -------
OPERATIONS..................... 29,720 32,947 36,211
------- ------- -------
INVESTING:
CAPITAL EXPENDITURES (Net of
dispositions).................... (14,611) (16,919) (24,155)
INVESTMENT IN JOINT VENTURE........ 0 0 0
OTHER (capitalized interest)....... (192) (222) (317)
------- ------- -------
INVESTING...................... (14,803) (17,141) (24,472)
------- ------- -------
FINANCING:
EQUITY............................. (0) 0 0
TERM/SECURED NOTES................. 0 0 0
MET LIFE MORTGAGE NOTES............ (309) (337) (368)
NEW SENIOR DEBT.................... (9,165) (10,165) (5,415)
NOTE PAYABLE--BANK, NET............ (5,463) 0 0
CAPITAL LEASE OBLIGATIONS.......... (4) (4) (5)
SALE/LEASEBACK FUNDING............. 0 0 0
TREASURY STOCK..................... 0 0 0
------- ------- -------
FINANCING...................... (14,942) (10,507) (5,788)
------- ------- -------
CASH CHANGE........................ (25) 5,299 5,952
BEGINNING CASH..................... 790 765 6,064
------- ------- -------
ENDING CASH........................ 765 6,064 12,016
======= ======= =======

PRER14A 61st Page of 215 TOC 1st Previous Next Bottom Just 61st

OPINION OF FINANCIAL ADVISOR TO THE SPECIAL COMMITTEE

Pursuant to a letter agreement dated November 6, 2000 (the "Engagement
Letter"), Adams, Harkness & Hill was retained by the special committee to render
a fairness opinion as to the fairness, from a financial point of view, of the
consideration to be received by Uno stockholders other than the Continuing
Stockholders in connection with the merger. Adams, Harkness & Hill is a
nationally recognized investment banking firm and is regularly engaged in the
valuation of businesses and their securities in connection with mergers and
acquisitions, negotiated underwritings, private placements and valuations for
corporate and other purposes.

Pursuant to the terms of the Engagement Letter, Uno paid Adams, Harkness &
Hill a retainer fee of $25,000 and a fee of $250,000 upon the delivery of its
written fairness opinion dated April 4, 2001 (which fee was payable regardless
of the conclusions expressed therein). Uno also agreed to reimburse Adams,
Harkness & Hill for all reasonable fees and disbursements of its counsel and all
of its reasonable travel and other out-of-pocket expenses arising in connection
with its engagement. In addition, Uno agreed to indemnify Adams, Harkness & Hill
and its affiliates to the full extent permitted by law against liabilities
relating to or arising out of its engagement, except for liabilities found to
have resulted from the bad faith, willful misconduct or gross negligence of
Adams, Harkness & Hill. The merger agreement provides that a condition to the
obligations of Uno to complete the merger is the affirmation of Adams,
Harkness & Hill's opinion on or within five days prior to the special meeting of
stockholders.

Prior to the delivery of its fairness opinion dated April 4, 2001, Adams,
Harkness & Hill reviewed a copy of the latest draft of the merger agreement.
Subsequently, Adams, Harkness & Hill also reviewed a copy of the executed merger
agreement dated April 19, 2001.

OPINION OF ADAMS, HARKNESS & HILL

At the meeting of the special committee on April 4, 2001, Adams, Harkness &
Hill rendered its opinion, in writing, that, as of that date, based upon and
subject to the various considerations set forth in the opinion, the
consideration to be received pursuant to the merger agreement was fair, from a
financial point of view, to the holders of shares of Uno common stock other than
the Continuing Stockholders.

THE FULL TEXT OF THE OPINION OF ADAMS, HARKNESS & HILL DATED APRIL 4, 2001,
WHICH SETS FORTH, AMONG OTHER THINGS, THE ASSUMPTIONS MADE, PROCEDURES FOLLOWED,
MATTERS CONSIDERED AND LIMITATIONS ON THE SCOPE OF THE REVIEW UNDERTAKEN BY
ADAMS, HARKNESS & HILL IN RENDERING ITS OPINION, IS ATTACHED AS EXHIBIT C TO
THIS PROXY STATEMENT AND IS INCORPORATED HEREIN BY REFERENCE. STOCKHOLDERS ARE
URGED TO, AND SHOULD, READ THE OPINION CAREFULLY AND IN ITS ENTIRETY. THE
OPINION AND PRESENTATIONS OF ADAMS, HARKNESS & HILL ARE AVAILABLE FOR INSPECTION
AND COPYING AT UNO'S EXECUTIVE OFFICES DURING REGULAR BUSINESS HOURS. ADAMS,
HARKNESS & HILL'S OPINION IS DIRECTED TO THE SPECIAL COMMITTEE AND ADDRESSES
ONLY THE FAIRNESS OF THE CONSIDERATION TO BE RECEIVED BY THE UNO STOCKHOLDERS
OTHER THAN THE CONTINUING STOCKHOLDERS, PURSUANT TO THE MERGER AGREEMENT, FROM A
FINANCIAL POINT OF VIEW AS OF APRIL 4, 2001, AND DOES NOT ADDRESS ANY OTHER
ASPECT OF THE MERGER OR CONSTITUTE A RECOMMENDATION TO ANY HOLDER OF COMMON
STOCK AS TO HOW TO VOTE AT THE SPECIAL MEETING. THE SUMMARY OF THE OPINION OF
ADAMS, HARKNESS & HILL SET FORTH IN THIS PROXY STATEMENT IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH OPINION.

The following is a summary of the various sources of information and
valuation methodologies used by Adams, Harkness & Hill in arriving at its
opinion. To assess the fairness of the transaction,

PRER14A 62nd Page of 215 TOC 1st Previous Next Bottom Just 62nd

Adams, Harkness & Hill employed analyses based on the following standard
assessments of financial performance:

- The financial performance and relative valuations of public company peers,
chosen for metric-based implied public trading values for companies
possessing similar strategic and operating characteristics;

- Relative valuation and transaction premiums associated with selected
precedent acquisitions, chosen for metric-based implied transaction values
for companies possessing similar strategic and operating characteristics;

- Absolute and relative stock price performance, chosen for an absolute and
relative comparison with companies possessing similar strategic and
operating characteristics; and

- Discounted cash flow analysis, chosen for assessment of forecasts based on
prior performance and industry variable at various discount rates.

In conducting its investigation and analysis and in arriving at its opinion,
Adams, Harkness & Hill reviewed the information and took into account the
investment, financial and economic factors it deemed relevant and material under
the circumstances. The material actions undertaken by Adams, Harkness & Hill in
its capacity as financial advisor to the special committee were as follows:

- Reviewed publicly-available information, including but not limited to
Uno's recent filings with the Securities and Exchange Commission;

- Reviewed internal financial information prepared by Uno's management
concerning the current status of Uno's business and historical financial
performance, including interim financial performance data (including
monthly same store sales trends) not yet disclosed to the public;

- Reviewed internal financial information prepared by Uno's management
concerning the projected performance of Uno assuming the merger is not
completed (and assuming the current public ownership and capital
structure) (the "Going Concern Projections");

- Reviewed internal financial information prepared by Uno's management
concerning the projected performance of Uno assuming the merger is
completed (the "Merger Projections");

- Held discussions with members of Uno's senior management concerning Uno's
historical and current financial condition and operating results, as well
as its future prospects (as reflected by both the Going Concern
Projections and the Merger Projections);

- Held discussions with Aaron D. Spencer concerning the merger and his
intentions and objectives regarding his majority ownership position and
Uno's future;

- Held discussions with the special committee concerning the evaluation by
the board of directors of various means of enhancing stockholder value,
including the unsuccessful public offering of Uno's common stock in 1999
and prior informal proposals by Mr. Spencer to acquire Uno in a leveraged
transaction;

- Compared the historical stock market prices and trading activity of Uno's
common stock with those of other publicly traded companies that Adams,
Harkness & Hill deemed relevant;

- Compared the financial position and operating results of Uno with those of
other publicly traded companies that Adams, Harkness & Hill deemed
relevant;

- Compared the proposed financial terms of the merger with the terms of
other change of control transactions that Adams, Harkness & Hill deemed
relevant, including certain transactions involving controlling
shareholders;

PRER14A 63rd Page of 215 TOC 1st Previous Next Bottom Just 63rd

- Reviewed the terms of the financing proposal for the merger made to the
Continuing Stockholders by Fleet National Bank (noting that the proposal
allowed for up to $10.00 per share cash consideration to the minority
stockholders);

- Reviewed the merger agreement in its draft form, as dated March 14, 2001;

- Reviewed relevant industry market research studies, investment research
reports for Uno's competitors, and key economic and market indicators,
including interest rates, commodities prices and general stock market
performance; and

- Contacted, with the permission of and under limitations set by the special
committee, six national restaurant chains and four financial investors to
solicit and qualify their interest in a negotiated acquisition of Uno. See
"--Limited Solicitation of Potential Acquirors."

Other than as set forth above, Adams, Harkness & Hill did not review any
additional information in preparing its opinion that, independently, was
material to its analysis. The special committee did not place any limitation,
other than those associated with the solicitation of potential acquirors, upon
Adams, Harkness & Hill with respect to the procedures followed or factors
considered by Adams, Harkness & Hill in rendering its opinion. In rendering its
opinion, Adams, Harkness & Hill assumed and relied upon the accuracy and
completeness of all of the financial and other information that was publicly
available or provided to Adams, Harkness & Hill by, or on behalf of, Uno, and
did not independently verify such information. Adams, Harkness & Hill assumed,
with the special committee's consent, that:

- All material assets and liabilities (contingent or otherwise, known or
unknown) of Uno as set forth in its financial statements are accurate;

- Obtaining any regulatory and other approvals and third party consents
required for completion of the merger would not have a material effect on
the anticipated benefits of the merger; and

- The draft of the merger agreement reviewed by Adams, Harkness & Hill would
conform in all material respects to the merger agreement in its final
form, and that the merger would be completed in accordance with the terms
set forth in the merger agreement in its final form, without any amendment
thereto and without waiver by Uno of any of the conditions to their
respective obligations thereunder.

Adams, Harkness & Hill also assumed, with the special committee's consent,
that both the Going Concern Projections and the Merger Projections were
reasonably prepared and based upon the best available estimates and good faith
judgments of Uno's management as to the future performance of Uno under either
scenario. The Going Concern Projections and the Merger Projections were
substantively similar, reflecting the same operating assumptions and general
competitive and market conditions, with the primary exception being the
significantly higher debt level assumed in the Merger Projections, and the
subsequent redirection of free cash flow for debt service. Given the use of cash
in the Merger Projections for debt service, new store openings are curtailed
and, accordingly, year to year revenue growth is lower in the Merger
Projections.

In conducting its review, Adams, Harkness & Hill did not obtain an
independent evaluation or appraisal of any of the assets or liabilities
(contingent or otherwise) of Uno. The valuation analyses conducted by Adams,
Harkness & Hill in rendering its opinion (specifically, the discounted cash flow
analysis, the historical stock price performance analysis, the transaction
premiums paid analysis, and the peer group analysis) constituted a "going
concern" analysis of Uno. Adams, Harkness & Hill's opinion did not predict or
take into account any possible economic, monetary or other changes which may
occur, or information which may come available, after the date of its written
opinion.

PRER14A 64th Page of 215 TOC 1st Previous Next Bottom Just 64th

PUBLIC COMPANY PEER ANALYSIS

Uno owns and operates 113 and franchises 68 casual dining, full-service
restaurants operating primarily under the name Pizzeria Uno ... Chicago Bar &
Grill. The restaurants feature Uno's signature Chicago-style, deep-dish pizza
and a selection of baked, grilled and sauteed entrees, including gourmet thin
crust pizza, pasta, fajitas, ribs, steak and chicken, as well as a variety of
appetizers, salads, sandwiches and desserts. Company-owned restaurants are
located primarily in major metropolitan markets from New England to Virginia, as
well as Florida, Chicago and Denver, and franchised restaurants are located
throughout the United States and Puerto Rico as well as Seoul, Korea, Lahor,
Pakistan and Dubai, United Arab Emirates. Uno also operates a consumer products
business that distributes Uno's branded and non-branded, Chicago-style deep-dish
pizza, calzones, and other pizza products in hotels, movie theater chains,
supermarkets, food courts and airports.

Adams, Harkness & Hill identified a group of publicly traded companies in
the restaurant industry that it deemed comparable to Uno based on their similar
full-service, casual dining strategy, the markets served, and their financial
performance (collectively, the "Peer Group Companies" or "Peer Group"). Adams,
Harkness & Hill identified and evaluated 25 public companies in the casual
dining segment that it considered to be relatively similar to Uno, but
acknowledging Uno's relatively small public market capitalization (i.e., the
value of all common shares outstanding) and the relative valuation discount
generally associated with companies possessing small public market
capitalization, focused its analysis on the 10 companies with a market
capitalization of less than $250 million. Adams, Harkness & Hill noted that
Uno's market capitalization had never exceeded $250 million since becoming a
public company in March of 1987. Adams, Harkness & Hill also noted the generally
lower profitability (as defined by the last 12 months operating margin) of these
10 companies, primarily reflecting the impact of their smaller size on their
ability to achieve economies of scale.

Adams, Harkness & Hill compared certain financial measures and metrics of
Uno with those of the Peer Group Companies. Such information included:

- Market Capitalization ("MC");

- Enterprise Value ("EV");

- Last Twelve Months ("LTM") Revenue;

- LTM Operating Margin;

- Enterprise Value / LTM Revenue;

- Price / Historical LTM Earnings Per Share Ratio ("Trailing LTM P/E");

- Price / Projected Calendar 2001 Earnings Per Share Ratio ("Forward 2001
P/E"); and

- Price / Book Value Per Share Ratio ("Trailing LTM P/E").

All financial measures and metrics involving Peer Group Companies' common
stock prices per share are as of the close of trading of April 3, 2001, one day
prior to the date of Adams, Harkness &

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Hill opinion. In addition, all data is in millions unless otherwise labeled or
noted. The Peer Group, made up of companies possessing public market
capitalization of less than $250 million, consists of:

[Enlarge/Download Table]

MARKET ENTERPRISE LTM LTM OPERATING
COMPANY CAPITALIZATION(A) VALUE(A) REVENUE(B) MARGIN(B)
------- ----------------- ---------- ---------- -------------

Avado Brands, Inc........................... $ 18.6 $324.7 $685.8 NM(e)
Champps Entertainment, Inc.................. $ 89.3 $ 98.7 $122.8 5.9%
Chart House Enterprises, Inc................ $ 30.1 $ 59.6 $141.7 1.2%
Chicago Pizza & Brewery, Inc................ $ 19.0 $ 23.6 $ 52.3 2.0%
Dave & Busters, Inc......................... $109.1 $209.8 $332.3 8.4%
Famous Dave's of America, Inc............... $ 35.4 $ 43.4 $ 70.2 3.7%
Lone Star Steakhouse & Saloon............... $229.0 $199.9 $575.9 3.7%
Max & Erma's, Inc........................... $ 22.2 $ 59.1 $131.0 3.7%
Morton's Restaurant Group, Inc.............. $ 89.8 $177.3 $248.4 8.4%
Roadhouse Grill, Inc........................ $ 15.4 $ 53.3 $167.4 NM(e)

Mean(c)..................................... $ 65.8 $124.9 $252.8 4.6%
Median(c)................................... $ 32.7 $ 79.1 $154.6 3.7%

Uno Restaurant Corporation(d)............... $109.2 $165.1 $238.3 7.3%

------------------------

(a) Market Capitalization and Enterprise Value derived from share prices as of
the close of trading on April 3, 2001 and fully diluted shares outstanding
and debt figures taken from each respective company's most recent Quarterly
Report on Form 10-Q or Annual Report on Form 10-K filed prior to April 3,
2001.

(b) LTM Revenue and Operating Margin data obtained from each respective
company's most recent Quarterly Report on Form 10-Q or Annual Report on 10-K
filed prior to April 3, 2001.

(d) All data presented reflects the consideration offered in the merger.

(e) NM = Not meaningful. Avado Brands and Roadhouse Grill have negative
operating margins and are not included in calculating the mean and median.

Adams, Harkness & Hill concluded that publicly-traded companies in the
casual dining segment of the restaurant industry are valued primarily on the
bases of historical and projected revenue growth, profitability and overall
size, all of which are reflected in the individual company's ratio of Enterprise
Value to LTM Revenue ("EV / LTM Revenue") and the multiple of Price to Earnings
("P/E"). Adams, Harkness & Hill employed an EV-based valuation in this analysis
because this methodology implies value based on a company's operations,
regardless of how the company finances those operations. To determine EV, MC is
calculated as the product of a company's common stock price per share (Adams,
Harkness & Hill used the closing price on April 3, 2001 for all public company
comparative analyses) multiplied by the number of diluted shares outstanding.
The MC is then adjusted for a company's debt and cash positions by adding the
debt balance and subtracting the cash balance to arrive at an EV. Unlike
EV-based valuation methodologies, P/E-based valuation methodologies imply a
value based on net after-tax earnings inclusive of the earnings impact of how
the company finances its operations. The following equation illustrates the
manner in which EV has been calculated:

EV = ((market value of equity) + (debt)) - (cash, cash equivalents and
short-term investments)

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In descending order of EV / LTM Revenue, the Peer Group Companies, inclusive
of Uno, ranked as follows:

[Download Table]

COMPANY EV / LTM REVENUE (A),(B)
------- ------------------------

Champps Entertainment, Inc............................. 0.8x
Morton's Restaurant Group, Inc......................... 0.7x
Dave & Busters, Inc.................................... 0.6x
Famous Dave's of America, Inc.......................... 0.6x
Avado Brands, Inc...................................... 0.5x
Chicago Pizza & Brewery, Inc........................... 0.5x
Max & Erma's, Inc...................................... 0.5x
Chart House Enterprises, Inc........................... 0.4x
Lone Star Steakhouse & Saloon.......................... 0.3x
Roadhouse Grill, Inc................................... 0.3x

Mean................................................... 0.5x
Median................................................. 0.5x

Uno Restaurant Corporation (c)......................... 0.7x

------------------------

(a) Enterprise Value derived from share prices as of close of trading on
April 3, 2001 and fully diluted shares outstanding and debt figures taken
from each company's Quarterly Report on Form 10-Q filed prior to April 3,
2001.

(b) LTM data obtained from each respective company's most recent Quarterly
Report on Form 10-Q filed prior to April 3, 2001.

Adams, Harkness & Hill noted Uno's EV / LTM Revenue multiple implied in the
merger proposal exceeded both the mean and the median of the Peer Group. Adams,
Harkness & Hill also noted Uno's EV/LTM Revenue multiple had historically lagged
behind the mean and median multiple of the Peer Group. This reflects Uno's
historically lower revenue and earnings growth, as well as the variability of
revenue and earnings. Adams, Harkness & Hill noted Uno's EV/LTM Revenue multiple
was .58 on October 23, 2000, two days prior to the public announcement of the
Continuing Stockholders' initial offer to take Uno private at a per share
purchase price of $8.75. Adams, Harkness & Hill considered October 23, 2000 the
appropriate date for the comparison of financial metrics and implied premiums
paid in its analysis, because there was a disproportionately high trading volume
and a material increase in Uno's share price on October 24, 2000, reflecting
what Adams, Harkness & Hill believes to be speculative trading based on rumors
of the initial offer.

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In descending order of Trailing LTM P/E (where earnings per share estimates
were available), the Peer Group, inclusive of Uno, is ranked as follows:

[Download Table]

COMPANY TRAILING LTM P/E (A),(B)
------- ------------------------

Famous Dave's of America, Inc........................... 16.8x
Lone Star Steakhouse & Saloon........................... 14.2x
Champps Entertainment, Inc.............................. 13.7x
Max & Erma's, Inc....................................... 12.1x
Chicago Pizza & Brewery, Inc............................ 9.8x
Dave & Busters, Inc..................................... 8.9x
Morton's Restaurant Group, Inc.......................... 8.9x
Avado Brands, Inc....................................... NM
Chart House Enterprises, Inc............................ NM
Roadhouse Grill, Inc.................................... NM
Mean (c)................................................ 12.1x
Median (c).............................................. 12.1x
Uno Restaurant Corporation (d).......................... 11.3x

------------------------

(a) Share prices as of close of trading on April 3, 2001. Trailing LTM P/E data
obtained from each respective company's most recent Quarterly Report on
Form 10-Q filed prior to April 3, 2001.

(b) NM = Not meaningful. In the case of Price/Earnings ratios, the companies
noted as NM did not have earnings and were not included in calculating the
mean and median.

(d) All data presented reflects the consideration offered in the merger.

In descending order of Forward 2001 P/E (where earnings per share estimates
were available), the Peer Group Companies, inclusive of Uno, are ranked as
follows:

[Download Table]

COMPANY FORWARD 2001E P/E(A)
------- --------------------

Max & Erma's, Inc......................................... 12.5x
Champps Entertainment, Inc................................ 10.1x
Lone Star Steakhouse & Saloon............................. 10.1x
Famous Dave's of America, Inc............................. 8.6x
Morton's Restaurant Group, Inc............................ 8.6x
Dave & Busters, Inc....................................... 5.2x
Avado Brands, Inc......................................... NA
Chart House Enterprises, Inc.............................. NA
Chicago Pizza & Brewery, Inc.............................. NA
Roadhouse Grill, Inc...................................... NA
Mean (b).................................................. 9.2x
Median (b)................................................ 9.4x
Uno Restaurant Corporation (c)(d)......................... 11.5x

------------------------

(a) Forward earnings estimates obtained from I/B/E/S International, Inc. and
Zacks Investment Research, Inc. where available, if not available then "NA."
Those companies without available forward earnings estimates are marked NA
and not included in the calculation of the mean and median. Share prices as
of close of trading on April 3, 2001.

(b) Mean and median calculations are based on Peer Group Companies and do not
include Uno.

(d) Based on estimates provided by Uno management.

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Adams, Harkness & Hill noted Uno's Trailing LTM P/E as reflected in the
merger proposal was below both the mean and median of the Peer Group. Adams,
Harkness & Hill noted that Uno's Forward 2001 P/E as reflected in the merger
proposal was above both the mean and median of the Peer Group. Adams,
Harkness & Hill noted the mean and median ratio generally compared favorably to
P/E ratios achieved by Uno's in the past, reflecting Uno's historically lower
earnings growth, as well as the variability of earnings.

To arrive at Uno's Trailing LTM P/E and Forward 2001 P/E, Adams, Harkness &
Hill used Uno's internal management projections, as Uno is no longer covered by
independent institutional research analysts, and, as such, externally developed
projections are not available. Adams, Harkness & Hill noted the absence of such
institutional research coverage likely increases the difficulty for investors to
perform analyses, because investors have no sources of third-party analysis upon
which to base investment decisions.

In descending order of Price / Book Value Per Share, the Peer Group
Companies, inclusive of Uno, ranked as follows:

[Enlarge/Download Table]

COMPANY PRICE / BOOK VALUE PER SHARE (A),(B)
------- ------------------------------------

Max & Erma's, Inc............................... 1.00x
Champps Entertainment, Inc...................... .22x
Chicago Pizza & Brewery, Inc.................... .16x
Famous Dave's of America, Inc................... .12x
Chart House Enterprises, Inc.................... .06x
Dave & Busters, Inc............................. .05x
Roadhouse Grill, Inc............................ .03x
Lone Star Steakhouse & Saloon................... .02x
Avado Brands, Inc............................... .01x
Morton's Restaurant Group, Inc.................. NM

Mean(c)......................................... .19x
Median(c)....................................... .06x

Uno Restaurant Corporation(d)................... .12x

------------------------

(a) Share prices as of close of trading on April 3, 2001. Book Value calculated
from and as of each respective company's most recent Quarterly Report on
Form 10-Q or Annual Report on Form 10-K filed prior to April 3, 2000.

(b) NM = Not meaningful. In the case of Price/Book Value Per Share ratios, the
companies with NM did not have positive book value.

(d) All data presented reflects the consideration offered in the merger.

Adams, Harkness & Hill noted Uno's multiple of Price to Book Value Per Share
is just below the mean value of the Peer Group and is above the median of the
Peer Group. Because companies in the restaurant industry utilize various methods
of financing their restaurant operations, both on balance sheet and off balance
sheet, Adams, Harkness & Hill advised the special committee that it did not
believe the multiple of Price to Book Value Per Share was relevant to its
analysis. Further, Adams, Harkness & Hill noted Uno's intention to sell and
leaseback certain restaurants that would generate approximately $25 million in
proceeds to be used for debt reduction.

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PRECEDENT TRANSACTION ANALYSIS

Adams, Harkness & Hill assessed the transaction premiums and relative
valuation associated with selected precedent publicly disclosed acquisitions it
deemed relevant to its inquiry. In particular, Adams, Harkness & Hill reviewed
29 precedent transactions (the "Precedent Transactions") involving selected
restaurant companies from November 1995 to November 2000 and involving the
acquisition of the equity shares of publicly-traded companies for which share
price data was available. The precedent transaction analysis includes companies
that possess similar strategic and operating characteristics. In addition, the
transactions that were assessed represented change in control transactions.
These transactions involve restaurants, which meet the strategic and operating
characteristics threshold, involve public companies that are/were going-private
to meet the change in control criteria, and a number of these transactions
involved the purchase by controlling owners effecting a going-private
transaction.

Premiums paid in precedent public company change of control transactions
typically imply the range of consideration acquirors are willing to pay above a
seller's stock price prior to the announcement of the relevant transaction. In
descending order of premiums paid based on the seller's stock price one trading
day prior to the announcement of the transaction, the selected transactions
analyzed by Adams, Harkness & Hill were:

[Enlarge/Download Table]

ANNOUNCEMENT TRANSACTION ONE DAY ONE WEEK FOUR WEEK
TARGET ACQUIROR DATE VALUE(A) PREMIUM(A) PREMIUM(A) PREMIUM(A)
------ ----------------------- ------------- ----------- ----------- ----------- -----------

Taco Cabana, Inc............. Carrols Corp. 10/26/00 $151.4 118% 110% 100%
Spaghetti Warehouse, Inc..... Consolidated Restaurant
Companies, Inc. 9/18/98 $ 54.3 79% 70% 47%
Timber Lodge Steakhouse...... Santa Barbara
Restaurant Group 12/12/97 $ 30.4 74% 74% 81%
Rainforest Cafe, Inc.(b)..... Landry's Seafood
Restaurants 9/26/00 $ 70.8 60% 58% 14%
Rudy's Restaurant Group...... Benihana, Inc. 7/23/97 $ 18.8 51% 70% 72%
Il Fornaio America Corp.*.... Bruckmann Rosser
Sherrill & Co. 11/16/00 $ 91.2 50% 45% 68%
DavCo Restaurants(c)......... Investor Group 9/5/97 $133.6 50% 50% 50%
NPC International, Inc....... Investor Group 12/13/00 $ 94.5 44% 44% 33%
VICORP Restaurants, Inc.*.... Investor Group 2/15/01 $174.2 36% 35% 51%
Bertucci's, Inc.............. NE Restaurant Co Inc 4/3/98 $ 96.5 35% 35% 35%
Mike's Restaurants,
Inc.(d).................... Pizza Delight Corp. 10/30/00 $ 14.5 30% 24% 16%
Perkins Family Restaurant,
LP......................... The Restaurant Company 8/4/97 $ 76.3 29% 27% 32%
El Chico Restaurants......... Investor Group 9/23/97 $ 49.2 21% 17% 26%
PJ America, Inc.*(e)......... Investor Group 3/23/01 $ 22.7 21% 43% 16%
Quizno's Corp.*.............. Quizno's Corp. 11/13/00 $ 11.7 19% 19% 24%
Sagebrush, Inc............... WSMP, Inc. 9/26/97 $ 39.4 16% 13% 21%
Buffets, Inc................. Caxton-Iseman Capital 6/5/00 $ 643 14% 26% 23%
Logans Roadhouse, Inc........ Cracker Barrel Old
Country Store, Inc. 12/11/98 $178.3 14% 10% 34%
Back Bay Restaurants......... SRC Holdings 12/3/98 $ 38.9 12% 14% 28%
International Dairy Queen, Berkshire Hathaway,
Inc........................ Inc. 10/21/97 $596.9 12% 9% 9%
Bayport Restaurant Group..... Landry's Seafood
Restaurants 4/20/96 $ 74.1 11% 29% 20%
Pollo Tropical, Inc.......... Carrols Corp. 6/4/98 $ 94.6 10% 7% 18%
Bugaboo Creek Steak House,
Inc........................ Longhorn Steaks, Inc. 6/14/96 $ 48.5 9% 16% 11%
Sbarro, Inc.(f).............. Investor Group 11/25/98 $386.4 8% 10% 8%
NPC International, Inc.*..... Investor Group 12/13/00 $ 88.3 7% 9% 31%
BFX Hospitality Group, Hospitality Concepts,
Inc........................ LLC 8/12/00 $ 8.9 6% 6% 6%

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[Enlarge/Download Table]

HomeTown Buffet, Inc......... Buffets, Inc. 6/4/96 $174.0 -3% 7% 3%
Koo Koo Roo, Inc.(g)......... Family Restaurants,
Inc. 6/10/98 $158.0 -15% -7% -3%

------------------------------

* Denotes transactions announced, but not yet closed.

(a) All Transaction Values are in millions and all Transaction Value statistics
and premia information are from Securities Data Company, Inc., or each of
the respective company's most recent Quarterly Report on Form 10-Q or Annual
Report on Form 10-K filed prior to the respective acquisition.

(b) Excludes a one-time impairment charge of $101.5 million incurred in the
quarter ended July 2, 2000.

(d) Amount of debt used to calculate data is taken from the company's Annual
Report on Form 10-K. The company's most recent Quarterly Report on
Form 10-Q does not provide debt data. Converted into US dollars from
Canadian dollars at a rate of .66 Canadian dollars to 1 US dollar.

(e) Excludes one time expenses of $9.5 million.

(f) An offer from the Sbarro family to purchase 65% of the company they did not
own.

(g) Excludes one time charges for store closings and $11.8 million in
restructuring charges.

Based upon Adams, Harkness & Hill's analysis of premiums paid in selected
precedent transactions, the mean and median premiums (discounts) paid in
relation to sellers' share prices (using the buyer's share price on the day
prior to the announcement date of the transaction to calculate consideration in
stock transactions) along with the implied premium offered by the merger
consideration in relation to Uno's share price for the day, week and month prior
are listed below:

[Download Table]

ONE ONE FOUR
DAY WEEK WEEK
PREMIUM(A) PREMIUM(A) PREMIUM(A)
---------- ---------- ----------

Mean....................................... 29% 30% 31%
Median..................................... 20% 24% 25%
Uno(b)..................................... 44% 38% 22%

------------------------

(a) All premia information is from Securities Data Company, Inc. or calculated
from trading statistics and deal value on a price per share basis.

(b) Based on the price of Uno's common stock on October 23, 2000 rather than
October 24, 2000 because of unusual trading activity in Uno common stock on
October 24, 2000.

Adams, Harkness & Hill noted the premium reflected in the merger proposal
was above the one day mean and median premium, and the one week mean and median
premium implied by the Precedent Transactions. Adams, Harkness & Hill also noted
that the four week premium reflected in the merger proposal was below the mean
and median implied by the Precedent Transactions.

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The following table sets forth a summary of the ranges of financial
multiples and ratios associated with the Precedent Transactions compared to the
corresponding multiple or ratio implied by the proposed merger consideration:

[Enlarge/Download Table]

HIGH MEAN MEDIAN UNO
VALUE VALUE VALUE LOW VALUE OFFER (A)
-------- -------- -------- --------- ---------

Transaction Value(b).............................. $643.0 $124.9 $76.3 $8.8 $97.7
Transaction Value / LTM Revenue(c)................ 2.0x 0.9x 0.8x 0.2x 0.4x
Target EV / LTM Operating Income(c,d)............. 77.3x 18.6x 14.8x 4.9x 9.5x
Target EV / LTM EBITDA(c,d)....................... 37.3x 9.9x 7.4x 2.5x 5.4x
Target MC / LTM Net Income(c,d)................... 255.4x 30.5x 15.9x 5.4x 11.3x

------------------------

(a) Transaction Value for Uno offer is estimated at 38% of the total number of
shares outstanding at $9.75 per share plus $56.2 million in outstanding
debt.

(b) Transaction Values are in millions.

(c) All data obtained from Securities Data Company, Inc. or each of the
respective company's most recent Quarterly Report on Form 10-Q or Annual
Report on Form 10-K filed prior to the respective acquisition.

(d) Price per share data used to calculate each company's MC and EV for the
respective multiples are the companies' share prices one day prior to the
announcement, or in the case of Uno, October 23, 2000 because of the unusual
trading activity in Uno common stock on October 24, 2000.

Adams, Harkness & Hill noted that the financial ratios reflected in the
merger proposal fall below the mean and median values for the Precedent
Transactions.

STOCK PRICE PERFORMANCE ANALYSIS

Adams, Harkness & Hill examined the following common stock closing price
data for Uno:

1) Price performance from Uno's initial public offering on March 30, 1997
through October 23, 2000 and April 3, 2001, compared to the performance of
the NASDAQ Composite and S&P 500 index, and;

2) Price performance from January 1, 1999, through October 23, 2000 and
April 3, 2001, compared to the S&P Small Cap Restaurant index and the Peer
Group Companies index.

Based on the above analyses, Adams, Harkness & Hill observed that, from
Uno's initial public offering on March 30, 1987 through October 23, 2000, Uno's
per share price had decreased 28.6%. During the same time period, the NASDAQ
composite increased 712.1% and the S&P 500 index increased 382.6%. Adams,
Harkness & Hill also observed that, from Uno's initial public offering on
March 30, 1987 through April 3, 2001, Uno's per share price had increased 8.0%.
During that same period, the NASDAQ composite increased 291.8% and the S&P 500
index increased 282.6%. On July 16, 1999, Uno's share price reached an all-time
high at $12.67 per share, which represents an annual growth rate since the
initial public offering of 3.7%.

Further, Adams, Harkness & Hill observed that Uno's per share price had
decreased 13% from January 1, 1999 through October 23, 2000, compared to an
increase of 14% in the S&P Small Cap Restaurant Index and a 45% decrease in the
Peer Group Companies index over the same time period. Adams, Harkness & Hill
also observed that Uno's per share price had increased 33% from January 1, 1999,
through April 3, 2001, compared to an increase of 30% in the S&P Small Cap
Restaurant Index and a 41% decrease in the Peer Group Companies index over the
same time period.

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Adams, Harkness & Hill used price information on October 23, 2000 in these
calculations rather than October 24, 2000, the day before the public
announcement, because of the unusual trading activity in Uno common stock on
October 24, 2000, reflecting what Adams, Harkness & Hill believes to be
speculative trading based on rumors of the initial offer.

DISCOUNTED CASH FLOW ANALYSIS

Adams, Harkness & Hill performed a discounted cash flow analysis to estimate
the present value of the stand-alone unlevered (i.e., before interest expense)
after-tax cash flows of Uno. To perform this analysis, Adams, Harkness & Hill
used the following assumptions and the following sources for data:

- Uno Management's financial projections, assuming the merger is completed,
for the fiscal year ended September 30, 2001 through the year ended
October 2, 2005.

- Uno's unlevered after-tax cash flows were calculated as the after-tax
operating earnings of Uno adjusted for the addition of non-cash expenses
and the deduction of uses of cash not reflected in the income statement.

- Uno's weighted-average cost of capital ranging from 13.0% to 15.0%.

- Terminal value based on Uno's earnings before interest, taxes,
depreciation and amortization ("EBITDA") for the fiscal year ended
October 2, 2005 multiplied by EBITDA multiples ranging from 4.0 to 6.0.

- Terminal value based on Uno's cash flow for the fiscal year ended
October 2, 2005 multiplied by a perpetual growth rate ranging from 4.0% to
6.0%.

- In order to calculate an appropriate range of terminal values, Adams,
Harkness & Hill also calculated an EV/EBITDA multiple for each of the Peer
Group Companies and arrived at a range of 3.9x to 21.3x with an average of
7.8x. Adams, Harkness & Hill noted that Uno has historically traded near
the bottom of the range. Adams, Harkness & Hill also noted that the
EV/EBITDA multiple reflected in the merger proposal is 5.4x.

Adams, Harkness & Hill combined (i) the calculated present value of Uno's
cash flows for the five fiscal years ending October 2, 2005, with (ii) Uno's
EBITDA terminal value, to arrive at a range of EVs based on the above
assumptions. These EVs were then adjusted by adding Uno's current cash balance
and subtracting its current funded debt balance to arrive at implied MCs (i.e.,
equity values). Adams, Harkness & Hill divided the computed equity values by the
number of shares of common stock outstanding and arrived at a range of implied
per share values of $6.34 to $11.54, with a median implied value of $8.84.

Adams, Harkness & Hill combined (i) the calculated present value of Uno's
cash flows for the fiscal years ended September 30, 2001 through October 2,
2005, with (ii) Uno's perpetual growth rate terminal value, to arrive at a range
of EVs based on the above assumptions. These EVs were then adjusted by adding
Uno's current cash balance and subtracting its current funded debt balance to
arrive at implied MCs (i.e., equity values). Adams, Harkness & Hill divided the
computed equity values by the number of shares of common stock outstanding and
arrived at a range of implied per share values of $4.57 to $9.13, with a median
implied value of $6.35.

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LIMITED SOLICITATION OF POTENTIAL ACQUIRORS

The special committee instructed Adams, Harkness & Hill to contact only the
parties approved by Mr. Spencer and to provide only publicly available
information to such parties. Because of his concern about the possibility of
management distraction and negative impact from potential press coverage,
Mr. Spencer indicated that he would like to limit the number of potential buyers
to ten. The special committee placed these limitations on Adams, Harkness & Hill
because Mr. Spencer controls a majority of Uno's common stock and, therefore,
any transaction involving a sale of Uno would require Mr. Spencer's approval.
Adams, Harkness & Hill contacted, with the permission of and under the
limitations set by the special committee, six national restaurant chains and
four financial investors to solicit and qualify their interest in a negotiated
acquisition of Uno. Initial contact with potential acquirors was made without
specifically revealing Uno until the potential acquiror signed a non-disclosure
agreement. Potential acquirors which indicated they were interested in pursuing
a transaction, received a non-disclosure agreement from Adams, Harkness & Hill.
Upon receipt by Adams, Harkness & Hill of an executed non-disclosure agreement,
Adams, Harkness & Hill provided each potential acquiror with a packet of
publicly disclosed materials and engaged in additional discussions with each of
the parties to ascertain their potential interest in acquiring Uno. None of the
six national restaurant chains indicated any interest. Three of the four
financial investors indicated preliminary interest conditioned upon
Mr. Spencer's willingness to act in concert with them in acquiring Uno.
Mr. Spencer indicated to Adams, Harkness & Hill that he had no interest in
pursuing these discussions. Adams, Harkness & Hill noted that without
Mr. Spencer's participation, this alternative to the merger was not feasible.

SUMMARY OF VALUATION ANALYSES

The foregoing summary describes the material analyses performed by Adams,
Harkness & Hill. The preparation of a fairness opinion is a complex process.
Adams, Harkness & Hill believes that its analyses must be considered as a whole,
and that selecting portions of such analyses, or portions of the factors
considered by it, without considering all analyses and factors would create an
incomplete view of the evaluation processes underlying its opinion. Adams,
Harkness & Hill did not attempt to assign specific weights to particular
analyses. Any estimates contained in Adams, Harkness & Hill's analyses are not
necessarily indicative of actual values, which may be significantly more or less
favorable than suggested by the analyses. In addition, estimates of the values
of companies do not purport to be appraisals or necessarily to reflect the
prices at which companies may actually be sold. Because such estimates are
inherently subject to uncertainty, Adams, Harkness & Hill does not assume
responsibility for their accuracy. Taken together, the information and analyses
employed by Adams, Harkness & Hill led to Adams, Harkness & Hill's overall
opinion that the consideration to be received in the merger is fair, from a
financial point of view, to the stockholders of Uno other than the Continuing
Stockholders.

PURPOSE AND STRUCTURE OF THE MERGER

For Uno, the purpose of the merger is to allow Uno stockholders to realize
the value of their investment in Uno in cash at a price that represents a
premium over the market price of Uno common stock before the public announcement
of the Continuing Stockholders' initial offer to take Uno private by purchasing
all of the outstanding shares of common stock at a price of $8.75 per share. The
board of directors believes that Uno has not been able to realize fully the
benefits of public company status. The reasons for their belief include the
limited ability of Uno stockholders to sell their stock quickly at the current
market price due to the low trading volume and the significant percentage of
outstanding stock held by Mr. Spencer and the Continuing Stockholders, and the
undervaluation of the common stock in the public market due to Uno's small
market capitalization, limited public float, limited research coverage from
securities analysts and the inability to generate the type of rapid revenue and
unit growth generally expected by the public markets. At the same time, the
public company status has

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imposed a number of limitations on Uno and its management in conducting Uno's
operations. These limitations include the costs and time associated with public
company reporting obligations and the short term focus on quarter to quarter
performance goals to meet expectations of the public markets. Accordingly, one
of the purposes of the merger is to afford greater operating flexibility,
allowing management to concentrate on long-term growth and to reduce its
attention to the quarter-to-quarter performance and to be able to pursue
opportunities that Uno could not previously pursue because of its duties to the
public stockholders. Further, the merger is intended to enable Uno to use in its
operations those funds that would otherwise be expended in complying with
requirements applicable to public companies.

For the Affiliate Stockholders, Parent and Newco, the purpose of the merger
is to allow the Continuing Stockholders to acquire complete ownership of Uno and
to increase the amount of Uno owned by the Continuing Stockholders indirectly
through their ownership of Parent. As described in the "--Background of the
Merger" section, the Affiliate Stockholders, Parent and Newco believe that Uno
has strong business prospects for the future, based upon publicly available
information regarding Uno and based upon their knowledge of the restaurant
industry. The Affiliate Stockholders, Parent and Newco believe that Uno will
have greater operating flexibility to focus on its long-term value by
emphasizing growth and operating cash flow without the constraint of the public
market's emphasis on quarterly earnings. The transaction has been structured as
a merger of Newco into Uno in order to preserve Uno's identity and existing
contractual arrangements with third parties. The Affiliate Stockholders, Parent
and Newco chose to make the offer for Uno common stock now for a variety of
reasons, including: the lack of interest in Uno's proposed public offering in
1999, a lack of continuing investor interest in Uno's common stock, a
recognition by the Affiliate Stockholders, Parent and Newco that Uno has not
been able to generate the growth in revenues and earnings that would attract the
interest and following of institutional investors and research analysts, as well
as for the other reasons more fully described above in the "--Background of the
Merger" section.

The transaction has been structured as a cash merger in which Parent, Newco
and Uno as the surviving corporation will incur indebtedness to acquire all
shares of Uno common stock for cash, other than shares held by Parent. Uno's
purpose in submitting the merger to the vote of its stockholders with a
favorable recommendation at this time is to allow the stockholders other than
the Parent an opportunity to receive a cash payment at a fair price to provide a
prompt and orderly transfer of ownership of Uno to the Parent and to provide the
stockholders (other than the Parent) with cash for all of their shares of Uno
common stock.

ALTERNATIVES TO THE MERGER

On October 16, 2000, the Continuing Stockholders stated in writing their
intention to make a tender offer, subject to the receipt of financing, for all
of the outstanding shares of Uno common stock not owned by the Continuing
Stockholders. The tender offer price of $8.75 per share represented a premium of
33.4% over the market price of Uno common stock on October 24, 2000, the day
before Uno announced the Continuing Stockholders' intent to engage in a tender
offer. If the tender offer was completed, Uno would have become a privately held
corporation.

From October 2000 through mid-January 2001, the Continuing Stockholders and
the special committee of the board of directors continued to discuss the terms
of the proposed tender offer, including the price per share, conditions to the
transaction and the payment of transaction fees and expenses. On January 16,
2001, a revised written offer was submitted by the Continuing Stockholders to
the special committee in which they increased their offer price to $9.00 per
share and changed the structure of the transaction from a cash tender offer to a
cash merger. The Continuing Stockholders and their advisors indicated that they
changed the structure of the transaction from a cash tender offer to a cash
merger because most of the financing commitment fees would be paid upon
completion of the merger and not in advance of a tender offer. Other than the
initially proposed tender offer, none

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of Uno, the Affiliate Stockholders, Parent and Newco, considered any transaction
which would have the effect of taking Uno private.

EFFECTS OF THE MERGER

Upon completion of the merger, Uno will be a privately held corporation,
wholly owned by Parent. The current stockholders of Uno, other than the
Continuing Stockholders and the holders of options to purchase shares of Uno
common stock as discussed below, will cease to have ownership interests in Uno
or rights as Uno stockholders and will not benefit from any continuing
operations or growth of Uno, or any transactions in which Uno may be involved in
the future. They will be entitled to receive $9.75 in cash for each of their
shares of Uno common stock. The Continuing Stockholders will indirectly, through
their ownership of Parent, own 100% of the outstanding shares of common stock in
Uno as the surviving corporation. The holders of options to purchase shares of
Uno common stock, other than Mr. Spencer and the Management Group, will continue
as holders of options to purchase shares of common stock of Uno as the surviving
corporation. After the merger, Uno as the surviving corporation may, but has not
yet decided to, offer to repurchase and cancel outstanding stock options of Uno
as the surviving corporation. If it does, Mr. Miller intends to sell to Uno as
the surviving corporation options to purchase approximately 82,500 shares of his
Uno common stock. Options to purchase shares of Uno common stock held by
Mr. Spencer and the remaining options held by the Management Group will be
cancelled and they will receive options to purchase shares of preferred stock of
Parent. After the merger, Parent may but has not yet decided to, issue options
to purchase shares of preferred stock in Parent to additional key employees of
Uno upon the cancellation of their options to purchase shares of Uno common
stock.

As a result of the merger, Uno will be a privately held corporation, and
there will be no public market for its common stock. After the merger, the
shares of common stock will cease to be traded on the New York Stock Exchange,
and price quotations of sales of shares of common stock in the public market
will no longer be available. In addition, registration of the common stock under
the Securities Exchange Act of 1934, as amended, will be terminated. This
termination will make most provisions of the Securities Exchange Act of 1934, as
amended, such as the short-swing profit recovery provisions of Section 16(b) and
the requirement of furnishing a proxy or information statement in connection
with stockholders' meetings, no longer applicable to Uno. After the effective
time of the merger, Uno will no longer be required to file periodic reports with
the Securities and Exchange Commission.

At the effective time of the merger, the directors of Newco, consisting of
Aaron D. Spencer, Craig S. Miller, Paul W. MacPhail, Alan M. Fox and Robert
M. Vincent, will become the directors of Uno as the surviving corporation. In
addition, the current management of Uno, consisting of Aaron D. Spencer, Craig
S. Miller, Paul W. MacPhail, Alan M. Fox, Robert M. Vincent, Mark A. Jones,
George W. Herz II and M. Heywood Whetsell, Jr., is expected, in general, to
remain the management of Uno as the surviving corporation. At the effective time
of the merger, Newco's certificate of incorporation and bylaws will become Uno's
certificate of incorporation and the bylaws.

It is expected that, following completion of the merger, the operations of
Uno will be conducted substantially as they are currently being conducted. Uno,
Parent, Newco and the Continuing Stockholders do not have any present plans or
proposals that relate to or would result in an extraordinary corporate
transaction following completion of the merger involving Uno's corporate
structure, business or management, such as a merger, reorganization,
liquidation, relocation of any operations or sale or transfer of a material
amount of assets. However, Uno, Parent, Newco, and the Affiliate Stockholders
will continue to evaluate Uno's business and operations after the merger and may
develop new plans and proposals that Uno, Parent, Newco, and the Affiliate
Stockholders consider to be in the best interests of Uno and its then current
stockholders.

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After the completion of the merger, Parent may seek to obtain additional or
replacement financing involving debt, equity or a combination of debt and
equity. To facilitate such financing, Mr. Spencer may sell to the party or
parties providing the financing, shares of Parent that he holds immediately
after the merger. Alternatively, Mr. Spencer may sell such shares of Parent
independent of any such financing. There presently are no proposals,
negotiations or plans to obtain such financing or to make any such sales.
Whether such financing or sales are sought or concluded will depend upon
business needs, personal financial objectives, market conditions and other
factors which Parent and Mr. Spencer deem relevant at the time.

See "Summary Term Sheet," "Questions and Answers About the Merger," "Special
Factors--Interests of the Continuing Stockholders," "Special Factors--Risks That
The Merger Will Not Be Completed" and "Special Factors --Estimated Fees and
Expenses of The Merger."

The following table sets forth for each Continuing Stockholder his or her
interest in the net book value and net income of Uno as of April 1, 2001, based
upon the percentage of his or her beneficial ownership of Uno common stock as of
April 1, 2001:

[Enlarge/Download Table]

OWNERSHIP PERCENT NET BOOK VALUE (1) NET INCOME (2)
----------------- ------------------ --------------

Aaron D. Spencer............................... 40.20% $34,229,764 $1,292,509
Uno Associates................................. 16.93 14,412,924 544,229
Mark Spencer................................... 2.41 2,050,631 77,431
Lisa Cohen..................................... 2.12 1,807,884 68,265
Craig S. Miller................................ 4.40 3,747,324 141,498
Paul W. MacPhail............................... * 9,010 340
Alan M. Fox.................................... 1.77 1,511,036 57,056
Robert M. Vincent.............................. 1.24 1,052,187 39,730

------------------------

* Less than one percent.

(1) Based on Uno's stockholders' equity as of April 1, 2001 (unaudited).

(2) Based on Uno's net income for the two quarters ended April 1, 2001.

The following table sets forth for each Continuing Stockholder, his or her
interest in the net book value and net income of Uno after the merger, based
upon the percentage of his or her expected beneficial ownership of capital stock
of Uno as the surviving corporation on a fully diluted basis:

[Enlarge/Download Table]

OWNERSHIP PERCENT
(1) NET BOOK VALUE (1)(2) NET INCOME (1)(2)(3)
----------------- --------------------- --------------------

Aaron D. Spencer(4).................... 58.38% $49,709,791 $1,877,031
Uno Associates......................... 25.48 21,695,880 819,232
Mark Spencer(5)........................ 2.94 2,503,371 94,527
Lisa Cohen(5).......................... 2.51 2,137,232 80,701
Craig S. Miller(6)..................... 5.71 4,861,989 183,588
Paul W. MacPhail....................... -- -- --
Alan M. Fox............................ 2.85 2,426,737 91,633
Robert M. Vincent...................... 2.13 1,813,667 68,484

------------------------

(1) Assumes that each member of the Management Group converts all of his shares
of Uno common stock into the right to receive $9.75 per share in cash in the
merger.

(2) Based on Uno's stockholders' equity as of April 1, 2001.

(3) Based on Uno's net income for the two quarters ended April 1, 2001.

(4) Assumes that the Cheryl Spencer Memorial Foundation converts all of its
221,018 shares of Uno common stock into the right to receive $9.75 per share
in cash in the merger.

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(5) Assumes that Mark Spencer and Lisa Cohen each convert 50,000 of their shares
of Uno common stock into the right to receive $9.75 per share in cash in the
merger.

(6) Assumes Mr. Miller sells to Uno as the surviving corporation options to
purchase 82,500 shares of Uno common stock.

RISKS THAT THE MERGER WILL NOT BE COMPLETED

Completion of the merger is subject to various risks, including, but not
limited to, the following:

- that the merger agreement will not be adopted and approved by the holders
of a majority of the outstanding shares of Uno common stock held by
stockholders other than the Continuing Stockholders and there is no waiver
of this condition by Parent, Newco, Uno and the special committee of the
board of directors;

- that Parent and Newco will not secure the financing necessary to complete
the merger on the terms and conditions set forth in the financing
proposal, as further described in "--Merger Financing";

- that the holders of more than 5% of the outstanding shares of Uno common
stock exercise their appraisal rights;

- that Uno, Parent or Newco will not have performed in all material respects
their obligations contained in the merger agreement before the effective
time of the merger;

- that the representations and warranties made by Uno, Parent or Newco in
the merger agreement will not be true and correct at the closing date of
the merger;

- that there may be new litigation that could prevent the merger, cause the
merger to be rescinded following completion of the merger or that could
have a material adverse effect on Uno;

- that there may be a material adverse change in Mr. Spencer's health; and

- that Uno will not secure required third-party consents to the merger,
including consents of liquor license authorities.

As a result of various risks to the completion of the merger, there can be
no assurance that the merger will be completed even if the requisite stockholder
approval is obtained. It is expected that, if Uno stockholders do not adopt and
approve the merger agreement or if the merger is not completed for any other
reason, the current management of Uno, under the direction of the board of
directors, will continue to manage Uno as an ongoing business. If the merger is
not completed, depending upon the circumstances, Uno may be required to
reimburse certain expenses of the Continuing Stockholders. See "Special
Factors--Estimated Fees and Expenses of the Merger."

INTERESTS OF THE CONTINUING STOCKHOLDERS IN THE MERGER

In considering the recommendation of the board of directors, Uno
stockholders should be aware that the Continuing Stockholders have interests
different from Uno stockholders generally. As a result of the conflict of
interest, the board of directors appointed the special committee, consisting of
four independent directors who are not officers or employees of Uno and who have
no financial interest in the merger different from Uno stockholders generally
(other than as holders of options to purchase shares of common stock of Uno).
The special committee was appointed to evaluate, negotiate and, if appropriate,
recommend the merger agreement and to evaluate whether the merger is in the best
interests of Uno stockholders other than the Continuing Stockholders. The
special committee was aware of these differing interests and considered them,
among other matters, in evaluating and

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Uno Restaurant Corp · PRER14A · On 6/27/01

Filed On 6/27/01 1:21pm ET · SEC File 1-09573 · Accession Number 912057-1-521405

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