<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to [Section]240.14a-11(c) or
[Section]240.14a-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):
[X] No fee required.
[ ] 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:
2) Aggregate number of securities to which transaction applies:
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):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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<PAGE> 2
UNO RESTAURANT CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
UNO RESTAURANT CORPORATION TO BE HELD ON
FEBRUARY 26, 1997
The Annual Meeting of Stockholders of UNO RESTAURANT CORPORATION will be
held on Wednesday, February 26, 1997 at 10:00 a.m., at Fleet National Bank, 8th
Floor, Room F, 75 State Street, Boston, Massachusetts, for the following
purposes:
1. To elect three Class III directors to hold office until the 2000
Annual Meeting of Stockholders and until their respective successors are
duly elected and qualified.
2. To consider and act upon a proposal to adopt the Uno Restaurant
Corporation 1997 Employee Stock Option Plan.
3. To consider and act upon any matters incidental to the foregoing
purposes and any other matters which may properly come before the Meeting
or any adjourned session thereof.
The Board of Directors has fixed January 22, 1997 as the record date for
determining the stockholders entitled to notice of, and to vote at, the Meeting.
You are cordially invited to attend the Meeting.
By Order of the Board Of Directors
JOHN O. CUNNINGHAM,
Secretary
Boston, Massachusetts
January 30, 1997
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING FORM OF
PROXY, SO THAT, IF YOU ARE UNABLE TO ATTEND THE MEETING, YOUR SHARES MAY
NEVERTHELESS BE VOTED. HOWEVER, THE PROXY IS REVOCABLE AS DESCRIBED IN THE PROXY
STATEMENT.
<PAGE> 3
UNO RESTAURANT CORPORATION
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
ON FEBRUARY 26, 1997
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Uno Restaurant Corporation, a Delaware
corporation with its principal executive offices at 100 Charles Park Road, West
Roxbury, Massachusetts 02132 (referred to hereinafter as the "Company"), for use
at the Annual Meeting of Stockholders to be held on February 26, 1997, and at
any adjournment or adjournments thereof (the "Meeting"). The enclosed proxy
relating to the Meeting is solicited on behalf of the Board of Directors of the
Company and the cost of such solicitation will be borne by the Company. It is
expected that this proxy statement and the accompanying proxy will be mailed to
stockholders on or about January 30, 1997. Certain of the officers and regular
employees of the Company may solicit proxies by correspondence, telephone or in
person, without extra compensation. The Company may also pay to banks, brokers,
nominees and certain other fiduciaries their reasonable expenses incurred in
forwarding proxy material to the beneficial owners of securities held by them.
Only stockholders of record at the close of business on January 22, 1997
will be entitled to receive notice of, and to vote at, the Meeting. As of that
date, there were outstanding and entitled to vote 12,215,438 shares of Common
Stock, $.01 par value, of the Company (the "Common Stock"). Each such
stockholder is entitled to one vote for each share of Common Stock so held and
may vote such shares either in person or by proxy.
The enclosed proxy, if executed and returned, will be voted as directed on
the proxy or, in the absence of such direction, for the election of the nominees
as directors and for the proposal to adopt the Company's 1997 Employee Stock
Option Plan. If any other matters shall properly come before the Meeting, the
enclosed proxy will be voted by the proxies in accordance with their best
judgment. The proxy may be revoked at any time prior to exercise by filing with
the Secretary of the Company a written revocation, by executing a proxy with a
later date, or by attending and voting at the Meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Meeting, three Class III directors are to be elected to serve until
the 2000 Annual Meeting of Stockholders and until their respective successors
have been duly elected and qualified.
The Company's Restated Certificate of Incorporation and Bylaws provide that
the Board of Directors shall be divided into three classes. At each Annual
Meeting of Stockholders following the initial classification, the directors
elected to succeed those whose terms expire shall be identified as being the
same class as the directors they succeed and shall be elected to hold office for
a term to expire at the third Annual Meeting of Stockholders after their
election, and until their respective successors are duly elected and qualified,
unless an adjustment in the term to which an individual director shall be
elected is made because of a change in the number of directors.
The Restated Certificate of Incorporation sets the initial number of
directors at seven and authorizes the Board of Directors and the stockholders to
change the number from time to time. The terms of Aaron D. Spencer, Stephen J.
Sweeney and James F. Carlin expire at the Meeting. Mr. Spencer, Mr. Sweeney and
1
<PAGE> 4
Mr. Carlin have each been renominated for election as a Class III director, each
to hold office until the 2000 Annual Meeting of Stockholders and until their
successors have been duly elected and qualified.
It is the intention of the persons named as proxies to vote for the
election of Mr. Spencer, Mr. Sweeney and Mr. Carlin as Class III directors. In
the unanticipated event that the nominees should be unable to serve, the persons
named as proxies will vote the proxy for such substitutes, if any, as the
present Board of Directors may designate or to reduce the number of directors.
The nominees have not been nominated pursuant to any arrangement or
understanding with any person.
The following table sets forth certain information with respect to the
nominees and each of the directors whose term extends beyond the Meeting,
including the year in which the nominees' terms would expire, if elected. When
used below, positions held with the Company include positions held with the
Company's predecessors and subsidiaries.
<TABLE>
<CAPTION>
YEAR TERM
EXPIRES,
DIRECTOR IF ELECTED,
NAME AGE PRINCIPAL OCCUPATION SINCE AND CLASS
---- --- -------------------- -------- -----------
<S> <C> <C> <C> <C>
Aaron D. Spencer*.................... 65 Chairman and Director of 1979 2000
the Company Class III
Stephen J. Sweeney*.................. 67 Former Chairman of the 1991 2000
Board of Boston Edison Class III
Company
James F. Carlin*..................... 56 Chairman of the 1996 2000
Massachusetts Board of Class III
Higher Education
S. James Coppersmith................. 63 Former President and 1989 1998
General Manager, WCVB-TV, Class I
Boston, MA
John T. Gerlach...................... 64 Director of the Graduate 1987 1998
Business Program and Class I
Director of the Center
for Policy Issues, Sacred
Heart University
Craig S. Miller...................... 47 President, Chief 1985 1999
Executive Officer, Chief Class II
Operating Officer and
Director of the Company
Robert M. Brown...................... 49 Treasurer, Senior Vice 1987 1999
President -- Finance, Class II
Chief Financial Officer
and Director of the
Company
</TABLE>
- ---------------
* Nominees for Class III directors.
Mr. Spencer, the founder of the Company, has been Chairman of the Company
since 1986 and previously served as the Company's Chief Executive Officer until
September 30, 1996 and as the Company's President until 1986. Mr. Spencer has 31
years of experience in the restaurant industry and was the founder and owner of
the predecessor of the Company which operated a chain of 24 Kentucky Fried
Chicken franchised restaurants at the time the restaurants were sold.
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<PAGE> 5
Mr. Sweeney was chairman of the board of Boston Edison Company from 1986 to
1992. He was chief executive officer of Boston Edison Company from 1984 to 1990
and president of Boston Edison Company from 1983 to 1987. Mr. Sweeney is a
director of the Boston Edison Company, Liberty Mutual Insurance Company, Liberty
Mutual Fire Insurance Company, Liberty Financial Services, the Boston Stock
Exchange Incorporated and Microscript, Inc.
Mr. Carlin has been the Chairman of the Massachusetts Board of Higher
Education since 1995. He has been the Chairman and Chief Executive Officer of
Carlin Consolidated, Inc. since 1966. He was also the Receiver for the City of
Chelsea, Massachusetts from 1991 to 1992. Mr. Carlin is a Director of Health
Plan Services, Inc., a Trustee of the Massachusetts Health and Education Tax
Exempt Trust, and a Trustee or Director of 33 funds managed by John Hancock
Mutual Life Insurance Company. He is also a director of Alpha Analytical, Inc.,
Carlin Insurance Agency, Inc. and the Arbella Mutual Insurance Company.
Mr. Coppersmith was president and general manager of WCVB-TV, a division of
The Hearst Corporation, in Boston from September 1990 until his retirement in
June 1994. From 1982 to 1990, Mr. Coppersmith was vice president and general
manager of WCVB-TV. From 1981 to 1982, he served as president of the Television
Division of Hubbard Broadcasting Inc., as general manager of its Tampa/St.
Petersburg station, WTOG television, and as president of F&F Productions, a
subsidiary of Hubbard Broadcasting Inc. From 1977 to 1981, Mr. Coppersmith was
vice president and general manager of WNEW-TV, Metromedia in New York. Mr.
Coppersmith has worked in the television broadcasting field since 1965. He is
presently a director of Waban, Inc., All-Comm Media Corporation, Chyron
Corporation and The Kushner-Locke Company and trustee of a number of investment
companies for which Sun American Asset Management Corp. is the investment
adviser. He is also chairman of the board of trustees of Emerson College and a
member of the board of governors of the Boston Stock Exchange Incorporated.
Mr. Gerlach has been the director of the Graduate Business Program of
Sacred Heart University since July 1992. He also has been the director of the
Center for Policy Issues of Sacred Heart University since January 1990. From
1988 to 1990, he was an adjunct professor of finance in the Graduate School of
Business at Drexel University. From 1986 to 1988, he was associate director of
Bear, Stearns & Co. From 1985 to 1986, he was a consultant for The Horn &
Hardart Co., and from 1982 to 1985, he was the president and chief operating
officer of The Horn & Hardart Co. Prior to that time, he was a vice president of
General Mills Inc. He is presently a director of American Woodmark Corp. and
Security American Financial Enterprises, Inc.
Mr. Miller has been President and Chief Operating Officer since 1986. He
became Chief Executive Officer on September 30, 1996. From 1984 to 1986, he
served as a Vice President and then Executive Vice President of the Company.
Prior to joining the Company, he spent 11 years with the General Mills Inc.
restaurant subsidiary, including four years in various executive capacities with
Casa Gallardo Mexican restaurants and six years with the Red Lobster restaurant
chain. Mr. Miller has a total of 29 years of experience in the restaurant
industry.
Mr. Brown has been Senior Vice President-Finance since 1988 and has served
as Chief Financial Officer and Treasurer since 1987. From 1987 to 1988, he
served as Vice President-Finance of the Company. From 1984 to 1987, he served as
vice president, treasurer and chief financial officer of the waste management
subsidiary of Genstar Corporation, and was employed by SCA Services, Inc. from
1980 to 1984, most recently as assistant controller. He is a certified public
accountant and has worked in accounting and finance since 1969.
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<PAGE> 6
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held five meetings during the fiscal
year ended September 29, 1996. Each current director attended at least 75% of
the aggregate number of all meetings of the Board of Directors and committees of
which he was a member during such fiscal year.
The Board of Directors has an Audit Committee, currently comprised of
Messrs. Coppersmith, Gerlach, Carlin and Sweeney, which met twice during fiscal
year 1996. The functions performed by this Committee include recommending to the
Board of Directors the engagement of the independent auditors, reviewing the
scope of internal controls and the results of internal audit activities, and
reviewing the implementation by management of recommendations made by the
independent auditors.
The Board of Directors also has a Compensation Committee, currently
comprised of Messrs. Coppersmith, Gerlach, Carlin and Sweeney. The Compensation
Committee met twice during fiscal year 1996. The functions of the Compensation
Committee include making recommendations to the Board of Directors concerning
salaries, incentive plans, benefits and overall compensation.
The Board of Directors also has an Executive Committee, currently comprised
of Messrs. Gerlach, Miller and Spencer. The Executive Committee was formed after
the end of fiscal year 1996. The Executive Committee is responsible for
reviewing and recommending to the Board of Directors for approval major business
decisions, including capital and operating budgets, strategic plans, financing
proposals, executive officer changes and composition of the Board of Directors.
The Executive Committee plans to meet twice each quarter.
The Board of Directors does not have a nominating committee. Changes in
directors are considered by the whole Board of Directors, based on
recommendations of the Executive Committee.
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth certain information as of November 30, 1996
concerning the beneficial ownership of Common Stock by each director, each
nominee for director, each named executive officer in the Summary Compensation
Table under "Executive Compensation," below, all executive officers and
directors as a group, and each person known by the Company to be the beneficial
owner of 5% or more of the Company's Common Stock. This information is based
upon information received from or on behalf of the named individuals.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY PERCENT
NAME OWNED(1) OF CLASS
---- ------------ --------
<S> <C> <C>
Robert M. Brown(2)(3)(4)(5).................................. 43,888 *
James F. Carlin(2)(6)........................................ 10,750 *
S. James Coppersmith(2)...................................... 24,155 *
Alan M. Fox(2)(4)(5)......................................... 71,859 *
John T. Gerlach(2)........................................... 18,711 *
Damon M. Liever (2)(4)(5)(7)................................. 19,257 *
Craig S. Miller(2)(4)(5)(7)(8)............................... 308,298 2.5%
Aaron D. Spencer(2)(4)(9)(10)................................ 2,156,391 17.6%
Stephen J. Sweeney(2)........................................ 19,066 *
Uno Associates(10)........................................... 4,192,707 34.3%
Executive Officers and Directors as a Group (12
Persons)(11)............................................... 6,959,876 55.0%
</TABLE>
4
<PAGE> 7
- ---------------
* Represents less than 1%.
(1) Unless otherwise noted, the beneficial owners listed have sole voting and
investment power over the shares listed.
(2) Includes the following shares subject to currently exercisable options: Mr.
Brown -- 36,202; Mr. Carlin -- 6,250; Mr. Coppersmith -- 16,677; Mr.
Fox -- 46,584; Mr. Gerlach -- 10,723; Mr. Liever -- 12,325; Mr.
Miller -- 164,750; Mr. Spencer -- 71,000; Mr. Sweeney -- 13,191.
(3) Includes 1,625 shares held by Mr. Brown's spouse.
(4) Includes the following shares held in participant accounts under the
employee stock ownership provision of the Employee Stock Ownership Plan:
Mr. Brown -- 845; Mr. Fox -- 555; Mr. Liever -- 104; Mr. Miller -- 1,503;
Mr. Spencer -- 829.
(5) Includes the following shares held in participant accounts under the 401(k)
savings provision of the Employee Stock Ownership Plan: Mr. Brown -- 216;
Mr. Fox -- 220; Mr. Liever -- 203; and Mr. Miller -- 248.
(6) Includes 2,500 shares held in a keogh plan and 2,000 shares held in a
family trust.
(7) Includes the following shares held in deferred compensation accounts: Mr.
Miller -- 10,000; Mr. Liever -- 2,000.
(8) Includes 9,375 shares held by a trust created by Mr. Miller.
(9) Includes 176,562 shares held by a charitable foundation of which Mr.
Spencer is a trustee.
(10) Uno Associates is a partnership owned 80% by Mr. Spencer and 10% each by
his two adult children, Lisa S. Cohen and Mark Spencer. Mr. Spencer is
deemed to be the beneficial owner of all of the shares held by Uno
Associates, and as a result is deemed to be the beneficial owner of an
aggregate of 6,349,098 shares, including exercisable stock options (51.7%
of the outstanding shares). The mailing address of Uno Associates and Mr.
Spencer is 100 Charles Park Road, West Roxbury, Massachusetts 02132.
(11) Includes all shares beneficially owned by the executive officers and
directors named and as described above, 12,795 shares beneficially owned
and 79,518 shares subject to currently exercisable options, held by three
executive officers not specifically named above, and an aggregate of 1,544
shares held in participant accounts under the 401(k) savings and employee
stock ownership provisions of the Employee Stock Ownership Plan for two
executive officers not specifically named above, and 937 shares held in
deferred compensation accounts for two executive officers not specifically
named above.
5
<PAGE> 8
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth the compensation of
each of the Chief Executive Officer and the four most highly-compensated
executive officers of the Company whose annual salary and bonus, if any,
exceeded $100,000 for services in all capacities to the Company during the last
three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
FISCAL -------------------- ------------ ALL OTHER
NAME AND YEAR SALARY BONUS OPTIONS COMPENSATION
PRINCIPAL POSITION ENDED ($) ($) (#)(1) ($)(2)
------------------ ------- -------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Aaron D. Spencer................. 9/29/96 $250,000 $68,900 0 $ 533
Chairman, Chief Executive 10/1/95 240,000 28,800 17,500 599
Officer and Director 10/2/94 225,000 81,675 30,000 909
Craig S. Miller.................. 9/29/96 $250,000 $68,900 20,000 $1,508
President, Chief Operating 10/1/95 240,000 28,800 17,500 1,382
Officer and Director 10/2/94 225,000 81,675 30,000 3,906
Robert M. Brown.................. 9/29/96 $145,000 $28,548 6,750 $1,736
Treasurer, Senior Vice 10/1/95 137,500 15,125 8,500 1,350
President -- Finance, Chief 10/2/94 130,000 42,900 5,000 2,301
Financial Officer and Director
Damon M. Liever.................. 9/29/96 $145,000 $30,180 6,750 $1,644
Senior Vice President -- 10/1/95 125,721 13,829 8,500 1,583
Marketing & New Business 10/2/94 105,385 40,572 12,500 193
Development
Alan M. Fox...................... 9/29/96 $145,000 $28,004 6,750 $1,434
Senior Vice President -- 10/1/95 137,500 16,500 8,500 1,405
Purchasing 10/2/94 130,000 35,750 5,000 2,207
President -- Uno Foods Inc.
</TABLE>
- ---------------
(1) Consisting of options granted under the Uno Restaurant Corporation 1987
Employee Stock Option Plan.
(2) Consisting solely of benefits under the Company's 401(k) savings provision
and the employee stock ownership provision of the Company's Employee Stock
Ownership Plan (the "ESOP"). The ESOP is designed to invest Company
contributions in shares of Common Stock. Such shares are entitled to receive
dividends if and when declared. The Company's contributions to a
participant's account are subject to a vesting schedule providing, in
general, for no vesting before three years of service and 20% vesting for
each additional year of service (100% vesting after seven years of service,
although there is an accelerated six year vesting schedule under certain
circumstances). As of October 1, 1996, the number and value of shares
allocated to the accounts of the executive officers listed in the table
above were as follows: Mr. Spencer -- 829 shares ($5,596), Mr.
Miller -- 1,751 shares ($11,817), Mr. Brown -- 1,061 shares ($7,162), Mr.
Liever -- 306 shares ($2,069) and Mr. Fox -- 775 shares ($5,232) (based upon
the closing sale price of the Common Stock on the New York Stock Exchange on
September 27, 1996).
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<PAGE> 9
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------- VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK
OPTIONS EXERCISE PRICE APPRECIATION FOR
OPTIONS GRANTED TO OR BASE OPTION TERM(2)
GRANTED EMPLOYEES IN PRICE EXPIRATION ----------------------
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ------- ------------ -------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Aaron D. Spencer........... 0 -- -- -- -- --
Craig S. Miller............ 20,000 6.8% $6.375 8/27/06 $80,184 $203,202
Robert M. Brown............ 6,750 2.3% $6.375 8/27/06 $27,062 $ 68,581
Damon M. Liever............ 6,750 2.3% $6.375 8/27/06 $27,062 $ 68,581
Alan M. Fox................ 6,750 2.3% $6.375 8/27/06 $27,062 $ 68,581
</TABLE>
- ---------------
(1) The options were granted under the 1987 Employee Stock Option Plan, and are
subject to a vesting schedule pursuant to which, in general, the options
become exercisable at a rate of 20% per year commencing one year after the
date of grant, provided the holder of the option remains employed by the
Company. Options may not be exercised beyond three months after the holder
ceases to be employed by the Company, except in the event of termination by
reason of death or permanent disability, in which event the option may be
exercised for up to one year following termination.
(2) The assumed rates are compounded annually for the full term of the options.
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
9/29/96 9/29/96(2)
-------------- ---------------
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
ON EXERCISE VALUE REALIZED UNEXERCISABLE UNEXERCISABLE
NAME (#)(1) ($)(1) (#) ($)
---- --------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Aaron D. Spencer............. -- -- 71,000/59,000 $31,688/$11,438
Craig S. Miller.............. -- -- 164,750/79,000 $31,688/$11,438
Robert M. Brown.............. -- -- 44,202/24,175 $ 55,868/$3,578
Damon M. Liever.............. -- -- 12,325/24,800 $ 2,484/$1,656
Alan M. Fox.................. -- -- 46,584/26,675 $ 31,188/$4,766
</TABLE>
- ---------------
(1) None of the named executive officers exercised any stock options during the
fiscal year ended September 29, 1996.
(2) Based upon the closing sale price of the Common Stock on September 27, 1996
on the New York Stock Exchange, minus the respective option exercise price.
Change in Control Protection Agreements. The Compensation Committee
determined and the Board of Directors of the Company affirmed that it is in the
best interests of the Company's stockholders, employees and customers to assure
continuity of management of the Company's administration and operations in the
event of a change in control of the Company. Therefore, the Company has entered
into Change in Control Protection Agreements with each of its officers that
provide, in general, for specified severance payments in the event that an
officer of the Company is terminated, other than for cause, within two years of
a change in control.
7
<PAGE> 10
A Change in Control will be deemed to have occurred, among other reasons,
if: the beneficial ownership interest of Aaron D. Spencer, Chairman of the
Company, is reduced to less than 15% of the outstanding shares of Common Stock;
another "person" becomes the beneficial owner of 35% or more of the Common
Stock; a majority of the Board of Directors is replaced within a period of two
years; or a sale of all, or substantially all, of the Company's assets occurs.
The Change in Control Protection Agreements provide for severance payments
that are, in general, the equivalent of salary and benefits for periods ranging
from between 12 and 24 months. Pursuant to the Change in Control Protection
Agreements, of the executive officers included in the Summary Compensation
Table, Mr. Spencer and Mr. Miller would be entitled to severance payments equal
to 24 months of salary and benefits, and Mr. Brown, Mr. Liever and Mr. Fox would
be entitled to severance payments equal to 18 months of salary and benefits.
See also, "Compensation of Directors -- Indemnification Agreements."
COMPENSATION OF DIRECTORS
Messrs. Carlin, Coppersmith, Gerlach and Sweeney, members of the Board of
Directors who are not employees of the Company, received an annual fee of $7,500
for the fiscal year ended September 29, 1996. In addition, these nonemployee
directors received the following fees for each meeting attended during the
fiscal year: $1,000 for each Board of Directors meeting, $500 for each committee
meeting and $500 for the committee chairman for each committee meeting. They
were also reimbursed for expenses incurred in attending such meetings.
Members of the Board of Directors who are not employees of the Company
participate in a retirement plan for nonemployee directors that provides for the
payment annually, upon retirement, of the annual fee then paid to active
nonemployee directors. This annual retirement payment will continue for the same
number of years as the director served as a nonemployee director.
Indemnification Agreements. The Company has entered into indemnification
agreements with each of its directors and anticipates that it will enter into
similar agreements with any future directors. The Company has also entered into
similar agreements with certain of the Company's officers who are not also
directors. Generally, the indemnification agreements attempt to provide the
maximum protection permitted by Delaware law with respect to indemnification of
directors and officers.
The indemnification agreements provide that the Company will pay certain
amounts incurred by a director or officer in connection with any civil or
criminal action or proceeding and specifically including actions by or in the
name of the Company (derivative suits) where the individual's involvement is by
reason of the fact that he is or was a director or officer. Such amounts
include, to the maximum extent permitted by law, attorney's fees, judgments,
civil or criminal fines, settlement amounts, and other expenses customarily
incurred in connection with legal proceedings. Under the indemnification
agreements, a director or officer will not receive indemnification if he is
found not to have acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company.
The 1989 and 1993 Nonqualified Stock Option Plans for Nonemployee
Directors. The Company has a 1989 Nonqualified Stock Option Plan for
Nonemployee Directors (the "1989 Directors Plan") and a 1993 Nonqualified Stock
Option Plan for Nonemployee Directors (the "1993 Directors Plan"). The 1989
Directors Plan and the 1993 Directors Plan are referred to collectively as the
"Directors Plans."
Options may be granted under the Directors Plans only to directors of the
Company who are not also employees of the Company. Currently, the nonemployee
directors of the Company are Messrs. Carlin, Coppersmith, Gerlach and Sweeney.
8
<PAGE> 11
Pursuant to the 1989 Directors Plan, each year, immediately following the
Company's Annual Meeting of Stockholders, each then nonemployee director is
granted an option to acquire 1,156 shares of Common Stock. During the fiscal
year ended September 29, 1996, under the 1989 Directors Plan, the Company
granted options to purchase 1,156 shares of Common Stock at an exercise price of
$7.25 per share to each of Messrs. Coppersmith, Gerlach and Sweeney. After the
Meeting this year, the Company will grant options to purchase 1,156 shares of
Common Stock to each of Messrs. Carlin, Coppersmith, Gerlach and Sweeney. As of
November 30, 1996, options to purchase 32,329 shares of Common Stock (net of
options to purchase 782 shares which had been canceled) had been granted under
the 1989 Directors Plan, and 6,734 shares of Common Stock were available for
issuance upon exercise of options not yet granted under the 1989 Directors Plan.
Pursuant to the 1993 Directors Plan, each nonemployee director was granted
an option to acquire 6,250 shares of Common Stock as of the date of adoption of
the 1993 Directors Plan. Subsequent to the date of adoption, an option to
acquire 6,250 shares of Common Stock will be granted to each nonemployee
director immediately following the Company's Annual Meeting of stockholders at
which such nonemployee director is first elected by the stockholders.
During the fiscal year ended September 29, 1996, 6,250 options were granted
to Mr. Carlin under the 1993 Directors Plan. As of November 30, 1996, options to
purchase 31,250 shares of Common Stock had been granted under the 1993 Directors
Plan, and 31,250 shares of Common Stock were available for issuance upon
exercise of options not yet granted under the 1993 Directors Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is comprised of S.
James Coppersmith, James F. Carlin, John T. Gerlach and Stephen J. Sweeney. No
member of the Compensation Committee is a former or current officer or employee
of the Company. However, Mr. Coppersmith is a stockholder in a corporation that
owns a franchised Pizzeria Uno Restaurant in Las Vegas, Nevada and Mr. Carlin
controls an insurance agency which provides insurance brokerage services to the
Company. See "Certain Relationships and Related Transactions." In addition,
although Mr. Spencer and Mr. Miller are not members of the Compensation
Committee, they serve as administrators of and are eligible to participate in
the Company's Management Bonus Plan. Bonuses under the Management Bonus Plan
awarded to Mr. Spencer and Mr. Miller are reviewed and approved by the
Compensation Committee. See "Compensation Committee Report."
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors is comprised solely of
nonemployee directors. The Compensation Committee is responsible for developing
and making recommendations to the Company with respect to executive officer
compensation policies addressing such matters as salaries, incentive plans,
benefits and overall compensation. The Compensation Committee determines the
compensation to be paid to the Chief Executive Officer and each of the other
executive officers of the Company.
The objectives of the Compensation Committee in determining the type and
amount of executive officer compensation are to provide a level of base
compensation which allows the Company to attract and retain superior talent. The
Compensation Committee endeavors to align the executive officer's interests with
the success of the Company through the payment of a bonus based upon Company
performance and participation in stock option and other stock ownership plans
which provide the executive officer with the opportunity to build a substantial
ownership interest in the Company.
The compensation of an executive officer of the Company includes cash
compensation, consisting of a base salary plus performance bonus, long-term
incentive compensation in the form of stock options and
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<PAGE> 12
participation in a 401(k) savings and employee stock ownership plan, and
participation in various benefit plans generally available to employees of the
Company.
Cash Compensation. Cash compensation consists of a base salary plus an
annual performance bonus under the Management Bonus Plan (the "Bonus Plan"). In
determining base salary, the Compensation Committee reviewed national and
regional compensation information for executives in the restaurant industry
reported in various sources, including the 1995 Chain Restaurant Compensation
Association Survey prepared by Towers, Perrin, Forster & Crosby, Inc. (the
"Towers Perrin Survey"), a multiple regression analysis of compensation
information for the executive positions of 63 companies, representing 98 dining
concepts. The Compensation Committee also considered the individual experience
and performance of each executive officer. The Compensation Committee sets base
salaries at a level which is competitive with similarly situated corporations.
The key management level employees, including executive officers, are
eligible to participate in the Bonus Plan. The Bonus Plan is administered by
Messrs. Spencer and Miller, although bonuses granted to Messrs. Spencer and
Miller are reviewed and approved by the Compensation Committee. The purpose of
the Bonus Plan is to align more closely the interests of the participating
employees with the financial success of the Company and to reward individual
performance contributing to such success. Under the Bonus Plan, each eligible
employee is assigned a percentage bonus factor ranging from 10% to 30%.
Individual employee and Company goals are established each year. At the end of
each year, each participating employee is rated against the employee's
individual and Company goals on a scale of 0 to 1.5. That rating is multiplied
by the employee's percentage bonus factor which in turn is multiplied by the
employee's salary to determine the employee's potential bonus. However, bonuses
are paid to employees only if the Company's earnings performance during the year
exceeds a certain threshold as specified by the Compensation Committee. During
the fiscal year ended September 29, 1996, the Company paid an aggregate of
$459,556 in bonuses under the Bonus Plan, including a total of $282,131 to all
executive officers as a group. Of those executive officers named in the table
above, Messrs. Spencer, Miller, Brown, Liever and Fox received bonuses of
$68,900, $68,900, $28,548, $30,180 and $28,004, respectively.
The Compensation Committee determined and the Board of Directors of the
Company affirmed that it is in the best interests of the Company's stockholders,
employees and customers to assure continuity of management of the Company's
administration and operations in the event of a change in control of the
Company. Therefore, the Company has entered into Change in Control Protection
Agreements with each of its officers that provide, in general, for specified
severance payments in the event that an officer of the Company is terminated,
other than for cause, within two years of a change in control. See also,
"Executive Compensation -- Change in Control Protection Agreements."
Long-Term Incentive Compensation. The executive officers, as well as all
salaried employees, of the Company are also eligible to participate in the Uno
Restaurant Corporation 1987 Employee Stock Option Plan (the "Employee Stock
Option Plan") and the ESOP.
The purpose of the Employee Stock Option Plan is to provide increased
incentives to salaried employees, to encourage new employees to become
affiliated with the Company and to associate more closely the interests of such
persons with those of the Company. The Employee Stock Option Plan is
administered by a Stock Option Committee consisting of John T. Gerlach and
Stephen J. Sweeney. The Stock Option Committee has the authority to determine
the individuals to whom stock options are awarded, the terms upon which option
grants shall be made and the number of shares subject to each option, all
subject to the terms and the conditions of the Employee Stock Option Plan.
For each executive officer, including Mr. Spencer, the Stock Option
Committee considered the financial performance of the Company and the individual
performance of each executive officer in determining the number of options to be
granted. During the fiscal year ended September 29, 1996, the Company granted
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options to purchase 0 shares, 20,000 shares, 6,750 shares, 6,750 shares and
6,750 shares to Mr. Spencer, Mr. Miller, Mr. Brown, Mr. Liever and Mr. Fox,
respectively.
The Employee Stock Option Plan will expire in March 1997. The Compensation
Committee intends to replace the Employee Stock Option Plan with the 1997
Employee Stock Option Plan which is the subject of "Proposal No. 2 -- To Adopt
the Company's 1997 Employee Stock Option Plan," below.
The executive officers also participate in the ESOP, which is funded by
Company contributions pursuant to the employee stock ownership provision of the
ESOP, as well as by voluntary contributions by employees and matching
contributions by the Company pursuant to the 401(k) savings provision of the
ESOP. The Company's matching contributions under the 401(k) savings provision
are based upon 25% of the first 2% of compensation, and 10% of the next 4% of
compensation contributed by employees. Employees may contribute up to 15% of
compensation per year, subject to a maximum dollar limit. All Company
contributions to the ESOP are intended to be held in the ESOP in the form of
Common Stock. Employee contributions to the ESOP are invested at the direction
of employees from among five investment funds made available by the ESOP. Each
year the Company's Board of Directors determines the amount, if any, that the
Company will contribute pursuant to the employee stock ownership provision and
the 401(k) savings provision of the ESOP for that plan year. As a result of the
Company's financial performance for the fiscal year ended September 29, 1996,
the Company contributed $75,000 pursuant to the employee stock ownership
provision of the ESOP. The Company also contributed $85,564 pursuant to the
401(k) savings provision of the ESOP during the fiscal year ended September 29,
1996. Contributions pursuant to the employee stock ownership provision of the
ESOP, plus any forfeitures arising from the termination of employees whose
accounts were not fully vested, will be allocated among those participants who
(i) completed a year of service that year and are employed on the last day of
the year or (ii) retired, died or became disabled that year. Allocations are
made pro rata on the basis of annual compensation, excluding compensation in
excess of $150,000 and compensation received before joining the ESOP.
The ESOP is designed to invest in shares of the Company's Common Stock.
Participants are entitled to direct the voting of all such shares allocated to
their accounts. Benefits will normally be distributed in a lump sum consisting
of shares of Common Stock, plus cash representing any fractional shares.
Participants receive their benefits when they retire, become disabled, die or
terminate service. If participants terminate employment for reasons other than
death, disability or retirement, they are entitled to receive only the vested
portion of their accrued benefit.
The assets of the ESOP were most recently allocated to the accounts of all
employees, including executive officers, as of September 30, 1996. At that time,
$6,457, $10,525, $6,061, $1,022 and $4,090 had been allocated to the accounts of
Mr. Spencer, Mr. Miller, Mr. Brown, Mr. Liever and Mr. Fox, respectively.
The stock ownership afforded under the Employee Stock Option Plan and the
ESOP allows executive officers to acquire a significant, long-term stock
ownership position in the Company which serves to align the executives'
interests with stockholders' interests.
Other Compensation. The Company provides certain other benefits, such as
health insurance, to the executive officers that are generally available to
Company employees. In addition, officers of the Company (including the named
executive officers) are eligible to participate in a deferred compensation plan,
to receive supplemental health insurance coverage and an automobile allowance.
For the fiscal year ended September 29, 1996, the amount of additional benefits
to each of the named executive officers of the Company did not exceed 10% of the
total of annual salary and bonus for each named executive officer.
Chief Executive Officer Compensation. The base salary for Mr. Spencer,
Chief Executive Officer, for the fiscal year ended September 29, 1996 was
$250,000, compared to $240,000 for the fiscal year ended
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<PAGE> 14
October 1, 1995 and $225,000 for the fiscal year ended October 1, 1994. Mr.
Spencer's salary was determined based upon a review of compensation data from
several surveys, data from selected peer companies and a review of Mr. Spencer's
past and expected future contributions to the Company. Based on the Towers
Perrin Survey referred to above, Mr. Spencer's total cash compensation is in the
middle range of executives of those restaurant companies which were the subject
of the survey. Mr. Miller became Chief Executive Officer on September 30, 1996.
As a result of the Company's financial performance, Mr. Spencer received a
bonus of $68,900 under the Bonus Plan for the fiscal year ended September 29,
1996.
Compensation Committee
John T. Gerlach
James F. Carlin
S. James Coppersmith
Stephen J. Sweeney
PERFORMANCE GRAPH
The following graph compares the yearly change in the Company's cumulative
total shareholder return with the cumulative total return on the Standard &
Poor's 500 Stock Index and the Standard & Poor's Restaurant Index for fiscal
years ended September 27, 1992, October 3, 1993, October 2, 1994, October 1,
1995 and September 29, 1996 based upon the market price of the Common Stock.
<TABLE>
<CAPTION>
Measurement Period UNO Restaurant
(Fiscal Year Covered) Corporation S & P 500 S & P Restaurants
<S> <C> <C> <C>
9/91 100 100 100
9/92 54 111 126
9/93 77 125 149
9/94 111 130 148
9/95 90 169 212
9/96 70 203 253
</TABLE>
The Performance Graph assumes the investment of $100 on September 29, 1991
in the Company's Common Stock, the Standard & Poor's 500 Stock Index and the
Standard & Poor's Restaurant Index, and the reinvestment of any and all
dividends.
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<PAGE> 15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Leases. The Company's executive offices are located in two adjacent
buildings in West Roxbury, Massachusetts. The first, a three-story building
owned by Aaron D. Spencer, Chairman of the Company, is leased to the Company
pursuant to a five-year lease, commencing on March 30, 1987, with options to
renew for two additional five-year terms. Rent during the initial term of the
lease was $30,000 per year. Currently, the first of two five-year options has
been exercised at a rate of $36,000 per year. During the final option period,
rent will be equal to fair market value rent, but may not be less than the rent
under the lease during the immediately preceding term. The value of any
leasehold improvements made by the Company will not be considered in determining
fair market value rent. The Company has added a third floor to the building. The
Company is responsible for all taxes, utilities, insurance, maintenance and
repairs. The adjacent facility, a two-story building owned by Mr. Spencer's
children, is also leased to the Company pursuant to a 15 year lease commencing
on February 1, 1990, with options to renew for three additional five-year
periods. Rent during the initial five-year period of the lease is $106,800 per
year, increasing to $128,160 per year for the next five years, and to $153,792
per year for the final five years of the initial term of the lease. The Company
is responsible for all taxes, utilities, insurance, maintenance and repairs.
Rent during any option term will be 120% of the rent for the prior term of the
lease. Management believes that the terms of the leases for the two offices are
as favorable as otherwise available in the real estate market. With the two
buildings, the executive offices currently consist of approximately 25,000
square feet and house the Company's executive, administrative and clerical
offices.
One of the Company-owned restaurants in Boston, Massachusetts is located on
the first floor of a six-story office building owned by Mr. Spencer. Mr. Spencer
has leased the entire building to the Company pursuant to a five-year lease,
ending on March 29, 1997, at a rent of $162,000 per year. The rent will be
increased by 12% of the cost of any improvements to the building made by Mr.
Spencer. The Company is responsible for all taxes, utilities, insurance,
maintenance and repairs. The lease may be terminated by either the Company or
Mr. Spencer upon six months prior notice. If Mr. Spencer or the Company
terminates the lease, a new lease between the Company and Mr. Spencer relating
only to the restaurant space of the building will become effective immediately.
The new lease will have a five-year term with two five-year renewal options.
Rent under the new lease will be 6.5% of total restaurant revenues but with a
minimum rent, determined by independent appraisal, equal to the fair market
value rent at the time the new lease becomes effective. The Company currently
sublets all but the restaurant space at rents which aggregate more than the
$162,000 annual rent that it is obligated to pay Mr. Spencer. Management
believes that the terms of both the existing lease and the new lease which will
become effective upon termination of the existing lease are as favorable as
those otherwise available in the real estate market. The Company is currently
negotiating a renewal of this lease.
Other Matters. A corporation, wholly-owned by Craig S. Miller ("Mr.
Miller"), President and Chief Executive Officer of the Company, and his brother,
owns two franchised Pizzeria Uno restaurants in San Diego, California and a
third franchised unit in Los Angeles, California under the Company's standard
unit franchise agreements. Mr. Miller's brother franchised a fourth Pizzeria Uno
restaurant in 1995 through a separate corporation in which Mr. Miller does not
hold an ownership interest. The restaurants are being operated by Mr. Miller's
brother and Mr. Miller is not involved in the daily operations of the
restaurants. The Board of Directors has determined that the franchise agreements
are as favorable as otherwise available from nonaffiliated franchisees. As a
result of the earthquake in the Los Angeles area in 1994, the franchised
restaurant in Los Angeles operated at below its break-even level until July,
1995 because the mall in which the restaurant is located was damaged severely.
The restaurant was closed for several weeks after the earthquake before it
reopened. The mall, however, did not reopen until July, 1995. Consistent with
Company practice, the Company waived the required minimum royalty for the months
of January, February and March 1994. From
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<PAGE> 16
April, 1994 until November, 1994, the Company accepted the required minimum
royalty of $1,000 per month. From December, 1994 until the mall reopened in
July, 1995, the franchisee paid royalties equal to two percent (2%) of sales.
This royalty rate was equal to one-half the royalty rate stated in the unit
franchise agreement. The franchisee resumed a normal royalty payment rate in
July, 1995. From January, 1994 through June, 1995, the Company waived an
aggregate of $38,000 in royalties.
Nevada Pizza Company Inc. owns a franchised Pizzeria Uno restaurant in Las
Vegas, Nevada under the Company's standard unit franchise agreement. S. James
Coppersmith, a director of the Company, owns one-third of the outstanding
capital stock of Nevada Pizza Company Inc. Mr. Coppersmith is one of three
individual guarantors of the standard unit franchise agreement. Mr. Coppersmith
is not involved in the daily operations of Nevada Pizza Company Inc. The Board
of Directors has determined that the unit franchise agreement is as favorable as
otherwise available from nonaffiliated franchisees.
On January 23, 1996, the Company loaned Mr. Miller the principal sum of
$150,000 pursuant to a promissory note (the "Note"). The Note bears interest at
the rate of 7.3% per year payable in arrears on a quarterly basis commencing
March 31, 1996. The principal amount of the Note together with any and all
accrued interest is due no later than March 31, 1997 unless accelerated upon the
occurrence of certain events. The Note is secured by all of Mr. Miller's real
and personal property.
Mr. Spencer owns 50% of the outstanding common stock of a corporation which
opened an Uno Pizza Take-Out unit in 1993. Mr. Spencer acquired the stock for a
purchase price of $50,000 and guaranteed up to $150,000 of financing for the
corporation. The Take-Out unit is not currently charged royalties, because it is
being operated as a test concept, and is currently operating below its
break-even level. Mr. Spencer also owns 16% of the outstanding common stock of a
corporation, which owns two franchised Pizzeria Uno restaurants under the
Company's standard unit franchise agreements. Mr. Spencer purchased his interest
in this corporation for $100,000.
James F. Carlin, a Director of the Company, and his adult children control
Carlin Insurance Agency, Inc. Carlin Insurance Agency, Inc. provides insurance
brokerage services to the Company. It places property and casualty insurance for
the Company with various insurance carriers. During the fiscal year ended
September 29, 1996, Carlin Insurance Agency, Inc. earned $166,201 in commissions
and fees from the Company.
PROPOSAL NO. 2
TO ADOPT THE UNO RESTAURANT CORPORATION
1997 EMPLOYEE STOCK OPTION PLAN
In January, 1997, the Board of Directors adopted, subject to stockholder
approval, the Company's 1997 Employee Stock Option Plan (the "1997 Plan"). The
Company's 1987 Employee Stock Option Plan will expire in March 1997 (the "1987
Plan"). The 1997 Plan is intended to replace the 1987 Plan. The 1997 Plan is
intended to provide long-term incentives and rewards to those key employees of
the Company and its subsidiaries who are in a position to contribute to the
long-term success and growth of the Company and its subsidiaries, to assist the
Company in retaining and attracting executives and key employees with requisite
experience and ability and to associate more closely the interests of such
executives and key employees with those of the Company's stockholders. The
following is a summary description of the 1997 Plan and is qualified in its
entirety by reference to the full text of the 1997 Plan, which is set forth as
Exhibit A to this Proxy Statement. Currently, there are approximately 150
employees eligible to participate in the 1997 Plan.
1997 Employee Stock Option Plan. Under the 1997 Plan, the Company may
grant both incentive stock options ("incentive stock options") intended to
qualify under Section 422 of the Internal Revenue Code of 1986, as it may be
amended from time to time (the "Code"), and other stock options which are not
qualified
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<PAGE> 17
as incentive stock options ("nonqualified stock options"). Incentive stock
options and nonqualified stock options may only be granted to persons who are
employees of the Company at the time of grant, which may include officers and
directors who are also employees.
The 1997 Plan is administered by a Stock Option Committee currently
consisting of John T. Gerlach and Stephen J. Sweeney. Subject to the terms of
the 1997 Plan, the Compensation Committee determines the persons to whom stock
options are granted, the number of shares covered by the stock option, the term
of any stock option and the time during which any stock option is exercisable.
Stock options under the 1997 Plan may not be granted after January 21,
2007. No incentive stock option under the 1997 Plan may be exercised subsequent
to ten years from the date of grant (five years after the date of grant for
incentive stock options granted to holders of more than 10% of the Company's
Common Stock).
No incentive stock option granted pursuant to the 1997 Plan may be
exercised more than three months after the option holder ceases to be an
employee of the Company, except that the Stock Option Committee may provide that
in the event of death or permanent and total disability of the stock option
holder, the stock option may be exercised by the holder (or his estate) for a
period of up to one year after the date of such death or permanent total
disability.
Nonqualified stock options may be granted at an exercise price greater or
lesser than the fair market value of the Common Stock on the date of the grant,
in the discretion of the Stock Option Committee, but not less than the par value
of the Common Stock. Incentive stock options, however, may not be granted at
less than the fair market value of the Common Stock and may be granted to
holders of more than 10% of the Common Stock only at an exercise price of at
least 110% of the fair market value of the Common Stock on the date of grant. On
January 14, 1997, the closing sale price of the Common Stock on the New York
Stock Exchange was $6.75. No stock options have been issued under the 1997 Plan.
The Stock Option Committee may authorize payment of the exercise price of
stock options granted under the 1997 Plan in the following forms: (i) cash, (ii)
by delivery of shares of Common Stock having a fair market value equal to the
purchase price of the shares, (iii) by delivery of any other property (valued at
its fair market value on the date of such exercise), (iv) any combination of
cash, stock and other property, or (v) by exercise of the stock option on a net
issuance basis (a cashless exercise).
A total of 1,000,000 shares of Common Stock is available for issuance under
the 1997 Plan, subject to adjustment for any recapitalization, reclassification,
stock split, stock combination, stock dividend or certain other corporate
reorganizations. The shares issued may include either authorized but unissued
shares of Common Stock or treasury shares. Shares subject to stock option that
ceases to be exercisable for any reason will be available for subsequent stock
option grants under the 1997 Plan.
Stock options granted under the 1997 Plan may not be assigned or
transferred except by will or the laws of descent and distribution or pursuant
to a "qualified domestic relations order" as defined by the Code or Title 1 of
ERISA.
The Board of Directors may amend, suspend or terminate the 1997 Plan;
provided, however, that no amendment may be made without stockholder approval if
such approval is necessary to comply with any applicable tax requirement, any
applicable securities rules or regulations or the rules and regulations of the
stock exchange or stock market on which the Company's Common Stock is traded or
quoted.
Federal Income Tax Consequences of the 1997 Plan. The following general
discussion of the Federal income tax consequences of stock options granted under
the 1997 Plan is based upon the provisions of the Code as in effect on the date
that this discussion was prepared, current regulations thereunder, and existing
public and private administrative rulings of the Internal Revenue Service. This
discussion is not intended to be
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<PAGE> 18
a complete discussion of all of the Federal income tax consequences of the 1997
Plan or of all of the requirements that must be met in order to qualify for the
tax treatment described herein. Changes in the law and regulations may modify
the discussion, and in some cases the changes may be retroactive. No information
is provided as to state tax laws. The 1997 Plan is not qualified under Section
401 of the Code, and is not subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended.
Incentive Stock Options Under the 1997 Plan. An option holder generally
will not recognize taxable income upon either the grant or the exercise of an
incentive stock option. However, under certain circumstances, there may be
alternative minimum tax or other tax consequences, as discussed below.
An option holder will recognize taxable income upon the disposition of the
shares of Common Stock received upon exercise of an incentive stock option. Any
gain recognized upon a disposition that is not a "disqualifying disposition" (as
defined below) will be taxable as long-term capital gain.
A "disqualifying disposition" means any disposition of shares of Common
Stock acquired on the exercise of an incentive stock option within two years of
the date the stock option was granted or within one year of the date the shares
were transferred to the option holder. The use of shares acquired pursuant to
the exercise of an incentive stock option to pay the option exercise price under
another incentive stock option is treated as a disposition for this purpose. In
general, if an option holder makes a disqualifying disposition, an amount equal
to the excess of (a) the lesser of (i) the fair market value of the shares on
the date of exercise or (ii) the amount actually realized over (b) the option
exercise price will be taxable as ordinary income and the balance of the gain
recognized, if any, will be taxable as either long-term or short-term capital
gain, depending on the option holder's holding period for the shares. In the
case of a gift or certain other transfers, the amount of ordinary income taxable
to the option holder is not limited to the amount of gain which would be
recognized in the case of a sale. Instead, it is equal to the excess of the fair
market value of the shares on the date of exercise over the option exercise
price.
Officers and directors generally will be subject to Section 16(b) of the
Securities Exchange Act of 1934 ("Section 16(b)") upon their sale of shares of
Common Stock and this may affect their tax liability. If such an officer or
director makes a disqualifying disposition, the date on which the fair market
value of the shares is determined may be postponed. The IRS regulations have not
yet been amended to conform with the recently revised rules under Section 16(b).
However, it is generally anticipated that the date on which the fair market
value of the shares is determined (the "Determination Date") will be the earlier
of (i) the date six months after the date the stock option was granted, or (ii)
the first day on which the sale of the shares would not subject the individual
to liability under Section 16(b). It is possible that the six month period will
instead run from the option holder's most recent grant or purchase of Common
Stock prior to his or her exercise of the stock option. On the Determination
Date, the option holder will generally recognize ordinary taxable income in an
amount equal to the excess of the fair market value of the shares of Common
Stock at that time over the option exercise price. Despite the general rule, if
there is a disqualifying disposition and the Determination Date is after the
date of exercise, the option holder may make an election pursuant to Section
83(b) of the Code in which case the option holder will recognize ordinary
taxable income at the time the stock option is exercised and not on the later
date. In order to be effective, the 83(b) election must be made within 30 days
after exercise.
In general, in the year of exercise of an incentive stock option, an
employee must include the excess of the fair market value of the shares issued
upon exercise over the exercise price in the calculation of alternative minimum
taxable income. The application of the alternative minimum tax rules for an
option holder subject to Section 16(b) or who receive shares that are not
"substantially vested" are more complex and may depend upon whether the holder
makes a Section 83(b) election, as described above.
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The Company will not be entitled to any deduction with respect to the grant
or exercise of an incentive stock option provided the option holder does not
make a disqualifying disposition. If the option holder does make a disqualifying
disposition, the Company will generally be entitled to a deduction for Federal
income tax purposes in an amount equal to the taxable income recognized by the
option holder, provided the Company reports the income on a timely provided and
filed Form W-2 or 1099, whichever is applicable.
Non-Qualified Stock Options Under the 1997 Plan. The recipient of a
non-qualified stock option under the 1997 Plan will not recognize any taxable
income at the time the stock option is granted.
Upon exercise, the option holder will generally recognize ordinary taxable
income in an amount equal to the excess of the fair market value of the shares
of Common Stock received on the date of exercise over the option exercise price.
Upon a subsequent sale of the shares, long-term or short-term capital gain or
loss (depending upon the holding period) will generally be recognized equal to
the excess of the difference between the amount realized over the fair market
value of the shares on the date of exercise.
The Company will generally be entitled to a compensation deduction for
Federal income tax purposes in an amount equal to the taxable income recognized
by the option holder, provided the Company reports the income on a timely
provided and filed Form W-2 or 1099, whichever is applicable.
An option holder who pays the option exercise price, in whole or in part,
by delivering shares of Common Stock already owned by him or her will recognize
no gain or loss for Federal income tax purposes on the shares surrendered, but
otherwise will be taxed according to the rules described above. To the extent
the shares acquired upon exercise are equal in number to the shares surrendered,
the basis of the shares received will be equal to the basis of the shares
surrendered. The basis of shares received in excess of the shares surrendered
upon exercise will be equal to the fair market value of the shares on the date
of exercise, and the holding period for the shares received will commence on
that date.
Required Vote. The affirmative vote of a majority of the holders of the
Common Stock present in person or by proxy at the Meeting is required for
adoption of Proposal No. 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL NO. 2.
OTHER MATTERS
VOTING PROCEDURES
The votes of stockholders present in person or represented by proxy at the
Meeting will be tabulated by an inspector of elections appointed by the Company.
The three nominees for director of the Company who receive the greatest number
of votes cast by stockholders present in person or represented by proxy at the
Meeting and entitled to vote thereon will be elected directors of the Company.
The affirmative vote of the holders of a majority of shares of Common Stock
present in person or represented by proxy at the Meeting and entitled to vote
thereon is required to approve the adoption of the Company's 1997 Plan.
Abstentions will have no effect on the outcome of the vote for the election
of directors, but will have the effect of being cast against the proposal to
adopt the Company's 1997 Plan even though the stockholder so abstaining intends
a different interpretation. Shares of Common Stock held of record by brokers who
do not return a signed and dated proxy will not be considered present at the
Meeting, will not be counted towards a quorum and will not be voted in the
election of directors or on the proposal to adopt the Company's 1997 Plan.
Shares of Common Stock held of record by brokers who return a signed and dated
proxy but who fail to vote on one of the proposals will count toward the quorum
but will count neither for nor against the proposal not voted.
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INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young LLP as the independent
auditors to audit the Company's consolidated financial statements for the fiscal
year ending September 28, 1997. Such firm and its predecessor have served
continuously in that capacity since 1979.
A representative of Ernst & Young LLP will be at the Meeting and will be
given an opportunity to make a statement, if so desired. The representative will
be available to respond to appropriate questions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors, and persons who own more than
10% of the Company's Common Stock, to file reports of ownership and changes in
ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission and
the New York Stock Exchange. Executive officers, directors and greater than 10%
stockholders are required to furnish the Company with copies of all Forms 3, 4
and 5 they file.
Based solely on the Company's review of the copies of such Forms it has
received and written representations from certain reporting persons that they
were not required to file Forms 5 for specified fiscal years, the Company
believes that all of its executive officers, directors and greater than 10%
stockholders complied with all Section 16(a) filing requirements applicable to
them during the Company's fiscal year ended September 29, 1996 except as
follows:
The executive officers and directors listed in the table below filed a Form
5 on January 15, 1997, reporting, as indicated in the table, one or more of (i)
the allocation of shares of Common Stock as of September 28, 1996 under the
Company's Employee Stock Ownership Plan (the "ESOP") to such participant's
account, (ii) the grant of stock options under the 1987 Employee Stock Option
Plan, and (iii) the grant of stock options under the 1989 Nonqualified Stock
Option Plan for Nonemployee Directors.
<TABLE>
<CAPTION>
ESOP EMPLOYEE STOCK DIRECTOR STOCK
NAME ALLOC OPTION GRANT OPTION GRANT
---- ----- -------------- --------------
<S> <C> <C> <C>
Robert M. Brown................................. 173 6,750
S. James Coppersmith............................ 1,156
Alan M. Fox..................................... 168 6,750
William A. Gallucci............................. 148 3,000
Thomas W. Gathers............................... 152 5,250
John T. Gerlach................................. 1,156
Eugene Lee...................................... 172 6,750
Damon Liever.................................... 193 6,750
Craig S. Miller................................. 149 20,000
Aaron D. Spencer................................ 4
Stephen J. Sweeney.............................. 1,156
</TABLE>
OTHER PROPOSED ACTION
The Board of Directors knows of no matters which may come before the
Meeting other than the election of directors and the proposal to adopt the
Company's 1997 Employee Stock Option Plan. However, if any other matters should
properly be presented to the Meeting, the persons named as proxies shall have
discretionary authority to vote the shares represented by the accompanying proxy
in accordance with their own judgment.
18
<PAGE> 21
STOCKHOLDER PROPOSALS
Proposals which stockholders intend to present at the Company's 1998 Annual
Meeting of Stockholders and wish to have included in the Company's proxy
materials must be received by the Company no later than October 3, 1997.
INCORPORATION BY REFERENCE
To the extent that this Proxy Statement has been or will be specifically
incorporated by reference into any filing by the Company under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the
sections of the Proxy Statement entitled "Compensation Committee Report" and
"Performance Graph" shall not be deemed to be so incorporated, unless
specifically otherwise provided in any such filing.
ANNUAL REPORT ON FORM 10-K
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED SEPTEMBER 29, 1996 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ARE AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST ADDRESSED TO
INVESTOR RELATIONS, UNO RESTAURANT CORPORATION AT 100 CHARLES PARK ROAD, WEST
ROXBURY, MASSACHUSETTS 02132.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS
ARE URGED TO FILL IN, SIGN AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE
ENCLOSED ENVELOPE.
19
<PAGE> 22
EXHIBIT A
UNO RESTAURANT CORPORATION
1997 EMPLOYEE STOCK OPTION PLAN
SECTION I. PURPOSE OF THE PLAN.
The purposes of this Uno Restaurant Corporation 1997 Employee Stock Option
Plan (the "1997 Plan") are (i) to provide long-term incentives and rewards to
those key employees (the "Employee Participants") of Uno Restaurant Corporation
(the "Corporation") and its subsidiaries who are in a position to contribute to
the long-term success and growth of the Corporation and its subsidiaries, (ii)
to assist the Corporation in retaining and attracting executives and key
employees with requisite experience and ability, and (iii) to associate more
closely the interests of such executives and key employees with those of the
Corporation's stockholders.
SECTION II. DEFINITIONS.
"Code" is the Internal Revenue Code of 1986, as it may be amended from time
to time.
"Common Stock" is the $.01 par value common stock of the Corporation.
"Committee" is defined in Section III, paragraph (a).
"Corporation" is defined in Section I.
"Corporation ISOs" are all stock options (including 1997 Plan ISOs) which
(i) are Incentive Stock Options and (ii) are granted under any plans (including
this 1997 Plan) of the Corporation, a Parent Corporation and/or a Subsidiary
Corporation.
"Employee Participants" is defined in Section I.
"Fair Market Value" of any property is the value of the property as
reasonably determined by the Committee.
"Incentive Stock Option" is a stock option which is treated as an incentive
stock option under Section 422 of the Code.
"1997 Plan" is defined in Section I.
"1997 Plan ISOs" are Stock Options which are Incentive Stock Options.
"Non-Employee Directors" has the meaning provided in Rule 16b-3(b) under
the Securities Exchange Act of 1934, as amended.
"Non-qualified Option" is a Stock Option which does not qualify as an
Incentive Stock Option or for which the Committee provides, in the terms of such
option and at the time such option is granted, that the option shall not be
treated as an Incentive Stock Option.
"Parent Corporation" has the meaning provided in Section 424(e) of the
Code.
"Permanent and Total Disability" has the meaning provided in Section
22(e)(3) of the Code.
"Section 16" means Section 16 of the Securities Exchange Act of 1934, as
amended, or any similar or successor statute, and any rules, regulations, or
policies adopted or applied thereunder.
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<PAGE> 23
"Stockholder Approval" means the affirmative vote of at least a majority of
the shares of Common Stock present and entitled to vote at a duly held meeting
of the stockholders of the Corporation, unless a greater vote is required by
state law, in which case such greater requirement shall apply. Stockholder
approval may be obtained by written consent or other means, to the extent
permitted by applicable state law.
"Stock Options" are rights granted pursuant to this 1997 Plan to purchase
shares of Common Stock at a fixed price.
"Subsidiary Corporation" has the meaning provided in Section 424(f) of the
Code.
"Ten Percent Stockholder" means, with respect to a 1997 Plan ISO, any
individual who directly or indirectly owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Corporation or any
Parent Corporation or any Subsidiary Corporation at the time such 1997 Plan ISO
is granted.
SECTION III. ADMINISTRATION.
(a) The Committee. This 1997 Plan shall be administered by a compensation
committee designated by the Board of Directors of the Corporation, which shall
consist solely of two or more Non-Employee Directors designated by the Board of
Directors (the administering body is hereafter referred to as the "Committee").
The Committee shall serve at the pleasure of the Board of Directors, which may
from time to time, and in its sole discretion, discharge any member, appoint
additional new members in substitution for those previously appointed and/or
fill vacancies however caused. A majority of the Committee shall constitute a
quorum and the acts of a majority of the members present at any meeting at which
a quorum is present shall be deemed the action of the Committee.
(b) Authority and Discretion of the Committee. Subject to the express
provisions of this 1997 Plan and provided that all actions taken shall be
consistent with the purposes of this 1997 Plan, and subject to ratification by
the Board of Directors only if required by applicable law, the Committee shall
have full and complete authority and the sole discretion to: (i) determine those
persons who shall constitute key employees eligible to be Employee Participants;
(ii) select the Employee Participants to whom Stock Options shall be granted
under this 1997 Plan; (iii) determine the size and the form of the Stock
Options, if any, to be granted to any Employee Participant; (iv) determine the
time or times such Stock Options shall be granted including the grant of Stock
Options in connection with other awards made, or compensation paid, to the
Employee Participant; (v) establish the terms and conditions upon which such
Stock Options may be exercised, including the exercise of Stock Options in
connection with other awards made, or compensation paid, to the Employee
Participant; (vi) make or alter any restrictions and conditions upon such Stock
Options and the Common Stock received on exercise thereof, including, but not
limited to, providing for limitations on the Employee Participant's right to
keep any Common Stock received on termination of employment; (vii) determine
whether the Employee Participant or the Corporation has achieved any goals or
otherwise satisfied any conditions or requirements that may be imposed on or
related to the exercise of Stock Options; and (viii) adopt such rules and
regulations, establish, define and/or interpret these and any other terms and
conditions, and make all determinations (which may be on a case-by-case basis)
deemed necessary or desirable for the administration of this 1997 Plan.
(c) Applicable Law. This 1997 Plan, and all Stock Options shall be
governed by the law of the state in which the Corporation is incorporated.
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<PAGE> 24
SECTION IV. TERMS OF STOCK OPTIONS.
(a) Agreements. Stock Options shall be evidenced by a written agreement
between the Corporation and the Employee Participant awarded the Stock Option.
This agreement shall be in such form, and contain such terms and conditions (not
inconsistent with this 1997 Plan) as the Committee may determine. If the Stock
Option described therein is not intended to be an Incentive Stock Option, but
otherwise qualifies as an Incentive Stock Option, the agreement shall include
the following, or a similar, statement: "This stock option is not intended to be
an Incentive Stock Option, as that term is described in Section 422 of the
Internal Revenue Code of 1986, as amended."
(b) Term. Stock Options shall be for such periods as may be determined by
the Committee, provided that in the case of 1997 Plan ISOs, the term of any such
1997 Plan ISO shall not extend beyond three months after the time the Employee
Participant ceases to be an employee of the Corporation. Notwithstanding the
foregoing, the Committee may provide in a 1997 Plan ISO that in the event of the
Permanent and Total Disability or death of the Employee Participant, the 1997
Plan ISO may be exercised by the Employee Participant or his estate (if
applicable) for a period of up to one year after the date of such Permanent and
Total Disability or Death. In no event may a 1997 Plan ISO be exercisable
(including provisions, if any, for exercise in installments) subsequent to ten
years after the date of grant, or, in the case of 1997 Plan ISOs granted to Ten
Percent Stockholders, more than five years after the date of grant.
(c) Purchase Price. The purchase price of shares purchased pursuant to any
Stock Option shall be determined by the Committee, and shall be paid by the
Employee Participant or other person permitted to exercise the Stock Option in
full upon exercise, (i) in cash, (ii) by delivery of shares of Common Stock
(valued at their Fair Market Value on the date of such exercise), (iii) any
other property (valued at its Fair Market Value on the date of such exercise),
(iv) any combination of cash, stock and other property, or (v) by exercise of
the Stock Option on a net issuance basis (a cashless exercise), with any payment
made pursuant to subparagraphs (ii), (iii), (iv) or (v) only as permitted by the
Committee, in its sole discretion. In no event will the purchase price of Common
Stock be less than the par value of the Common Stock. Furthermore, the purchase
price of Common Stock subject to a 1997 Plan ISO shall not be less than the Fair
Market Value of the Common Stock on the date of the issuance of the 1997 Plan
ISO, provided that in the case of 1997 Plan ISOs granted to Ten Percent
Stockholders, the purchase price shall not be less than 110% of the Fair Market
Value of the Common Stock on the date of issuance of the 1997 Plan ISO.
(d) Further Restrictions as to Incentive Stock Options. To the extent that
the aggregate Fair Market Value of Common Stock with respect to which
Corporation ISOs (determined without regard to this section) are exercisable for
the first time by any Employee Participant during any calendar year exceeds
$100,000, such Corporation ISOs shall be treated as options which are not
Incentive Stock Options. For the purpose of this limitation, options shall be
taken into account in the order granted, and the Committee may designate that
portion of any Corporation ISO that shall be treated as not an Incentive Stock
Option in the event that the provisions of this paragraph apply to a portion of
any option, unless otherwise required by the Code or regulations of the Internal
Revenue Service. The designation described in the preceding sentence may be made
at such time as the Committee considers appropriate, including after the
issuance of the option or at the time of its exercise. For the purpose of this
section, Fair Market Value shall be determined as of the time the option with
respect to such stock is granted.
(e) Restrictions. Stock Options granted under the 1997 Plan may not be
assigned or transferred except by will or the laws of descent and distribution
or pursuant to a "qualified domestic relations order" as defined by the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended. At
the discretion of the Committee, the Common Stock issued pursuant to the Stock
Options granted hereunder may
22
<PAGE> 25
be subject to restrictions on vesting or transferability. For the purposes of
this limitation, options shall be taken into account in the order granted.
(f) Withholding of Taxes. Pursuant to applicable federal, state, local or
foreign laws, the Corporation may be required to collect income or other taxes
upon the grant of a Stock Option to, or exercise of a Stock Option by, a holder.
The Corporation may require, as a condition to the exercise of a Stock Option,
or demand, at such other time as it may consider appropriate, that the Employee
Participant pay the Corporation the amount of any taxes which the Corporation
may determine is required to be withheld or collected, and the Employee
Participant shall comply with the requirement or demand of the Corporation. In
its discretion, the Corporation may withhold shares to be received upon exercise
of a Stock Option if it deems this an appropriate method for withholding or
collecting taxes.
(g) Securities Law Compliance. Upon exercise (or partial exercise) of a
Stock Option, the Employee Participant or other holder of the Stock Option shall
make such representations and furnish such information as may, in the opinion of
counsel for the Corporation, be appropriate to permit the Corporation to issue
or transfer Common Stock in compliance with the provisions of applicable federal
or state securities laws. The Corporation, in its discretion, may postpone the
issuance and delivery of Common Stock upon any exercise of Stock Options until
completion of such registration or other qualification of such shares under any
federal or state laws, or stock exchange listing, as the Corporation may
consider appropriate. Furthermore, the Corporation is not obligated to register
or qualify the shares of Common Stock to be issued upon exercise of a Stock
Option under federal or state securities laws (or to register or qualify them at
any time thereafter), and it may refuse to issue such shares if, in its sole
discretion, registration or exemption from registration is not practical or
available. The Corporation may require that prior to the issuance or transfer of
Common Stock upon exercise of a Stock Option, the Employee Participant enter
into a written agreement to comply with any restrictions on subsequent
disposition that the Corporation deems necessary or advisable under any
applicable federal and state securities laws. Certificates for shares of Common
Stock issued hereunder may bear a legend reflecting such restrictions.
(h) Right to Stock Option. No employee of the Corporation or any other
person shall have any claim or right to be an Employee Participant in this 1997
Plan or to be granted a Stock Option hereunder. Neither this 1997 Plan nor any
action taken hereunder shall be construed as giving any person any right to be
retained in the employ of the Corporation. Nothing contained hereunder shall be
construed as giving any person any equity or interest of any kind in any assets
of the Corporation or creating a trust of any kind or a fiduciary relationship
of any kind between the Corporation and any such person. As to any claim for any
unpaid amounts under this 1997 Plan, any person having a claim for payments
shall be an unsecured creditor.
(i) Indemnity. Neither the Board of Directors nor the Committee, nor any
members of either, nor any employees of the Corporation or any parent,
subsidiary, or other affiliate, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with their responsibilities with respect to this 1997 Plan, and the Corporation
hereby agrees to indemnify the members of the Board of Directors, the members of
the Committee, and the employees of the Corporation and its parent or
subsidiaries in respect of any claim, loss, damage, or expense (including
reasonable counsel fees) arising from any such act, omission, interpretation,
construction or determination to the full extent permitted by law.
(j) Participation by Foreigners. Without amending this 1997 Plan, except
to the extent required by the Code in the case of Incentive Stock Options, the
Committee may modify grants made to Employee Participants who are foreign
nationals or employed outside the United States so as to recognize differences
in local law, tax policy, or custom.
23
<PAGE> 26
SECTION V. AMENDMENT AND TERMINATION; ADJUSTMENTS UPON CHANGES IN STOCK.
The Board of Directors of the Corporation may at any time, and from time to
time, amend, suspend or terminate this 1997 Plan or any portion thereof,
provided that no amendment shall be made without Stockholder approval if such
approval is necessary to comply with any applicable tax requirement, any
applicable rules or regulations of the Securities and Exchange Commission,
including Rule 16(b)-3 (or any successor rule thereunder), or the rules and
regulations of the New York Stock Exchange or any other exchange or stock market
on which the Corporation's securities are listed or quoted. Except as provided
herein, no amendment, suspension or termination of this 1997 Plan may affect the
rights of an Employee Participant to whom a Stock Option has been granted
without such Employee Participant's consent. The Committee is specifically
authorized to convert, in its discretion, the unexercised portion of any 1997
Plan ISO granted to an Employee Participant to a Non-qualified Option at any
time prior to the exercise, in full, of such 1997 Plan ISO. If there shall be
any change in the Common Stock or to any Stock Option granted under this 1997
Plan through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split or other change in the corporate structure of the
Corporation, appropriate adjustments may be made by the Committee (or if the
Corporation is not the surviving corporation in any such transaction, the Board
of Directors of the surviving corporation, or its designee) in the aggregate
number and kind of shares subject to this 1997 Plan, and the number and kind of
shares and the price per share subject to outstanding Stock Options, provided
that such adjustment does not affect the qualification of any 1997 Plan ISO as
an Incentive Stock Option. In connection with the foregoing, the Committee may
issue new Stock Options in exchange for outstanding Stock Options.
SECTION VI. SHARES OF COMMON STOCK SUBJECT TO THE PLAN.
The number of shares of Common Stock that may be the subject of awards
under this 1997 Plan shall not exceed an aggregate of 1,000,000 shares. Shares
to be delivered under this 1997 Plan may be either authorized but unissued
shares of Common Stock or treasury shares. Any shares subject to a Stock Option
hereunder which for any reason terminates, is canceled or otherwise expires
unexercised, and any shares reacquired by the Corporation due to restrictions
imposed on the shares, shares returned because payment is made hereunder in
Common Stock of equivalent value rather than in cash, and/or shares reacquired
from a recipient for any other reason shall, at such time, no longer count
towards the aggregate number of shares which have been the subject of Stock
Options issued hereunder, and such number of shares shall be subject to further
awards under this 1997 Plan, provided, first, that the total number of shares
then eligible for award under this 1997 Plan may not exceed the total specified
in the first sentence of this Section VI, and second, that the number of shares
subject to further awards shall not be increased in any way that would cause
this 1997 Plan or any Stock Option to not comply with Section 16, if applicable
to the Corporation.
SECTION VII. EFFECTIVE DATE AND TERM OF THE PLAN.
Provided there is Stockholder Approval on or before January 21, 1998, the
effective date of this 1997 Plan is January 21, 1997 (the "Effective Date") and
awards under this 1997 Plan may be made for a period of ten years commencing on
the Effective Date. The period during which a Stock Option may be exercised may
extend beyond that time as provided herein.
24
<PAGE> 27
PROXY UNO RESTAURANT CORPORATION PROXY
The undersigned hereby appoints Craig S. Miller and Robert M. Brown, and each of
them, acting singly, with full power of substitution, attorneys and proxies to
represent the undersigned at the 1997 Annual Meeting of Stockholders of Uno
Restaurant Corporation to be held on Wednesday, February 26, 1997, and at any
adjournment or adjournments thereof, with all power which the undersigned would
possess if personally present, and to vote all shares of stock which the
undersigned may be entitled to vote at said meeting upon the matters set forth
in the Notice of and Proxy Statement for the Meeting in accordance with the
following instructions and with discretionary authority upon such other matters
as may come before the Meeting. All previous proxies are hereby revoked.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT WILL BE VOTED
AS DIRECTED BY THE UNDERSIGNED AND IF NO DIRECTION IS INDICATED, IT WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES AS DIRECTORS AND FOR THE PROPOSAL TO
ADOPT THE 1997 EMPLOYEE STOCK OPTION PLAN.
Continued, and to be signed, on reverse side
(Please fill in the reverse side and mail in enclosed envelope)
<PAGE> 28
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES
AS DIRECTORS AND FOR THE PROPOSAL TO ADOPT THE 1997 EMPLOYEE STOCK OPTION PLAN.
/ / PLEASE MARK VOTES AS IN THIS EXAMPLE.
1. Election of Directors:
Nominees: Aaron D. Spencer, Stephen J. Sweeney and James F. Carlin
/ / FOR ALL NOMINEES (except as marked to the contrary)
/ / WITHHOLD AUTHORITY to vote for all nominees
FOR except vote withheld from the following nominee(s):
________________________________________________________
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE WRITE THAT NOMINEE'S NAME IN THE
SPACE PROVIDED ABOVE.)
FOR AGAINST ABSTAIN
2. To adopt the 1997 Employee Stock Option Plan / / / / / /
as described in the accompanying Proxy Statement.
MARK HERE FOR
ADDRESS CHANGE
AND NOTE AT LEFT / /
(Signatures should be the same as the name printed hereon. Executors,
administrators, trustees, guardians, attorneys, and officers of corporations
should add their titles when signing.)
Signature:__________________________ Date:____________
Signature:__________________________ Date:____________
