AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 9, 1997
REGISTRATION NO. 333-
AND POST-EFFECTIVE AMENDMENT NO. 1 (333-21869)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------

FINE HOST CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE 5812 06-1156070
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)

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

3 GREENWICH OFFICE PARK
GREENWICH, CONNECTICUT 06831
(203) 629-4320
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
------------------------------

ELLEN KEATS, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
FINE HOST CORPORATION
3 GREENWICH OFFICE PARK
GREENWICH, CONNECTICUT 06831
(203) 629-4320
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------

COPIES TO:

STEVEN J. GARTNER, ESQ.
WILLKIE FARR & GALLAGHER
ONE CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022
(212) 821-8000
--------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined by
market conditions.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: /X/

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same
offering: / / ______________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / / ______________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
--------------------------

CALCULATION OF REGISTRATION FEE

TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED(1) PER SHARE(1) PRICE(1) REGISTRATION FEE

Common Stock, $.01 par
value................. 950,150 $29.00 $27,554,350 $8,350(2)

(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) based on the average of the high and low sales prices of the
Common Stock quoted on the Nasdaq National Market on May 5, 1997.
(2) A fee in the amount of $6,303 is paid herewith. A fee in the amount of
$2,047, representing the registration fee covering the $6,752,657 in maximum
aggregate public offering price of Common Stock registered under the Prior
Registration Statement (defined below), was previously paid.
--------------------------

THIS DOCUMENT IS BOTH A NEW REGISTRATION STATEMENT (THE "NEW REGISTRATION
STATEMENT") AND POST-EFFECTIVE AMENDMENT NO. 1 TO THE REGISTRANT'S REGISTRATION
STATEMENT ON FORM S-1 (NO. 333-21869) DECLARED EFFECTIVE ON FEBRUARY 28, 1997
(THE "PRIOR REGISTRATION STATEMENT"). PURSUANT TO RULE 429 UNDER THE SECURITIES
ACT, THE PROSPECTUS INCLUDED IN THIS DOCUMENT IS A COMBINED PROSPECTUS RELATING
TO THE NEW REGISTRATION STATEMENT AND TO THE PRIOR REGISTRATION STATEMENT.
POST-EFFECTIVE AMENDMENT NO. 1 TO THE PRIOR REGISTRATION STATEMENT SHALL, IN
ACCORDANCE WITH SECTION 8(E) OF THE SECURITIES ACT, HEREAFTER BECOME EFFECTIVE
CONCURRENTLY WITH THE EFFECTIVENESS OF THE NEW REGISTRATION STATEMENT.
--------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SUBJECT TO COMPLETION, MAY 9, 1997
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

FILED PURSUANT TO RULE 424(b)(2)
REGISTRATION NO. 333-21869

FINE HOST CORPORATION
COMMON STOCK

UP TO 941,350 PRESENTLY OUTSTANDING SHARES (THE "SHARES") OF COMMON STOCK,
PAR VALUE $.01 PER SHARE (THE "COMMON STOCK") OF FINE HOST CORPORATION, A
DELAWARE CORPORATION (THE "COMPANY"), MAY BE OFFERED FOR SALE FROM TIME TO TIME
BY CERTAIN STOCKHOLDERS OF THE COMPANY (THE "SELLING STOCKHOLDERS"). SEE
"PRINCIPAL AND SELLING STOCKHOLDERS." THE COMPANY WILL NOT RECEIVE ANY OF THE
PROCEEDS FROM THE SALE OF SHARES BY THE SELLING STOCKHOLDERS.

THE SHARES COVERED BY THIS PROSPECTUS MAY BE SOLD BY THE SELLING
STOCKHOLDERS OR BY PLEDGEES, DONEES, TRANSFEREES OR OTHER SUCCESSORS IN
INTEREST. SALES OF SHARES BY THE SELLING STOCKHOLDERS MAY BE EFFECTED FROM TIME
TO TIME IN ONE OR MORE TRANSACTIONS, INCLUDING BLOCK TRADES, IN NEGOTIATED
TRANSACTIONS OR IN A COMBINATION OF ANY SUCH METHODS OF SALE. THE SELLING PRICE
OF THE SHARES MAY BE AT THE MARKET PRICE PREVAILING AT THE TIME OF THE SALE, AT
A PRICE RELATED TO SUCH PREVAILING MARKET PRICE OR AT A NEGOTIATED PRICE. EACH
OF THE SELLING STOCKHOLDERS MAY BE DEEMED TO BE AN "UNDERWRITER" WITHIN THE
MEANING OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). SEE
"PLAN OF DISTRIBUTION."

THE COMPANY'S COMMON STOCK IS TRADED ON THE NASDAQ NATIONAL MARKET UNDER THE
SYMBOL "FINE." ON MAY 8, 1997, THE LAST REPORTED SALE PRICE OF THE COMMON STOCK
ON THE NASDAQ NATIONAL MARKET WAS $31.00 PER SHARE. SEE "PRICE RANGE OF COMMON
STOCK."

SEE "RISK FACTORS" COMMENCING ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.

---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

MAY , 1997

(This page has been left blank intentionally.)

PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE
DETAILED INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES
THERETO, APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS THE CONTEXT INDICATES OR
REQUIRES OTHERWISE, REFERENCES IN THIS PROSPECTUS TO THE "COMPANY" OR "FINE
HOST" ARE TO FINE HOST CORPORATION AND ITS SUBSIDIARIES.

THE COMPANY

Fine Host Corporation is a leading contract food service management company,
providing food and beverage concession, catering and other ancillary services at
more than 750 facilities located in 38 states, primarily through multi-year
contracts. Fine Host targets four distinct markets within the contract food
service industry: the recreation and leisure market (arenas, stadiums,
amphitheaters, civic centers and other recreational facilities); the convention
center market; the education market (colleges, universities and elementary and
secondary schools); and the business dining market (corporate cafeterias, office
complexes and manufacturing plants). The Company is the exclusive provider of
food and beverage services at substantially all of the facilities it serves.

The Company estimates that the United States contract food service industry
had annual revenues of approximately $96 billion in 1995, of which approximately
$60 billion was in markets in which the Company presently competes. In this
industry, the facility owner, rather than the food service provider, is
primarily responsible for attracting patrons. As a result, the Company does not
incur the expense of marketing to the broader public and is able to focus on
operations, client satisfaction, account retention and new account development.

Fine Host was founded as a start-up company in 1985 by experienced contract
food service industry executives and has grown to a business with net sales of
$127.9 million in fiscal 1996 and $49.5 million for the three months ended March
26, 1997. Throughout its history, the Company has focused its efforts
exclusively on the contract food service industry, unlike most of its national
competitors. The Company achieved early success in the industry by focusing on
facilities generating $1 million to $4 million in annual food and beverage
sales. The Company believes that these "middle-market" facilities generally
provide greater profit margins and require less capital investment than larger
facilities. Middle-market facilities serviced by the Company include the
Albuquerque Convention Center in Albuquerque, New Mexico; the D. L. Lawrence
Convention Center in Pittsburgh, Pennsylvania; the Pyramid Arena in Memphis,
Tennessee; and Xavier University in New Orleans, Louisiana. This middle-market
focus has been supplemented by several contracts at larger facilities such as
Pro Player Stadium (home of the Miami Dolphins and the Florida Marlins and the
site of two Super Bowls), the Orange County Convention Center in Orlando,
Florida (one of the largest convention centers in the world) and Boise State
University in Boise, Idaho. Servicing these larger facilities gives the Company
high visibility in the industry and strengthens its credibility when bidding on
new contracts or pursuing acquisitions.

Fine Host has developed and implemented various operating strategies and
systems, including labor and product cost management, quality control programs,
facility-design and customized menu design capabilities and extensive on-site
marketing support. The Company believes that these operating techniques have led
to significant increases in sales at many of the facilities it serves. The
Company's operating strategies and systems are implemented by localized
management teams that are given the freedom and authority to make operational
decisions. The Company emphasizes flexibility and responsiveness in consistently
providing high quality and client satisfaction while tightly controlling labor
and overhead costs at the local level. As the Company has grown, it has been
able to achieve economies of scale and develop a strong corporate image and
national reputation.

The Company has increased its net sales and profits by renewing existing
contracts, by successfully bidding on new targeted accounts and by making
acquisitions. The Company believes that its strong operating performance and
focus on client satisfaction have enabled it to retain and renew contracts. Fine

Host has retained the food and beverage business at each of the 24 public
convention centers at which it has been awarded a contract without the loss of
any such contract, and has renewed each of the 13 convention center contracts
that have come up for renewal. The Company believes its ability to obtain new
contracts is enhanced by the experience of its management team, its geographic
diversity and market penetration, its expansion into the education and corporate
dining markets and its establishment of an international presence. From April
1993 through January 1997, the Company completed nine acquisitions of companies
in the contract food service industry, which have accounted for a significant
part of the Company's growth. Fine Host believes there are other opportunities
to expand its business through acquisition, particularly in the education and
corporate dining markets, as well as in markets where the Company does not
primarily operate, such as hospitals, healthcare facilities and correctional
facilities. The Company believes that it can integrate acquired companies
successfully without a significant increase in general and administrative
expenses. See "Risk Factors--Risk of Inability to Operate or Integrate Acquired
Businesses; Expenses Associated with Acquisition Strategy" and "Business--Growth
Opportunities."

Fine Host's growth has accelerated since its initial public offering on June
25, 1996 (the "Initial Public Offering") with the successful completion of five
strategic acquisitions. These acquisitions significantly increase the Company's
presence in the education and business dining markets in the northeastern and
mid-Atlantic regions of the United States. Four of these acquisitions, Ideal
Management Services, Inc. ("Ideal"), Republic Management Corp. of Massachusetts
("Republic"), Service Dynamics Corp. ("Service Dynamics") and Serv-Rite
Corporation ("Serv-Rite"), increase the Company's presence in the school
nutrition (grades K-12) ("School Nutrition") market, a market estimated by the
U.S. government to be approximately $10 billion in 1995. The Company believes
that all of these companies have experienced management teams and strong
operating results at their facilities, yet can benefit from the Company's size
and operating infrastructure.

On February 12, 1997, the Company completed a follow-on offering (the
"Follow-On Offering") of 2,875,000 shares of Common Stock, consisting of
2,689,000 shares sold by the Company and 186,000 shares sold by certain selling
stockholders, resulting in net proceeds to the Company of approximately $59.1
million.

The Company was incorporated in Delaware in November 1985 and its principal
executive offices are located at 3 Greenwich Office Park, Greenwich, Connecticut
06831. Its telephone number is (203) 629-4320.

THE OFFERING

Common Stock offered by the Selling Stockholders... 941,350 shares
Common Stock outstanding........................... 8,959,266 shares(1)
Nasdaq National Market symbol...................... FINE

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(1) Based on shares outstanding as of May 8, 1997. Does not include 501,444
shares of Common Stock issuable upon the exercise of outstanding stock
options and 80,917 shares of Common Stock issuable upon conversion of
outstanding convertible notes. An aggregate of 34,334 additional shares of
Common Stock has been reserved for future grants under the Company's stock
plans. See "Management--Compensation Pursuant to Plans" and "Description of
Capital Stock--Convertible Notes."

SUMMARY CONSOLIDATED FINANCIAL DATA

THREE
MONTHS
ENDED
FISCAL YEARS (1) -----------
----------------------------------------------------- MARCH 27,
1992 1993 1994 1995 1996 1996
--------- --------- --------- --------- --------- -----------

(IN THOUSANDS, EXCEPT PER SHARE AND CONTRACT DATA)

STATEMENT OF INCOME DATA:

Net sales............................................. $ 39,429 $ 61,212 $ 82,119 $ 95,462 $ 127,925 $ 24,160

Gross profit.......................................... 4,031 5,396 8,286 9,886 14,222 2,530

Income from operations................................ 949 2,747 4,880 6,260 8,834 1,194

Net income before accretion........................... $ 340 $ 1,084 $ 1,866 $ 2,196 $ 3,804 $ 259

Net income per share assuming full dilution (2)....... $ 0.17 $ 0.24 $ 0.49 $ 0.39 $ 0.50 $ (0.22)

Average number of shares of Common Stock outstanding
assuming full dilution.............................. 2,048 3,087 3,287 3,330 5,005 3,510

SELECTED OPERATING DATA:

EBITDA (3)............................................ $ 2,154 $ 4,631 $ 7,563 $ 10,416 $ 14,078 $ 2,199

Net cash provided by operating activities............. 1,676 3,765 2,570 2,971 346 1,630

Net cash used in investing activities................. (2,295) (7,669) (9,046) (8,124) (25,875) (6,725)

Net cash provided by financing activities............. 463 2,737 7,632 4,255 29,619 5,823

Total contracts (at end of period) (4)................ 28 42 81 95 341 156

MARCH 26,
1997
-----------

STATEMENT OF INCOME DATA:
Net sales............................................. $ 49,452
Gross profit.......................................... 5,242
Income from operations................................ 2,027
Net income before accretion........................... $ 848
Net income per share assuming full dilution (2)....... $ 0.11
Average number of shares of Common Stock outstanding
assuming full dilution.............................. 7,951
SELECTED OPERATING DATA:
EBITDA (3)............................................ $ 4,042
Net cash provided by operating activities............. 324
Net cash used in investing activities................. (15,716)
Net cash provided by financing activities............. 24,432
Total contracts (at end of period) (4)................ 713

MARCH 26, 1997
---------------

(IN THOUSANDS)

BALANCE SHEET DATA:

Total debt........................................................................................ $ 8,735

Stockholders' equity.............................................................................. 107,454

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

(1) The Company's fiscal year ends on the last Wednesday of December. The 1992
fiscal year was a 53-week period.

(2) Net income (loss) per share assuming full dilution is calculated based upon
net income less accretion to the redemption value of warrants issued in
fiscal 1993. Accretion to redemption value of warrants was $230 ($0.07 per
share), $250 ($0.08 per share), $900 ($0.27 per share) and $1,300 ($0.26 per
share) for fiscal 1993, 1994, 1995 and 1996, respectively, and $1,040 ($0.30
per share) and $0 for the three months ended March 27, 1996 and March 26,
1997, respectively.

(3) Represents earnings before interest expense, income tax expense and
depreciation and amortization ("EBITDA"). EBITDA is not a measurement in
accordance with generally accepted accounting principles ("GAAP") and should
not be considered an alternative to, or more meaningful than, income from
operations, net income or cash flows as defined by GAAP or as a measure of
the Company's profitability or liquidity. The Company has included
information concerning EBITDA herein because management believes EBITDA
provides useful information regarding the cash flow of the Company and its
ability to service debt.

(4) Represents total contracts other than contracts for one-time or special
events.

RISK FACTORS

IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, PROSPECTIVE
INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN EVALUATING AN
INVESTMENT IN THE COMPANY AND ITS BUSINESS BEFORE PURCHASING ANY SHARES OF
COMMON STOCK OFFERED HEREBY. THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS
WHICH INVOLVE RISKS AND UNCERTAINTIES RELATING TO FUTURE EVENTS. PROSPECTIVE
INVESTORS ARE CAUTIONED THAT THE COMPANY'S ACTUAL EVENTS OR RESULTS MAY DIFFER
MATERIALLY FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS
THAT MIGHT CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY
SUCH FORWARD-LOOKING STATEMENTS INCLUDE THE MATTERS SET FORTH BELOW.

RISK OF INABILITY TO OPERATE OR INTEGRATE ACQUIRED BUSINESSES; EXPENSES
ASSOCIATED WITH ACQUISITION STRATEGY

A significant portion of the Company's growth to date has been achieved
through acquisitions. From April 1993 through January 1997, the Company acquired
nine companies, including five since the closing of the Initial Public Offering.
A key component of the Company's strategy is to continue to pursue acquisitions.
There can be no assurance, however, that the Company will be able to identify,
negotiate and consummate acquisitions or that acquired businesses can be
operated profitably or integrated successfully into the Company's operations. In
addition, acquisitions by the Company are subject to various risks generally
associated with the acquisition of businesses, including the financial impact of
expenses associated with the integration of acquired businesses. There can be no
assurance that the Company's historic or future acquisitions will not have an
adverse impact on the Company's business, financial condition or results of
operations. If suitable opportunities arise, the Company anticipates that it
would finance future acquisitions through available cash, bank lines of credit
or through additional debt or equity financing. There can be no assurance that
such debt or equity financing would be available to the Company on acceptable
terms when, and if, suitable strategic opportunities arise. If the Company were
to consummate one or more significant acquisitions in which part or all of the
consideration consisted of equity, stockholders of the Company could suffer a
significant dilution of their interests in the Company. In addition, many of the
acquisitions the Company is likely to pursue, if accounted for as a purchase,
would result in substantial amortization charges to the Company. See
"Business--Growth Opportunities."

ADVERSE EFFECTS OF AN INABILITY TO RETAIN EXISTING CONTRACTS AND OBTAIN NEW
CONTRACTS

The Company's success will depend on its ability to retain and renew
existing client contracts and to obtain and successfully negotiate new client
contracts. Most of the Company's corporate dining contracts are terminable after
a short notice period. The Company's remaining contracts generally have a fixed
term and in any fiscal year a number of these contracts either expire or come up
for renewal. There can be no assurance that the Company will be able to retain
and renew existing client contracts or obtain new contracts or that such
contracts will be profitable. The Company's failure to retain and renew existing
contracts or obtain new contracts could have a material adverse effect on the
Company's business, financial condition and results of operations. See
"Business--Growth Opportunities."

ADVERSE EFFECTS OF AN INABILITY TO MANAGE GROWTH

Fine Host has experienced rapid growth and expansion, which has resulted in
an increase in the level of responsibility for existing management personnel.
Future growth and expansion could place a significant strain on its personnel
and resources. The Company seeks to manage its current and anticipated growth
through the recruitment of additional management personnel and the
implementation of internal systems and controls. The failure to manage growth
effectively could have a material adverse effect on the Company's business,
financial condition and results of operations. To the extent the Company
continues to expand internationally, the Company will be subject to additional
risks of doing business abroad, including fluctuations in currency exchange
rates, difficulties in obtaining licenses and sourcing products and labor, and
economic and political uncertainties. See "Business--Growth Opportunities."

DEPENDENCE ON CLIENTS; INVESTMENT IN CLIENT CONTRACTS AND ADVANCES TO CLIENTS

The Company depends on municipalities, corporations, educational
institutions and facility owners to attract and retain tenants and users of
their facilities and to operate their facilities on a sound financial and
business basis. The failure of these parties to attract and retain tenants and
users of their facilities could have a material adverse effect on the Company's
business, financial condition and results of operations. In connection with
certain contracts, the Company is required to make an investment in the client's
facilities or make advances to its clients. While these contracts typically
require the client to repay any advance and to reimburse the Company for any
unamortized invested capital in the event the contract terminates or expires,
there can be no assurance that the client will repay such advance or reimburse
the Company for any unamortized invested capital. See "Business--Contracts."

SIGNIFICANT VARIABILITY OF QUARTERLY RESULTS

The Company's revenues and operating results have varied, and are expected
to continue to vary, significantly from quarter to quarter as a result of
seasonal patterns, the unpredictability in the number, timing and type of new
contracts and acquisitions, the timing of contract expirations and special
one-time events at facilities served by the Company. The Company's business is
seasonal in nature, with many recreation and leisure facilities experiencing
slack periods in March, April and May and convention centers generally hosting a
lower number of conventions from May through September. In addition, many
education dining facilities are closed during the summer months. Results of
operations for any particular quarter may not be indicative of results of
operations for future periods. There can be no assurance that future seasonal
and quarterly fluctuations will not have a material adverse effect on the
Company's business, financial condition and results of operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Quarterly Results of Operations."

DEPENDENCE ON KEY PERSONNEL

The Company's future success depends to a significant extent on the efforts
and abilities of its executive officers. The loss of the services of certain of
these individuals could have a material adverse effect on the Company's
business, financial condition and results of operations. The Company believes
that its future success also will depend significantly upon its ability to
attract, motivate and retain additional highly skilled managerial personnel.
Competition for such personnel is intense, and there can be no assurance that
the Company will be successful in attracting, assimilating and retaining the
personnel it requires to grow and operate profitably. See "Business--Employees"
and "Management--Executive Officers and Directors."

CONSTRAINTS AND EXPENSES ASSOCIATED WITH AN UNAVAILABILITY OF LABOR

From time to time, the Company must hire a large number of qualified,
temporary workers to provide food service at a particular event or events. The
Company may encounter difficulty in hiring sufficient numbers of qualified,
temporary workers to staff these events, which could result in lower sales at
these events, constraints to growth and significant expense or otherwise could
have a material adverse effect on the Company's business, financial condition
and results of operations. See "Business--Growth Opportunities."

ADVERSE EFFECTS OF COMPETITION

The Company encounters significant competition in each area of the contract
food service market in which it operates. Certain of the Company's competitors
compete with the Company on both a national and international basis and have
significantly greater financial and other resources than the Company.
Competition may result in price reductions, decreased gross margins and loss of
market share. In addition, existing or potential clients may elect to "self
operate" their food service, eliminating the opportunity for

the Company to compete for the account. There can be no assurance that the
Company will be able to compete successfully in the future or that competition
will not have a material adverse effect on the Company's business, financial
condition or results of operations. See "Business--Competition."

GOVERNMENT REGULATION

The Company's business is subject to various governmental regulations
incidental to its operations, such as environmental, employment and health and
safety regulations. The Company also holds liquor licenses at many facilities at
which it provides services, and is subject to the liquor license requirements of
the states in which it holds liquor licenses, including "dram-shop" statutes.
"Dram-shop" statutes generally provide a person injured by an intoxicated person
the right to recover damages from an establishment that wrongfully served
alcoholic beverages to the intoxicated person. While the Company maintains
insurance for such liability, there can be no assurance that such insurance will
be adequate to cover any potential liability or that such insurance will
continue to be available on commercially acceptable terms. The loss of one or
more liquor licenses could have a material adverse effect on the Company's
business, financial condition or results of operations. There can be no
assurance that additional federal or state regulation would not limit the
activities of the Company in the future or significantly increase the cost of
regulatory compliance. See "Business--Government Regulation."

RISKS ASSOCIATED WITH GENERAL ECONOMIC CONDITIONS

Although most of the Company's contracts provide for minimum annual price
increases for products and services provided by the Company, the Company could
be adversely impacted during inflationary periods if the rate of contractual
increases are lower than the inflation rate. In addition, a significant
recession could cause users of, and persons attending events held at, facilities
at which the Company operates to cancel, reduce or postpone their use of the
facilities or cause patrons to reduce their spending on food and beverages while
at such facilities.

SHARES ELIGIBLE FOR FUTURE SALE; POTENTIAL FOR ADVERSE EFFECT ON STOCK PRICE;
REGISTRATION RIGHTS

Sales of a substantial number of shares of Common Stock in the public market
or the prospect of such sales could adversely affect prevailing market prices
for the Common Stock. Of the 8,959,266 shares of Common Stock outstanding, the
Company estimates that all of such shares, including the 941,350 Shares of
Common Stock offered by this Prospectus, will be freely tradable without
restriction under the Securities Act. Certain of the Selling Stockholders,
representing 223,000 of the Shares offered by this Prospectus, have agreed,
however, to sell their Shares subject to the volume limitations of Rule 144. As
of May 8, 1997, there were outstanding options to purchase a total of 501,444
shares of Common Stock. See "Management--Compensation Pursuant to Plans." The
Company has granted registration rights with respect to 80,917 shares of Common
Stock underlying shares issuable upon the exercise of convertible notes. See
"Description of Common Stock--Registration Rights." The sale of such shares
could have a material adverse effect on the Company's ability to raise capital
in the public markets. See "Shares Eligible for Future Sale."

ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER AND BY-LAW PROVISIONS

The Company's Restated Certificate of Incorporation, as amended (the
"Restated Certificate"), provides for a classified Board of Directors and
authorizes the issuance of Preferred Stock without stockholder approval and upon
such terms as the Board of Directors may determine. These provisions could have
the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from acquiring or making a proposal to acquire, a
majority of the outstanding stock of the Company and could adversely affect the
prevailing market price of the Common Stock. The rights of the holders of Common
Stock will be subject to, and may be adversely affected by, the rights of
holders of Preferred

Stock that may be issued in the future. The Company has no present plans to
issue any shares of Preferred Stock. See "Description of Capital
Stock--Preferred Stock."

LIMITED PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

The Common Stock has traded on the Nasdaq National Market since June 1996
and has a limited public market history. There can be no assurance that future
market prices for the shares will equal or exceed the price to public set forth
on the cover page of this Prospectus. The price at which the Common Stock will
trade will depend upon a number of factors, including, but not limited to, the
Company's historical and anticipated operating results and general market and
economic conditions, some of which factors are beyond the Company's control.
Factors such as quarterly fluctuations in the Company's financial and operating
results, announcements by the Company or others and developments affecting the
Company, its clients or the industry generally, could also cause the market
price of the Common Stock to fluctuate substantially. In addition, the stock
market has from time to time experienced extreme price and volume fluctuations.
These broad market fluctuations may adversely affect the market price of the
Common Stock.

USE OF PROCEEDS

The Company will not receive any proceeds from the sale of Shares by the
Selling Stockholders.

PRICE RANGE OF COMMON STOCK

The Common Stock has been quoted on the Nasdaq National Market under the
symbol "FINE" since the Initial Public Offering on June 19, 1996.

The following table sets forth the high and low sale prices of the Common
Stock on the Nasdaq National Market for the periods indicated.

HIGH LOW
--------- ---------

Fiscal Year Ended December 25, 1996:

Second Quarter (beginning June 19, 1996)................................. $ 12.25 $ 10.75
Third Quarter............................................................ 16.25 10.50
Fourth Quarter........................................................... 19.25 14.00

Fiscal Year Ending December 31, 1997:

First Quarter............................................................ $ 28.50 $ 18.25
Second Quarter (through May 8, 1997)..................................... 33.00 22.75

On May 8, 1997, the last reported sale price for the Common Stock as
reported by Nasdaq was $31.00 per share. As of May 8, 1997, there were
approximately 40 holders of record of the Common Stock.

DIVIDEND POLICY

The Company has never paid cash dividends on its Common Stock and presently
does not intend to declare any cash dividends on the Common Stock in the
foreseeable future. It is the current policy of the Company's Board of Directors
to retain earnings to finance the operations and expansion of the Company's
business. In addition, the Company's financing agreement restricts the Company's
ability to pay dividends to its stockholders and it is anticipated that future
financing agreements will have similar restrictions. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

CAPITALIZATION

The following table sets forth the capitalization of the Company as of March
26, 1997. This table should be read in conjunction with the consolidated
financial statements of the Company and notes thereto appearing elsewhere in
this Prospectus.

MARCH 26, 1997
--------------

(IN THOUSANDS)
Short-term obligations:
Current portion of long-term debt............................................................... $ --
Current portion of subordinated debt............................................................ 1,765
--------------
Total....................................................................................... $ 1,765
--------------
--------------
Long-term obligations:
Long-term debt.................................................................................. $ 1,461
Subordinated debt............................................................................... 5,509
--------------
Total....................................................................................... 6,970

Stockholders' equity:
Preferred Stock, $.01 par value, 1,000,000 shares authorized; none issued and outstanding.......
Common Stock, $.01 par value, 25,000,000 shares authorized; 8,955,766 issued and outstanding
(1)........................................................................................... 90
Additional paid-in capital...................................................................... 101,551
Retained earnings............................................................................... 5,969
Receivables from stockholders for purchase of Common Stock...................................... (156)
--------------
Total stockholders' equity.................................................................. 107,454
--------------
Total capitalization...................................................................... 114,424
--------------
--------------

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

(1) Does not include 501,044 shares of Common Stock issuable upon the exercise
of outstanding stock options and 80,917 shares of Common Stock issuable upon
conversion of outstanding convertible notes. An aggregate of 34,334
additional shares of Common Stock has been reserved for future grants under
the Company's stock plans. See "Management--Compensation Pursuant to Plans"
and "Description of Capital Stock--Convertible Notes."

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data of the Company as of
December 27, 1995 and December 25, 1996 and for each of the three years in the
period ended December 25, 1996 were derived from the consolidated financial
statements of the Company and the notes thereto, included elsewhere in this
Prospectus, which have been audited by Deloitte & Touche LLP, independent
auditors. The following selected consolidated financial data of the Company as
of March 27, 1996 and March 26, 1997 and for each of the three-month periods
then ended were derived from the unaudited consolidated financial statements of
the Company and the notes thereto, included elsewhere in this Prospectus. The
following selected consolidated financial data of the Company should be read in
conjunction with the consolidated financial statements of the Company and the
notes thereto and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" included elsewhere in this Prospectus.

FISCAL YEARS (1) THREE MONTHS ENDED
----------------------------------------------------- ------------------------

MARCH 27, MARCH 26,
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- ----------- -----------

(IN THOUSANDS, EXCEPT PER SHARE AND CONTRACT DATA)

STATEMENT OF INCOME DATA:
Net sales......................................... $ 39,429 $ 61,212 $ 82,119 $ 95,462 $ 127,925 $ 24,160 $ 49,452
Cost of sales..................................... 35,398 55,816 73,833 85,576 113,703 21,630 44,210
--------- --------- --------- --------- --------- ----------- -----------
Gross profit...................................... 4,031 5,396 8,286 9,886 14,222 2,530 5,242
General and administrative expenses............... 3,082 2,649 3,406 3,626 5,388 1,336 3,215
--------- --------- --------- --------- --------- ----------- -----------
Income from operations............................ 949 2,747 4,880 6,260 8,834 1,194 2,027
Interest expense, net............................. 393 834 1,629 2,479 2,330 767 538
--------- --------- --------- --------- --------- ----------- -----------
Income before tax provision and extraordinary
item............................................ 556 1,913 3,251 3,781 6,504 427 1,489
Tax provision..................................... 216 829 1,385 1,585 2,700 168 641
--------- --------- --------- --------- --------- ----------- -----------
Income before extraordinary item.................. 340 1,084 1,866 2,196 3,804 259 848
Extraordinary item................................ -- 112 -- -- -- -- --
--------- --------- --------- --------- --------- ----------- -----------
Net income........................................ 340 972 1,866 2,196 3,804 259 848
Accretion to redemption value of warrants......... -- (230) (250) (900) (1,300) (1,040) --
--------- --------- --------- --------- --------- ----------- -----------
Net income available to Common Stockholders....... $ 340 $ 742 $ 1,616 $ 1,296 $ 2,504 $ (781) $ 848
--------- --------- --------- --------- --------- ----------- -----------
--------- --------- --------- --------- --------- ----------- -----------
Net income per share assuming full dilution(2).... $ 0.17 $ 0.24 $ 0.49 $ 0.39 $ 0.50 $ (0.22) $ 0.11
--------- --------- --------- --------- --------- ----------- -----------
--------- --------- --------- --------- --------- ----------- -----------
Average number of shares of Common Stock
outstanding assuming full dilution.............. 2,048 3,087 3,287 3,330 5,005 3,510 7,951
--------- --------- --------- --------- --------- ----------- -----------
--------- --------- --------- --------- --------- ----------- -----------

SELECTED OPERATING DATA:
EBITDA(3)......................................... $ 2,154 $ 4,631 $ 7,563 $10,416 $ 14,078 $ 2,199 $ 4,042
Net cash provided by operating activities......... 1,676 3,765 2,570 2,971 346 1,630 324
Net cash used in investing activities............. (2,295) (7,669) (9,046) (8,124) (25,875) (6,725 ) (15,716 )
Net cash provided by financing activities......... 463 2,737 7,632 4,255 29,619 5,823 24,432
Total contracts (at end of period)(4)............. 28 42 81 95 341 156 713

BALANCE SHEET DATA (AT END OF PERIOD):
Working capital (deficit)......................... $ 843 $ (33) $(4,056) $(4,499) $ 4,578 $ (6,595 ) $ 16,138
Total assets...................................... 19,938 29,174 53,153 60,581 117,443 73,757 153,567
Total debt........................................ 10,759 13,358 25,518 28,931 39,621 36,599 8,735
Stockholders' equity.............................. 2,726 6,970 8,586 11,382 46,772 10,971 107,454

(FOOTNOTES APPEAR ON THE FOLLOWING PAGE)

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

(1) The Company's fiscal year ends on the last Wednesday of December. The 1992
fiscal year was a 53-week period.

(3) Represents earnings before interest expense, income tax expense and
depreciation and amortization. EBITDA is not a measurement in accordance
with GAAP and should not be considered an alternative to, or more meaningful
than, income from operations, net income or cash flows as defined by GAAP or
as a measure of the Company's profitability or liquidity. The Company has
included information concerning EBITDA herein because management believes
EBITDA provides useful information regarding the cash flow of the Company
and its ability to service debt.

(4) Represents total contracts other than contracts for one-time or special
events.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION

OVERVIEW

The Company was formed in 1985 and has grown to become a leading provider of
food and beverage concession, catering and ancillary services to more than 750
facilities in 38 states. The Company targets four distinct markets within the
contract food service industry: the recreation and leisure market ("Recreation
and Leisure"), serving arenas, stadiums, amphitheaters, civic centers and other
recreational facilities; the convention center market ("Convention Centers");
the educational and school nutrition markets ("Education"), which the Company
entered in 1994, serving colleges, universities and since 1996, elementary and
secondary schools; and the business dining market ("Business Dining"), which the
Company entered in 1994, serving corporate cafeterias, office complexes and
manufacturing plants.

A significant portion of the Company's growth to date has been derived from
acquisitions. From April 1993 through January 1997, the Company acquired nine
companies. In April 1993, the Company acquired Fanfare, Inc., which primarily
serves Recreation and Leisure facilities. In September 1994, the Company
acquired Creative Food Management, Inc., which serves the Education, Business
Dining and Recreation and Leisure markets. In July 1995, the Company acquired
Northwest Food Service, Inc. which serves the Education and Business Dining
markets. The Company acquired Sun West Services, Inc. ("Sun West") in March
1996, Ideal in July 1996, PCS Holding Corporation (formerly known as HCS
Management Corporation) ("PCS") in November 1996 and Republic in December 1996
for an aggregate purchase price of approximately $23.4 million. In the beginning
of the first quarter of the 1997 fiscal year, the Company acquired two
additional companies. On December 30, 1996 the Company acquired Service Dynamics
for a purchase price of approximately $3.0 million. On January 23, 1997 the
Company acquired Serv-Rite for a purchase price of approximately $7.5 million.
The Company is in the process of eliminating certain redundant operations
through closings of offices and termination of excess personnel from certain of
the companies acquired in 1996 and the first quarter of 1997.

The matters discussed in this Prospectus contain forward-looking statements
which involve risks relating to future events and uncertainties associated with
the food service industry. The Company's actual events or results may differ
materially from the results discussed in the forward looking statements. These
risks are detailed from time to time in the Company's filings with the
Securities and Exchange Commission.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain financial
data as a percentage of the Company's net sales:

THREE MONTHS ENDED
FISCAL YEARS ---------------------
------------------- MARCH 27, MARCH 26,
1994 1995 1996 1996 1997
----- ----- ----- --------- ---------

Net sales.................................................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales................................................................ 89.9 89.6 88.9 89.5 89.4
----- ----- ----- --------- ---------
Gross profit................................................................. 10.1 10.4 11.1 10.5 10.6
General and administrative expenses.......................................... 4.1 3.8 4.2 5.5 6.5
----- ----- ----- --------- ---------
Income from operations....................................................... 6.0 6.6 6.9 5.0 4.1
Interest expense, net........................................................ 2.0 2.6 1.8 3.2 1.1
----- ----- ----- --------- ---------
Income before tax provision.................................................. 4.0 4.0 5.1 1.8 3.0
Tax provision................................................................ 1.7 1.7 2.1 0.7 1.3
----- ----- ----- --------- ---------
Net income before warrant accretion.......................................... 2.3% 2.3% 3.0% 1.1% 1.7%
----- ----- ----- --------- ---------
----- ----- ----- --------- ---------

The following table sets forth net sales attributable to the Company's
principal operating markets, expressed in dollars (in thousands) and as a
percentage of total net sales:

THREE MONTHS ENDED
FISCAL YEARS ------------------------------
----------------------------------------------- MARCH 27, MARCH 26,
1994 1995 1996 1996 1997
-------------- -------------- --------------- -------------- --------------

Recreation and Leisure................... $45,773 55.7% $42,657 44.7% $ 40,897 32.0% $ 6,898 28.6% $ 6,505 13.2%
Convention Centers....................... 30,443 37.1 34,746 36.4 42,585 33.3 11,835 49.0 13,816 27.9
Education................................ 2,715 3.3 8,902 9.3 26,109 20.4 3,068 12.6 14,135 28.6
Business Dining.......................... 3,188 3.9 9,157 9.6 18,334 14.3 2,359 9.8 14,996 30.3
------- ----- ------- ----- -------- ----- ------- ----- ------- -----
Total.................................. $82,119 100.0% 95,462 100.0% $127,925 100.0% $24,160 100.0% $49,452 100.0%
------- ----- ------- ----- -------- ----- ------- ----- ------- -----
------- ----- ------- ----- -------- ----- ------- ----- ------- -----

THREE MONTHS ENDED MARCH 26, 1997 COMPARED TO THREE MONTHS ENDED MARCH 27, 1996

NET SALES. The Company's net sales increased 105% from $24.1 million for
the three months ended March 27, 1996 to $49.5 million for the three months
ended March 26, 1997. Net sales increased in all market areas except Recreation
and Leisure. However, excluding from the first quarter of 1996 the one time
sales from food service at Super Bowl XXX, net sales from the Recreation and
Leisure market increased from new and existing contracts. Net sales from
Convention Centers increased 17% primarily as a result of increased sales from
new and existing contracts. Net sales in Education and Business Dining more than
doubled, primarily as a result of the impact of acquisitions in 1996 and 1997.

GROSS PROFIT. Gross profit increased from $2.5 million or 10.5% of net
sales to $5.2 million or 10.6% of net sales for the comparable 1997 period. The
increase in gross profit as a percentage of net sales was attributable to
benefits from acquisitions and the contribution of new and existing contracts.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased from $1.3 million (or 5.5% of net sales) for the three months ended
March 27, 1996 to $3.2 million (or 6.5% of net sales) for the three months ended
March 26, 1997. The increase was attributable primarily to the Company's
continued investment in training programs, regional and accounting management
and additional sales personnel to support its current and future growth plans.

OPERATING INCOME. Operating income increased 69.8% from $1.2 million for
the three months ended March 27, 1996 to $2.0 million for the three months ended
March 26, 1997 primarily as a result of the factors discussed above.

INTEREST EXPENSE. Interest expense decreased approximately $229,000 for the
three months ended March 26, 1997, due to decreased debt levels resulting from
the repayment of certain obligations under the Company's credit facility with
the net proceeds from the Initial Public Offering and the Follow-On Offering.

FISCAL 1996 COMPARED TO FISCAL 1995

NET SALES. The Company's net sales increased 34% from $95.5 million in
fiscal 1995 to $127.9 million in fiscal 1996. Net sales increased in fiscal 1996
in all market areas except Recreation and Leisure. Recreation and Leisure net
sales decreased 4%, primarily due to a decrease in attendance at the Florida
Marlins major league baseball games and the decision by a private tenant of one
of the Company's clients to build a new facility and self operate its food
service. This decrease was partially offset by new contracts signed with the
Concord Pavilion in Concord, California and the Coral Sky Amphitheater in West
Palm Beach, Florida. Net sales from Convention Centers increased 23% primarily
as a result of increased sales from existing contracts, including the Orange
County Convention Center in Orlando, Florida, the Monroe Civic Center Complex in
Monroe, Louisiana, the D.L. Lawrence Convention Center in Pittsburgh,
Pennsylvania and the Albuquerque Convention Center in New Mexico. Net sales from
Education and Business Dining more than doubled primarily as a result of the
acquisitions of Sun West in March 1996,

Ideal in July 1996, PCS in November 1996 and Republic in December 1996, as well
as the impact of new contracts such as Boise State University in Boise, Idaho
and St. Edward's College in Austin, Texas.

GROSS PROFIT. Gross profit as a percentage of net sales increased from
10.4% in fiscal 1995 to 11.1% in fiscal 1996. This increase is attributable to
purchasing efficiencies gained from an expanded base of business and the
contribution of new contracts and acquisitions.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased from $3.6 million (or 3.8% of net sales) in fiscal 1995 to $5.4
million (or 4.2% of net sales) in fiscal 1996. This increase was attributable
primarily to the Company's continued investment in training programs, regional
management and additional sales personnel to support its current and future
growth plans.

OPERATING INCOME. Operating income increased 41%, from $6.3 million in
fiscal 1995 to $8.8 million in fiscal 1996, primarily for the reasons mentioned
above.

INTEREST EXPENSE. Interest expense decreased approximately $149,000, due
primarily to a reduction in debt levels resulting from the repayment of certain
obligations under the Company's credit facility with the net proceeds from the
Initial Public Offering, as well as the repayment of subordinated debt.

FISCAL 1995 COMPARED TO FISCAL 1994

NET SALES. The Company's net sales increased 16.2% from $82.1 million in
fiscal 1994 to $95.5 million in fiscal 1995. Net sales increased in fiscal 1995
in all markets areas, except Recreation and Leisure. Recreation and Leisure net
sales decreased 6.8% in fiscal 1995 as compared to fiscal 1994, primarily from
the continued effects of the Major League Baseball lock-out as well as a decline
in attendance at Florida Marlins games, partially offset by the effects of new
contracts signed in 1994 and 1995. The Company's contract at Pro Player Stadium
in Miami, Florida, the home of the Miami Dolphins and the Florida Marlins,
accounted for $13.0 million of net sales in fiscal 1995, compared to $16.0
million in fiscal 1994. Net sales from Convention Centers increased 14.1% in
fiscal 1995 as compared to fiscal 1994 primarily as a result of increased sales
from existing contracts and the impact of new contracts signed in 1994 and in
1995. Net sales from Education and Business Dining increased in fiscal 1995 as
compared to fiscal 1994, primarily as a result of the full year impact of the
acquisition of Creative and the impact of the acquisition of Northwest.

GROSS PROFIT. Gross profit as a percentage of net sales increased to 10.4%
in fiscal 1995 from 10.1% in fiscal 1994 primarily attributable to the benefit
of continued economies of scale from national purchasing programs, effective
labor cost controls and an increase in management fee contracts.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased from $3.4 million (or 4.1% of net sales) in fiscal 1994 to $3.6
million (or 3.8% of net sales) in fiscal 1995. The dollar increase was
attributable primarily to the increase in clerical support for new accounts and
acquisitions. The percentage decrease resulted from a proportionally greater
increase in net sales relative to general and administrative expenses.

OPERATING INCOME. Operating income increased 28.3%, from $4.9 million in
fiscal 1994 to $6.3 million in fiscal 1995, primarily for the reasons mentioned
above.

INTEREST EXPENSE. Interest expense increased approximately $850,000, due
primarily to increased debt levels to finance investments in new accounts and
acquisitions as well as an increase in the prime rate and the reset of the
interest rate on its variable rate subordinated notes from 9.8% to 12.79%.

QUARTERLY RESULTS OF OPERATIONS

The Company's net sales and operating results vary significantly from
quarter to quarter as a result of seasonal patterns, the unpredictability in the
number, timing and type of new contracts, the timing of

contract expirations and special one-time events at facilities served by the
Company. Results of operations for any particular quarter may not be indicative
of results of operations for future periods. There can be no assurance that
future seasonal and quarterly fluctuations will not have a material adverse
effect on the Company's business, financial condition and results of operations.

The following table sets forth unaudited selected consolidated income
statement data for the periods indicated, as well as such data expressed as a
percentage of net sales for the same periods. This information has been derived
from unaudited consolidated financial statements and, in the opinion of
management, includes all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of such information.

FISCAL QUARTERS
-------------------------------------------------------------------------------
1995 1996 1997
---------------------------------- ---------------------------------- -------
FIRST SECOND THIRD FOURTH FIRST SECOND THIRD FOURTH FIRST
------- ------- ------- ------- ------- ------- ------- ------- -------

(IN THOUSANDS)
Net sales................................ $23,429 $20,090 $26,340 $25,603 $24,160 $25,803 $37,272 $40,690 $49,452
Cost of sales............................ 21,295 18,422 23,002 22,857 21,630 23,389 32,766 35,918 44,210
------- ------- ------- ------- ------- ------- ------- ------- -------
Gross profit............................. 2,134 1,668 3,338 2,746 2,530 2,414 4,506 4,772 5,242
General and administrative expenses...... 1,090 923 870 743 1,336 1,241 1,467 1,344 3,215
------- ------- ------- ------- ------- ------- ------- ------- -------
Income from operations................... 1,044 745 2,468 2,003 1,194 1,173 3,039 3,428 2,027
Interest expenses, net................... 696 633 642 508 767 756 496 311 538
------- ------- ------- ------- ------- ------- ------- ------- -------
Income before tax provision.............. 348 112 1,826 1,495 427 417 2,543 3,117 1,489
Tax provision............................ 140 38 781 626 168 167 1,144 1,221 641
------- ------- ------- ------- ------- ------- ------- ------- -------
Net income............................... $ 208 $ 74 $ 1,045 $ 869 $ 259 $ 250 $ 1,399 $ 1,896 $ 848
------- ------- ------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- ------- ------- -------

(AS A PERCENTAGE OF NET SALES)

Net sales................................ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales............................ 90.9 91.7 87.3 89.3 89.5 90.6 87.9 88.3 89.4
------- ------- ------- ------- ------- ------- ------- ------- -------
Gross profit............................. 9.1 8.3 12.7 10.7 10.5 9.4 12.1 11.7 10.6
General and administrative expenses...... 4.6 4.6 3.3 2.9 5.5 4.9 3.9 3.3 6.5
------- ------- ------- ------- ------- ------- ------- ------- -------
Income from operations................... 4.5 3.7 9.4 7.8 5.0 4.5 8.2 8.4 4.1
Interest expense, net.................... 3.0 3.2 2.5 2.0 3.2 2.9 1.3 0.8 1.1
------- ------- ------- ------- ------- ------- ------- ------- -------
Income before tax provision.............. 1.5 0.5 6.9 5.8 1.8 1.6 6.9 7.6 3.0
Tax provision............................ 0.6 0.2 3.0 2.4 0.7 0.6 3.1 3.0 1.3
------- ------- ------- ------- ------- ------- ------- ------- -------
Net income............................... 0.9% 0.3% 3.9% 3.4% 1.1% 1.0% 3.8% 4.6% 1.7%
------- ------- ------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- ------- ------- -------

LIQUIDITY AND CAPITAL RESOURCES

The Company has funded its capital requirements from a combination of
operating cash flow and debt and equity financing. Net cash provided by
operating activities was $2.6 million, $3.0 million and $346,000 in fiscal 1994,
1995 and 1996, respectively. Cash flow from operating activities was a source of
funds of approximately $1.6 million and $324,000 for the three months ended
March 27, 1996, and March 26, 1997, respectively.

EBITDA was $7.6 million, $10.4 million and $14.1 million in fiscal 1994,
1995 and 1996, respectively, and $2.2 million and $4.0 million for the three
months ended March 27, 1996 and March 26, 1997, respectively. EBITDA represents
earnings before interest expense, income tax expense and depreciation and
amortization. EBITDA is not a measurement in accordance with GAAP and should not
be considered an alternative to, or more meaningful than, income from
operations, net income or cash flows as defined by GAAP as a measure of the
Company's profitability or liquidity. The Company has included information
concerning EBITDA herein because management believes EBITDA provides useful
information regarding the cash flow of the Company and its ability to service
debt. EBITDA information should be read in conjunction with the Consolidated
Statements of Cash Flows of the Company included in the consolidated financial
statements of the Company elsewhere in this Prospectus.

Cash flows used in investing activities was $9.0 million, $8.1 million and
$25.9 million in fiscal 1994, 1995 and 1996, respectively. In fiscal 1994, 1995
and 1996, $6.3 million, $3.3 million and $8.5 million, respectively, was used
for additions to fixtures and equipment. In 1994, the Company made advances
aggregating $2.3 million to two clients in accordance with their food service
contracts.

Cash flows used in investing activities was approximately $6.7 million and
$15.7 million for the three months ended March 27, 1996 and March 26, 1997,
respectively. The increase in use of funds was primarily a result of investment
in acquired companies.

In June 1996, the Company completed its Initial Public Offering, resulting
in net proceeds of approximately $32.6 million after deducting underwriting
discounts and certain expenses.

In connection with the Initial Public Offering, the Company's credit
facility was amended and restated on June 19, 1996 (the "Restated Bank
Agreement"). The Restated Bank Agreement provides for (i) a working capital
revolving credit line for general obligations and letters of credit, in the
maximum aggregate amount of $20.0 million (the "Working Capital Line") and (ii)
a line of credit to provide for future expansion by the Company, in the maximum
amount of $55.0 million (the "Guidance Line"). The maximum aggregate allowable
borrowings under the Restated Bank Agreement is $75.0 million. The Restated Bank
Agreement terminates on April 30, 1999. The Working Capital Line provides funds
for liquidity, seasonal borrowing needs and other general corporate purposes.
The Guidance Line is available to fund the Company's acquisitions and for
investments made in connection with obtaining new contracts.

At December 25, 1966 and March 26, 1997 the Company's current assets
exceeded its current liabilities, resulting in a working capital surplus of $4.6
million and $16.1 million, respectively.

On February 12, 1997, the Company completed the Follow-On Offering,
resulting in net proceeds to the Company of approximately $59.1 million after
deducting underwriting discounts and certain expenses. The proceeds of the
Follow-On Offering were used to repay obligations under the Restated Bank
Agreement and for general working capital purposes.

The Company believes that the proceeds of the Follow-On Offering, funds
expected to be generated from operations and amounts available under the
Restated Bank Agreement will be sufficient to satisfy the Company's capital
requirements for at least the next twelve months.

NEW ACCOUNTING PRONOUNCEMENTS

In February 1997, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 128, Earnings Per Share ("EPS"). SFAS No. 128 establishes
accounting standards for the computation, presentation and disclosure
requirements for EPS. SFAS No. 128 is effective for financial statements for
interim and annual periods ending after December 15, 1997. Earlier application
is not permitted. However, an entity is permitted to disclose pro forma EPS
amount computed using SFAS No. 128 in the notes to the financial statement in
periods prior to the required adoption. The Company has disclosed the pro forma
EPS in the first quarter 1997 financial statements.

In conjunction with the issuance of SFAS No. 128, the FASB issued SFAS No.
129, Disclosure of Information About Capital Structure. SFAS No. 129 requires
disclosure of the pertinent rights and privileges of various securities
outstanding. SFAS No. 129 is effective for financial statements for periods
ending after December 15, 1997. The adoption of SFAS No. 129 will not have an
impact on the Company since the Company has disclosed the required information
in prior financial statements.

INFLATION

The Company believes that inflation has not had a material effect on its
results of operations.

SEASONALITY

The Company's business is seasonal in nature. Many Recreation and Leisure
facilities experience slack periods in March, April and May due to fewer
sporting events in these months, and Convention Centers generally host fewer
conventions from May through September. In addition, many Education facilities
are closed during the summer months. Among other things, the Company adjusts its
labor scheduling and staffing to compensate for these fluctuations.

BUSINESS

GENERAL

INDUSTRY OVERVIEW

The Company estimates that the United States contract food service industry
had annual revenues of approximately $96 billion in 1995, of which approximately
$60 billion was in markets in which the Company presently competes. The
remaining $36 billion consisted of sales primarily to hospitals and health care
facilities, correctional facilities, military facilities, child-care facilities
and transportation facilities such as airports, train stations and bus depots.
In the contract food service industry, the facility owner, rather than the food
service provider, is primarily responsible for attracting patrons. All of the
markets in which the Company operates are highly fragmented. The contract food
service industry has been experiencing consolidation in recent years.

BUSINESS STRATEGY

The Company's objective is to become the leading contract food service
management company serving middle-market locations. The Company's business
strategy is comprised of the following key elements:

EXCLUSIVE FOCUS ON CONTRACT FOOD SERVICE. Unlike most of its national
competitors, the Company focuses exclusively on the contract food service
industry. Management believes that its focus has allowed it to develop superior
operating techniques, hire and retain high quality unit, regional and senior
managers and maintain a greater awareness of and responsiveness to changing
market conditions.

MIDDLE-MARKET FOCUS. The Company focuses on obtaining new contracts
principally at facilities generating $1 million to $4 million in annual food and
beverage sales. The Company believes that these "middle-market" facilities
generally provide greater profit margins and require less capital investment
than larger facilities. On a selective basis, the Company will attempt to obtain
additional larger accounts which give the Company high visibility in the
industry and strengthen its credibility when bidding on new contracts or
pursuing acquisitions.

SUPERIOR OPERATING TECHNIQUES. Fine Host has developed and implemented
various operating strategies and systems including (i) labor cost management
techniques that include forecasting labor costs on an event-by-event basis and
moving full-time employees between nearby facilities in response to changes in
demand, (ii) product cost management programs to reduce costs by establishing
national agreements with food manufacturers, distributors and equipment
manufacturers, (iii) quality control programs to ensure client satisfaction,
(iv) a facility design capability that maximizes point-of-sale contacts and uses
portable sales locations to increase sales, (v) customized menu design that
entails working closely with facility management to determine food and beverage
selection and pricing that meets client needs and

(vi) extensive on-site marketing and support, including an on-site salesperson
at certain locations to oversee food and beverage functions and to help sell
unutilized space. The Company believes that its operating techniques have led to
significant increases in sales and profits at many of the facilities it serves.

EMPOWERED LOCAL MANAGEMENT. Fine Host's decentralized management approach
assigns operating responsibility to the Company's general manager at each
facility. The Company's general managers and region managers, each of whom is
compensated in significant part through a bonus program tied closely to the
financial performance of the facilities, are given the freedom and authority to
make operational decisions. At convention centers and certain recreation and
leisure facilities, the Company typically employs an on-site salesperson who is
available to the convention or event manager to oversee the operation of food
and beverage functions and to help sell unutilized space.

RESPONSIVENESS TO CLIENTS. Consistent with the Company's client-oriented
approach, the Company is flexible in structuring the key terms of contracts in
order to satisfy client objectives. Senior management seeks to establish and
maintain close working relationships with clients, which the Company believes
enhance its ability to renew contracts. Monthly visits by region managers serve
to enhance the client relationship.

ACCOUNT DIVERSITY. The Company provides food service and other ancillary
services at more than 750 facilities, including recreation and leisure
facilities, convention centers, educational facilities and business dining
facilities of varying sizes. These facilities are located domestically in 38
states and internationally in Southeast Asia. The Company believes this
diversity, in terms of both type of facility and geographic region, enhances the
Company's ability to withstand localized economic pressures and downturns
associated with a particular market.

COST CONTROLS AND ECONOMIES OF SCALE. The Company focuses on controlling
labor and overhead costs and capitalizing on economies of scale. As the number
of facilities served by the Company has increased, the Company has reduced labor
costs by transferring employees between nearby facilities during off-peak
periods. The Company centralizes various functions, including legal, finance,
contract administration, human resources, training, regulatory compliance,
marketing, purchasing and accounting services, in order to control overhead
costs. The Company's size has allowed it to procure national purchasing and
distribution arrangements with vendors that include national pricing available
to all Fine Host locations.

GROWTH OPPORTUNITIES

The Company believes that substantial opportunities for continued growth
exist through the renewal of existing contracts, the addition of new contracts
and acquisitions.

RENEWAL OF CONTRACTS. The Company believes that its strong operating
performance and focus on client satisfaction have enabled it to achieve a
favorable contract renewal rate. Fine Host's sales and marketing staff maintains
ongoing relationships with facility owners and typically seeks renewal of
existing contracts months in advance of the scheduled termination date. The
Company's senior management handles principal aspects of contract negotiations,
enabling the Company to be responsive in negotiations. Fine Host has retained
the food and beverage business at each of the 24 public convention centers at
which it has been awarded a contract without the loss of any such contract, and
has renewed each of the 13 convention center contracts that have come up for
renewal. The Company believes that its ability to renew convention center
contracts is particularly significant because public authorities choosing the
food service provider put great emphasis on the level of quality and service
offered. These aspects are viewed as critical factors in the decision-making
process of convention organizers and meeting planners when making site
selections.

OBTAINING NEW CONTRACTS. The Company believes that the expertise and
experience of its management team enable it to identify new contract
opportunities and negotiate and implement facility contracts in a disciplined
manner. The Company believes that its ability to obtain new contracts is
enhanced by the following factors:

- INDUSTRY GROWTH. The Company believes that opportunities to obtain new
contracts will come from both the growing number of newly constructed and
expanded facilities, especially stadiums, arenas, amphitheaters and
convention centers, and the large number of existing facilities in each of
the Company's principal operating markets which are expected to put their
food service contracts out for bid in the near term.

- INCREASED MARKET PENETRATION. The Company's presence at a significant
facility within a city or region often results in additional business from
other facilities in the area because (i) other facilities may select the
Company based on the reputation the Company has gained in the area and (ii)
other accounts which were not economically viable for the Company to manage
on a stand-alone basis may now be managed by the Company's local management
team. By leveraging its established market presence, the Company is able to
bid more competitively for local business.

- EXPANDED PRESENCE IN EDUCATION AND BUSINESS DINING. The Company's
entry through acquisition into the education and business dining markets
provides the Company with operating experience which the Company believes
will facilitate further penetration into these highly fragmented markets.
This has been evidenced recently by the Company's entrance into the School
Nutrition market, which is shifting toward outsourcing contract food
services.

- INTERNATIONAL EXPANSION. In 1994, the Company established a joint
venture with a Thai facilities management company to jointly market their
services throughout Asia, and obtained the food service contract for the
Queen Sirikit National Convention Center in Bangkok, Thailand. In addition,
the Company recently expanded its presence in Southeast Asia through the
execution of multi-year food service management agreements to operate the
Bangkok International Trade and Exhibition Center in Bangkok, Thailand and
the Bali Festival Park in Bali, Indonesia. The Company believes that the
rapid growth of the Asian economy, including the increased construction of
recreation and leisure facilities and convention centers, provides the
Company with further opportunities for expansion on an international basis
due to the lack of both food service technology and sophistication within
the Asian contract food service industry.

ACQUISITIONS. The Company believes there are significant opportunities to
expand its business through the acquisition of companies in the contract food
service industry, particularly in the education and business dining markets, as
well as in markets where the Company does not primarily operate, such as
hospitals and healthcare facilities and correctional facilities. Senior
management of the Company has been primarily responsible for identifying,
pursuing and negotiating potential acquisition opportunities and integrating
acquired operations. The Company believes that it can integrate such companies
into the Company's management structure and diversified operations successfully
without a significant increase in general and administrative expense. There can
be no assurance, however, that the Company's acquisition strategy can be
implemented successfully. See "Risk Factors--Risk of Inability to Operate or
Integrate Acquired Businesses; Expenses Associated with Acquisition Strategy."

Fine Host's growth has accelerated since its Initial Public Offering with
the successful completion of five strategic acquisitions. These acquisitions
significantly increase the Company's presence in the education and business
dining markets in the northeastern and mid-Atlantic regions of the United
States. Four of these acquisitions, Ideal, Republic, Service Dynamics and
Serv-Rite, have increased the Company's presence in the School Nutrition market,
a market estimated by the U.S. government to be approximately

$10 billion in 1995. The Company believes that all of these companies have
effective management teams and strong operating results at their facilities, yet
can benefit from the Company's size and operating infrastructure.

SERVICES AND OPERATIONS

The Company provides a wide array of food services, ranging from food and
beverage concessions, such as hot dogs, sandwiches, soda and beer, to
sophisticated catering and fine dining in a formal setting. At its convention
center locations, the Company routinely serves banquets attended by thousands of
persons.

The Company is the exclusive provider of food and beverages at substantially
all of the facilities it serves and is responsible for hiring, training and
supervising food service personnel and ordering, receiving, preparing and
serving all items of food and beverage sold. At facilities serviced by the
Company, the client attracts patrons on an event-specific basis at recreation
and leisure facilities and convention centers and on a continuing basis at
education and corporate dining facilities. As a result, the Company does not
incur the expense of marketing to the broader public, and is able to focus on
operations, client satisfaction, account retention and new account development.

Fine Host has developed and implemented various operating strategies and
systems to quickly and efficiently provide food and beverages to a large number
of people in a short period of time and in a cost-effective manner, including:

LABOR COST MANAGEMENT. The Company focuses on tight management of on-site
costs, particularly with respect to labor. The Company requires its general
managers to forecast labor requirements on an event-by-event basis and has the
ability to tailor labor costs to specific events and venues. For example,
managers reduce labor during individual events when operationally desirable,
such as after half time of a football game. In addition, as the number of
locations managed by the Company has grown, the Company has been able to achieve
labor savings by moving full-time employees between nearby facilities during
off-peak periods at one or more of the facilities.

PRODUCT COST MANAGEMENT. The Company focuses on reducing total product
costs, including distribution costs and raw product costs. The Company has
implemented a program to control its distribution costs of grocery products
pursuant to national distribution contracts, while at the same time it has
negotiated agreements with the manufacturers of many of the principal products
needed at its facility locations. As the Company has grown, it has been able to
achieve economies of scale, including national pricing from manufacturers, food
distributors and food equipment manufacturers. The Company also manages its
product costs by carefully monitoring the size of food and beverage portions
against predetermined standards.

QUALITY CONTROL. The Company has instituted a quality control program to
ensure client satisfaction and monitor quality levels at each of its locations.
The Company requires its region managers to visit each of the locations for
which he or she is responsible at least once monthly. The region manager is
required to submit to senior management a written summary of each visit,
including a report on the level of quality and service being maintained at each
location, as well as the client's view of Fine Host's performance. In addition,
the Company surveys meeting planners, convention organizers, fans and students
using its food and beverage services, enabling the Company to track levels of
satisfaction and to respond rapidly as problems arise.

FACILITY DESIGN CAPABILITY. The Company has expertise in designing
appealing and efficient food service facilities, including food courts, kitchens
and permanent and portable concession stands. The Company believes that its
design of concession stands and use of systems and equipment such as portable
concession stands have enabled it to increase sales and improve client
satisfaction at many facilities.

CUSTOMIZED MENU DESIGN. Fine Host works closely with each facility's
management to customize concession and catering menus and prices and to create
catering brochures that meet the needs of prospective users of the facility and
accommodate the tastes of the region in which the facility is located. Menus and
prices are further refined and upgraded during meetings between Fine Host
on-site management and facility patrons in accordance with the patron's
individual desires.

ON-SITE MARKETING AND SUPPORT. At convention centers and certain recreation
and leisure facilities, the Company's on-site salesperson is available to the
convention or event manager to oversee the operation of food and beverage
functions. This commissioned salesperson also assists the convention center in
selling unutilized space for events requiring food service, such as meetings,
luncheons and weddings. This cooperative effort can result in incremental income
for both Fine Host and its client.

TRAINING AND RECRUITING. The Company has established a training program for
its facility general managers and their staffs to establish a consistent level
of quality at its facilities. The Company's training programs enable it to train
a large number of temporary employees in a short period of time. The Company has
developed and implemented numerous training programs, including an alcohol
awareness program which requires that all servers of alcohol products receive
special training, as well as a "train the trainer" program, which develops a
management employee at each location capable of conducting the Company's on-site
training programs.

ACCOUNTING SYSTEMS AND CONTROLS. The Company's management information
system is based on open hardware platforms that allow the Company to choose from
a wide variety of software, system utilities and development tools. The
Company's time management, inventory management (such as beverage yield analysis
and food cost analysis) and retail point-of-sale control systems provide data
for posting directly to the Company's general ledger and to other accounting
subsystems. The automated general ledger system provides management reports on a
timely basis which compare current and prior operating results and measure
actual performance against predetermined operating budgets. The results are
reported to and reviewed by regional and corporate management. Such reporting
includes weekly and monthly forecasts of revenues and expenses and detailed
performance reports.

CLIENTS

The Company provides contract food services principally to recreation and
leisure facilities, convention centers, education facilities and business dining
accounts. As of March 26, 1997, the Company provided contract food service
management at more than 750 facilities.

RECREATION AND LEISURE FACILITIES. The Company offers food and beverage
concession and catering services to arenas, stadiums, amphitheaters, civic
centers and other recreational facilities. These facilities typically select a
food service provider on the basis of its ability to generate increased volume
from concession sales while maintaining high quality and attendee satisfaction.
The Company employs its facility design capability and other operating
techniques to serve its recreation and leisure venues and to increase total
sales and profitability. The Company believes that, as a result of the growing
popularity of minor league sports, significant opportunities exist at stadiums
and arenas at which minor league baseball and hockey teams play. As of March 26,
1997, the Company provided services to facilities hosting eight minor league
baseball teams and seven minor league hockey teams. The Company further believes
that more

major college athletic programs will seek to outsource food and beverage
concession operations at on-campus stadiums and arenas. Recreation and leisure
facilities served by the Company presently include Pro Player Stadium in Miami,
Florida (home of the Miami Dolphins and Florida Marlins), Sun Devil Stadium in
Tempe, Arizona (home of the Arizona Cardinals) and the Great Woods Center for
the Performing Arts in Mansfield, Massachusetts. The Company also provides
concession services to recreation and leisure facilities at colleges and
universities including Arizona State University, Boise State University and the
University of Minnesota.

CONVENTION CENTERS. Food service offered in convention centers consists
primarily of large scale catering and banquet functions held in the facility's
ballroom and banquet halls, catering and concession services to functions held
in meeting rooms, and concession services offered to convention and trade show
attendees. The Company's convention center operations focus on providing
consistent high quality and client satisfaction in all food service areas,
particularly with respect to catering and banquet services. The Company believes
that its ability to renew convention center contracts is particularly
significant because public authorities choosing the food service provider put
great emphasis on the level of quality and service offered. These aspects are
viewed as critical factors in the decision-making process of convention
organizers and meeting planners when making site selections. The Company also
encourages convention organizers to choose other convention centers serviced by
Fine Host for subsequent events. The Company believes it is well positioned to
gain incremental sales at existing convention centers which are expanding their
banquet and ballroom capacities, and to obtain additional contracts at newly
constructed convention centers. Major convention center clients include the
Albuquerque Convention Center in Albuquerque, New Mexico; the Austin Convention
Center in Austin, Texas; the Lawrence Convention Center in Pittsburgh,
Pennsylvania; the Orange County Convention Center in Orlando, Florida; the
Oregon Convention Center in Portland, Oregon; and the Wisconsin Center in
Milwaukee, Wisconsin.

EDUCATION. The Company provides food and beverage concession and catering
services to student cafeterias, food courts, snack bars and clubs at colleges,
universities and elementary and secondary schools. College student dining habits
have changed dramatically in recent years, with students tending to eat smaller
meals throughout the day and evening, often paying with debit cards in lieu of
cash or traditional board plans. In response to these changes, the Company now
offers increased quality and choices among food and beverage items at
educational facilities, including recognized brand name foods served in
education facilities by the Company's employees. The Company has contractual
arrangements with Subway Corporation, Pizza Hut, Inc. and Taco Bell Corp. to
offer their products at various dining locations at educational institutions.
The Company presently provides dining services to students at colleges and
universities including Morris Brown College in Atlanta, Georgia; Mt. Hood
Community College in Gresham, Oregon; Wayne State University in Detroit,
Michigan; and Xavier University in New Orleans, Louisiana.

BUSINESS DINING. Fine Host provides food and beverage services to business
dining rooms and cafeterias, office complexes and manufacturing plants. Business
dining facilities are increasingly offering upscale, quality food and beverage
items and are often subsidized by employers seeking to shorten employee meal
breaks and increase productivity. The Company seeks to capitalize on this trend
by providing high quality food and beverage service at its corporate client
dining locations. The Company serves a diversified mix of large corporate
clients, focusing on more upscale office dining. Clients include facilities of
Chrysler Corporation, General Motors Corporation, Ore-Ida Foods, Inc. and
Whirlpool Corporation.

CONTRACTS

The Company generally enters into one of three types of contracts: profit
and loss contracts, profit sharing contracts and management fee contracts.

PROFIT AND LOSS CONTRACTS ("P&LS"). Under P&Ls, the Company receives all
the revenues and bears all the expenses of the operation. These expenses include
rent paid to the client, typically calculated as a fixed percentage of various
categories of sales. While Fine Host often benefits from greater upside
potential with a P&L contract, it is responsible for all costs of running the
food service operation and consequently bears greater risk than with a
management fee or profit sharing contract.

PROFIT SHARING CONTRACTS. Under profit sharing contracts, the Company
receives a percentage of profits earned at the facility plus a fixed fee or
percentage of sales as an administrative fee. Under this type of contract, Fine
Host does not bear responsibility for losses incurred, if any.

MANAGEMENT FEE CONTRACTS. Revenues derived under management fee contracts
are based upon a fixed fee. Fine Host is reimbursed for all its on-site expenses
incurred in providing food and beverage services under management fee contracts.
A number of the Company's management fee contracts provide for an additional
incentive fee based on a percentage of sales over a base threshold level. The
benefit of this type of contract is that risks associated with food and beverage
operations at the facility are generally not borne by Fine Host.

Fine Host often provides a capital commitment in its bid to win a new
facility contract. This commitment most frequently takes the form of an
investment in food service equipment and leasehold facilities, which upgrade the
facility itself and can increase the returns to both Fine Host and the facility
owner by generating increased sales. Occasionally, the Company makes loans or
advances to the client, the proceeds of which are generally used to improve an
existing facility or to complete a new facility. These loans are sometimes
collateralized by other assets in the facility. When the Company makes an
investment, loan or advance to a facility under either a management fee or
profit sharing contract, the amount of the commitment, together, in certain
cases, with interest, is repaid to the Company out of the revenues generated by
the food service operation in accordance with an amortization schedule set forth
in the contract. P&L contracts do not require the repayment of invested capital
to the Company during the contract term. All of the Company's contracts require
the client to reimburse the Company for any unamortized invested capital in the
event of the expiration or termination of the contract for any reason, and Fine
Host keeps title to the subject assets until such payment is made. Invested
capital is usually amortized over a period of time equal to or greater than the
term of the contract. The Company believes that its willingness to make
selective investments can provide it with a competitive advantage in bidding for
new contracts. There can be no assurance, however, that any such investments
will enhance returns and not result in losses for the Company. See "Risk
Factors--Dependence on Clients; Investment in Client Contracts and Advances to
Clients."

The length of contracts varies depending on the type of facility, type of
contract and financial investment. Contracts for recreation and leisure
facilities typically include the largest capital investment by the Company and
generally have a term of three to ten years. Contracts for convention centers
generally have a term of three to five years. Education contracts generally have
a term of one to five years. Corporate dining accounts, which generally require
the smallest capital investment by the Company, typically have a shorter term
than those in the recreation and leisure, convention center and education areas,
and generally contain a provision allowing either party to terminate for
convenience after a short notice period, typically ranging from 30 to 90 days.
Most corporate dining contracts are terminable after a short notice period. The
Company's remaining contracts generally have a fixed term and in any fiscal year
a number of these contracts either expire or come up for renewal.

Certain municipalities and governmental authorities require that a certain
percentage of food service contract bids be from minority-owned and/or
women-owned businesses ("MBEs" and "WBEs," respectively). The Company has
entered into joint ventures with four MBEs/WBEs to operate facilities in
Orlando, Florida; Portland, Oregon; Fort Worth, Texas; and Milwaukee, Wisconsin.
It is likely that the Company will be required to partner with additional
MBEs/WBEs in the future as a precondition to winning certain municipal and
governmental authority facility food service contracts.

SALES AND MARKETING

The Company selectively bids for both privately owned facility contracts and
contracts awarded by governmental and quasi-governmental agencies. The privately
negotiated transactions are usually competitive in nature, with a privately
owned facility owner or operator soliciting proposals from Fine Host and several
of its competitors. These bids often require a Fine Host team to formulate a
rapid response and make a proposal encompassing, among other things, a capital
investment and other financial terms. In certain cases, a private facility owner
may choose to negotiate with the Company exclusively for a period of time. The
Company believes that its flexibility with clients has helped it in these
instances. See "--Business Strategy." Governmental contracts are usually awarded
pursuant to a request-for-proposal process. Bidding in publicly controlled
venues often requires more than a year of effort by a Fine Host team, focusing
on building meaningful relationships in the local community in which the venue
is located and raising the profile of the Fine Host name with the decision
makers within that community. During this bidding period, the Company expends
substantial time, effort and funds preparing a contract proposal and negotiating
the contract. See "Risk Factors--Adverse Effects of an Inability to Retain
Existing Contracts and Obtain New Contracts." The Company's sales and marketing
team consists of three senior sales executives and ten sales and marketing
professionals. The entire team is involved at various stages in formulating
sales proposals and operating plans and negotiating new contracts.

Members of the Company's sales and marketing team maintain a high degree of
visibility in various industry trade associations. Virtually all of the
Company's clients and potential clients in facilities operated by governmental
and quasi-governmental authorities are members of these trade groups. The
Company regularly exhibits at industry trade shows held for and by groups
comprised of recreation and leisure facility owners, convention center managers
and representatives of colleges, universities and elementary and secondary
schools. Fine Host also advertises on a regular basis in magazines and
periodicals that focus on the public facilities industry.

COMPETITION

The Company encounters significant competition in each area of contract food
service market in which it operates. Food service companies compete for clients
on the basis of quality and service standards, innovative approaches to food
service facilities design, maximization of sales and price (including the making
of loans, advances and investments in client facilities and equipment).
Competition may result in price reductions, decreased gross margins and loss of
market share. Certain of the Company's competitors compete with the Company on
both a national and international basis and have significantly greater financial
and other resources than the Company. In addition, existing or potential clients
may elect to "self operate" their food service, eliminating the opportunity for
the Company to compete for the account. There can be no assurance that the
Company will be able to compete successfully in the future or that competition
will not have a material adverse effect on the Company's business, financial
condition or results of operations.

EMPLOYEES

As of March 26, 1997, the Company had approximately 2,100 full-time salaried
employees. During March 1997, approximately 7,900 employees were part-time or
hired on an event-by-event basis. The number of part-time employees can vary
significantly from time to time. The Company believes that its future success
will depend in large part upon the continued service of its senior management
personnel and upon the Company's continuing ability to attract and retain highly
qualified managerial personnel. Competition for highly qualified personnel is
intense and there can be no assurance that the Company will be able to retain
its key managerial personnel or that it will be able to attract and retain
additional managerial personnel in the future. Approximately 9.0% of the
Company's total employees (including full and part-time) are covered by
collective bargaining agreements. The Company has not experienced any work
stoppage and considers its relations with its employees to be satisfactory. The
Company has hired and

expects to continue to need to hire a large number of qualified, temporary
workers at particular events. See "Risk Factors--Adverse Effects of an Inability
to Manage Growth" and "--Constraints and Expenses Associated with an
Unavailability of Labor."

GOVERNMENT REGULATION

The Company's business is subject to various governmental regulations
incidental to its operations, such as environmental, employment and health and
safety regulations. Since it serves alcoholic beverages at many convention
centers and recreation and leisure facilities, the Company also holds liquor
licenses incidental to its contract food service business and is subject to the
liquor license requirements of the states in which it holds a liquor license. As
of March 26, 1997, the Company and its affiliates held liquor licenses in 20
states. While the application procedures and requirements for a liquor license
vary by state, the Company has received an alcoholic beverage license with
respect to each of the approximately 32 applications it has submitted, and has
never had an alcoholic beverage license revoked or suspended.

Typically, liquor licenses must be renewed annually and may be revoked or
suspended for cause at any time. Alcoholic beverage control regulations relate
to numerous aspects of the Company's operations, including minimum age of
patrons and employees, hours of operation, advertising, wholesale purchasing,
inventory control and handling, and storage and dispensing of alcoholic
beverages. The Company has not encountered any material problems relating to
alcoholic beverage licenses to date. The failure to receive or retain a liquor
license in a particular location could adversely affect the Company's ability to
obtain such a license elsewhere.

The Company is subject to "dram-shop" statutes in the states in which
facilities are located. These statutes generally provide a person injured by an
intoxicated person the right to recover damages from an establishment which
wrongfully served alcoholic beverages to the intoxicated individual. The Company
carries liquor liability coverage as part of its existing comprehensive general
liability insurance which it believes is adequate. While the Company maintains
such insurance, there can be no assurance that such insurance will be adequate
to cover any potential liability or that such insurance will continue to be
available on commercially acceptable terms. See "Risk Factors--Government
Regulation."

The cost of the Company's compliance with governmental regulations has not
been material. However, there can be no assurance that additional federal or
state legislation, or changes in regulatory implementation, would not limit the
activities of the Company in the future or significantly increase the cost of
regulatory compliance. See "Risk Factors--Government Regulation."

PROPERTIES

The Company leases its corporate headquarters in Greenwich, Connecticut
pursuant to a lease expiring in June 2004. The Company also maintains accounting
processing centers in Toledo, Ohio and Tempe, Arizona. The Company leases the
space for each of these facilities. The Company believes that the properties
which are currently under lease are adequate to serve the Company's business
operations for the foreseeable future. The Company believes that if it were
unable to renew the lease on any of these facilities, other suitable facilities
would be available to meet the Company's needs.

LITIGATION

In January 1996, the Company was served with a complaint naming it as one of
five defendants in a lawsuit brought by multiple plaintiffs in the New York
State Supreme Court alleging damages arising out of the Woodstock II Festival
held in August 1994 in Saugerties, New York. The promoter of the festival is
also a defendant. According to the complaint, the plaintiffs were hired by the
Company (which had a concession agreement with the promoters of the festival) as
subcontractors of food, beverage and/or merchandise. In their complaint, which
seeks approximately $5.9 million, the plaintiffs allege damages arising
primarily from the failure to provide adequate security and prevent festival
attendees from bringing

food and beverages in to the festival. The Company has made claim for
indemnification under applicable provisions of the concession agreement, which
has been rejected by the promoter. On April 4, 1996, the other defendants named
in the suit answered the complaint and asserted cross-claims for contribution
and indemnification against the Company. Thereafter, the Company cross-claimed
for contribution and indemnification against a co-defendant.

The Company has also sued a former client in the Jefferson Circuit Court of
the Commonwealth of Kentucky for certain amounts owed by the former client under
the food service contract between the parties, and the former client has filed a
counterclaim against the Company seeking unspecified damages for the Company's
alleged tortious interference with a prospective contractual relationship with
another food service provider.

The Company is involved in certain other legal proceedings incidental to the
normal conduct of its business. The Company does not believe that any
liabilities relating to any of the legal proceedings to which it is a party are
likely to be, individually or in the aggregate, material to its consolidated
financial position or results of operations.

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of the Company are as follows:

NAME AGE POSITION
- ------------------------------------------------------ --- ------------------------------------------------------

Richard E. Kerley(1).................................. 55 President, Chief Executive Officer and Chairman of the
Board of Directors
Catherine B. James.................................... 44 Executive Vice President, Chief Financial Officer and
Director
Randy B. Spector...................................... 45 Executive Vice President, Chief Administrative Officer
and Director
Randall K. Ziegler.................................... 54 Group President--Convention, Leisure and International
and Director
Robert F. Barney...................................... 57 Group President--Education and Business Dining
Nelson A. Barber...................................... 41 Senior Vice President and Treasurer
Ellen Keats........................................... 39 Vice President, General Counsel and Secretary
Cynthia J. Robbins.................................... 41 Vice President and Controller
Ronald E. Blaylock(2)................................. 37 Director
J. Michael Chu........................................ 38 Director
Neal F. Finnegan(2)(3)................................ 59 Director
Jack H. Nusbaum(2).................................... 56 Director
Joshua A. Polan(1)(2)(3).............................. 49 Director

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

(1) Member of Executive Committee.

(2) Member of Audit Committee.

(3) Member of Compensation Committee.

RICHARD E. KERLEY has been the President and Chief Executive Officer of Fine
Host since 1991. In April 1997, Mr. Kerley became Chairman of the Board. He
previously served as Chief Financial Officer of the Company from 1990 to 1991.
He has been a director of the Company since 1994. Mr. Kerley has 21 years of
experience in the food services industry. Prior to joining the Company in 1990,
Mr. Kerley held a series of senior management positions at Ogden Corporation, a
contract food service provider, including head of business development, logistic
support and accounting.

CATHERINE B. JAMES has been Executive Vice President and Chief Financial
Officer of the Company since April 1997 and a director of the Company since
1994. She was an executive officer of Strategic Distribution, Inc. ("Strategic
Distribution") through April 1997, serving as Chief Financial Officer from
February 1996, as Executive Vice President from January 1989 and as Secretary
and Treasurer from December 1989. She has served as a member of the Board of
Directors of Strategic Distribution since 1990. She was also Chief Financial
Officer of Strategic Distribution from January 1989 until September 1993. Ms.
James was a Managing Director of Interlaken Capital, Inc. ("Interlaken Capital")
from January 1990 to April 1997. From 1982 through 1988, she was employed by
Morgan Stanley & Co. Incorporated, serving as a Managing Director in the
corporate finance area during the last two years of her tenure.

RANDY B. SPECTOR has been Chief Administrative Officer and a director of the
Company since March 1997. He continues to serve as Executive Vice President of
the Company, a position he has held since 1993. From 1990 to 1993, Mr. Spector
was Senior Vice President--Law and Corporate Affairs of the Company. From 1987
to 1990, Mr. Spector served as Vice President and General Counsel of the
Company. Before joining Fine Host in 1987, Mr. Spector spent five years as Vice
President and General Counsel of

Dellwood Foods, Inc., a processor and distributor of milk and dairy products in
the New York City metropolitan area.

RANDALL K. ZIEGLER has been Group President--Convention, Leisure and
International since March 1997. He previously served as Executive Vice
President--Recreation and Leisure of the Company from 1995 to 1997. Prior to
that time, he served as President of the Company's Food Services Division from
1990 to 1995. From 1985 to 1990, Mr. Ziegler served as Vice President--Sales of
the Company. Mr. Ziegler has been a director of the Company since 1994. Prior to
joining the Company in 1985, he held a number of senior management positions at
Service America Corporation, a contract food service provider, including head of
new business development.

ROBERT F. BARNEY has been Group President--Education and Business Dining
since March 1997. He joined the Company as Vice President--Education and
Business Dining in 1995 and became Executive Vice President--Education and
Business Dining in 1996. Prior to joining Fine Host, Mr. Barney founded
Northwest Food Services, Inc. in 1976, and served as its President and Chief
Executive Officer until its sale to Fine Host in 1995.

NELSON A. BARBER has been Senior Vice President and Treasurer of the Company
since 1993. He was Chief Financial Officer of the Company from 1995 to April
1997. From 1989 to 1993, Mr. Barber was Chief Financial Officer and Treasurer of
GEV Corporation (now known as Pioneer Companies, Inc.) and from 1987 to 1989 he
was Director of Corporate and International Accounting at Combustion Engineering
Inc., a diversified industrial services company.

Ellen Keats has been Vice President, General Counsel and Secretary of the
Company since December 1996. Ms. Keats became Secretary in March 1997. She
previously served as Corporate Counsel of the Company from 1994 to 1996. Prior
to joining the Company, from 1993 to 1994, Ms. Keats was General Counsel of EIS
International, Inc., a telecommunications and software company in Stamford,
Connecticut. Prior to such time, Ms. Keats was a partner with the Greenwich,
Connecticut law firm of Gilbride, Tusa, Last and Spellane.

Cynthia J. Robbins has been the Vice President and Controller of the Company
since December 1996. From 1995 to 1996, Ms. Robbins was Vice President-Finance
of ACI America Holdings Inc. ("ACI"), a diversified manufacturing company. From
1992 to 1995, Ms. Robbins was Controller and Treasurer of ACI. From 1989 to
1992, Ms. Robbins was Vice President, Director of Accounting for Citicorp POS
Information Services, Inc., an information gathering company.

RONALD E. BLAYLOCK has been a director of the Company since the Initial
Public Offering in June 1996. Mr. Blaylock has been President and Chief
Executive Officer of Blaylock & Partners, L.P., an investment banking firm,
since he founded the firm in September 1993. Prior to September 1993, Mr.
Blaylock was a founding partner and Executive Vice President of Utendahl Capital
Partners, a minority-owned broker dealer, where he specialized in taxable
fixed-income securities, from 1991 to 1993. Prior to such time, Mr. Blaylock was
a First Vice President at PaineWebber Incorporated from 1988 to 1991 and a Vice
President at Citibank Capital Markets from 1982 to 1988. Mr. Blaylock is a
director of Georgetown University, where he was a member of an NCAA Final Four
basketball team, and also serves as a director of Harbourton Mortgage Corp. and
Covenant House.

J. MICHAEL CHU has been a director of the Company since April 1997. Mr. Chu
has been the Managing Director of Catterton-Simon Partners ("Catterton") since
1989. Catterton is a private equity investment firm focusing on the consumer,
food and beverage industries. Mr. Chu is a member of the Board of Trustees of
Bates College.

NEAL F. FINNEGAN has been a director of the Company since April 1997. Mr.
Finnegan has been President and Chief Executive Officer of UST Corp. since 1993.
Mr. Finnegan is also Chairman, President and Chief Executive Officer of USTrust.
Prior to joining UST Corp., Mr. Finnegan was Executive Vice President in charge
of Private Banking at Bankers Trust Company in New York City. From 1986 to 1988,

Mr. Finnegan was President and Chief Operating Officer of Bowery Savings Bank in
New York City. From 1982 to 1986, Mr. Finnegan was Vice Chairman of Shawmut
Corporation in Boston, Massachusetts. Mr. Finnegan serves as Vice Chairman of
the Board of Trustees of Northeastern University.

JACK H. NUSBAUM has been a director of the Company since the Initial Public
Offering in June 1996. Mr. Nusbaum is the Chairman of the New York law firm of
Willkie Farr & Gallagher, where he has been a partner for more than the past
twenty-five years. He is also a director of Pioneer Companies, Inc. ("PCI"),
W.R. Berkley Corporation, Strategic Distribution, Prime Hospitality Corp. and
The Topps Company, Inc. Mr. Nusbaum is also a trustee of Prep for Prep, the
Joseph Collins Foundation and the Robert Steel Foundation.

JOSHUA A. POLAN has been a director of the Company since 1994. Mr. Polan has
served as an executive officer of Interlaken Capital since June 1988, currently
serving as a Managing Director. He has served as a member of the Board of
Directors of Strategic Distribution since 1988. For more than five years prior
to June 1988, Mr. Polan was a partner in the accounting firm of Touche Ross &
Co.

Ms. James and Mr. Polan were executive officers of Idle Wild Farm, Inc., a
privately owned company that was formerly engaged in the manufacture of frozen
foods which, in October 1993, filed a chapter 11 petition for reorganization
under federal bankruptcy laws.

The Board of Directors is divided into three classes. One class of directors
will be elected each year at the annual meeting of stockholders for terms of
office expiring after three years. Messrs. Nusbaum and Spector serve in the
class whose terms expire in 1997; Mr. Blaylock, Mr. Finnegan and Ms. James serve
in the class whose terms expire in 1998; and Messrs. Chu, Kerley and Ziegler
serve in the class whose terms expire in 1999. Mr Polan has chosen not to stand
for election at the 1997 annual meeting. Each director serves until the
expiration of his term and thereafter until his successor is duly elected and
qualified. The classified Board of Directors could have the effect of making it
more difficult for a third party to acquire, or of discouraging a third party
from acquiring or making a proposal to acquire, a majority of the outstanding
stock of the Company. Executive officers of the Company are elected annually by
the Board of Directors and serve at their discretion or until their successors
are duly elected and qualified. There are no family relationships among any of
the executive officers and directors of the Company.

The Board of Directors has established a Compensation Committee (the
"Compensation Committee"), which provides recommendations concerning salaries
and incentive compensation for employees of, and consultants to, the Company.
The Board of Directors has also established an Audit Committee, which reviews
the results and scope of the annual audit of the Company's financial statements
conducted by the Company's independent accountants, the scope of other services
provided by the Company's independent accountants, proposed changes in the
Company's financial and accounting standards and principles, and the Company's
policies and procedures with respect to its internal accounting, auditing and
financial controls and makes recommendations to the Board of Directors on the
engagement of the independent accountants, as well as other matters which may
come before the Audit Committee or at the direction of the Board of Directors.
The independent directors comprise a majority of the members of the Audit
Committee.

DIRECTORS' ANNUAL COMPENSATION

Members of the Board of Directors who are not officers or employees of the
Company receive $2,500 per meeting and participate in the 1996 Non-Employee
Director Stock Plan. The Company reimburses its Board members for all reasonable
expenses incurred in connection with their attendance at directors' meetings.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

For the 1996 fiscal year, the Compensation Committee was composed of William
R. Berkley, Andrew M. Bursky and Joshua A. Polan. Mr. Berkley was Chairman of
the Board of the Company until April 10, 1997, when he resigned from the Board
of Directors. Mr. Bursky, who also resigned from the Board of Directors on April
10, 1997, served as an executive officer of the Company from 1985 to 1990.
Messrs. Berkley, Bursky and Polan received compensation for their service as
directors as set forth under "--Directors' Annual Compensation." Mr. Berkley is
Chairman of the Board and a member of the Compensation Committee of PCI and a
director of Strategic Distribution. Mr. Bursky, a director of PCI and an
executive officer of Strategic Distribution, served on the Compensation
Committee of the Company until his resignation on April 10, 1997. See "Certain
Transactions" for a description of certain transactions between the Company and
certain other entities, of which Messrs. Berkley, Bursky and Polan are officers,
directors or partners.

EMPLOYMENT AGREEMENT WITH ROBERT F. BARNEY

Mr. Barney serves the Company pursuant to an employment agreement dated as
of June 30, 1995, as amended on July 1, 1996 and March 17, 1997 (the "Employment
Agreement"). Pursuant to the terms of the Employment Agreement, Mr. Barney is
employed as Group President--Education and Business Dining and President of the
Company's wholly owned subsidiary, Northwest Food Service, Inc. In 1996, Mr.
Barney received a base salary of $160,000 per annum plus a bonus and
participated in such other compensation plans as are available to comparably
situated executives of the Company. The Employment Agreement expires on June 30,
1999.

EXECUTIVE COMPENSATION

The following table sets forth information regarding the compensation of the
Company's Chief Executive Officer and the four other most highly compensated
executive officers (collectively, the "Executive Officer Group") during the
fiscal years ended December 27, 1995 and December 25, 1996.

SUMMARY COMPENSATION TABLE

LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------ ---------------------
FISCAL OTHER ANNUAL SECURITIES UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (1) OPTIONS/SARS COMPENSATION (2)
- -------------------------------------- ------ -------- -------- ---------------- --------------------- ----------------

Richard E. Kerley..................... 1996 $225,000 $256,500 -- 54,000 $44,811
President and CEO 1995 185,000 125,000 -- -- 1,440

Randall K. Ziegler.................... 1996 193,500 71,750 -- 15,000 28,602
Executive Vice President 1995 180,000 52,500 -- -- 1,440

Randy B. Spector...................... 1996 175,000 128,250 -- 22,000 39,732
Executive Vice President 1995 155,000 62,500 -- -- 510

Robert F. Barney (3).................. 1996 160,000 71,750 50,362(4) 14,500 4,300
Executive Vice President 1995 60,000 17,500 -- -- --

Nelson A. Barber...................... 1996 132,000 102,756 -- 14,500 2,396
Senior Vice President 1995 115,000 52,500 -- -- --

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

(1) Other annual compensation in the form of perquisites and other personal
benefits has been omitted for certain executive officers where the aggregate
amount of such perquisites and other personal benefits was less than
$50,000.

(2) Represents premiums paid by the Company for excess group life insurance (Mr.
Kerley - $2,250; Mr. Ziegler - $1,440; Mr. Spector - $870; Mr. Barney -
$2,250; Mr. Barber - $437) and contributions by the Company to a 401(k)
savings plan on account of each executive officer for the fiscal year ended
December 25, 1996 (Mr. Kerley - $3,614; Mr. Ziegler - $3,614; Mr. Spector -
$3,614; Mr. Barney - $2,050; Mr. Barber - $1,959). Also represents
forgiveness of interest on promissory notes for the fiscal year ended
December 25, 1996, payable by certain executive officers (Mr. Kerley -
$38,947; Mr. Ziegler - $23,548; Mr. Spector - $35,248) -- see "Certain
Transactions--Employee Notes and Registration."

(3) Mr. Barney became an executive officer of the Company in July 1995.

(4) Of this amount, $47,062 reflects payments to Mr. Barney for moving expenses.

STOCK OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information regarding options granted to the
Executive Officer Group during the fiscal year ended December 25, 1996.

NUMBER OF PERCENT OF POTENTIAL REALIZABLE
SECURITIES OPTIONS GRANTED VALUE(1)
UNDERLYING TO EMPLOYEES IN EXERCISE EXPIRATION ------------------------
NAME OPTIONS GRANTED FISCAL YEAR PRICE DATE(2) 5% 10%
- ------------------------------------- ------------------- ----------------- ----------- ----------- ---------- ------------

Richard E. Kerley.................... 54,000 14.2% $ 12.00 6/19/06 $ 407,521 $ 1,032,742

Randall K. Ziegler................... 15,000 3.9 12.00 6/19/06 113,200 286,873

Randy B. Spector..................... 22,000 5.8 12.00 6/19/06 166,027 420,747

Robert F. Barney..................... 14,500 3.8 12.00 6/19/06 109,427 277,310

Nelson A. Barber..................... 14,500 3.8 12.00 6/19/06 109,427 277,310

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

(1) These columns illustrate the hypothetical appreciation in the value of the
stock options under the assumption that the Common Stock, which had a value
per share of $12.00 on the date of grant of the option, appreciates at the
rate of 5% or 10%, respectively, compounded annually for ten years, the term
of the options.

(2) The options are exercisable in 20% increments annually commencing on June
19, 1997 and on each anniversary thereof.

AGGREGATE FISCAL YEAR-END OPTION VALUES

The following table sets forth information concerning the number and value
of unexercised stock options held at December 25, 1996 by each member of the
Executive Officer Group. No stock options were exercised by members of the
Executive Officer Group during the fiscal year ended December 25, 1996.

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR END FISCAL YEAR END (1)
-------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------------- ----------- ------------- ----------- -------------

Richard E. Kerley..................... 15,166 61,584 $ 181,157 $ 434,839
Randall K. Ziegler.................... 5,833 17,917 69,675 130,468
Randy B. Spector...................... 10,500 27,250 125,422 202,961
Robert F. Barney...................... 4,666 16,834 52,422 118,659
Nelson A. Barber...................... 10,500 19,750 125,422 155,148

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

(1) The amounts set forth in this column were calculated using the difference in
the fiscal year-end closing price of the Common Stock, $18.375 per share,
and the exercise price per share.

COMPENSATION PURSUANT TO PLANS

1994 STOCK OPTION PLAN: The Company's Amended and Restated 1994 Stock
Option Plan (the "1994 Stock Plan") is open to participation by directors,
officers and key employees of the Company and its subsidiaries, except members
of the Compensation Committee. The number of shares of Common Stock reserved for
issuance under the 1994 Stock Plan is 569,000 shares. Either incentive stock
options or options that do not qualify as incentive stock options may be granted
under the 1994 Stock Plan. The 1994 Stock Plan expires in November 2004.

The 1994 Stock Plan is administered by either the full Board of Directors or
a committee appointed by the Board from among its members, which determines, in
its discretion, those persons to be granted

options and the number of options to be received, the times when recipients of
options ("Optionees") may exercise the options, the expiration dates of the
options and whether the options will be incentive stock options. The
Compensation Committee may determine the option price of the stock options;
provided that (i) the option price of an incentive stock option may not be less
than the fair market value of the Common Stock on the date of grant and (ii) the
option price of an option which is not an incentive stock option shall not be
less than 85% of the fair market value. Unless an option agreement provides
otherwise, in the event of a Change in Control (as defined in the 1994 Stock
Plan) the outstanding options shall immediately become exercisable. As of May 8,
1997, options to purchase an aggregate of 501,444 shares of Common Stock under
the 1994 Stock Plan are outstanding.

The Board of Directors has approved amendments to the 1994 Stock Plan to (i)
increase the maximum number of shares of Common Stock available for issuance
under the 1994 Stock Plan from 569,000 to 1,569,000 shares, (ii) provide for the
issuance of shares under the LTIP (described below) in the event of approval of
the LTIP by the Company's stockholders and (iii) make such other modifications
as the Board of Directors deemed necessary, including such modifications needed
to bring the 1994 Stock Plan into conformity with new Rule 16b-3 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company
will submit the amendments to the 1994 Stock Plan to the stockholders at the
Annual Meeting of Stockholders to be held on May 23, 1997 (the "1997 Annual
Meeting") in order to comply with the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") and the requirements of
Section 162(m) of the Code in order for compensation paid under the 1994 Stock
Plan to be deductible by the Company irrespective of the $1 million limit in
such Section. Stockholder approval is also required by the rules of the Nasdaq
National Market System in order for shares of Common Stock issued pursuant to
the 1994 Stock Plan to be listed for trading thereunder. If the amendments to
the 1994 Stock Plan are authorized by the Company's stockholders, in addition to
the options for 501,444 shares which have been granted and are outstanding,
options for an additional 1,034,334 shares will be available for issuance under
the 1994 Stock Plan.

1996 NON-EMPLOYEE DIRECTOR STOCK PLAN: The 1996 Non-Employee Director Stock
Plan (the "Directors Plan") authorizes the grant of an aggregate of 50,000
shares of Common Stock. Common Stock is granted pursuant to the Directors Plan
only to members of the Board of Directors who are not officers or employees of
the Company ("Non-Employee Directors"). The Directors Plan is administered by
the Compensation Committee. Six members of the Board of Directors are currently
eligible for participation in the Directors Plan, including Mr. Berkley.

Upon consummation of the Initial Public Offering, each Non-Employee Director
was granted 1,250 shares pursuant to the terms of the Directors Plan. On the
date of each of the Company's annual meeting of stockholders each Non-Employee
Director is automatically granted, without further action by the Board of
Directors, a number of shares of Common Stock equal to $15,000 divided by the
Fair Market Value (as defined in the Director's Plan) of one share of Common
Stock on the date of grant.

On April 10, 1997, the Board of Directors approved an amendment to the
Directors Plan in order to modify the automatic formula award to provide that
awards vest on the date of the Company's annual meeting of stockholders
immediately following the date of grant, unless otherwise determined by the
Board, and to amend the termination and amendment provisions in light of recent
changes to Rule 16b-3 of the Exchange Act. In the event of a Change in Control
(as defined in the Directors Plan), all restrictions with respect to shares of
Common Stock previously granted pursuant to the Directors Plan will immediately
lapse and all such shares will become immediately transferable.

LONG-TERM INCENTIVE COMPENSATION PLAN: The Board of Directors has approved
the Long-Term Incentive Compensation Plan (the "LTIP") and will submit the LTIP
to the Company's stockholders at the 1997 Annual Meeting in order to comply with
the requirements of Section 162(m) of the Code. The LTIP authorizes the grant of
an aggregate of 300,000 participation units (the "Units"). No more than 75,000
Units may be awarded under the LTIP to any one participant.

Units will be granted under the LTIP only to key employees designated by the
Compensation Committee, which will administer the LTIP. It is currently
contemplated that approximately 20 employees will be eligible to participate in
the LTIP. Subject to stockholder approval, Units may be awarded as of the
effective date of the LTIP, which was March 27, 1997, and may be awarded
thereafter as of the first day of any fiscal year of the Company through 2006.
Units generally vest and become exercisable over a maximum term of five years
from the date of their award and will become fully vested upon (i) the
attainment of the unit's maximum cumulative unit value, (ii) the termination of
a participant's employment by the Company without cause, (iii) his or her
retirement at or after age 65, or (iv) his or her death or disability.

The value of an outstanding Unit during any fiscal year is determined by a
formula which measures the degree of increase in the Company's earnings per
share from the previous fiscal year. Each Unit's value for each fiscal year over
the course of the five years from the date of award is cumulated to obtain such
Unit's cumulative value, which is capped at an amount determined by the
Compensation Committee at the time the Unit is granted.

Upon exercise of a Unit, the participant will receive not less than 50% of
the Unit's cumulative value in cash and the balance in the form of either cash
or shares of Common Stock, or both, as determined by the Compensation Committee
in its discretion. In the event of a participant's termination without cause
following a Change in Control (as defined in the LTIP), payment to a participant
upon exercise of a Unit will be made solely in cash.

ANNUAL INCENTIVE COMPENSATION PLAN: The Board of Directors has approved the
Annual Incentive Compensation Plan (the "Annual Plan") and will submit the
Annual Plan to the Company's stockholders at the 1997 Annual Meeting in order to
comply with the requirements of Section 162(m) of the Code. If the Annual Plan
is approved by stockholders, it will be implemented commencing in fiscal 1998.
The Annual Plan authorizes the payment of annual bonuses to certain key
employees of the Company, as further described below. Bonuses will be granted
pursuant to the Annual Plan only to key employees designated by the Compensation
Committee, which will administer the Annual Plan. It is currently contemplated
that approximately 20 employees will be eligible to participate in the Annual
Plan.

The Annual Plan is structured to pay out an annual bonus to each participant
equal to a percentage of certain bonus targets based on the attainment of
certain performance goals predetermined at the commencement of each fiscal year
by the Compensation Committee. The performance goals fall within three
categories of specific business criteria. The business criteria used in the
Annual Plan consist of (i) the Company's net income on a consolidated basis for
the fiscal year ("Net Income"), (ii) the performance of a particular business
unit in relation to Net Income and (iii) a participant's individual performance.
At the end of any fiscal year for which bonus amounts can be earned, the
Compensation Committee makes a determination with respect to each participant as
to the level of achievement of the performance goals. The percentage is then
applied to the bonus targets to determine the amount of bonus for each
participant.

No bonuses will be paid under the Annual Plan for any fiscal year unless the
Company achieves at least 80% of budgeted Net Income for that year, as set by
the committee of the Board of Directors responsible for setting the Company's
budget. The maximum amount of any individual's bonus for any fiscal year is
limited to 6% of Net Income for such fiscal year. The Annual Plan may be amended
or terminated at any time by the Company, provided that no amendment will be
effective prior to approval of the Company's stockholders to the extent such
approval is required under Section 162(m) of the Code to preserve deductibility
of certain compensation paid pursuant to the Annual Plan.

CERTAIN TRANSACTIONS

ADVISORY AGREEMENT WITH INTERLAKEN CAPITAL

The Company has paid Interlaken Capital, Inc. ("Interlaken Capital"), a
private investment and consulting firm affiliated with Interlaken Investment
Partners, L.P. ("Interlaken Partners"), an advisory fee of $150,000 during each
of fiscal 1994, 1995 and 1996, for certain administrative services provided by
Interlaken Capital to the Company. The Company pays Interlaken Capital this
annual advisory fee pursuant to an advisory services agreement which terminates
on December 31, 1999. Mr. Berkley, (formerly a director of the Company), is the
sole owner and President of Interlaken Capital, and each of Mr. Bursky (formerly
a director of the Company) and Mr. Polan is a managing director of Interlaken
Capital. Ms. James was a managing director of Interlaken Capital through April
1997. Messrs. Berkley and Bursky are also directors of Interlaken Capital. Each
of Mr. Berkley, Mr. Bursky and Mr. Polan are limited partners of Interlaken
Management Partners, L.P. ("Interlaken Management"), the general partner of
Interlaken Partners. Ms. James was a limited partner of Interlaken Management
through April 1997.

EMPLOYEE NOTES AND REGISTRATION

In 1987 and 1991, Messrs. Kerley, Spector and Ziegler, executive officers of
the Company, purchased Common Stock from the Company in exchange for promissory
notes payable to the Company in the original principal amounts of $86,545,
$77,412 and $34,618 and having outstanding principal amounts as of March 26,
1997, of $81,995 and $74,208, with respect to Messrs. Kerley and Spector. On
February 12, 1997, Mr. Ziegler repaid the outstanding balance of $32,796 on his
promissory note. In addition, in 1985, Douglas M. Stabler, a former officer of
the Company, and Mr. Ziegler purchased Common Stock with funds borrowed from
Interlaken Capital Partners Limited Partnership ("ICPLP"), of which Messrs.
Berkley and Bursky are general partners, evidenced by notes each in the original
principal amount of $16,779 and having an outstanding principal amount of
$16,779, with respect to Mr. Stabler, as of March 26, 1997. On February 12,
1997, Mr. Ziegler repaid the outstanding balance of $16,779 on his promissory
note. Upon the closing of the Initial Public Offering on June 25, 1996, pursuant
to the terms of the employee notes to the Company and ICPLP, interest on the
notes (aggregating $38,947 for Mr. Kerley, $35,248 for Mr. Spector, $23,548 for
Mr. Ziegler and $7,970 for Mr. Stabler) was forgiven and interest thereafter
ceased to accrue. In addition, the employee notes were amended to extend their
maturity for three years. The Company agreed to file a shelf registration
statement under the Securities Act after the first anniversary of the Initial
Public Offering covering the sale of shares of Common Stock held by Messrs.
Kerley, Ziegler, Spector and Stabler, which would entitle them to sell such
shares within the volume limitations of Rule 144 under the Securities Act. The
Company subsequently agreed to file such registration statement promptly after
the closing of the Follow-On Offering. The Company has filed a Registration
Statement of which this Prospectus is a part in satisfaction of such obligation.
See "Principal and Selling Stockholders." The Company believes these
arrangements assist it in retaining qualified management personnel.

BANK OF AMERICA AND ING ARRANGEMENTS

In April 1993, the Company entered into a subordinated loan agreement with
Continental Bank, N.A. (now known as Bank of America Illinois ("BAI")) pursuant
to which the Company sold $8.5 million of its variable rate subordinated notes
and issued warrants to acquire 733,467 shares of non-voting common stock at an
exercise price of $4.93 per share and warrants to acquire 133,763 shares of
non-voting common stock at an exercise price of $.01 per share. On April 21,
1995, the rate of interest was reset at 12.79% for the remainder of the term of
the notes. BAI agreed in April 1995 to reduce the number of shares of Common
Stock represented by certain of the warrants. In addition, the terms of certain
of the warrants provided for a reduction in the number of shares issuable upon
exercise thereof in the event the Company satisfied certain conditions.

On March 22, 1996, in connection with the transfer by BAI of the $6.5
million variable rate subordinated notes to ING Capital Corp. ("ING"), BAI
transferred to ING one-half of its warrants to

acquire shares of non-voting common stock at an exercise price of $4.93 per
share and one-half of its warrants to acquire shares of non-voting common stock
at an exercise price of $.01 per share. All warrants held by BAI and ING were
repurchased by the Company upon the closing of the Initial Public Offering.

FANFARE FINANCING

In connection with the financing of the acquisition of Fanfare in 1993, the
Company issued to The Berkley Family Limited Partnership (the "Partnership")
15,650 shares of Series A Convertible Preferred Stock, a warrant to acquire
21,294 shares of Common Stock at an exercise price of $4.93 per share and a
warrant to acquire 81,613 shares of Common Stock at an exercise price of $0.01
per share. In addition, the Company issued to GRD Corporation ("GRD") 86,942
shares of Series A Convertible Preferred Stock, a warrant to acquire 118,307
shares of Common Stock at an exercise price of $4.93 per share and a warrant to
acquire 453,432 shares of Common Stock at an exercise price of $0.01 per share
(collectively, the "Fanfare Financing"). The consideration for the issuance and
sale of such securities to the Partnership consisted of the reduction of
$539,925 in principal amount of a promissory note made by the Company and
payable to the Partnership, and the consideration for the issuance and sale of
such securities to GRD was $2,999,499. In connection with the Fanfare Financing,
the Company granted the Partnership and GRD certain registration rights relating
to the shares of Common Stock owned by them. Upon the closing of the Initial
Public Offering, the shares of Series A Convertible Preferred Stock held by the
Partnership and GRD were converted into 109,550 and 608,594 shares of Common
Stock, respectively. All shares issuable upon exercise of the warrants issued to
the Partnership and GRD were sold in the Initial Public Offering, except for
warrants to acquire 133,756 shares, which were canceled pursuant to their terms.

INTERLAKEN PARTNERS INVESTMENT

In April 1995, Interlaken Partners purchased 31,579 shares of Series A
Convertible Preferred Stock from the Company for a price of $47.50 per share.
Upon the closing of the Initial Public Offering, the shares of Series A
Convertible Preferred Stock held by Interlaken Partners were converted into
221,053 shares of Common Stock and sold. In connection with the April 1995
financing, the Company granted Interlaken Partners certain registration rights
relating to the shares acquired by it. See "Description of Capital
Stock--Registration Rights."

USTRUST CREDIT FACILITY

USTrust is Agent for and one of the banks which provide the Company with its
existing credit facility, which provides for (i) a working capital revolving
credit line for general obligations and letters of credit, in the maximum
aggregate amount of $20.0 million and (ii) a line of credit to provide for
future expansion by the Company, in the maximum amount of $55.0 million, for
which USTrust receives customary fees. Mr. Finnegan, a director of the Company,
is President and Chief Executive Officer of UST Corp., a bank holding company
which is the parent company of USTrust. In addition, Mr. Finnegan is also
Chairman, President and Chief Executive Officer of USTrust.

OTHER

The Company has retained the law firm of Willkie Farr & Gallagher as its
counsel with respect to certain matters, including the Offering, and anticipates
it will continue to do so in the future. Mr. Nusbaum, a director of the Company,
is the Chairman of Willkie Farr & Gallagher. See "Legal Matters."

Fine Host was a participating employer in the Interlaken Capital Retirement
401(k) Savings Plan through March 31, 1997.

The Company believes that all transactions between the Company and its
officers, directors and principal stockholders or affiliates thereof, in light
of the circumstances of the transactions, have been and will in the future be on
terms no less favorable to the Company than could be obtained from unaffiliated
third parties. Such transactions will, in the future, be subject to the approval
of a majority of the disinterested directors of the Company.

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information with regard to the
beneficial ownership of the Common Stock as of May 8, 1997 by (i) each person
known by the Company to own beneficially more than 5% of the outstanding shares
of Common Stock, (ii) each director of the Company and each member of the
Executive Officer Group, (iii) all directors and officers of the Company as a
group and (iv) each Selling Stockholder. Except as otherwise noted, the named
beneficial owner has sole voting and investment power.

BENEFICIAL OWNERSHIP
PRIOR TO THE OFFERING MAXIMUM
(1) NO. OF
NAME AND ADDRESS ----------------------- SHARES
OF BENEFICIAL OWNER SHARES PERCENTAGE OFFERED
--------------------- ---------- ----------- ----------

Putnam Investments, Inc.(2)..................................... 1,135,302 12.6% --
One Post Office Square
Boston, MA 02109
William R. Berkley.............................................. 701,250 7.8% 701,250
165 Mason Street
Greenwich, CT 06830
The LGT Asset Group(3).......................................... 487,700 5.4% --
1166 Avenue of the Americas
New York, NY 10036
Massachusetts Financial Services Company(4)..................... 450,500 5.0% --
500 Boylston Street
Boston, MA 02116
Richard E. Kerley............................................... 80,966(5) * 70,000
Randall K. Ziegler.............................................. 63,833(6) * 55,000
Randy B. Spector................................................ 60,900(7) * 56,000
Robert F. Barney................................................ 8,566(8) * --
Nelson A. Barber................................................ 3,650(9) * --
Ronald E. Blaylock.............................................. 1,250 * --
J. Michael Chu.................................................. --
Neal F. Finnegan................................................ --
Catherine B. James.............................................. 34,750 * --
Jack H. Nusbaum................................................. 6,250 * --
Joshua A. Polan................................................. 39,250 * --
Douglas M. Stabler.............................................. 53,100 10) * 42,000
William C. Smitherman
and Joann McBride Smitherman.................................. 8,700 * 8,700
James E. McBride................................................ 8,400 * 8,400
All directors and executive officers as a group
(13 persons).................................................. 299,415 11) 3.3% 181,000

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

* Less than 1%.

(1) Under the rules of the Securities and Exchange Commission, shares are deemed
to be "beneficially owned" by a person if such person directly or indirectly
has or shares (i) the power to vote or dispose of such shares, whether or
not such person has any pecuniary interest in such shares, or (ii) the right
to acquire the power to vote or dispose of such shares within 60 days,
including any right to acquire through the exercise of any option, warrant
or right.

(2) Putnam Investments, Inc. ("Putnam"), a wholly-owned subsidiary of Marsh &
McLennan Companies, Inc. ("MMC"), wholly owns two registered investment
advisers: Putnam Investment Management, Inc. ("PIM"), which is the
investment adviser to the Putnam family of mutual funds, and The Putnam
Advisory Company, Inc. ("PAC"), which is the investment adviser to Putnam's
institutional clients. Both subsidiaries have dispository power over the
shares as investment managers, but each of the mutual funds' trustees have
voting power over the shares held by each fund, and PAC has shared voting
power over the shares held by the institutional clients. In the Putnam
family of funds is The Putnam OTC & Emerging Growth Fund (the "Fund"), which
holds 722,900 of the total shares owned by Putnam. The business address for
each of Putnam, PIM, PAC and the Fund is One Post Office Square, Boston
Massachusetts 02109. The business address for MMC is 1166 Avenue of the
Americas, New York, New York 10036. Information regarding Putnam has been
obtained by the Company from a Schedule 13G filed by Putnam with the
Securities and Exchange Commission on or about March 7, 1997, reporting
beneficial ownership of Common Stock as of February 28, 1997.

(3) The LGT Asset Group is comprised of Chancellor LGT Asset Management, Inc.,
Chancellor LGT Trust Company and LGT Asset Management, Inc. The business
address of LGT Asset Management, Inc. is 50 California Street, San
Francisco, California 94111. The business address of the other members of
the LGT Asset Group is 1166 Avenue of the Americas, New York, New York
10036. Information regarding the LGT Asset Group has been obtained by the
Company from a Schedule 13G filed by the LGT Asset Group with the Securities
and Exchange Commission on or about February 7, 1997, reporting beneficial
ownership of Common Stock as of December 31, 1996.

(4) Information regarding Massachusetts Financial Services Company ("MFS") has
been obtained by the Company from a Schedule 13G filed by MFS with the
Securities and Exchange Commission on or about February 11, 1997, reporting
beneficial ownership of Common Stock as of December 31, 1996.

(5) Includes 10,966 shares of Common Stock issuable upon exercise of stock
options.

(6) Includes 8,833 shares of Common Stock issuable upon exercise of stock
options.

(7) Includes 4,900 shares of Common Stock issuable upon exercise of stock
options.

(8) Includes 7,566 shares of Common Stock issuable upon exercise of stock
options.

(9) Consists of 3,650 shares of Common Stock issuable upon exercise of stock
options.

(10) Includes 11,100 shares of Common Stock issuable upon exercise of stock
options.

(11) Includes 35,915 shares of Common Stock issuable upon exercise of stock
options beneficially owned by directors and executive officers of the
Company, and excludes shares owned by William R. Berkley, who resigned as a
director of the Company as of April 10, 1997.

Mr. Berkley was a director of the Company from 1985 through April 10, 1997,
serving as Chairman of the Board from 1994 to such date. The shares offered by
Mr. Berkley pursuant to this Prospectus are entitled to incidental or
"piggyback" registration rights with respect to certain registrations of equity
securities by the Company. The Company has filed a Registration Statement of
which this Prospectus is a part in satisfaction of such registration rights. The
Shares offered by Messrs. Kerley, Spector, Ziegler and Stabler pursuant to this
Prospectus were purchased by such Selling Stockholders in exchange for
promissory notes payable to the Company and ICPLP. The Company agreed to file a
shelf registration statement under the Securities Act after the first
anniversary of the Initial Public Offering covering the sale of such Shares,
which would entitle such Selling Stockholders to sell the Shares within the
volume limitations of Rule 144 under the Securities Act. The Company
subsequently agreed to file such registration statement promptly after the
closing of the Follow-On Offering, which closed on February 12, 1997. The
Company has filed a Registration Statement of which this Prospectus is a part in
satisfaction of such registration rights. See "Certain Transactions--Employee
Notes and Registration." Messrs. Kerley, Spector and Ziegler are executive
officers of the Company and Mr. Stabler was an executive officer of the Company

until May 1996. The Shares offered by William C. Smitherman and Joann McBride
Smitherman and James E. McBride pursuant to this Prospectus were issued to such
Selling Stockholders in connection with the acquisition of Sun West in March
1996.

Because the Selling Stockholders may offer pursuant to this Prospectus all
or some part of the 941,350 Shares to which this Prospectus relates, and because
the Offering may or may not be an underwritten offering on a firm commitment
basis, no estimate can be given as of the date hereof as to the number of Shares
to be offered for sale by the Selling Stockholders or as to the number of shares
of Common Stock that will be held by the Selling Stockholders upon termination
of the Offering. See "Plan of Distribution."

DESCRIPTION OF CAPITAL STOCK

GENERAL

The authorized capital stock of the Company currently consists of 25,000,000
shares of Common Stock, par value $.01 per share, and 1,000,000 shares of
Preferred Stock, par value $.01 per share. As of May 8, 1997, there were
8,959,266 shares of Common Stock and no shares of Preferred Stock outstanding.

COMMON STOCK

Holders of Common Stock are entitled to one vote per share in all matters to
be voted on by the stockholders of the Company and do not have cumulative voting
rights. Subject to preferences that may be applicable to any Preferred Stock
outstanding at the time, holders of Common Stock are entitled to receive ratably
such dividends, if any, as may be declared from time to time by the Board of
Directors out of funds legally available therefor. See "Dividend Policy." In the
event of a liquidation, dissolution or winding up of the Company, holders of
Common Stock are entitled to share ratably in all assets remaining after payment
of the Company's liabilities and the liquidation preference, if any, of any
outstanding Preferred Stock. All of the outstanding shares of Common Stock are,
and the shares offered by the Company in the Offering will be, when issued and
paid for, fully paid and non-assessable. Holders of Common Stock have no
preemptive, subscription, redemption or conversion rights. The rights,
preferences and privileges of holders of Common Stock are subject to, and may be
adversely affected by, the rights of the holders of shares of any series of
Preferred Stock which the Company may designate and issue in the future.

PREFERRED STOCK

The Board of Directors has the authority, without any further vote or action
by the stockholders, to provide for the issuance of up to 1,000,000 shares of
Preferred Stock from time to time in one or more series with such designations,
rights, preferences and limitations as the Board of Directors may determine,
including the consideration received therefor. The Board also has the authority
to determine the number of shares comprising each series, dividend rates,
redemption provisions, liquidation preferences, sinking fund provisions,
conversion rights and voting rights without approval by the holders of Common
Stock. Although it is not possible to state the effect that any issuance of
Preferred Stock might have on the rights of holders of Common Stock, the
issuance of Preferred Stock may have one or more of the following effects: (i)
to restrict Common Stock dividends if Preferred Stock dividends have not been
paid, (ii) to dilute the voting power and equity interest of holders of Common
Stock to the extent that any series of Preferred Stock has voting rights or is
convertible into Common Stock or (iii) to prevent current holders of Common
Stock from participating in the Company's assets upon liquidation until any
liquidation preferences granted to holders of Preferred Stock are satisfied. In
addition, the issuance of Preferred Stock may, under certain circumstances, have
the effect of discouraging a change in control of the Company by, for example,
granting voting rights to holders of Preferred Stock that require approval by
the separate vote of the holders of Preferred Stock for any amendment to the
Restated Certificate or any reorganization, consolidation, merger or other
similar transaction involving the Company. As a result, the issuance of such
Preferred Stock may discourage bids for the Common Stock at a premium over the
market price therefor, and could have a materially adverse effect on the market
value of the Common Stock. See "Risk Factors-- Anti-Takeover Effect of Certain
Charter and By-Law Provisions."

CONVERTIBLE NOTES

In connection with the acquisition of Ideal, the Company issued to the
sellers subordinated notes in the aggregate principal amount of $1,420,000,
which are convertible into shares of Common Stock at a price of $15 per share,
or an aggregate of 94,667 shares of Common Stock as of the date of issuance. As
of May 8, 1997, the principal amount of the notes is equal to $1,213,750,
convertible into an aggregate of 80,917 shares.

REGISTRATION RIGHTS

An aggregate of 80,917 shares underlying convertible subordinated notes
issued by the Company in connection with the acquisition of Ideal are subject to
demand and piggyback registration rights beginning after June 25, 1997.

LIMITATIONS ON DIRECTORS' LIABILITY

The Restated Certificate and By-laws limit the liability of directors to the
maximum extent permitted by Delaware law. Delaware law provides that directors
of a corporation will not be personally liable for monetary damages for breach
of their fiduciary duties as directors, including gross negligence, except
liability for (i) breach of the directors' duty of loyalty, (ii) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of the law, (iii) the unlawful payment of a dividend or unlawful stock
purchase or redemption and (iv) any transaction from which the director derives
an improper personal benefit. Delaware law does not permit a corporation to
eliminate a director's duty of care, and this provision of the Company's
Restated Certificate has no effect on the availability of equitable remedies,
such as injunction or rescission, based upon a director's breach of the duty of
care.

These provisions do not limit liability under state or federal securities
laws. The Company believes that these provisions assist the Company in
attracting and retaining qualified individuals to serve as directors.

CLASSIFIED BOARD OF DIRECTORS; PREFERRED STOCK

The Restated Certificate provides for a classified Board of Directors and
authorizes the issuance of Preferred Stock without stockholder approval and upon
such terms as the Board of Directors may determine. These provisions may have
the effect of making it difficult for a third party to acquire, or of
discouraging a third party from acquiring or making a proposal to acquire, a
majority of the outstanding stock of the Company. The rights of the holders of
Common Stock would be subject to, and may be adversely affected by, the rights
of holders of Preferred Stock that may be issued in the future. The Company has
no present plans to issue any shares of Preferred Stock. See "Description of
Capital Stock-- Preferred Stock" and "Risk Factors--Anti-Takeover Effect of
Certain Charter and By-Law Provisions."

SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW

The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law ("Section 203"). Under Section 203, certain "business
combinations" between a Delaware corporation whose stock generally is publicly
traded or held of record by more than 2,000 stockholders and an "interested
stockholder" are prohibited for a three-year period following the date that such
a stockholder became an interested stockholder, unless (i) the corporation has
elected in its original certificate of incorporation not to be governed by
Section 203 (the Company did not make such an election), (ii) the business
combination was approved by the Board of Directors of the corporation before the
other party to the business combination became an interested stockholder, (iii)
upon consummation of the transaction that made it an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the corporation
outstanding at the commencement of the transaction (excluding voting stock owned
by directors who are also officers or held in employee benefit plans in which
the employees do not have a confidential right to tender or vote stock held by
the plan) or (iv) the business combination was approved by the Board of
Directors of the corporation and ratified by two-thirds of the voting stock
which the interested stockholder did not own. The three-year prohibition also
does not apply to certain business combinations proposed by an interested
stockholder following the announcement or notification of certain extraordinary
transactions involving the corporation and a person who had not been an
interested stockholder during the previous three years or who became an
interested stockholder with the approval of the majority of the corporation's
directors. The term "business combination" is defined generally to

include mergers or consolidations between a Delaware corporation and an
"interested stockholder," transactions with an "interested stockholder"
involving the assets or stock of the corporation or its majority-owned
subsidiaries and transactions which increase an interested stockholder's
percentage ownership of stock. The term "interested stockholder" is defined
generally as a stockholder who, together with affiliates and associates, owns
(or, within three years prior, did own) 15% or more of a Delaware corporation's
voting stock. Section 203 could prohibit or delay a merger, takeover or other
change in control of the Company and therefore could discourage attempts to
acquire the Company.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar of the Common Stock is Continental Stock
Transfer and Trust Company.

INCLUSION IN THE NASDAQ NATIONAL MARKET

The Common Stock is quoted on the Nasdaq National Market under the symbol
"FINE."

SHARES ELIGIBLE FOR FUTURE SALE

As of May 8, 1997, the Company had outstanding 8,959,266 shares of Common
Stock. Of the 8,959,266 shares of Common Stock outstanding, the Company
estimates that all of such shares, including the 941,350 Shares of Common Stock
offered by this Prospectus, will be freely tradable without restriction under
the Securities Act. Certain of the Selling Stockholders, representing 223,000 of
the Shares offered by this Prospectus, have agreed, however, to sell their
Shares subject to the volume limitations of Rule 144.

In general, under Rule 144, subject to certain conditions with respect to
the manner of sale, the availability of current public information concerning
the Company and other matters, each of the existing stockholders who has
beneficially owned shares of Common Stock for at least two years is entitled to
sell within any three month period that number of such shares which does not
exceed the greater of 1% of the total number of then outstanding shares of
Common Stock (approximately 89,593 shares as of May 8, 1997) or the average
weekly trading volume of shares of Common Stock during the four calendar weeks
preceding the date on which notice of the proposed sale is sent to the
Securities and Exchange Commission (the "Commission"). Moreover, each of the
existing stockholders who is not deemed to be an affiliate of the Company at the
time of the proposed sale and who has beneficially owned his or her shares of
Common Stock for at least two years is entitled to sell such shares under Rule
144(k) without regard to such volume limitations.

Approximately 80,917 shares, constituting shares issuable upon the exercise
of convertible notes, are entitled to certain registration rights. See
"Description of Capital Stock--Registration Rights."

The Common Stock has traded on the Nasdaq National Market since June 1996
and has a limited public market history. There can be no assurance that future
market prices for the shares will equal or exceed the price to public set forth
on the cover page of this Prospectus. No prediction can be made as to the
effect, if any, that future sales of shares of Common Stock, or the availability
of shares of Common Stock for future sale, to the public will have on the market
price of the Common Stock prevailing from time to time. Sales of substantial
amounts of presently outstanding or subsequently issued stock, or the perception
that such sales could occur, could adversely affect prevailing market prices for
the Common Stock and could impair the Company's ability to raise capital in the
future through an offering of its additional shares of Common Stock that may be
offered for sale or sold to the public in the future.

PLAN OF DISTRIBUTION

Any or all of the Shares may be sold from time to time to purchasers
directly by any of the Selling Stockholders. The Shares may also be offered in
one or more underwritten offerings, on a firm commitment or best efforts basis.
The Company will receive no proceeds from the sale of the Shares by the Selling
Stockholders.

The Shares may be sold from time to time in one or more transactions at a
fixed offering price, which may be changed, or at varying prices determined at
the time of sale or at negotiated prices. Such prices will be determined by the
Selling Stockholder or by agreement between such Selling Stockholder and the
Selling Stockholder's underwriters, dealers, brokers or agents.

Any underwriters, dealers, brokers or agents participating in the
distribution of the Shares may receive compensation in the form of underwriting
discounts, concessions, commissions or fees from the Selling Stockholder and/or
purchasers of Shares, for whom they may act. In addition, the Selling
Stockholder and any such underwriters, dealers, brokers or agents that
participate in the distribution of Shares may be deemed to be underwriters under
the Securities Act, and any profits on the sale of Shares by them and any
discounts, commissions or concessions received by any of such persons may be
deemed to be underwriting discounts and commissions under the Securities Act.
Those who act as underwriter, broker, dealer or agent in connection with the
sale of Shares will be selected by the Selling Stockholder and may have other
business relationships with the Company and its subsidiaries or affiliates in
the ordinary course of business.

At any time a particular offer of Shares is made by any Selling Stockholder,
a supplement to this Prospectus will be distributed, if required, which will set
forth the aggregate amount of Shares being offered and the terms of the
offering, including the name or names of any underwriters, dealers or agents,
any discounts, commissions and other items constituting compensation from the
Selling Stockholder and any discounts, commissions and concessions allowed or
reallowed or paid to dealers. Such Prospectus supplement and, if necessary, a
post-effective amendment to the Registration Statement of which this Prospectus
is a part will be filed with the Commission to reflect the disclosure of
additional information with respect to the distribution of the Shares.

Any Shares covered by this Prospectus that qualify for sale pursuant to Rule
144 under the Securities Act may be sold under Rule 144 rather than pursuant to
this Prospectus.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by Willkie Farr & Gallagher, New York, New York. Jack H. Nusbaum,
Chairman of Willkie Farr & Gallagher, is a director of the Company and
beneficially owns 6,250 shares of Common Stock.

EXPERTS

The financial statements as of December 27, 1995 and December 25, 1996 and
for each of the three years in the period ended December 25, 1996 of Fine Host
included in this Prospectus have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report appearing herein, and have been
so included in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public facilities

of the Commission at its principal office at Judiciary Plaza, 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and at its regional offices in Chicago
(Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois 60611),
and in New York (Seven World Trade Center, New York, New York 10007). Any
interested party may obtain copies of all or any portion of the Registration
Statement at prescribed rates from the Public Reference Section of the
Commission at its principal office at Judiciary Plaza, 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549. The Commission also maintains a Web site that
contains reports, proxy and information statements and other information
regarding registrants, such as the Company, that file electronically with the
Commission. Any interested party may access such information at Web site
http://www.sec.gov. In addition, such reports, proxy and information statements
and other information can also be inspected at the offices of The Nasdaq Stock
Market, 1735 K Street, N.W., Washington, D.C. 20006.

The Company has filed with the Commission a Registration Statement on Form
S-1 under the Securities Act, with respect to the Shares. For the purposes
hereof, the term "Registration Statement" means the original Registration
Statement and any and all amendments thereto, including the schedules and
exhibits to such original Registration Statement or any such amendment. This
Prospectus does not contain all of the information set forth in the Registration
Statement, to which reference hereby is made. Each statement made in this
Prospectus concerning a document filed as an exhibit to the Registration
Statement is qualified in its entirety by reference to such exhibit for a
complete statement of its provisions. Any interested party may inspect the
Registration Statement, without charge, at the public reference facilities of
the Commission as described in the previous paragraph.

INDEX TO FINANCIAL STATEMENTS

PAGE
---------

Independent Auditors' Report............................................................................. F-2

Consolidated Balance Sheets as of December 27, 1995 and December 25, 1996................................ F-3

Consolidated Statements of Income for the fiscal years ended December 28, 1994, December 27, 1995 and
December 25, 1996...................................................................................... F-4

Consolidated Statements of Stockholders' Equity for the fiscal years ended December 28, 1994, December
27, 1995 and December 25, 1996......................................................................... F-5

Consolidated Statements of Cash Flows for the fiscal years ended December 28, 1994, December 27, 1995 and
December 25, 1996...................................................................................... F-6

Notes to Consolidated Financial Statements............................................................... F-7

Consolidated Balance Sheets as of December 25, 1996 and March 26, 1997 (unaudited)....................... F-23

Unaudited Consolidated Statements of Income for the three months ended March 27, 1996 and March 26,
1997................................................................................................... F-24

Unaudited Consolidated Statements of Stockholders' Equity for the three months ended March 26, 1997...... F-25

Unaudited Consolidated Statements of Cash Flows for the three months ended March 27, 1996 and March 26,
1997................................................................................................... F-26

Notes to Unaudited Consolidated Financial Statements..................................................... F-27

F-1

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of

FINE HOST CORPORATION

We have audited the accompanying consolidated balance sheets of Fine Host
Corporation and subsidiaries (the "Company") as of December 27, 1995 and
December 25, 1996, and the consolidated statements of income, stockholders'
equity and cash flows for each of the three years in the period ended December
25, 1996. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Fine Host Corporation and
subsidiaries as of December 27, 1995 and December 25, 1996 and the results of
their operations and their cash flows for each of the three years in the period
ended December 25, 1996 in conformity with generally accepted accounting
principles.

Deloitte & Touche LLP

New York, New York

February 28, 1997

F-2

FINE HOST CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

DECEMBER 27, 1995 DECEMBER 25, 1996
----------------- -----------------

ASSETS
Current assets:
Cash and cash equivalents................................................ $ 634 $ 4,724
Accounts receivable...................................................... 7,548 14,580
Inventories.............................................................. 2,099 3,260
Prepaid expenses and other current assets................................ 2,413 3,749
------- --------
Total current assets................................................. 12,694 26,313

Contract rights, net....................................................... 12,866 22,869
Fixtures and equipment, net................................................ 15,829 24,057
Excess of cost over fair value of net assets acquired, net................. 13,406 34,362
Other assets............................................................... 5,786 9,842
------- --------
Total assets......................................................... $ 60,581 $ 117,443
------- --------
------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses.................................... $ 12,467 $ 18,690
Current portion of long-term debt........................................ 2,981 --
Current portion of subordinated debt..................................... 1,745 3,045
------- --------
Total current liabilities............................................ 17,193 21,735

Deferred income taxes...................................................... 6,421 12,360
Long-term debt............................................................. 15,326 31,562
Subordinated debt.......................................................... 8,879 5,014
------- --------
Total liabilities.................................................... 47,819 70,671

Commitments and contingencies

Stock warrants............................................................. 1,380 --

Stockholders' equity:
Convertible Preferred Stock, $.01 par value, 250,000 shares authorized,
134,171 and 0 issued and outstanding at December 27, 1995 and December
25, 1996, respectively................................................. 1 --
Common Stock, $.01 par value, 25,000,000 shares authorized, 2,048,200 and
6,212,016 issued and outstanding at December 27, 1995 and December 25,
1996, respectively..................................................... 20 62
Additional paid-in-capital............................................... 8,933 41,778
Retained earnings........................................................ 2,617 5,121
Receivables from stockholders for purchase of Common Stock............... (189) (189)
------- --------
Total stockholders' equity........................................... 11,382 46,772
------- --------
Total liabilities and stockholders' equity......................... $ 60,581 $ 117,443
------- --------
------- --------

See accompanying notes to consolidated financial statements.

F-3

FINE HOST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA)

FISCAL YEARS ENDED
----------------------------------------

DECEMBER 28, DECEMBER 27, DECEMBER 25,
1994 1995 1996
------------ ------------ ------------
Net sales............................................................. $ 82,119 $ 95,462 $ 127,925
Cost of sales......................................................... 73,833 85,576 113,703
------------ ------------ ------------
Gross profit.......................................................... 8,286 9,886 14,222
General and administrative expenses................................... 3,406 3,626 5,388
------------ ------------ ------------
Income from operations................................................ 4,880 6,260 8,834
Interest expense, net................................................. 1,629 2,479 2,330
------------ ------------ ------------
Income before tax provision........................................... 3,251 3,781 6,504
Tax provision......................................................... 1,385 1,585 2,700
------------ ------------ ------------
Net income............................................................ 1,866 2,196 3,804
Accretion to redemption value of warrants............................. (250) (900) (1,300)
------------ ------------ ------------
Net income available to Common Stockholders........................... $ 1,616 $ 1,296 $ 2,504
------------ ------------ ------------
------------ ------------ ------------
Earnings per share of Common Stock.................................... $ .50 $ .39 $ .51
------------ ------------ ------------
------------ ------------ ------------
Average number of shares of Common Stock outstanding.................. 3,230 3,307 4,929
------------ ------------ ------------
------------ ------------ ------------
Earnings per share assuming full dilution............................. $ .49 $ .39 $ .50
------------ ------------ ------------
------------ ------------ ------------
Average number of shares of Common Stock outstanding assuming full
dilution............................................................ 3,287 3,330 5,005
------------ ------------ ------------
------------ ------------ ------------

See accompanying notes to consolidated financial statements.

F-4

FINE HOST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA)

RECEIVABLES
FROM
STOCKHOLDERS
CONVERTIBLE FOR
PREFERRED STOCK COMMON STOCK ADDITIONAL RETAINED PURCHASE OF
----------------------- --------------------- PAID IN EARNINGS COMMON
SHARES AMOUNT SHARES AMOUNT CAPITAL (DEFICIT) STOCK
---------- ----------- ---------- --------- ----------- ----------- -------------

Balance, December 29, 1993......... 102,592 $ 1 2,048,200 $ 20 $ 7,433 $ (295) $ (189)
Net income....................... 1,866
Stock warrant accretion.......... (250)
---------- ----------- ---------- --------- ----------- ----------- -----
Balance, December 28, 1994......... 102,592 1 2,048,200 20 7,433 1,321 (189)
Net income....................... 2,196
Stock warrant accretion.......... (900)
Shares issued.................... 31,579 1,500
---------- ----------- ---------- --------- ----------- ----------- -----

Balance, December 27, 1995......... 134,171 1 2,048,200 20 8,933 2,617 (189)
Net income......................... 3,804
Stock warrant accretion............ (1,300)
Shares issued in connection with
Sun West acquisition............. 25,900 1 369
Shares issued in connection with
initial public offering.......... 3,064,718 30 31,967
Conversion of Preferred Stock...... (134,171) (1) 939,197 9 (8)
Warrants exercised................. 123,585 1 608
Warrants redeemed.................. (200)
Other.............................. 10,416 1 109
---------- ----------- ---------- --------- ----------- ----------- -----

Balance, December 25, 1996......... -- $ -- 6,212,016 $ 62 $ 41,778 $ 5,121 $ (189)
---------- ----------- ---------- --------- ----------- ----------- -----
---------- ----------- ---------- --------- ----------- ----------- -----

TOTAL
STOCKHOLDERS'
EQUITY
------------

Balance, December 29, 1993......... $ 6,970
Net income....................... 1,866
Stock warrant accretion.......... (250)
------------
Balance, December 28, 1994......... 8,586
Net income....................... 2,196
Stock warrant accretion.......... (900)
Shares issued.................... 1,500
------------
Balance, December 27, 1995......... 11,382
Net income......................... 3,804
Stock warrant accretion............ (1,300)
Shares issued in connection with
Sun West acquisition............. 370
Shares issued in connection with
initial public offering.......... 31,997
Conversion of Preferred Stock...... --
Warrants exercised................. 609
Warrants redeemed.................. (200)
Other.............................. 110
------------
Balance, December 25, 1996......... $ 46,772
------------
------------

See accompanying notes to consolidated financial statements.

F-5

FINE HOST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

FISCAL YEARS ENDED
----------------------------------------

DECEMBER 28, DECEMBER 27, DECEMBER 25,
1994 1995 1996
------------ ------------ ------------
Cash flows from operating activities:
Net income.......................................................... $ 1,866 $ 2,196 $ 3,804
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization..................................... 2,379 3,804 4,692
Deferred income tax provision..................................... 1,359 1,536 2,620
Changes in operating assets and liabilities:
Accounts receivable............................................. (2,238) (372) (3,100)
Inventories..................................................... (367) 306 (366)
Prepaid expenses and other current assets....................... (1,001) (473) (1,175)
Accounts payable and accrued expenses........................... 2,100 (2,627) (6,065)
Increase in other assets.............................................. (1,528) (1,399) (64)
------------ ------------ ------------
Net cash provided by operating activities....................... 2,570 2,971 346
------------ ------------ ------------
Cash flows from investing activities:
Increase in contract rights......................................... (234) (3,446) (6,277)
Purchases of fixtures and equipment................................. (6,303) (3,329) (8,516)
Sales of fixtures and equipment..................................... -- -- 64
Acquisition of business, net of cash acquired....................... (777) (3,478) (11,640)
Collection of notes receivable...................................... 548 2,129 494
Issuance of notes receivable........................................ (2,280) -- --
------------ ------------ ------------
Net cash used in investing activities........................... (9,046) (8,124) (25,875)
------------ ------------ ------------
Cash flows from financing activities:
Issuance of common stock............................................ -- -- 32,016
Issuance of convertible preferred stock............................. -- 1,500 --
Borrowings under long-term debt agreement........................... 10,739 8,580 27,844
Payment of long-term debt........................................... (1,529) (2,300) (22,254)
Payment of subordinated debt........................................ (1,578) (3,525) (8,396)
Redemption of warrants.............................................. -- -- (200)
Proceeds from exercise of warrants.................................. -- -- 609
------------ ------------ ------------
Net cash provided by financing activities....................... 7,632 4,255 29,619
------------ ------------ ------------
(Decrease) increase in cash......................................... 1,156 (898) 4,090
Cash, beginning of year............................................. 376 1,532 634
------------ ------------ ------------
Cash, end of year................................................... $ 1,532 $ 634 $ 4,724
------------ ------------ ------------
------------ ------------ ------------

See accompanying notes to consolidated financial statements.

F-6

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

1. DESCRIPTION OF BUSINESS

Fine Host Corporation and its subsidiaries ( the "Company") provides
contract food service management to four distinct markets within the contract
food service industry: the recreation and leisure market (arenas, stadiums,
amphitheaters, civic centers and other recreational facilities); the convention
center market; the education market (colleges, universities and elementary and
secondary schools); and the business dining market (corporate cafeterias, office
complexes and manufacturing plants).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION--The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. All significant
intercompany transactions and accounts have been eliminated.

CASH AND CASH EQUIVALENTS--Cash and cash equivalents include cash, money
market funds, commercial paper and certain U.S. Government securities with an
original maturity of three months or less and are deposited with a number of
institutions with high credit ratings. The Company does not believe it is
exposed to any significant credit risk related to cash and cash equivalents.

INVENTORIES--Inventories are stated at the lower of cost, determined on a
first-in, first-out (FIFO) basis, or market.

CONTRACT RIGHTS--Certain directly attributable costs, primarily direct
payments to clients to acquire contracts and the cost of licenses and permits,
incurred by the Company in obtaining contracts with clients are recorded as
contract rights and are amortized over the contract life of each such contract
without consideration of future renewals. The costs of licenses and permits are
amortized over the shorter of the related contract life or the term of the
license or permit. The unamortized value of such capitalized costs was $10,940
at December 25, 1996, consisting of costs related to 53 contracts. Contract
rights are being amortized over a range of 3 to 20 years, with an average
amortization period of 8 years as of December 25, 1996. The cost of licenses and
permits are being amortized over a range of 3 to 10 years. The value of contract
rights acquired through acquisitions has been determined through independent
valuation based on projected cash flows discounted at a rate that market
participants would use to determine fair value and is being amortized over the
projected lives as determined through the valuation process, with an average
amortization period of 10 years as of December 25, 1996. The unamortized value
of contract rights acquired through acquisitions was $11,929 at December 25,
1996, consisting of rights relating to 259 contracts. Accumulated amortization
was $3,949 and $6,180 at December 27, 1995 and December 25, 1996, respectively.
The carrying value of the asset would be reduced if it is probable that
management's best estimate of future cash flows from related operations over the
remaining amortization period, on an undiscounted basis, will be less than the
carrying amount of the asset, plus allocated goodwill if acquired in a business
combination. Any such impairment loss would be measured as the amount by which
the carrying value of the asset exceeds the fair value determined as the present
value of estimated expected future cash flow discounted at a rate that market
participants would use to determine fair value.

F-7

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FIXTURES AND EQUIPMENT--Acquisitions of fixtures and equipment are recorded
at cost and are depreciated using the straight line method over the shorter of
estimated useful lives of the assets or the term of the customer concession and
catering contract. Fixtures and equipment are periodically reviewed to determine
recoverability by comparing the carrying value to expected future cash flows.

EXCESS OF COST OVER FAIR VALUE OF NET ASSETS ACQUIRED--The excess of cost
over fair value of net assets acquired is amortized using the straight line
method over periods generally ranging from 20 to 30 years. Accumulated
amortization was $848 and $1,758 at December 27, 1995 and December 25, 1996,
respectively.

The carrying value of the net asset would be reduced if it is probable that
management's best estimate of future cash flows from related operations, on an
undiscounted basis, will be less than the carrying amount of the asset over the
remaining amortization period. Any such impairment loss would be measured as the
amount by which the carrying value of the asset exceeds the fair value
determined as the present value of estimated expected future cash flow.

REVENUE RECOGNITION AND COST OF SALES--Sales from food and beverage
concession and catering contract food services are recognized as the services
are provided.

The Company generally enters into one of three types of contracts for its
food services: profit and loss contracts ("P&Ls"), profit sharing contracts and
management fee contracts. Under P&L contracts, all food and beverage sales are
recorded in net sales. P&Ls require the Company to bear all the expenses of the
operation, including rent paid to the client (usually calculated as a fixed
percentage of various categories of sales). Under the profit sharing contracts,
the Company receives a percentage of profits earned at the facility after the
payment of all expenses of the operation plus a fixed fee or percentage of sales
as an administrative fee. Under this type of contract, the fixed and
administrative fees and all food and beverage sales generated at a location are
recorded in net sales. Management fee contracts provide for a fixed fee. Fine
Host is also reimbursed for all of its on-site expenses incurred in providing
food and beverage services under management fee contracts. Certain of the
Company's management fee contracts provide for an additional incentive fee based
on a percentage of sales over a base threshold level. In the case of a
management fee contract, the Company records only the fixed and incentive fee,
if any, as net sales.

Cost of sales is composed of the following:

FISCAL YEARS ENDED
--------------------------------

1994 1995 1996
--------- --------- ----------
Wages and benefits.......................................... $ 20,079 $ 27,024 $ 38,555
Food and beverages.......................................... 18,463 24,670 38,007
Rent paid to clients........................................ 25,345 22,035 24,425
Other operating expenses.................................... 7,567 8,259 8,368
Depreciation and amortization............................... 2,379 3,588 4,348
--------- --------- ----------
$ 73,833 $ 85,576 $ 113,703
--------- --------- ----------
--------- --------- ----------

P&L and profit sharing contracts include all on-site costs for the above
items. Management fee contracts include only the amortization of invested
capital.

F-8

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES--Deferred tax assets or liabilities (shown net) are recognized
for the estimated future tax effects attributable to temporary differences,
principally depreciation, amortization of contract rights and operating loss
carryforwards. A temporary difference is the difference between the tax basis of
an asset or liability and its reported amount in the financial statements.

STOCK OPTION PLAN--Stock options are recorded in accordance with Accounting
Principles Board Opinion ("APB") No. 25, with pro forma disclosures of net
income and earnings per share as if Statement of Financial Accounting Standards
("SFAS") No. 123 had been applied.

EARNINGS PER SHARE--Earnings per share of Common Stock is computed based on
the weighted average number of common and common equivalent shares outstanding
during each year. The Series A Convertible Preferred Stock has been considered
to be the equivalent of Common Stock from the time of its issuance in 1993. The
number of shares issuable on conversion of Preferred Stock was added to the
number of shares of Common Stock. The number of shares of Common Stock was also
increased by the number of shares issuable on the exercise of options and
warrants when the fair value of the Common Stock exceeded the exercise price of
the options and warrants. Prior to the initial public offering (the "IPO"), the
fair value was estimated through analysis of transactions in the Company's stock
involving third parties. This increase in the number of shares of Common Stock
was reduced by the number of shares of Common Stock which are assumed to have
been purchased with the proceeds from the exercise of the warrants. These
purchases were assumed to have been made at the average fair value of the Common
Stock during the year. Earnings per share assuming full dilution gives effect to
the assumed exercise of all dilutive stock options and the assumed conversion of
dilutive convertible securities (warrants) as of the beginning of the respective
year except when their effect is antidilutive; outstanding shares were increased
as described above for the option and warrant conversions except that the
purchases of Common Stock are assumed to have been made at the year-end fair
value if it was higher than the average fair value. In calculating earnings per
share, net income has been reduced for the accretion to the redemption value of
warrants by $250, $900, and $1,300 in fiscal 1994, 1995 and 1996, respectively
(see Note 10).

FISCAL YEAR--The Company's fiscal year ends on the last Wednesday in
December.

RECLASSIFICATION--Prior year balances have been restated to conform to the
current presentation.

3. ACQUISITIONS

In December 1996, the Company acquired 100% of the stock of Republic
Management Corp. ("Republic"). Republic provides contract food service and
vending to various corporations and elementary and secondary schools. The
purchase price was approximately $8,600 consisting of cash to the sellers, a
subordinated note payable to one shareholder plus assumed debt of Republic.

In November 1996, the Company acquired 100% of the stock of PCS Holding
Corporation (formerly known as HCS Management Corporation) ("PCS"). PCS, through
its operating subsidiaries, provides non-patient contract food and other
services to hospitals and corporations. The purchase price was approximately
$6,000 consisting of cash to the seller plus assumed debt of HCS.

In July 1996, the Company acquired 100% of the outstanding stock of Ideal
Management Services, Inc. ("Ideal"). Ideal provides contract food and beverage
services to elementary and secondary schools in

F-9

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

3. ACQUISITIONS (CONTINUED)
New York State. The purchase price was approximately $3,200, consisting of cash,
convertible subordinated notes with interest at 7 1/4%, and a seven year
covenant not to compete valued at $400. At the option of the note holders, the
outstanding principal balance of the notes is convertible into Common Stock at a
conversion price of $15 per share.

In March 1996, the Company acquired 100% of the outstanding stock of Sun
West Services, Inc. ("Sun West"). Sun West provides contract food and beverage
services primarily to elementary and secondary schools as well as to other
institutional clients. The purchase price was approximately $5,200 consisting of
cash, five-year subordinated notes to the sellers with interest at 7% and 25,900
shares of Common Stock.

In July 1995, the Company acquired 100% of the outstanding stock of
Northwest Food Service, Inc. ("Northwest"). Northwest provides contract food and
beverage services, primarily in the education and business dining markets. The
purchase price was approximately $2,500 consisting of subordinated notes to the
seller and cash.

The aforementioned acquisitions have been accounted for under the purchase
method of accounting and, accordingly, the accompanying consolidated financial
statements reflect the fair values of the assets acquired and liabilities
assumed or incurred as of the effective date of the acquisitions. The results of
operations of the acquired companies are included in the accompanying
consolidated financial statements since their respective dates of acquisition.

The following table summarizes pro forma information as follows: (i) with
respect to the income statement data for fiscal year 1995 as if the acquisitions
of Republic, PCS, Ideal, Sun West, and Northwest had been completed as of the
beginning of such period; and (ii) with respect to the income statement data for
fiscal year 1996 as if the acquisition of Republic, PCS, Ideal and Sun West had
been completed as of the beginning of such period. No adjustments for
acquisition synergies (i.e. overhead reductions) have been reflected.

FISCAL YEARS ENDED
--------------------------

DECEMBER 27, DECEMBER 25,
1995 1996
------------ ------------
SUMMARY STATEMENT OF INCOME DATA:
Net sales........................................................ $ 151,031 $ 161,204
Income from operations........................................... 5,782 8,057
Net Income before warrant accretion.............................. 758 2,407
Net Income per share before warrant accretion assuming full
dilution....................................................... $ .23 $ .48
------------ ------------
------------ ------------

The above pro forma information is provided for informational purposes only.
It is based on historical information and does not necessarily reflect the
actual results that would have occurred nor is it necessarily indicative of
future results of operations of the combined enterprise.

F-10

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

4. INVENTORIES

The components of inventories are as follows:

DECEMBER 27, DECEMBER 25,
1995 1996
------------- -------------

Food and liquor.................................................. $ 1,333 $ 2,814
Beverage......................................................... 447 41
Other............................................................ 319 405
------ ------
Total........................................................ $ 2,099 $ 3,260
------ ------
------ ------

5. FIXTURES AND EQUIPMENT

Fixtures and equipment consists of the following:

DECEMBER 27, DECEMBER 25,
1995 1996
------------ ------------

Furniture and fixtures........................................... $ 15,091 $ 19,677
Office equipment................................................. 1,811 3,550
Leasehold improvements........................................... 1,114 1,405
Smallwares....................................................... 2,306 3,846
Other............................................................ 1,218 2,135
------------ ------------
21,540 30,613
Less: accumulated depreciation................................... 5,711 6,556
------------ ------------
Fixtures and equipment, net...................................... $ 15,829 $ 24,057
------------ ------------
------------ ------------

The Company invests in fixtures and equipment at various locations. Upon
termination of a concession agreement, the client is generally required to
purchase the assets from the Company for an amount equal to their net book
value.

All fixtures and equipment are depreciated over their useful lives ranging
from 3 to 20 years, except smallwares which are depreciated over periods ranging
from 3 to 5 years.

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consists of the following:

DECEMBER 27, DECEMBER 25,
1995 1996
------------ ------------

Accounts payable................................................. $ 5,197 $ 8,404
Accrued wages and benefits....................................... 1,607 2,640
Accrued rent to clients.......................................... 2,576 3,187
Accrued other.................................................... 3,087 4,459
------------ ------------
Total........................................................ $ 12,467 $ 18,690
------------ ------------
------------ ------------

F-11

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

7. LONG-TERM DEBT

Long-term debt consists of the following:

DECEMBER 27, DECEMBER 25,
1995 1996
------------ ------------

Working Capital Line............................................. $ 6,000 $ 15,818
Guidance Line.................................................... 3,207 15,744
Term Loan........................................................ 9,100 --
------------ ------------
$ 18,307 $ 31,562
Less: current portion............................................ 2,981 --
------------ ------------
Total........................................................ $ 15,326 $ 31,562
------------ ------------
------------ ------------

The Company's bank agreement was amended and restated on June 19, 1996 in
connection with the IPO (the "Restated Bank Agreement") and provides for (i) a
working capital revolving credit line (the "Working Capital Line") for general
obligations and letters of credit of the Company, in the maximum amount of
$20,000 and (ii) a line of credit to provide for future expansion by the Company
(the "Guidance Line") in the maximum amount of $55,000. The maximum borrowing
available to the Company under the Restated Bank Agreement was $75,000 as of
December 25, 1996. The Restated Bank Agreement terminates on April 30, 1999.

The Company's obligations under the Restated Bank Agreement are
collateralized by a pledge of shares of the common stock or other equity
interests of the Company's subsidiaries, as well as by certain fixtures and
equipment, notes receivable and other assets, and the receipt, if any, of
certain funds paid to the Company with respect to the termination of client
contracts prior to their expiration.

The Restated Bank Agreement contains various financial and other
restrictions, including, but not limited to, restrictions on indebtedness,
capital expenditures and commitments. Additional obligations require maintenance
of certain financial ratios, including the ratio of total debt to operating cash
flow, operating cash flow to cash interest expense, and minimum net worth and
operating cash flow. The Restated Bank Agreement also contains prohibitions on
the payment of dividends.

The net proceeds from the IPO, including the exercise of option over
allotment granted to the underwriters (see Note 9), were used to repay
substantially all of the long term debt then outstanding at the close of the
transactions.

On December 25, 1996, the prime rate was 8.25%. Interest payable on the
Working Capital Line is prime or LIBOR plus 2.0% and the Guidance Line is the
prime plus .5% or the 180 day LIBOR rate plus 2.0%.

F-12

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

7. LONG-TERM DEBT (CONTINUED)
Long-term debt at December 25, 1996 is payable as follows:

YEAR ENDING AMOUNT
- ----------------------------------------------------------------------------------- ---------

December 31, 1997.................................................................. $ --
December 30, 1998.................................................................. --
December 29, 1999.................................................................. 15,818
December 27, 2000.................................................................. 3,149
December 26, 2001.................................................................. 3,149
Thereafter......................................................................... 9,446
---------
Total.......................................................................... $ 31,562
---------
---------

The net proceeds from the second offering on February 7, 1997, including the
exercise of the warrants and option granted to the underwriters (see Note 17),
were used to repay all of the long term debt outstanding at the close of the
transaction.

Interest paid on long-term debt was $639, $1,645 and $2,128 for fiscal 1994,
1995 and 1996, respectively.

8. SUBORDINATED DEBT

In December 1996, as part of the acquisition of Republic (see Note 3), the
Company issued to a stockholder of Republic a subordinated promissory note with
a face value of $1,000 at 8.75% interest per annum, payable in quarterly
installments. The note was discounted to present value using a market rate of
11% and had a balance of $958 at December 25, 1996, of which $623 was classified
as long term.

In July 1996, as part of the acquisition of Ideal (see Note 3), the Company
issued to the stockholders of Ideal two convertible subordinated promissory
notes each with a face value of $710 at 7 1/4% interest per annum, payable in
quarterly installments. At the option of the note holders, the outstanding
principal balance of the notes is convertible into Common Stock at a conversion
price of $15 per share. The notes were discounted to present value using a
market rate of 13% and had a combined balance at December 25, 1996 of $1,144, of
which $870 was classified as long-term.

In March 1996, as part of the acquisition of Sun West (see Note 3), the
Company issued to the stockholders of Sun West the following: (1) a subordinated
promissory note with a face value of $1,350 at 7% interest per annum, payable in
four annual installments beginning in 1998; and (2) a subordinated promissory
note with a face value of $638 at 7% interest per annum, payable in three annual
installments beginning in 1997. The notes were discounted to present value using
a market rate of 10%. The respective balances at December 25, 1996 were $1,221
and $602, of which $1,221 and $330 were classified as long term.

In July 1995, as part of the purchase price of Northwest (see Note 3), the
Company issued a $1,350 note to the seller at 7% interest per annum. The note
was discounted to present value using a market rate of 12.5% and had a balance
at December 25, 1996 of $1,207 of which $1,135 was classified as long-term.

In April 1993, the Company entered into a subordinated loan agreement, as
amended (the "Subordinated Loan Agreement"), pursuant to which the Company sold
$8,500 of its variable rate subordinated

F-13

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

8. SUBORDINATED DEBT (CONTINUED)
notes (the "Notes"), together with detachable warrants to purchase a maximum of
867,230 shares of a new class of Non-Voting Common Stock. The proceeds of the
issuance of the Notes were used to repay existing indebtedness. A portion of the
net proceeds from the IPO (see Note 9) were used to repay these Notes.

The estimated fair value approximated the carrying amount of subordinated
debt at December 27, 1995 and December 25, 1996. Considerable judgment was
required in interpreting market data to develop the estimates of fair value. In
addition, the use of different market assumptions and/or estimation
methodologies may have had a material effect on the estimated fair value
amounts. Accordingly, the estimated fair value of subordinated debt as of
December 27, 1995 and December 25, 1996 is not necessarily indicative of the
amounts that the Company could realize in a current market exchange.

Subordinated debt at December 25, 1996 is payable as follows:

YEAR ENDING AMOUNT
- ------------------------------------------------------------------------------------- ---------

December 31, 1997.................................................................... $ 3,259
December 30, 1998.................................................................... 2,165
December 29, 1999.................................................................... 1,870
December 27, 2000.................................................................... 885
December 26, 2001.................................................................... 625
Thereafter........................................................................... --
---------
8,804
Less: discount on subordinated note.................................................. 745
---------
Total............................................................................ $ 8,059
---------
---------

Interest paid on subordinated debt was $1,253, $1,427 and $392 for fiscal
1994, 1995 and 1996, respectively.

9. STOCKHOLDERS' EQUITY

COMMON STOCK--Holders of Common Stock are entitled to one vote per share in
all matters to be voted on by the stockholders of the Company. Subject to
preferences that may be applicable to any Preferred Stock outstanding at the
time, holders of Common Stock are entitled to receive ratably such dividends, if
any, as may be declared from time to time by the Board of Directors out of funds
legally available therefor.

On June 19, 1996, the effective date of the IPO, as authorized by the Board
of Directors, the Company sold 3,064,718 shares at a price of $12.00 per share,
generating net proceeds (including the net proceeds received by the Company upon
the exercise of certain warrants and options) of approximately $32.6 million,
after deducting the underwriting discount and offering expenses paid by the
Company. The net proceeds were used to repay obligations under the Company's
credit facility in effect prior to the IPO and subordinated notes, as well as to
repurchase certain warrants; and the remainder was used for general corporate
purposes.

On February 7, 1997, the Company made a second offering resulting in net
proceeds of approximately $59.1 million after deducting underwriting discounts
and certain expenses (see Note 17).

F-14

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

9. STOCKHOLDERS' EQUITY (CONTINUED)
PREFERRED STOCK--Holders of the Series A Convertible Preferred Stock are
entitled to receive, when and as declared, out of the net profits of the
Company, dividends in an amount per share equal to the aggregate per share
amount of all cash dividends declared on the Common Stock multiplied by the
number of shares of Common Stock into which a share of Series A Convertible
Preferred Stock is convertible on the date on which such dividend is to be paid
in full. All dividends declared upon Series A Convertible Preferred Stock shall
be declared pro rata per share. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the holders of the shares
of Series A Convertible Preferred Stock then outstanding shall be entitled to
share ratably with holders of the shares of Common Stock in any distribution of
the assets and funds of the Company. Each share of Series A Convertible
Preferred Stock is convertible into seven shares of Common Stock, subject to
certain adjustments. In conjunction with the IPO all of the then outstanding
Convertible Preferred Stock was converted into 939,197 shares of common stock.

1996 NON-EMPLOYEE DIRECTOR STOCK PLAN--The 1996 Non-Employee Director Stock
Plan (the "Directors Plan") authorizes the grant of an aggregate of 50,000
shares of Common Stock. Common Stock is granted pursuant to the Directors Plan
only to members of the Board of Directors who are not officers or employees of
the company ("Non-Employee"). Upon consummation of the IPO, each Non-Employee
Director was granted 1,250 shares pursuant to the terms of the Directors Plan.
Thereafter, for the remainder of the term of the Directors Plan and provided he
or she remains a director of the Company, on the date of each of the Company's
annual meeting of Stockholders, each Non-Employee Director will be automatically
granted, without further action by the Board of Directors, a number of shares of
Common Stock equal to $15,000 divided by the Fair Market Value (as defined in
the Director's Plan) of one share of Common Stock on the date of grant.

Three officers of the Company purchased in 1987 and 1991 an aggregate of
154,000 shares of Common Stock for cash and notes at prices ranging from $0.32
to $1.40 per share. The subject notes have an aggregate outstanding balance of
$189 and are due on June 30, 1999. Upon closing of the IPO, pursuant to the
terms of the employee notes to the Company, the interest on the notes was
forgiven, and interest thereafter ceased to accrue.

10. STOCK OPTIONS AND WARRANTS

STOCK OPTIONS--The 1994 Stock Option Plan provides for granting of either
incentive stock options or non qualified options to purchase shares of Common
Stock. The plan provides that (i) the option price of an incentive stock option
may not be less than the fair market value of the Common Stock on the date of
grant and (ii) the option price of an option which is not an incentive stock
option shall not be less than 85% of the fair value. Generally, options granted
become exercisable after one year in 20% increments per year and expire ten
years from the date of grant. The Company has reserved 566,084 shares for
distribution under the Plan. In addition, included in the table below are 27,944
options issued in connection with the Fanfare acquisition in 1993.

F-15

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

10. STOCK OPTIONS AND WARRANTS (CONTINUED)
A summary of the status of the Company's stock option plan as of December
28, 1994, December 27, 1995 and December 25, 1996 and changes during the years
ending on those dates is presented below:

1994 1995 1996
---------------------------- ---------------------------- ---------------------------

WEIGHTED-AVERAGE WEIGHTED-AVERAGE WEIGHTED-AVERAGE
SHARES EXERCISE PRICE SHARES EXERCISE PRICE SHARES EXERCISE PRICE
--------- ----------------- --------- ----------------- --------- ----------------
Outstanding at beginning of year... 27,944 $ 4.93 132,944 $ 6.11 143,444 $ 6.19
Granted............................ 105,000 6.43 10,500 7.14 380,750 12.82
Exercised.......................... -- -- -- 2,916 6.43
Canceled........................... -- -- -- 30,084 10.92
--------- --------- ---------
Outstanding at end of year......... 132,944 6.11 143,444 6.19 491,194 11.03
--------- --------- ---------
--------- --------- ---------
Options exercisable at year-end.... 6,148 4.93 50,090 6.13 88,204 6.20
--------- --------- ---------
--------- --------- ---------
Options available for grant at end
of year.......................... 464,000 453,500 102,834
--------- --------- ---------
--------- --------- ---------

The following table summarizes information about stock options outstanding
at December 25, 1996:

OPTIONS OUTSTANDING OPTIONS EXERCISABLE
----------------------------------------------------- ------------------------------

NUMBER WEIGHTED-AVERAGE NUMBER
RANGE OF OUTSTANDING REMAINING WEIGHTED-AVERAGE EXERCISABLE WEIGHTED-AVERAGE
EXERCISE PRICES AT 12/25/96 CONTRACTUAL LIFE EXERCISE PRICE AT 12/25/96 EXERCISE PRICE
- ----------------- ----------- --------------------- ----------------- ----------- -----------------
$ 4.93--$ 7.14 134,694 7 $ 6.17 88,204 $ 6.20
$ 7.15--$12.00 250,500 9 $ 12.00 -- --
$ 12.01--$15.63 106,000 10 $ 14.93 -- --
--
----------- ------ ----------- -----
491,194 9 $ 11.03 88,204 $ 6.20
--
--
----------- ------ ----------- -----
----------- ------ ----------- -----

If the fair value based accounting method was used to account for
stock-based compensation costs, pro forma net income for the fiscal years ended
December 27, 1995 and December 25, 1996 would have been $1,291, and $2,429 or
$.39 and $.49 pro forma fully diluted earnings per share, respectively. The fair
value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 1995, and 1996 respectively: no dividend yield;
expected volatility of 15% and risk-free interest rates of 5%.

HOLDERS OF SUBORDINATED NOTES--In conjunction with the Ideal acquisition
(Note 3) convertible subordinated notes were issued. At the option of the note
holders the outstanding principle balance is convertible into common stock at a
conversion price of $15 per share. The outstanding principle balance at December
25, 1996 was $1,283.

Pursuant to the issuance and sale of the Notes (see Note 8), the purchaser
received warrants to purchase 733,467 and 133,763 shares of Non-Voting Common
Stock at exercise prices $4.93 a share (the "$4.93 Warrants") and $.01 a share
(the "$.01 Warrants), respectively. The warrants were valued at $230.

F-16

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

10. STOCK OPTIONS AND WARRANTS (CONTINUED)
The $4.93 and the $.01 Warrants were exercisable from the date of issue
through the periods ended April 29, 2001 and April 29, 2003, respectively. Both
the number of shares and exercise price were subject to adjustment under various
antidilution provisions.

Upon achieving specified levels of earnings in each of fiscal 1993 and 1994,
the Company had the right to earn back, in respect of each such year, the
portion of the $4.93 Warrants issued to the purchaser of the Notes representing
the right to acquire 1% of the fully diluted Common Stock. The Company achieved
the required earnings levels specified for those fiscal years. Accordingly, in
each of May 1994 and June 1995, respectively, the Company canceled $4.93
Warrants to acquire the equivalent of 1% of the fully diluted Common Stock, or
approximately 43,365 shares (in each year). As a result of the refinancing
completed prior to the IPO, the Company redeemed an additional amount of the
$4.93 Warrants equal to 2% of the fully diluted Common Stock, or 86,730 shares.

Upon achieving specified levels of earnings in each of fiscal 1993, 1994,
1995 and 1996, the Company has the right to earn back the total of the $.01
Warrant issued (133,763) to the Note holder. Since the Company achieved the
required earnings level specified for fiscal 1993, 1994 and 1995, the Company,
in each of fiscal 1994, 1995 and 1996 earned back and canceled 33,439 of the
$.01 Warrants held by the purchaser of the Notes, respectively.

During a specified repurchase period, the Company was obligated (the "Put
Repurchase"), subject to certain conditions, to repurchase all or a designated
portion of the issuable warrant shares within 120 days after notification of a
put option exercise. The Put Repurchase period began on the earlier of (i) April
29, 1997, (ii) the prepayment of 50% of the original principal amount of the
Notes issued under the Subordinated Loan Agreement, or (iii) a Change of
Control, as defined, of the Company. The Put Repurchase price was based upon the
greater of the Appraised Value (as defined in the warrant agreement) of the
Common Stock, and the result obtained by dividing a multiple of the Company's
adjusted earnings, as defined, by the number of fully diluted shares of Common
Stock. The Put Repurchase was accreted to its highest redemption price based on
the IPO offering price. Upon the closing of the IPO, holders of Warrants to
acquire an aggregate of 296,726.5 additional shares of Common Stock (280,003.5
at $4.93 per share and 16,723 at $.01 per share) were obligated to sell these
Warrants to the Company at a price equal to $2,180.

In March 1996, the holder of the Notes sold the Notes to a non-affiliate of
the Company. The purchaser also acquired 280,003.5 of the $4.93 Warrants and
16,723 of the $.01 Warrants. In connection with this transaction, the purchaser
granted the Company an option to purchase all of the warrants for prices ranging
from $500 to $1500 in the event the Notes were fully redeemed before various
dates from June 30, 1996 to December 31, 1996. In the event the Company
increased its bank borrowings in excess of $32,500, the option price would
increase by $200 for each additional $2,500 of borrowings, subject to a maximum
increase in the option price of $600. Upon the closing of the IPO, the Company
repurchased these warrantsfor an aggregate repurchase price of $700.

HOLDERS OF SERIES A CONVERTIBLE PREFERRED STOCK--In connection with the sale
in fiscal 1993 by the Company of the Series A Convertible Preferred Stock to an
investor and one of its directors (described in Note 9), each purchaser received
$4.93 warrants and $.01 warrants to purchase Common Stock. The investor received
118,307 of the $4.93 Warrants and the director received 21,294 of the $4.93
Warrants. The investor received 453,432 of the $.01 Warrants. and the director
received 81,613 of the $.01 Warrants.

F-17

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

10. STOCK OPTIONS AND WARRANTS (CONTINUED)
Both the number of shares and exercise price are subject to adjustment under
various antidilution provisions.

The $4.93 Warrants issued by the Company to the investor and the director
(139,601 in total) are subject to cancellation to the extent that the Company
earns back $4.93 Warrants issued to the purchaser of its Notes (see above).
Since the Company has achieved the earnings level specified for fiscal 1993 and
1994 required under the Notes, 8,253 of these $4.93 Warrants, the maximum
allowed during the 1993 reduction period, were canceled in June 1994, and an
additional 7,763, the maximum allowed during the 1994 reduction period, were
canceled in June 1995. In conjunction with the IPO, these holders of $4.93
Warrants exercised the remaining 123,585 $4.93 Warrants and sold such shares in
the IPO.

Upon achieving specified levels of earnings in fiscal 1993, 1994, 1995 and
1996, the Company has the right to earn back the total of the $.01 Warrants
(535,045 in the aggregate) issued to the holders of the Series A Convertible
Preferred Stock. Since the Company achieved the required earnings level
specified for each of fiscal 1993, 1994 and 1995, the Company, in 1994, 1995 and
1996, respectively, canceled 133,763 of these warrants, representing 113,358
warrants for the investor and 20,405 for the director. The Company has achieved
the specified earnings in fiscal 1996 as required under the $.01 Warrants. As a
result, in fiscal 1997, the Company will redeem and cancel the remaining $.01
Warrants held by the investor and the director (133,756 in total).

F-18

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

11. COMMITMENTS AND CONTINGENCIES

The Company operates principally at its clients' premises pursuant to
written contracts ("Client Contracts"). The length of Client Contracts generally
ranges from one to ten years with options to renew for periods of one to ten
years. Certain of these Client Contracts provide for base rent and contingent
rent. Aggregate rent expense under these agreements for fiscal 1994, 1995 and
1996 was $25,345, $22,035 and $24,425 respectively.

Future minimum commitments as of December 25, 1996 for all noncancellable
operating leases and client contracts are as follows:

YEAR AMOUNT
- ------------------------------------------------------------------------------------- ---------

1997................................................................................. $ 3,013
1998................................................................................. 1,890
1999................................................................................. 867
2000................................................................................. 672
2001................................................................................. 301
Thereafter........................................................................... 150
---------
Total.............................................................................. $ 6,893
---------
---------

Pursuant to its contracts with various clients, the Company is committed to
spend approximately $3,765 for equipment and capital improvements as of December
25, 1996. At December 25, 1996, the Company was contingently liable for the
following: (1) a standby Letter of Credit for $1,000, the principal amount of
which is reduced annually pursuant to its terms and (2) performance bonds in the
aggregate amount of $4,483.

The Company has entered into purchasing agreements with various national and
regional suppliers pursuant to which the Company agreed to purchase its
requirements of products (as defined in the agreements). If the Company exceeds
the agreed-upon purchasing levels, additional rebates and promotional allowances
may be payable by the suppliers. If the Company fails to meet agreed-upon
purchasing levels during the term of the agreements, the suppliers may elect to
extend the term of the agreements by one year, or a longer period, if necessary,
to reach agreed-upon purchasing levels.

F-19

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

12. INCOME TAXES

The income tax provision consists of the following:

FISCAL YEARS ENDED
-------------------------------------------
DECEMBER 28, DECEMBER 27, DECEMBER 25,
1994 1995 1996
------------- ------------- -------------

Current:
Federal............................................................. $ -- $ -- $ --
State and local..................................................... 26 49 80
------ ------ ------
Total current................................................... 26 49 80
------ ------ ------

Deferred:
Federal............................................................. 1,123 1,471 2,086
State and local..................................................... 236 65 534
------ ------ ------
Total deferred.................................................. 1,359 1,536 2,620
------ ------ ------
Total......................................................... $ 1,385 $ 1,585 $ 2,700
------ ------ ------
------ ------ ------

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities are presented below:

DECEMBER 27, DECEMBER 25,
1995 1996
------------- ------------

Deferred tax assets:
Net operating loss carryforwards................................................... $ 1,100 $ 1,125
------ ------------
Total deferred tax assets...................................................... 1,100 1,125

Deferred tax liabilities:
Tax in excess of book depreciation................................................. 1,500 2,150
Excess tax deduction attributable to contract rights............................... 5,394 10,178
Other.............................................................................. 627 1,157
------ ------------
Total deferred tax liabilities................................................. 7,521 13,485
------ ------------
Total........................................................................ $ 6,421 $ 12,360
------ ------------
------ ------------

The Company's effective income tax rate differed from the Federal statutory
rate as follows:

FISCAL YEARS ENDED
-------------------------------------------------

DECEMBER 28, DECEMBER 27, DECEMBER 29,
1994 1995 1996
--------------- --------------- ---------------
Federal statutory rate................................................ 34.0% 34.0% 34.0%
Excess of cost over fair value of net assets acquired................. 4.8 4.2 4.7
State & local taxes net of Federal tax benefits....................... 4.2 4.2 4.2
Other, net............................................................ (0.4) (0.5) (1.3)
--- --- ---
Effective income tax rate............................................. 42.6% 41.9% 41.6%
--- --- ---
--- --- ---

F-20

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

12. INCOME TAXES (CONTINUED)
At December 25, 1996, the Company had, for Federal income tax reporting, an
estimated net operating loss carryforward of approximately $2,869 that will
begin to expire in 2008.

Income taxes paid in fiscal 1994, 1995 and 1996 were $26, $49 and $80,
respectively.

13. LITIGATION

In January 1996, the Company was served with a complaint naming it as one of
five defendants in a lawsuit brought by multiple plaintiffs alleging damages
arising out of the Woodstock II Festival held in August 1994 in Saugerties, New
York. The promoter of the Festival is also a defendant. Plaintiffs were hired by
the Company (which had a concession agreement with the promoters of Woodstock
II) as subcontractors of food, beverage and/or merchandise. In their complaint,
which seeks approximately $5,900, plaintiffs allege damages arising primarily
from the failure to (i) provide adequate security; and (ii) prevent Festival
attendees from bringing food and beverages in to the Festival. The Company's
concession agreement with the promoter made the promoter solely responsible for
providing security and preventing food and beverage from being brought onto the
premises, and the Company has made claim for indemnification under applicable
provisions of the concession agreement, which has been rejected by the promoter.
On April 4, 1996, the other defendants named in the suit answered the complaint
and asserted cross-claims for contribution and indemnification against the
Company. Thereafter, the Company cross-claimed for contribution and
indemnification against a co-defendant. The Company believes that its ultimate
liability, if any, will not be material.

The Company has also sued a former client in the Jefferson Circuit Court of
the Commonwealth of Kentucky for certain amounts owed by the former client under
the food service contract between the parties, and the former client has filed a
counterclaim against the Company seeking unspecified damages for the Company's
alleged tortuous interference with a prospective contractual relationship with
another food service provider. The Company believes that its ultimate liability,
if any, will not be material.

14. RELATED PARTY TRANSACTION

For each of fiscal 1994, 1995 and 1996, the Company incurred $150 in
advisory fees with a company whose sole owner was formerly the Chairman of the
Board of the Company.

15. MAJOR CLIENT

During fiscal 1994 and 1995 one client represented 19.5% and 13.7% of net
sales respectively, and during fiscal 1996, another client represented 10.0% of
net sales.

F-21

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

16. QUARTERLY RESULTS (UNAUDITED)

The following summary shows the quarterly results of operations of the
Company for fiscal 1995 and 1996.

FISCAL QUARTERS
------------------------------------------

FIRST SECOND THIRD FOURTH
--------- --------- --------- ---------
1995:
Net sales............................................................. $ 23,429 $ 20,090 $ 26,340 $ 25,603
Gross profit.......................................................... 2,134 1,668 3,338 2,746
Net income before warrant accretion................................... $ 208 $ 74 $ 1,045 $ 869
Net income per share(a)............................................... $ 0.05 $ 0.01 $ 0.26 $ 0.07
Net income per share assuming full dilution(a)........................ $ 0.04 $ 0.01 $ 0.26 $ 0.07
1996:
Net sales............................................................. $ 24,160 $ 25,803 $ 37,272 $ 40,690
Gross profit.......................................................... 2,530 2,413 4,506 4,772
Net income before warrant accretion................................... 259 250 1,399 1,895
Net income per share(a)............................................... $ 0.08 $ 0.07 $ 0.22 $ 0.30
Net income per share assuming full dilution(a)........................ $ 0.07 $ 0.07 $ 0.22 $ 0.30

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

(a) Each period calculated separately.

17. SUBSEQUENT EVENTS

On February 7, 1997, the Company made a second offering, as authorized by
the Board of Directors, selling 2,689,000 shares at a price of $23.50 per share,
generating net proceeds (including the net proceeds received by the Company upon
the exercise of certain options) of approximately $59.1 million, after deducting
the underwriting discount and offering expenses paid by the Company. The net
proceeds were used to repay obligations under the Company's credit facility in
effect prior to the public offering and the remainder was invested in short term
investments in accordance with the Company's investment policy. Assuming this
transaction had occurred at the beginning of fiscal year 1996, supplemental pro
forma 1996 net income per share assuming full dilution is $.54 and was
calculated based upon (i) net income adjusted for the reduction in interest
expense resulting from the application of the net proceeds of the Offering to
reduce indebtedness of the Company and (ii) the average number of shares of
Common Stock outstanding assuming full dilution, as adjusted to reflect the sale
by the Company of a number of shares in the Offering.

On January 23, 1997, the Company acquired 100% of the stock of Versatile
Holding Corporation, which owns 100% of the stock of Serv-Rite Corporation
("Serv-Rite"), a contract food services management company that provides food
services to the education and business dining markets in New York and
Pennsylvania. The purchase price was approximately $7,500, consisting of cash
and assumed debt of Serv-Rite.

On December 30, 1996, the Company acquired 100% of the stock of Service
Dynamics Corp. ("Service Dynamics"). Service Dynamics provides contract food
service to various corporations and schools. The purchase price was
approximately $3,000 consisting of cash paid to the seller.

F-22

FINE HOST CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

DECEMBER 25, 1996 MARCH 26, 1997
----------------- --------------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents............................... $ 4,724 $ 13,764
Accounts receivable..................................... 14,580 19,079
Inventories............................................. 3,260 5,014
Prepaid expenses and other current assets............... 3,749 4,424
-------- --------------
Total current assets.................................. 26,313 42,281
Contract rights, net...................................... 22,869 28,896
Fixtures and equipment, net............................... 24,057 30,987
Excess of cost over fair value of net assets acquired,
net..................................................... 34,362 41,873
Other assets.............................................. 9,842 9,530
-------- --------------
Total assets.......................................... $ 117,443 $ 153,567
-------- --------------
-------- --------------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued expenses................... $ 18,690 $ 24,378
Current portion of subordinated debt.................... 3,045 1,765
-------- --------------
Total current liabilities............................. 21,735 26,143
Deferred income taxes..................................... 12,360 13,000
Long-term debt............................................ 31,562 1,461
Subordinated debt......................................... 5,014 5,509
-------- --------------
Total liabilities..................................... 70,671 46,113

Stockholders' equity:

Common Stock, $.01 par value, 25,000,000 shares
authorized, 6,212,016 and 8,955,766 issued and
outstanding at December 25, 1996 and March 26, 1997,
respectively.......................................... 62 90
Additional paid-in capital.............................. 41,778 101,551
Retained earnings....................................... 5,121 5,969
Receivables from stockholders for purchase of Common
Stock................................................. (189) (156)
-------- --------------
Total stockholders' equity............................ 46,772 107,454
-------- --------------
Total liabilities and stockholders' equity.......... $ 117,443 $ 153,567
-------- --------------
-------- --------------

See accompanying notes to unaudited consolidated financial statements.

F-23

FINE HOST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

THREE MONTHS ENDED
------------------------

MARCH 27, MARCH 26,
1996 1997
----------- -----------

Net sales.................................................................................. $ 24,160 $ 49,452

Cost of sales.............................................................................. 21,630 44,210
----------- -----------

Gross profit............................................................................. 2,530 5,242

General and administrative expenses........................................................ 1,336 3,215
----------- -----------

Income from operations................................................................... 1,194 2,027

Interest expense, net...................................................................... 767 538
----------- -----------

Income before tax provision.............................................................. 427 1,489

Tax provision.............................................................................. 168 641
----------- -----------

Net income............................................................................... 259 848

Accretion to redemption value of warrants.................................................. (1,040) --
----------- -----------

Net income (loss) available to Common Stockholders....................................... $ (781) $ 848
----------- -----------
----------- -----------

Earnings (loss) per share of Common Stock.................................................. $ (.23) $ .11
----------- -----------
----------- -----------

Average number of shares of Common Stock outstanding....................................... 3,408 7,941
----------- -----------
----------- -----------

Earnings (loss) per share of Common Stock assuming full dilution........................... $ (.22) $ .11
----------- -----------
----------- -----------

Average number of shares of Common Stock outstanding assuming full dilution................ 3,510 7,951
----------- -----------
----------- -----------

See accompanying notes to unaudited consolidated financial statements.

F-24

FINE HOST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA)

(UNAUDITED)

RECEIVABLES
FROM
STOCKHOLDERS
COMMON STOCK ADDITIONAL FOR PURCHASE
----------------------- PAID-IN RETAINED OF COMMON STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS STOCK EQUITY
---------- ----------- ---------- ----------- ------------- ------------

Balance, December 25, 1996............. 6,212,016 $ 62 $ 41,778 $ 5,121 $ (189) $ 46,772
Shares issued in connection with
follow-on public offering............ 2,689,000 27 59,073 59,100
Options exercised...................... 54,750 1 700 701
Stockholder Receivable collected....... 33 33
Net income............................. 848 848
---------- --- ---------- ----------- ----- ------------
Balance, March 26, 1997................ 8,955,766 $ 90 $ 101,551 $ 5,969 $ (156) $ 107,454
---------- --- ---------- ----------- ----- ------------
---------- --- ---------- ----------- ----- ------------

See accompanying notes to unaudited consolidated financial statements.

F-25

FINE HOST CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

THREE MONTHS ENDED
------------------------

MARCH 27, MARCH 26,
1996 1997
----------- -----------
Cash flows from operating activities:
Net income................................................................................. $ 259 $ 848
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization............................................................ 957 1,874
Deferred income tax provision............................................................ 167 641
Changes in operating assets and liabilities:
Accounts receivable.................................................................... 26 (2,080)
Inventories............................................................................ (195) (250)
Prepaid expenses and other current assets.............................................. 578 (476)
Accounts payable and accrued expenses.................................................. 833 (583)
Decrease (Increase) in other assets........................................................ (995) 350
----------- -----------
Net cash provided by operating activities.............................................. 1,630 324
----------- -----------
Cash flows from investing activities:
Increase in contract rights.............................................................. (2,462) (1,739)
Purchases of fixtures and equipment...................................................... (1,067) (2,477)
Acquisition of business, net of cash acquired............................................ (3,215) (11,500)
----------- -----------
Collection of notes receivable........................................................... 19 --
Net cash used in investing activities.................................................. (6,725) (15,716)
----------- -----------
Cash flows from financing activities:
Borrowings under long-term debt agreement................................................ 6,909 --
Proceeds from issuance of common stock................................................... -- 59,133
Payment of long-term debt................................................................ (814) (35,131)
Payment of subordinated debt............................................................. (272) (271)
Proceeds from exercise of options........................................................ -- 701
----------- -----------
Net cash provided by financing activities.................................................. 5,823 24,432
----------- -----------
Net increase in cash....................................................................... 728 9,040
Cash, beginning of period.................................................................. 634 4,724
----------- -----------
Cash, end of period........................................................................ $ 1,362 $ 13,764
----------- -----------
----------- -----------

See accompanying notes to unaudited consolidated financial statements.

F-26

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION--The unaudited consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany transactions and accounts have been eliminated.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. The unaudited financial statements include all adjustments
which are of a normal recurring nature, which, in the opinion of management, are
necessary for a fair presentation of the results of operations for the three
months ended March 27, 1996 and March 26, 1997. The accompanying unaudited
consolidated financial statements should be read in conjunction with the
consolidated financial statements of the Company and notes thereto for the
fiscal year ended December 25, 1996 included in the Company's Annual Report on
Form 10-K.

EARNINGS (LOSS) PER SHARE--Earnings (loss) per share of Common Stock is
computed based on the weighted average number of common and common equivalent
shares outstanding during each period. Earnings (loss) per share assuming full
dilution gives effect to the assumed exercise of all dilutive stock options and
the assumed conversion of dilutive convertible securities (debt and warrants)
except when their effect is antidilutive. In calculating earnings (loss) per
share, net income has been reduced for the accretion to the redemption value of
warrants by $1,040 and $0 for the three months ended March 27, 1996 and March
26, 1997, respectively.

ACCOUNTING PRONOUNCEMENTS--In February 1997, the FASB issued Statement of
Financial Accounting Standards ("SFAS") No. 128, Earnings per share. SFAS No.
128 specifies the computation, presentation and disclosure requirements for
earnings per share ("EPS"). SFAS No. 128 is effective for financial statements
for interim and annual periods ending after December 15, 1997. Earlier
application is not permitted. Pro forma earnings per share amounts computed
using this statement can be disclosed. Accordingly, before warrant accretion,
basic EPS would have been $.13 and $.11 and diluted EPS would have been $.07 and
$.11 for March 27, 1996 and March 26, 1997, respectively.

2. ACQUISITIONS

In January 1997, the Company acquired 100% of the stock of Versatile Holding
Corporation, which owns 100% of the stock of Serv-Rite Corporation
("Serv-Rite"), a contract food services management company that provides food
services to the education and business dining markets in New York and
Pennsylvania. The purchase price was approximately $7,500, consisting of cash
and assumed debt of Serv-Rite.

On December 30, 1996, the Company acquired 100% of the stock of Service
Dynamics Corp. ("Service Dynamics"). Service Dynamics provides contract food
service to the education and business dining markets in New Jersey and . The
purchase price was approximately $3,000 consisting of cash paid to the seller.

F-27

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

2. ACQUISITIONS (CONTINUED)
The aforementioned acquisitions have been accounted for under the purchase
method of accounting and, accordingly, the accompanying unaudited consolidated
financial statements reflect the fair values of the assets acquired and
liabilities assumed or incurred as of the effective date of the acquisitions.
The results of operations of the acquired companies are included in the
accompanying unaudited consolidated financial statements since their respective
dates of acquisition.

The following table summarizes pro forma information with respect to the
income statement data for the three months ended March 27, 1996 and March 26,
1997, as if the acquisitions of Serv-Rite and Service Dynamics had been
completed as of the beginning of such period. No adjustment for acquisition
synergies (i.e. overhead reductions) have been reflected:

THREE MONTHS ENDED
------------------------

MARCH 27, MARCH 26,
1996 1997
----------- -----------
Summary statement of income data:
Net sales.............................................................. $ 34,613 $ 52,198
Income from operations................................................. 936 2,045
Net income (loss) before warrant accretion............................. (28) 840
Net income per share before warrant accretion assuming full dilution... $ -- $ .11
----------- -----------

This pro forma information is provided for informational purposes only. It
is based on historical information and does not necessarily reflect the actual
results that would have occurred nor is it necessarily indicative of future
results of operations of the combined enterprise.

3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

DECEMBER 25, MARCH 26,
1996 1997
------------ -----------

Accounts payable.................................................... $ 8,404 $ 10,064
Accrued wages and benefits.......................................... 2,640 4,018
Accrued rent to clients............................................. 3,187 3,475
Accrued other....................................................... 4,459 6,821
------------ -----------
Total............................................................... $ 18,690 $ 24,378
------------ -----------
------------ -----------

F-28

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

4. LONG-TERM DEBT

Long-term debt consists of the following:

DECEMBER 25 MARCH 26,
1996 1997
------------ -----------

Working Capital Line................................................ $ 15,818 $ 1,461
Guidance Line....................................................... 15,744 --
Total............................................................... $ 31,562 $ 1,461

The net proceeds from the follow-on public offering on February 12, 1997,
including the exercise of the over allotment option granted to the underwriters
(see Note 5), were used to repay all of the long term debt outstanding at the
close of the transaction.

The Company's bank agreement was amended and restated on June 19, 1996 in
connection with the initial public offering (the "Restated Bank Agreement") and
provides for (i) a working capital revolving credit line (the "Working Capital
Line") for general obligations and letters of credit of the Company, in the
maximum amount of $20,000 and (ii) a line of credit to provide for future
expansion by the Company (the "Guidance Line") in the maximum amount of $55,000.
The maximum borrowing under the Restated Bank Agreement was $75,000 as of March
26, 1997. The Restated Bank Agreement terminates on April 30, 1999.

The Company's obligations under the Restated Bank Agreement are
collateralized by a pledge of shares of the common stock or other equity
interests of the Company's subsidiaries, as well as by certain fixtures and
equipment, notes receivable and other assets, as well as the receipt, if any, of
certain funds paid to the Company with respect to the termination of client
contracts prior to their expiration.

5. STOCKHOLDERS' EQUITY

On February 12, 1997, the Company conducted a follow on public offering, as
authorized by the Board of Directors, selling 2,689,000 shares of its common
stock at a price of $23.50 per share, generating net proceeds (including the net
proceeds received by the Company upon the exercise of certain options) of
approximately $59.1 million, after deducting the underwriting discount and
offering expenses paid by the Company. The net proceeds were used to repay
obligations under the Company's credit facility in effect prior to the public
offering and the remainder of the net proceeds was invested in short term
investments in accordance with the Company's investment policy.

6. INCOME TAXES

At March 26, 1997, the Company had a tax provision of $641, which was
entirely deferred. In addition, the Company had, for Federal income tax
reporting, an estimated net operating loss carryforward of approximately $3,000
that will begin to expire in 2008.

F-29

FINE HOST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

7. MAJOR CLIENT

One client represented 15.0% and 8.2% of net sales for the three months
ended March 27, 1996 and March 26, 1997, respectively.

F-30

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

[GRAPHIC OMITTED]

NO DEALER, SALESMAN OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING NOT CONTAINED IN
THIS PROSPECTUS, AND ANY INFORMATION OR REPRESENTATION NOT CONTAINED HEREIN MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SHARES OF COMMON STOCK TO WHICH IT RELATES, OR AN
OFFER TO, OR SOLICITATION OF, ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THAT INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
---------------------

PAGE
---------

PROSPECTUS SUMMARY........................... 3
RISK FACTORS................................. 6
USE OF PROCEEDS.............................. 10
PRICE RANGE OF COMMON STOCK.................. 10
DIVIDEND POLICY.............................. 10
CAPITALIZATION............................... 11
SELECTED CONSOLIDATED FINANCIAL DATA......... 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS................................. 14
BUSINESS..................................... 19
MANAGEMENT................................... 29
CERTAIN TRANSACTIONS......................... 37
PRINCIPAL AND SELLING STOCKHOLDERS........... 39
DESCRIPTION OF CAPITAL STOCK................. 42
SHARES ELIGIBLE FOR FUTURE SALE.............. 45
PLAN OF DISTRIBUTION......................... 46
LEGAL MATTERS................................ 46
EXPERTS...................................... 46
ADDITIONAL INFORMATION....................... 46
INDEX TO FINANCIAL STATEMENTS................ F-1

[LOGO]

FINE HOST CORPORATION
COMMON STOCK
------------
PROSPECTUS
-------------------

MAY , 1997

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

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered which will be paid
solely by the Company. All the amounts shown are estimates, except the SEC
registration fee and the NASD filing fee and the Nasdaq National Market listing
fee:

AMOUNT
----------

SEC registration fee.............................................................. $ 8,350
Transfer agent and registrar fees and expenses.................................... 1,000
Printing and engraving expenses................................................... 10,000
Legal fees and expenses........................................................... 50,000
Accounting fees and expenses...................................................... 10,000
Blue Sky fees and expenses........................................................ 5,000
Miscellaneous expenses............................................................ 650
----------
Total......................................................................... $ 85,000
----------
----------

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company's Restated Certificate of Incorporation (the "Restated
Certificate") provides that the Company shall indemnify each person who is or
was a director, officer or employee of the Company to the fullest extent
permitted under Section 145 of the Delaware General Corporation Law. Section 145
of the Delaware General Corporation Law empowers a Delaware corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of such corporation) by reason of the fact that such person is or was
a director, officer, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. A corporation may indemnify such person
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. A corporation may, in
advance of the final disposition of any civil, criminal, administrative or
investigative action, suit or proceeding, pay the expenses (including attorneys'
fees) incurred by any officer or director in defending such action, provided
that the director or officer undertakes to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
corporation.

A Delaware corporation may indemnify officers and directors in an action by
or in the right of the corporation to procure a judgment in its favor under the
same conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses (including attorneys' fees) which he actually and
reasonably incurred in connection therewith. The indemnification provided is not
deemed to be exclusive of any other rights to which an officer or director may
be entitled under any corporation's bylaw, agreement, vote or otherwise.

The Restated Certificate provides that a director of the Company will not be
personally liable to the Company or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the Company or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii)

II-1

under Section 174 of the Delaware General Corporation Law, which concerns
unlawful payments of dividends, stock purchases or redemption, or (iv) for any
transaction from which the director derived an improper personal benefit.

While the Restated Certificate provides directors with protection from
awards for monetary damages for breaches of their duty of care, it does not
eliminate such duty. Accordingly, the Restated Certificate will have no effect
on the availability of equitable remedies such as an injunction or rescission
based on a director's breach of his or her duty of care. The provisions of the
Restated Certificate described above apply to an officer of the Company only if
he or she is a director of the Company and is acting in his or her capacity as
director, and do not apply to officers of the Company who are not directors.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

The Company has issued the following securities within the past three years:

On September 9, 1994, the Company issued a subordinated promissory note, due
September 9, 1998, to James E. Kern, in the aggregate principal amount of
$1,450,000, in connection with the acquisition of Creative.

On September 9, 1994, the Company issued a subordinated promissory note, due
September 9, 1998, to John F. Kusner, in the aggregate principal amount of
$1,005,000, in connection with the acquisition of Creative.

On September 9, 1994, the Company issued a subordinated promissory note, due
September 9, 1998, to John C. Hjalmarson, in the aggregate principal amount of
$97,000, in connection with the acquisition of Creative.

On September 9, 1994, the Company issued a convertible subordinated
promissory note, due September 9, 2000, to James E. Kern, in the aggregate
principal amount of $655,000, in connection with the acquisition of Creative.

On September 9, 1994, the Company issued a convertible subordinated
promissory note, due September 9, 2000, to John F. Kusner, in the aggregate
principal amount of $200,000, in connection with the acquisition of Creative.

On November 1, 1994, the Company issued options to purchase up to 105,000
shares of Common Stock, par value $.01 per share, to various employees of the
Company in consideration of services rendered.

On April 24, 1995, the Company issued 31,579 shares of Series A Convertible
Preferred Stock, par value $0.01 per share, to Interlaken Investment Partners,
L.P., for a cash purchase price of $47.50 per share.

On September 28, 1995, the Company issued options to Robert Barney to
purchase up to 7,000 shares of Common Stock, par value $.01 per share, at an
exercise price of $7.14 per share in consideration of services rendered.

On September 28, 1995, the Company issued options to William Mahone, Martin
O'Connell and Charles Martin to purchase up to 1,169 shares, 1,169 shares and
1,162 shares, respectively, of Common Stock, par value $.01 per share, at an
exercise price of $7.14 per share in consideration of services rendered.

On June 30, 1995, the Company issued a subordinated promissory note, due
June 30, 2001, to Robert F. Barney, in the aggregate principal amount of
$1,350,000, in connection with the acquisition of Northwest.

II-2

On March 25, 1996, the Company issued 17,500 shares of Common Stock, par
value $.01 per share, to William C. Smitherman and Joann McBride Smitherman
jointly, at a value of $14.29 per share, in connection with the acquisition of
Sun West.

On March 25, 1996, the Company issued 8,400 shares of Common Stock, par
value $.01 per share, to James E. McBride, at a value of $14.29 per share, in
connection with the acquisition of Sun West.

On March 25, 1996, the Company issued a note, due April 25, 2000, to William
C. Smitherman and Joann M. Smitherman, in the aggregate principal amount of
$1,350,000, in connection with the acquisition of Sun West.

On March 25, 1996, the Company issued a note, due April 25, 1999, to Edward
G. Enos, in the aggregate principal amount of $637,500, in connection with the
acquisition of Sun West.

On July 31, 1996, the Company issued two convertible promissory notes, due
2000, to the sellers, in the aggregate principal amount of $1,420,000, in
connection with the acquisition of Ideal.

On December 5, 1996, the Company issued a subordinated promissory note, due
December 1, 1999, to Richard B. Schenkel, in the aggregate principal amount of
$1,000,000, in connection with the acquisition of Republic.

The above transactions were private transactions not involving a public
offering and were exempt from the registration provisions of the Securities Act,
pursuant to Section 4(2) thereof. The sale of securities was without the use of
an underwriter, and the certificates evidencing the shares bear a restrictive
legend permitting the transfer thereof only upon registration of the shares or
an exemption under the Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) EXHIBITS

EXHIBIT NO. DESCRIPTION
- ---------------- ------------------------------------------------------------------------------------------------

*3.1 Restated Certificate of Incorporation
*3.2 Restated By-Laws
*4 Specimen of Registrant's Common Stock certificate
5 Opinion of Willkie Farr & Gallagher as to the legality of the Common Stock
*10.1 Registration Rights Agreement, dated as of April 29, 1993, by and among the Company, Continental
Bank N.A., GRD Corporation and William R. Berkley.
*10.2 (a) Advisory Services Agreement, dated as of March 25, 1996, between the Company and Interlaken
Capital, Inc.
**10.2 (b) Amendment to Advisory Services Agreement, dated as of April 10, 1997.
10.3 Form of Amended and Restated 1994 Stock Option Plan
**10.4 Form of Amended and Restated 1996 Non-Employee Director Stock Plan
10.5 Form of 1997 Long-Term Incentive Compensation Plan
10.6 Form of 1998 Annual Incentive Compensation Plan
*10.7 (a) Employment Agreement, dated as of June 30, 1995, by and among the Company, Northwest Food
Service, Inc. and Robert F. Barney.
***10.7 (b) First Amendment to Employment Agreement, dated as of July 1, 1996 by and among the Company,
Northwest Food Service, Inc. and Robert F. Barney.
**10.7 (c) Second Amendment to Employment Agreement, dated as of March 17, 1997 by and among the Company,
Northwest Food Service, Inc. and Robert F. Barney.

II-3

EXHIBIT NO. DESCRIPTION
- ---------------- ------------------------------------------------------------------------------------------------

*10.8 Lease, dated as of January 31, 1994, as amended, between the Company and Fawn Associates Limited
Partnership, in regard to 3 Greenwich Office Park, Greenwich, Connecticut.
*10.9 Form of Promissory Note from Richard E. Kerley to the Company.
*10.10 Form of Promissory Note from Randy B. Spector to the Company.
*10.11 Form of Promissory Note from Douglas M. Stabler to Interlaken Capital Partners Limited
Partnership.
*10.12 Form of Registration Rights Agreement by and among the Company and Messrs. Kerley, Spector,
Ziegler and Stabler.
****10.13 Third Amended and Restated Loan Agreement, dated as of June 19, 1996, among the Company and its
subsidiaries and USTrust, as lender and agent for the Banks.
**11 Computations of Per Share Earnings
*****21 Subsidiaries
23.1 Consent of Willkie Farr & Gallagher (included in their opinion filed as Exhibit 5)
23.2 Consent of Deloitte & Touche LLP
24 Power of Attorney (included on the signature page of this Registration Statement)

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

* Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (File No. 333-2906), as amended, originally filed with the
Commission on March 29, 1996.

** Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarterly period ended March 26, 1997.

*** Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 25, 1996.

**** Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarterly period ended June 26, 1996.

***** Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (File No. 333-19909), as amended, originally filed with the
Commission on January 16, 1997.

Certain instruments defining the rights of holders of long-term debt of the
Company have not been filed in accordance with Item 601(b)(4)(iii) of Regulation
S-K under the Securities Act. The Company hereby agrees to furnish a copy of
such instruments to the Commission upon request.

(b) FINANCIAL STATEMENT SCHEDULES

None.

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if

II-4

the total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities Act if, in
the aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement;

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;

PROVIDED, HOWEVER, that subparagraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in registration statements on Form S-3 or Form S-8 and
the information required to be included in a post-effective amendment by those
subparagraphs is contained in periodic reports filed by the Registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.

(2) That for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to its Restated Certificate, Bylaws, the Underwriting
Agreement or otherwise, the Registrant has been advised that, in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

The Registrant hereby undertakes that:

(a) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of the
Registration Statement as of the time it was declared effective.

(b) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in New York, New York on May 8, 1997.

FINE HOST CORPORATION

By: /s/ RICHARD E. KERLEY
------------------------------------
Name: Richard E. Kerley
Title: President and Chief Executive
Officer

II-6

POWER OF ATTORNEY

Each of the undersigned officers and directors of Fine Host Corporation
hereby severally constitutes and appoints Richard E. Kerley, Randy B. Spector
and Nelson A. Barber and each of them as the attorneys-in-fact for the
undersigned, in any and all capacities, with full power of substitution, to sign
any and all pre- or post-effective amendments to this Registration Statement,
any subsequent Registration Statement for the same offering which may be filed
under Rule 462(b) under the Securities Act of 1933 and any and all pre- or
post--effective amendments thereto, and to file the same with exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that each said attorney-in-fact, or either of them, may lawfully do or cause to
be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURE TITLE DATE
- ---------------------------------------------------------------------------------------------------- ------------

/s/ RICHARD E. KERLEY President and Chief Executive May 8, 1997
------------------------------------------- Officer and Chairman of the Board (Principal
Richard E. Kerley Executive Officer)

/s/ CATHERINE B. JAMES Executive Vice President, Chief Financial Officer May 8, 1997
------------------------------------------- and Director (Principal Financial Officer)
Catherine B. James

/s/ RANDY B. SPECTOR Executive Vice President, Chief Administrative May 8, 1997
------------------------------------------- Officer and Director
Randy B. Spector

/s/ RANDALL K. ZIEGLER Group President--Convention, Leisure and May 8, 1997
------------------------------------------- International and Director
Randall K. Ziegler

/s/ NELSON A. BARBER Senior Vice President and Treasurer (Principal May 8, 1997
------------------------------------------- Accounting Officer)
Nelson A. Barber

/s/ RONALD E. BLAYLOCK Director May 8, 1997
-------------------------------------------
Ronald E. Blaylock

/s/ J. MICHAEL CHU Director May 8, 1997
-------------------------------------------
J. Michael Chu

/s/ NEAL F. FINNEGAN Director May 8, 1997
-------------------------------------------
Neal F. Finnegan

/s/ JACK H. NUSBAUM Director May 8, 1997
-------------------------------------------
Jack H. Nusbaum

/s/ JOSHUA A. POLAN Director May 8, 1997
-------------------------------------------
Joshua A. Polan

II-7

EXHIBIT INDEX

EXHIBIT NO. DESCRIPTION PAGE NO.
- ---------------- ----------------------------------------------------------------------------------- ---------------

*3.1 Restated Certificate of Incorporation

*3.2 Restated By-Laws

*4 Specimen of Registrant's Common Stock certificate

5 Opinion of Willkie Farr & Gallagher as to the legality of the Common Stock

*10.1 Registration Rights Agreement, dated as of April 29, 1993, by and among the
Company, Continental Bank N.A., GRD Corporation and William R. Berkley.

*10.2 (a) Advisory Services Agreement, dated as of March 25, 1996, between the Company and
Interlaken Capital, Inc.

**10.2 (b) Amendment to Advisory Services Agreement, dated as of April 10, 1997.

10.3 Form of Amended and Restated 1994 Stock Option Plan

**10.4 Form of Amended and Restated 1996 Non-Employee Director Stock Plan

10.5 Form of 1997 Long-Term Incentive Compensation Plan

10.6 Form of 1998 Annual Incentive Compensation Plan

*10.7 (a) Employment Agreement, dated as of June 30, 1995, by and among the Company,
Northwest Food Service, Inc. and Robert F. Barney.

***10.7 (b) First Amendment to Employment Agreement, dated as of July 1, 1996 by and among the
Company, Northwest Food Service, Inc. and Robert F. Barney.

**10.7 (c) Second Amendment to Employment Agreement, dated as of March 17, 1997 by and among
the Company, Northwest Food Service, Inc. and Robert F. Barney.

*10.8 Lease, dated as of January 31, 1994, as amended, between the Company and Fawn
Associates Limited Partnership, in regard to 3 Greenwich Office Park, Greenwich,
Connecticut.

*10.9 Form of Promissory Note from Richard E. Kerley to the Company.

*10.10 Form of Promissory Note from Randy B. Spector to the Company.

*10.11 Form of Promissory Note from Douglas M. Stabler to Interlaken Capital Partners
Limited Partnership.

*10.12 Form of Registration Rights Agreement by and among the Company and Messrs. Kerley,
Spector, Ziegler and Stabler.

****10.13 Third Amended and Restated Loan Agreement, dated as of June 19, 1996, among the
Company and its subsidiaries and USTrust, as lender and agent for the Banks

**11 Computations of Per Share Earnings

*****21 Subsidiaries

23.1 Consent of Willkie Farr & Gallagher (included in their opinion filed as Exhibit 5)

23.2 Consent of Deloitte & Touche LLP

EXHIBIT NO. DESCRIPTION PAGE NO.
- ---------------- ----------------------------------------------------------------------------------- ---------------

24 Power of Attorney (included on the signature page of this Registration Statement)

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

* Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (File No. 333-2906), as amended, originally filed with the
Securities and Exchange Commission on March 29, 1996.

** Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarterly period ended March 26, 1997.

*** Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 25, 1996.

**** Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarterly period ended June 26, 1996.

***** Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (File No. 333-19909), as amended, originally filed with the
Commission on January 16, 1997.