COOKER RESTAURANT CORP /OH/, 424B4, 1996-05-08

COOKER RESTAURANT CORP /OH/
424B4, 1996-05-08
EATING PLACES

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<PAGE> 1
Rule 424(b)(4) Registration No. 333-2635

2,500,000 SHARES

[COOKER BAR AND GRILLE LOGO]

COMMON SHARES

All of the 2,500,000 Common Shares, without par value (the "Common
Shares"), offered hereby are being sold by Cooker Restaurant Corporation
("Cooker" or the "Company"). The Common Shares are listed on The New York Stock
Exchange under the symbol "CGR." On May 7, 1996, the last reported sale price of
the Common Shares on The New York Stock Exchange was $13.875 per share. See
"Price Range of Common Shares."

SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN PURCHASING THE COMMON
SHARES 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.

<TABLE>
<S> <C> <C> <C>
========================================================================================
Underwriting
Price to Discounts and Proceeds to
Public Commissions(1) Company(2)
- ----------------------------------------------------------------------------------------
Per Share...................... $13.875 $0.73 $13.145
Total(3)....................... $34,687,500 $1,825,000 $32,862,500
========================================================================================
</TABLE>

(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other matters.

(2) Before deducting certain expenses payable by the Company estimated at
$300,000.

(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 375,000 additional Common Shares solely to cover over-allotments, if any.
If the Underwriters exercise this option in full, the Price to Public will
total $39,890,625, the Underwriting Discounts and Commissions will total
$2,098,750 and the Proceeds to Company will total $37,791,875. See
"Underwriting."

The Common Shares are offered by the Underwriters named herein, subject to
receipt and acceptance by them and subject to their right to reject any order in
whole or in part. It is expected that delivery of the certificates representing
such shares will be made against payment therefor at the office of Montgomery
Securities on or about May 13, 1996.

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

MONTGOMERY SECURITIES

EQUITABLE SECURITIES CORPORATION
May 7, 1996
<PAGE> 2

#1
7 X 3 1/2
COOKER RESTAURANT/EXTERIOR PHOTO

#2
SERVER W/MENU & GUESTS

1/4 X 3

#3
AVOCADO W/SIDE OF SOUP

1/4 X 3

"Cooker Bar and Grille(R)" and design and "The Southern Cooker -- Home
Style Restaurant & Bar(R)" and design are registered servicemarks of the
Company. The Company also uses the word "CookerSM" as a servicemark in
combination with words and designs other than those used in the registered
marks.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON SHARES
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
<PAGE> 3

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to the more
detailed information and Financial Statements, including the notes thereto,
appearing elsewhere in this Prospectus or incorporated by reference herein.
Except as otherwise specified, all information in this Prospectus (i) assumes no
exercise of the Underwriters' over-allotment option and (ii) gives retroactive
effect to the one-for-three reverse stock split which was effective on April 29,
1991 and the two-for-one stock split which was effective on April 13, 1992. See
"Underwriting."

THE COMPANY

The Company operates 40 full-service "Cooker" restaurants (the
"Restaurants") in Florida, Georgia, Indiana, Kentucky, Maryland, Michigan, North
Carolina, Ohio, Tennessee and Virginia. Restaurants average approximately 7,600
square feet and 245 seats, and are designed to provide traditional and
comfortable dining experiences rather than a theme atmosphere or menu. The
Company provides an attractive value to customers by offering a
moderately-priced, full menu of high quality food served in generous portions.
The menu includes appetizers, soups, salads, chicken, fish, beef and pasta
entrees, sandwiches, burgers and desserts, most of which are created from
original recipes and prepared from scratch using fresh ingredients. Entree
selections generally range in price from $4.45 to $14.95 and, for the three
months ended March 31, 1996, the average guest check was approximately $10.60.
The Company is committed to providing prompt, friendly and efficient customer
service as reflected by its "100% Satisfaction Guarantee" policy and by its
having what the Company believes is a higher ratio of service personnel to
customers and a greater number of managers per Restaurant than many of its
competitors.

In 1994, the Company began an aggressive program designed to enhance
operational execution, broaden and strengthen senior and Restaurant-level
management talent, and reduce operating costs. The Company's rapid expansion in
1993, opening nine Restaurants on a base of 20, overextended its
Restaurant-level management. In addition, several of these new Restaurants
produced lower sales than the Company's existing Restaurants since they were
located in new markets where the Company's concept was not established. As a
result, the Company slowed its growth and opened only six Restaurants in 1994
and three Restaurants in 1995. These Restaurants primarily were opened in
markets where the Cooker reputation was already known and where it could
capitalize on distribution and supervisory efficiencies. During this period, the
Company focused its attention more closely on improving operations at existing
Restaurants. In 1994 and 1995, the Company strengthened its senior-level
management team by adding three key executives: Phillip L. Pritchard, President
and Chief Operating Officer, formerly with General Mills Restaurants Inc.
("GMRI"); David C. Sevig, Vice President -- Chief Financial Officer, formerly
with GMRI and Blockbuster Entertainment Group; and Jeffrey M. Karla, Human
Resources Director, previously with McDonald's. Additionally, the Company
strengthened its Restaurant-level management teams by implementing an ongoing,
comprehensive development program. Furthermore, rather than staffing all
Restaurants with the same number of managers, the Company began to staff
Restaurants according to sales volume, which significantly reduced the Company's
cost of labor as a percentage of sales by decreasing the average number of
managers per Restaurant from approximately 8.3 to 5.5.

The implementation of these programs has positioned the Company to focus
its efforts on expansion. The Company has opened three Restaurants to date in
1996 and intends to open six additional Restaurants in 1996, five of which are
scheduled to open in the second quarter. The Company intends to open 11 to 13
Restaurants in 1997. A majority of potential locations for openings in 1997 has
been tentatively identified and negotiations for those locations are currently
in progress. In order to effectively control its operational and administrative
costs, as well as take advantage of name recognition, the Company anticipates
that further expansion will be in medium to large metropolitan areas in the
Midwest, East and Southeast regions of the United States, primarily in areas
where the Company currently operates Restaurants. The Company intends to locate
Restaurants in freestanding buildings and in retail developments in proximity to
high density, high traffic, office, residential and retail areas.

3
<PAGE> 4

The Company is an Ohio corporation and is the surviving corporation of a
merger of affiliated corporations in 1988. The Company's executive offices are
located at 5500 Village Boulevard, West Palm Beach, Florida 33407. Its telephone
number is (407) 615-6000.

THE OFFERING

Common Shares to be offered........... 2,500,000 shares

Common Shares to be outstanding after
the offering.......................... 9,651,222 shares(1)

Use of proceeds....................... To repay bank debt, to finance the
development of new Restaurants and
for general corporate purposes.

New York Stock Exchange symbol........ CGR
- ---------------

(1) Based on shares outstanding as of March 31, 1996. Does not include as of
March 31, 1996 (i) 1,271,282 Common Shares issuable upon exercise of options
outstanding and (ii) 807,884 Common Shares issuable upon conversion of
outstanding 6 3/4% Convertible Subordinated Debentures Due 2002 (the
"Convertible Debentures").

SUMMARY FINANCIAL DATA

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
FISCAL YEARS (1) --------------------
----------------------------------------------- APRIL 2, MARCH 31,
1991 1992 1993 1994 1995 1995 1996
------- ------- ------- ------- ------- -------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AND RESTAURANT DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Sales................................. $39,516 $53,028 $66,688 $84,169 $91,678 $22,899 $25,486
Restaurant operating income........... 7,145 9,894 9,921 10,008 14,461 3,556 4,186
Net income............................ 2,615 3,980 3,494 2,965 4,432 1,005 1,360
Earnings per common share(2).......... $ 0.38 $ 0.52 $ 0.45 $ 0.41 $ 0.60 $ 0.14 $ 0.18
Weighted average number of common
shares and common equivalent shares
outstanding......................... 6,923 7,715 7,846 7,254 7,387 7,236 7,556
RESTAURANT OPERATING DATA:
Number of Restaurants open at end of
period.............................. 15 20 29 35 37 34 39
Restaurant operating income as a
percentage of sales................. 18.1% 18.7% 14.9% 11.9% 15.8% 15.5% 16.4%
</TABLE>

<TABLE>
<CAPTION>
MARCH 31, 1996
--------------------
AS
ACTUAL ADJUSTED(3)
-------- ---------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.............................................................. $ 1,071 $ 6,880
Total assets........................................................................... 92,496 98,305
Long-term debt......................................................................... 44,174 17,420
Shareholders' equity................................................................... 38,863 71,426
</TABLE>

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

(1) Ended December 29, 1991, January 3, 1993, January 2, 1994, January 1, 1995
and December 31, 1995, respectively.

(2) Earnings per common share has been calculated using the weighted average
number of Common Shares outstanding during the period, including Common
Share equivalents. The Convertible Debentures have not been included as
Common Share equivalents due to their antidilutive effect.

(3) As adjusted to give effect to the sale of 2,500,000 Common Shares by the
Company at the offering price of $13.875 per share and the application of
the estimated net proceeds therefrom. See "Use of Proceeds" and
"Capitalization."

4
<PAGE> 5

RISK FACTORS

In addition to the other information contained in this Prospectus or
incorporated by reference herein, prospective investors should carefully
consider the following factors in evaluating an investment in the Common Shares
offered hereby.

EXPANSION PLANS; CAPITAL RESOURCE REQUIREMENTS

Future growth will depend to a substantial extent on the Company's ability
to increase the number of its Restaurants. The Company has opened three
Restaurants to date in 1996, and intends to open six additional Restaurants in
1996 and 11 to 13 Restaurants in 1997. The Company's ability to expand will
depend on a number of factors, including the selection and availability of
suitable locations, hiring and training sufficiently skilled management and
personnel, adequate financing, constructing or acquiring Restaurants at a
reasonable cost and other factors, some of which are beyond the control of the
Company. While the Company has in the past successfully opened new Restaurants,
there can be no assurance that the Company will be able to continue to open new
Restaurants or that, if opened, those Restaurants can be operated profitably.

The three Restaurants opened by the Company in 1995 and the two Restaurants
opened through March 31, 1996 required an initial investment, including land,
building, fixtures, furniture, equipment and pre-opening costs, averaging
approximately $2.35 million. The Company expects that the average cost of
developing and opening a Restaurant in the future also will be approximately
$2.35 million, as will the cost of converting an existing facility into a
Restaurant. However, these costs may vary greatly depending on the site selected
or the quality and condition of the existing facility. There can be no assurance
that the estimated cost of developing and opening a Restaurant in the future or
the cost of converting an existing facility into a Restaurant will not increase.
See "Business -- Expansion and Site Selection" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."

COMPETITION; CONSUMER PREFERENCES

The restaurant and food service industry is highly competitive and
fragmented. There are numerous restaurants and other food service operations
that compete directly and indirectly with the Company. Many competitors have
been in existence longer, have a more established market presence and have
significantly greater financial, marketing and other resources and higher total
sales volume and profits than does the Company. In addition to other restaurant
companies, the Company competes with numerous other businesses for suitable
locations for its Restaurants.

The restaurant industry may be adversely affected by changes in consumer
tastes, discretionary spending priorities, national, regional or local economic
conditions, demographic trends, consumer confidence in the economy, traffic
patterns, weather conditions, employee availability and the type, number and
location of competing restaurants. Changes in any of these factors could
adversely affect the Company. In addition, factors such as inflation and
increased food, liquor, labor and other costs could adversely affect the
Company. See "Business -- Competition."

GOVERNMENT REGULATION

5
<PAGE> 6

in, or cancellation of, the opening of new Restaurants. Although the Company has
satisfied restaurant, liquor and retail licensing for its existing Restaurants,
no assurance can be given that the Company will be able to maintain existing
approvals or obtain such further approvals at other locations. The development
and construction of additional Restaurants will be subject to compliance with
applicable zoning, land use and environmental regulations. There can be no
assurance that the Company will be able to obtain necessary variances or other
approvals on a cost effective and timely basis in order to construct and develop
Restaurants in the future. See "Business -- Government Regulation."

DEPENDENCE ON KEY OFFICERS

The Company's success will depend largely on the abilities of the Company's
senior management, including G. Arthur Seelbinder, the Chairman of the Board and
Chief Executive Officer, Phillip L. Pritchard, President and Chief Operating
Officer, and Glenn W. Cockburn, Senior Vice President -- Operations of the
Company. The Company does not have an employment or non-competition agreement
with any of these officers. The Company has an insurance policy with death
benefits of $2 million on the life of Mr. Seelbinder. The loss of the services
of any of these officers could adversely affect the Company. See "Management."

RESTRICTIONS ON CHANGE IN CONTROL

The Company adopted a shareholder rights plan in 1990. Certain provisions
of the shareholder rights plan and certain of the Company's charter provisions
and applicable corporate laws could be used to hinder or delay a takeover bid
for the Company. Such provisions may inhibit takeover bids and decrease the
chance of shareholders realizing a premium over market price for their Common
Shares as a result of a takeover bid. See "Description of Securities."

POSSIBLE VOLATILITY OF STOCK PRICE

The market price of the Common Shares, like that of the securities of many
other companies, has been and is likely to continue to be highly volatile. The
price at which the Common Shares trade is determined in the marketplace and may
be affected by many factors, including the performance of the Company, investor
expectations for the Company, the trading volume in the Common Shares, general
economic and market conditions, and competition. In addition, the stock market
has experienced and continues to experience price and volume fluctuations which
have affected the market price of many companies and which have often been
unrelated to the operating performance of these companies. These broad market
fluctuations, as well as general economic and political conditions, may
adversely affect the market price of the Common Shares.

NOTE GUARANTY AND PLEDGE OF COMMON SHARES

The Company has guaranteed the payment of a $5,000,000 loan made by a
commercial bank to G. Arthur Seelbinder, Chairman of the Board and Chief
Executive Officer of the Company. In addition to the Company's guaranty, the
$5,000,000 loan and three other loans made to Mr. Seelbinder by the Bank,
aggregating $2,975,000 in principal amount, are secured by a pledge by Mr.
Seelbinder of 570,000 Common Shares. The guaranty agreement between the Company
and the Bank provides that, in the event of a default, the proceeds from the
sale by the Bank of the pledged shares will be applied first to the $5,000,000
note guaranteed by the Company. The guaranty agreement also provides that in the
event the Bank is unable to liquidate the pledged shares within 120 days after
the occurrence of a default, the Company will pay the unsatisfied portion of the
$5,000,000 loan. A sale of all or part of the pledged shares by the Bank could
have a significant adverse effect on the market price of the Common Shares. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

6
<PAGE> 7

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,500,000 Common
Shares offered by the Company at an offering price of $13.875 per share are
estimated to be approximately $32.6 million ($37.5 million if the over-allotment
option is exercised in full). The Company intends to use the net proceeds as
follows: (i) to repay the outstanding balance of the Company's revolving/term
loan (the "Credit Agreement") (approximately $29.0 million) and (ii) to finance
the development of new Restaurants and for other general corporate purposes.
Borrowings under the Credit Agreement have been used to develop new Restaurants,
remodel existing or purchased properties, redeem outstanding Convertible
Debentures and for working capital. Borrowings under the Credit Agreement mature
on December 31, 1998. Interest on borrowings under the Credit Agreement is
payable quarterly and is calculated using one of two formulas, which the Company
selects, based either on LIBOR or the lender's prime rate. Depending on a
financial ratio contained in the Credit Agreement, the rate based on LIBOR
ranges from 1.25% to 2.00% above LIBOR and the rate based on the prime rate
ranges from the prime rate to 0.50% above the prime rate. Interest on borrowings
at December 31, 1995 ranged from 7.43% to 8.75%. See "Business -- Expansion and
Site Selection" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources." Pending such
uses, the Company plans to invest the net proceeds of this offering in
short-term investment grade, interest-bearing securities.

PRICE RANGE OF COMMON SHARES

The Company's Common Shares were designated on the NASDAQ-National Market
System under the symbol "COKR" until May 11, 1994 when the shares were listed on
the New York Stock Exchange under the symbol "CGR." The following table
summarizes the high and low sale prices per share of the Common Shares for the
periods indicated, as reported on the NASDAQ-NMS or NYSE, as appropriate.

<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
1994
1st Quarter................................................. $13.25 $ 8.50
2nd Quarter................................................. 9.38 7.00
3rd Quarter................................................. 8.00 6.13
4th Quarter................................................. 8.13 5.88
1995
1st Quarter................................................. $ 7.75 $ 6.13
2nd Quarter................................................. 12.00 7.00
3rd Quarter................................................. 13.13 9.75
4th Quarter................................................. 11.50 9.38
1996
1st Quarter................................................. $14.00 $11.00
2nd Quarter (through May 7, 1996)........................... 15.00 13.25
</TABLE>

As of May 6, 1996, there were approximately 2,617 holders of Common Shares.
On May 7, 1996, the last reported sale price on the NYSE for the Common Shares
was $13.875.

7
<PAGE> 8

DIVIDEND POLICY

The Company paid cash dividends of $0.05 per Common Share in February 1994
and 1995 and $0.06 per Common Share in February 1996. Under the Credit
Agreement, dividends may only be declared if the Company's net income for that
fiscal year has exceeded $2,000,000 and such dividends, together with all other
dividends declared within such fiscal year, do not exceed 15% of the Company's
net income for the previous fiscal year. Payment of future cash dividends by the
Company, if any, will be at the discretion of the Company's Board of Directors
and will depend upon the earnings and financial condition of the Company and on
such other factors as the Board of Directors may consider relevant at the time.
See "Description of Securities."

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
March 31, 1996 and as adjusted to reflect the sale by the Company of 2,500,000
Common Shares offered hereby at the public offering price of $13.875 per share
and the application of the net proceeds therefrom. This table should be read in
conjunction with the Financial Statements and notes thereto appearing elsewhere
in this Prospectus.

<TABLE>
<CAPTION>
MARCH 31, 1996
-----------------------
ACTUAL AS ADJUSTED
------- -----------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt, less current maturities................................ $44,174 $17,420
Shareholders' equity:
Common shares -- without par value; authorized 30,000,000; issued
7,664,606; 10,164,606 issued as adjusted(1)...................... 26,068 58,631
Retained earnings................................................. 18,944 18,944
Treasury stock, at cost, 513,384 shares........................... (6,149) (6,149)
------- ---------
Total shareholders' equity................................... 38,863 71,426
------- ---------
Total capitalization.................................... $83,037 $88,846
======= =========
</TABLE>

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

(1) Does not include (i) 1,271,282 Common Shares issuable upon exercise of
options outstanding and (ii) 807,884 Common Shares issuable upon conversion
of outstanding Convertible Debentures.

8
<PAGE> 9

SELECTED FINANCIAL DATA

The selected financial data presented below should be read in conjunction
with the Company's Financial Statements and notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included elsewhere in this Prospectus. The selected financial data for 1993
through 1995 have been derived from the financial statements audited by Price
Waterhouse LLP, the Company's independent accountants, and for 1991 and 1992
have been derived from the financial statements audited by another firm of
independent accountants. The selected financial data for the three months ended
April 2, 1995 and March 31, 1996 have not been audited and are not necessarily
indicative of the results to be expected for the full year. The accompanying
unaudited financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information. In the opinion
of management, all adjustments, consisting of normal recurring accruals,
considered necessary for a fair presentation have been included.

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
FISCAL YEARS (1) ------------------
----------------------------------------------- APRIL 2, MARCH 31,
1991 1992 1993 1994 1995 1995 1996
------- ------- ------- ------- ------- ------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Sales.................................. $39,516 $53,028 $66,688 $84,169 $91,678 $22,899 $25,486
------- ------- ------- ------- ------- ------- --------
Cost of sales:
Food and beverages................... 11,264 15,181 18,780 24,193 26,218 6,457 7,167
Labor................................ 13,615 17,944 23,384 31,389 31,977 8,116 8,817
Restaurant operating expenses........ 6,060 8,062 10,540 13,549 15,065 3,677 4,312
Restaurant depreciation and
amortization....................... 1,432 1,947 4,063 5,030 3,957 1,093 1,004
------- ------- ------- ------- ------- ------- --------
32,371 43,134 56,767 74,161 77,217 19,343 21,300
------- ------- ------- ------- ------- ------- --------
Restaurant operating income............ 7,145 9,894 9,921 10,008 14,461 3,556 4,186
------- ------- ------- ------- ------- ------- --------
Other expenses (income):
General and administrative........... 2,952 3,606 3,710 4,532 5,785 1,261 1,517
Interest expense..................... 133 221 1,105 1,787 1,848 499 544
Gain on sale of property............. -- -- -- -- (305) (2) --
Interest and other income............ (102) (293) (409) (72) (30) (8) --
------- ------- ------- ------- ------- ------- --------
2,983 3,534 4,406 6,247 7,298 1,750 2,061
------- ------- ------- ------- ------- ------- --------
Income before income taxes and
extraordinary item................... 4,162 6,360 5,515 3,761 7,163 1,806 2,125
Provision for income taxes before
extraordinary item................... 1,547 2,380 2,021 1,280 2,731 801 765
------- ------- ------- ------- ------- ------- --------
Income before extraordinary item....... 2,615 3,980 3,494 2,481 4,432 1,005 1,360
Extraordinary gain, net of income
taxes................................ -- -- -- 484 -- -- --
------- ------- ------- ------- ------- ------- --------
Net income............................. $ 2,615 $ 3,980 $ 3,494 $ 2,965 $ 4,432 $ 1,005 $ 1,360
======== ======== ======== ======== ======== ======== ==========
Earnings per common share:
Before extraordinary item............ $ 0.38 $ 0.52 $ 0.45 $ 0.34 $ 0.60 $ 0.14 $ 0.18
Extraordinary item................... -- -- -- 0.07 -- -- --
------- ------- ------- ------- ------- ------- --------
Total........................... $ 0.38 $ 0.52 $ 0.45 $ 0.41 $ 0.60 $ 0.14 $ 0.18
======== ======== ======== ======== ======== ======== ==========
Dividends per common share............. $ 0.03 $ 0.035 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.06
Weighted average number of common
shares and common equivalent shares
outstanding.......................... 6,923 7,715 7,846 7,254 7,387 7,236 7,556
======== ======== ======== ======== ======== ======== ==========
BALANCE SHEET DATA (AT END OF PERIOD):
Cash and cash equivalents.............. $ 4,762 $ 1,979 $ 4,132 $ 2,087 $ 1,299 $ 2,552 $ 1,071
Total assets........................... 31,659 62,068 66,598 70,852 83,181 70,910 92,496
Long-term debt......................... -- 23,000 23,000 28,600 35,976 28,345 44,174
Shareholders' equity................... 28,226 33,619 35,968 33,908 37,946 34,534 38,863
</TABLE>

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

(1) Ended December 29, 1991, January 3, 1993, January 2, 1994, January 1, 1995
and December 31, 1995, respectively.

9
<PAGE> 10

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

GENERAL

The Company operates 40 restaurants in ten states in the Midwest, East and
Southeast regions of the United States, and intends to open six additional
Restaurants during the remainder of 1996 and 11 to 13 Restaurants in 1997.
Although the Company historically has been able to open its Restaurants in a
timely and cost-effective manner, there can be no assurance that new Restaurants
can be opened on anticipated opening dates or at anticipated cost levels in the
future.

A new Restaurant is included in the same store sales calculation at the
beginning of the first quarter following the Restaurant's first full five
quarters of operation. At March 31, 1996, there were 33 Restaurants included in
the calculation of same store sales.

The Company's labor costs per Restaurant traditionally have been higher
than those of its competitors due to the Company's strategy of striving to
provide superior service to its customers. During 1993 and 1994, labor costs as
a percentage of sales increased to a level higher than had been experienced in
the past. As a result of changes initiated by new management, the Company's
labor costs as a percentage of sales decreased from 37.3% in 1994 to 34.9% in
1995 by reducing the average number of managers per Restaurant from
approximately 8.3 to 5.5.

Pre-opening costs consist primarily of costs for employee training and
relocation and supplies incurred in connection with the opening of a new
Restaurant. These costs are accumulated to the date that the Restaurant is
opened and are amortized on a straight-line basis over one year from the date of
opening. Prior to 1993, pre-opening costs were amortized on a straight-line
basis over three years. At January 1, 1996, the unamortized portion of
pre-opening costs for new Restaurants was $302,000, all of which will be charged
against earnings during 1996.

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 under the caption "Risk Factors."

10
<PAGE> 11

RESULTS OF OPERATIONS

The operating results of the Company expressed as a percentage of sales
were as follows:

<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL YEARS(1) ----------------------
------------------------- APRIL 2, MARCH 31,
1993 1994 1995 1995 1996
----- ----- ----- -------- ---------
<S> <C> <C> <C> <C> <C>
Sales............................................ 100.0% 100.0% 100.0% 100.0% 100.0%
----- ----- ----- -------- ---------
Cost of sales:
Food and beverages............................. 28.2 28.7 28.6 28.2 28.1
Labor.......................................... 35.0 37.3 34.9 35.4 34.6
Restaurant operating expenses.................. 15.8 16.1 16.4 16.1 16.9
Restaurant depreciation and amortization....... 6.1 6.0 4.3 4.8 4.0
----- ----- ----- -------- ---------
85.1 88.1 84.2 84.5 83.6
----- ----- ----- -------- ---------
Restaurant operating income...................... 14.9 11.9 15.8 15.5 16.4
----- ----- ----- -------- ---------
Other (income) expenses:
General and administrative..................... 5.6 5.4 6.3 5.5 6.0
Interest expense............................... 1.7 2.1 2.0 2.1 2.1
Gain on sale of property....................... -- -- (0.3) -- --
Interest and other income...................... (0.6) (0.1) -- -- --
----- ----- ----- -------- ---------
6.7 7.4 8.0 7.6 8.1
----- ----- ----- -------- ---------
Income before income taxes and extraordinary
item........................................... 8.2 4.5 7.8 7.9 8.3
Provision for income taxes before extraordinary
item........................................... 3.0 1.5 3.0 3.5 3.0
----- ----- ----- -------- ---------
Income before extraordinary item................. 5.2 3.0 4.8 4.4 5.3
Extraordinary gain, net of income taxes.......... -- 0.5 -- -- --
----- ----- ----- -------- ---------
Net income....................................... 5.2% 3.5% 4.8% 4.4% 5.3%
===== ===== ===== ======= =========
</TABLE>

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

(1) Ended on January 2, 1994, January 1, 1995 and December 31, 1995,
respectively.

THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE MONTHS ENDED APRIL 2, 1995

Sales increased $2,587,000, or 11.3%, from $22,899,000 for the three months
ended April 2, 1995 to $25,486,000 for the three months ended March 31, 1996.
The increase was due primarily to sales at new Restaurants opened after April 2,
1995. The openings included Gainesville, Florida, Sylvania (Toledo), Ohio, and
Solon (Cleveland), Ohio opened in 1995 and Hamilton Road (Columbus), Ohio and
Murfreesboro (Nashville), Tennessee opened in 1996. Same store sales decreased
0.9% for the three months ended March 31, 1996 from the comparable period in
1995, primarily as a result of severe winter weather in January. However, same
store sales increased in both February and March and average sales for all
stores increased 2.1% for the three months ended March 31, 1996.

Restaurant operating income increased $630,000, or 17.7%, from $3,556,000
for the three months ended April 2, 1995 to $4,186,000 for the three months
ended March 31, 1996. Restaurant operating income as a percentage of sales
increased from 15.5% for the three months ended April 2, 1995 to 16.4% for the
three months ended March 31, 1996. The increase was primarily the result of
continued lower labor expenses and lower amortization of pre-opening expenses.

The cost of food and beverages as a percentage of sales decreased from
28.2% for the three months ended April 2, 1995 to 28.1% for the three months
ended March 31, 1996. The decrease was the result of minor changes in the mix of
menu items sold in 1996.

Labor costs as a percentage of sales decreased from 35.4% for the three
months ended April 2, 1995 to 34.6% for the three months ended March 31, 1996.
The reduction was due to changes in store management staffing implemented during
1995.

11
<PAGE> 12

Restaurant operating expenses as a percentage of sales increased from 16.1%
for the three months ended April 2, 1995 to 16.9% for the three months ended
March 31, 1996. The increase was primarily attributable to increased repair and
maintenance, snow removal, utilities and property taxes.

Restaurant depreciation and amortization of store pre-opening expenses as a
percentage of sales decreased from 4.8% for the three months ended April 2, 1995
to 4.0% for the three months ended March 31, 1996. This decrease was due to
lower amortization of pre-opening expenses which resulted from the slowdown in
the number of new Restaurants opened in 1995.

General and administrative expenses as a percentage of sales increased from
5.5% for the three months ended April 2, 1995 to 6.0% for the three months ended
March 31, 1996. This increase resulted from higher labor and related training
expenses for the increased number of manager trainees in 1996. During the three
months ended April 2, 1995, the Company slowed its new Restaurant opening rate
and reduced the number of managers per Restaurant. During the three months ended
March 31, 1996, the Company significantly increased its hiring of management
trainees in anticipation of an accelerated opening schedule.

The provision for income taxes as a percentage of income before income
taxes decreased from 44.4% for the three months ended April 2, 1995 to 36.0% for
the three months ended March 31, 1996. The provision for the three months ended
April 2, 1995 was higher due to the inclusion of the Company's estimate of
additional liabilities for prior years.

1995 COMPARED TO 1994

Sales increased $7,509,000, or 8.9%, from $84,169,000 in 1994 to
$91,678,000 in 1995. The increase was primarily due to sales generated from new
Restaurants opened during 1995 and those opened late in 1994. The 1995 openings
included Restaurants in Gainesville, Florida; Sylvania (Toledo), Ohio and Solon
(Cleveland), Ohio. Same store sales increased during 11 of the 12 months of 1995
with an average annual increase of 0.8%.

Restaurant operating income increased $4,453,000, or 44.5%, from
$10,008,000 in 1994 to $14,461,000 in 1995. Restaurant operating income as a
percentage of sales increased from 11.9% in 1994 to 15.8% in 1995. The increase
was due primarily to a reduction in store management staffing as well as changes
to the Company's hourly employee staffing schedules and related payroll tax and
benefit savings. Labor costs as a percentage of sales decreased from 37.3% in
1994 to 34.9% in 1995.

The Company experienced unusually high produce prices in the second quarter
of 1995 and higher than normal chicken prices in the second and third quarters
of 1995. However, changes in the items on the menu made during 1995 offset these
temporary cost increases and cost of food and beverages as a percentage of sales
decreased from 28.7% in 1994 to 28.6% in 1995. No significant menu price
increases were made during 1995.

Restaurant operating expenses as a percentage of sales increased from 16.1%
in 1994 to 16.4% in 1995. Most of this increase was the result of higher repair
and maintenance spending.

Restaurant depreciation and amortization of store pre-opening expenses as a
percentage of sales decreased from 6.0% in 1994 to 4.3% in 1995. This change was
due to lower amortization of pre-opening expenses which was a result of the
slowdown in the number of new Restaurants opening in 1994.

General and administrative expenses as a percentage of sales increased from
5.4% in 1994 to 6.3% in 1995. This increase was the result of the payment of
higher management bonuses in 1995 due to significantly stronger Company
performance and the addition of the President and Chief Operating Officer for
all of 1995.

The provision for income taxes increased as a percentage of income before
income taxes from 34.0% in 1994 to 38.1% in 1995. The 1995 provision included a
$205,000 provision for the Company's estimate of additional tax liability.

1994 COMPARED TO 1993

Sales increased $17,481,000, or 26.2%, from $66,688,000 in 1993 to
$84,169,000 in 1994. The increase was primarily due to sales generated from new
Restaurants opened during 1994 and those opened late in 1993.

12
<PAGE> 13

The 1994 openings included Restaurants in Bethesda, Maryland; Tampa and Orlando,
Florida; Cincinnati, Ohio; Atlanta, Georgia; and Detroit, Michigan. Same store
sales declined 3.4% for the year but showed improvement during the second half
of the year and ended with fourth quarter 1994 sales matching fourth quarter
1993 sales.

Restaurant operating income increased $87,000, or 0.9%, from $9,921,000 in
1993 to $10,008,000 in 1994. Restaurant operating income as a percentage of
sales decreased from 14.9% in 1993 to 11.9% in 1994. The decline was primarily
due to a moderate increase in commodity costs for raw materials and lower
average sales in some of the newer Restaurants.

Food and beverage costs as a percentage of sales increased from 28.2% in
1993 to 28.7% in 1994 primarily as a result of the commodity cost increase noted
above.

Labor costs as a percentage of sales increased from 35.0% in 1993 to 37.3%
in 1994. Since a significant portion of labor costs is fixed, labor expense
increases as a percentage of sales as average sales volumes decline. As a result
of the lower sales volumes experienced in some of the newer stores, the Company
reviewed store staffing models in 1994 and tested a reduced labor staffing model
in several markets. The new staffing model reduced the amount of fixed labor
expenses and provided more flexibility in improving the labor costs in stores
with lower sales volumes.

Restaurant operating expenses as a percentage of sales increased from 15.8%
in 1993 to 16.1% in 1994, primarily as a result of lower average sales volumes
in newer Restaurants.

Restaurant depreciation and amortization of store pre-opening expenses as a
percentage of sales decreased from 6.1% in 1993 to 6.0% in 1994. This change is
the result of an increase in depreciation as a percent of sales due primarily to
lower sales volume offset by a relative reduction of pre-opening expenses.
Beginning in January 1993, the Company began amortizing store preoperational
expenses over a 12-month period as compared to the 36-month period used
previously. Related to the change in the amortization period, the Company
expensed $950,000 of preoperational expenses in the fourth quarter of 1993 for
stores that were opened before 1993 so that accounting treatment would be
consistent for all Restaurants.

General and administrative expenses as a percentage of sales decreased from
5.6% in 1993 to 5.4% in 1994 primarily due to these expenses being spread over
an increasing number of Restaurants.

The provision for income taxes before extraordinary items as a percentage
of income before income taxes and extraordinary items decreased from 36.6% in
1993 to 34.0% in 1994, reflecting approximately $250,000 of credits from the
FICA tip tax credit.

During the fourth quarter of 1994, the Company repurchased $2,500,000
principal of its Convertible Debentures in the open market for a discounted
purchase price of $1,618,000 which resulted in an after tax extraordinary gain
of $484,000.

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal capital requirements arise from the development and
opening of new Restaurants. The Company's primary sources of working capital are
cash flow from operations and borrowings under the Credit Agreement. The
Company's cash flow from operations was $6,203,000, $7,571,000, $9,495,000 and
$2,607,000 for 1993, 1994, 1995 and the three months ended March 31, 1996,
respectively. The Credit Agreement provides for a $33,000,000 line of credit and
as of March 31, 1996, the Company had outstanding borrowings of $26,754,000
under the Credit Agreement. The Company estimates that at the time of this
offering, the outstanding balance will be approximately $29,000,000 and that a
portion of the net proceeds of this offering will be used to repay this
outstanding balance.

Capital expenditures were $23,627,000, $11,318,000, $17,200,000 and
$10,616,000 for 1993, 1994, 1995 and the three months ended March 31, 1996,
respectively. The Company has opened three Restaurants to date in 1996, and
intends to open six additional Restaurants in 1996 and 11 to 13 Restaurants in
1997. Total capital expenditures are estimated to be approximately $18,500,000
in 1996 and approximately $30,000,000 in 1997. The Company believes that cash
flow from operations, borrowings from the Credit Agreement and proceeds

13
<PAGE> 14

from this offering will be sufficient to fund the planned expansion as well as
the ongoing maintenance and remodeling of existing Restaurants through 1997.

In 1992, the Company issued its Convertible Debentures in the principal
amount of $23,000,000 in a public offering. Under the terms of the Indenture
pursuant to which the Convertible Debentures were issued, the Company is
required to redeem up to $1,150,000 principal amount on November 1 of each year
if timely request is made by holders. In 1994 and 1995, the Company redeemed
$1,150,000 and $1,150,000, respectively, of the Convertible Debentures as a
result of requests by holders. In addition, the Company is required to redeem up
to $25,000 per deceased holder during any twelve-month period. In 1994, 1995 and
the three months ended March 31, 1996, the Company redeemed $50,000, $30,000,
and $50,000, respectively, of the Convertible Debentures by reason of the death
of holders. In 1994, the Company purchased $2,500,000 principal amount of the
Convertible Debentures on the open market at a market price of $1,618,000, in
1995 purchased $250,000 principal amount at a market price of $222,000 and in
the first quarter of 1996, purchased $400,000 principal amount at $363,000. All
of the redemptions and purchases of Convertible Debentures during 1994 and 1995
were made with funds obtained from loans under the Credit Agreement.

In March 1994, the Company entered into a guaranty agreement with First
Union National Bank of Tennessee ("First Union") pursuant to which the Company
guaranteed the payment of a $5,000,000 loan to G. Arthur Seelbinder, Chairman of
the Board and Chief Executive Officer of the Company. First Union also is the
lender to the Company under the Credit Agreement. In 1995, the Company requested
that Mr. Seelbinder refinance the $5,000,000 loan with a bank that was not a
lender to the Company. In July 1995, Mr. Seelbinder refinanced the loan with
NationsBank of Tennessee N.A. ("NationsBank") and incurred refinancing costs of
approximately $42,000, which were paid by the Company. As a condition to the
refinancing, NationsBank required that the Company reaffirm its guaranty of the
$5,000,000 loan to Mr. Seelbinder. The NationsBank loan bears interest at a per
annum rate equal to 0.25% over the prime rate of interest charged by NationsBank
from time to time and is due and payable on August 1, 1997. Mr. Seelbinder
pledged 570,000 of his Common Shares to NationsBank as collateral for the
$5,000,000 loan and as collateral for three additional loans aggregating
$2,975,000 in principal amount made to Mr. Seelbinder by NationsBank. The loan
agreement between Mr. Seelbinder and NationsBank provides that if there were a
default with respect to any of the four loans or a default by the Company under
the Credit Agreement, NationsBank would be able to declare all four loans
immediately due and payable. The guaranty agreement provides that the Bank will
apply the proceeds from the sale of the pledged shares first to the $5,000,000
loan guaranteed by the Company. The guaranty agreement also provides that in the
event the Bank is unable to liquidate the pledged shares within 120 days after
the occurrence of a default, the Company will pay the unsatisfied portion of the
$5,000,000 note. Mr. Seelbinder agreed to pay the Company an annual fee in the
amount of 0.25% of the principal amount of the loan during each year that the
Company's guaranty is outstanding.

SFAS NO. 123

In October 1995, the FASB issued Statement of Financial Accounting
Standards No. 123 ("SFAS No. 123"), "Accounting for Stock-Based Compensation."
SFAS No. 123 establishes financial accounting and reporting standards for stock
based employee compensation plans. The statement defines a "fair value based
method" of accounting for employee stock options or similar equity instruments
and encourages all entities to adopt that method of accounting for all of their
employee stock compensation plans. However, SFAS No. 123 also allows an entity
to continue to measure compensation costs for those plans using the "intrinsic
value based method" of accounting, which the Company currently uses. The Company
currently plans on adopting SFAS No. 123 for fiscal 1996 and intends to retain
the intrinsic value method of accounting for stock based compensation.

IMPACT OF INFLATION

The Company does not believe that inflation has materially affected
earnings during the past three years. Substantial increases in costs,
particularly labor, employee benefits or food costs, could have a significant
impact on the Company.

14
<PAGE> 15

BUSINESS

GENERAL

The Company operates 40 full-service "Cooker" Restaurants in Florida,
Georgia, Indiana, Kentucky, Maryland, Michigan, North Carolina, Ohio, Tennessee
and Virginia. Restaurants average approximately 7,600 square feet and 245 seats,
and are designed to provide traditional and comfortable dining experiences
rather than a theme atmosphere or menu. The Company provides an attractive value
to customers by offering a moderately-priced, full menu of high quality food
served in generous portions. The menu includes appetizers, soups, salads,
chicken, fish, beef and pasta entrees, sandwiches, burgers and desserts, most of
which are created from original recipes and prepared from scratch using fresh
ingredients. Entree selections generally range in price from $4.45 to $14.95
and, for the three months ended March 31, 1996, the average guest check was
approximately $10.60. The Company is committed to providing prompt, friendly and
efficient customer service as reflected by its "100% Satisfaction Guarantee"
policy and by its having what the Company believes is a higher ratio of service
personnel to customers and a greater number of managers per Restaurant than many
of its competitors.

In 1994, the Company began an aggressive program designed to enhance
operational execution, broaden and strengthen senior and Restaurant-level
management talent, and reduce operating costs. The Company's rapid expansion in
1993, opening nine Restaurants on a base of 20, overextended its
Restaurant-level management. In addition, several of these new Restaurants
produced lower sales than the Company's existing Restaurants since they were
located in new markets where the Company's concept was not established. As a
result, the Company slowed its growth and opened only six Restaurants in 1994
and three Restaurants in 1995. These Restaurants primarily were opened in
markets where the Cooker reputation was already known and where it could
capitalize on distribution and supervisory efficiencies. During this period, the
Company focused its attention more closely on improving operations at existing
Restaurants. In 1994 and 1995, the Company strengthened its senior-level
management team by adding three key executives: Phillip L. Pritchard, President
and Chief Operating Officer, formerly with GMRI; David C. Sevig, Vice
President -- Chief Financial Officer, formerly with GMRI and Blockbuster
Entertainment Group; and Jeffrey M. Karla, Human Resources Director, previously
with McDonald's. Additionally, the Company strengthened its Restaurant-level
management teams by implementing an ongoing, comprehensive development program.
Furthermore, rather than staffing all Restaurants with the same number of
managers, the Company began to staff Restaurants according to sales volume,
which significantly reduced the Company's cost of labor as a percentage of sales
by decreasing the average number of managers per Restaurant from approximately
8.3 to 5.5.

THE COOKER CONCEPT

The key features of the Cooker concept include the following:

"100% Satisfaction Guarantee." The Company is committed to providing high
quality food, friendly and efficient service and comfortable, clean
surroundings. Restaurant managers visit tables to make sure every customer is
satisfied with the Cooker experience. If a customer is not satisfied with any
part of the visit, particularly the food and service, the Restaurant staff is
authorized to provide that customer with a free meal.

Original Recipes Made From Scratch. Cooker provides an attractive value to
customers by offering a moderately-priced, full menu of high quality food served
in generous portions. Most of the items on Cooker's menu are created from
original recipes and prepared from scratch using fresh ingredients, which the
Company believes results in more flavorful foods. The menu is re-evaluated in
June and December of each year when the least popular items from each category
(appetizers, entrees and desserts) are removed from the menu and replaced with
new items created by the Company's culinary team. Each menu item is researched
and tested in Cooker's test kitchen and in Restaurants to ensure customer
acceptance.

Commitment to Staffing. The Company's commitment to meeting the highest
standards of customer service is reflected in having what the Company believes
is a higher ratio of service personnel to customers and having a greater number
of managers per Restaurant than many of its competitors. The Company believes
that higher staffing levels permit its staff to interact with customers,
resulting in an enhanced dining

15
<PAGE> 16

experience. This strategy results in repeat customer visits, as well as
"word-of-mouth" advertising from current customers that attracts new customers.

Timeless Atmosphere. The Company's Restaurants are designed to create a
traditional and comfortable atmosphere suitable for any occasion. This
atmosphere is enhanced by friendly service and a menu that appeals to a broad
segment of the population and encourages customers to visit the Company's
Restaurants more often. Unlike many casual dining restaurants that center around
a "theme," the Company believes its Restaurants are not as sensitive to changing
customer preferences and trends.

Dedicated Employees. The Company hires its personnel only after extensive
interviews, and seeks to recruit employees who share the Company's commitment to
high standards of customer service. Each new non-management employee is
initially trained for a minimum of seven to ten days or longer if hired for a
new Restaurant. Regardless of their background, new management personnel undergo
90 to 120 days of training that includes gaining exposure to all areas of
Restaurant operations and attending training classes at the Company's
headquarters. The Company encourages a sense of personal commitment from its
employees at every level by providing extensive training, employee development
and competitive compensation. Management believes its personnel policies result
in a low rate of employee turnover.

The Company provides an attractive value to customers by offering a
moderately-priced, full menu of high quality food and beverage items served in
generous portions. The menu features 66 dishes including appetizers, soups,
salads, chicken, fish, beef and pasta entrees, sandwiches, burgers and desserts.
Most of the items on the menu are created from original recipes and prepared
from scratch using fresh ingredients, which the Company believes results in more
flavorful food. Lunch and dinner entrees generally range in price from $4.45 to
$14.95 and, for the three months ended March 31, 1996, lunch accounted for
approximately 40% of sales. The average check per person for the three months
ended March 31, 1996 was approximately $10.60. Each Restaurant offers alcoholic
beverages including liquor, wine and beer, which constituted approximately 11%
of sales for the three months ended March 31, 1996. The Company re-evaluates its
menu in June and December of each year, and the least popular items from each
category are removed from the menu and replaced with new items created by the
Company's culinary team. Each menu item and recipe is researched and tested in
Cooker's test kitchen and in the Restaurants to ensure customer acceptance.

DESIGN

The Restaurants are designed to be comfortable and functional, with a decor
that includes materials such as mahogany, slate, marble and tile. The average
Restaurant is approximately 7,600 square feet (of which approximately 40% is
devoted to kitchen and service areas) with seating for approximately 245
customers. However, seven of the nine Restaurants planned to be opened in 1996
will have in excess of 8,000 square feet and will seat approximately 270
customers. This increase is a result of the size of the existing facilities that
the Company is converting into Restaurants and does not reflect a management
decision to increase the size of future Restaurants. The majority of the seating
is in booths, which enhances customer privacy and comfort. Each Restaurant also
has a separate bar area which has stool and booth seating. The Company believes
that the typical Restaurant kitchen is comparatively large by industry standards
and is designed for quality and speed of food preparation. These kitchens permit
the Company to be flexible in the types of food items which can be prepared and
to adapt to changing consumer tastes and preferences.

16
<PAGE> 17

RESTAURANT LOCATIONS

The following table reflects the existing 40 Restaurant locations and the
six additional Restaurant locations scheduled to open during the remainder of
1996.

<TABLE>
<CAPTION>
LOCATION METROPOLITAN AREA
- ------------------------------ ------------------------
<S> <C>
FLORIDA
Altamonte Springs........... Orlando
Ft. Myers................... Ft. Myers
Gainesville................. Gainesville
Melbourne................... Melbourne
Palm Harbor................. Tampa-St. Petersburg
GEORGIA
Alpharetta.................. Atlanta
Gwinnett.................... Atlanta
Towne Center*............... Atlanta
Wildwood.................... Atlanta
INDIANA
Keystone.................... Indianapolis
Willow Lake................. Indianapolis
KENTUCKY
Hurstbourne Plaza........... Louisville
MARYLAND
Bethesda.................... Washington, DC
MICHIGAN
Ann Arbor................... Detroit
Auburn Hills................ Detroit
Livonia..................... Detroit
Novi........................ Detroit
Sterling Heights*........... Detroit
NORTH CAROLINA
Raleigh..................... Raleigh-Durham
</TABLE>
<TABLE>
<CAPTION>

LOCATION METROPOLITAN AREA
- ------------------------------------ ------------------
<S> <C>
OHIO
Governor's Hill................... Cincinnati
Paxton Road....................... Cincinnati
Springdale........................ Cincinnati
Rockside.......................... Cleveland
Beachwood......................... Cleveland
Westlake.......................... Cleveland
Solon............................. Cleveland
Bethel Road....................... Columbus
Cleveland Avenue.................. Columbus
East Main St...................... Columbus
Hamilton Rd....................... Columbus
Morse Road*....................... Columbus
North High St..................... Columbus
Beaver Creek*..................... Dayton
Miamisburg Centerville............ Dayton
Poe Road*......................... Dayton
Toledo............................ Toledo
Sylvania.......................... Toledo
Boardman Township*................ Youngstown
TENNESSEE
Memphis........................... Memphis
Regalia Center.................... Memphis
Hermitage......................... Nashville
Murfreesboro...................... Nashville
Parkway........................... Nashville
Rivergate......................... Nashville
West End.......................... Nashville
VIRGINIA
Fairfax........................... Washington, DC

<FN>
* Restaurants scheduled to open during remainder of 1996.
</TABLE>

The Company leases 15 Restaurants from unaffiliated lessors with terms
ranging from 10 to 48 years, that include options to extend such leases
exercisable by the Company. See Note 10 to the Financial Statements for
information relating to lease commitments. The Company owns the remaining
Restaurants, six of which are subject to a mortgage granted to the First Union
National Bank of Tennessee to secure the Credit Agreement.

UNIT ECONOMICS

For the fifty-two week period ended March 31, 1996, the 34 Restaurants open
for the period generated average sales of approximately $2.6 million, average
Restaurant operating income of approximately $434,000, or 16.7% of sales, and
average cash flow (Restaurant operating income plus depreciation and
amortization) of approximately $521,000, or 20.1% of sales. Average cash flow is
commonly used as an additional measure of operating profitability in the
restaurant industry, although it should not be considered an alternative to
operating income as an indicator of the Company's operating performance or an
alternative to cash flow from operating activities as a measure of liquidity.
The three Restaurants opened by the Company in 1995 and the two Restaurants
opened through March 31, 1996 required an initial investment, including land,
building, fixtures, furniture, equipment and pre-opening costs, averaging
approximately $2.35 million. The Company expects that the average cost of
developing and opening a Restaurant in the future also will be approximately
$2.35 million, as will the cost of converting an existing facility into a
Restaurant. However, these costs may vary greatly depending on the site selected
or the quality and condition of the existing facility. There can be no assurance
that the estimated cost of developing and opening a Restaurant in the future or
the cost of converting an existing facility into a Restaurant will not increase.

<PAGE> 18

EXPANSION AND SITE SELECTION

The Company has opened three Restaurants to date in 1996 and intends to
open an additional six Restaurants this year. On January 4, 1996, the Company
purchased six properties from a subsidiary of Darden Restaurants, Inc. for a
cash purchase price of approximately $11.2 million. The properties purchased by
the Company had been operated as part of a chain of "China Coast Restaurants."
This chain closed in 1995. The Company is in the process of remodeling these
properties to conform to its specifications and plans to open them at different
times during the second quarter of 1996. The Company intends to open 11 to 13
Restaurants in 1997. A majority of potential locations for openings in 1997 has
been tentatively identified and negotiations for those locations are currently
in progress. There can be no assurance that the Company will be able to open the
number of Restaurants planned to be opened by it or that such Restaurants will
be opened on schedule.

The Company considers the specific location of a Restaurant to be critical
to its long-term success and devotes significant effort to the investigation and
evaluation of potential sites. In order to effectively control its operational
and administrative costs, as well as take advantage of name recognition, the
Company anticipates that further expansion will be in medium to large
metropolitan areas in the Midwest, East and Southeast regions of the United
States, primarily in areas where the Company currently operates Restaurants. The
Company intends to locate Restaurants in freestanding buildings and in retail
developments in proximity to high density, high traffic, office, residential and
retail areas. The Company owns and leases the sites for its existing facilities,
although the Company prefers to own the property.

RESTAURANT OPERATIONS

Management and Employees. The Company currently has eight regional
managers who are each responsible for supervising between four and six of the
Company's Restaurants and continuing the development of a Restaurant's
management team. Through regular visits to the Restaurants, the regional
managers ensure that the Company's concept, strategy and standards of quality
are being adhered to in all aspects of restaurant operations. Each of the
Company's Restaurants typically has one general manager, one assistant general
manager, one kitchen manager and between two and four assistant managers. The
general manager of each Restaurant has primary responsibility for the day-to-day
operations of the entire Restaurant and is responsible for maintaining the
standards of quality and performance established by the Company. The average
number of hourly employees in each Restaurant is approximately 85. Management
believes that its success is in part attributable to its high level of service
and interaction between its employees and guests.

The Company seeks to attract and retain high quality managers and hourly
employees by providing attractive financial incentives and flexible working
schedules. Financial incentives provided to attract high quality managers
include competitive salaries, bonuses and stock options based upon position,
seniority and performance criteria. Also, management believes that the Company
attracts qualified managers by providing a higher overall quality of life
characterized by a five-day work schedule.

Prior to 1994, the Company maintained an average of approximately 8.3
managers for each Restaurant. During 1994, management implemented a program to
better match the number of managers with the sales of a particular Restaurant.
As a result of this program, management has reduced the average number of
managers per Restaurant to approximately 5.5, thereby reducing the Company's
cost of labor as a percentage of sales.

Training and Development. The Company hires its personnel only after
extensive interviews, and seeks to recruit employees who share the Company's
commitment to high standards of customer service. Each new non-management
employee is initially trained for a minimum of seven to ten days or longer if
hired for a new Restaurant. Regardless of their background, new management
personnel undergo 90 to 120 days of training that includes gaining exposure to
all areas of Restaurant operations and attending training classes at the
Company's headquarters. The Company encourages a sense of personal commitment
from its employees at every level by providing extensive training, employee
development and competitive compensation. Management believes its personnel
policies result in a low rate of employee turnover.

18
<PAGE> 19

Restaurant Reporting Systems. The Company uses integrated management
information systems that include a point-of-sale system to facilitate the
movement of food and beverage orders between the customer areas and kitchen
operations, control cash, handle credit card authorizations, and gather data on
sales by menu item and hours worked by employees. In addition, Restaurant
systems have been developed to record accounts payable and inventories. Sales,
cash control, and summary payroll data are transferred to the Company's
headquarters nightly. Detailed payroll, accounts payable and inventory data are
transferred to the Company's headquarters weekly. These Restaurant information
systems provide data for posting directly to the Company's general ledger, to
other accounting subsystems and to other systems developed to evaluate
Restaurant performance.

The Restaurant system also provides hourly, daily and weekly reports for
each Restaurant manager to evaluate current performance and to plan for future
staffing and food production needs. The headquarters' systems also provide a
variety of management reports comparing current results to prior periods and
predetermined operating budgets. The results are reported to and reviewed with
Company management by accounting personnel. Included among the reports produced
are (i) daily reports of revenue and labor cost by Restaurant, (ii) weekly
summary profit and loss statement by Restaurant and an analysis of sales by menu
item, and (iii) monthly detailed profit and loss statements by Restaurant as
well as analytical reports on a variety of Restaurant performance
characteristics.

Purchasing. Purchasing specifications are determined by the Company's
corporate offices. Each Restaurant's management team determines the daily
quantities of food items needed and orders such quantities from major suppliers
at prices often negotiated directly with the Company's corporate offices. The
Company purchases its food products and supplies from a variety of national,
regional and local suppliers. The Company is not dependent upon any one supplier
and has not experienced significant delays in receiving its food and beverage
inventories, restaurant supplies or equipment. Management believes that the
diversity of the Company's menu enables its overall food costs to be less
dependent upon the price of a particular product. The Company also tests various
new products in an effort to obtain the highest quality products possible and to
be responsive to changing customer tastes.

Advertising and Marketing. The Company relies primarily on "word of mouth"
advertising to attract customers to its Restaurants. Management believes its
"100% Satisfaction Guarantee," made-from-scratch menu items and focus on
high-quality service generates a high level of repeat customers and new customer
visits. The Company focuses its limited advertising expenses on local promotions
and public relations efforts.

Hours of Operation. The Restaurants generally offer food service from
11:00 a.m. to 11:00 p.m., Sunday through Thursday, and 11:00 a.m. to midnight on
Friday and Saturday. All menu items (other than alcoholic beverages) are
available for carry-out.

COMPETITION

19
<PAGE> 20

GOVERNMENT REGULATION

The Company's business is subject to various federal, state and local
government regulations, including those relating to the sale of food and
alcoholic beverages. While the Company to date has not experienced an inability
to obtain or maintain any necessary governmental licenses, permits or approvals,
the failure to maintain food and liquor licenses could have a material adverse
effect on the Company's operating results. In addition, Restaurant operating
costs are affected by increases in the minimum hourly wage, unemployment tax
rates, sales taxes and similar costs over which the Company has no control.
Since many of the Company's employees are paid at rates based on the federal
minimum wage, increases in the minimum wage will result in an increase in the
Company's labor costs. Some states have set minimum wage requirements higher
than the federal level, and there are currently proposals in Congress to
increase the federal minimum wage. The Company is subject to "dram shop"
statutes in certain states which generally provide a person injured by an
intoxicated person with the right to recover damages from an establishment that
served alcoholic beverages to the intoxicated person. Difficulties or failure in
obtaining required licenses and approvals will result in delays in, or
cancellation of, the opening of new Restaurants. Although the Company has
satisfied restaurant, liquor and retail licensing for its existing Restaurants,
no assurance can be given that the Company will be able to maintain existing
approvals or obtain such further approvals at other locations. The development
and construction of additional Restaurants will be subject to compliance with
applicable zoning, land use and environmental regulations. There can be no
assurance that the Company will be able to obtain necessary variances or other
approvals on a cost effective and timely basis in order to construct and develop
Restaurants in the future.

EMPLOYEES

At March 31, 1996, the Company had approximately 3,520 employees, of which
approximately 3,240 were Restaurant employees, approximately 250 were Restaurant
management personnel, and approximately 30 were corporate staff personnel. None
of the Company's employees is represented by a labor union or a collective
bargaining unit. The Company considers relations with its employees to be
satisfactory.

MARKS

The Company has registered the service mark "Cooker Bar and Grille" and
Design with the United States Patent and Trademark Office. The Company
previously registered the service mark "The Southern Cooker -- Home Style
Restaurant & Bar" and Design with the United States Patent and Trademark Office
but did not renew the registration when its initial term expired. The Company
also uses the word Cooker as a service mark in combination with words and
designs other than those used in the registered marks. Other providers of
restaurant services use trade names that include the word "cooker." Some of
these users may resist the Company's use of its marks, as it expands into new
territories. However, in view of the extensive third party use of such trade
names, management believes that the Company should be in a reasonably good
position to resist adverse claims. This same extensive third party use means,
however, that the Company may in the future have difficulty blocking use by
others of marks incorporating the word "cooker." It is possible for prior users
to develop rights in such marks in their geographic territories and it would be
difficult for the Company to limit such use, even though the Company has a
federal registration.

20
<PAGE> 21

MANAGEMENT

The directors and executive officers of the Company, their ages and
positions are as follows:
<TABLE>
<CAPTION>

NAME AGE POSITION
---- --- --------
<S> <C> <C>
G. Arthur Seelbinder.................... 52 Chairman of the Board, Chief Executive
Officer and Director
Phillip L. Pritchard.................... 46 President, Chief Operating Officer and
Director
Glenn W. Cockburn....................... 40 Senior Vice President -- Operations and
Director
David C. Sevig.......................... 52 Vice President -- Chief Financial Officer
Margaret A. Epperson.................... 51 Secretary and Treasurer
Henry R. Hillenmeyer.................... 52 Director
David L. Hobson......................... 59 Director
Robin V. Holderman...................... 44 Director
David T. Kollat......................... 57 Director
Joseph E. Madigan....................... 63 Director
Margaret T. Monaco...................... 48 Director
</TABLE>

G. Arthur Seelbinder is one of the founders of the Company. He has served
as Chairman of the Board, Chief Executive Officer and a director of the Company
since 1986. From September 1989 to December 1994, Mr. Seelbinder served as
President of the Company. From 1984 to the time it was merged into the Company
in 1988, Mr. Seelbinder served as Chairman of the Board of Cooker Corporation, a
predecessor of the Company. Mr. Seelbinder also is the President and a director
of Financial Land Corporation, a real estate holding company.

Phillip L. Pritchard has served as President, Chief Operating Officer and a
director of the Company since December 1994. From March 1972 to December 1994,
Mr. Pritchard was employed by GMRI where he served in a number of positions,
including Executive Vice President, Operations, for GMRI's Red Lobster
restaurants and Executive Vice President, Operations, for GMRI's China Coast
restaurants.

Glenn W. Cockburn is one of the founders of the Company. Mr. Cockburn has
served as a director of the Company since October 1989 and as the Company's
Senior Vice President -- Operations since August 1991. From 1988 to August 1991,
Mr. Cockburn served as Vice President -- Food Services of the Company. From 1986
to the time it was merged into the Company in 1988, Mr. Cockburn served as Vice
President of Food Operations of Cooker Corporation.

David C. Sevig has served as Vice President -- Chief Financial Officer of
the Company since June 1995. From May 1994 to May 1995, Mr. Sevig was employed
by Blockbuster Entertainment Group in connection with its development of the
Block Party entertainment concept. From 1967 to March 1994, Mr. Sevig was
employed by GMRI where he served in a number of positions, including Vice
President -- Controller of international restaurants and Vice
President -- Controller of Red Lobster restaurants.

Margaret A. Epperson has served as Secretary and Treasurer of the Company
since 1986. Ms. Epperson also has served as the Secretary and Treasurer of
Financial Land Corporation since 1988.

Henry R. Hillenmeyer has served as a director of the Company since October
1994. Since March 1995, Mr. Hillenmeyer has served as the Chairman and Chief
Executive Officer of Skill Search Corporation, a resume database company. From
May 1988 to October 1994, Mr. Hillenmeyer served as Chairman and President of
Southern Hospitality Corporation, a Wendy's franchise operator based in
Nashville, Tennessee.

David L. Hobson has been a director of the Company since 1986. Mr. Hobson
has served as a member of the United States House of Representatives since
January 1991. From 1982 to December 1990, Mr. Hobson

21
<PAGE> 22

served as a member of the Ohio Senate and from November 1988 to December 1990
served as its president pro-tem. Mr. Hobson has been involved in the restaurant
industry for more than 18 years.

Robin V. Holderman has served as a director of the Company since 1986. Mr.
Holderman has served as President of Ruscilli Development Co., Ltd., a real
estate development company, since May 1995. From April 1994 to May 1995, Mr.
Holderman served as Manager of Industrial Development of Duke Realty
Investments, Inc., a real estate development company. From December 1992 to
April 1994, Mr. Holderman served as President of Conquest Corporation, a
commercial and industrial real estate development company located in Columbus,
Ohio, which he founded. From June 1990 to December 1992, Mr. Holderman served as
the Director of Development for the Columbus, Ohio office of the
Miller-Valentine Group, a commercial real estate development and construction
company based in Dayton, Ohio.

David T. Kollat has served as a director of the Company since 1988. Mr.
Kollat has served as Chairman of 22 Inc., a company specializing in research and
consulting for retailers and consumer goods manufacturers, since October 1987.
Mr. Kollat currently serves as a director for Consolidated Stores, Inc., The
Limited, Inc., Wolverine World Wide, Inc. and Audio Environment, Inc.

Joseph E. Madigan has served as a director of the Company since 1989. Mr.
Madigan has served as the President of Madigan Associates, a consulting firm,
since it was established in 1988 and has served as Chairman of the Board of
Cardinal Realty Services, Inc., a multi-family housing enterprise, since 1995.
Mr. Madigan currently serves as a director for Skyline Chili, Inc., a fast food
service restaurant and food production company.

Margaret T. Monaco has served as a director of the Company since April
1994. Ms. Monaco has served as a principal with Probus Advisors, a management
and financial consulting firm, since July 1993. From October 1987 to June 1993,
Ms. Monaco served as Vice President and Treasurer of The Limited, Inc. Ms.
Monaco currently serves as a director for Barnes & Noble, Inc. and Crown America
Realty Trust.

22
<PAGE> 23

PRINCIPAL SHAREHOLDERS

The following table sets forth, as of March 31, 1996, certain information
regarding the beneficial ownership of Common Shares for (i) each person known to
the Company to own beneficially more than 5% of the Common Shares, (ii) each
director, (iii) each of the executive officers whose compensation equaled or
exceeded $100,000 in 1995, and (iv) the Company's directors and executive
officers as a group.

<TABLE>
<CAPTION>
SHARES PERCENTAGE OF COMMON PERCENTAGE OF COMMON
BENEFICIALLY SHARES BENEFICIALLY SHARES BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED(1)(2) OWNED PRIOR TO THE OFFERING OWNED AFTER THE OFFERING
- ---------------------------- --------- --------------------------- ------------------------
<S> <C> <C> <C>
G. Arthur Seelbinder(3) 838,576(4)(5)(6) 11.7% 8.7%
Glenn W. Cockburn 280,778(4) 3.9% 2.9%
Henry R. Hillenmeyer 8,200(6)(7) * *
David L. Hobson 61,874(6) * *
David T. Kollat 117,943(6) 1.6% 1.2%
Robin V. Holderman 22,518(6) * *
Joseph E. Madigan 31,907(8) * *
Margaret T. Monaco 4,200 * *
Phillip L. Pritchard 131,910(4) 1.8% 1.4%
All directors and executive
officers as a group
(11 persons) 1,510,833(4)(6)(8) 21.1% 15.7%
<FN>
- ---------------
* Less than 1%.

(1) Unless otherwise indicated, the beneficial owner has sole voting and
dispositive power over these shares subject to the spousal rights, if any,
of the spouses of those beneficial owners who have spouses.

(2) Includes Common Shares subject to stock options outstanding and exercisable
as of March 31, 1996 or within 60 days thereafter: for Mr. Seelbinder,
95,013 Common Shares; for Mr. Cockburn, 75,934 Common Shares; for Mr.
Hillenmeyer, 1,200 Common Shares; for Mr. Hobson, 19,442 Common Shares; for
Mr. Holderman, 20,436 Common Shares; for Mr. Kollat, 44,311 Common Shares;
for Mr. Madigan, 29,243 Common Shares; for Ms. Monaco, 1,200 Common Shares;
for Mr. Pritchard, 37,500 Common Shares; and for all directors and executive
officers as a group, 325,897 Common Shares.

(3) Mr. Seelbinder's address is c/o the Company, 5500 Village Boulevard, West
Palm Beach, Florida 33407.

(4) Includes Common Shares beneficially owned through the Employee Stock
Ownership Plan ("ESOP"): for Mr. Cockburn, 4,843 Common Shares; for Mr.
Seelbinder, 5,441 Common Shares; for Mr. Pritchard, six Common Shares; and
for all directors and executive officers as a group, 12,505 Common Shares.

(5) Mr. Seelbinder has pledged 570,000 of his Common Shares to a commercial bank
as collateral for loans made to him. See "Risk Factors -- Note Guaranty and
Pledge of Common Shares" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources."

(6) The ESOP holds approximately 312,707 Common Shares, constituting
approximately 4.4% of the outstanding Common Shares as of March 31, 1996.
Margaret A. Epperson, Secretary and Treasurer of the Company, is the trustee
of the ESOP. Under certain circumstances, Ms. Epperson has investment power
over Common Shares held by the ESOP and may, to such extent, be deemed the
beneficial owner of such shares. Messrs. Kollat, Hobson, Hillenmeyer and
Holderman, as members of the Compensation Committee, have shared voting and,
in certain circumstances, investment power over unallocated Common Shares
held by the ESOP and may, to such extent, be deemed the beneficial owners of
such shares. Messrs. Kollat, Hobson, Hillenmeyer and Holderman disclaim
beneficial ownership of all Common Shares held by the ESOP.

(7) Includes 3,000 Common Shares owned of record by his spouse and children, as
to which beneficial ownership is disclaimed.

(8) Includes 1,332 Common Shares as to which Mr. Madigan shares voting and
investment power.
</TABLE>
23
<PAGE> 24

DESCRIPTION OF SECURITIES

The authorized capital stock of the Company consists of 30,000,000 Common
Shares, without par value, 300,000 Class A Junior Participating Preferred
Shares, without par value ("Class A Preferred Shares"), none of which is
outstanding, and 4,700,000 Class B Preferred Shares, without par value ("Class B
Preferred Shares"), none of which is outstanding. The following brief
description of the Company's capital stock is qualified in its entirety by
reference to its Amended and Restated Articles of Incorporation (the
"Articles"), Amended and Restated Code of Regulations (the "Regulations") and
the Rights Agreement, each of which are exhibits to the Registration Statement
of which this Prospectus forms a part. See "Available Information."

COMMON SHARES

The issued and outstanding Common Shares are, and the Common Shares
issuable in this offering will be, upon receipt of payment therefor and delivery
thereof, duly authorized, validly issued, fully paid and nonassessable. Holders
of Common Shares are entitled to one vote per share on all matters that properly
come before the shareholders, including the election of directors. The Common
Shares do not have cumulative voting rights and, therefore, a simple majority of
the Common Shares present and voting at a meeting of shareholders will be able
to elect all of the directors to be elected at such meeting. Holders of Common
Shares are entitled to receive dividends when, as and if declared by the Board
of Directors of the Company out of funds legally available therefor. Under the
Company's Credit Agreement, dividends may be declared only if the Company's net
income for that fiscal year exceeded $2,000,000 and such dividends, together
with all other dividends declared within such fiscal year, do not exceed 15% of
the Company's net income for the previous fiscal year. See "Dividend Policy." In
the event of the liquidation, dissolution or winding up of the affairs of the
Company, holders of Common Shares are entitled to receive ratably the net assets
of the Company available for distribution after the Company's creditors are
paid. Holders of Common Shares have no preemptive, redemption or conversion
rights.

SHAREHOLDER RIGHTS PLAN

Adoption of the Shareholder Rights Plan. On January 16, 1990, the Board of
Directors adopted a shareholder rights plan for the Company. The purpose of the
shareholder rights plan is to protect the interests of the Company's
shareholders if the Company is confronted with coercive or unfair takeover
tactics by encouraging third parties interested in acquiring the Company to
negotiate with the Board of Directors.

The shareholder rights plan is a plan by which the Company has distributed
rights ("Rights") to purchase (at the rate of 1.5 Rights per Common Share) one
hundredth of a Class A Preferred Share at an exercise price of $15 per Right.
The Rights are attached to Common Shares and are not exercisable until after 20%
of the Common Shares has been acquired. At this point, they would be separately
traded and exercisable. Upon certain events, including a third party obtaining
20% or more of the Common Shares, the Rights would "flip-in" (but not the Rights
of such substantial shareholder) and become Rights to acquire, upon payment of
the exercise price, Common Shares (or, in certain circumstances, other
consideration) with a value of twice the exercise price of the Right. If a third
party were to take certain action to acquire the Company, such as a merger, the
Rights would "flip-over" and entitle the holder to acquire shares of the
acquiring person with a value of twice the exercise price. The Rights are
redeemable by the Company at any time before they become exercisable for $.01
per Right and expire on January 16, 2000. The number of Rights per Common Share
originally was one, but such number was adjusted to reflect the impact of the
April 29, 1991 three-for-one share combination and the April 13, 1992
two-for-one share split, and the number of Rights per Common Share will be
adjusted in the future to reflect future splits and combinations of, and Common
Share dividends on, the Common Shares. The exercise price of the Rights will be
adjusted to reflect changes in the Class A Preferred Shares.

Class A Preferred Shares. The Class A Preferred Shares purchasable upon
exercise of the Rights will be redeemable at a price equal to the product of
66 2/3 multiplied by the current per share market price of the Common Shares at
the time of redemption, together with any accrued but unpaid dividends. Each
Class A Preferred Share will have a minimum preferential quarterly dividend of
$0.05 per share and will be entitled to

24
<PAGE> 25

an aggregate dividend of 66 2/3 times the dividend declared on the Common
Shares. In the event of liquidation, the holders of the Class A Preferred Shares
will receive a preferred liquidation payment equal to $0.10 per share and, after
the Common Shares have received a proportionate distribution, will share in the
remaining assets on a proportionate basis with the Common Shares. If dividends
on Class A Preferred Shares are in arrears in an amount equal to six quarterly
dividend payments, all holders of Preferred Shares of the Company (including
holders of Class A Preferred Shares) with dividends in arrears equal to such
amount, voting as a class, will have the right to elect two directors of the
Company. Shares of issued and outstanding Class A Preferred Shares will rank
senior to the Company's Common Shares but junior to any other outstanding class
of Preferred Shares of the Company as to both the payment of dividends and the
distribution of assets. Each Class A Preferred Share will have 66 2/3 votes on
all matters submitted to the shareholders. In the event of any merger,
consolidation or other transaction in which Common Shares are exchanged, each
Class A Preferred Share will be entitled to receive 66 2/3 times the amount
received per Common Share. It was the intention of the Company that each Class A
Preferred Share approximate 100 Common Shares as they existed on March 5, 1990,
the date the Rights were first distributed; therefore, the redemption price,
dividend, liquidation price and voting rights have been, and will in the future
be, adjusted to reflect splits and combinations of, and Common Share dividends
on, the Common Shares.

Anti-Takeover Effects. The Company's shareholder rights plan is designed
to deter coercive takeover tactics and otherwise to encourage persons interested
in acquiring the Company to negotiate with the Board of Directors. The
shareholder rights plan will confront a potential acquirer of the Company with
the possibility that the Company's shareholders will be able to substantially
dilute the acquirer's equity interest by exercising Rights to buy additional
shares in the Company or, in certain cases, shares in the acquirer, at a
substantial discount. The Board of Directors may redeem the Rights at a nominal
consideration if it considers the proposed acquisition of the Company to be in
the best interests of the Company and its shareholders. Accordingly, the
shareholder rights plan should not interfere with any merger or other business
combination which has been approved by the Board of Directors. Any plan or
arrangement which effectively requires an acquiring company to negotiate with
the Company's management may be characterized as increasing such management's
ability to maintain its position with the Company, including the approval of a
transaction which provides less value to the shareholders while providing
benefits to management.

CLASS B PREFERRED SHARES

The Board of Directors has the authority, without shareholder approval, to
issue Class B Preferred Shares having voting or conversion rights which could
adversely affect the voting power of holders of Common Shares. The issuance of a
series or class of Class B Preferred Shares could be used to hinder or delay a
takeover bid for the Company which might have the effect of inhibiting such bids
and decreasing the chance of the shareholders realizing a premium over market
price for their Common Shares as a result of such a takeover bid. The Company
does not have any current plan, arrangement or understanding to issue any of the
Class B Preferred Shares.

CERTAIN CHARTER PROVISIONS

Certain provisions of the Articles and the Regulations may have the effect
of deterring companies or other persons from making takeover bids for control of
the Company or may be used to hinder or delay a takeover bid thereby decreasing
the chance of the shareholders of realizing a premium over market price for
their Common Shares as a result of such bids. The relevant provisions of the
Articles are (a) a provision that requires the approval of holders of 75% of the
Company's voting shares and holders of a majority of the voting shares held by
disinterested persons for certain business combinations involving shareholders
who beneficially own more than 10% of the Company's outstanding shares and (b) a
provision authorizing the Company to purchase its capital shares by action of
the Board of Directors. The relevant provisions of the Regulations are (i) a
provision that divides the Board of Directors into three classes with staggered
three year terms, (ii) a provision that restricts the right of shareholders to
nominate directors from the floor at the annual meeting, (iii) a provision that
requires a vote of holders of 75% of the voting shares to remove a director,
(iv) a provision that requires the approval of an amendment to the Code of
Regulations by holders of 75% of the

25
<PAGE> 26

voting shares if it is not approved by at least three-fourths of the directors,
(v) a provision that restricts the right of shareholders to call a special
meeting of shareholders unless holders of 50% of the voting shares join in the
request for a call, and (vi) a provision that requires a vote of holders of 75%
of the voting shares to change the number of directors although such number may
be changed within the range of 3 to 15 without shareholder approval.

CERTAIN LAWS

The Company is subject to the Ohio Control Share Acquisition Law, which
requires that, subject to certain exemptions, any acquisition of shares having
one-fifth to one-third, one-third to one-half or a majority or more of the
Company's voting power be made only with the prior authorization of the holders
of a majority of the voting shares present at the meeting held to obtain such
authorization and a majority of the holders of shares who are disinterested. The
Company is also subject to Chapter 1704 of the Ohio Revised Code. Under Chapter
1704, the Company may not engage in a Chapter 1704 transaction (a term that
broadly includes mergers, asset and stock sales and other financing
transactions) with an interested shareholder (a person or entity that controls
10% or more of the Company's voting power) for three years after such
shareholder became an interested shareholder unless the directors of the Company
approve the transaction or the purchase of shares by the interested shareholder
in advance. Chapter 1704 transactions between an interested shareholder that has
held such shares for three years and the Company that were not approved by the
directors in advance are subject to additional shareholder approval requirements
or fairness criteria. The provisions of Chapter 1704 may deter or prevent
takeover bids that have not been approved in advance by the directors and may
decrease the chances of shareholders realizing a premium over market price for
their Common Shares as the result of such a takeover bid.

TRANSFER AGENT AND RIGHTS AGENT

First Union National Bank of North Carolina, Two First Union Center, 12th
Floor, Charlotte, North Carolina 28288-1154 is the transfer agent for the Common
Shares and the rights agent for the shareholder rights plan.

26
<PAGE> 27

UNDERWRITING

Montgomery Securities and Equitable Securities Corporation (the
"Underwriters") have severally agreed subject to the terms and conditions
contained in the underwriting agreement (the "Underwriting Agreement") by and
among the Company and the Underwriters to purchase from the Company the number
of Common Shares indicated below opposite their respective names at the public
offering price less the underwriting discount set forth on the cover page of
this Prospectus. The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters are committed to purchase all of the Common Shares if they purchase
any.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER COMMON SHARES
---------------------------------------------------------------- -------------
<S> <C>
Montgomery Securities........................................... 1,250,000
Equitable Securities Corporation................................ 1,250,000
-------------
Total................................................. 2,500,000
==============
</TABLE>

The Company has been advised that the Underwriters propose initially to
offer the Common Shares to the public on the terms set forth on the cover page
of this Prospectus. The Underwriters may allow to selected dealers a concession
of not more than $0.40 per share; and the Underwriters may allow, and such
dealers may reallow, a concession of not more than $0.10 per share to certain
other dealers. After the offering, the public offering price and other selling
terms may be changed by the Underwriters. The Common Shares are offered subject
to receipt and acceptance by the Underwriters and to certain other conditions,
including the right to reject orders in whole or in part.

The Company has granted an option to the Underwriters, exercisable during
the 30-day period after the date of this Prospectus, to purchase up to a maximum
of 375,000 additional Common Shares to cover over-allotments, if any, at the
same price per share as the initial shares to be purchased by the Underwriters.
To the extent that the Underwriters exercise this option, the Underwriters will
be committed subject to certain conditions to purchase such additional shares in
approximately the same proportion as set forth in the above table. The
Underwriters may purchase such shares only to cover over-allotments made in
connection with this offering.

The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act of 1933, as amended, or will contribute to payments the
Underwriters may be required to make in respect thereof.

The Company's directors and executive officers have all agreed that for a
period of 120 days from the date of this Prospectus they will not offer, sell or
otherwise dispose of any of their Common Shares or options to acquire Common
Shares without the prior written consent of Montgomery Securities, subject to
certain limited exceptions. The Company has agreed not to sell any Common Shares
for a period of 120 days from the date of this Prospectus without the prior
written consent of Montgomery Securities, except that the Company may issue
without consent Common Shares upon the exercise of outstanding stock options or
the conversion of outstanding Convertible Debentures.

27
<PAGE> 28

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed with the Commission by the Company are
incorporated by reference in this Prospectus: (1) the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995 as amended by Amendment
Number 1 thereto on Form 10-K/A(Commission File Number 1-13044); (2) the
Company's current report on Form 8-K filed with the Commission on January 12,
1996; (3) the description of the Common Shares contained in the Company's
registration statement on Form 8-A (Commission File Number 1-13044) and the
description of the Rights contained in the Company's registration statement on
Form 8-A (Commission File Number 1-13044); and (4) all documents filed by the
Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), subsequent to the date of this
Prospectus and prior to the termination of the offering of the Common Shares
described herein.

Any statement contained in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any other subsequently filed document which
also is or is deemed to be incorporated by reference in this Prospectus modifies
or supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.

The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any and all of the information that has been incorporated herein (not including
exhibits to information unless such exhibits are specifically incorporated by
reference into the information incorporated herein). Requests should be directed
to Cooker Restaurant Corporation, 5500 Village Boulevard, West Palm Beach, FL
33407; Attention: Margaret A. Epperson, Secretary; telephone (407) 615-6000.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Copies of such reports, proxy statements and other information can be inspected
and copied at prescribed rates at the public reference facilities maintained by
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the following Regional Offices of the Commission: 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511; and 7 World Trade Center, Suite 1300,
New York New York 10048. Copies of such material may be obtained at prescribed
rates from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. The Company's Common Shares are listed on The New
York Stock Exchange. Reports, proxy statements and other information concerning
the Company may be inspected at the offices of The New York Stock Exchange, 20
Broad Street, New York, New York 10005.

The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended,
with respect to the Common Shares offered hereby. This Prospectus, which is a
part of such Registration Statement, does not contain all of the information set
forth in the Registration Statement and the exhibits and schedules thereto,
certain parts of which have been omitted in accordance with the rules and
regulations of the Commission. Statements contained in this Prospectus as to the
contents of any contract or other document referred to are not necessarily
complete, and in each instance, reference is made to the copy of such contract
or other document filed as an exhibit or incorporated by reference to the
Registration Statement of which this Prospectus forms a part. Each such
statement is qualified in all respects by such reference. For further
information with respect to the Company and the Common Shares offered hereby,
reference is made to the Registration Statement and the exhibits and schedules
thereto. Copies of the Registration Statement and the exhibits and schedules
thereto can be inspected, and copied at prescribed rates, at the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549.

28
<PAGE> 29

LEGAL MATTERS

The validity of the securities offered hereunder will be passed upon for
the Company by Schwartz, Warren & Ramirez a Limited Liability Company, Columbus,
Ohio and for the Underwriters by Locke Purnell Rain Harrell (A Professional
Corporation), Dallas, Texas.

EXPERTS

The financial statements as of December 31, 1995 and January 1, 1995 and
for each of the three fiscal years in the period ended December 31, 1995
included in this Prospectus have been so included in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.

29
<PAGE> 30

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
Report of Independent Accountants................................................. F-2
Balance Sheet at January 1, 1995 and December 31, 1995............................ F-3
Statement of Income for the Fiscal Years ended January 2, 1994, January 1, 1995
and December 31, 1995........................................................... F-4
Statement of Changes in Shareholders' Equity for the Fiscal Years ended January 2,
1994, January 1, 1995 and December 31, 1995..................................... F-5
Statement of Cash Flows for the Fiscal Years ended January 2, 1994, January 1,
1995 and December 31, 1995...................................................... F-6
Notes to Financial Statements..................................................... F-7
Balance Sheet at December 31, 1995 and March 31, 1996 (unaudited)................. F-15
Statement of Income for the Three Month Period ended April 2, 1995 and March 31,
1996 (unaudited)................................................................ F-16
Statement of Cash Flows for the Three Month Period ended April 2, 1995 and March
31, 1996 (unaudited)............................................................ F-17
</TABLE>

F-1
<PAGE> 31

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders
of Cooker Restaurant Corporation

In our opinion, the accompanying balance sheet and the related statements of
income, of changes in shareholders' equity and of cash flows present fairly, in
all material respects, the financial position of Cooker Restaurant Corporation
(the Company) at January 1, 1995 and December 31, 1995, and the results of its
operations and its cash flows for each of the three fiscal years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.

Price Waterhouse LLP

Columbus, Ohio

January 29, 1996

F-2
<PAGE> 32

COOKER RESTAURANT CORPORATION

BALANCE SHEET

<TABLE>
<CAPTION>
FISCAL YEARS ENDED
-----------------------------
JANUARY 1, DECEMBER 31,
ASSETS 1995 1995
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................... $ 2,087 $ 1,299
Inventory................................................... 830 914
Preoperational costs........................................ 678 302
Prepaid expenses and other current assets................... 739 511
------------ ------------
Total current assets................................ 4,334 3,026
Property and equipment........................................ 64,481 78,127
Other assets.................................................. 2,037 2,028
------------ ------------
$ 70,852 $ 83,181
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................ $ 2,604 $ 2,421
Accrued liabilities......................................... 4,433 5,543
Income taxes payable........................................ 633 783
Deferred income taxes....................................... 79 79
------------ ------------
Total current liabilities........................... 7,749 8,826
Long-term debt................................................ 28,600 35,976
Deferred income taxes......................................... 595 433
------------ ------------
Total liabilities................................... 36,944 45,235
------------ ------------
Shareholders' equity:
Common shares -- without par value; authorized,
30,000,000 shares; issued 7,651,000 and 7,663,000 shares
at January 1, 1995 and December 31, 1995, respectively... 26,003 26,082
Retained earnings........................................... 13,939 18,013
Treasury stock, at cost, 500,000 and 513,000 shares
at January 1, 1995 and December 31, 1995, respectively... (6,034) (6,149)
Commitments (Note 13)
------------ ------------
33,908 37,946
------------ ------------
$ 70,852 $ 83,181
============ ============
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-3
<PAGE> 33

COOKER RESTAURANT CORPORATION

STATEMENT OF INCOME

<TABLE>
<CAPTION>
FISCAL YEARS ENDED
------------------------------------------
JANUARY 2, JANUARY 1, DECEMBER 31,
1994 1995 1995
------------ ------------ ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Sales.............................................. $ 66,688 $ 84,169 $ 91,678
------------ ------------ ------------
Cost of sales:
Food and beverages............................... 18,780 24,193 26,218
Labor............................................ 23,384 31,389 31,977
Restaurant operating expenses.................... 10,540 13,549 15,065
Restaurant depreciation and amortization......... 4,063 5,030 3,957
------------ ------------ ------------
56,767 74,161 77,217
------------ ------------ ------------
Restaurant operating income........................ 9,921 10,008 14,461
------------ ------------ ------------
Other expenses (income):
General and administrative....................... 3,710 4,532 5,785
Interest expense................................. 1,105 1,787 1,848
Gain on sale of property......................... -- -- (305)
Interest and other income........................ (409) (72) (30)
------------ ------------ ------------
4,406 6,247 7,298
------------ ------------ ------------
Income before income taxes and extraordinary
item............................................. 5,515 3,761 7,163
Provision for income taxes before extraordinary
item............................................. 2,021 1,280 2,731
------------ ------------ ------------
Income before extraordinary item................... 3,494 2,481 4,432
Extraordinary gain, net of income taxes............ -- 484 --
------------ ------------ ------------
Net income......................................... $ 3,494 $ 2,965 $ 4,432
============ ============ ============
Earnings per common share:
Before extraordinary item........................ $ 0.45 $ 0.34 $ 0.60
Extraordinary item............................... -- 0.07 --
------------ ------------ ------------
Total.................................... $ 0.45 $ 0.41 $ 0.60
============ ============ ============
Weighted average number of common shares and common
equivalent shares outstanding.................... 7,846 7,254 7,387
============ ============ ============
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-4
<PAGE> 34

COOKER RESTAURANT CORPORATION

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON SHARES TREASURY STOCK
----------------- RETAINED -----------------
SHARES AMOUNTS EARNINGS SHARES AMOUNTS TOTAL
------ ------- -------- ------ ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Balance, January 3, 1993.......... 7,591 $25,393 $ 8,226 -- $ -- $33,619
Purchase of treasury stock...... -- -- -- 105 (1,347) (1,347)
Issuance of common shares under
stock option plans........... 55 338 -- -- -- 338
Tax benefits of stock options
exercised.................... -- 244 -- -- -- 244
Dividends paid $.05 per share... -- -- (380) -- -- (380)
Net income...................... -- -- 3,494 -- -- 3,494
------ ------- -------- ------ ------- -------
Balance, January 2, 1994.......... 7,646 25,975 11,340 105 (1,347) 35,968
Purchase of treasury stock...... -- -- -- 395 (4,687) (4,687)
Issuance of common shares under
stock option plans........... 5 22 -- -- -- 22
Tax benefits of stock options
exercised.................... -- 6 -- -- -- 6
Dividends paid $.05 per share... -- -- (366) -- -- (366)
Net income...................... -- -- 2,965 -- -- 2,965
------ ------- -------- ------ ------- -------
Balance, January 1, 1995.......... 7,651 26,003 13,939 500 (6,034) 33,908
Addition to treasury stock...... -- -- -- 13 (115) (115)
Issuance of common shares under
stock option plans........... 12 52 -- -- -- 52
Tax benefits of stock options
exercised.................... -- 27 -- -- -- 27
Dividends paid $.05 per share... -- -- (358) -- -- (358)
Net income...................... -- -- 4,432 -- -- 4,432
------ ------- -------- ------ ------- -------
Balance, December 31, 1995........ 7,663 $26,082 $18,013 513 $(6,149) $37,946
====== ======== ======== ====== ======== =======
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-5
<PAGE> 35

COOKER RESTAURANT CORPORATION

STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
FISCAL YEARS ENDED
------------------------------------------
JANUARY 2, JANUARY 1, DECEMBER 31,
1994 1995 1995
------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income....................................... $ 3,494 $ 2,965 $ 4,432
Adjustments to reconcile net income to net cash
providing by operating activities:
Depreciation and amortization................. 4,482 5,464 4,375
Gain on sale of property...................... -- -- (305)
Gain on repurchase of debentures, net of
income taxes................................ -- (484) (23)
(Increase) in inventory....................... (207) (192) (84)
(Increase) in preoperational costs............ (2,441) (1,348) (444)
Decrease (increase) in prepaid expenses and
other current assets........................ (756) (327) 237
(Increase) decrease in other assets........... 130 (131) (276)
Increase in accounts payable.................. (336) 683 460
Increase in accrued liabilities............... 985 475 1,110
Increase in income taxes payable.............. 752 625 175
Decrease (increase) in deferred income
taxes....................................... 100 (159) (162)
------------ ------------ ------------
Net cash provided by operating activities..... 6,203 7,571 9,495
------------ ------------ ------------
Cash flows from investing activities:
Purchases of property and equipment.............. (23,627) (11,318) (17,200)
Proceeds from sales of property and equipment.... 108 206 459
Proceeds from sales of short-term investments.... 18,628 749 --
Advances to related party........................ (375) -- --
Payments from related party...................... 375 -- --
------------ ------------ ------------
Net cash used in investing activities......... (4,891) (10,363) (16,741)
------------ ------------ ------------
Cash flows from financing activities:
Proceeds from borrowings......................... -- 9,300 8,811
Repurchase of debentures......................... -- (1,200) (1,180)
Redemption of debentures......................... -- (975) (893)
Exercise of stock options........................ 337 22 78
Purchases of treasury stock...................... -- (6,034) --
Dividends paid................................... (379) (366) (358)
------------ ------------ ------------
Net cash provided by (used in) financing
activities.................................. (42) 747 6,458
------------ ------------ ------------
Net increase (decrease) in cash and cash
equivalents...................................... 1,270 (2,045) (788)
Cash and cash equivalents at beginning of year..... 2,862 4,132 2,087
------------ ------------ ------------
Cash and cash equivalents at end of year........... $ 4,132 $ 2,087 $ 1,299
============ ============ ============
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-6
<PAGE> 36

COOKER RESTAURANT CORPORATION

NOTES TO THE FINANCIAL STATEMENTS

1. DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cooker Restaurant Corporation (the Company) owns and operates 37
restaurants in Tennessee, Ohio, Indiana, Kentucky, Michigan, Florida, Georgia,
North Carolina, Virginia, and Maryland which have been developed under the
Cooker concept.

Fiscal year. The Company's fiscal year ends on the Sunday closest to
December 31 of each year. Fiscal years 1993, 1994 and 1995 consisted of 52
weeks.

Cash and cash equivalents. Cash and cash equivalents consist of cash on
hand and in banks and credit card receivables. Credit card receivables are
considered cash equivalents because of their short collection period. The
carrying amount of credit card receivables approximates fair value.

Inventories. Inventories consist primarily of food and beverages and are
stated at the lower of cost or market. Cost is determined by the first-in,
first-out (FIFO) method.

Preoperational costs. Preoperational costs consist primarily of costs for
employee training and relocation and supplies incurred in connection with the
opening of each restaurant. These costs are accumulated to the date the
restaurant is opened and are amortized on the straight-line method over one year
commencing from that date. Prior to fiscal 1993, preoperational costs were
amortized on the straight-line method over three years. This change in estimate
decreased fiscal 1993 net income by $611,000 or $0.08 per share. Accumulated
amortization of preoperational costs was $711,000 and $136,000 at January 1,
1995 and December 31, 1995, respectively.

Property and equipment. Property and equipment, including capital
improvements, are recorded at cost. Depreciation is computed by the
straight-line method over the estimated useful lives of the assets. Leasehold
improvements are amortized using the straight-line method over the shorter of
the useful life of the improvements or the remaining lease term.

Maintenance and repairs are charged directly to expense as incurred. When
property and equipment are sold or otherwise disposed of, the related cost and
accumulated depreciation are removed from the accounts and the resulting gains
or losses are reported in operations.

Interest is capitalized primarily in connection with the construction of
new restaurants. Capitalized interest is amortized over the asset's estimated
useful life. Interest costs of $429,000, $291,000 and $291,000 were capitalized
in fiscal 1993, 1994 and 1995, respectively.

Deferred financing costs. Deferred financing costs are being amortized over
the term of the related debt.

Prepaid lease. Prepaid lease represents prepayment of a long-term land
lease and is being amortized over the lease term.

Financial instruments. The carrying amounts of financial instruments,
including cash and cash equivalents, accounts payable and other current
liabilities approximate their estimated fair values. The carrying amount of
borrowings under the Amended and Restated Loan Agreement (see Note 5)
approximates fair value at December 31, 1995. The fair value of the convertible
subordinated debentures is determined using discounted future cash flows based
on similar types of borrowing arrangements. At December 31, 1995, the carrying
amount and fair value of the convertible subordinated debentures are $17,870,000
and $15,569,000, respectively.

Income taxes. Income taxes are accounted for under the liability method in
accordance with Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes.

Earnings per share. Earnings per share is calculated using the weighted
average number of common shares outstanding including common share equivalents,
which consist of stock options. The convertible subordinated debentures have not
been included as common share equivalents due to their antidilutive effect.

F-7
<PAGE> 37

COOKER RESTAURANT CORPORATION

NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

Use of estimates. 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.

Reclassifications. Certain fiscal 1993 and 1994 amounts have been
reclassified to conform with fiscal 1995 presentations.

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
JANUARY 1, DECEMBER 31,
1995 1995
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Land......................................... $ 17,512 $ 19,595
Buildings and leasehold improvements......... 39,135 43,097
Furniture, fixtures and equipment............ 15,961 16,836
Construction in progress..................... 858 11,013
Land held for sale........................... 1,089 882
-------- --------
74,555 91,423
Less accumulated depreciation and
amortization............................... (10,074) (13,296)
-------- --------
$ 64,481 $ 78,127
======== ========
</TABLE>

3. OTHER ASSETS

Other assets consist of the following:

<TABLE>
<CAPTION>
JANUARY 1, DECEMBER 31,
1995 1995
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Deferred financing costs, net of accumulated
amortization of $465,000 and $573,000...... $ 753 $ 764
Prepaid lease, net of accumulated
amortization of $33,000 and $46,000........ 617 643
Advances to Employee Stock Ownership Plan.... 298 270
Liquor licenses, net of accumulated
amortization of $73,000 and $90,000........ 224 209
Other........................................ 145 142
-------- --------
$ 2,037 $ 2,028
======== ========
</TABLE>

F-8
<PAGE> 38

COOKER RESTAURANT CORPORATION

NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

4. ACCRUED LIABILITIES

Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
JANUARY 1, DECEMBER 31,
1995 1995
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Salaries and wages........................... $ 2,274 $ 3,221
Gift certificates payable.................... 567 608
Sales tax payable............................ 442 466
Property taxes............................... 485 298
Other........................................ 665 950
---------- ----------
$ 4,433 $ 5,543
========== ==========
</TABLE>

5. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
JANUARY 1, DECEMBER 31,
1995 1995
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Convertible subordinated debentures.......... $ 19,300 $ 17,870
Revolving line of credit..................... 9,300 18,106
---------- ----------
$ 28,600 $ 35,976
========== =========
</TABLE>

The convertible subordinated debentures (the "Debentures") mature October
1, 2002. The Debentures bear interest at 6.75% which is payable quarterly on the
first day of each January, April, July and October. The Debentures are
convertible at any time before maturity, unless previously redeemed, into common
shares of the Company at a conversion price of $21.5625 per share, subject to
adjustment for stock splits. The Debentures are subordinated to all existing and
future Senior Indebtedness of the Company as defined in the indenture relating
to the Debentures.

At the holder's option, the Company is obligated to redeem debentures
tendered during the period from August 1 through October 1 of each year,
commencing August 1, 1994, at 100% of their principal amount plus accrued
interest, subject to an annual aggregate maximum (excluding the redemption
option on the death of the holder) of $1,150,000. During fiscal years 1994 and
1995, the Company redeemed the annual aggregate maximum amount required by the
holder's option. The Company is also required to redeem debentures at 100% of
their principal plus accrued interest in the event of death of a debenture
holder up to a maximum of $25,000 per year per deceased debenture holder. During
fiscal years 1994 and 1995, the Company redeemed debentures subject to this
provision of $50,000 and $30,000, respectively.

The Debentures are redeemable at any time on or after October 1, 1994 at
the option of the Company, in whole or in part, at declining premiums. In
addition, upon the occurrence of certain changes of control of the Company, the
Company is obligated to purchase Debentures at the holder's option at par plus
accrued interest.

In December 1994, the Company recorded an extraordinary gain of $734,000
($484,000 after taxes) in connection with the repurchase of debentures in the
principal amount of $2,500,000. In December 1995, the Company repurchased
debentures in the principal amount of $250,000 resulting in a gain of $23,000.
These transactions were financed through funds available under the revolving
line of credit.

On December 22, 1995, the Company entered into a Revolving/Term Loan under
an Amended and Restated Loan Agreement (the Agreement) with a bank for
borrowings up to $33,000,000. Borrowings under

F-9
<PAGE> 39

COOKER RESTAURANT CORPORATION

NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

the Agreement may be used for general working capital purposes and costs
incurred in expansion of the restaurant business. The Agreement is secured by
certain properties owned by the Company. Beginning January 1, 1998, borrowing
availability will be reduced quarterly by a maximum of $1,650,000. Borrowings
are due December 31, 1998.

Interest, payable quarterly, is at the Company's option at LIBOR plus 1.25%
up to LIBOR plus 2.00% or prime up to prime plus 0.50%, based on a financial
ratio as defined in the Agreement. Interest on borrowings at December 31, 1995
ranged from 7.43% to 8.75%.

The Agreement contains certain restrictive covenants, including maintenance
of a minimum tangible net worth and fixed charge coverage ratio and limitations
on indebtedness, stock acquisitions, encumbrances and new restaurant expansion.
In addition, provided that net income of the prior year exceeds $2,000,000,
dividends can be declared but cannot exceed 15% of the prior year's net income.

6. SHAREHOLDERS' EQUITY

The Company has authorized 5,000,000 shares of Class A participating
preferred stock, none of which have been issued.

In January 1990, the Board of Directors approved a Shareholder Rights Plan,
as amended, which provides that, in the event that a third party purchases 20%
or more of total outstanding stock of the company, a dividend distribution of
one and one-half rights for each outstanding common share will be made. These
rights expire ten years from date of issuance, if not earlier redeemed by the
Company, and entitle the holder to purchase, under certain conditions, preferred
shares or common shares of the Company. As of December 31, 1995, approximately
10,725,000 rights were outstanding.

7. INCOME TAXES

The provision for income taxes for the following fiscal years then ended
consists of:

<TABLE>
<CAPTION>
JANUARY 2, JANUARY 1, DECEMBER 31,
1994 1995 1995
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Current taxes:
Federal................................ $ 1,453 $ 1,037 $ 2,412
State and local........................ 468 402 481
---------- ---------- ----------
1,921 1,439 2,893
Deferred taxes........................... 100 (159) (162)
---------- ---------- ----------
Provision for income taxes before
extraordinary item..................... 2,021 1,280 2,731
Provision for income taxes on
extraordinary item..................... -- 249 --
---------- ---------- ----------
Provision for income taxes............... $ 2,021 $ 1,529 $ 2,731
========== ========== ==========
</TABLE>

F-10
<PAGE> 40

COOKER RESTAURANT CORPORATION

NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

A reconciliation of the differences between income taxes calculated at the
Federal statutory tax rate and the provision for income taxes before
extraordinary item is as follows:

<TABLE>
<CAPTION>
FISCAL YEARS ENDED
--------------------------------------
JANUARY 2, JANUARY 1, DECEMBER 31,
1994 1995 1995
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Income tax expense on income before
extraordinary item based on the Federal
statutory rate......................... $ 1,875 $ 1,279 $ 2,435
State taxes, net of Federal tax
benefit................................ 258 265 317
Reserve for tax examination.............. -- -- 205
FICA tip tax credit...................... -- (250) (376)
Tax-exempt income and other.............. (112) (14) 150
---------- ---------- ----------
$ 2,021 $ 1,280 $ 2,731
========== ========== ==========
</TABLE>

Deferred income taxes are recorded based upon the difference between the
book and tax bases of assets and liabilities, primarily property and equipment,
preoperational costs and accrued liabilities. Deferred tax assets at January 1,
1995 and December 31, 1995 were $137,000 and $373,000, respectively. Deferred
tax liabilities at January 1, 1995 and December 31, 1995 were $811,000 and
$885,000, respectively.

8. EMPLOYEE STOCK OWNERSHIP PLAN

In 1989, the Company established an Employee Stock Ownership Plan (the
"ESOP" or the "Plan"). All employees who have reached the age of 21 years are
participants in the Plan. Participants vest in the Plan based upon a graduated
schedule providing 20% after three years of service and each year thereafter,
with full vesting after seven years.

The amount and frequency of contributions to the Plan are at the discretion
of the Company. Contributions of $73,000 were made to the ESOP during fiscal
1995. No contributions were made during fiscal 1994 and 1993. Dividends on
shares held by the ESOP are used to reduce the Company's receivable from the
ESOP prior to allocation to ESOP participant accounts. Shares forfeited due to
participant withdrawals from the ESOP during fiscal 1995 will be reallocated to
remaining participants as of the end of the plan year, as was done for shares
forfeited due to participant withdrawals from the ESOP during fiscal 1994.

As of January 1, 1995, and December 31, 1995, the ESOP owns 363,000 and
335,000, respectively, of the Company's common shares, all of which are
allocated to eligible participants.

9. STOCK OPTION PLANS

The Company has employee stock option plans adopted in 1988 (1988 Plan) and
1992 (1992 Plan). Under these plans, employees and nonmanagement directors are
granted stock options and stock appreciation rights as determined by a committee
appointed by the Board of Directors (the Committee). Each option permits the
holder to purchase one share of common stock of the Company at the stated
exercise price up to ten years from the date of grant. The stated exercise price
is the market value of the stock on the date of grant. Options vest at a rate of
25% per year. The Company has reserved 620,000 and 600,000 common shares for
issuance to employees and 73,000 and 200,000 for issuance to nonmanagement
directors under the 1988 Plan and 1992 Plan, respectively.

F-11
<PAGE> 41

COOKER RESTAURANT CORPORATION

NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

Changes in the number of shares under the stock option plans are summarized
as follows:

<TABLE>
<CAPTION>
OPTIONS PRICE
-------- -------------
<S> <C> <C>
Balance at January 3, 1993.......................... 536,000 $ 4.03-$17.75
Granted........................................ 282,000 17.75- 21.75
Canceled....................................... (1,000) 4.03- 4.41
Exercised...................................... (55,000) 4.03- 11.19
-------- -------------
Balance at January 2, 1994.......................... 762,000 4.03- 21.75
Granted........................................ 772,000 6.63- 12.88
Canceled....................................... (634,000) 4.03- 21.75
Exercised...................................... (6,000) 4.03- 4.41
-------- -------------
Balance at January 1, 1995.......................... 894,000 4.03- 21.75
Granted........................................ 65,000 6.75- 11.00
Canceled....................................... (17,000) 6.75- 11.19
Exercised...................................... (11,000) 4.03- 7.63
-------- -------------
Balance at December 31, 1995........................ 931,000 $ 4.03-$21.75
======== ============
</TABLE>

At December 31, 1995, options were exercisable to purchase 417,000 common
shares.

During fiscal 1994, the Committee changed the exercise price of certain
options through the authorization of the surrender and cancellation of 541,000
options and the reissuance of 398,000 options under the 1988 and 1992 Plans. The
remaining 143,000 canceled options were made available for subsequent
reissuance.

10. LEASES

The Company leases buildings for certain of its restaurants under long-term
operating leases which expire over the next twenty-five years. In addition to
the minimum rental for these leases, the Company also pays, in certain
instances, additional rent based on a percentage of sales, and its pro rata
share of the lessor's direct operating expenditures. Several of the leases
provide for option renewal periods and scheduled rent increases. Rental expense
totaled $1,394,000, $1,637,000 and $1,378,000, including percentage rent of
$245,000, $247,000 and $262,000 for the fiscal years ended January 2, 1994,
January 1, 1995 and December 31, 1995, respectively.

Minimum rental commitments for noncancelable leases as of December 31, 1995
are as follows:

<TABLE>
<CAPTION>
FISCAL YEAR ENDING AMOUNT
- ----------------------------------- --------------
(IN THOUSANDS)
<S> <C>
1996.......................... $ 1,494
1997.......................... 1,498
1998.......................... 1,519
1999.......................... 1,545
2000.......................... 1,462
Thereafter.................... 14,761
-----------
$ 22,279
===========
</TABLE>

11. SUPPLEMENTAL CASH FLOW INFORMATION

During 1995, the Company received $115,000 of its common stock from the
ESOP for partial repayment of the advances to the ESOP. The common stock
received was recorded as treasury stock.

F-12
<PAGE> 42

COOKER RESTAURANT CORPORATION

NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

During fiscal 1993, the Company acquired treasury stock of $1,347,000 which
was included in accounts payable at January 2, 1994 and was paid in fiscal 1994.
Also, as described in Note 5, $643,000 related to the repurchase of Debentures
was included in accounts payable at January 1, 1995 and was paid during 1995.

Cash paid for interest for fiscal 1993, 1994 and 1995 was $1,007,000,
$2,175,000 and $1,489,000, respectively.

Cash paid for taxes for fiscal 1993, 1994 and 1995 was $1,169,000, $895,000
and $2,581,000, respectively.

12. RELATED PARTIES

During October 1993, the Company advanced $375,000 to the Chairman of the
Board of Directors (the Chairman). This advance bore interest at 7%. Principal
and interest were repaid in December 1993 and March 1994, respectively.

Effective March 9, 1994, the Board of Directors (the Board) authorized the
Company to execute a Guaranty and Suretyship Agreement whereby the Company
guaranteed $5,000,000 of personal indebtedness of the Chairman. This
indebtedness is secured by a pledge of 570,000 common shares owned by the
Chairman. The guaranty provides that the bank will sell the pledged shares and
apply the proceeds thereof to the loan prior to calling on the Company for its
guaranty. A fee of .25% per annum is charged on the amount of the guarantee. On
June 27, 1995, the Board requested the Chairman to refinance his personal
indebtedness with another bank. On December 27, 1995, the Board authorized the
Company to reimburse the Chairman $42,000 for refinancing costs incurred in
executing the request. The Company does not consider it necessary to provide for
a potential loss related to the guarantee in the financial statements at this
time.

13. SUBSEQUENT EVENT

In January 1996, the Company borrowed an additional $7,050,000 on its
revolving line of credit to finance the purchase of land and buildings for which
commitments existed at December 31, 1995.

F-13
<PAGE> 43

COOKER RESTAURANT CORPORATION

NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

14. QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly financial data for fiscal 1994 and 1995 are summarized as
follows:

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
1994 QUARTER QUARTER QUARTER QUARTER
---------------------------------------- ------- ------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Sales................................... $20,120 $20,830 $21,226 $21,993
Restaurant operating income(a).......... 2,473 2,159 2,452 2,924
Income before income taxes and
extraordinary item.................... 1,003 814 820 1,124
Extraordinary gain (net of tax)......... -- -- -- 484
Net income.............................. 652 554 549 1,210
Earnings per common share before
extraordinary item.................... $0.09 $0.08 $0.07 $0.10
Earnings per common share from
extraordinary gain.................... -- -- -- $0.07
Earnings per common share............... $0.09 $0.08 $0.07 $0.17
</TABLE>

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
1995 QUARTER QUARTER QUARTER QUARTER
---------------------------------------- ------- ------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Sales................................... $22,899 $22,694 $22,758 $23,327
Restaurant operating income(a).......... 3,556 3,547 3,615 3,743
Income before income taxes.............. 1,806 1,723 1,733 1,901
Net income.............................. 1,005 1,102 1,109 1,216
Earnings per common share............... $0.14 $0.15 $0.15 $0.16
</TABLE>

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

(a) Sales less food and beverages, labor, restaurant operating expenses and
depreciation and amortization.

F-14
<PAGE> 44

COOKER RESTAURANT CORPORATION

BALANCE SHEET
(UNAUDITED)

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
ASSETS 1995 1996
------------ ---------
(IN THOUSANDS)
<S> <C> <C>
Current assets:
Cash and cash equivalents.......................................... $ 1,299 $ 1,071
Inventory.......................................................... 914 918
Preoperational costs............................................... 302 271
Prepaid expenses and other current assets.......................... 511 610
-------- -------
Total current assets....................................... 3,026 2,870
Property and equipment............................................... 78,127 87,884
Other assets......................................................... 2,028 1,742
-------- -------
$ 83,181 $92,496
======== =======
LIABILITIES
Current liabilities:
Accounts payable................................................... $ 2,421 $ 1,812
Accrued liabilities................................................ 5,543 5,848
Income taxes payable............................................... 783 1,287
Deferred income taxes.............................................. 79 79
-------- -------
Total current liabilities.................................. 8,826 9,026
Long-term debt....................................................... 35,976 44,174
Deferred income taxes................................................ 433 433
-------- -------
Total liabilities.......................................... 45,235 53,633
-------- -------
Shareholders' equity:
Common shares -- without par value; authorized, 30,000,000 shares;
issued 7,663,000 and 7,664,000 at December 31, 1995 and March
31, 1996, respectively.......................................... 26,082 26,068
Retained earnings.................................................. 18,013 18,944
Treasury stock at cost, 513,000 and 513,000 shares at December 31,
1995 and March 31, 1996, respectively........................... (6,149) (6,149)
-------- -------
37,946 38,863
-------- -------
$ 83,181 $92,496
======== =======
</TABLE>

F-15
<PAGE> 45

COOKER RESTAURANT CORPORATION

STATEMENT OF INCOME
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
---------------------
APRIL 2, MARCH 31,
1995 1996
------- ---------
<S> <C> <C>
Sales................................................................. $22,899 $25,486
------- ---------
Cost of sales:
Food and beverages................................................. 6,457 7,167
Labor.............................................................. 8,116 8,817
Restaurant operating expenses...................................... 3,677 4,312
Restaurant depreciation and amortization........................... 1,093 1,004
------- ---------
19,343 21,300
------- ---------
Restaurant operating income........................................... 3,556 4,186
------- ---------
Other expenses (income):
General and administrative......................................... 1,261 1,517
Interest expense................................................... 499 544
Gain on sale of property........................................... (2) --
Interest and other income.......................................... (8) --
------- ---------
1,750 2,061
------- ---------
Income before income taxes and extraordinary item..................... 1,806 2,125
Provision for income taxes before extraordinary item.................. 801 765
------- ---------
Income before extraordinary item...................................... 1,005 1,360
Extraordinary gain, net of income taxes............................... -- --
------- ---------
Net income............................................................ $ 1,005 $ 1,360
======= =======
Earnings per common share:
Before extraordinary item.......................................... $ 0.14 $ 0.18
Extraordinary item................................................. -- --
------- ---------
Total......................................................... $ 0.14 $ 0.18
======= =======
Weighted average number of common shares and common equivalent shares
outstanding........................................................ 7,236 7,556
======= =======
</TABLE>

F-16
<PAGE> 46

COOKER RESTAURANT CORPORATION

STATEMENT OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
APRIL 2, MARCH 31,
1995 1996
-------- ---------
(IN THOUSANDS)
<S> <C> <C>
Cash flows from operating activities:
Net Income......................................................... $ 1,005 $ 1,360
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................................... 1,211 1,128
(Increase) in current assets.................................... (23) (316)
(Increase) decrease in deposits and other assets................ (48) 33
Increase in current liabilities................................. 637 402
------- --------
Net cash provided by operating activities....................... $ 2,782 $ 2,607
Cash flows from investing activities:
Purchase of property and equipment................................. (1,039) (10,616)
Cash flows from financing activities:
Proceeds from borrowings........................................... (255) 8,648
Repurchase of debentures........................................... (643) (400)
Redemption of debentures........................................... -- (50)
Exercise of stock options.......................................... -- 12
Dividends paid..................................................... (380) (429)
------- --------
Net cash provided by (used in) financing activities............. (1,278) 7,781
Net increase (decrease) in cash and cash equivalents................. 465 (228)
Cash and cash equivalents at beginning of period..................... 2,087 1,299
Cash and cash equivalents at end of period........................... $ 2,552 $ 1,071
======= ========
</TABLE>

F-17
<PAGE> 47
Registrant's six page camera ready menu.

<PAGE> 48

[PHOTO]
KITCHEN PREP

[PHOTO]
RESTAURANT SEATING

[PHOTO]
2 FEMALE SERVERS W/FOOD
<PAGE> 49

======================================================

No dealer, salesman or any other person has been authorized to give any
information or to make any representations in connection with this offering,
other than those made in this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any of the Underwriters. 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 Shares to which it relates, or an offer to, or a
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 any implication that there has
been no change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to the date
hereof.

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

TABLE OF CONTENTS
----------------------------

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 5
Use of Proceeds....................... 7
Price Range of Common Shares.......... 7
Dividend Policy....................... 8
Capitalization........................ 8
Selected Financial Data............... 9
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 10
Business.............................. 15
Management............................ 21
Principal Shareholders................ 23
Description of Securities............. 24
Underwriting.......................... 27
Incorporation of Certain Documents by
Reference........................... 28
Available Information................. 28
Legal Matters......................... 29
Experts............................... 29
Index to Financial Statements......... F-1
</TABLE>
======================================================

======================================================

2,500,000 SHARES

LOGO

COMMON SHARES

------------------------
PROSPECTUS
------------------------

MONTGOMERY SECURITIES

EQUITABLE SECURITIES
CORPORATION

May 7, 1996

======================================================