2000 FINANCIAL REVIEW

          Selected Financial Data..................................18

          Management's Discussion and Analysis of
          Financial Condition and Results of Operations............19

          Consolidated Statements of Income........................22

          Consolidated Balance Sheets..............................23

          Consolidated Statements of Cash Flows....................24

          Consolidated Statements of Stockholders' Equity..........25

          Notes to Consolidated Financial Statements...............26

          Report of Independent Auditors...........................35

          Shareowner Information...................................36

          Directors and Executive Officers.........................37


                            Page 17 in Annual Report

<PAGE>

                             SELECTED FINANCIAL DATA

             Morrison Management Specialists, Inc. and Subsidiaries

The following table  summarizes  certain  selected  financial  information  with
respect to Morrison Management Specialists, Inc. (the "Company" or "MMS") and is
derived from the Financial  Statements of MMS. Effective March 9, 1996, Morrison
Health Care,  Inc.  ("MHCI")  was spun off (the  "Distribution")  from  Morrison
Restaurants Inc. ("MRI"),  becoming an independent  public  corporation  trading
under the symbol MHI on the New York Stock Exchange.  MHCI subsequently  changed
its name to Morrison Management  Specialists,  Inc. effective June 30, 1999. The
Selected Financial Data of MMS is presented as if MMS had been a separate entity
for  fiscal  year  1996.  The  information  set  forth  below  should be read in
conjunction with  "Management's  Discussion and Analysis of Financial  Condition
and  Results  of  Operations"  and the  Financial  Statements  of MMS and  notes
thereto.  Weighted  average  shares  for 1996 were  determined  as if the shares
issued in connection with the  Distribution  were outstanding from the beginning
of the year.

<TABLE>

                                                        For the Fiscal Year*
----------------------------------------------------------------------------------------------------------------
   (In thousands except per share data)             2000        1999            1998          1997          1996
----------------------------------------------------------------------------------------------------------------
   Consolidated Statements of Income Data:
<CAPTION>
<S>                                             <C>        <C>             <C>           <C>           <C>
   Revenues ................................... $441,074   $ 324,968       $ 250,371     $ 221,011     $ 219,995
  ==============================================================================================================
   Income before provision for income taxes.... $ 23,573   $  22,197       $  19,065     $  17,576     $  16,011
   Provision for federal and state income taxes.   9,311       8,657           7,513         7,290         6,731
                                                ----------------------------------------------------------------
   Net income.................................. $ 14,262   $  13,540       $  11,552     $  10,286     $   9,280
                                                ================================================================
   Earnings per share - Basic.................. $   1.10   $    1.04       $    0.88     $    0.79     $    0.72
                                                ================================================================
   Earnings per share - Diluted................ $   1.07   $    1.02       $    0.86     $    0.79     $    0.72

   Weighted average common shares - Basic .....   12,918      13,071          13,132        12,964        12,841
   Net dilutive effect of stock options and
      nonvested stock awards...................      427         244             279            62            56
                                               ------------------------------------------------------------------
   Weighted average common shares - Diluted....   13,345      13,315          13,411        13,026        12,897
                                               ==================================================================

*Fiscal years 2000, 1999 and 1998 are 12-month years. Fiscal years 1997 and 1996
are composed of 52 weeks. Prior years' share data and earnings per share amounts
have been adjusted to reflect the May 2000 stock dividend.

</TABLE>
<TABLE>

<S>                                             <C>        <C>             <C>            <C>          <C>

   Consolidated Balance Sheets Data:
    Total assets............................... $120,460   $ 102,927       $  84,374      $ 60,203     $  61,101
    Long-term debt............................. $ 54,865   $  49,305       $  31,690      $ 15,022     $  20,034
    Stockholders'equity........................ $ 15,085   $  14,563       $  10,220      $  6,969     $   5,645
    Working capital............................ $ 16,870   $  15,670       $   7,344      $  3,891     $   8,677
    Current ratio..............................    1.5:1       1.6:1           1.2:1         1.1:1         1.3:1


   Other Data:
    Managed volume** (unaudited)............... $778,600   $ 647,900       $ 504,400      $464,800     $ 435,600
    Cash dividends per share of common stock*** $   0.16   $    0.16       $    0.82      $   0.82     $   0.205
</TABLE>

**The Company generally  performs its services pursuant to either management fee
or profit and loss  contracts.  See  "Management's  Discussion  and  Analysis of
Financial Condition and Results of Operations-Managed  Volume".  Management uses
the concept of managed volume as an important  indicator of the Company's growth
and performanace.  MMS defines and estimates managed volume as the total cost of
operating  all client  accounts as if MMS performed all services on a profit and
loss basis.  Managed  volume is not a measure of  performance  under  accounting
principles  generally  accepted in the United  States.  Management  uses managed
volume as an additional  indicator of  performance  and not as a replacement  of
financial  measures,  such as revenues,  as defined and  required by  accounting
principles generally accepted in the United States.

***Dividends were not paid prior to the fourth quarter of fiscal year 1996. Cash
dividends  per share of common  stock have not been  adjusted to reflect the May
2000 stock dividend.

                            Page 18 in Annual Report

<PAGE>

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

             Morrison Management Specialists, Inc. and Subsidiaries

This discussion should be read in conjunction with the Financial  Statements and
related notes found on pages 22 to 34.

MANAGED VOLUME
--------------
Morrison  Management  Specialists,  Inc.  (the  "Company"  or  "MMS")  generally
performs  its  services  pursuant  to either  management  fee or profit and loss
contracts. While the services performed are the same, revenue recognition varies
by type of contract.  In a management fee account,  MMS manages the services and
facilities,  but the  client is  responsible  for all or nearly  all the  costs.
Revenues and fees are recognized for the amount of the contractually agreed-upon
management  fee, any earned  incentives,  plus any expenses or employee  payroll
costs paid by the Company and charged  back to the client.  In a profit and loss
account,  MMS assumes the risk of profit or loss for the foodservice  operation.
For such  accounts,  the  amount  of  revenue  reported  is the  actual  revenue
generated from meals served to patients, client employees and visitors.

     Due to the difference  between the amount of revenue that is reported for a
fee account (net management fees plus reimbursed expenses) and a profit and loss
account (gross revenues from meal sales), Management uses the concept of managed
volume as an important  indicator of the Company's growth and  performance.  MMS
defines and estimates  managed  volume as the total cost of operating all client
accounts as if MMS performed all services on a profit and loss basis. Management
uses  managed  volume as an  additional  indicator of  performance  and not as a
replacement of financial measures,  such as revenues, as defined and required by
accounting principles generally accepted in the United States.

     The Company's  managed volume  continues to increase at record  levels.  In
fiscal year 2000,  managed volume increased $130.7 million,  or 20.2%, to $778.6
million compared to $647.9 million in fiscal year 1999. Managed volume increased
$143.5  million in fiscal year 1999, or 28.5%,  to $647.9 million as compared to
$504.4 million in fiscal year 1998.

RESULTS OF OPERATIONS
---------------------
2000 Compared To 1999

Overview

The  Company  is  the  nation's  second  largest  outsourcing  provider  in  the
healthcare and senior living industries. MMS is the only national, publicly held
company which  specializes  exclusively in providing food,  nutrition and dining
services to the  healthcare  and senior living  markets.  MMS serves some of the
largest and most prominent hospitals,  integrated  healthcare systems and senior
living communities in the United States.

     In fiscal year 2000, the Company continued to demonstrate  strong financial
results,  with  increases  in revenue,  operating  profit and net income.  These
accomplishments  were due to record  levels of new account  sales,  high account
retention, and growth in existing accounts. A key factor contributing to the new
record new  business  was the award of a five-year  contract to provide food and
nutrition services to over 60 of Tenet HealthSystem Medical, Inc.'s hospitals.

Revenue

For fiscal year 2000,  revenue  increased  $116.1  million,  or 35.7%, to $441.1
million as compared to $325.0  million for fiscal year 1999.  The primary source
of the increase  was the opening of a  significant  number of new accounts  that
were  larger  than  accounts  which  closed  during  the  year.  Adding  vending
operations  and  increasing   employee   payrolls  at  existing   accounts  also
contributed to the growth of revenue as a whole.

Gross Profit

Gross  profit,  defined as revenue  less  operating  expenses,  increased  $12.5
million,  or 22.9%,  to $66.8  million in fiscal  year 2000 as compared to $54.3
million in fiscal year 1999.  Management's  continued emphasis on food and labor
cost  reductions  and growth of existing  account  business  contributed  to the
favorable results.

Selling, General and Administrative Expenses

Selling,  general and administrative expenses increased $10.7 million, or 35.9%,
to $40.5 million in fiscal year 2000 as compared to $29.8 million in fiscal year
1999. The increase was associated with significant new business  attained during
the fiscal year,  which  required  additional  operating  costs and expenses for
human resources, training, relocations and promotions.

<PAGE>

Interest Expense, Net

Interest expense increased 16.0% to $2.7 million in fiscal year 2000 as compared
to $2.4 million in the prior year due to increased debt levels  associated  with
the Company's increased capital expenditures and stock repurchases.

Federal and State Income Taxes

The combined  federal and state  effective tax rate increased to 39.5% in fiscal
year 2000 from 39.0% in fiscal year 1999.

1999 Compared To 1998

Overview

In fiscal year 1999, the Company showed strong financial results, with increases
in revenue,  operating profit and net income.  The  accomplishments  were due to
continued focus on cost reductions in all accounts, growth in existing accounts,
strong new account sales and the acquisition of Culinary Service  Network,  Inc.
("CSN") in October 1998.  CSN was MMS's third  acquisition  in the senior living
market.  The experience and practices of these industry  experts created a solid
foundation  for further  developing  and growing the  nation's  foremost  senior
dining services  business.  (See Note 2 of the Notes to  Consolidated  Financial
Statements for more information.)

                            Page 19 in Annual Report

<PAGE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

             Morrison Management Specialists, Inc. and Subsidiaries

Revenue

In fiscal  year 1999,  revenue  increased  $74.6  million,  or 29.8%,  to $325.0
million as compared to $250.4 million in fiscal year 1998.  The primary  sources
of this  increase were growth at existing  accounts,  including  adding  vending
operations and increasing  employee  payrolls,  opening more and larger accounts
than were closed and key acquisitions.

Gross Profit

Gross profit increased $11.2 million, or 26.0%, to $54.3 million for fiscal year
1999 as  compared  to $43.1  million  in fiscal  year 1998.  Growth of  existing
account  business,  continued  emphasis on food and labor cost  reductions,  and
acquisitions all contributed to the favorable results.

Selling, General and Administrative Expenses

Selling,  general and administrative  expenses increased $6.9 million, or 29.9%,
to $29.8  million for fiscal  year 1999 as  compared to $22.9  million in fiscal
year 1998. The increase was associated  with  additional  costs  associated with
obtaining new business,  such as additional expenses related to human resources,
training, relocations and promotions.

Interest Expense, Net

Interest  expense  increased  110.0%  to $2.4  million  in  fiscal  year 1999 as
compared to $1.1 million in the prior year due to higher debt levels  associated
with the Company's  acquisitions and increased capital expenditures for both the
Advanced Culinary Centers(TM) and the Company's technology initiatives.

Federal and State Income Taxes

The combined  federal and state  effective tax rate decreased to 39.0% in fiscal
1999 from 39.4% in fiscal 1998.

YEAR 2000 COMPLIANCE
--------------------
The Company's  technology  initiatives  included both  preparations for the year
2000 issue and significant  system upgrades and  enhancements.  Such initiatives
identified   plans  necessary  to  minimize   failures  of  systems  to  process
date-sensitive  information in the year 2000 and beyond.  MMS elected to replace
its  most  critical   system,  a   shared-mainframe   corporate   system,   with
client-server systems developed using Year 2000 compliant standards. The Company
also verified that all other significant  vendor licensed software  applications
were either Year 2000  compliant or would be by December  31, 1999.  The Company
did not experience any significant failures of its systems during the transition
from 1999 to 2000.  MMS will continue to monitor system  performance  throughout
the year 2000 to ensure continued  compliance.  While it is not possible to give
an estimate of the costs specifically  related to the year 2000 issue, the total
cost of these technology initiatives was approximately $5 million.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Cash Flow, Capital Expenditures and Financing

Due to the nature of its contract foodservice  business,  the Company is able to
maintain  a  relatively   steady  cash  flow.  Cash  flow  from  operations  has
historically  financed  MMS's capital  investments.  MMS has plans for expansion
over the next  several  years and expects  that cash flow from  operations  plus
utilization  of the existing  lines of credit will be  sufficient to provide for
this expansion. See "Special Note Regarding Forward-Looking Information."

     The Company has a $75 million revolving credit facility from four financial
institutions  extending  through  July 2,  2003.  Borrowings  under  the  credit
facility bear interest based on LIBOR.

     The Company  utilizes  two  interest  rate swap  agreements  with  notional
amounts of $10  million  each to reduce  the  impact of changes in the  interest
rates on its floating rate debt. These swap agreements effectively converted $20
million of variable rate  borrowings to fixed rates of  approximately  5.6% plus
the credit spread.  Interest expense is adjusted for the differential to be paid
or received as interest rates change. The effect of such adjustments on interest
expense has not been  significant.  The Company's swap  agreements  expose it to
credit  risks that are inherent in all interest  rate swaps.  Counterparties  to
these  agreements are major financial  institutions.  Consequently,  the Company
believes  that the credit risk of its swap  agreements  is minimal.  The Company
does not believe that any reasonably  likely change in near-term  interest rates
would have a material adverse effect on the future earnings or cash flows of the
Company.

<PAGE>

     The Company's  effective  interest rate increased to approximately  6.1% in
fiscal year 2000 from 5.8% in fiscal year 1999.  The increase was  primarily due
to the increase in the LIBOR rate throughout the fiscal year.

     On May 31,  2000,  MMS had $54.9  million  outstanding  in total  debt,  an
increase of $5.5 million from $49.4 million in the prior year.

     Trade  accounts  receivable  make up the  majority of MMS's  total  current
assets. Historically,  the average days outstanding in trade accounts receivable
is less than one month and bad debt expense has been minimal.

     MMS requires capital principally for acquisitions,  new accounts, equipment
replacement  and  remodeling  of  existing  accounts,  and the  construction  of
Advanced   Culinary   Centers(TM).   Cash   provided  by  operating   activities
approximated  $22.0  million  for fiscal year 2000  compared to $8.1  million in
fiscal year 1999.  Capital  expenditures were  approximately  $12.6 million,  an
increase of $4.2  million  compared to the $8.4  million in the prior year.  The
Company did not have material commitments for capital expenditures as of the end
of fiscal year 2000. Capital expenditures are anticipated to total approximately
$15  million to $20  million  for fiscal  year 2001.  MMS plans to finance  this
amount primarily through internally generated funds. See "Special Note Regarding
Forward-Looking Information." Cash used for acquisition-related expenditures was
$1.4 million for fiscal year 2000,  a decrease of $5.5  million  compared to the
$6.9 million in fiscal year 1999.

                            Page 20 in Annual Report

<PAGE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
           OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(continued)

             Morrison Management Specialists, Inc. and Subsidiaries

Stock Repurchase Program

In March 1998, MMS's Board of Directors authorized a program to repurchase up to
1,000,000 shares of the Company's  Common Stock. An additional  1,000,000 shares
were authorized to be repurchased in June of 1999.  During fiscal year 2000, the
Company  repurchased  868,200 shares of the Company's stock at an aggregate cost
of $21.0  million.  During  fiscal year 1999,  the Company  repurchased  777,210
shares at an aggregate cost of $14.5 million. A total of 259,790 shares remained
authorized for repurchase under the Company's stock repurchase program as of the
end of fiscal year 2000.  Subsequent  to year end, in June 2000,  the  Company's
Board of Directors authorized the repurchase of another 1,000,000 shares.

Working Capital

As of May 31, 2000,  working  capital was $16.9  million while the current ratio
was 1.5:1.  Working  capital  increased  $1.2 million from $15.7 million and the
current ratio decreased 0.1 from 1.6:1 for fiscal year 1999.

Dividends

MMS paid  approximately  $1.9 million in cash dividends to  stockholders  during
fiscal  year  2000.   The  Company  plans  to  pay  annual  cash   dividends  of
approximately  $2.1  million in the next fiscal year.  On March 28, 2000,  MMS's
Board of  Directors  declared a 10% stock  dividend  payable on May 19,  2000 to
shareholders   of  record  on  May  1,  2000.   See  "Special   Note   Regarding
Forward-Looking Information."

KNOWN EVENTS, UNCERTAINTIES AND TRENDS
--------------------------------------
Impact of Inflation

In the past, MMS has been able to recover  inflationary  cost increases  through
contract inflation  adjustments,  increased productivity and menu changes. There
have  been,  and  there  may be in the  future,  delays  in  contract  inflation
adjustments and competitive  pressures which limit MMS's ability to recover such
cost  increases  in their  entirety.  Historically,  the effects of inflation on
MMS's net income have not been materially  adverse.  See "Special Note Regarding
Forward-Looking Information."

Management's Outlook

Management  believes  that  growth  will  continue  to  occur  through  sales to
integrated  healthcare  systems  and  senior  living  communities,  and  through
expanding  services at the Company's existing accounts and the Advanced Culinary
Centers(TM).  Morrison  believes  that  pressures  on hospitals  and  healthcare
systems to outsource  foodservices are increasing due to the Balanced Budget Act
and managed care.  Management  believes  these  pressures will aid the continued
growth  of MMS.  The  Company  expects  growth  from the  senior  living  market
primarily  from  focused  expertise  and the  ability to provide  unique  dining
solutions for senior living communities.

     MMS serves  some of the largest and most  prominent  hospitals,  healthcare
systems and senior living  communities in the United States. The Company strives
to maintain its long-term  partnerships with these facilities and communities by
continuing to increase  quality and lower costs.  During the upcoming  year, MMS
believes that additional  investments in its team members and programs  designed
to enhance  its  aggressive  sales  drive will add new  clients  while  building
stronger  relationships  with  current  accounts.  By  focusing on its market of
hospitals and integrated healthcare systems and expanding into the senior living
market,  the Company  believes that it is  strategically  positioned  for strong
growth. See "Special Note Regarding Forward-Looking Information."

Special Note Regarding Forward-Looking Information

The  foregoing   section  and  other  areas  of  this  report  contain   various
"forward-looking  statements"  which  represent  the Company's  expectations  or
beliefs concerning future events, including the following:  statements regarding
account  growth,  future capital  expenditures  and  borrowings,  the payment of
dividends,  the impact of inflation and the effects of  Management's  strategies
for growth.  The Company  cautions  that a number of  important  factors  could,
individually or in the aggregate, cause actual results to differ materially from
those included in the forward-looking statements including,  without limitation,
the  following:  healthcare  spending  trends;  the growth of systems  and group
purchasing   organizations;   changes  in  healthcare   regulations;   increased
competition  in the  healthcare  food and  nutrition or senior  living  markets;
customers'  acceptance  of the  Company's  cost-saving  programs;  and  laws and
regulations affecting labor and employee benefit costs.

                            Page 21 in Annual Report

<PAGE>

<TABLE>

                        CONSOLIDATED STATEMENTS OF INCOME

             Morrison Management Specialists, Inc. and Subsidiaries

                                                  For the Fiscal Year Ended

-----------------------------------------------------------------------------------
(In thousands, except per share data)
                                      May 31, 2000   May 31, 1999     May 31, 1998
-----------------------------------------------------------------------------------
<CAPTION>
<S>                                       <C>            <C>             <C>

Revenues...........................       $441,074       $324,968         $250,371
Operating expenses.................        374,310        270,637          207,265
                                   ------------------------------------------------
Gross profit.......................         66,764         54,331           43,106
Selling, general and administra-
  tive expenses....................         40,457         29,776           22,919
                                   ------------------------------------------------
                                            26,307         24,555           20,187
Interest expense, net of interest
  income of $315 in 2000, $396
  in 1999 and $406 in 1998.........          2,734          2,358            1,122
                                   ------------------------------------------------
Income before provision for
  income taxes.....................         23,573         22,197           19,065
Provision for federal and state
  income taxes.....................          9,311          8,657            7,513
                                   ------------------------------------------------
Net income.........................       $ 14,262       $ 13,540         $ 11,552
                                   ================================================


Earnings per share - Basic.........       $   1.10       $   1.04         $   0.88
Earnings per share - Diluted.......       $   1.07       $   1.02         $   0.86

Weighted average common

  shares - Basic...................         12,918         13,071           13,132
Net dilutive effect of stock
  options and nonvested stock
  awards...........................            427            244              279
                                   ------------------------------------------------
Weighted average common

  shares - Diluted.................         13,345         13,315           13,411
                                   ================================================

Prior years' share data and  earnings  per share  amounts have been  adjusted to
reflect the May 2000 stock dividend.

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

</TABLE>

                            Page 22 in Annual Report

<PAGE>
<TABLE>

                           CONSOLIDATED BALANCE SHEETS

             Morrison Management Specialists, Inc. and Subsidiaries

(In thousands)                                   May 31, 2000    May 31, 1999
                                                 ----------------------------
<CAPTION>
<S>                                                   <C>             <C>
ASSETS
Current assets:

  Cash and short-term investments................     $ 3,645         $ 2,780
  Receivables:
    Trade, less allowance for doubtful
    accounts of $677 at May 31, 2000 and
    $712 at May 31, 1999.........................      34,952          27,804
    Other........................................       5,465           6,231
  Inventories....................................       4,909           2,940
  Prepaid expenses...............................       3,209           2,312
  Deferred income tax benefits...................       1,397           1,747
                                                 ----------------------------
Total current assets.............................      53,577          43,814

Property and equipment - at cost:

  Land...........................................       1,375               -
  Buildings and improvements.....................       6,512           5,931
  Equipment......................................      28,445          24,923
  Construction in progress.......................       4,467             121
                                                 ----------------------------
                                                       40,799          30,975
Less accumulated depreciation....................      15,408          12,376
                                                 ----------------------------
                                                       25,391          18,599
Deferred income tax benefits.....................       2,506           2,947
Cost in excess of net assets acquired, net.......      18,670          18,331
Notes receivable, less current portion...........       1,024           3,626
Deferred Compensation Plan assets................       6,517           4,910
Other assets.....................................      12,775          10,700
                                                 ----------------------------
Total assets.....................................    $120,460        $102,927
                                                 ============================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable...............................    $ 19,290        $ 15,091
  Accrued liabilities:
    Taxes, other than income taxes...............       3,834           2,187
    Payroll and related costs....................      10,675           7,322
    Insurance....................................       1,278           1,909
    Other........................................       1,602           1,499
  Current portion of long-term debt..............          28             136
                                                 ----------------------------
Total current liabilities........................      36,707          28,144

Long-term debt...................................      54,865          49,305
Deferred Compensation Plan obligation............       6,517           4,910
Other liabilities................................       7,286           6,005

Stockholders' equity:
  Common stock, $0.01 par value (authorized
    100,000 shares; issued: 2000 - 12,704 shares;
    1999 - 11,977 shares).......................          127             120
  Capital in excess of par value................       16,488           3,324
  Unearned ESOP shares..........................       (2,292)         (2,806)
  Deferred Compensation Plan liability
    payable in Company stock....................        1,645           1,518
  Retained earnings.............................          762          13,925
                                                -----------------------------
                                                       16,730          16,081
Less cost of Company stock held by Deferred
  Compensation Plan.............................        1,645           1,518
                                                -----------------------------
Total stockholders' equity......................       15,085          14,563
                                                -----------------------------
Total liabilities and stockholders' equity......     $120,460        $102,927
                                                =============================

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

</TABLE>

                            Page 23 in Annual Report

<PAGE>

<TABLE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

             Morrison Management Specialists, Inc. and Subsidiaries

                                            For the Fiscal Year Ended

                               -------------------------------------------------
(In thousands)                   May  31, 2000    May 31, 1999    May 31, 1998
                               -------------------------------------------------
<CAPTION>
<S>                                    <C>           <C>             <C>

OPERATING ACTIVITIES:
Net income.....................        $14,262        $ 13,540        $ 11,552
Adjustments to reconcile net
  income to net cash provided
  by operating activities:
Depreciation...................          4,862           3,254           2,538
Amortization of intangibles....          1,021             860             377
Deferred income taxes..........            791            (182)           (811)
Gain on disposition of assets..           (140)           (112)            (19)
Changes in operating assets and
  liabilities:
    Receivables................         (3,780)         (5,949)         (6,359)
    Inventories................         (1,969)             (4)           (246)
    Prepaid and other assets...         (4,579)         (4,141)         (3,420)
    Accounts payable, accrued

      and other liabilities....         11,559             855           3,430
                               -------------------------------------------------
Net cash provided by operating
  activities...................         22,027           8,121           7,042
                               -------------------------------------------------
INVESTING ACTIVITIES:
Purchases of property and
  equipment....................        (12,582)         (8,389)         (8,850)
Proceeds from disposal of
  assets.......................          1,068             799             268
Acquisition of businesses,
  net of cash acquired.........         (1,360)         (6,859)         (7,464)
                               -------------------------------------------------
Net cash used by investing
  activities...................        (12,874)        (14,449)        (16,046)
                               -------------------------------------------------
FINANCING ACTIVITIES:
Net proceeds from long-term
  debt.........................         26,560          19,893          21,690
Principal payments on long-term
  debt.........................        (21,108)         (7,309)         (5,011)
Proceeds from exercise of stock
  options and issuance of
  stock, net of income tax
  benefits.....................          8,211           6,766           3,054
Dividends paid.................         (1,886)         (1,937)         (9,877)
Payments to acquire Treasury
  Stock........................        (20,961)        (14,539)         (1,891)
ESOP shares released ..........            896             514             412
                               -------------------------------------------------
Net cash (used)/provided by
 financing activities..........         (8,288)          3,388           8,377
                               -------------------------------------------------
Increase/(decrease) in cash

  and short-term investments...            865          (2,940)           (627)
Cash and short-term
  investments at the
  beginning of the year........          2,780           5,720           6,347
                               -------------------------------------------------
Cash and short-term investments
  at the end of the year.......        $ 3,645         $ 2,780         $ 5,720
                               =================================================

Supplemental disclosure of cash flow information - cash paid for:
    Interest...................        $ 3,015         $ 2,924         $ 1,696
    Income taxes...............        $ 6,938         $ 9,386         $ 7,933

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

</TABLE>

                            Page 24 in Annual Report

<PAGE>
<TABLE>

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

             Morrison Management Specialists, Inc. and Subsidiaries

(In thousands, except per share data)
                                          May 31, 2000           May 31, 1999             May 31, 1998
                                       Shares     Amount       Shares     Amount       Shares     Amount
                                       -----------------       -----------------       -----------------
<CAPTION>
<S>                                    <C>         <C>         <C>         <C>         <C>         <C>
COMMON STOCK
Beginning balance..................... 11,977      $ 120       12,379      $ 124       12,165      $ 122
Stock dividend........................  1,144         11            0          0            0          0
Shares issued under Stock Incentive
  Plans...............................    451          5          470          5          214          2
Cancellation of Treasury Stock........   (868)        (9)        (872)        (9)           0          0
                                       -----------------       -----------------       -----------------
Ending balance........................ 12,704        127       11,977        120       12,379        124
                                       -----------------       -----------------       -----------------

CAPTIAL IN EXCESS OF PAR VALUE
Beginning balance.....................             3,324                  12,859                   9,717
Stock dividend........................            25,528                       0                       0
Shares issued under Stock Incentive
  Plans, net of income tax benefits...             8,206                   6,761                   3,052
Shares released from ESOP.............               382                     125                      90
Cancellation of Treasury Stock........           (20,952)                (16,421)                      0
                                      ------------------       -----------------       -----------------
Ending balance........................            16,488                   3,324                  12,859
                                      ------------------       -----------------       -----------------

UNEARNED ESOP SHARES
Beginning balance.....................   (198)    (2,806)        (226)    (3,195)        (249)    (3,517)
Shares released from ESOP.............     20        514           28        389           23        322
                                      ------------------       -----------------       -----------------
Ending balance........................   (178)    (2,292)        (198)    (2,806)        (226)    (3,195)
                                      ------------------       -----------------       -----------------

DEFERRED COMPENSATION PLAN LIABILITY
  PAYABLE IN COMPANY STOCK
Beginning balance.....................             1,518                   1,848                   1,341
Net change............................               127                    (330)                    507
                                      ------------------       -----------------       -----------------
Ending balance........................             1,645                   1,518                   1,848
                                      ------------------       -----------------       -----------------

RETAINED EARNINGS
Beginning balance.....................            13,925                   2,322                     647
Net income............................            14,262                  13,540                  11,552
Stock dividend........................           (25,539)                      0                       0
Cash dividends of $0.16 per share in
  fiscal 2000 and 1999; $0.82 per
  share in fiscal 1998................            (1,886)                 (1,937)                 (9,877)
                                      ------------------       -----------------       -----------------
Ending balance........................               762                  13,925                   2,322
                                      ------------------       -----------------       -----------------

TREASURY/COMPANY STOCK HELD BY
  DEFERRED COMPENSATION PLAN
Beginning balance.....................    (85)    (1,518)        (199)    (3,738)         (95)    (1,341)
Cancellation/(Purchase) of Treasury
  Stock...............................      0          0           95      1,891          (95)    (1,891)
(Purchase)/Sale of Company Stock -
  held by Deferred Compensation Plan..    (13)      (127)          19        329           (9)      (506)
                                      ------------------       -----------------       -----------------
Ending balance........................    (98)    (1,645)         (85)    (1,518)        (199)    (3,738)
                                      ------------------       -----------------       -----------------
Total Stockholders' Equity............           $15,085                 $14,563                 $10,220
                                      ==================       =================       =================

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

</TABLE>

                            Page 25 in Annual Report

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

             Morrison Management Specialists, Inc. and Subsidiaries

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION
On March 9, 1996, Morrison Health Care, Inc. and Subsidiaries  ("MHCI") was spun
off (the "Distribution") from Morrison Restaurants Inc. ("MRI").  Effective June
30, 1999 MHCI changed its name to Morrison  Management  Specialists,  Inc.  (the
"Company"  or  "MMS").  Prior  to  the  Distribution,  MMS  was a  wholly  owned
healthcare contract food and nutrition business of MRI.

USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  Management to make estimates
and assumptions  that affect the reported  amounts of the 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.

BUSINESS AND CREDIT RISK CONCENTRATIONS
The Company  primarily  competes in the  healthcare  food,  nutrition and senior
dining  services and encounters  significant  competition in these markets.  The
length of each contract varies by customer. During fiscal year 2000, the Company
was awarded a new five-year  contract to provide food and nutrition  services to
over 60 of Tenet HealthSystem Medical,  Inc.'s ("Tenet") hospitals.  The revenue
from the Tenet accounts for fiscal years 2000,  1999 and 1998 was $69.2 million,
$23.2 million and $12.0  million,  respectively.  These  revenues  accounted for
15.7%,  7.2% and 4.8% of total  revenue for fiscal  years  2000,  1999 and 1998,
respectively.

     Concentration  of credit risk with respect to trade accounts  receivable is
generally  limited  due to the  large  number  of  customers  that  make  up the
Company's  customer base,  thus spreading  trade risk.  With the addition of new
Tenet accounts,  Tenet accounted for 12.9% and 6.8% of total accounts receivable
at May 31, 2000 and 1999,  respectively.  The  Company  maintains  reserves  for
potential   uncollectible  amounts  which,  in  aggregate,   have  not  exceeded
Management's expectations.

PRINCIPLES OF CONSOLIDATION
The accompanying  consolidated  financial statements include the accounts of MMS
and its wholly owned  subsidiaries.  All significant  intercompany  accounts and
transactions have been eliminated.

FISCAL YEAR
Effective with the fiscal year 1998,  the Company's  fiscal year ends on May 31.
Starting  with fiscal year 1998,  the Company  changed  from a 52-53 week fiscal
year to a 12-month fiscal year ending May 31 each year.

CASH AND SHORT-TERM INVESTMENTS
The Company's cash management program provides for the investment of excess cash
balances in short-term  money market  instruments.  Short-term  investments  are
stated at cost, which  approximates  market.  The Company  considers  marketable
securities  with a  maturity  of  three  months  or less  when  purchased  to be
short-term investments.

INVENTORIES

Inventories consist of materials, food supplies, china and silver and are stated
at the lower of cost (first in-first out) or market.

PROPERTY AND EQUIPMENT DEPRECIATION
Property  and  equipment  are  stated  at cost  and are  being  depreciated  for
financial  reporting purposes using the straight-line  method over the estimated
useful lives of the assets. Annual rates of depreciation generally range from 3%
to 5% for buildings and from 10% to 34% for kitchen and other  equipment.  Costs
incurred in connection with the  construction at major facilities or of Advanced
Culinary  Centers(TM)  are  capitalized as  construction  in progress until such
facilities or centers become operational.  Interest is capitalized in connection
with these capitalized  construction costs. The capitalized interest is recorded
as part of the  asset to which it  relates  and is  amortized  over the  asset's
estimated  useful life.  In fiscal 2000,  1999 and 1998,  $37,011,  $219,000 and
$127,000 of interest was capitalized, respectively.

     Property and equipment are periodically reviewed for impairment based on an
assessment  of future  operations.  The  Company  records  impairment  losses on
long-lived  assets used in operations  when indicators of impairment are present
and the  undiscounted  cash flows  estimated to be generated by those assets are
less than the asset's carrying amount.

<PAGE>

INTANGIBLE ASSETS
Excess  of costs  over the fair  value of net  assets  acquired  with  purchased
businesses  generally is amortized on a straight-line basis over periods ranging
from  10  to 40  years.  At  May  31,  2000,  1999  and  1998,  the  accumulated
amortization  for costs in excess of net assets acquired was $3.8 million,  $2.8
million and $1.9 million, respectively.

     The  carrying  value  of  goodwill  and  other   intangibles  is  evaluated
periodically in relation to the operating  performance  and future  undiscounted
cash flows of each operating business acquired.  Adjustments are made if the sum
of  expected  future net cash  flows is less than net book  value.  The  Company
believes that the remaining amounts of these assets have continuing value.

                            Page 26 in Annual Report

<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

             Morrison Management Specialists, Inc. and Subsidiaries

REVENUE RECOGNITION
Revenue is  recognized  upon  performance  of  services.  The Company  generally
performs  its  services  pursuant  to either  management  fee or profit and loss
contracts.  While actual services  performed are the same,  revenue  recognition
varies by type of  contract.  In a  management  fee  account,  MMS  manages  the
services and facilities, but the client is responsible for all or nearly all the
costs.  Revenue  and fees are  recognized  for the  amount of the  contractually
agreed  upon  management  fee and any earned  incentives  plus the amount of any
expenses or employee  payroll  costs paid by the Company and charged back to the
client. In a profit and loss account, MMS assumes the risk of profit or loss for
the foodservice operation.  For such accounts, the amount of revenue reported is
the actual revenue generated from meals served to patients, client employees and
visitors.

INCOME TAXES
Deferred income taxes are determined utilizing a liability approach. This method
gives  consideration to the future tax consequences  associated with differences
between financial accounting and tax bases of assets and liabilities.

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

NEW ACCOUNTING STANDARDS
The  Financial   Accounting  Standards  Board  has  issued  Statement  No.  133,
"Accounting for Derivative  Instruments and Hedging  Activities,"  Statement No.
137, "Accounting for Derivative and Hedging Activities-Deferral of the Effective
Date of FASB Statement No. 133," and statement No. 138,  "Accounting for Certain
Derivative  Instruments  and certain  Hedging  Activities-  an amendment of FASB
Statement  No.  133,"  which  establish   reporting   standards  for  derivative
instruments.  These  statements  are  effective  for all fiscal  quarters of all
fiscal years  beginning  after June 15, 2000, and will be adopted by the Company
in fiscal  2002.

     Based upon the Company's current limited use of derivative  instruments and
hedging  activities,  Management  does not  believe  the  statement  will have a
material impact on the Company's  consolidated  financial  position,  results of
operations or cash flows.

PRE-OPENING EXPENSES
Pre-opening costs, such as salaries, personnel training costs and other expenses
of opening a new account,  are often reimbursed by the client.  In circumstances
when they are not reimbursed, these costs are charged to expense as incurred.

FINANCIAL INSTRUMENTS
The Company's financial  instruments at May 31, 2000, 1999 and 1998 consisted of
cash and short-term investments,  accounts and notes receivable,  long-term debt
and  interest  rate  swap   agreements.   The  fair  value  of  these  financial
instruments, except the interest rate swap agreements, approximated the carrying
amounts  reported  in  the  balance  sheets.  Cash  is  deposited  in  financial
institutions which carry FDIC insurance. From time to time, the cash balances in
these institutions  exceed the insured amount.  Management does not believe this
is a significant risk to the Company.

     The Company uses  interest  rate swap  agreements  to manage  interest rate
exposure.  The fair value of such swap agreements was not significant at May 31,
2000.

     Although  substantially all of the Company's trade accounts  receivable are
from healthcare institutions,  Management believes that concentrations of credit
risk are limited due to the geographic diversity of the Company's customer base.
The Company  performs  periodic credit  evaluations of its customers'  financial
condition and generally does not require collateral.  Historically,  the Company
has not experienced significant losses related to trade accounts receivable from
individual customers or from groups of customers in any geographic area.

RECLASSIFICATION

Certain prior year amounts and balances have been reclassified to conform to the
current year presentation.

                            Page 27 in Annual Report

<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

             Morrison Management Specialists, Inc. and Subsidiaries

NOTE 2. ACQUISTIONS

In October 1998,  the Company  acquired all of the  outstanding  common stock of
Philadelphia-based  Culinary  Service  Network,  Inc. In March 1998, the Company
acquired substantially all of the assets of Chicago-based Spectra Services, Inc.
In January 1998,  the Company  acquired all of the  outstanding  common stock of
Phoenix-based  Drake  Management  Services,  Inc. Each of the  companies,  which
provided  dining  services in the senior living market,  were acquired for cash,
with a total  acquisition  price of $12.1  million.  Contingent  payments may be
earned by sellers in future  years.  Approximately  $1.4  million of  additional
consideration  was paid in the year ended May 31, 2000.  The  acquisitions  were
accounted  for  using  the  purchase  method of  accounting,  and the  resulting
goodwill is being amortized over 20 years using the  straight-line  method.  The
operating  results of these  companies have been included from their  respective
acquisition dates. Pro forma results are not presented for these acquisitions as
they were not significant during the periods presented.

NOTE 3. LONG-TERM DEBT

Long-term debt consists of the following:

                                         ---------------------------------------
(In thousands)                              May 31, 2000         May 31, 1999
                                         ---------------------------------------
Variable rate revolving credit
  facility due in full 7/2/03............        $52,115              $46,555
Other notes and mortgages................          2,778                2,886
                                         ---------------------------------------
                                                  54,893               49,441
Less current maturities..................             28                  136
                                         ---------------------------------------
                                                 $54,865              $49,305
                                         =======================================

     The  Company  has  a  $75  million  credit  facility  with  four  financial
institutions  extending  through  July 2,  2003.  Borrowings  under  the  credit
facility bear a variable  interest rate based upon LIBOR.  Commitment fees range
from  0.20% to 0.30% per annum  based on the  Company's  leverage  ratio and are
payable on the  unused  portion of the credit  facility.  At May 31,  2000,  the
Company had $52.1 million in  borrowings  under the  agreement,  with a weighted
average variable rate of approximately 6.5%.

     The Company  utilizes two interest  rate swap  agreements,  with a notional
amount of $20  million at May 31,  2000,  to reduce the impact of changes in the
interest rates on its floating rate debt. Under these  agreements,  MMS pays the
counterparties  interest at a weighted average fixed rate of approximately  5.6%
plus the credit spread,  and the  counterparties  pay MMS interest at a variable
rate  equal to LIBOR.  The  differential  to be paid or  received  is accrued as
interest rates change and is recognized as an adjustment to the interest expense
related  to  the  debt.   The  related   amount   payable  or  receivable   from
counterparties is included in trade and other receivables or payables.

     In addition,  the Company had uncommitted  demand lines of credit amounting
to $5  million.  At May 31,  2000,  the  Company  did not  have  any  borrowings
outstanding under these agreements.

     The credit facility contains certain  restrictions on incurring  additional
indebtedness  and certain funded debt, and fixed charge  coverage  requirements.
The Company was in compliance with all such covenants at May 31, 2000.

<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

             Morrison Management Specialists, Inc. and Subsidiaries

NOTE 4. INCOME TAXES

The components of income tax expense (benefit) are as follows:

(In thousands)                            For the Fiscal Year Ended
                             --------------------------------------------------
                               May 31, 2000     May 31, 1999    May 31,1998
                             --------------------------------------------------
Current:
Federal......................        $7,399           $7,301         $6,875
State........................         1,121            1,538          1,449
                             --------------------------------------------------
                                      8,520            8,839          8,324
                             --------------------------------------------------
Deferred:
Federal......................           838             (150)          (670)
State........................           (47)            ( 32)          (141)
                             --------------------------------------------------
                                        791             (182)          (811)
                             --------------------------------------------------
                                     $9,311           $8,657         $7,513
                             ==================================================

Deferred tax assets and liabilities are comprised of the following:

                                           ------------------------------------
(In thousands)                                  May 31, 2000    May 31, 1999
                                           ------------------------------------
Deferred tax assets:
Employee benefits..........................           $5,410          $4,484
Insurance reserves.........................              798           1,093
Bad debt reserve...........................              271             292
Other......................................              467             907
                                           ------------------------------------
Total deferred tax assets..................            6,946           6,776
                                           ------------------------------------
Deferred tax liabilities:
Property and equipment.....................            1,991             517
Retirement plans...........................              502             451
Prepaid deductions.........................              111             157
Other......................................              439             957

                                           ------------------------------------
Total deferred tax liabilities.............            3,043           2,082
                                           ------------------------------------
Net deferred tax assets....................           $3,903          $4,694
                                           ====================================

                            Page 28 in Annual Report

<PAGE>

     SFAS No.  109  specifies  that  deferred  tax assets are to be reduced by a
valuation  allowance  if it is more  likely  than not that some  portion  of the
deferred  tax assets  will not be  realized.  Management  believes  that  future
taxable  income will be sufficient to realize all of the Company's  deferred tax
assets  based on  historical  earnings of the  Company;  therefore,  a valuation
allowance has not been established.

     A  reconciliation  from the  statutory  federal  income tax  expense to the
reported income tax expense is shown below:

(In thousands)                                For the Fiscal Year Ended
                                   --------------------------------------------
                                   May 31, 2000     May 31, 1999    May 31,1998
                                   --------------------------------------------
Statutory federal income taxes.....      $8,250           $7,769         $6,673
State income taxes net of
  federal income tax benefit.......         702              839            853
Other, net.........................         359               49            (13)
                                   --------------------------------------------
                                         $9,311           $8,657         $7,513
                                   ============================================

     The  effective  income tax rate was 39.5%,  39.0% and 39.4% in fiscal years
2000, 1999 and 1998, respectively.

NOTE 5. EMPLOYEE BENEFIT PLANS

DEFINED CONTRIBUTION PLANS:
Salary Deferral Plan

Under the Company's  Salary Deferral Plan,  each eligible  employee may elect to
make pretax  contributions  to a trust fund in amounts ranging from 2% to 10% of
their annual  earnings.  The Company's  contribution to the Plan is based on the
employee's pretax contribution and years of service. Under the provisions of the
Plan, highly compensated employees, as defined by the Internal Revenue Code, are
limited  to  contributions  of 3% and  receive a  maximum  of a 20%  match.  The
Company's  contributions to the trust fund approximated  $655,000,  $515,000 and
$414,000 for fiscal years 2000, 1999 and 1998, respectively.

     During fiscal year 1997, the Company began sponsorship of an employee stock
ownership (ESOP) feature covering  participants in the Salary Deferral Plan. The
Company loaned the Plan $3.6 million (with outstanding  balances of $2.3 million
and $2.8  million at May 31, 2000 and May 31,  1999,  respectively)  to purchase
approximately  280,000 shares of common stock, at an interest rate of 5.47%. The
Company  adopted the  provisions  of AICPA  Statement of Position No. 93-6 which
requires that  compensation  expense be measured  based on the fair value of the
shares over the period the shares are earned.  The fair value of unearned shares
at May 31, 2000 and May 31, 1999 was  approximately  $4,853,000 and  $3,885,000,
respectively.

Deferred Compensation Plan

The Company  maintains  the  Deferred  Compensation  Plan for  certain  selected
employees.  The  provisions  of this  Plan are  similar  to those of the  Salary
Deferral Plan.  Differences  include which employees are eligible to participate
and  the  limitations  on  the  amount  of  deferrals  that  may be  elected  by
participants.  The Company's contributions under the Plan approximated $185,000,
$112,000  and  $104,000,  for fiscal  years 2000,  1999 and 1998,  respectively.
Assets  of the Plan are held in a rabbi  trust and must be  accounted  for as if
they are assets of the Company.  Assets and liabilities of the Plan approximated
$8,162,000  and $6,428,000 at May 31, 2000 and 1999,  respectively,  and include
$1,645,000 and $1,518,000, respectively, of MMS common stock, which is accounted
for as treasury stock at cost.

DEFINED BENEFIT PLANS:
Retirement Plan

The Retirement Plan was frozen by Ruby Tuesday,  Inc. ("RTI") (formerly Morrison
Restaurants  Inc.) on December 31, 1987.  The Company is a joint  sponsor of the
Retirement Plan. No additional benefits accrued, no contributions were made, and
no new participants  entered the Plan after that date. The Company will continue
to share in future  expenses of the Plan.  Participants  will  receive  benefits
based upon salary and length of service. The Plan's assets include common stock,
fixed income securities, short-term investments and cash.

Executive Supplemental Pension Plan

Under the Company's Executive Supplemental Pension Plan, employees with a salary
of at least $100,000 for five consecutive years in a qualifying  position become
eligible to earn supplemental  retirement  payments based upon salary and length
of service, reduced by Social Security benefits and amounts otherwise receivable
under the Retirement Plan.

Management Retirement Plan

Under the Company's Management  Retirement Plan,  individuals that have 15 years
of  credited  service  (as defined by the  Company)  and earn an average  annual
compensation  of at least  $40,000  for the  immediately  preceding  three years
become participants.  Participants receive benefits based upon salary and length
of service,  reduced by Social Security  benefits and benefits payable under the
Retirement Plan and Executive Supplemental Pension Plan.

<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

             Morrison Management Specialists, Inc. and Subsidiaries

     To provide a funding source for the payment of benefits under the Executive
Supplemental  Pension Plan and the Management  Retirement Plan, the Company owns
various life insurance contracts on some of the participants.  The cash value of
these policies,  net of loans,  was $3,632,000 at May 31, 2000 and $2,204,000 at
May 31, 1999. The policies have been placed in a rabbi trust which will hold the
policies and death benefit proceeds as they are received.

                            Page 29 in Annual Report

<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

             Morrison Management Specialists, Inc. and Subsidiaries

     The following table reconciles the change in the pension benefit obligation
and the fair market value of plan assets and presents the  components of pension
expense,  the  funded  status  and  the  amounts  recognized  in  the  Company's
consolidated  financial  statements  for  the  Retirement  Plan,  the  Executive
Supplemental Pension Plan and the Management Retirement Plan.

<TABLE>

(In thousands)                                                                     Benefit Obligation
                                             Assets Exceed                       Exceeds Assets -Executive
                                           Benefit Obligation -                 Supplemental Pension Plan
                                             Retirement Plan                   and Management Retirement Plan
                                     ----------------------------------     ------------------------------------
                                     May 31,     May 31,       May 31,         May 31,      May 31,    May 31,
For the Fiscal Year Ended              2000        1999          1998            2000         1999       1998
                                     ----------------------------------     ------------------------------------
COMPONENTS OF NET PERIODIC PENSION
  EXPENSE/(INCOME):
<CAPTION>
<S>                                  <C>         <C>          <C>             <C>          <C>          <C>
Service cost........................ $    0      $    0       $     0         $   177      $   140      $ 108
Interest cost.......................    293         274           347             408          322        270
Expected return on plan assets......   (391)       (342)       (1,046)              0            0          0
Amortization and deferral...........    128          (8)          629             220          184        149
                                    ----------------------------------     --------------------------------------
Net periodic pension expense/
 (income)........................... $   30      $  (76)      $   (70)        $   805      $   646      $ 527
                                    ==================================     ======================================

CHANGE IN BENEFIT OBLIGATION:
Benefit obligation at beginning
  of year........................... $4,163      $3,895                       $ 5,261      $ 4,318
Service cost .......................      0           0                           177          140
Interest cost.......................    293         274                           408          322
Actuarial (gains) losses............    (33)        588                           616          524
Benefit payments....................   (571)       (594)                         (134)         (43)
                                    --------------------                    ------------------------
Benefit obligation at end of year... $3,852      $4,163                       $ 6,328      $ 5,261
                                    ====================                    ========================

CHANGE IN FAIR VALUE OF PLAN ASSETS:
Fair value at beginning of year..... $4,174      $4,425                       $     0      $     0
Benefit payments....................   (572)       (593)                            0            0
Actual return on plan assets........    391         266                             0            0
Gains on investments................     18          76                             0            0
                                    --------------------                   ------------------------
Fair value at end of year........... $4,011      $4,174                       $     0      $     0
                                    ====================                   ========================
FUNDED(UNFUNDED) STATUS              $  159      $   11                       $(6,328)     $(5,261)
Unrecognized prior service cost.....      0           0                           677          207
Unrecognized net losses.............    961       1,071                         1,370        1,383
Unrecognized net transition
  obligation........................    142         211                           396          456
Additional minimum liability........      0           0                          (609)        (291)
                                    --------------------                   ------------------------
Prepaid (accrued) benefit cost...... $1,262      $1,293                       $(4,494)     $(3,506)
                                    ====================                   ========================
</TABLE>

The weighted  average  discount rate for all three plans was 8.0%, 7.5% and 7.5%
for fiscal  years  2000,  1999 and 1998,  respectively.  The rate of increase in
compensation  levels  for  the  Executive  Supplemental  Pension  Plan  and  the
Management  Retirement Plan was 4% for all three years  presented.  The expected
long-term rate of return on plan assets for the Retirement  Plan was 10% for all
three years.  The aggregate  projected  benefit  obligation and the  accumulated
benefit  obligation  for  the  Executive   Supplemental  Pension  Plan  and  the
Management  Retirement Plan, both of which exceed the fair value of plan assets,
were $6,328,000 and $4,494,000, respectively, as of May 31, 2000, and $5,261,000
and $3,463,000,  respectively,  as of May 31, 1999. For the Retirement Plan, the
projected benefit obligation equaled the accumulated  benefit obligation and was
less than the fair value of plan assets as of May 31, 2000 and May 31, 1999.

                            Page 30 in Annual Report

<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

             Morrison Management Specialists, Inc. and Subsidiaries

NOTE 6. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

The  Company  provides  health  care  benefits  and life  insurance  benefits to
eligible  retirees.  Benefits  are funded as medical  claims and life  insurance
premiums are incurred.  Retirees become eligible for retirement benefits if they
have met certain service and minimum age requirements at date of retirement. The
Company accrues expenses related to postretirement healthcare and life insurance
benefits during the years an employee provides services.

The  following  table  reconciles  the  change  in  the  postretirement  benefit
obligation  and the fair market value of plan assets and presents the components
of net  periodic  postretirement  benefit  expense,  the  funded  status and the
amounts recognized in the Company's consolidated financial statements:

(In thousands)
 -------------------------------------------------------------------------------
 For the Fiscal Year Ended          May 31, 2000     May 31, 1999    May 31,1998
 -------------------------------------------------------------------------------
Components of net periodic postretirement expense:

Service cost........................     $     6          $     8           $  7
Interest cost.......................          89              136            147
Amortization and deferral...........          24               17              4
                                    --------------------------------------------
Net periodic postretirement expense.     $   119          $   161           $158
                                    ============================================

Change in benefit obligation:
Benefit obligation at beginning
  of year..........................      $ 1,853          $ 1,919
Service cost.......................            6                8
Interest cost......................           89              136
Actuarial (gains) losses...........         (502)               0
Benefit payments...................         (119)            (210)
                                   --------------------------------
Benefit obligation at end of year..      $ 1,327          $ 1,853
                                   ================================

Change in fair value of plan assets:

Fair value at beginning of year....      $     0          $     0
Employer contributions.............          119              210
Benefit payments...................         (119)            (210)
                                   --------------------------------
Fair value at end of year..........      $     0          $     0
                                   ================================

Funded (unfunded) status...........      $(1,327)         $(1,853)
Unrecognized prior service cost....          (95)            (117)
Unrecognized net (gains)/losses....          (34)             466
                                   --------------------------------
Accrued postretirement benefit

  cost.............................      $(1,456)         $(1,504)
                                   ================================

The  weighted   average   discount  rate  used  for  measuring  the  accumulated
postretirement benefit obligation was 8.0%, 7.5% and 7.5% for fiscal years 2000,
1999 and 1998, respectively.  SFAS No. 132 requires the disclosure of the impact
of a one percent increase and a one percent  decrease in the assumed  healthcare
cost trend rates on the accumulated  postretirement  benefit  obligation and the
service and interest  costs  components of net periodic  postretirement  benefit
costs. This benefit is not subject to healthcare inflation,  therefore, there is
no impact from a one percent increase or decrease in the trend rates.

NOTE 7. PREFERRED STOCK

Under its  Certificate  of  Incorporation,  the Company is  authorized  to issue
preferred  stock  with a par value of $0.01 in an amount  not to exceed  250,000
shares which may be divided into and issued in designated series,  with dividend
rates, rights of conversion,  redemption,  liquidation prices and other terms or
conditions as determined  by the Board of  Directors.  No preferred  shares have
been issued as of May 31, 2000. The Board of Directors has designated  50,000 of
such  shares as Series A Junior  Participating  Preferred  Stock and has  issued
rights to acquire such shares,  upon certain events, at an exercise price of $75
per  one  one-thousandth  of a  share,  subject  to  adjustment.  Under  certain
circumstances,  the rights will  entitle the  holders  thereof to receive,  upon
payment of the exercise  price,  in lieu of preferred  shares,  shares of common
stock with a market  value equal to twice the  exercise  price.  The rights will
expire  on  March 1,  2006 and may be  redeemed  prior  to ten  days  after  the
acquisition by any person or group of 20% or more of the Company's  common stock
without the consent of the Company.

<PAGE>

NOTE 8. STOCK DIVIDEND

On May 19, 2000, the Company paid a 10% stock dividend to shareholders of record
on May 1, 2000.  Fractional  shares  were cashed out and  payments  were made to
shareholders in lieu of fractional shares on May 19, 2000. The basic and diluted
weighted  average  number  of  shares  outstanding  and  net  income  per  share
information  for all prior  reporting  periods have been restated to reflect the
effects of the stock dividend.

                            Page 31 in Annual Report

<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

             Morrison Management Specialists, Inc. and Subsidiaries

NOTE 9. STOCK INCENTIVE PLANS

Under the Company's stock incentive plans,  equity  incentives may be granted to
key employees and outside  directors to purchase  shares of Company  stock.  The
Company's 1996 Stock Incentive Plan and 1996 Non-Executive  Stock Incentive Plan
(the Plans) are both administered by a Committee,  appointed by the Board, which
has complete  discretion to determine  participants and the terms and provisions
of stock  incentives,  subject to the Plans.  The Plans permit the  Committee to
make  awards of a variety of stock  incentives,  including  (but not limited to)
dividend  equivalent  rights,  incentive  stock  options,   non-qualified  stock
options,  performance unit awards, phantom shares, stock appreciation rights and
stock awards.  All options  awarded under the Plans have been at the  prevailing
market value at the time of issue or grant.  All options  granted have five-year
or  ten-year  terms and become  exercisable  at the end of two or three years of
continued employment. At May 31, 2000 and 1999, the Company had reserved a total
of  1,565,758  and  1,762,684  shares,  respectively,  of common stock under the
Company's  1996 Stock  Incentive  Plan,  and a total of 1,725,717  and 2,020,924
shares,  respectively,  of  common  stock  under  the 1996  Non-Executive  Stock
Incentive Plan.

     The Company's Stock Incentive and Deferred  Compensation Plan for Directors
provides  non-management  directors with  opportunities  to defer the receipt of
their retainer fees or to allocate their retainer fees to purchase shares of the
Company.  In general,  the Plan sets a target ownership level for non-management
directors. All options awarded under the Plan have been at the prevailing market
price at the time of grant. A Committee, appointed by the Board, administers the
Plan on  behalf  of the  Company.  At May 31,  2000 and 1999,  the  Company  had
reserved 78,910 and 85,380 shares, respectively, of common stock for this Plan.

     The Company  applies APB No. 25 and related  interpretations  in accounting
for its stock incentive  plans.  Under APB No. 25, because the exercise price of
the Company's  employee  stock options is set at the prevailing market value, no
compensation expense is recognized.

     Pro forma information  regarding net income and earnings per share has been
determined as if the Company had accounted for its employee  stock options under
the fair value  method of SFAS No.  123.  The fair value for these  options  was
estimated at the date of grant using a  Black-Scholes  option pricing model with
the following weighted average assumptions for fiscal years 2000, 1999 and 1998,
respectively:  risk-free  interest  rates of 5.7%,  5.5%  and  5.7%;  volatility
factors  of .28,  .17 and .24;  dividend  yields  of 0.6%,  0.7% and  0.9%;  and
weighted average expected lives of 6.7, 7.0 and 7.5 years.

     For  purposes of pro forma  disclosures,  the  estimated  fair value of the
options is amortized to expense over the options'  vesting period.  Prior years'
share data and earnings per share  amounts have been adjusted to reflect the May
2000 stock dividend. The Company's pro forma information follows:

(In thousands, except per share data)             For the Fiscal Year Ended
                                           -------------------------------------
                                             May 31,       May 31,      May 31,
                                               2000          1999         1998
                                           -------------------------------------
Pro forma net income - Basic and Diluted... $12,216       $12,224      $10,771
Pro forma earnings per share - Basic....... $  0.95       $  0.94      $  0.82
Pro forma earnings per share - Diluted..... $  0.92       $  0.92      $  0.80


     The effects of applying SFAS No. 123 in this pro forma  disclosure  are not
indicative of future  amounts.  SFAS No. 123 does not apply to awards made prior
to fiscal year 1996, and additional awards are anticipated.

                            Page 32 in Annual Report

<PAGE>

A summary of the Company's stock option activity and related information for the
years ended May, 31, 2000, 1999 and 1998 follows:

<TABLE>

                                          May 31, 2000            May 31, 1999            May 31, 1998
                                       -------------------     -------------------     -------------------
                                                  Weighted                Weighted                Weighted
                                                  Average                 Average                 Average
                                       Options    Exercise     Options    Exercise     Options    Exercise
                                        (000)     Price         (000)     Price         (000)     Price
                                       -------------------     -------------------     -------------------
<CAPTION>
<S>                                      <C>      <C>            <C>      <C>            <C>      <C>
Outstanding - beginning of year........  2,114    $15.20         2,471    $14.95         2,538    $14.38
Granted................................  1,100    $18.25           628    $15.93           392    $16.15
Exercised..............................   (498)   $15.19          (697)   $13.35          (301)   $10.95
Forfeited..............................   (130)   $20.93          (288)   $19.15          (158)   $14.14
                                       -------------------     -------------------     -------------------
Outstanding - end of year..............  2,586    $16.21         2,114    $15.20         2,471    $14.95
                                       ===================     ===================     ===================
Exercisable at end of year.............    874    $14.26         1,143    $15.02         1,210    $15.54
                                       ===================     ===================     ===================
Weighted average fair value of
  options granted during the year.....            $ 6.30                  $ 4.85                  $ 6.05
                                       ===================     ===================     ===================

</TABLE>

The following table summarizes  information  about stock options  outstanding at
May 31, 2000:

<TABLE>

                                     -----------------------------------------------------------------
                                            Options Outstanding                  Options Exercisable
                                     -----------------------------------------------------------------
                                                                        Weighted

                                                   Weighted   Average                       Weighted
Range of                              Number       Average    Remaining        Number       Average
Exercise                              Outstanding  Exercise   Contractual      Exercisable  Exercise
Prices                                  (000)      Price      Life              (000)       Price
------------------------------------------------------------------------------------------------------
<CAPTION>
<S>                                      <C>       <C>         <C>               <C>        <C>
$ 8.16 - $15.00......................    814       $13.80      2.96              743        $13.70
$15.06 - $16.14......................    693       $15.65      7.35               80        $15.77
$16.36 - $17.78......................    674       $17.68      8.73               11        $16.97
$17.84 - $28.72......................    405       $19.60      6.07               40        $20.73
                                     -----------------------------------------------------------------
                                       2,586       $16.21      6.13              874        $14.26
                                     =================================================================
</TABLE>
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
             Morrison Management Specialists, Inc. and Subsidiaries

NOTE 10. CONTINGENCIES

At May 31, 2000,  the Company was  contingently  liable for  approximately  $5.8
million in letters of credit,  issued  primarily in connection with its workers'
compensation and casualty insurance programs.

     The Company is presently,  and from time to time, subject to pending claims
and lawsuits  arising in the ordinary course of its business.  In the opinion of
Management,  the ultimate resolution of these pending legal proceedings will not
have  a  material  adverse  effect  on the  Company's  operations  or  financial
position.

     Prior to the  Distribution,  the Company  entered  into an  agreement  with
Morrison Fresh Cooking,  Inc., a company also spun off in the Distribution,  and
MRI, which subsequently  changed its name to Ruby Tuesday,  Inc.,  providing for
assumptions of liabilities and cross-indemnities.  These agreements are designed
to  allocate  generally,  among  the  three  companies,   effective  as  of  the
Distribution date, financial responsibility for liabilities arising out of or in
connection with business  activities prior to the  Distribution.  No significant
amounts were incurred under this agreement during fiscal year 2000 or 1999.

NOTE 11. SUBSEQUENT EVENT (UNAUDITED)

Subsequent to May 31, 2000, the Company  entered into a strategic  alliance with
foodbuy.com,  Inc.,  a  purchasing  services  firm in the  foodservice  industry
utilizing  e-business  technology.  In  addition,  the  Company  made a minority
investment in foodbuy.com, Inc. of approximately $3.0 million.

                            Page 33 in Annual Report

<PAGE>

NOTE 12. SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly  financial  results  for the years ended May 31, 2000 and May 31, 1999
are summarized below. All quarters are composed of three months.

<TABLE>

                                            First       Second      Third       Fourth
(In thousands, except per share data)       Quarter     Quarter     Quarter     Quarter     Total
-----------------------------------------------------------------------------------------------------
For the fiscal year ended May 31, 2000
<CAPTION>
<S>                                         <C>         <C>         <C>         <C>         <C>
Revenues................................... $93,983     $101,185    $115,024    $130,882    $441,074
=====================================================================================================
Gross profit*.............................. $15,031     $ 16,110    $ 15,425    $ 20,198    $ 66,764
=====================================================================================================
Income before income taxes................. $ 6,020     $  5,680    $  3,876    $  7,997    $ 23,573
Provision for federal and state
  income taxes.............................   2,375        2,232       1,546       3,158       9,311
                                           ----------------------------------------------------------
Net income................................. $ 3,645     $  3,448    $  2,330    $  4,839    $ 14,262
                                           ==========================================================
Earnings per share:**
    Basic.................................. $  0.28     $   0.26    $   0.19    $   0.37    $   1.10
    Diluted................................ $  0.27     $   0.26    $   0.18    $   0.36    $   1.07



For the fiscal year ended May 31, 1999
Revenues................................... $72,246     $ 77,833     $84,085     $90,804    $324,968
====================================================================================================
Gross profit*.............................. $11,597     $ 13,255     $13,771     $15,708    $ 54,331
====================================================================================================
Income before income taxes................. $ 5,255     $  5,620     $ 5,251     $ 6,071    $ 22,197
Provision for federal and state
  income taxes.............................   2,103        2,196       2,021       2,337       8,657
                                           ---------------------------------------------------------
Net income................................. $ 3,152     $  3,424     $ 3,230     $ 3,734    $ 13,540
                                           =========================================================
Earnings per share:**
    Basic.................................. $  0.24     $   0.25     $  0.26     $  0.29    $   1.04
    Diluted................................ $  0.24     $   0.25     $  0.24     $  0.29    $   1.02


*The Company defines gross profit as revenue less operating expenses. **Earnings
per share amounts have been adjusted to reflect the May 2000 stock dividend.

</TABLE>

                            Page 34 in Annual Report

<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

             Morrison Management Specialists, Inc. and Subsidiaries

Stockholders and Board of Directors
Morrison Management Specialists, Inc. and Subsidiaries

We have  audited  the  accompanying  consolidated  balance  sheets  of  Morrison
Management  Specialists,  Inc. and Subsidiaries  (formerly Morrison Health Care,
Inc.)  as of May 31,  2000  and  May 31,  1999,  and  the  related  consolidated
statements of income,  stockholders' equity and cash flows for each of the three
fiscal years in the period ended May 31, 2000.  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 in accordance  with  auditing  standards  generally
accepted in the United States.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  Management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all  material  respects,  the  consolidated  financial  position  of Morrison
Management Specialists,  Inc. and Subsidiaries at May 31, 2000 and May 31, 1999,
and the  consolidated  results of their operations and their cash flows for each
of the three fiscal years in the period ended May 31, 2000, in  conformity  with
accounting principles generally accepted in the United States.

/s/Ernst & Young LLP

Atlanta, Georgia
June 22, 2000

                            Page 35 in Annual Report

<PAGE>

                             SHAREOWNER INFORMATION

             Morrison Management Specialists, Inc. and Subsidiaries

COMMON STOCK MARKET PRICES AND DIVIDENDS
Morrison Management Specialists, Inc. common stock is publicly traded on the New
York Stock Exchange (NYSE) under the ticker symbol MHI. The following table sets
forth the reported high and low sales prices on the NYSE for each quarter during
fiscal years 2000 and 1999.

<TABLE>

                                    First       Second      Third       Fourth
                                    Quarter     Quarter     Quarter     Quarter
-------------------------------------------------------------------------------
<CAPTION>
<S>                                 <C>         <C>         <C>         <C>
2000 MARKET PRICE PER SHARE:
High............................... $23.409     $22.046     $22.841     $28.000
Low................................ $16.875     $16.364     $17.273     $19.205

1999 MARKET PRICE PER SHARE:
High............................... $18.068     $16.818     $18.295     $18.125
Low................................ $15.341     $14.545     $16.477     $15.909

</TABLE>

Market  price per share data has been  adjusted  to  reflect  the May 2000 stock
dividend.

Cash dividends on the common stock of Morrison Management Specialists, Inc. were
paid during each quarter of fiscal years 2000 and 1999 as follows:

<TABLE>

                                    First       Second      Third       Fourth
                                    Quarter     Quarter     Quarter     Quarter     Total
-----------------------------------------------------------------------------------------
<CAPTION>
<S>                                 <C>         <C>         <C>         <C>         <C>
2000 cash dividends per share.......$0.040      $0.040      $0.040      $0.040      $0.160
1999 cash dividends per share.......$0.040      $0.040      $0.040      $0.040      $0.160
</TABLE>

On June 28, 2000, the Company's Board of Directors declared a quarterly dividend
of $0.04 per share,  payable July 31, 2000, to 3,320  stockholders  of record on
July 14, 2000.  Cash  dividends per share of common stock have not been adjusted
to reflect the May 2000 stock dividend.

<TABLE>

<S>                                           <C>
TRANSFER AGENT, REGISTRAR, DIVIDEND           EXECUTIVE AND OPERATING OFFICES
DISBURSING AGENT AND DIVIDEND                 1955 Lake Park Drive, SE
REINVESTMENT PLAN ADMINISTRATOR               Suite 400
SunTrust Bank, Atlanta                        Smyrna, GA 30080
Mail Code 258                                 (770) 437-3300
PO Box 4625
Atlanta, GA 30302                             FORM 10-K INFORMATION
(800) 568-3476                                A copy of the Company's annual
                                              report on Form 10-K, excluding
DIVIDEND REINVESTMENT PLAN                    exhibits, filed with the Securities
For information contact the                   and Exchange Commission, will be
the Dividend Reinvestment Plan                furnished to any shareholder
Administrator or the Investor Relations       without charge upon written request
Department.                                   to the:

INDEPENDANT AUDITORS                          Investor Relations Department
Ernst & Young LLP                             1955 Lake Park Drive, SE, Suite 400
600 Peachtree Street                          Smyrna, GA  30080
Atlanta, GA  30308
                                              ANNUAL MEETING
LEGAL COUNSEL The Annual Meeting of  Shareholders  Powell,  Goldstein,  Frazer &
Murphy LLP will be held Wednesday,  191 Peachtree Street, NE September 27, 2000,
starting at Atlanta, GA 30303 1:00 p.m. EST at the:

                                              Georgia International Convention Center
                                              1902 Sullivan Road
                                              College Park, GA  30337
</TABLE>

Morrison's  Spice  of  Life(TM),  The  Spice  Event  (TM)  ,  Advanced  Culinary
System(TM),  Advanced Culinary Center(TM),  ACC(TM),  Strides for Life(TM),  PhD
(Pro-Health  Dining)(R)  and Resident  Choice(TM)  are  trademarks or registered
trademarks of Morrison  Management  Specialists,  Inc.  Clients for Life(R) is a
registered trademark of Tenacity,  Inc. All other trademarks  identified in this
Annual Report are the property of third parties.

                            Page 36 in Annual Report

<PAGE>
<TABLE>

                        DIRECTORS AND EXECUTIVE OFFICERS

                      Morrison Management Specialists, Inc.

<CAPTION>
<S>                                           <C>

THE BOARD OF DIRECTORS                        EXECUTIVE OFFICERS OF THE COMPANY

Glenn A. Davenport                            Glenn A. Davenport
Chairman and                                  Chairman and
Chief Executive Officer,                      Chief Executive Officer
Morrison Management Specialists, Inc.
                                              K. Wyatt Engwall
Claire L. Arnold (1,2,3)                      Chief Financial Officer
Chairman and Chief Executive                  and Assistant Secretary
Officer, Leapfrog Services Inc.;
Former Chief Executive                        John E. Fountain
Officer, NCC L.P.                             Vice President, General
                                              Counsel and Secretary

E. Eugene Bishop (1,2,3)
Former Chairman                               Jerry D. Underhill
and Chief Executive Officer,                  President, Morrison Healthcare
Morrison Restaurants Inc.                     Food Services

Fred L. Brown (1,2,3)                         Eugene D. Dolloff
Vice Chairman, BJC Health                     President, Morrison Senior Dining
System; Immediate Past Chairman,
American Hospital Association;                Gary L. Gaddy
Visiting Professor,                           Executive Vice President, Sales
George Washington University                  and Marketing

Michael F. Corbett (1,2,3)                    Richard C. Roberson
President, Michael F. Corbett &               Division Vice President,
Associates, LTD; Chairman and                 Morrison Healthcare Food Services
Executive Director of The
Outsourcing Research Council                  George T. Levins
Chairman of The Corbett Group                 Division Vice President,
                                              Morrison Healthcare Food Services

John B. McKinnon (1,2,3)
Former Dean, Babcock Graduate School
of Management, Wake Forest University;
Former President, Sara Lee Corporation

A. Robert Outlaw, Jr. (1,2,3)
Chairman  and Chief Executive
Officer, Marshall Biscuit Company

Dr. Benjamin F. Payton (1,2,3)
President, Tuskegee University


Committees of the Board
1. Compensation and Stock Option*
2. Audit*
3. Nominating*

*Comprised entirely of non-employee Board Members

</TABLE>

                            Page 37 in Annual Report