<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Age of 1934
Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(6)(2)
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Suburban Lodges of America, Inc.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Suburban Lodges of America, Inc.
------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-
6(i)(1)(4) and 0-11.
/ / (1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of class of securities to which
transaction applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and
state how it was determined):
----------------------------------------------------------
<PAGE>
SUBURBAN LODGES OF AMERICA, INC.
1000 Parkwood Circle
Suite 850
Atlanta, Georgia 30339
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on April 15, 1997
The Annual Meeting of Shareholders of Suburban Lodges of
America, Inc. (the "Company") will be held on April 15, 1997, at
2:30 p.m. at the Atlanta Marriott Northwest, 200 Interstate North
Parkway, Atlanta, Georgia 30339, for the purposes of considering
and voting upon the following matters, all of which are described
in the attached Proxy Statement:
1. The election of one director whose term will
expire in 2000; and
2. Such other matters as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record at the close of business on
February 28, 1997, the record date fixed by the Board of
Directors, will be entitled to notice of and to vote at the
meeting or any adjournment thereof.
A Proxy Statement and a Proxy solicited by the Board of
Directors are enclosed herewith. Please sign, date and return
the Proxy promptly in the enclosed business reply envelope. If
you attend the meeting you may, if you wish, withdraw your Proxy
and vote in person.
By Order of the Board of Directors,
Kevin R. Pfannes
Secretary
March 25, 1997
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY/VOTING
INSTRUCTION CARD PROMPTLY SO THAT YOUR VOTE MAY BE RECORDED AT
THE MEETING IF YOU DO NOT ATTEND PERSONALLY.
<PAGE>
SUBURBAN LODGES OF AMERICA, INC.
1000 Parkwood Circle
Suite 850
Atlanta, Georgia 30339
PROXY STATEMENT
SHAREHOLDERS' MEETING
This Proxy Statement is furnished in connection with the
solicitation of Proxies by the Board of Directors of Suburban
Lodges of America, Inc. (the "Company") for use at the Annual
Meeting of Shareholders of the Company to be held at the Atlanta
Marriott Northwest, 200 Interstate North Parkway, Atlanta,
Georgia 30339, on April 15, 1997, at 2:30 p.m. and any
adjournment thereof, for the purposes set forth in the
accompanying notice of the meeting. It is anticipated that this
Proxy Statement and the accompanying Proxy will first be mailed
to shareholders on or about March 25, 1997.
REVOCATION OF PROXIES
Any Proxy given pursuant to this solicitation may be revoked
by any shareholder who attends the meeting and gives written
notice of his or her election to vote in person, without
compliance with any other formalities. In addition, any Proxy
given pursuant to this solicitation may be revoked prior to the
meeting by delivering an instrument revoking it or a duly
executed Proxy bearing a later date to the Secretary of the
Company. If the Proxy is properly completed and returned by the
shareholder and is not revoked, it will be voted at the meeting
in the manner specified thereon. If the Proxy is returned but no
choice is specified thereon, it will be voted for the person
named below as a nominee under the caption "Information about the
Nominee and the Continuing Directors."
COSTS OF SOLICITATION
The expenses of this solicitation, including the cost of
preparing and mailing this Proxy Statement, will be paid by the
Company. Copies of solicitation materials may be furnished to
banks, brokerage houses and other custodians, nominees and
fiduciaries for forwarding to beneficial owners of shares of the
Company's common stock, par value $0.01 per share (the "Common
Stock"), and normal handling charges may be paid for such
forwarding service. In addition to solicitations by mail,
directors and regular employees of the Company may solicit
Proxies in person or by telephone.
BENEFICIAL OWNERSHIP OF SECURITIES AND VOTING RIGHTS
There are outstanding and entitled to vote as of the record
date, February 28, 1997, 12,127,502 shares of Common Stock of the
Company. Holders of Common Stock are entitled to one vote per
share on all matters voted on by shareholders, including
elections of directors.
VOTING SECURITIES AND PRINCIPAL HOLDERS. The following
table sets forth as of February 28, 1997, beneficial ownership of
the Common Stock by (i) each "person" (as that term is defined by
the Securities and Exchange Commission (the "SEC")) known by the
Company to be the beneficial owner of more than five percent (5%)
of the Company's voting securities; (ii) each director of the
Company; (iii) the Chief Executive Officer; (iv) the nominee for
director; and (v) all directors and executive officers of the
Company as a group.
1
<PAGE>
<TABLE>
<CAPTION>
Name of Number of Share Percent <F7>
Beneficial Owner <F1> Owned Beneficially of Class
--------------------- ------------------ --------------
<S> <C> <C>
David E. Krischer <F2> 2,837,937 23%
Dan J. Berman <F3> 163,131 1.3%
James R. Kuse<F4><F5> 162,176 1.3%
Michael McGovern<F4> 414,016 3.4%
John W. Spiegel<F4><F8> 9,500 *
All Directors and Executive 3,893,848 31.8%
Officers as a Group (9) persons)<F6>
________________________________
* Represents less than one percent of the outstanding Common
Stock.
<FN>
<F1> Unless otherwise indicated, the address of the persons named
above is care of Suburban Lodges of America, Inc., 1000
Parkwood Circle, Suite 850, Atlanta, Georgia 30339.
<F2> Includes 117 shares held in an individual retirement account
for the benefit of Mr. Krischer's spouse and 117 shares held
in an individual retirement account for the benefit of Mr.
Krischer's daughter, and 37,500 shares of Common Stock
underlying an option which will vest and be exercisable on
May 22, 1997. On December 27, 1996, Mr. Krischer gave
25,000 shares of Common Stock to a charitable trust.
<F3> Includes 100 shares held by Mr. Berman's spouse as joint
tenants with the right of survivorship and 12,500 shares of
Common Stock underlying an option which will vest and be
exercisable on May 22, 1997.
<F4> Includes 1,000 shares of restricted Common Stock and options
exercisable on April 15, 1997 to purchase 1,500 shares of
Common Stock at the IPO price which were granted on May 23,
1996 pursuant to the Directors' Plan.
<F5> Includes 159,676 shares held of record by K & K Holdings,
LLC, a limited liability company in which James R. Kuse has
an indirect 10% interest and the remainder of which is owned
by his son, Michael J. Kuse.
<F6> Includes (a) options exercisable on April 15, 1997 to
purchase 4,500 shares of Common Stock which were granted to
Messrs. Kuse, McGovern and Spiegel on May 23, 1996 pursuant
to the Director's Plan; (b) 37,500 shares of Common Stock
underlying options granted to Mr. Krischer on May 22, 1997
which will vest and be exercisable on May 22, 1997; and (c)
62,500 shares of Common Stock which underlie options
granted on May 22, 1997 to Messrs. Berman, Christian,
Feldman, Hilliard and Pfannes which will vest and be
exercisable on May 22, 1997. Each of Messrs. Berman,
Christian, Feldman, Hilliard and Pfannes will be able to
exercise an option for 12,500 shares of Common Stock on May
22, 1997.
<F7> Based on 12,127,502 outstanding shares of Common Stock as of
February 28, 1997.
<F8> Includes 7,000 shares of Common Stock beneficially owned by
Mr. Spiegel for which the record holder is Montgomery Securities.
</TABLE>
2
<PAGE>
ELECTION OF DIRECTORS
The Articles of Incorporation and the Bylaws of the Company
provide that the Board of Directors shall consist of not less
than two but no more than nine directors. Currently, there are
five directors, three of whom are independent directors. The
Board of Directors is divided into three classes of directors
serving staggered three-year terms. One director is to be
elected at the meeting for a three-year term expiring in 2000.
The Board has nominated John W. Spiegel for re-election to a
three-year term. After the re-election of Mr. Spiegel at the
meeting, the Company will have five directors, including the four
directors whose present terms currently extend beyond the
meeting. Information on Mr. Spiegel and the continuing directors
is set forth below.
Each Proxy executed and returned by a shareholder will be
voted as specified thereon by the shareholder. IF NO
SPECIFICATION IS MADE, THE PROXY WILL BE VOTED FOR THE RE-
ELECTION OF MR. SPIEGEL. In the event that Mr. Spiegel withdraws
or for any reason is not able to serve as a director, the Proxy
will be voted for such other person as may be designated by the
Board of Directors as a substitute nominee, but in no event will
the Proxy be voted for more than one nominee. Management of the
Company has no reason to believe that Mr. Spiegel will not serve
if elected.
Directors are elected by a majority of the votes cast by the
holders of the shares entitled to vote in an election at a
meeting at which a quorum is present. A quorum is present when
the holders of a majority of the shares outstanding on the record
date are present at a meeting in person or by proxy. Abstentions
and broker non-votes will be included in determining whether a
quorum is present at a meeting, but will not have an effect on
the outcome of a vote for directors.
INFORMATION ABOUT THE NOMINEE AND THE CONTINUING DIRECTORS
The following information as of February 28, 1997 has been
furnished by Mr. Spiegel and the continuing directors. Except as
otherwise indicated, the nominee and the continuing directors
have been or were engaged in their present or last principal
employment, in the same or a similar position, for more than five
years.
<TABLE>
<CAPTION>
Name (Age) Information About the Nominee and the Continuing Directors
---------- -----------------------------------------------------------
Nominee for Director Whose Term Will Expire in 2000
- ---------------------------------------------------
<S> <C>
John W. Spiegel (55) Mr. Spiegel was elected as a Director of the Company in May 1996. Since 1985,
Mr. Spiegel has served as Executive Vice President and Chief Financial Officer of
SunTrust Banks, Inc. He has also served as Treasurer of Trust Company of Georgia
since 1978 and is an officer and director of various subsidiaries of SunTrust
Banks, Inc. Mr. Spiegel is also a member of the Board of Directors of Rock-Tenn
Company, Student Loan Marketing Association and ContiFinancial Corporation.
Directors Whose Terms Expire in 1997
- ------------------------------------
James R. Kuse (66) Mr. Kuse was elected as a Director of the Company in May 1996. Mr. Kuse has been
the Chairman of the Board of Directors of Georgia Gulf Corporation since January
1985. From February 1989 through February 1991, Mr. Kuse also served as the
Chief Executive Officer of Georgia Gulf Corporation. Mr. Kuse also serves as a
Director of Rhodes, Inc. and Green Capital Investors.
Michael McGovern (53) Mr. McGovern was elected as a Director of the Company in May 1996. Since 1975,
Mr. McGovern has been the President and a Director of McGovern Enterprises, Inc.,
a company which provides corporate, financial and real estate advisory services
throughout the United States.
3<PAGE>
Directors Whose Terms Expire in 1999
- ------------------------------------
David E. Krischer (47) Mr. Krischer formed the Company in 1987 to develop a national chain of economy
extended stay facilities and has served as its President and Chairman since
inception. Mr. Krischer has over 15 years of experience in real estate
development and has been involved in the hospitality industry for more than ten
years. From 1974 to 1986, he was a partner with two Atlanta law firms,
Arrington, Rubin, Winter, Krischer & Goger and Costanzo & Krischer, where his
practice focused on general business and real estate law and real estate
syndication.
Dan J. Berman (32) Mr. Berman joined the Company in September 1993 as its Vice President -
Franchising and was elected as a Director in March 1996. Prior to joining the
Company in 1993, Mr. Berman practiced commercial law in New York City with the
firm Young and Young from September 1990 to May 1993. Mr. Berman received the
degrees of Juris Doctor and Master of Business Administration from Emory
University Law and Business Schools in 1990.
</TABLE>
BOARD COMMITTEES
There are two standing committees of the Company's Board of
Directors: the Audit Committee and the Compensation Committee.
Both of these committees were formed shortly prior to the IPO and
did not meet in 1996.
AUDIT COMMITTEE. The Audit Committee consists of Messrs.
Kuse, Spiegel and Krischer. The Audit Committee will make
recommendations concerning the engagement of independent public
accountants, review with the independent public accountants the
plans and results of the audit engagement, approve professional
services provided by the independent accountants, review the
independence of the independent public accountants, consider the
range of audit and non-audit fees and review the adequacy of the
Company's internal accounting controls.
COMPENSATION COMMITTEE. The Compensation Committee consists
of Messrs. Kuse and McGovern. The Compensation Committee will
determine compensation for the Company's executive officers and
will administer the Company's 1996 Plan (as defined herein). In
1996, Mr. Krischer, in his capacity as Chairman of the Board,
Chief Executive Officer and President, determined compensation
for all of the Company's employees.
BOARD MEETINGS
During 1996, the Board of Directors held two meetings.
COMPENSATION OF DIRECTORS
The Company's non-employee directors receive directors' fees
of $1,250 per board meeting attended, and all Directors are
reimbursed for their out-of-pocket expenses incurred in
connection with their service on the Board of Directors. In
addition, all non-employee directors are entitled to participate
in and receive non-cash compensation through The Directors' Plan
as described below. Messrs. Krischer and Berman receive no
compensation for their service on the Board of Directors other
than reimbursement for their out-of-pocket expenses incurred in
connection with such service. There will be no fees for
attendance at committee meetings held in conjunction with Board
meetings.
4<PAGE>
THE DIRECTORS' PLAN. The Directors' Plan provides for the grant
of options to purchase Common Stock and the award of Common Stock
to non-employee directors. Provided that a director remains a
director of the Company, he or she is eligible to receive a grant
of 1,500 options, exercisable for ten years, on the earliest of
the first anniversary after the grant or the date of the next
annual meeting. Options are exercisable, for cash, Common Stock,
acceptable cash equivalent or a combination acceptable to The
Directors' Plan administrator. Options are generally non-
transferable. At the first board meeting following the annual
meeting of shareholders, non-employee directors are eligible to
receive an award of 1,000 shares of Common Stock; or if the value
of such shares exceeds $10,000, the equivalent amount of Common
Stock with a fair market value of $10,000. A director is 100%
vested with respect to the Common Stock award on the earliest of
the first anniversary of the award or the date of the next annual
meeting, provided that the director continues to serve as a
director after the Annual Meeting. A director has the right to
vote and to receive dividends with respect to the awarded stock,
even if he or she is not vested. In the event of a change of
control, all restricted stock (other than restricted stock
granted within six months of the Change in Control) and all
options granted under The Directors' Plan shall become
exercisable. On May 23, 1996, the Company granted options to
purchase 1,500 shares of Common Stock at the initial public
offering ("IPO") price, and awarded 1,000 shares of Common Stock
to each non-employee director.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding
the annual compensation for services in all capacities to the
Company and its predecessors for the fiscal year ended December
31, 1996 of David Krischer, the Company's Chief Executive Officer
and the only officer whose annual salary and bonus exceeded
$100,000. The Company has not entered into an employment
agreement with any of its officers or employees.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation All other
Annual Compensation Awards Compensation
------------------- ------ ------------
Securities
Other Underlying
Annual Options/SARs
Name and Compen- (No. of
Principal Position Year Salary Bonus sation Shares)
------------------ ---- ------ ----- ------- --------
<S> <C> <C> <C> <C> <C>
David E. Krischer 1996 $260,000 $121,000 150,000 $1,100 <F1>
Chairman of the Board,
Chief Executive
Officer and President
___________________________
<FN>
<F1> Includes the Company's contribution of $986.03 to the Suburban Lodge
401(k) Savings Plan on behalf of Mr. Krischer and $114.00 in term life
insurance premiums paid by the Company for Mr. Krischer during 1996.
</FN>
</TABLE>
5<PAGE>
1996 STOCK INCENTIVE PLAN. The 1996 Stock Incentive Plan ("The
1996 Plan") which is administered by the Compensation Committee
(the "Administrator"), permits the Administrator to grant, from
time to time, stock awards, restricted stock awards or
performance shares to employees who are selected to participate
in The 1996 Plan (the "Participants") by the Administrator.
Incentive Stock Options ("ISOs") and nonqualified stock options,
exercisable for 10 years, may be granted by the Administrator at
a price that cannot be less than the shares' fair market value on
the date of the grant; PROVIDED, HOWEVER, that the exercise price
of an ISO granted to a shareholder who holds more than 10% of the
Company's Common Stock (a "Ten Percent Shareholder") may not be
less than 110% of the shares fair market value on the date of the
grant and the ISOs granted to any Ten Percent Shareholder are
exercisable for five years. No Participant is permitted to be
granted options to purchase more than 150,000 shares of Common
Stock within a 12-month period.
The 1996 Plan also provides for the awarding of Share
Appreciation Rights ("SARs") which entitle the Participant to
receive an amount no greater than the fair market value of the
Company's Common Stock over the initial price of the SAR (I.E.,
the fair market value of the Company's Common Stock on the date
of the grant of the SAR). The amount payable upon the exercise
of a SAR may be paid in cash, Common Stock, or any combination of
the two, PROVIDED, HOWEVER, that no Participant is entitled to
receive more than the excess of the fair market value of a share
of Common Stock on the date of exercise over the initial value of
the SAR. The maximum number of shares underlying SARs which can
be awarded during any 12-month period to any Participant is
150,000 shares. No Participant may be granted ISOs or related
SARs which are first exercisable in any calendar year for stock
having an aggregate fair market value that exceeds $100,000. A
Participant has no rights as a shareholder until the options are
exercised.
In addition, the Administrator, pursuant to The 1996 Plan,
may award Common Stock to Participants which may be restricted
unless the Participant fulfills certain conditions such as
continuing employment with the Company or achieving certain
objectives. The 1996 Plan also provides for Performance Share
Awards, which entitle the Participant to receive a payment equal
to the fair market value of a specified number of shares of
Common Stock if certain performance standards are met. To the
extent that performance shares are earned, the obligation may be
settled in cash, in Common Stock or by a combination of the two.
No more than 25,000 performance shares may be earned by a
Participant with respect to any performance period.
On the Grant Date, the Company granted to Mr. Krischer
options to purchase 150,000 shares of the Company's Common Stock.
The purchase price to be paid upon the exercise of the options
is $18.70 per share (subject to adjustment as provided in the
1996 Plan) which is 110% of the fair market value of a share of
Common Stock on the Grant Date. The options may be exercised on
each the four consecutive anniversary dates of the Grant Date,
beginning on May 22, 1997 for a quarter of the underlying shares;
provided, however, that the Administrator may accelerate the time
when the options may be exercised. The table which follows
sets forth the options granted to Mr. Krischer.
6
<PAGE>
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Potential Realizable Value
At Assumed Annual Rates
of Stock Price
Appreciation<F3>
No. of % of Total
Securities Options
Underlying Granted To for Option Term
Options Employees Exercise Expiration ---------------
Name Granted in 1996 Price Date 5% 10%
---- ------- ------- ----- ---- -- ----
<S> <C> <C> <C> <C> <C> <C>
David E. Krischer 150,000 <F1> 37.5% $18.70<F2> 5-22-00 $449,518 $1,301,801
<FN>
<F1> On May 22, 1996, the Company granted Mr. Krischer an option to
purchase 150,000 shares of Common Stock which will vest and be
exercisable according to the following schedule:
DATE NUMBER OF ISOs NUMBER OF NQSOs
May 22, 1997 5,880 31,620
May 22, 1998 5,880 31,620
May 22, 1999 5,880 31,620
May 22, 2000 5,880 31,620
23,520 of Mr. Krischer's options are ISOs and the balance are
nonqualified stock options
<F2> The Exercise Price represents 110% of the IPO price per share of
Common Stock.
<F3> These amounts, based on the assumed appreciation rates of 5% and 10%
rates prescribed by the Securities and Exchange Commission rules, are not
intended to forecast possible future appreciation, if any, of the
Company's stock price.
</FN>
</TABLE>
7
<PAGE>
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing a seven-month
cumulative total return among the Company, the NASDAQ Stock
Market-U.S. Index and Standard & Poor's Corporation's Lodging-
Hotel Index.
[graph appears here]
<TABLE>
<CAPTION>
COMPARISON OF 7 MONTH CUMULATIVE TOTAL RETURN <F1>
AMONG SUBURBAN LODGES OF AMERICA, INC., THE NASDAQ STOCK MARKET-US INDEX
AND THE S & P LODGING - HOTELS INDEX
5/23/96 5/96 6/96 7/96 8/96 9/96 10/96 11/96 12/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Suburban Lodges of America, Inc. 100 144 136 117 138 124 123 101 94
NASDAQ Stock Market-US 100 105 100 91 96 103 102 109 109
S&P Lodging-Hotels 100 100 104 94 90 92 94 95 90
<FN>
<F1> Assumes that the value of the investment in Company Common Stock
was $100 on May 23, 1996 and for each index was $100 on April 30, 1996
and that all dividends were reinvested.
/FN
<PAGE>
CERTAIN TRANSACTIONS
Prior to and in connection with the IPO, the Company entered
into a number of transactions with certain of its officers and
directors and their affiliates in connection with the
restructuring of the Company and its operations in preparation
for public ownership. The Company merged with certain affiliated
entities (the "Affiliated Entities") in exchange for an aggregate
of 875,189 shares of Common Stock, with a value of approximately
$15.0 million based upon the IPO price, and approximately $2.9
million in cash. Of these shares, an aggregate of 784,008 shares
were issued to affiliates of the Company, including 307,144
shares issued to Mr. Krischer, 199,333 shares issued to Mr. Kuse
and his affiliates, 131,735 shares issued to Mr. McGovern,
124,630 shares issued to the investors in HS Associates and
21,166 shares issued to the officers of the Company as a group,
in exchange for their interests in the Affiliated Entities.
These shares had a value of approximately $13.3 million based on
the IPO price. Of the shares issued to Mr. McGovern,
approximately 13,500 shares were issued as payment for
development services rendered in connection with the development
of the Mableton facility.
Of the $2.9 million in cash paid in connection with the
acquisition of the Affiliated Entities, approximately $1.1
million was paid to affiliates of the Company as follows:
$84,600 to Mr. Krischer, $545,700 to Mr. Kuse and his affiliates,
$386,600 to Mr. McGovern and $48,000 to the other officers of the
Company as a group. Also, the Company paid a $100,000
development fee (of which $25,000 was paid to Mr. Krischer) with
respect to the Conyers facility.
Prior to the IPO, Messrs. Krischer, Kuse and McGovern and HS
Associates made loans to the Company and the partnerships and
limited liability companies which owned the 16 facilities
acquired in a corporate organization to fund development,
construction and working capital requirements. In connection
with the corporate organization, a portion of the net proceeds of
the IPO was used to repay the indebtedness of the Company and
such partnerships and limited liability companies, including
approximately $1.7 million to affiliates of the Company,
including approximately $401,000 to Mr. Krischer and his family
members, $1.0 million to Mr. Kuse and his affiliates, $129,000 to
Mr. McGovern and $126,000 to HS Associates. In addition, Mr.
Krischer, HS Associates and Mr. McGovern had extended a wrap-
mortgage of approximately $2.7 million to the former owner of the
Forest Park facility. After repayment of the underlying
mortgage, Mr. Krischer, HS Associates and Mr. McGovern received
approximately $559,000, $373,000 and $187,000, respectively, upon
repayment of the wrap-mortgage by such seller. In addition,
almost all of the indebtedness repaid with a portion of the net
proceeds of the IPO had been guaranteed by Mr. Krischer and one
or more of Mr. McGovern and Mr. Kuse and his affiliates.
Immediately prior to the IPO, the Affiliated Entities
distributed to Mr. Krischer, as agent, the cash and cash
equivalents of the Affiliated Entities for purposes of
liquidating current liabilities and making final distributions to
the investors in the Affiliated Entities. The cash distributed
to Mr. Krischer, as agent, aggregated approximately $747,000, and
Messrs. Krischer, Kuse and McGovern, investors in HS Associates
9
<PAGE>
and certain other officers of the Company received approximately
$257,000, $133,000, $75,000, $85,000 and $10,000, respectively,
of such distribution after liquidation of certain liabilities in
the amount of approximately $187,000. These distributions
substantially reduced the cash balances of the Affiliated
Entities immediately prior to the closing of the IPO. Also, the
Company reimbursed the Affiliated Entities $473,000 for expenses
advanced to fund the IPO.
Pursuant to the terms of a Management Agreement between the
Company and the former owner of the Forest Park facility, upon
consummation of the Company's acquisition of the Forest Park
facility, the Company received a sales incentive fee of $198,000,
which was accounted for as a reduction in the price paid for the
Forest Park facility.
Shortly before the IPO, the Company distributed $100,000 to
Mr. Krischer as an advance on his bonus for calendar year 1996.
On December 20, 1996, Suburban Franchise Systems, Inc.
("SFS"), a wholly-owned subsidiary of the Company, entered into a
Preliminary Agreement for a License to Develop a Suburban Lodge
Unit with each of E.E.B. Lodging Systems, LLC ("EEB") and E.E.B.
Lodging Systems II, LLC ("EEBII"), both of which are Georgia
limited liability companies, in which both Michael McGovern, a
director of the Company, and Michael Kuse, the son of James R.
Kuse, a director of the Company, own significant interests. On
the same day, both EEB and EEBII entered into separate
Development and Design/Build Agreements with SLA Development,
Inc. ("SDI"), an affiliate of SFS, pursuant to which each of EEB
and EEBII will pay SDI $100,000 to perform certain services in
connection with the site selection, site purchase, design,
development and construction supervision of their Suburban Lodge
hotels. Subsequently, SFS entered into Suburban Lodge Franchise
Agreements with each of EEB and EEBII which gave EEB and EEBII
the right to operate Suburban Lodge hotels and to utilize certain
license marks in connection therewith.
INFORMATION CONCERNING THE COMPANY'S ACCOUNTANTS
Deloitte & Touche LLP ("Deloitte & Touche") was the
principal independent public accountant for the Company during
the fiscal year ended December 31, 1996. Representatives of
Deloitte & Touche are expected to be present at the Annual
Meeting and will have the opportunity to make a statement if they
desire to do so and to respond to appropriate questions.
The management of the Company plans to recommend to the
Board of Directors that Deloitte & Touche be selected to continue
as the accountant for the Company for the current year.
DEADLINE FOR SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals of shareholders intended to be presented at the
Company's 1998 Annual Meeting must be received by November 25,
1997, in order to be eligible for inclusion in the Company's
Proxy Statement and Proxies for that meeting.
COMPLIANCE WITH SECTION 16(A)
Pursuant to Section 16(a) of the Securities Exchange Act of
1934, each executive officer, director and beneficial owner of
10% or more of the Company's Common Stock is required to file
certain forms with the Securities and Exchange Commission. A
report of beneficial ownership of the Company's Common Stock on
Form 3 is due at the time such person becomes subject to the
reporting requirement and a report on Form 4 or 5 must be filed
to reflect changes in beneficial ownership occurring thereafter.
The Company believes that all filing requirements applicable to
its officers and directors were complied with during the 1996 fiscal
year except for Mr. Spiegel's report of one transaction which was
inadvertently filed late.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
Management of the Company knows of no matters other than
those stated above that are to be brought before the meeting. If
any other matters should be presented for consideration and
voting, however, it is the intention of the persons named as
proxies in the enclosed Proxy to vote in accordance with their
judgment as to what is in the best interest of the Company.
10<PAGE>
AVAILABLE INFORMATION
THE COMPANY WILL FILE AN ANNUAL REPORT ON FORM 10-K WITH THE
SECURITIES AND EXCHANGE COMMISSION. A COPY OF SUCH ANNUAL REPORT
ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996,
INCLUDING THE FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENT
SCHEDULES, BUT EXCLUDING EXHIBITS, MAY BE OBTAINED, FREE OF
CHARGE, UPON WRITTEN REQUEST BY ANY SHAREHOLDER TO: SUBURBAN
LODGES OF AMERICA, INC., SUITE 850, 1000 PARKWOOD CIRCLE,
ATLANTA, GEORGIA 30339, ATTENTION: TERRY J. FELDMAN, VICE
PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER.
SUBURBAN LODGES OF AMERICA, INC.
March 25, 1997
11
<PAGE>
COMMON STOCK
OF SUBURBAN LODGES OF AMERICA, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF
DIRECTORS FOR THE 1997 ANNUAL MEETING OF SHAREHOLDERS.
The undersigned hereby appoints James R. Kuse and Michael
McGovern, or either of them, with power of substitution to each,
the proxies of the undersigned to vote all of the undersigned's
shares of the Common Stock of Suburban Lodges of America, Inc. at
the Annual Meeting of Shareholders of SUBURBAN LODGES OF AMERICA,
INC. to be held at 2:30 p.m. at the Atlanta Marriott Northwest,
200 Interstate North Parkway, Atlanta, Georgia 30339, on April
15, 1997, and any adjournment thereof.
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE NOMINEE AND UNLESS
INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN THE SPACE PROVIDED,
THE PROXY WILL BE SO VOTED.
Election of Nominee Nominee: John W. Spiegel
FOR the nominee listed to the right WITHHOLD AUTHORITY
to vote for nominee
/ / / /
It is understood that this proxy
confers discretionary authority in
respect to matters not known or
determined at the time of the
mailing of the notice of the
meeting to the undersigned.
The undersigned hereby acknowledges
receipt of the Notice of Annual
Meeting of Shareholders dated March
25, 1997 and the Proxy Statement
furnished therewith.
Dated and signed ___________, 1997
_______________________________
_______________________________
(Signature should agree with the
name(s) hereon. Executors,
administrators, trustees, guardians
and attorneys should so indicate
when signing. For joint accounts,
each owner should sign.
Corporations should sign their full
corporate name by a duly authorized
officer.)
This proxy is revocable at or at
any time prior to the meeting.
Please sign and return this proxy
in the accompanying prepaid
envelope.
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