SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(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)
N/A
------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
N/A
-----------------------------------------------------------------
(2) Aggregate number of class of securities to which transaction
applies:
N/A
-----------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fees
was paid previously. Identify the previous filing by registration statement
number or the form or schedule and the date of its filing.
(1) Amount previously paid: N/A
-------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.: N/A
----------------------
(3) Filing Party: N/A
------------------------------------------------------
(4) Date Filed: N/A
--------------------------------------------------------
<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 27 , 1998
The Annual Meeting of Shareholders of Suburban Lodges of America, Inc.
(the "Company") will be held on April 27, 1998, 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 two directors whose terms will expire in
2001; 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 March 2, 1998,
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. The proxy may be revoked at any time
prior to exercise, and if you attend the meeting, then you may, if you wish,
withdraw your Proxy at that time and vote in person.
By Order of the Board of Directors,
Kevin R. Pfannes
Secretary
April 1, 1998
------------------------------------------------------------------
/ 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 27, 1998, 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 April 1, 1998.
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 PERSONS NAMED BELOW AS THE NOMINEES FOR THE BOARD OF DIRECTORS
UNDER THE CAPTION "INFORMATION ABOUT THE NOMINEES 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 15,429,227 shares of Common Stock of the Company outstanding
and entitled to vote as of the record date, March 2, 1998. Holders of
Common Stock are entitled to one vote per share on all matters voted on by
shareholders, including the election of directors.
VOTING SECURITIES AND PRINCIPAL HOLDERS. The following table sets
forth certain information regarding the beneficial ownership of Common Stock
by (i) each director of the Company; (ii) each named executive officer of
the Company; (iii) all directors and executive officers of the Company as a
group and (iv) each person known to the Company to beneficially own more
than five percent (5%) of the outstanding Common Stock. Unless otherwise
indicated, all shares are owned directly and the indicated person has sole
voting and investment power. The number of shares represents the number of
shares of Common Stock the person holds as of March 2, 1998, unless
otherwise indicated.
1
<PAGE>
<TABLE>
<CAPTION>
NAME OF NUMBER OF SHARES PERCENT
BENEFICIAL OWNER <F1> OWNED BENEFICIALLY OF CLASS <F14>
- ----------------------------- ----------------------- -------------------
<S> <C> <C>
David E. Krischer <F2> 2,837,937 18.4%
The Equitable Companies 1,698,752 11.0%
Incorporated <F3>
Provident Investment Counsel, 942,141 6.1%
Inc. <F4>
SAFECO Corp. <F5> 1,965,400 12.7%
Dan J. Berman <F6><F7> 153,131 1.0%
Seth H. Christian <F6><F8> 153,094 1.0%
Terry J. Feldman <F6><F9> 20,205 *
G. Hunter Hilliard <F6><F10> 92,060 *
Kevin R. Pfannes <F6><F11> 15,627 *
James R. Kuse <F12> 19,043 *
Michael McGovern <F12> 414,591 2.7%
John W. Spiegel <F12><F13> 10,075 *
All Directors and Executive
Officers as a Group (nine persons) 3,715,763 23.9%
________________________________
* 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 options to purchase 37,500 shares, which are
currently exercisable, 117 shares held in an individual
retirement account for the benefit of Mr. Krischer's spouse,
117 shares held in an individual retirement account for the
benefit of Mr. Krischer's daughter, and 550,000 shares held
by Parrotts Cove Associates, L.P., a limited partnership of
which Mr. Krischer is the general partner. It does not
include options to purchase an additional 37,500 shares
which become exercisable on May 23, 1998.
<F3> The Equitable Companies Incorporated's address is 787
Seventh Avenue, New York, New York 10019. Share
information is based on an amended Schedule 13G filed with
the SEC on January 8, 1998, in which sole voting power as to
1,697,517 shares and sole dispositive power as to 1,698,752
shares is reported by an affiliated group.
2
<PAGE>
<F4> Provident Investment Counsel, Inc.'s address is 300 North
Lake Avenue, Pasadena, California 91101. Share information
is based on an amended Schedule 13G filed with the SEC on
February 10, 1998, in which sole voting power as to 878,741
shares and sole dispositive power as to 942,141 shares is
reported.
<F5> SAFECO Corp.'s address is SAFECO Plaza, Seattle, Washington
98185. Share information is based on a Schedule 13G filed
with the SEC on March 10, 1998, in which shared voting power
and shared dispositive power as to 1,965,400 shares are
reported. SAFECO Asset Management Company, whose address is
601 Union Street, Suite 2500, Seattle, Washington 98101
jointly reports shared voting and dispositive power as to
1,857,700 (12.0%) of the shares. SAFECO Common Stock Trust,
whose address is the same as SAFECO Corp. jointly reports
shared voting and dispositive power as to 1,466,600 (9.5%)
of the shares. SAFECO Corp. and SAFECO Asset Management
Company disclaim beneficial ownership of the shares.
<F6> Includes options to purchase 12,500 shares, which are
currently exercisable. It does not include options to
purchase an additional 12,500 shares which become
exercisable on May 23, 1998.
<F7> Includes 100 shares held with Mr. Berman's spouse as joint
tenant with the right of survivorship.
<F8> Includes 140,594 shares which are jointly owned with his
spouse.
<F9> Includes 6,000 shares held jointly with his spouse.
<F10> Includes 1,400 shares held by Mr. Hilliard's spouse.
<F11> Includes 117 shares held in an individual retirement account
for Mr. Pfannes' benefit.
<F12> Includes 575 shares of restricted Common Stock and 1,500
shares of Common Stock subject to options.
<F13> Includes 7,000 shares which are jointly owned with his
spouse.
<F14> Based on shares of Common Stock outstanding on March 2,
1998, as adjusted for shares subject to options exercisable
within 60 days of that date.
</FN>
</TABLE>
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 not 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. Two directors are to be elected at the meeting for
a three-year term expiring in 2001. The Board has nominated both
James R. Kuse and Michael McGovern for re-election to a three-year
3<PAGE>
term. After the re-election of Messrs. Kuse and McGovern at the
meeting, the Company will have five directors, including the three
directors whose present terms currently extend beyond the meeting.
Information about Messrs. Kuse and McGovern 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 Messrs. Kuse and
McGovern. In the event that either of Messrs. Kuse or McGovern
withdraws as a nominee 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 two nominees.
Management of the Company has no reason to believe that either of
Messrs. Kuse or McGovern will not serve if elected.
Directors are elected by a plurality 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 voting 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 NOMINEES AND THE CONTINUING DIRECTORS
The following information has been furnished by the nominees and
the continuing directors. Except as otherwise indicated, the nominees
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.
INFORMATION ABOUT THE NOMINEES AND THE
NAME (AGE) CONTINUING DIRECTORS
--------- --------------------------------------
NOMINEES FOR DIRECTOR WHOSE TERMS WILL EXPIRE IN 2001
- -----------------------------------------------------
James R. Kuse (67) Mr. Kuse has been a director of the Company
since May 1996. Since January 1985, he has
served as the Chairman of the Board of
Directors of Georgia Gulf Corporation.
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 (54) Mr. McGovern has been a director of the
Company since 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.
4
<PAGE>
DIRECTORS WHOSE TERMS EXPIRE IN 1999
- ------------------------------------
David E. Krischer (49) Mr. Krischer formed the Company in 1987 to
develop a national chain of economy
extended stay hotels and has served as its
President and Chairman since inception.
Mr. Krischer has over 15 years of
experience in real estate development, has
been involved in the hospitality industry
for more than 12 years and currently is the
Chairman of the Extended Stay Lodging
Council, a division of the American Hotel &
Motel Association. 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 (33) Mr. Berman joined the Company in September
1993 as its Vice President - Franchising
and has been a director since March 1996.
Prior to joining the Company, 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.
DIRECTOR WHOSE TERM EXPIRES IN 2000
- -----------------------------------
John W. Spiegel (56) Mr. Spiegel has been a director of the
Company since 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 and
ContiFinancial Corporation.
5
<PAGE>
BOARD COMMITTEES
There are two standing committees of the Board of Directors: the
Audit Committee and the Compensation Committee. The Company has no
standing nominating committee or other committee performing similar
functions.
AUDIT COMMITTEE. The Audit Committee consists of Messrs.
Krischer, Spiegel, and Kuse. 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 public 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. The Audit Committee held one meeting
during fiscal year 1997.
COMPENSATION COMMITTEE. The Compensation Committee consists of
Messrs. McGovern and Kuse. The Compensation Committee determines
compensation for the Company's executive officers and administers the
Company's 1996 Plan (as defined below). The Compensation Committee
met one time during fiscal year 1997.
BOARD MEETINGS
During 1997, the Board of Directors held four meetings. Each of
the directors attended at least 75% of the Board meetings and meetings
of committees on which he served.
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 are no fees for attendance at committee meetings held in
conjunction with Board meetings.
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 earlier 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 administrator of The Directors' Plan. 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 number of shares 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 earlier of the first
6<PAGE>
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
of control) shall vest and all options granted under The Directors'
Plan shall become exercisable.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding the
annual compensation for services in all capacities to the Company and
its predecessors paid to the Company's Chief Executive Officer and the
other four most highly compensated executive officers during the last
three fiscal years. The Company has not entered into an employment
agreement with any of its officers or employees.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
Awards
---------------------------------------------------------------------
Securities
Underlying
Name and Options/SARs
Principal Position Year Salary Bonus (No. of Shares)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
David E. Krischer............... 1997 $260,000
Chairman of the Board, 1996 $260,000 $121,000 150,000
Chief Executive 1995 $187,000 $7,769
Officer and President
Dan J. Berman.................... 1997 $80,307 $31,165
Vice President -
Franchising
Terry J. Feldman................. 1997 $71,385 $42,000
Vice President, Chief
Financial Officer and
Treasurer
Seth H. Christian................ 1997 $71,692 $42,000
Vice President -
Operations
Kevin R. Pfannes................. 1997 $64,538 $90,000
Vice President-
Development and
Secretary
</TABLE>
7
<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 may be granted by the Administrator at a price that cannot be less
than the share's 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 share's fair market value on
the date of the grant, and the ISOs granted to any Ten Percent Shareholder
may not be exercisable for a period in excess of five years. No Participant
may 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 granting 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 may, pursuant to The 1996 Plan, award
Common Stock to Participants which may be restricted until 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.
No options or SARs were granted to the Chief Executive Officer or any
of the other four executive officers listed above during the fiscal year
1997, and none of those executive officers exercised any options or SARs
last year.
8<PAGE>
<TABLE>
<CAPTION>
FISCAL YEAR-END OPTION VALUES
NO. OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
FISCAL YEAR END AT FISCAL YEAR END <F1>
-----------------------------------------------------------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------- ------------------ --------------- -----------------
<S> <C> <C> <C> <C>
David E. Krischer.......... 37,500 112,500 0 0
Dan J. Berman.............. 12,500 37,500 0 0
Terry J. Feldman........... 12,500 37,500 0 0
Seth H. Christian.......... 12,500 37,500 0 0
Kevin R. Pfannes........... 12,500 37,500 0 0
G. Hunter Hilliard......... 12,500 37,500 0 0
_____________________________
<FN>
<F1> None of the outstanding options held by these individuals were in-the-money
on December 31, 1997.
</FN>
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE
The compensation of the Company's executive officers is generally
determined by the Compensation Committee of the Board of Directors.
The Compensation Committee, which consists of two directors who are
not officers or employees of the Company, also grants stock options to
executive officers. The following report with respect to certain
compensation paid or awarded to the Company's executive officers
during 1997 is furnished by the Compensation Committee.
GENERAL POLICIES
The Company's compensation program is intended to enable the
Company to attract, motivate, reward, and retain the management talent
required to achieve corporate objectives in a highly competitive
industry, and thereby increase shareholder value. It is the Company's
policy to provide incentives to its senior management to achieve both
short-term and long-term objectives. To attain these objectives, the
Company's policy is to provide a significant portion of executive
compensation in the form of at-risk, incentive-based compensation,
such as stock options. The Compensation Committee believes that such
a policy, which directly aligns the financial interests of management
with the financial interests of shareholders, provides the proper
incentives to attract, motivate, reward, and retain high quality
management. In determining the nature and amounts of compensation for
the Company's executive officers, the Compensation Committee takes
into account all factors that its considers relevant, including
business conditions, both in the lodging industry and generally, the
Company's performance in light of those conditions, the market rates
of compensation for executives of similar backgrounds and experience,
and the performance of the specific executive officer.
9<PAGE>
CASH COMPENSATION
Cash compensation for executive officers consists of salary and
cash bonuses. Base salaries and cash bonuses for executive officers
are determined by a subjective assessment of responsibilities and
position within the Company, individual performance, and the Company's
overall performance.
STOCK OPTIONS
The Compensation Committee considers incentive compensation in
the form of stock options to be an integral and relatively large part
of executive compensation in particular and employee compensation
generally. All options granted (other than incentive stock options
granted to a ten percent shareholder) have an exercise price equal to
the fair market value of the Common Stock on the grant date.
Options are granted generally to executive officers and other
company employees upon commencement of employment. Other option
awards are made at the discretion of the Compensation Committee. In
exercising this discretion, the Compensation Committee considers
factors specific to each employee such as salary, position, and
responsibilities and the Company's performance with respect to those
factors such as the rate of the Company's development and growth,
revenue growth, and increases in the market value of the Company's
Common Stock. Option grants relating to recruiting and employment
offers and special circumstances are recommended by management.
CHIEF EXECUTIVE OFFICER COMPENSATION
David E. Krischer founded the Company in January 1987 and has
been its President and Chief Executive Officer since that time. Mr.
Krischer's annual compensation was determined by the Compensation
Committee using the same criteria that were used to determine
compensation levels for other corporate officers and was based on the
Compensation Committee's assessment of Mr. Krischer's overall
performance and on information regarding compensation paid by similar
companies. The Compensation Committee believes that Mr. Krischer's
experience, dedication, and knowledge have been of vital importance to
the successful and ongoing growth of the operations of the Company.
No specific weighting was assigned to these factors. Mr. Krischer's
compensation in 1997 consisted only of base salary.
James R. Kuse
Michael McGovern
10<PAGE>
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing cumulative total return
among the Company, the NASDAQ Stock Market-U.S. Index and Standard & Poor's
Corporation's Lodging-Hotel Index for the period beginning May 23, 1996 and
ending December 31, 1997.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
COMPARISON OF 19 MONTH CUMULATIVE TOTAL RETURN*
AMONG SUBURBAN LODGES OF AMERICA, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE S & P LODGING-HOTELS INDEX
5/23/96 6/96 9/96 12/96 3/97 6/97 9/97 12/97
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUBURBAN LODGES OF AMERICA, INC. 100 136 124 94 106 124 155 78
NASDAQ STOCK MARKET (U.S.) 100 100 103 109 103 121 142 133
S & P LODGING-HOTELS 100 105 92 90 93 104 123 125
</TABLE>
*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.
11
<PAGE>
CERTAIN TRANSACTIONS
In 1997, Suburban Franchise Systems, Inc. ("SFS"), a wholly-owned
subsidiary of the Company, entered into a franchise agreement with
each of E.E.B. Lodging Systems, LLC ("EEB") and E.E.B. Lodging Systems
II, LLC ("EEBII"), for the development and ownership by each of a
Suburban Lodge hotel in Arlington, Texas. EEB and EEBII are Georgia
limited liability companies, in which Michael McGovern, a director of
the Company, owns a one- third interest and Michael Kuse, the son of
James R. Kuse, a director of the Company, owns a one-third interest.
The Company, through its subsidiaries, has entered into agreements
with EEB and EEBII to develop and manage both facilities. In June
1997, EEBII borrowed approximately $837,500 from the Company for the
acquisition and development of the property. EEBII paid off the loan
in September 1997 with 7% annual interest. In addition, in 1997 the
Company was paid $75,000 and $50,000, respectively, by EEB as
development fees for the development of the Arlington South, Texas,
and Arlington North, Texas, Suburban Lodge hotels.
In 1997, the Company entered into development agreements with L&M
Suites I, Inc. ("L&M I") and L&M Suites II, Inc. ("L&M II"), both of
which are Georgia corporations, for the development of two hotels in
Georgia. L&M I and L&M II have each paid $33,000 to the Company as
the initial payment of their development fees. Michael McGovern owns
a one-third interest in each of L&M I and L&M II.
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, 1997. Representatives of Deloitte & Touche are
expected to be present at the Annual Meeting and will have an
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 1999 ANNUAL MEETING
Proposals of shareholders intended to be presented at the
Company's 1999 Annual Meeting must be received by December 3, 1998, 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 1997 fiscal year, except that G. Hunter Hilliard, on
two occasions during 1997, made gifts of 201 shares each and did not
make the required filings.
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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.
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, 1997, 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.
April 1, 1998
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COMMON STOCK
OF SUBURBAN LODGES OF AMERICA, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF
DIRECTORS FOR THE 1998 ANNUAL MEETING OF SHAREHOLDERS.
The undersigned hereby appoints Dan J. Berman and John W.
Spiegel, 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 27, 1998, and any
adjournment thereof.
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE NOMINEES, AND, UNLESS
INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN THE SPACE PROVIDED, THE
PROXY WILL BE SO VOTED.
ELECTION OF NOMINEES NOMINEES: James R. Kuse
Michael McGovern
FOR the nominees listed to the right WITHHOLD AUTHORITY
to vote for all nominees
/ / / /
/ / / /
WITHHOLD AUTHORITY
to vote for an individual
nominee
/ /
/ /
Write name below:
____________________________
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 April 1, 1998 and the Proxy Statement
furnished therewith.
Dated and signed ______________________, 1998
_____________________________________________
_____________________________________________
(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.
