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(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 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.
300 Galleria Parkway
Suite 1200
Atlanta, Georgia 30339
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 11, 2000
The Annual Meeting of Shareholders of Suburban Lodges of America, Inc.
(the "Company") will be held on May 11, 2000, at 11:00 a.m. at The Cobb Galleria
Centre, Room 117, Two Galleria Parkway N.W., Atlanta, GA 30339, for the purposes
of considering and voting upon the following matters which are described in the
attached Proxy Statement:
1. The election of one director whose term will expire
in 2003; 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 23, 2000,
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 you may withdraw your Proxy at that time
and vote in person.
By Order of the Board of Directors,
Kevin R. Pfannes
Secretary
April 7, 2000
- ---------------------------------------------------------------------------
| |
| 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.
300 Galleria Parkway
Suite 1200
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 Cobb Galleria Centre, Room 117, Two Galleria Parkway N.W., Atlanta,
Georgia 30339 on May 11, 2000, at 11:00 a.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 7, 2000.
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
THE NOMINEE FOR THE BOARD OF DIRECTORS UNDER THE CAPTION "PROPOSAL NO. 1 -
ELECTION OF DIRECTOR."
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 13,715,972 shares of Common Stock of the Company outstanding
and entitled to vote as of the record date, March 23, 2000. 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 dispositive power.
The number of shares represents the number of shares of Common Stock the person
holds as of February 29, 2000, unless otherwise indicated.
1
<PAGE>
<TABLE>
<CAPTION>
Name of Number of Shares Percent
Beneficial Owner<F1> Owned Beneficially of Class<F11>
- --------------------------------------------------------- ---------------------------------- -------------------
<S> <C> <C>
David E. Krischer<F2> 2,900,437 20.8%
SAFECO Corporation<F3> 1,899,800 13.8%
Dimensional Fund Advisors<F4> 959,700 7.0%
Roger Feldman<F5> 783,900 5.7%
Harvey Hanerfeld<F5> 783,900 5.7%
WR Investment Partners Small Cap Corp.<F6> 779,300 5.7%
Dan J. Berman<F7> 165,931 1.2%
Seth H. Christian<F7> 185,594 1.3%
Paul A. Criscillis, Jr.<F8> 22,500 *
James R. Kuse<F9> 25,158 *
Michael McGovern<F9> 420,706 3.1%
Kevin R. Pfannes<F7> 53,127 *
John W. Spiegel<F9> 16,190 *
All Directors and Executive 3,917,453 27.6%
Officers as a Group (eleven persons)<F10>
- --------------------------------------------------------------------
* 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., 300 Galleria Parkway, Suite
1200, Atlanta, Georgia 30339.
<F2> Includes options to purchase 150,000 shares, which are exercisable
within 60 days of March 1, 2000, 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.
<F3> SAFECO Corporation's address is SAFECO Plaza, Seattle, Washington
98185. Share information is based on a Schedule 13G amendment filed
with the Securities and Exchange Commission on February 11, 2000, in
which shared voting power and shared dispositive power as to 1,899,800
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 1,761,700 (11.4%) of
the shares. SAFECO Common Stock Trust, whose address is 10865 Willows
Rd NE, Redmond, Washington 98052, jointly reports shared voting and
dispositive power as to 1,026,800 (6.7%) of the shares. SAFECO Corp.
and SAFECO Asset Management Company disclaim beneficial ownership of
the shares.
<F4> The address of Dimensional Fund Advisors, a Delaware corporation, is
1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401. Share
information is based on a Schedule 13G filed with the Securities and
Exchange Commission on February 3, 2000. The shares are reported as
owned by investment companies and certain group trusts and separate
accounts to whom the reporting entity provides investment advice and
management services.
2
<PAGE>
<F5> The address of Messrs. Feldman and Hanerfeld is 700 Eleventh Street,
N.W., Suite 640, Washington, D.C. 20001. Share information is based on
a Schedule 13G filed with the Securities and Exchange Commission on
November 8, 1999, in which shared voting power as to 783,900 shares
and shared dispositive power as to 196,3000 shares are reported. Of
the shares reported, Cumberland Investment Partners, L.L.C., a
Delaware limited liability company ("Cumberland") owns 587,600 shares,
and West Creek Partners Fund L.P., a Delaware limited partnership (the
"Fund"), owns 196,300 shares. Messrs. Feldman and Hanerfeld are voting
members of Cumberland and are the sole voting members of West Creek
Partners GP, LLC, a Delaware limited liability company and the general
partner of the Fund.
<F6> The address of WR Investment Partners Small Cap Corp., a New Jersey
corporation, is P. O. Box 1975, 330 South Street, Morristown, NJ
07962-1975. Share information is based on a Schedule 13D filed with the
Securities and Exchange Commission on May 13, 1999. E. Burke Ross, Jr.
is reported as the sole shareholder of the reporting corporation.
<F7> Includes options to purchase 50,000 shares, which are exercisable
within 60 days of February 29, 2000.
<F8> Includes options to purchase 12,500 shares, which are exercisable
within 60 days of February 29, 2000.
<F9> Includes 1,000 shares of restricted Common Stock and options to
purchase 6,000 shares, which are exercisable within 60 days of February
29, 2000.
<F10> Includes 3,000 shares of restricted Common Stock and options to
purchase 393,000 shares, which are exercisable within 60 days of
February 29, 2000.
<F11> Based on 13,784,972 shares of Common Stock outstanding on February 29,
2000, as adjusted for shares subject to options exercisable within 60
days of February 29, 2000.
</FN>
</TABLE>
Proposal No. 1 -- 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. One director is to be elected at
the meeting for a three-year term expiring in 2003. The Board has nominated Mr.
John 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
about 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 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. Management of the Company has no reason to
believe that Mr. Spiegel 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.
3
<PAGE>
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.
Name (Age) Information About the Nominee
Nominee for Director Whose Term Will Expire in 2003
- ---------------------------------------------------
John W. Spiegel (59) 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.
Name (Age) Information About the Continuing Directors
- ---------- ------------------------------------------
Directors Whose Terms Expire in 2001
- ------------------------------------
James R. Kuse (69) 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, a chemical
manufacturing company. From February 1989
through February 1991, Mr. Kuse also served as
the Chief Executive Officer of Georgia Gulf
Corporation.
Michael McGovern (56) 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 that provides
corporate, financial and real estate advisory
services throughout the United States. Mr.
McGovern formerly served as a Director of
Premier Bancshares, Inc., and currently serves
as a Director of Bentley Pharmaceuticals, Inc.
Directors Whose Terms Will Expire in 2002
- -----------------------------------------
David E. Krischer (51) Mr. Krischer formed the Company in 1987 to
develop a national chain of economy extended
stay hotels and has served as its Chief
Executive Officer since inception. Mr. Krischer
has over 18 years of experience in real estate
development, has been involved in the
hospitality industry for more than 13 years and
served as the founding Chairman of the Extended
Stay Lodging Council, a division of the American
Hotel & Motel Association.
Dan J. Berman (35) 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.
4
<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. McGovern,
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 two meetings during 1999.
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 three times during 1999.
Board Meetings
During 1999, the Board of Directors held five meetings. Each of the
directors attended at least 80% 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 $2,000
per Board meeting attended in person and $1,250 per Board meeting attended by
telephone, 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, but each committee chairperson
is paid $2,000 per year.
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 an annual 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 of shareholders. 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 shares of Common Stock that have a fair market
value of $10,000 (based on the closing Nasdaq market price on the date of such
meeting). A director is 100% vested with respect to the Common Stock award on
the earlier of the first anniversary of the award or the date of the next annual
meeting of shareholders, 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.
5
<PAGE>
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 during the last three fiscal years to the Company's Chief Executive Officer
and the other four most highly compensated executive officers (with annual
salary and bonus in excess of $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
Annual Compensation Awards
------------------------------------------ -- ------------------
Securities
Underlying
Name and Options/SARs All Other
Principal Position Year Salary Bonus (No. of Shares) Compensation <F1>
- ----------------------------- --------- ---------------- --------------- -- ------------------ -----------------
<S> <C> <C> <C> <C> <C>
David E. Krischer .......... 1999 $302,500 $ 70,000 75,000 $ 2,500
Chairman of the Board, ..... 1998 $270,000 $100,000 75,000 $ 2,478
and Chief Executive 1997 $260,000 $ 1,158
Officer.................
Paul A. Criscillis, Jr ..... 1999 $154,154 $ 35,000 25,000 $ 1,159
Vice President and ......... 1998 $ 57,692 $ 18,750 50,000
Chief Financial Officer
Dan J. Berman .............. 1999 $130,000 $ 32,206 25,000 $ 1,260
Vice President - Franchising 1998 $ 96,692 $ 56,639 25,000 $ 967
1997 $ 80,307 $ 31,165 $ 774
Kevin R. Pfannes ........... 1999 $130,000 $ 23,000 25,000 $ 1,530
Vice President - ........... 1998 $ 67,500 $158,000 25,000 $ 2,314
Development and Secretary 1997 $ 64,538 $ 90,000 $ 797
Seth H. Christian .......... 1999 $130,000 $ 23,000 25,000 $ 1,250
Vice President - Operations 1998 $ 93,254 $ 42,500 25,000 $ 933
1997 $ 71,692 $ 42,000 $ 628
- -----------------------------
<FN>
<F1> The amounts shown in this column consist of contributions by the Company to
its 401(k) Savings Plan on behalf of the named executive officers.
</FN>
</TABLE>
6
<PAGE>
Options Granted in Last Year
The following table summarizes certain information regarding stock
options granted during 1999 to the Company's executive officers named in the
Summary Compensation Table.
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------
Potential Realizable
Number of Percent of Value at Assumed
Securities Total Options Exercise Annual Rates of Stock
Underlying Granted to or Base Price Appreciation for
Options Employees in Price Expiration Option Term
Name Granted<F1> Year ($/Sh) Date 5% 10%
---- ------- ---- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
David E. Krischer......... 75,000 8.9% $5.625 10/25/2009 $265,300 $ 672,400
Dan J. Berman............. 25,000 3.0% $5.625 10/25/2009 $ 88,400 $ 224,100
Seth H. Christian......... 25,000 3.0% $5.625 10/25/2009 $ 88,400 $ 224,100
Paul A. Criscillis, Jr.... 25,000 3.0% $5.625 10/25/2009 $ 88,400 $ 224,100
Kevin R. Pfannes.......... 25,000 3.0% $5.625 10/25/2009 $ 88,400 $ 224,100
- ---------------------------
<FN>
<F1> All of the options have a term of ten years and vest one-third annually
beginning October 25, 2000.
</FN>
</TABLE>
Year-End Option Values
The following table provides certain information about the year-end
values of stock options held at December 31, 1999, by the Company's executive
officers named in the Summary Compensation Table. No options were exercised by
executive officers during 1999.
<TABLE>
<CAPTION>
No. of Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options
Fiscal Year End At Fiscal Year End (1)
----------------------------------- --------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
David E. Krischer.......... 150,000 150,000 0 0
Dan J. Berman.............. 50,000 50,000 0 0
Seth H. Christian.......... 50,000 50,000 0 0
Paul A. Criscillis, Jr..... 12,500 62,500 0 0
Kevin R. Pfannes........... 50,000 50,000 0 0
- --------------------------
<FN>
<F1> None of the outstanding options held by these individuals were in-the-money
on December 31, 1999.
</FN>
</TABLE>
Change in Control Agreements
Each of the Company's eight executive officers has entered into
substantially similar "change in control agreements" with the Company. Pursuant
to the agreements, the officer will immediately vest in all unvested stock
options in the event of a "Change in Control" (as defined in the agreements).
The agreements also provide for certain benefits in the event of a termination
of employment under certain circumstances in connection with a Change in Control
of the Company. In general, each agreement provides benefits to the officer upon
an "involuntary termination" (essentially, termination without cause) or a
"voluntary termination" (essentially, resignation in the face of coercive
tactics) occurring within 24 months after or six months prior to the date of a
Change in Control. Upon any such termination, subject to certain limitations,
the officer will be entitled to receive the following benefits: (i) three times
the officer's then-current salary, paid in a lump sum amount discounted to
present value; (ii) three times the officer's average annual bonus for the
previous two years, paid in a lump sum amount discounted to present value; (iii)
continuation of health and life insurance for three years; (iv) three times the
annual value of the Company's contribution to its 401(k) retirement plan on the
7
<PAGE>
officer's behalf, paid as a lump sum amount discounted to present value; and (v)
payment of up to $25,000 for outplacement services. The agreements place certain
limits on the amounts an individual officer can collect under the agreement.
Each of the agreements is for a rolling three-year term, such that the remaining
term is always three years, provided that each agreement automatically
terminates on the officer's 65th birthday. The Company may terminate any of such
agreements upon three years' notice.
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 1999 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.
To the extent it is able to do so, the Compensation Committee considers
the anticipated tax treatment to the Company and to the executives of various
payments and benefits. No current or anticipated compensation arrangements would
be subject to the $1 million deductibility limitation of Section 162(m) of the
Internal Revenue Code.
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 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
8
<PAGE>
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
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. His
compensation has remained substantially the same over the period since the
Company conducted its initial public offering (adjusted for differences in pay
periods), except that he declined the $100,000 bonus recommended by this
committee for 1997. 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.
James R. Kuse
Michael McGovern
9
<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, 1999.
[Graph appears here and represented by the numbers below]
COMPARISON OF 43 MONTH CUMULATIVE TOTAL RETURN*
AMONG SUBURBAN LODGES OF AMERICA, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE S&P LODGING-HOTALS INDEX
<TABLE>
<CAPTION>
Cumulative Total Return
------------------------------------------------------------------
5/23/96 12/96 12/97 12/98 12/99
<S> <C> <C> <C> <C> <C>
SUBURBAN LODGES OF
AMERICA, INC. 100.00 94.12 78.31 48.16 30.52
NASDAQ STOCK
MARKET (U.S.) 100.00 108.54 133.00 187.41 338.58
S&P LODGING -
HOTELS 100.00 89.55 125.30 102.01 102.00
</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.
Certain Transactions
During 1999 the Company exercised its option to purchase from Michael
McGovern, a director of the Company, his one-fourth interest in L&M Suites I,
LLC, a Georgia limited liability company (formerly a Georgia corporation) which
built a Suburban Lodge Extra(R) hotel in Sandy Springs, Georgia. The Company
paid Mr. McGovern $70,000 to exercise the option. The Company had previously
paid Mr. McGovern $230,000 in 1998 to acquire the option. The Company already
controlled a one-fourth interest in L&M and subsequently has acquired complete
ownership.
10
<PAGE>
Information Concerning the Company's Accountants
Deloitte & Touche LLP ("Deloitte & Touche") served as the Company's
independent public accounting firm during the year ended December 31, 1999.
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 2001 Annual Meeting
Proposals of shareholders intended to be presented at the Company's
2001 Annual Meeting must be received by December 8, 2000, in order to be
eligible for inclusion in the Company's Proxy Statement and Proxies for that
meeting. The Company must be notified of any other shareholder proposal intended
to be presented for action at the meeting not later than February 22, 2001, or
else proxies may be voted on such proposal at the discretion of the person or
persons holding those proxies.
Section 16(a) Beneficial Ownership Reporting Compliance
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 in a
timely manner during 1999. The Company is not aware that any holder of more than
10% of the Company's Common Stock has not filed reports required under Section
16(a) on a timely basis.
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 has filed 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 year
ended December 31, 1999, 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.,
300 Galleria Parkway, Suite 1200, Atlanta, Georgia 30339, Attention: Paul A.
Criscillis, Jr., Chief Financial Officer.
SUBURBAN LODGES OF AMERICA, INC.
April 7, 2000
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COMMON STOCK
OF SUBURBAN LODGES OF AMERICA, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF
DIRECTORS FOR THE 2000 ANNUAL MEETING OF SHAREHOLDERS.
The undersigned hereby appoints David E. Krischer and Dan J. Berman, 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 11:00 a.m. at The Cobb Galleria
Centre, Room 117, Two Galleria Parkway, NW, Atlanta, Georgia 30339, on May 11,
2000, and any adjournment thereof.
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE ELECTION OF THE BOARD NOMINEE,
AND, UNLESS INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN THE SPACE PROVIDED,
THE PROXY WILL BE SO VOTED.
Proposal 1 -- Election of Director Nominee: John W. Spiegel
FOR the nominee listed to the right. WITHHOLD AUTHORITY
to vote for the 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 April 7, 2000 and the Proxy Statement furnished therewith.
Dated and signed ___________________, 2000
__________________________________________
__________________________________________
(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.
