LODGIAN, INC.
3445 PEACHTREE ROAD, N.E., SUITE 700
ATLANTA, GEORGIA 30326
--------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 12, 2000
----------------------------------------------------
To the Stockholders of Lodgian, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of Lodgian,
Inc., a Delaware corporation ("Lodgian"), will be held on Thursday, October 12,
2000, commencing at 9:30 a.m. local time, at The Resource Forum, 3340 Peachtree
Road N.E., Atlanta, Georgia 30326 for the following purposes:
1. To elect two Class II directors to serve for three-year terms expiring
at the 2003 Annual Meeting of Stockholders.
2. To consider a proposal by William J. Yung and his affiliates that the
stockholders adopt a resolution to repeal any provisions or amendments of the
By-laws of the Company adopted by the Board without stockholder approval
subsequent to March 9, 2000 and prior to the Annual Meeting.
3. To consider and act upon such other business as may properly come before
the Annual Meeting.
The Board of Directors has fixed the close of business on August 22, 2000 as
the record date for the determination of stockholders entitled to notice of and
to vote on any matters which may properly come before the Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting in
person. Even if you plan to attend the Annual Meeting, you are requested to
mark, sign, date and return the accompanying proxy as soon as possible. If you
are planning to attend the Annual Meeting, please notify the Secretary or
Assistant Secretary.
By order of the Board of
Directors,
/s/ THOMAS S. GRYBOSKI
--------------------------------
Thomas S. Gryboski
Secretary
Dated: September 1, 2000
Atlanta, Georgia
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AND VOTED AT THE MEETING.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING. PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED WHITE PROXY CARD AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE
YOUR REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PRE-PAID
IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. IF YOU HAVE ANY
QUESTIONS ABOUT THE VOTING OF YOUR SHARES, PLEASE CALL D.F. KING & CO., INC.,
TOLL-FREE AT 1-800-769-6414.
<PAGE>
LODGIAN, INC.
3445 PEACHTREE ROAD, N.E., SUITE 700
ATLANTA, GEORGIA 30326
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished by the Board of Directors of Lodgian, Inc.,
a Delaware corporation ("Lodgian" or the "Company"), in connection with the
Board's solicitation of proxies for use at the 2000 Annual Meeting of
Stockholders of Lodgian (the "Annual Meeting"), which will be held on Thursday,
October 12, 2000, commencing at 9:30 a.m. local time, at The Resource Forum,
3340 Peachtree Road N.E., Atlanta, Georgia 30326, and at any adjournments
thereof, for the purposes set forth in the accompanying Notice of Annual Meeting
of Stockholders. All stockholders are entitled and encouraged to attend the
Annual Meeting in person. This Proxy Statement and the accompanying White Proxy
Card are being mailed to stockholders of Lodgian on or about September 1, 2000.
RECORD DATE AND VOTING SECURITIES
The Board of Directors has fixed the close of business on August 22, 2000 as
the record date for determination of stockholders entitled to notice of, and to
vote at, the Annual Meeting. Holders of record of the common stock, par value
$.01 per share (the "Common Stock"), of Lodgian as of August 22, 2000, will be
entitled to one vote for each share held. On August 22, 2000, there were
28,126,591 shares of Common Stock outstanding and entitled to vote.
VOTING
Each share of Common Stock issued and outstanding on the record date is
entitled to one vote. In the election of directors, the candidates receiving the
highest number of affirmative votes of the shares present and voting at the
Annual Meeting at which a quorum is present will be elected directors. In voting
by proxy with regard to the election of directors, stockholders may vote in
favor of the nominee or withhold their votes as to the nominee. With respect to
the election of directors, where no vote is specified on a proxy, the votes
represented by the WHITE proxy card will be cast, at the discretion of the
proxies named therein, for all the candidates nominated by the Board. An
affirmative vote of a majority of the shares present and voting at the meeting
is generally required for approval of any other items properly submitted to the
stockholders for their consideration. An affirmative vote of 80% of the
outstanding shares of Common Stock is required to amend the By-laws. The
presence at the Annual Meeting in person or by proxy of a majority of the shares
outstanding as of the record date will constitute a quorum. Abstentions and
broker non-votes are counted towards a quorum. Abstentions are counted in
tabulations of the votes cast on proposals presented to stockholders and have
the effect of negative votes, whereas broker non-votes are not counted for any
purpose in determining whether a proposal has been approved.
REVOCABILITY OF PROXIES
A stockholder who has given a proxy may revoke it at any time before it is
exercised by giving notice of revocation to the Secretary or Assistant Secretary
of the Company, by submitting a proxy bearing a later date or by attending the
Annual Meeting and voting in person. Attendance at the Annual Meeting will not,
in itself, constitute revocation of a proxy. PLEASE NOTE, HOWEVER, THAT IF YOUR
SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO
VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN
YOUR NAME.
SOLICITATION OF PROXIES
Solicitation of proxies may be made by directors, officers and other
employees of the Company listed in Appendix A of this Proxy Statement, by means
of personal interview, telephone, telegraph, telefax or electronic
communications. No additional compensation will be paid for any such services.
Costs of solicitation will be borne by the Company. Upon request, the Company
will reimburse the reasonable fees and expenses of banks, brokerage houses or
other nominees or fiduciaries for forwarding proxy materials to, and obtaining
authority to execute proxies from, beneficial owners for whose accounts they
hold shares of Common Stock. The Company has retained D.F. King & Co., Inc.
("D.F. King") to assist in the solicitation of proxies. Pursuant to the
Company's agreement, D.F. King will provide various proxy advisory and
solicitation services for the Company at a fee estimated not to exceed $200,000,
plus reasonable out-of-pocket expenses and indemnification against certain
liabilities. It is expected that D.F. King will use approximately 120 persons in
such solicitation. Certain information concerning the directors, officers and
other employees of the Company who may solicit proxies is outlined in Appendix A
to this Proxy Statement.
Certain information concerning the Common Stock held by the persons listed in
Appendix A and certain transactions between any of them and the Company is set
forth in this Proxy Statement. Although no precise estimate can be made at this
time, the Company anticipates that the aggregate amount to be spent by the
Company in connection with the solicitation of proxies by the Company will be
approximately $450,000, of which approximately $150,000 has been incurred to
date. This amount includes the fees payable to D.F. King but excludes (i) the
salaries and expenses of officers, directors, and employees of the Company; and
(ii) the normal expenses of an uncontested election. The aggregate amount to be
spent will vary depending on, among other things, any developments that may
occur in the proxy contest described below.
Please complete, date and sign the enclosed WHITE proxy card and return it
promptly in the envelope provided. If your shares are held in "street name,"
only your bank or broker can vote your shares and only upon your specific
instructions. Please contact the person responsible for your account and
instruct him or her to vote the WHITE proxy card. The Board of Directors urges
you NOT TO SIGN any GREEN proxy card sent to you by the Yung Group. See "Counter
Solicitation" below. If you have already done so, you may revoke your previously
signed GREEN proxy by delivering a written notice of revocation or a later dated
WHITE proxy card in the enclosed envelope.
COUNTER SOLICITATION
In a letter dated April 18, 2000, a group led by William J. Yung notified the
Company that it intends to nominate William J. Yung, one of Mr. Yung's attorneys
and one of Mr. Yung's employees for election to the Board at the Annual Meeting.
Members of the Yung Group include William J. Yung, his brother Joseph Yung,
Edgecliff Holdings, LLC, Casuarina Cayman Holdings, Ltd., Edgecliff Management,
LLC, The 1994 William J. Yung Family Trust and The 1998 William J. Yung and
Martha A. Yung Family Trust. The Yung Group also notified the Company that it
intends to submit a proposal to stockholders at the 2000 Annual Meeting to
repeal any provisions or amendments of the By-laws of the Company adopted by the
Board without stockholder approval subsequent to March 9, 2000 and prior to the
approval of their proposal. Your Board has not amended the Company's By-laws
since March 9, 2000 and is not considering any amendments at this time. The Yung
Group's proxy materials will contain information regarding its nominees and its
proposal.
YOUR BOARD URGES YOU NOT TO SIGN ANY PROXY CARD SENT TO YOU BY THE YUNG GROUP.
IF YOU HAVE ALREADY DONE SO, YOU MAY REVOKE YOUR PREVIOUSLY SIGNED PROXY BY
SUBMITTING A LATER DATED WHITE PROXY IN THE ENCLOSED ENVELOPE.
On April 7, 2000, certain members of the Yung Group filed a Verified
Complaint for Declaratory and Injunctive Relief in the Court of Chancery of the
State of Delaware in and for New Castle County, encaptioned CASUARINA CAYMAN
HOLDINGS LTD. and EDGECLIFF HOLDINGS, LLC v. LODGIAN, INC., ET AL. (the "Yung
Complaint"). Named as defendants are the Company and five of its directors. The
Yung Complaint alleges that the defendant directors breached their fiduciary
duties in connection with effecting certain changes to the size and composition
of the Company's Board. Before January 12, 2000, the Board was comprised of
eight members divided into three classes: Class I (term expiring in 2002)
included Peter R. Tyson and one vacant seat; Class II (term expiring in 2000)
included Michael A. Leven, Joseph C. Calabro and John M. Lang; and Class III
(term expiring in 2001) included Robert S. Cole, Richard H. Weiner and one
vacant seat. Under the rules and regulations of the New York Stock Exchange and
the Company's certificate of incorporation, the directors must be apportioned as
evenly as possible among the classes. Therefore, as announced on March 9, 2000,
the Board took action consistent with its authority under the Company's
certificate of incorporation, bylaws and applicable law to apportion the
director classes as evenly as possible. First, Joseph C. Calabro resigned as a
Class II Director with a term expiring in 2000 and was appointed to fill a
vacancy in Class I. Second, the Board of Directors reduced the Board's size from
eight to six members, with the result that each class now consists of two
directors. On May 1, 2000, the Company and the individual defendants moved to
dismiss the complaint. The Company believes that the allegations set forth in
the Yung Complaint are frivolous. The Board took lawful and appropriate action
solely to bring the Company into compliance with its certificate of
incorporation and the rules and regulations of the New York Stock Exchange.
On July 19, 2000, certain members of the Yung Group filed a complaint in the
Court of Chancery of the State of Delaware in and for New Castle County,
encaptioned CASUARINA CAYMAN HOLDINGS LTD. and EDGECLIFF HOLDINGS, LLC v.
LODGIAN, INC., seeking to establish a date for the 2000 annual meeting of
stockholders of Lodgian. The Company believes that the Yung Group had no basis
for initiating this action because at the time the Yung Group initiated its
lawsuit the Company was in full compliance with Delaware law regarding annual
stockholder meetings which requires that a Company designate a date for its
annual stockholder meeting within 13 months of its last annual stockholder
meeting. The Company announced the date of its 2000 annual meeting within such
13 month period. In addition, at the time it initiated its lawsuit, the Yung
Group was fully aware that Lodgian, as a public company, was prohibited by the
federal securities laws from soliciting proxies for its annual stockholder
meeting until the Company's annual report was completed. As previously
announced, Lodgian's 1999 annual report was delayed due to difficulties in
integrating and converting information and accounting systems resulting from the
Company's December 1998 merger with Impac Hotel Group. Once the annual report
was completed the Company immediately set the date for the Annual Meeting, and
since the date for the Annual Meeting has now been set, the Company believes
that the Yung Group has no legitimate basis for pursuing this action.
On August 16, 2000, the Company filed a complaint against the Yung Group in
United States District Court for the Southern District of New York, captioned
LODGIAN, INC. V. CASUARINA CAYMAN HOLDINGS LTD., ET AL. The complaint asserts
that the Yung Group violated Section 13 of the Securities and Exchange Act of
1934 by making false and misleading statements in its filings with the
Securities and Exchange Commission on Schedule 13D. In particular, the complaint
alleges that the Yung Group failed to disclose that its actual purpose in
acquiring stock in the Company and seeking to elect directors to the Board is to
force a sale of the Company to a third party or, in the alternative, to the Yung
Group at a price that does not reflect Lodgian's full value or, failing that, to
force the Company to repurchase the shares held by the Yung Group at a
substantial premium to market price. The Company's complaint alleges that these
plans should have been, but were not disclosed in the Yung Group's Schedule 13D
filings. Lodgian believes these allegations are supported by its discussions
with the Yung Group during which the Yung Group has never submitted an
unconditional, firm and fair offer to acquire the Company at a price that the
Company believes reflects the full value of Lodgian. In addition, the Yung Group
recently proposed to Lodgian that Lodgian sell certain of its hotels to the Yung
Group and use part of the proceeds from the sale to purchase the Lodgian stock
held by the YUNG GROUP ONLY, at a SUBSTANTIAL PREMIUM to MARKET PRICE in a
"greenmail" transaction.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF THE
NOMINEES OF THE BOARD DESCRIBED BELOW AND NOT VOTE IN FAVOR OF THE NOMINEES OF
THE YUNG GROUP. THE BOARD OF DIRECTORS ALSO RECOMMENDS A VOTE AGAINST THE YUNG
GROUP'S PROPOSAL RELATING TO THE BY-LAWS OF YOUR COMPANY.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding ownership of
Common Stock as of August 22, 2000, by (i) each person known to the Company to
be the beneficial owner of more than 5% of the issued and outstanding Common
Stock as of August 22, 2000, (ii) each of the members of the Company's Board of
Directors, (iii) each of the Company's current executive officers named in the
"Summary Compensation Table" under "Executive Compensation" below, and (iv) all
directors and executive officers of the Company as a group. All shares were
owned directly with sole voting and investment power unless otherwise indicated.
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
COMMON STOCK COMMON STOCK
BENEFICIALLY BENEFICIALLY
OWNED(1)(15) OWNED(2)
NAME OF BENEFICIAL OWNER AND ADDRESS OF BENEFICIAL
OWNER
BENEFICIAL OWNERS OF 5% OR MORE OF OUTSTANDING
COMMON STOCK:
<S> <C> <C>
William J. Yung.................................... 4,191,800(3) 14.5%
207 Grandview Drive
Fort Mitchell, KY 41017
Dimensional Fund Advisors.......................... 1,556,300(4) 5.4%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401 DIRECTORS:
Robert S. Cole..................................... 724,672(5) 2.5%
Joseph C. Calabro.................................. 276,360(6) *
John M. Lang....................................... 368,472(7) 1.3%
Michael A. Leven................................... 40,724(8) *
Peter R. Tyson..................................... 61,316(9) *
Richard H. Weiner.................................. 60,100(10) *
NON-DIRECTOR EXECUTIVE OFFICERS:
Karyn Marasco...................................... 90,200(11) *
Kenneth R. Posner.................................. 420,000(12) 1.5%
Lawrence Carballo.................................. 23,000(13) *
All directors and executive officers as a group (nine
persons)......................................... 2,064,844(14) 7.2%
</TABLE>
----------------------
* Represents less than 1%.
(1) This number does not include those shares of Lodgian to be distributed
upon conversion of shares of Servico, Inc. ("Servico") and Impac Holdings,
LLC ("Impac") units pursuant to the Merger which have as yet not been
converted.
(2) Ownership percentages are based on 28,126,591 shares of Common Stock
outstanding as of August 22, 2000 and options to purchase 762,500 shares
of Common Stock currently exercisable by the named individual or group.
(3) William J. Yung filed a Schedule 13D/A dated August 22, 2000 with the SEC
reporting beneficial ownership of 4,191,800 shares of Common Stock. Mr.
Yung may be deemed to be the indirect beneficial owner of and have shared
voting and dispositive power with respect to (i) the 2,598,100 Shares held
by Edgecliff Holdings, LLC by virtue of his indirect control of Edgecliff
Holdings, LLC and (ii) the 1,593,700 Shares held by Casuarina Cayman
Holdings, Ltd. by virtue of his direct control of Casuarina.
(4) Dimensional Fund Advisors filed a Schedule 13G dated February 3, 2000 with
the SEC reporting ownership of 1,556,300 shares of Common Stock with sole
voting and dispositive power with respect to such shares.
(5) Includes currently exercisable options to purchase 37,000 shares of Common
Stock.
(6) Includes currently exercisable options to purchase 60,000 shares.
(7) The shares in the table above do not include: (i) shares beneficially held
by ProTrust Properties IV, Ltd., ProTrust Properties V, Ltd., Hotel
Investors, L.P., and ProTrust Equity Growth Fund I, L.P. (collectively,
the "Entities"), from which, as of June 8, 1999, Mr. Lang resigned his
position as manager, and the shares held by which were formerly deemed to
be beneficially owned by him; and (ii) shares beneficially owned by Hotel
Capital II, LLC, a limited liability company whose manager, with sole
voting and dispositive power, is Robert H. Woods (a partner in Lang
Capital Partners, LLC), with respect to which Mr. Lang is not a member or
manager, and does not have voting or dispositive power with respect to
those shares; therefore, such shares are not included in Mr. Lang's
beneficial ownership. Includes currently exercisable options to purchase
5,000 shares.
(8) Includes currently exercisable options to purchase 30,000 shares of Common
Stock and 5,700 shares owned by Mr. Leven's spouse.
(9) Includes currently exercisable options to purchase 60,000 shares of Common
Stock.
(10) Includes currently exercisable options to purchase 60,000 shares of Common
Stock.
(11) Includes currently exercisable options to purchase 87,500 shares of Common
Stock.
(12) Includes currently exercisable options to purchase 400,000 shares of
Common Stock.
(13) Includes currently exercisable options to purchase 23,000 shares of Common
Stock.
(14) Includes currently exercisable options to purchase 762,500 shares of
Common Stock.
(15) All options described in this table have been priced at $6.125 per share.
ELECTION OF DIRECTORS
The Restated Bylaws of Lodgian provide that the Lodgian Board will consist of
not less than six members, the exact number to be determined by resolution
adopted by the affirmative vote of a majority of all directors of Lodgian. The
number of directors is currently set at six. The Board of Directors is divided
into three classes; directors in each class are elected for a three-year term in
staggered years.
John M. Lang, and Michael A. Leven, the Class II directors whose terms expire
at the 2000 Annual Meeting, have been nominated for re-election to the Board of
Directors to hold office for a full three-year term expiring at the 2003 Annual
Meeting of Stockholders or until a successor has been duly elected and
qualified. The nominees are presently directors of Lodgian and have consented to
be named as nominees and to serve as directors if elected. Should a nominee be
unable or unwilling to serve as a director, the enclosed proxy will be voted for
such other person or persons as the Board of Directors may recommend. Management
does not anticipate that such an event will occur.
INFORMATION ABOUT THE NOMINEES, THE CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
The table below sets forth the names and ages of the directors and the
executive officers of the Company, as well as the positions and offices held by
such persons. A summary of the background and experience of each of these
individuals is set forth after the table.
NAME AGE POSITION WITH LODGIAN
---- --- ---------------------
Nominees for election as director:
John M. Lang...................... 45 Director and Member of the Office
of the Chairman of the Board
Michael A. Leven.................. 62 Director and Member of the Office
of the Chairman of the Board
Directors whose terms expire in 2001:
Robert S. Cole.................... 38 Director, Chief Executive Officer
and President
Richard H. Weiner................. 50 Director
Directors whose terms expire in 2002:
Peter R. Tyson.................... 53 Director
Joseph C. Calabro................. 49 Director and Chairman of the Office
of the Chairman of the Board
Executive officers who are not
directors:
Karyn Marasco..................... 42 Chief Operating Officer and
Executive Vice
President
Thomas R. Eppich.................. 48 Chief Financial Officer
Robert S. Cole has been the Chief Executive Officer and President of the
Company since the December 11, 1998 merger between Servico and Impac (the
"Merger"). From 1990 until the Merger, Mr. Cole was the President of Impac and
its predecessors and affiliates. Prior to that time, he held a variety of
general manager positions in hotels throughout the United States.
Karyn Marasco has been the Chief Operating Officer and Executive Vice
President of the Company since the Merger. From 1997 until the Merger, Ms.
Marasco was the Chief Operating Officer and Executive Vice President of Servico.
Prior to such time, Ms. Marasco was affiliated with Westin Hotels & Resorts for
18 years. Most recently, Ms. Marasco served as Westin's Area Managing Director,
based in Chicago.
Thomas R. Eppich has been the Chief Financial Officer for Lodgian, Inc. since
June 1, 2000. Mr. Eppich is also currently affiliated with Jay Alix &
Associates, a turnaround and restructuring financial consulting firm. During
1997 and 1998, Mr. Eppich was affiliated with Questor Management Company and
during 1995 and 1996 was a Vice President of Questor Management Company. Questor
Management Company manages the Questor Partners Funds, which invest in troubled
and underperforming companies. Mr. Eppich possesses more than 25 years of public
accounting, auditing and financial consulting experience.
Joseph C. Calabro has been a director of Lodgian since the Merger, is
currently Chairman of the Office of the Chairman of the Board and was a director
of Servico from August 1992 until the Merger. Mr. Calabro has been a principal
of Joseph C. Calabro, C.P.A., a Devon, Pennsylvania accounting firm, since 1982.
Mr. Calabro has also been an officer and director of Bibsy Corporation, which
previously owned and operated a Holiday Inn hotel in Bensalem, Pennsylvania,
since 1971.
John M. Lang has been a director of Lodgian since the Merger. Mr. Lang is the
President of Lang Capital Partners, LLC, a private real estate venture firm
based in Atlanta, Georgia. From June 1996 until May 1998, Mr. Lang served as
Chief Executive Officer of ProTrust Capital, Inc. ("ProTrust"), a private
investment firm based in Atlanta, Georgia. Mr. Lang is a member of ProTrust
Holdings LLC, ProTrust Holdings II, LLC, Hotel Investors, LLC and ProTrust
Equity Partners, LLC. Each of these private equity partnerships made investments
in hotels acquired or developed by Impac. Prior to joining ProTrust in June
1996, Mr. Lang, an attorney, was the managing partner of Reece & Lang, P.S.C., a
London, Kentucky law firm with offices in Atlanta.
Michael A. Leven has been a director of Lodgian since the Merger and was a
director of Servico from August 1997 until the Merger. Since October, 1995 until
June 2000, Mr. Leven served as President, Chairman and Chief Executive Officer
of US Franchise Systems, Inc., which sells franchises for Hawthorne Suites, Best
Inns and Microtel Inns hotel brands. Since June 2000, Mr. Leven has been
Chairman and Chief Executive Officer of US Franchise Systems, Inc. From October
1990 until September 1995, Mr. Leven was President and Chief Operating Officer
of Holiday Inn Worldwide.
Peter R. Tyson has been a director of Lodgian since the Merger and was a
director of Servico from August 1992 until the Merger. From December 1990 to the
present, Mr. Tyson has been President of Peter R. Tyson & Associates, Inc., a
firm offering consulting services to clients in the hospitality industry. Prior
to forming Peter R. Tyson & Associates, Inc., Mr. Tyson was the
partner-in-charge of the hospitality industry consulting practice in the
Philadelphia office of the accounting and consulting firm of Laventhol &
Horwath, with which he was associated for 20 years.
Richard H. Weiner has been a director of Lodgian since the Merger and was a
director of Servico from August 1992 until the Merger. Mr. Weiner is a senior
partner in the Albany, New York law firm of Cooper, Erving, Savage, Nolan &
Heller, where he has practiced law since 1975.
DIRECTOR COMPENSATION
Lodgian pays non-executive Board members a $24,000 total annual retainer, as
well as fees of $1,500 per board meeting, $1,000 per board committee meeting,
and $500 per telephonic board or board committee meeting. This amount is payable
in either cash or stock of the Company or a combination of both at the
discretion of the Director. In addition, Mr. Joseph C. Calabro, in lieu of the
normal annual retainer and per meeting fees, is receiving annual director
compensation of $100,000 for services rendered to Lodgian in his capacity as
Chairman of the Office of the Chairman of the Board. Mr. Robert Cole, as an
executive officer of the Company, received no compensation for serving as a
member of Lodgian's Board.
Lodgian also reimburses directors for expenses associated with attending
Board and committee meetings.
Under the Company's Stock Option Plan, each non-employee director is
automatically granted, on the date such director's term of office commences and
each year thereafter on the day following any annual meeting of stockholders (as
long as such director's term as a director is continuing for the ensuing year),
an option to acquire 5,000 shares of Common Stock at an exercise price equal to
the fair market value of the Common Stock on the date of grant. All options
granted to non-employee directors become exercisable upon grant.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of Lodgian held 15 meetings during the last fiscal
year. No director attended fewer than 86% of the total aggregate number of the
Company's meetings of the Board of Directors and any committee of the Board of
Directors on which such director served during his tenure as a director or
committee member.
The Board of Directors of Lodgian currently has two standing committees: the
Audit Committee and the Compensation Committee. The full Board of Directors
currently serves as the Nominating Committee.
The principal functions of the Audit Committee are to review the Company's
financial statements and management's disclosures, recommend to the Board of
Directors the appointment of independent public accountants to be employed by
the Company, confer with the independent public accountants concerning the scope
of their audit and, on completion of their audit, review the accountants'
findings and recommendations, review the adequacy of the Company's systems of
internal accounting controls, review areas of possible conflicts of interest and
sensitive payments and consider such other matters as the committee deems
appropriate. The Audit Committee of Lodgian held three formal meetings during
the last fiscal year. The present members of the Audit Committee are Joseph C.
Calabro, John M. Lang, Peter R. Tyson and Richard H. Weiner.
The principal functions of the Compensation Committee are to approve or, in
some cases, to recommend to the Board of Directors remuneration arrangements and
compensation plans involving the Company's directors and executive officers,
review bonus criteria and bonus recommendations, review compensation of
directors and administer the Company's Stock Option Plan. The Compensation
Committee held one formal meeting during the last fiscal year. The present
members of the Compensation Committee are John M. Lang, Michael A. Leven, Peter
R. Tyson and Richard H. Weiner.
EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning
compensation paid or accrued by the Company, to or on behalf of the Chief
Executive Officer and to each of the Company's executive officers other than the
Chief Executive Officer during the year ended December 31, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
OTHER AWARDS
ANNUAL SECURITIES ALL OTHER
COMPEN- UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) SATION ($) OPTIONS/SARS(5) SATION(6)
--------------------------- -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert S. Cole(1).................. 1999 293,524 -- -- -- --
Chief Executive Officer and 1998 17,308 -- -- 185,000 --
President
Karyn Marasco(2)................... 1999 257,862 121,000 -- -- --
Chief Operating Officer and 1998 235,000 100,000 -- -- 20,106
Executive Vice President 1997 137,269 60,000 -- 125,000 --
Kenneth R. Posner(3)............... 1999 159,812 180,000 -- 400,000 4,791
Chief Financial Officer and
Executive Vice President
Lawrence Carballo(4)............... 1999 137,581 -- -- --
Vice President, Corporate 1998 128,000 40,000 -- -- 419
Controller and Treasurer 1997 118,519 40,000 -- 20,000 4,750
</TABLE>
----------------------------
(1) Mr. Cole has served as Chief Executive Officer and President since
December 11, 1998.
(2) Ms. Marasco's employment with Servico began in May 1997.
(3) Mr. Posner served as Executive Vice President and Chief Financial Officer
of Lodgian from April 27, 1999 until June 1, 2000. Since June 1, 2000 he
has continued to serve as Executive Vice President.
(4) Mr. Carballo served as Interim Chief Financial Officer of Lodgian from
March 1, 1999 until April 27, 1999. Thereafter, Mr. Carballo was appointed
Vice President and Corporate Controller. In November, 1999, Mr. Carballo
was appointed Treasurer. Mr. Carballo resigned from the Company effective
February 11, 2000.
(5) Represents the number of shares of common stock underlying the
options/SARs.
(6) Each item included in this column represents a contribution made by
Lodgian under its 401(k) Plan on behalf of the named executive based on
such executive's annual elective pre-tax deferred contribution (included
under Salary) to such plan, except for Ms. Marasco, whose figure also
includes a relocation allowance of $19,687 and Mr. Posner whose figure
includes a relocation allowance of $4,791.
STOCK OPTION PLAN
The Company's Stock Option Plan provides for the issuance of incentive stock
options within the meaning of Section 422A of the Internal Revenue Code of 1986
(the "Internal Revenue Code") and non-qualified stock options not intended to
meet the requirements of Section 422A of the Internal Revenue Code. The plan is
administered by a committee of the Board of Directors which, subject to the
terms of the plan, determines to whom grants are made and the vesting, timing
and amounts of such grants.
The following table sets forth information concerning stock option grants
made during 1999 to the executive officers named in the "Summary Compensation
Table," including the potential realizable value of each grant assuming that the
market value of the Common Stock appreciates from the date of grant to the
expiration of the option at annualized rates of 5% and 10%, in each case
compounded annually over the term of the option. These assumed rates of
appreciation have been specified by the Securities and Exchange Commission for
illustration purposes only and are not intended to predict future prices of the
Common Stock. The actual future value of the options will depend on the market
value of the Common Stock.
<TABLE>
<CAPTION>
STOCK OPTION GRANTS IN FISCAL YEAR 1999
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE AT
NUMBER OF PERCENT OF ASSUMED ANNUAL RATES OF
SECURITIES TOTAL STOCK PRICE
UNDERLYING OPTIONS/SARS EXERCISE APPRECIATION FOR OPTION
OPTIONS/SARS GRANTED TO PRICE EXPIRATION ------------------------------
GRANTED EMPLOYEES (&) ($/SH) DATE 5% ($) 10% ($)
------------- --------------------------- ------------ -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Kenneth R. Posner 400,000 58% $ 5.00 4/9/09 1,257,789 3,187,485
</TABLE>
The following table sets forth certain summary information concerning
exercised and unexercised options to purchase Servico's Common Stock as of
December 31, 1999, under Lodgian's Stock Option Plan held by the executive
officers named in the "Summary Compensation Table."
STOCK OPTION EXERCISES IN FISCAL YEAR
1999 AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS IN-THE-MONEY
HELD AT FISCAL OPTIONS/SARS AT
ACQUIRED ON VALUE YEAR-END (#) FISCAL YEAR-END ($)(1)
----------------------------- --------------------------
NAME AND POSITION DURING 1999 FISCAL YEAR EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------------------------------------- ---------------------------------------- ----------------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Robert S. Cole........................... -- -- 37,000 148,000 -- --
President and Chief Executive Officer
Karyn Marasco............................ -- -- 87,500 50,000 -- --
Chief Operating Officer and Executive
Vice President
Kenneth R. Posner........................ -- -- 400,000 -- -- --
Chief Financial Officer and Executive
Vice President
Lawrence Carballo........................ -- -- 23,000 10,000 -- --
Vice President, Corporate Controller
and Treasurer
</TABLE>
-------------------------
(1) The value of unexercised in-the-money options/SARs represents the number
of options/SARs held at year-end 1999 multiplied by the difference between
the exercise price and $5.00, the closing price of Lodgian's Common Stock
at year-end 1999.
<PAGE>
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT
Employment Agreements
Robert Cole entered into an employment agreement with Lodgian relating to his
employment as President and Chief Executive Officer, as of December 11, 1998.
The employment agreement provided for a base salary subject to increases and
bonuses, in each case, at the discretion of the Board of Directors. The base
salary paid to Mr. Cole during 1999 was $293,524. Mr. Cole also receives paid
health insurance, paid disability insurance and is entitled to participate, to
the extent eligible, under any benefit plans provided to other executives of
Lodgian. Mr. Cole is entitled to a minimum of four weeks paid vacation annually.
Mr. Cole's employment agreement contains provisions for payments to Mr. Cole in
the event of a change in control, as described more fully under "-- Arrangements
Regarding Termination of Employment and Changes of Control."
Karyn Marasco entered into a three-year employment agreement with Servico
relating to her employment as Executive Vice President and Chief Operating
Officer of Servico on May 2, 1997. On November 24, 1998, the agreement was
extended for a period of one year and on July 28, 2000 was extended through
September 2002. This agreement was assumed by Lodgian and is still in effect.
The employment agreement provides for a base salary of $257,862 subject to
increases and bonuses in the discretion of the Board. Ms. Marasco is also
entitled to receive the benefits offered other executive officers. Pursuant to
the terms of her employment agreement, Ms. Marasco was granted options to
acquire 50,000 shares of Lodgian Common Stock with options with respect to
10,000 of such shares vesting immediately and 10,000 vesting annually. The
employment agreement is terminable upon 30 days notice but in the event Ms.
Marasco is terminated other than "for Cause," as defined in the agreement, she
will be entitled to her base salary and benefits under the agreement for the
greater of the unexpired term or one year.
Kenneth R. Posner entered into an agreement with Lodgian relating to his
employment as an Executive Vice President and Chief Financial Officer as of
April 9, 1999 and effective as of April 27, 1999. The employment agreement
provides for a base salary of $250,000. For the calendar year 1999, Mr. Posner
was guaranteed a bonus equal to one hundred percent (100%) of his prorated base
salary. Thereafter, any bonus payments are at the discretion of the Board of
Directors. Mr. Posner is also entitled to receive the benefits offered to other
executive officers. Pursuant to the terms of his employment agreement, Mr.
Posner was granted options to acquire 400,000 shares of Lodgian Common Stock.
The options vest twenty percent (20%) per year over five years. In the event Mr.
Posner is terminated other than "for Cause", as defined in the agreement, he
will be entitled to receive his base salary, plus a percentage of his bonus,
under the agreement for the greater of the unexpired term or one year.
On June 30, 2000 Mr. Posner entered into an Amendment to Employment Agreement
and Release with Lodgian whereby Mr. Posner agreed to resign as Executive Vice
President as of July 30, 2000. Mr. Posner also agreed to complete work on the
1999 Form 10-K for the Company. The Company agreed to pay Mr. Posner his salary
through July 30, 2000 and thereafter pay Mr. Posner $250,000. All unvested
options granted to Mr. Posner on April 9, 1999 vested on July 30, 2000. The
Company and Mr. Posner released one another from all claims arising out of Mr.
Posner's employment with the Company.
Thomas R. Eppich is an employee of Jay Alix & Associates ("Jay Alix"). The
Company has an agreement with Jay Alix pursuant to which Mr. Eppich is employed
by the Company but is compensated entirely by Jay Alix.
ARRANGEMENTS REGARDING TERMINATION OF EMPLOYMENT AND CHANGES OF CONTROL
The employment agreement between Lodgian and Mr. Cole provides for payments
to Mr. Cole in an amount equal to two and one-half times his annual base
compensation, less any other cash severance payments contractually owed to the
Board of Directors or the acquisition by any individual or group of in excess of
50% of Lodgian's outstanding Common Stock, and the duties or responsibilities of
Mr. Cole are materially diminished within 24 months thereafter.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The compensation of Lodgian's executive officers, including its Chief
Executive Officer, is determined by the Compensation Committee of Lodgian's
Board of Directors (the "Compensation Committee"). The Compensation Committee is
composed of John M. Lang, Michael A. Leven, Peter R. Tyson, and Richard H.
Weiner.
Lodgian's executive compensation policies are designed to provide competitive
levels of compensation that integrate pay with Lodgian's short-term and
long-term performance goals, reward corporate performance and recognize
individual initiative and achievement. It is anticipated that these policies
will help Lodgian to continue to attract and retain quality personnel and
thereby enhance Lodgian's long-term profitability and share value.
Executive compensation ranges have been designed to be competitive with
amounts paid to senior executives at companies in the hospitality industry which
compete with Lodgian, companies which are similar in size and profitability to
Lodgian and companies with which Lodgian competes for senior executives. Within
this framework, individual executive compensation is based on personal and
corporate achievement and the individual's level of responsibility and
experience. However, in any particular year, Lodgian's executives may be paid
more or less than executives in peer companies depending upon Lodgian's
performance.
Base Compensation
The base salaries of Lodgian's executive officers are based in part on
comparative industry data and on various quantitative and qualitative
considerations regarding corporate and individual performance. An executive's
base salary is determined only after an assessment of his or her sustained
performance, current salary in relation to an objective salary range for the
executive's job responsibilities and his or her experience and potential for
advancement. Further, in establishing base salaries for Lodgian's executive
officers the Compensation Committee considers numerous other factors, including
the following:
i. Industry compensation trends;
ii. Cost-of-living and other local and geographic considerations;
iii. Consultation with other Lodgian executives;
iv. Hospitality industry and job-specific skills and knowledge;
v. Historical and expected contributions to Lodgian's performance; and
vi. Level, complexity, breadth and difficulty of duties.
In establishing the base salaries of the executive officers, the Compensation
Committee was cognizant of the roles of each executive officer in the operations
of Lodgian and its predecessors. The Compensation Committee specifically
recognized the results of operations and financial condition of Lodgian's
predecessors during the prior fiscal year and the roles and responsibilities of
each of the executive officers.
Bonus Program
An annual bonus program has been implemented at Lodgian. The objectives of
the bonus program are to: motivate and reward the accomplishment of corporate
objectives; reinforce a strong performance orientation; provide a direct link
between corporate performance and executive compensation; and provide a fully
competitive compensation package which will attract, reward and retain
individuals of the highest quality. As a performance-based plan, cash bonus
awards are required to be paid under the plan only upon the achievement of
pre-established corporate performance objectives on a quarterly and annual
basis, and no bonuses are required to be paid if the minimum established
thresholds are not met. A maximum ceiling is also established for awards under
the bonus program which is determined after consideration of Lodgian's
competitive position in the industry, assessment of long-term goals and business
performance considerations.
Stock Options and Stock Appreciation Rights
Lodgian's long-term executive compensation incentives are in the form of
stock option awards and stock appreciation rights. The Compensation Committee
believes that stock option awards and stock appreciation rights are an effective
means of advancing the long-term interests of Lodgian's stockholders by
integrating executive compensation with the long-term value of Lodgian Common
Stock. Awards are granted at the prevailing market price on the date of grant
and are valuable to executives only if Lodgian Common Stock appreciates. During
1999, the Compensation Committee awarded options to purchase an aggregate of
695,000 shares of Lodgian Common Stock in accordance with the terms of his
employment agreement. All of such options were granted with an exercise price
equal to the market price at the time of issuance.
Chief Executive Officer
Like the other executive officers listed in the "Summary Compensation Table,"
compensation for 1999 for Robert Cole, Lodgian's President and Chief Executive
Officer, consisted primarily of a base salary and a discretionary bonus based on
corporate performance. His base salary for 1999 was set at $300,000 per year.
(Mr. Cole received $293,524, due to pay period arrangements.) Mr. Cole was
awarded no discretionary bonus for 1999.
At the time of the Merger, Lodgian's Compensation Committee determined Mr.
Cole's compensation for 1999 based on the expectation that Mr. Cole would act as
Lodgian's President. Upon David Buddemeyer's resignation from the position of
Chief Executive Officer of Servico, Mr. Cole agreed to serve as Chief Executive
Officer of Lodgian upon consummation of the Merger.
Submitted by,
John M. Lang
Michael A. Leven
Peter R. Tyson
Richard H. Weiner
PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total stockholder return
on Lodgian's Common Stock with the Dow Jones Equity Market Index and the Dow
Jones Lodging Index. The Lodgian Common Stock traded on the American Stock
Exchange under the symbol "SER" from August 18, 1992 until June 18, 1997 and
thereafter traded on the New York Stock Exchange ("NYSE") until December 11,
1998, at which time the symbol was changed to "LOD". The graph assumes an
investment of $100.00 on December 31, 1994 in (i) Lodgian's Common Stock, (ii)
the stocks comprising the New York Stock Exchange Index and (iii) the Dow Jones
Lodging Index.
[GRAPH]
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following parties had a direct or indirect material interest in
transactions with the Company since the beginning of its most recently completed
fiscal year and such transactions are described below.
Mr. Cole is a minority shareholder of Impac Hotel Development ("IHD"), which
provided acquisition and property development services to Impac for a
development fee of 4% of the total project cost of each property acquired or
developed. Impac agreed to terminate this agreement prior to the consummation of
the Merger so that Impac and its subsidiaries will have no further obligations
under the agreement after the Merger other than the payment of up to a 4%
development fee (not to exceed $2.5 million in the aggregate) in the event
Lodgian acquires or develops any of the hotels or properties identified in the
Merger Agreement as Impac's acquisition and development pipeline. During 1999,
the Company paid $1.0 million in connection with this arrangement. Of this
amount, Mr. Cole received $225,000.
IHD had contracted with Elegant Interiors, LLC ("Elegant"), an entity wholly
owned by Sheila Lang (the spouse of John M. Lang) to provide interior design
consulting services. In the event IHD, or its assignee, receives payment of the
above-referenced development fees, IHD, or its assignee, will pay Elegant
accrued consulting fees (not to exceed $250,000) with respect to any of the
hotels or properties identified in the Merger Agreement as being in Impac's
acquisition pipeline. On January 3, 2000, Impac Design Company, LLC, the
assignee of IHD satisfied its obligations under this agreement.
Mr. Cole has been a 7% limited partner in the partnership that owns the
Courtyard by Marriott in Tifton, Georgia since 1996. The Company manages this
hotel in accordance with a management agreement, which provides that the Company
is paid a base fee calculated as a percentage of gross revenues, an accounting
services fee and an incentive management fee. The base fee is 3% of gross
revenues and the incentive fee is a percentage of the amount by which gross
operating profit exceeds a negotiated amount. The Company earned fees of
$69,300, $60,000 and $55,800 during 1999, 1998 and 1997, respectively.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires Lodgian's
directors, executive officers and 10% stockholders to file reports of ownership
and reports of changes in ownership of Lodgian's Common Stock and other equity
securities with the SEC and the NYSE. Directors, executive officers and 10%
stockholders are required to furnish Lodgian with copies of all Section 16(a)
forms they file. Based on a review of the copies of such reports furnished to
it, Lodgian believes that during 1999, Lodgian's directors, executive officers
and 10% stockholders complied with all Section 16(a) filing requirements
applicable to them.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, the following directors served on the Compensation Committee of
the Board of Directors: John Lang, Michael A. Leven, Peter R. Tyson and Richard
H. Weiner. None of such persons is or has been an executive officer of the
Company, and no interlocking relationships exist between any such person and the
directors or executive officers of any other Company.
OTHER BUSINESS
The Board of Directors does not intend to bring any other business before the
meeting, and, as far as is known by the Board, no matters are to be brought
before the meeting except as disclosed in the Notice of Annual Meeting of
Stockholders. However, as to any other business which may properly come before
the meeting, it is intended that proxies, in the form enclosed, will be voted in
respect thereof in accordance with the judgment of the persons voting such
proxies.
INDEPENDENT AUDITORS
Ernst & Young served as Lodgian's independent certified public accountants
for the fiscal year ended December 31, 1999. The Company is currently
considering the possible selection of a new auditor for Fiscal Year 2000. Ernst
& Young representatives are not expected to be present at the meeting.
ANNUAL REPORT AND FINANCIAL STATEMENTS
A copy of Lodgian's 1999 Annual Report, including audited financial
statements, has been mailed to stockholders of the Company. The Annual Report,
however, is not part of the proxy soliciting material. ADDITIONAL COPIES OF THE
ANNUAL REPORT AND COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION (THE "SEC") (WITHOUT EXHIBITS) ARE AVAILABLE UPON REQUEST, WITHOUT
CHARGE, FROM LODGIAN. SUCH REQUESTS SHOULD BE DIRECTED TO LODGIAN INC., 3445
PEACHTREE ROAD, N.E., SUITE 700, ATLANTA, GEORGIA 30326. ATTENTION: SHAREHOLDER
RELATIONS DEPARTMENT.
STOCKHOLDERS' PROPOSALS FOR NEXT ANNUAL MEETING
Lodgian's Bylaws have an advance notice procedure for stockholders to bring
business before an annual meeting of stockholders. The advance notice procedure
requires that a stockholder interested in presenting a proposal for action at
the 2001 Annual Meeting of Stockholders must deliver a written notice of the
proposal, together with certain specified information relating to such
stockholder's stock ownership and identity, to Lodgian's Secretary not earlier
than July 14, 2001 and not later than August 13, 2001.
Stockholders' proposals intended to be included in Lodgian's proxy statement
and form of proxy for the 2001 Annual Meeting of Stockholders must be received
by Lodgian no later than 120 days prior to the anniversary date of the first
notice of the 2000 Annual Meeting, or May 4, 2001.
By order of the Board of
Directors,
/s/ Thomas S. Gryboski
Name: Thomas S. Gryboski
Title: Secretary
Dated: September 1, 2000
<PAGE>
APPENDIX A
INFORMATION CONCERNING DIRECTORS AND CERTAIN OFFICERS AND EMPLOYEES OF THE
COMPANY WHO MAY SOLICIT PROXIES
Under the applicable regulations of the SEC, each of the Directors of the
Company is deemed to be a "Participant" in the Company's solicitation of
proxies. The following table sets forth (a) the name, business address and
principal occupation of the Directors and nominees as Director of the Company
and any officers and employees of the Company who may assist in soliciting
proxies from stockholders of the Company ("Participants") and (b) the dates,
types and amounts of each Participants' purchases and sales of the Company's
Common Stock within the past two years.
Except as described in this Proxy Statement, shares of Common Stock of the
Company owned of record by each Participant are also owned beneficially by such
Participant. The total number of shares of Common Stock of the Company owned by
each Participant is set forth in this Proxy Statement.
DATE OF TYPE OF
NAME TRANSACTION TRANSACTION(1) AMOUNT OF SHARES
---- ----------- -------------- ----------------
Robert S. Cole 3/4/99 A 20,000
Chief Executive Officer 4/8/99 A 20,000
Lodgian, Inc. 5/20/99 A 15,000
3445 Peachtree Road, NE 9/3/99 A 5,000
Suite 700
Atlanta, GA 30326
Joseph C. Calabro 1/1/99 A 2,565
Principal 4/1/99 A 2,565
Joseph C. Calabro, 7/1/99 A 2,565
C.P.A.
868 Lancaster Avenue 10/1/99 A 2,565
Devon, PA 19333
John M. Lang 1/1/99 A 1,231
President 4/1/99 A 1,231
Lang Capital Partners, 7/1/99 A 1,231
LLC
3399 Peachtree Road, NE 10/1/99 A 1,231
Suite 2050 12/1/99 A 22,910
Atlanta, GA 30326
Michael A. Leven 1/1/99 A 1,231
Chairman and Chief 3/19/00 A 5,700
Executive Officer
US Franchise Systems, 4/1/99 A 1,231
Inc.
13 Corporate Square 7/1/99 A 1,231
Suite 250 10/1/99 A 1,231
Atlanta, GA 30329 12/21/99 A 5,700
Carol A. Tedesco(2) N/A N/A N/A
Executive Assistant
Lodgian, Inc.
3445 Peachtree Road, NE
Suite 700
Atlanta, GA 30326
Peter R. Tyson 7/31/99 A 200
President
Peter Tyson &
Associates, Inc.
743 Unionville Rd.
Kennett Square, PA 19348 8/13/99 A 200
Richard Weiner N/A N/A N/A
Partner
Cooper, Erving & Savage
39 North Pearl Street
Albany, NY 12207
--------------------------------------
(1) "A" indicates an acquisition of the Company's stock. "D" indicates a
disposal of the Company's stock.
(2) Ms. Tedesco currently holds 500 shares of the Company's Common Stock.
Except as described in this Proxy Statement, none of the Participants nor any
of their respective affiliates or associates (together, the "Participant
Affiliates"), (i) directly or indirectly beneficially owns any securities of the
Company or of any subsidiary of the Company or (ii) has had any relationship
with the Company in any capacity other than as a stockholder, employee, officer
or director. Furthermore, except as described in this Proxy Statement, no
Participant or Participant Affiliate is either a party to any transaction or
series of transactions since January 1, 1999, or has knowledge of any currently
proposed transaction or series of transactions, (i) to which the Company or any
of its subsidiaries was or is to be a party, (ii) in which the amount involved
exceeds $60,000, and (iii) in which any director, executive officer, or nominee
for election as director of the Company, beneficial owner of five percent or
more of the Company's of any class of the Company's voting securities, or a
family member of any of the foregoing, had or will have, a direct or indirect
material interest.
Except as described in this Proxy Statement, no Participant or Participant
Affiliates has entered into any agreement or understanding with any person
respecting any (i) future employment by the Company or its affiliates or (ii)
any transactions to which the Company or any of its affiliates will or may be a
party. Except as described in this Proxy Statement, there are no contracts,
arrangements or understandings by any Participant or Participant Affiliates
within the past year with any person with respect to any capital stock of the
Company.
Except as described in this Proxy Statement, no Participant has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
<PAGE>
LODGIAN, INC.
ANNUAL MEETING OF STOCKHOLDERS -- OCTOBER 12, 2000 THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Robert S. Cole and Thomas S. Gryboski, or
either of them with power of substitution, as attorneys in fact, agents and
proxies for the undersigned to vote all shares of Common Stock, par value $.01
per share, of Lodgian, Inc. ("the Company") which the undersigned is entitled to
vote at the Annual Meeting of Stockholders of the Company, to be held on
Thursday, October 12, 2000, commencing at 9:30 a.m. local time, at The Resource
Forum, 3340 Peachtree Road N.E., Atlanta, Georgia 30326, and at any and all
adjournments or postponements thereof, to the same extent and with the same
power as if the undersigned was personally present at said meeting or such
adjournments or postponements thereof and, without limiting the generality of
the power hereby conferred, the proxy nominees named above and each of them are
specifically directed to vote as indicated below.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES AS DIRECTORS.
If there are amendments or variations to the matters proposed at the meeting
or at any adjournments or postponements thereof, or if any other business
properly comes before the meeting, this proxy confers discretionary authority on
the proxy nominees named herein and each of them to vote on such amendments,
variations or other business.
THE UNDERSIGNED HEREBY REVOKES ANY PREVIOUS PROXIES WITH RESPECT TO MATTERS
COVERED BY THIS PROXY.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 1.
1. The election as directors of all nominees listed below:
|_| FOR |_| WITHHOLD AUTHORITY for all nominees
Nominees: Michael A. Leven, John M. Lang
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEES(S), MARK "FOR"
ABOVE AND WRITE THE NAME(S) OF THE NOMINEES(S) FOR WHOM YOU DO NOT WISH TO VOTE
BELOW.
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 2.
2. By-Law Resolution Proposed by the Yung Group To adopt the following
resolution:
"RESOLVED, that each provision or amendment of the By-Laws of Lodgian, Inc.
(the "Company") adopted by the Board of Directors of the Company without the
approval of the Company's stockholders subsequent to March 9, 2000 and prior
to the approval of this resolution be, and it hereby is, repealed, effective
as of the time this resolution is approved by the Company's stockholders."
|_| FOR |_| AGAINST |_| ABSTAIN
(Continued, and to be signed and dated on the other side.)
3.In their discretion, act on any other matters that may properly come
before the meeting and matters incidental to the conduct of the meeting.
The undersigned acknowledges receipt of the accompanying Notice of Annual
Meeting of Stockholders and the Proxy Statement for the October 12, 2000
meeting.
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS CARD. JOINT OWNERS SHOULD
EACH SIGN PERSONALLY. CORPORATION PROXIES SHOULD BE SIGNED IN CORPORATE NAME BY
AN AUTHORIZED OFFICER. EXECUTORS, ADMINISTRATORS, TRUSTEES OR GUARDIANS SHOULD
GIVE THEIR TITLE WHEN SIGNING. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME
BY AUTHORIZED PERSON.
Dated:___________________________, 2000
Signature of
Stockholder(s)
----------------------------
----------------------------
Print Name(s) Here
----------------------------
----------------------------
PLEASE COMPLETE, DATE, SIGN AND MAIL
THIS PROXY IN THE ENVELOPE PROVIDED.
IF YOU NEED ASSISTANCE IN VOTING YOUR
SHARES, PLEASE CALL LODGIAN'S PROXY
SOLICITOR, D.F. KING & CO., INC.,
TOLL-FREE AT 1-800-769-6414.
