<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
Jameson Inns, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(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 fee 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
JAMESON INNS, INC.
8 PERIMETER CENTER EAST, SUITE 8050
ATLANTA, GEORGIA 30346-1604
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 17, 2000
To the Stockholders of
JAMESON INNS, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Jameson Inns, Inc., a Georgia corporation (the "Company"), will be held at
Lakeview Pavilion, 7000 Holiday Road, Lake Lanier Islands, Georgia 35018, on
Saturday, June 17, 2000, at 11:00 a.m., local time, for the following purposes:
1. To elect two directors to Class I for a three-year term;
2. To consider and act upon a proposal to ratify the appointment
of Ernst & Young LLP as independent auditors of the Company
for 2000; and
3. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 28,
2000, as the record date for the meeting, and only holders of record of Common
Stock at such time will be entitled to vote at the meeting or any adjournment
thereof. A complete list of the stockholders entitled to vote at the meeting
will be open to the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours for a period of ten days prior to
the date of the meeting at the offices of the Company and at the time and place
of the meeting.
By Order of the Board of Directors,
/s/ Steven A. Curlee
--------------------------------------
Steven A. Curlee
Secretary
Atlanta, Georgia
May 10, 2000
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES. IF YOU DO ATTEND THE MEETING, YOU MAY WITHDRAW
YOUR PROXY AND VOTE IN PERSON.
If you attend the meeting in person, please inform the gate attendant
at Lake Lanier Islands that you are attending the Jameson stockholders' meeting
and you will not be required to pay any entrance or parking fees. If you need
additional directions to Lake Lanier Islands, please call the Company at (770)
901-9020 and ask for Cathi Stockton at extension 202. You may also call Lake
Lanier Islands at (770) 932-7200.
<PAGE> 3
JAMESON INNS, INC.
8 PERIMETER CENTER EAST, SUITE 8050
ATLANTA, GEORGIA 30346-1604
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 17, 2000
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Jameson Inns, Inc., a Georgia corporation (the
"Company"), of proxies to be voted at the Annual Meeting of Stockholders of the
Company to be held on June 17, 2000, or at any adjournment thereof (the "Annual
Meeting"), for the purposes set forth in the accompanying Notice of Annual
Meeting. This Proxy Statement and accompanying proxy were first forwarded on or
about May 12, 2000, to stockholders of record on April 28, 2000.
If the accompanying proxy is properly executed and returned, the shares
represented by the proxy will be voted at the Annual Meeting. If a stockholder
indicates in his or her proxy a choice with respect to any matter to be acted
upon, that stockholder's shares will be voted in accordance with such choice. If
no choice is indicated, such shares will be voted "FOR" (1) the election of the
two nominees for director named below and (2) ratification of the appointment of
the independent auditor. A stockholder giving a proxy may revoke it by giving
written notice of revocation to the Secretary of the Company at any time before
it is voted, by executing another valid proxy bearing a later date and
delivering such proxy to the Secretary of the Company prior to or at the Annual
Meeting, or by attending the Annual Meeting and voting in person.
The expenses of this proxy solicitation, including the cost of
preparing and mailing this Proxy Statement and accompanying proxy will be borne
by the Company. Such expenses will also include the charges and expenses of
banks, brokerage firms, and other custodians, nominees or fiduciaries for
forwarding solicitation material regarding the Annual Meeting to beneficial
owners of the Company's Common Stock. Solicitation of proxies may be made by
mail, telephone, personal interviews or by other means by the Board of Directors
or employees of the Company who will not be additionally compensated therefor,
but who may be reimbursed for their out-of-pocket expenses in connection
therewith.
STOCKHOLDERS ENTITLED TO VOTE
Holders of record of the Common Stock, par value $.10 per share, of the
Company (the "Common Stock"), at the close of business on April 28, 2000 (the
"Record Date"), will be entitled to vote at the Annual Meeting. As of the Record
Date, there were issued and outstanding 11,429,093 shares of Common Stock. Each
share of Common Stock is entitled to one vote. There is no cumulative voting
with respect to the election of directors. The presence in person or by proxy of
the holders of issued and outstanding shares having a majority of the votes
entitled to vote at the Annual Meeting will constitute a quorum for the
transaction of business. Votes withheld from the nominee for director,
abstentions and broker non-votes will be counted for purposes of determining
whether a quorum has been reached. Under the law of Georgia, the Company's state
of incorporation, directors are elected by a plurality of votes cast. As
provided in the Company's Bylaws, each of the other proposals before the
stockholders will be approved if the number of votes cast at the Annual Meeting
for the action exceeds the number of votes cast opposing the action. With regard
to the election of directors, votes may be cast in favor of or withheld from the
nominee; votes that are withheld will be excluded entirely from the vote and
will have no effect. Based on the Company's understanding of Georgia state law
requirements, abstentions, broker non-votes and withheld votes will not be
considered "votes cast" and will have no effect on the outcome of the election
of a director or other proposals. Votes will be tabulated by an inspector of
elections appointed by the Board of Directors of the Company.
<PAGE> 4
PROPOSAL ONE
ELECTION OF DIRECTORS
The Amended and Restated Articles of Incorporation (the "Articles") of
the Company provide that the Board of Directors of the Company (the "Board of
Directors") shall consist of not less than two nor more than 15 directors, as
determined from time to time by resolution of the Board of Directors. The
number of directors is currently fixed at four. The Board of Directors is
divided into three classes. The terms of such classes are staggered so that,
except with respect to directors appointed to fill vacancies created by an
increase in the number of directors, only one class is elected at the annual
meeting of stockholders each year for a three-year term. The term of the Class
I directors, currently consisting of Dr. Robert D. Hisrich and Mr. Thomas J.
O'Haren, will expire at the Annual Meeting. The accompanying proxy solicits
your vote for two Class I directors. The term of the Class I directors elected
at the 2000 annual meeting will expire at the annual meeting of stockholders to
be held in 2003.
The Board of Directors has nominated Dr. Robert D. Hisrich and Mr.
Thomas J. O'Haren for re-election as Class I directors. The persons named as
proxies in the accompanying proxy, who have been designated by the Board of
Directors, intend to vote, unless otherwise instructed in such proxy, for the
election of Dr. Hisrich and Mr. O'Haren. Should Dr. Hisrich and/or Mr. O'Haren
become unable for any reason to stand for election as a director of the
Company, it is intended that the persons named in such proxy will vote for the
election of such other person(s) as the Board of Directors may recommend. The
Company knows of no reason why either Dr. Hisrich or Mr. O'Haren will be
unavailable or unable to serve.
The Board of Directors recommends a vote "FOR" the following nominees
for director.
NOMINEES FOR DIRECTOR
CLASS I
(TERM EXPIRES 2003)
ROBERT D. HISRICH, Ph. D., 55, became a director in October 1993. Dr.
Hisrich has held the A. Malachi Mixon III Chair in Entrepreneurial Studies and
has been a professor at the Weatherford School of Management, Case Western
Reserve University, Cleveland, Ohio, since September 1993. From 1985 until his
appointment at Case Western Reserve University, Dr. Hisrich held the Bovaird
Chair of Entrepreneurial Studies and Private Enterprise and was a Professor of
marketing and a Director of the Enterprise Development Center at The University
of Tulsa, Tulsa, Oklahoma. In the spring of 1992, Dr. Hisrich was a Visiting
Professor of Entrepreneurship Studies at the University of Limerick, Limerick,
Ireland, and from 1990 through 1991, he was a Fulbright Professor and holder of
the Alexander Hamilton Chair in Entrepreneurship at the Foundation for Small
Enterprise Economic Development, Budapest, Hungary. In the spring of 1989, Dr.
Hisrich was a Fulbright Professor at the International Management Center,
Budapest, Hungary. In addition, since 1974 Dr. Hisrich has been director of H &
B Associates, a marketing and management consulting firm and is a director of
Xeta Corporation and Noteworthy Corporation. He has also held a number of other
academic positions and is widely published in the areas of marketing,
management and entrepreneurship. Dr. Hisrich has a B.A. degree in English and
science from DePauw University, an M.B.A. degree in marketing from the
University of Cincinnati and a Ph.D. degree in business administration from the
University of Cincinnati.
THOMAS J. O'HAREN, 68, became a director in June 1997. Mr. O'Haren was
employed for 30 years in sales and marketing for Cigna Financial Advisors,
Inc., a company engaged in the insurance business. From May 1992 through
September 1998, Mr. O'Haren served that company both as a regional vice
president and as a consultant. Since October 1998, Mr. O'Haren has been the
managing partner of Madison Financial, a financial planning marketing firm. He
is active in the insurance industry, including serving as an adjunct professor
of leadership at The American College, the degree-granting college of the
insurance industry, as a member of The American College Leadership Institute
and as chairman of the board of trustees of the GAMA Foundation, a research
foundation for the insurance industry. Mr. O'Haren has a B.S. degree in finance
from Pennsylvania State University, received his Chartered Life Underwriter
designation in 1966 and his designation as a Chartered Financial Consultant in
1983.
-2-
<PAGE> 5
DIRECTORS CONTINUING IN OFFICE
CLASS II
(TERM TO EXPIRE 2001)
MICHAEL E. LAWRENCE, 57, became a director in April 1994. Since March
1994, he has been a director of Sea Pines Associates, Inc., a publicly held
corporation with approximately $50 million in annual revenues which owns and
operates real estate and recreational properties on Hilton Head Island, South
Carolina. Mr. Lawrence is president of Sea Pines Company, a subsidiary of Sea
Pines Associates, Inc., where he has served as the chief financial officer since
February 1990. Since that date he has also been vice president and chief
financial officer of Sea Pines Real Estate Company and a director, vice
president and chief financial officer of Sea Pines Country Club, Inc., both
companies being subsidiaries of Sea Pines Associates, Inc. Prior to joining Sea
Pines Associates, Inc., Mr. Lawrence was a management consultant with Ernst &
Young from 1969 through 1989 and was a partner in that firm from 1982 through
1989. Mr. Lawrence also serves as a director of Atlantic Savings Bank. Mr.
Lawrence is a certified public accountant with a B.S. degree from Washington &
Lee University and an M.B.A. degree from Emory University.
CLASS III
(TERM EXPIRES 2002)
THOMAS W. KITCHIN, 58, is Chief Executive Officer, a director and
Chairman of the Board of Directors of the Company. He has been an officer and
director of the Company since its incorporation in 1988. He served from 1977
until December 1986 as the President and Chairman of the Board of a public oil
and gas company. Prior thereto, Mr. Kitchin was involved in the banking
business for 16 years. Mr. Kitchin is a Director of the American Hotel and
Motel Association, the Georgia Hospitality and Travel Association, the Georgia
State University Cecil B. Day School of Hospitality Administration and the
Association for Publicly Traded Companies. Mr. Kitchin is the father of Craig
R. Kitchin, President and Chief Financial Officer of the Company.
COMPENSATION OF DIRECTORS
Each director other than Mr. Kitchin receives from the Company an
annual fee of $10,000, $500 for each Board of Directors or Board Committee
meeting attended and reimbursement of expenses incurred in attending Board or
Committee meetings. Payment of the annual fee is not contingent upon attendance
at Board or Committee meetings.
Under the Jameson Inns, Inc. Director Stock Option Plan (the "1995
Director Plan"), each director of the Company who is not otherwise an employee
of the Company or any of its subsidiaries or affiliates is granted an option to
purchase ("Director Option") 25,000 shares of Common Stock upon his initial
election as a director of the Company. Dr. Hisrich and Mr. Lawrence, who were
elected or appointed as directors prior to the adoption in 1995 of the 1995
Director Plan, each received a Director Option to purchase 25,000 shares of
Common Stock upon the adoption of the 1995 Director Plan in exchange for their
surrender and the cancellation of stock options previously granted to each of
them under the 1993 Jameson Stock Incentive Plan. Director Options vest
immediately at the time of grant and have a per share exercise price equal to
the fair market value of a share of Common Stock at the close of business on the
last business day preceding the day of grant. The Director Options granted to
Dr. Hisrich and Mr. Lawrence have an exercise price of $7.25 per share. Mr.
O'Haren received a Director Option to purchase 25,000 shares of Common Stock on
June 20, 1997, at an exercise price of $11.375.
Under the Jameson Inns, Inc. 1997 Director Stock Option Plan (the "1997
Director Plan"), each director of the Company who is serving as a director on
the first business day following the annual meeting of the Company's
stockholders and at such annual meeting was considered as a director of the
Company who was continuing in office or was reelected as a director and is not
otherwise an employee of the Company or any of its subsidiaries or affiliates is
granted an option to purchase ("Annual Director Option") 5,000 shares of Common
Stock as of the first business day following the annual meeting of the Company's
stockholders. Dr. Hisrich, Mr. Lawrence and Mr. O'Haren, who were elected or
appointed as directors prior to the adoption in November 1997 of the 1997
Director Plan, each received an Annual Director Option to purchase 5,000 shares
of Common Stock upon the adoption of the 1997
-3-
<PAGE> 6
Director Plan. The Annual Director Options vest immediately at the time of
grant and have a per share exercise price equal to the fair market value of a
share of Common Stock at the close of business on the last business day
preceding the day of grant. The Annual Director Options granted to Dr. Hisrich,
Mr. Lawrence and Mr. O'Haren in November 1997 have an exercise price of $11.625
per share. On June 29, 1998, each of these directors received an Annual
Director Option to purchase 5,000 shares of Common Stock at an exercise price
of $10.00 per share. On May 8, 1999, each of these directors received an Annual
Director Option to purchase 5,000 shares of Common Stock at an exercise price
of $9.00 per share.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During 1999, the Board of Directors held four meetings. In addition,
the Board of Directors took action 18 times during 1999 by unanimous written
consent. No director attended fewer than 75 percent of the aggregate of: (1) the
total number of meetings of the Board of Directors held during the period in
which the respective director was a director during 1999, or (2) the total
number of meetings held by all Committees of the Board of Directors on which the
respective director served. The Company has a standing Audit Committee and a
Compensation Committee of the Board of Directors.
The Audit Committee is composed of Dr. Hisrich and Mr. Lawrence. The
Audit Committee, which met one time in 1999, annually considers the
qualifications of the independent auditor of the Company and makes
recommendations to the Board of Directors on the engagement of the independent
auditor. The Audit Committee also reviews (a) any transactions between the
Company and its officers, directors and principal stockholders, (b) the plans
for and results of audits of the Company, and (c) the results of any internal
audits, compliance with any of the Company's written policies and procedures and
the adequacy of the Company's system of internal accounting controls.
In 1999, the Compensation Committee was composed of Dr. Hisrich, Mr.
Lawrence and Mr. O'Haren. During 1999, the Compensation Committee met one time.
The Compensation Committee administers the Jameson 1993 Stock Incentive Plan and
the Jameson 1996 Stock Incentive Plan and also reviews the determinations by
Jameson Hospitality, LLC under the Cost Reimbursement Agreement (see "Certain
Transactions - Cost Reimbursement Agreement," below) as to the percentage of
time each executive officer of the Company devoted to the Company's business
during the relevant period.
The Company does not have a standing Nominating Committee. The
Company's Bylaws provide that nominations of candidates for election as
directors of the Company may be made by or at the direction of the Board of
Directors or by any stockholder entitled to vote at the meeting at which
directors are to be elected who complies with the advance notice procedures set
forth therein. These procedures require any stockholder who intends to make a
nomination for director to deliver notice of such nomination to the Secretary of
the Company not later than the date on which stockholder proposals must be
received by the Secretary of the Company for inclusion in the Company's proxy
statement under the rules of the Securities and Exchange Commission. The notice
must contain all information specified by the Board of Directors. If the
chairman of the meeting determines that a person is not nominated in accordance
with the nomination procedure, such nomination will be disregarded.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
Upon the recommendation of the Audit Committee, the Board of Directors
has appointed Ernst & Young LLP as independent auditors of the Company for the
fiscal year ending December 31, 2000. Ernst & Young LLP have been independent
auditors of the Company since the Company's inception in 1988. A proposal will
be presented at the Annual Meeting asking the stockholders to ratify the
appointment of Ernst & Young LLP as the Company's independent auditors. If the
stockholders do not ratify the appointment of Ernst & Young LLP, the Board of
Directors will reconsider the appointment.
-4-
<PAGE> 7
This proposal will be approved if the number of votes cast for the
proposal at the Annual Meeting exceeds the number of votes cast against the
proposal. The Board of Directors recommends a vote "FOR" the ratification of
Ernst & Young LLP as independent auditors for 2000.
A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting and therefore is expected to be available to respond to
appropriate questions. If a representative of Ernst & Young LLP is present at
the meeting, he or she will be given the opportunity to make a statement, if he
or she desires to do so, and respond to appropriate questions.
PRINCIPAL STOCKHOLDERS AND
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as of April 28,
2000, regarding (a) the ownership of the Company's Common Stock by all persons
known by the Company to be beneficial owners of more than five percent of such
stock, and (b) the ownership of the Company's Common Stock, 9.25% Series A
Cumulative Preferred Stock, par value $1.00 per share ("Series A Preferred
Stock"), and $1.70 Series S Cumulative Convertible Preferred Stock, par value
$1.00 per share ("Series S Preferred Stock"), by (i) each director and nominee
for director of the Company, (ii) each of the executive officers of the Company
named in the Summary Compensation Table below, and (iii) all executive officers
and directors of the Company as a group. Unless otherwise noted, the persons
named below have sole voting and investment power with respect to such shares.
<TABLE>
<CAPTION>
SHARES OF SHARES OF
SHARES OF SERIES A SERIES S
COMMON PREFERRED PREFERRED
STOCK STOCK STOCK
NAME OF OWNER OR BENEFICIALLY PERCENTAGE BENEFICIALLY PERCENTAGE BENEFICIALLY PERCENTAGE
IDENTITY OF GROUP OWNED(1) OF CLASS OWNED(1) OF CLASS OWNED(1) OF CLASS
- ----------------- ------------ ---------- ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Thomas W. Kitchin 668,129(2) 6.71% 72,727 5.71% -- --
8 Perimeter Center East,
Suite 8050
Atlanta, Georgia 30346-1604
Robert D. Hisrich 40,900(3) * -- -- -- --
Michael E. Lawrence 40,500(3) * 100 * -- --
Thomas J. O'Haren 78,396(3) * -- -- -- --
All directors and executive 1,280,348(4) 10.90% 72,827 * -- --
officers as a group
(8 persons)
</TABLE>
- ---------------
* Less than one percent (1%)
(1) The total number includes shares issued and outstanding as of April 28,
2000, plus shares which the owner shown above has the right to acquire within 60
days after April 28, 2000. For purposes of calculating the percent of the class
outstanding held by each owner shown above with a right to acquire additional
shares, the total number of shares excludes the shares which all other persons
have the right to acquire within 60 days after April 28, 2000, pursuant to the
exercise of outstanding stock options.
(2) Includes 46,938 shares owned by Kitchin Children's Trust, the beneficiaries
of which are members of the family of Mr. Kitchin and of which Mr. Kitchin
serves as trustee, 105,000 shares issuable upon the exercise of currently
-5-
<PAGE> 8
vested stock options, 148,459 shares of restricted Common Stock and 21,000
shares owned jointly with Mr. Kitchin's spouse.
(3) Includes 40,000 shares issuable upon the exercise of currently vested stock
options.
(4) Includes 336,067 shares issuable upon the exercise of currently vested
stock options and 346,207 shares of restricted Common Stock.
EXECUTIVE OFFICERS
The executive officers of the Company are:
<TABLE>
<CAPTION>
NAME POSITION
---- --------
<S> <C>
Thomas W. Kitchin Chief Executive Officer, Director, Chairman of the Board of
Directors
Craig R. Kitchin President, Chief Financial Officer
William D. Walker Vice President - Development
Steven A. Curlee Vice President - Legal, General Counsel, Secretary
Martin D. Brew Treasurer, Corporate Controller
</TABLE>
Set forth below is certain information concerning the Company's
executive officers except for Mr. Thomas W. Kitchin. Information concerning Mr.
Kitchin is set forth above under the heading "Proposal One - Election of
Directors - Directors Continuing in Office."
Craig R. Kitchin, 32, became Chief Financial Officer of the Company in
February 1994, Vice President-Finance in September 1997 and President in
November 1998. He joined the Company as its Controller and Treasurer on June 15,
1992, upon receiving his M.B.A degree from the University of Chicago with
concentrations in accounting and finance. Before attending the University of
Chicago, he was a financial analyst with FMC Corporation in Santa Clara,
California, from 1989 to 1990, where his primary responsibilities included
budgeting and forecasting overhead expenses. Mr. Kitchin graduated from Santa
Clara University with a degree in finance in 1989. Craig Kitchin is the son of
Thomas W. Kitchin, the Chief Executive Officer of the Company.
William D. Walker, 46, is Vice President-Development of the Company.
He has been an officer of the Company since its inception in 1988 and served as
a director from 1988 through October 29, 1993. Prior to joining the Company, he
worked in various financial management positions for 12 years. Mr. Walker
received a B.B.A. degree in finance from Texas Tech University in 1975.
Steven A. Curlee, 48, became General Counsel and Secretary of the
Company in January 1993 and Vice President-Legal in September 1997. From April
1985 to July 1992, he was general counsel for a public oil and gas company in
Tulsa, Oklahoma primarily involved in the formation of large public limited
partnerships for the acquisition of producing oil and gas properties for
investors. Prior thereto, he was engaged in the private practice of law in
Tulsa, Oklahoma for five years. From 1976 to 1980, Mr. Curlee served on active
duty in the U.S. Navy as a Judge Advocate. He continues to serve in the Navy
Reserves, having attained the rank of Commander. Mr. Curlee received a B.A.
degree in political science and his J.D. from the University of Arkansas. He
received a Masters of Law in Taxation degree from Georgetown University. Mr.
Curlee is admitted to practice law in Arkansas, the District of Columbia,
Oklahoma, Texas and Georgia.
-6-
<PAGE> 9
Martin D. Brew, 39, has been an officer of the Company since the
Company's acquisition of Signature Inns, Inc. in May 1999. Prior to joining the
Company, he was employed by Signature Inns, Inc. for 13 years, first as
controller and later as treasurer. Mr. Brew was also employed by KPMG LLP prior
to his employment with Signature Inns. Mr. Brew has a B. S. degree in business
from Indiana University and is a member of the American Institute of Certified
Public Accountants.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who own more than ten percent of the Company's
equity securities to file reports concerning their ownership of such securities.
To the Company's knowledge, based solely on review of the Forms 3, 4 and 5
furnished to the Company and certain representations made to the Company, during
and for fiscal 1999, all Section 16(a) filing requirements applicable to its
officers and directors were complied with.
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to the
compensation of Thomas W. Kitchin, the Company's Chief Executive Officer, for
services in all capacities to the Company during the fiscal years ended December
31, 1997, 1998 and 1999. No other executive officer of the Company had an annual
salary and bonus in excess of $100,000 during any such year. No information is
given as to any person for any fiscal year during which such person was not an
executive officer of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ----------------------
RESTRICTED SECURITIES UNDERLYING
NAME AND SALARY STOCK AWARDS OPTIONS
PRINCIPAL POSITION YEAR ($)(1) ($) (#)
------------------ ---- ----- ------------ ---------------------
<S> <C> <C> <C> <C>
Thomas W. Kitchin, Chairman, 1999 40,636 -- --
Chief Executive Officer 1998 25,113 100,000(3) --
1997 80,145 -- 75,000(2)
</TABLE>
- ---------------
(1) Mr. Kitchin holds positions with Jameson Hospitality, LLC ("Jameson
Hospitality"), as well as with the Company, and receives compensation from such
entity. The amount set forth in the table represents an allocation to the
Company by Jameson Hospitality of Mr. Kitchin's total compensation from both
entities (and their predecessors) based on the estimated time spent by Mr.
Kitchin related to the Company. Compensation which Mr. Kitchin receives from
Jameson Hospitality is not reported in the table. See "Certain Transactions -
Cost Reimbursement Agreement."
(2) Consists of options to purchase 75,000 shares of Common Stock at $11.625 per
share granted under the Jameson 1993 Stock Incentive Plan. Options vest equally
over the five year period following the date of grant.
(3) Represents the closing price of shares of Common Stock on the Nasdaq
National Market on the date of grant for 10,959 shares of restricted common
stock granted under the Jameson 1996 Stock Incentive Plan. Such shares vest 10
years after the date of grant, assuming continuous employment with Jameson
through the date of vesting.
-7-
<PAGE> 10
Option Exercises in Last Fiscal Year;
Aggregate Fiscal Year-End Values of Options
The named executive officer did not exercise any options during 1999.
The following table sets forth the values as of December 31, 1999, of all
options held by the named executive officer during 1999.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-MONEY
NAME OPTIONS AT FISCAL YEAR-END OPTIONS AT FISCAL YEAR-END
- ----- -------------------------- ---------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Thomas W. Kitchin 105,000 45,000 $0 $0
</TABLE>
EMPLOYMENT AGREEMENT
In connection with consummation in early 1994 of the Company's initial
public offering of 2,600,000 shares of Common Stock, the Company entered into an
employment agreement with Thomas W. Kitchin. Under the agreement, the Board of
Directors sets the maximum amount of annual salary for which the Company
reimburses Jameson Hospitality under the Cost Reimbursement Agreement between
the Company and Jameson Hospitality based on the amount of time Mr. Kitchin
devotes to the Company's business. See "Certain Transactions - Cost
Reimbursement Agreement."
Subject to certain penalties for early termination set forth below, the
employment agreement can be terminated by Mr. Kitchin upon giving 60 days'
notice. The Company may terminate the agreement at any time. If the Company
terminates Mr. Kitchin's employment without cause, however, and elects to
continue the non-compete provisions of the agreement described below, the
Company must pay Mr. Kitchin an amount equal to 300% of his annual compensation
by the Company in equal monthly installments over the 24-month term of the
non-compete provisions. Pursuant to such provisions, Mr. Kitchin is prohibited
from owning, operating or managing, directly or indirectly, any hotel property
during the term of his employment, or, for two years following such employment,
any hotel property within a 20-mile radius of any hotel property owned by the
Company.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee met once during 1999. At that meeting the
Compensation committee approved the recommendations of Thomas W. Kitchin
regarding stock option awards to executive officers and other key employees
under the Jameson 1993 Stock Incentive Plan (the "1993 Plan") and recommended
such awards to the Stock Plan Committee of the 1993 Plan. All other decisions
regarding the compensation of executive officers were in practice made by Mr.
Kitchin, the Company's Chief Executive Officer, Chairman of the Board and a
director.
This report is made by Dr. Robert D. Hisrich, Michael E. Lawrence and
Thomas J. O'Haren constituting the Compensation Committee during 1999.
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
As noted above under "Report on Executive Compensation," Thomas W.
Kitchin, the Company's Chief Executive Officer, Chairman of the Board and a
director made recommendations to the directors constituting the Compensation
Committee regarding stock option awards to executives and other key employees
under the 1993 Plan. All other decisions regarding the compensation of executive
officers was determined in practice during 1999 by Mr. Kitchin.
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<PAGE> 11
STOCKHOLDER RETURN PERFORMANCE GRAPH
The Company's Common Stock was first registered under the Securities
Exchange Act of 1934 and was listed for trading on the Nasdaq National Market on
January 27, 1994. The following graph compares the percentage change in the
cumulative total stockholder return on the Company's Common Stock during the
period which commenced January 27, 1994, and ended December 31, 1999, with the
cumulative total return on the Nasdaq Market - U.S. Index and the Standard &
Poors Hotel-Motel Index.
Research Data Group Peer Group Total Return Worksheet
JAMESON INNS INC
<TABLE>
<CAPTION>
Cumulative Total Return
--------------------------------------------------
12/94 12/95 12/96 12/97 12/98 12/99
<S> <C> <C> <C> <C> <C> <C>
JAMESON INNS INC 100.00 134.86 219.42 208.12 173.32 156.48
NASDAQ STOCK MARKET (U.S.) 100.00 141.33 173.89 213.07 300.25 542.43
S&P LODGING-HOTELS 100.00 118.19 140.80 197.03 160.40 160.39
</TABLE>
The above performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
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<PAGE> 12
CERTAIN TRANSACTIONS
THE LEASES
All of the Company's operating hotel properties ("Inns") are leased,
and future Inns are expected to be leased, to Jameson Hospitality, pursuant to
several master leases (the "Leases") from the various Jameson entities that hold
legal title to the Inns. Thomas W. Kitchin, Chief Executive Officer, Chairman of
the Board and a director of the Company, and members of his family are the sole
owners of Jameson Hospitality.
The Leases covering the Company's Jameson Inns (collectively, the
"Jameson Lease") terminate December 31, 2007, subject to earlier termination
upon the occurrence of certain events. The Jameson Lease provides for payment of
base rent and, if required based on the formula set forth under the Jameson
Lease, percentage rent. The Jameson Lease requires the Company to pay real and
personal property taxes, general liability and casualty insurance premiums, the
cost of maintaining structural elements, including underground utilities, and
the cost of refurbishment of the Jameson Inns. Jameson Hospitality is required
to pay liability insurance premiums, utility costs and all other costs and
expenses incurred in the operation of the Jameson Inns. The Leases covering the
Company's Signature Inns (collectively, the "Signature Lease") are substantially
the same as the Jameson Lease except for the term and the rental calculation.
The Signature Lease expires December 31, 2012, subject to earlier termination
upon the occurrence of certain events. In 1999, aggregate base rent charged to
Jameson Hospitality by the Company under the Leases totaled $21.0 million and
aggregate percentage rent totaled $13.7 million.
TURNKEY CONSTRUCTION CONTRACTS
All new Inns and expansions of existing Inns were constructed by
Jameson Hospitality or by its predecessor companies. It is anticipated that
Jameson Hospitality will act as general contractor for new Inns built by the
Company as well as expansions of existing Jameson Inns. All Inns and Inn
expansions are constructed by Jameson Hospitality on a turnkey basis pursuant to
construction agreements with the Company. Jameson Hospitality also performs all
of the construction work for renovations of existing Inns and constructed
fitness centers for Jameson Inns constructed prior to their becoming a standard
feature of new Jameson Inns. The Company paid Jameson Hospitality an aggregate
of approximately $27.3 million for turnkey construction of new Inns, expansions
and renovations during the year ended December 31, 1999. Under the construction
agreements, if the contract price for a new Inn or group of Inns or an Inn
expansion exceeds Jameson Hospitality's costs plus 10%, Jameson Hospitality is
required to refund the excess amount to the Company. The contract price as well
as the other terms of each construction agreement submitted by Jameson
Hospitality are subject to approval by the Company's independent directors.
COST REIMBURSEMENT AGREEMENT
The officers and employees of the Company are also employees of Jameson
Hospitality, a limited liability company owned 100% by Thomas W. Kitchin and
members of his family. Rather than duplicate payroll and certain other
administrative functions, the Company and Jameson Hospitality are parties to the
Cost Reimbursement Agreement which provides that the Company will reimburse
Jameson Hospitality, on an actual cost basis, for the employee compensation and
overhead costs attributable to the Company. The officers and employees of the
Company receive their salaries, hourly wages and fringe benefits entirely from
Jameson Hospitality, which also pays the Company's office overhead and other
general and administrative costs. Under the Cost Reimbursement Agreement, the
Company determines for each officer and employee the amount the Company would
pay in salary and benefits if such person devoted 100% of his or her time to
Company business. Jameson Hospitality then determines, subject to review by the
Company, the actual percentage of the person's time devoted to the Company's
business and applies that percentage to the Company-established compensation
amount. The resulting amount is the amount the Company reimburses Jameson
Hospitality with respect to the officer's or employee's compensation. Office
overhead and other general and administrative costs are also allocated to and
borne by the Company based primarily on the amount of time spent by these
officers and employees on Company business. In 1999, such allocations of salary,
office overhead and other general and administrative costs to the Company
totaled approximately $360,000.
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<PAGE> 13
OTHER MATTERS
MATTERS WHICH MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors knows of no matters other than those described
in this Proxy Statement which will be brought before the Annual Meeting for a
vote of the stockholders. If any other matter properly comes before the Annual
Meeting for a stockholder's vote, the persons named in the accompanying proxy
will vote thereon in accordance with their best judgment. The enclosed proxy
confers discretionary authority on the named individuals to take action
regarding any additional matters which may come before the Annual Meeting.
INCLUSION IN PROXY STATEMENT OF STOCKHOLDER PROPOSALS
Stockholder proposals submitted for inclusion in the Company's proxy
materials for the 2001 Annual Meeting of stockholders pursuant to Rule 14a-8
under the Exchange Act must be received by the Company no later than April 18,
2001. Notice that a stockholder intends to nominate a person as a director, or
to submit any business proposal, at the 2001 Annual Meeting of stockholders must
be received by the Company not later than April 18, 2001 (but may not be
received prior to March 18, 2001). All such submissions and notices must be in
writing and addressed to the Secretary of the Company at 8 Perimeter Center
East, Suite 8050, Atlanta, Georgia 30346-1604.
ANNUAL REPORT
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, EXCLUDING EXHIBITS,
FOR THE YEAR ENDED DECEMBER 31, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS UPON WRITTEN
REQUEST TO: STEVEN A. CURLEE, SECRETARY, JAMESON INNS, INC., 8 PERIMETER CENTER
EAST, SUITE 8050, ATLANTA GEORGIA 30346-1604.
/s/ Steven A. Curlee
-----------------------------------------
Steven A. Curlee, Secretary of
Jameson Inns, Inc.
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<PAGE> 14
PROXY
JAMESON INNS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Thomas W. Kitchin and Craig R.
Kitchin, or either of them, with full power of substitution, as Proxies of the
undersigned, with all powers that the undersigned would possess if personally
present to cast all votes that the undersigned would be entitled to vote at the
Annual Meeting of Stockholders of Jameson Inns, Inc. (the "Company") to be held
at Lakeview Pavilion, 7000 Holiday Road, Lake Lanier Islands, Georgia 30518, on
Saturday, June 17, 2000, at 11:00 a.m., local time, and at any and all
adjournments or postponements thereof, as indicated below:
1. Election of Directors.
a. [ ] FOR the following nominee (except as marked to the contrary
below) for term expiring in 2003: Dr. Robert D. Hisrich
b. [ ] WITHHOLD AUTHORITY to vote for the nominee above.
a. [ ] FOR the following nominee (except as marked to the contrary
below) for term expiring in 2003: Mr. Thomas J. O'Haren
b. [ ] WITHHOLD AUTHORITY to vote for the nominee above.
(Continued and to be signed on the reverse side)
<PAGE> 15
(Continued from other side)
2. Proposal to ratify the appointment of Ernst & Young LLP as the
Company's independent auditors for 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This Proxy will be voted as directed herein by the undersigned
stockholder. If no specifications are made, this Proxy will be voted FOR the
nominees for director and FOR proposal number 2 above. If any other business
should properly be brought before the meeting, the persons named as proxies
will vote on such business in accordance with their best judgment.
PLEASE MARK, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED STATES.
Dated: _________________________, 2000
--------------------------------------
Signature(s)
--------------------------------------
Signature(s)
IMPORTANT: Please date this Proxy and sign exactly as your name appears to the
left. If shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give title as
such. If a corporation, please sign in full corporate name by president or
other authorized officer. If a partnership, please sign in partnership name by
authorized person.
