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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 2000
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
For the transition period from to
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Commission file number 1-14537
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A. Full title of the plan and the address of the plan, if
different from that of the issuer named below: Lodgian Inc.,
401 (k) Plan
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office: Lodgian Inc.,
3445 Peachtree Road N.E., Suite 700, Atlanta, GA 30326
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REQUIRED INFORMATION
1. Audited financial statements of the Plan including:
a. Audited Statements of Net Assets Available for Benefits - Exhibit 1
December 31, 2000 and 1999
b. Audited Statements of Changes in Net Assets Available Exhibit I
for Benefits for the year ended December 31, 2000.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustee has duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Lodgian, Inc., 401 (k) Plan
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Date August 24, 2001 /s/ Karyn A. Gutierrez
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Karyn A. Gutierrez
Executive Vice President and Chief
Operating Officer
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EXHIBIT 1
LODGIAN, INC. 401(K) PLAN
(FORMERLY SERVICO, INC. 401(K) PLAN)
Financial Statements and Schedules
as of December 31, 2000 and 1999
Together With Auditors' Report
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LODGIAN, INC. 401(K) PLAN
(FORMERLY SERVICO, INC. 401(K) PLAN)
FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 2000 AND 1999
TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits--December 31, 2000 and
1999
Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 2000
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
SCHEDULES SUPPORTING FINANCIAL STATEMENTS
Schedule I: Schedule H, Line 4i--Assets (Held at End of Year)--
December 31, 2000
Schedule II: Schedule H, Line 4j--Reportable Transactions for the Year
Ended December 31, 2000
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of
Lodgian, Inc. 401(k) Plan
(Formerly Servico, Inc. 401(k) Plan):
We have audited the accompanying financial statements and supplemental schedules
of LODGIAN, INC. 401(K) PLAN (formerly Servico, Inc. 401(k) Plan) as of December
31, 2000 and 1999 and for the years then ended, as listed in the accompanying
table of contents. These financial statements and the schedules referred to
below are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
As described in Note 2, these financial statements and schedules were prepared
on the modified cash basis of accounting, which is a comprehensive basis of
accounting other than accounting principles generally accepted in the United
States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule of assets (held at end of
year) as of December 31, 2000 and the schedule of reportable transactions for
the year ended December 31, 2000 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Arthur Andersen, LLP
Atlanta, Georgia
August 13, 2001
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LODGIAN, INC. 401(K) PLAN
(FORMERLY SERVICO, INC. 401(K) PLAN)
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
(MODIFIED CASH BASIS)
2000 1999
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INVESTMENTS, AT FAIR MARKET VALUE $9,640,907 $9,935,382
CASH 19,711 97
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NET ASSETS AVAILABLE FOR BENEFITS $9,660,618 $9,935,479
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The accompanying notes are an integral part of these statements.
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LODGIAN, INC. 401(K) PLAN
(FORMERLY SERVICO, INC. 401(K) PLAN)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2000
(MODIFIED CASH BASIS)
INTEREST AND DIVIDEND INCOME $ 202,960
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NET DEPRECIATION OF INVESTMENTS (604,055)
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CONTRIBUTIONS:
Employer 548,785
Participant 1,848,697
Rollovers 345,995
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Total contributions 2,743,477
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DISTRIBUTIONS TO PARTICIPANTS (2,395,113)
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ADMINISTRATIVE EXPENSES AND OTHER (222,130)
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NET DECREASE (274,861)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 9,935,479
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End of year $9,660,618
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The accompanying notes are an integral part of this statement.
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LODGIAN, INC. 401(K) PLAN
(FORMERLY SERVICO, INC. 401(K) PLAN)
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 2000 AND 1999
(MODIFIED CASH BASIS)
1. DESCRIPTION OF THE PLAN
The following is a brief description of Lodgian, Inc. 401(k) Plan (the
"Plan"). Participants should refer to the plan agreement for a more
complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan adopted by Servico, Inc.,
effective July 1, 1984, covering all eligible employees of Lodgian,
Inc. (the "Company" or "Lodgian"), as defined by the Plan. Servico,
Inc. and Impac Hotel Group LLC ("Impac") combined their respective
businesses through a series of corporate mergers, the result of which
Servico, Inc. and Impac became wholly owned subsidiaries of Lodgian,
effective December 11, 1998. Effective January 1, 1999, Lodgian assumed
sponsorship of the Plan. Accordingly, the name of the Plan changed from
Servico, Inc. 401(k) Plan to the Lodgian, Inc. 401(k) Plan. Also
effective January 1, 1999, the Impac 401(k) Plan merged into the Plan.
An eligible employee, as defined, is allowed to participate in the Plan
on the January 1 or July 1 coincident with or immediately following the
attainment of age 21, the completion of six months of employment, and
500 hours of service. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA"), as amended.
CONTRIBUTIONS
Participants may contribute up to 10% of pretax annual compensation, as
defined by the Plan. The Company may elect to make a matching
contribution ("base match") which will equal a certain percentage of
the participant's contribution for the year. The base match is made on
an annual basis and is allocated to the participant's account in the
Company's common stock. The Company may also elect to make a bonus
matching contribution equal to a percentage of the participant's
contributions invested in company stock. The bonus match is allocated
to the participant's account as of the end of the year following the
year in which the contributions were made and invested in company
stock, provided the participant leaves his/her contributions invested
in company stock until then. Total company contributions are limited to
10% of the participant's annual compensation. Participants are eligible
for the Company's contributions if he/she is employed as of the last
day of the respective plan year, except if the participant's employment
terminated due to retirement, disability, or death, and have completed
one year of service. The Company's board of directors approved company
contributions of $436,447 for the year ended December 31, 2000.
Contributions are subject to certain Internal Revenue Code ("IRC")
limitations.
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PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contribution, an allocation of the Company's contributions, and the
investment income (loss) of the Plan for the plan year. Investment
income (loss) of the Plan is allocated to the participants' accounts in
proportion to their respective account balances.
VESTING
Participants are fully vested in their contributions and the earnings
thereon.
Participants are vested ratably in the Company's contributions
beginning with 20% vesting upon completion of three years of service
and reaching 100% vesting upon completion of seven years of service.
INVESTMENT OPTIONS
Participants may direct their contributions and any related earnings
into any investment fund option offered by the Plan. Investment options
consist of publicly traded mutual funds, a common collective trust
fund, and company stock. Under the terms of the Plan, company
contributions are invested in company stock.
FORFEITURES
Amounts forfeited by participants who are terminated from the Plan
prior to being 100% vested are used to either reduce future
administrative expenses or company contributions at the discretion of
the Company. For the year ended December 31, 2000, forfeited accounts
of $149,482 were utilized to reduce administrative expenses. Total
forfeited balances as of December 31, 2000 and 1999 were $71,775 and
$130,581, respectively.
DISTRIBUTIONS TO PARTICIPANTS
Upon termination of service, a participant or his/her beneficiary may
elect to receive a distribution of 100% of the participant's vested
account balance. If a participant terminates due to death or
retirement, distribution of his/her account may begin as soon as
practicable. The forms of benefit payments under the Plan are a lump
sum, installments over a period of years, or an annuity purchase, at
the election of the participants.
ADMINISTRATIVE EXPENSES
All usual and reasonable costs of administering the Plan are paid by
the Plan.
LOANS TO PARTICIPANTS
A participant may borrow the lesser of $50,000 or 50% of his/her vested
account balance with a minimum loan amount of $500. Loans are repayable
through payroll deductions over periods ranging up to 60 months, unless
the loan is utilized to acquire a principal residence. The interest
rate is based on prevailing market conditions and is fixed over the
life of the loan.
PLAN TERMINATION
The Company has the right under the Plan to suspend its contributions
at any time and to terminate the Plan subject to the provisions of
ERISA and the Plan. In the event of plan termination, participants will
become fully vested in their accounts.
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on the
modified cash basis of accounting, which is a comprehensive basis of
accounting other than accounting principles generally accepted in the
United States. Under the modified cash basis, participant and company
contribution receivables, as well as refunds of contributions, as a
result of limitations under the IRC, and accrued income were not
recorded in the accompanying financial statements.
INVESTMENT VALUATION
Securities traded on national securities exchanges are valued at the
closing price on the last day of the plan year; investments traded in
over-the-counter markets and listed securities for which no sale was
reported on that date are valued at the last reported bid price.
Net realized gains (losses) and unrealized (depreciation) appreciation
is recorded in the accompanying statement of changes in net assets
available for benefits as net (depreciation) appreciation in fair value
of investments.
Net depreciation in fair value of investments for the year ended
December 31, 2000 is as follows:
Mutual funds $ 219,849
Lodgian, Inc. common stock (823,904)
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$(604,055)
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Security transactions are accounted for on the trade date.
Investment securities, in general, are exposed to various risks,
including credit, interest, and overall market volatility risks. Due to
the level of risk associated with certain investment securities, it is
possible that changes in values of investment securities will occur and
that such changes could materially affect the amount reported in the
statements of net assets available for benefits. The fair value of the
Company's common stock decreased from $3.3125 per share on December 29,
2000 to $0.43 per share on August 13, 2001. In addition, the Company
has been notified by the New York Stock Exchange (the "Exchange") that
it is not in compliance with the Exchange's continuing listing
requirements because the average closing price of the Company's stock
was less than the $1.00 per share limit over a consecutive 30
trading-day period. The Company is considering actions that may be
taken in order to bring itself into compliance with the Exchange's
requirements. The Company believes that it has until its annual
shareholders' meeting in 2002 to remedy this lack of compliance.
3. TAX STATUS
The Internal Revenue Service has determined and informed the Company by
a letter dated January 5, 2000 that the Plan, as designed, is qualified
and that the trust established under the Plan is tax-exempt under the
appropriate sections of the IRC. The Plan has been amended since
receiving the determination letter. However, the plan administrator
believes that the Plan is currently designed and being operated in
compliance with the applicable requirements of the IRC. Therefore, the
plan administrator believes that the Plan was qualified and that the
related trust was tax-exempt as of the financial statement dates.
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4. SIGNIFICANT INVESTMENTS
Individual investments that represent 5% or more of the Plan's net
assets as of December 31, 2000 and 1999 are as follows:
2000 1999
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Dodge & Cox Balanced Fund $3,752,008 $4,029,498
SEI Stable Asset Fund 972,514 963,242
SSgA Funds--S&P 500 Index Fund 2,009,668 2,161,613
Company stock 2,162,569 2,274,045
Information about the net assets and the significant components of the
changes in net assets relating to the company common stock
(nonparticipant-directed) as of December 31, 2000 and for the year then
ended is as follows:
Net assets:
Common stock $ 2,162,569
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Changes in net assets:
Employer contributions $ 548,785
Participant contributions 470,140
Net depreciation in fair value (823,904)
Distributions to participants (323,002)
Administrative expenses (63,799)
Net transfer to other investment options 80,304
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$ (111,476)
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5. CONTINGENCIES
The Impac 401(k) Plan, which merged into the Plan effective January 1,
1999, did not pass the nondiscrimination test described in Section
401(k)(3)(A)(ii) of the IRC for 1998. The Company is currently in the
process of exploring alternatives to correct this situation, as
permitted under Internal Revenue Procedure 2001-17. The possible
corrective actions could include an additional employer contribution to
the Plan, which would be funded by the Company from general corporate
funds, the total amount of which is estimated to be approximately
$54,000 plus earnings calculated from January 1, 2000 through the date
of the contribution. However, it is not possible to identify the
specific method of correction, the exact dollar amount of the required
contribution, the effect on participants, or any other possible effects
on the Plan as a result of this matter.
The Impac 401(k) Plan has not been audited as of December 31, 1998 and
1997 and for the years then ended, as required by ERISA. The Company
communicated and is attempting to satisfactorily resolve this matter
with the Department of Labor. However, there are no assurances in this
regard. In addition, it is not possible at this time to identify the
impact that this matter will have on the Plan.
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SCHEDULE I
LODGIAN, INC. 401(K) PLAN
(FORMERLY SERVICO, INC. 401(K) PLAN)
SCHEDULE H, LINE 4I--ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2000
(MODIFIED CASH BASIS)
IDENTITY OF ISSUER, BORROWER, DESCRIPTION OF INVESTMENT, INCLUDING MATURITY DATE, CURRENT
LESSOR, OR SIMILAR PARTY RATE OF INTEREST, COLLATERAL, AND PAR OR MATURITY VALUE COST VALUE
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* STATE STREET BANK American Century Equity Growth Fund, 13,204 shares (a) $ 287,465
Managers International Equity Fund, 2,813 shares (a) 138,985
SSgA Funds--S&P 500 Index Fund, 92,102 shares (a) 2,009,668
Royce Total Return Fund, 10,418 shares (a) 80,954
Strong Funds Corporate Bond Fund, 2,708 shares (a) 28,520
Dodge & Cox Balanced Fund, 59,161 shares (a) 3,752,008
SEI Stable Asset Fund, 972,514 shares (a) 972,514
Federated Automated Cash Management Trust, 16,192 shares (a) 16,192
* LODGIAN, INC. Common stock, 652,851 shares $3,897,357 2,162,569
* PARTICIPANT LOANS Interest rates range from 10.25% to 11.5% (a) 192,032
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$9,640,907
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*Represents a party in interest.
(a) Participant-directed.
The accompanying notes are an integral part of this schedule.
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SCHEDULE II
LODGIAN, INC. 401(K) PLAN
(FORMERLY SERVICO, INC. 401(K) PLAN)
SCHEDULE H, LINE 4J--REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
TOTAL NUMBER TOTAL NUMBER TOTAL VALUE OF TOTAL VALUE OF NET
IDENTITY OF PARTY DESCRIPTION OF ASSET OF PURCHASES OF SALES PURCHASES SALES GAIN
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* LODGIAN, INC. Common stock 42 20 $444,670 $205,162 $67,373
*Represents a party in interest.
The accompanying notes are an integral part of this schedule.