SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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SUBURBAN LODGES OF AMERICA, INC.
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The following press release was issued by registrant on May 9, 2001.
PRESS RELEASE
CONTACT: CHUCK CRISCILLIS 770-799-5000
INSTITUTIONAL SHAREHOLDER SERVICES (ISS)
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REJECTS FRENCH GROUP PLATFORM
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AND RECOMMENDS VOTE FOR ELECTION OF BOARD'S DIRECTOR NOMINEES
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AT SUBURBAN LODGES OF AMERICA, INC.
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ATLANTA, GEORGIA, May 9, 2001 . . . Suburban Lodges of America, Inc. (NASDAQ:
SLAM) ("Suburban" or the "Company") announced today that Institutional
Shareholder Services, the nation's leading proxy-voting advisory firm for
institutional investors and an industry-recognized proponent of shareholder
rights ("ISS"), has recommended that shareholders of Suburban vote for the
election of James R. Kuse and Michael McGovern, the nominees of Suburban's
incumbent board of directors (the "Board"), as directors to the Board at
Suburban's Annual Meeting of Shareholders scheduled for Thursday, May 17, 2001.
David E. Krischer, Chairman and Chief Executive Officer of Suburban, said, "We
are happy to receive the ISS endorsement. At the same time, we recognize that
our shareholders want us to maximize share value, and we are committed to
achieving that goal. The Company's Board and management remain alert to
opportunities that may be available to the Company. If presented with an
appropriate opportunity to grow share value, the Board is prepared to act
promptly".
A dissident shareholder group, owning approximately 6.4% of the Company's
outstanding shares and led by Raymond A.D. French, has nominated Mr. French and
Paul Coulson for election to the Company's Board. The French group has claimed
that, if elected, its nominees would advocate a sale of Suburban's Company-owned
hotels. If these hotels cannot be sold "within a reasonable period of time," the
French group claims its nominees would advocate a sale of the entire Company.
In a six-page report, ISS concluded that:
The plan brought forth by the dissidents represents little or no
departure from the current strategy of management. Additionally, it
appears that the dissidents may have overlooked some of the unique
company issues that raise serious doubts as to the success of their
proposed strategies.
Although management has not been successful in maximizing value in the
recent past, it is mostly due to the fact that the company is
continuing a difficult evolution from a property developer to a
fee-based franchiser. In our opinion, considering the current market
disposition towards the hotel industry in general, and the company in
specific, it would take a more innovative business strategy than what
is currently proposed by the dissidents in order for shareholders to
see any significant turnaround in the price of their shares.
Rather than cause an additional disruption on the board that would most
likely result in the company once again losing focus on its current
business plan, we believe that shareholders would be best served by
maintaining the company's current board composition.
Suburban Lodges of America, Inc. owns, franchises and manages Suburban Lodge
hotels, the nation's largest economy extended stay lodging chain, and franchises
GuestHouse International hotels, the owner-friendly brand of mid-market nightly
hotels.
In connection with the May 17 meeting, the Board recommends that Suburban's
shareholders vote for election of the Board's nominees on the WHITE proxy card.
If a shareholder already has signed a gold card from the French group, the
shareholder has every right to change their vote simply by signing, dating and
mailing a WHITE proxy card. Only the latest-dated proxy card will count at the
annual meeting. Shareholders needing assistance in voting their shares can
contact D.F. King & Co., Inc. toll-free on 1-800-488-8035.
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