<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A
                                 AMENDMENT NO. 1

(Mark One)
    [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 (FEE REQUIRED)

         For the fiscal year ended December 31, 2001 or

    [_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE  ACT OF 1934  (NO FEE  REQUIRED)  for the transition from
         ________________ to ________________

                         Commission File Number: 0-23256

                               JAMESON INNS, INC.
             (Exact name of Registrant as specified in its Articles)

            Georgia                                             58-2079583
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

8 Perimeter Center East, Suite 8050,
        Atlanta, Georgia                                         30346-1604
(Address of principal executive offices)                         (Zip code)
Registrant's telephone number, including area code:  (770) 901-9020

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $0.10 per share

      9.25% Series A Cumulative Preferred Stock, par value $1.00 per share

             $1.70 Series S Cumulative Convertible Preferred Stock,
                           par value $1.00 per share
                              (Title of Each Class)

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to the
filing requirements for the past 90 days. [X] Yes [_] No

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]

     Aggregate market value of the voting and non-voting common equity stock
held by nonaffiliates of the registrant as of March 20, 2002: $40,489,671.

     Number of shares of common stock outstanding on March 20, 2002:11,740,846.

<PAGE>

     This Amendment No. 1 on Form 10-K/A to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001 is being filed to add the
information required to be set forth in Part III.


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Directors.

The Directors of the Company are:

     Thomas W. Kitchin, 60, is our Chief Executive Officer, a director and
Chairman of the Board of Directors. 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 serves as a director of the Georgia State University Cecil B. Day
School of Hospitality Administration; director of a private school; and director
of the Northside Hospital Advisory Board. Mr. Kitchin is the father of Craig R.
Kitchin, our President and Chief Financial Officer.

     Michael E. Lawrence, 57, became a director in April 1994. Since March 1994,
he has been Chief Executive Officer and 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, Inc. and Sea Pines Real Estate Company, 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 and the Hilton
Head Island Chamber of Commerce. Mr. Lawrence is a licensed real estate broker
and a certified public accountant with a B.S. degree from Washington & Lee
University and an M.B.A. degree from Emory University.

     Robert D. Hisrich, Ph. D., 57, 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. Dr. Hisrich was a visiting professor at the Technical
University of Vienna in Austria in 2001 and at the University of Ljubljana in
Slovenia in 2000. 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,
Noteworthy Corporation and NeoMed. 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 a management consultant to
the financial services industry. 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

<PAGE>

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.

Executive Officers.

The executive officers of the Company are:

     Name                     Position
     ----                     --------

     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

     Set forth below is certain information concerning our executive officers
except for Mr. Thomas W. Kitchin. Information concerning Mr. Kitchin is set
forth above under the heading "Item 10. Directors and Executive Officers of the
Registrant - Directors."

     Craig R. Kitchin, 34, 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, 48, 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, 50, became General Counsel and Secretary of the Company
in January 1993 and Vice President-Legal in September 1997. 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.

     Martin D. Brew, 41, has been an officer of Kitchin Hospitality and the
Company since the acquisition of Signature Inns, Inc. in May 1999. He was
employed by Signature Inns for 13 years, first as controller and later as
treasurer. Mr. Brew was 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 certified public accountant.

Section 16(a) Beneficial Ownership Reporting Compliance.

     Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers, and persons who own more than 10% of our common stock to
report their initial ownership of our common stock and any subsequent changes in
that ownership to the Securities and Exchange Commission or the SEC and to


                                       2

<PAGE>

furnish us with a copy of each of these reports. SEC regulations impose specific
due dates for these reports, and we are required to disclose in this proxy
statement any failure to file by these dates during fiscal 2001.

     To our knowledge, based solely on the review of the copies of these reports
furnished to us and written representations that no other reports were required,
during and with respect to fiscal 2001, all Section 16(a) filing requirements
applicable to our executive officers, directors and more than 10% stockholders
were complied with.

ITEM 11.  EXECUTIVE COMPENSATION

     The following table sets forth certain information with respect to the
compensation of Thomas W. Kitchin, our Chief Executive Officer, for services in
all capacities to the Company during the fiscal years ended December 31, 1999,
2000, and 2001. No other executive officer of the Company had an annual salary
and bonus in excess of $100,000 paid by the Company 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>
                                        Annual Compensation                Long-Term Compensation Awards
                                        -------------------                -----------------------------

             Name and                                                   Restricted          Securities Underlying
        Principal Position              Year     Salary ($) (1)       Stock Awards ($)           Options (#)
        ------------------              ----     --------------       ----------------           -----------
<S>                                     <C>      <C>                  <C>                   <C>
Thomas W. Kitchin, Chairman and         2001         40,636            140,000 (2)                   --
Chief Executive Officer                 2000        111,749            700,000 (3)                   --
                                        1999         40,636                --                        --
                                                                                                     --
</TABLE>

---------------

(1) Mr. Kitchin holds positions with Kitchin Hospitality, LLC ("Kitchin
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 Kitchin 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
Kitchin Hospitality is not reported in the table. See "Certain Relationships and
Related Party Transactions - Cost Reimbursement Agreement."

(2) Represents the closing price of shares of common stock on the date of grant
for 20,000 shares of restricted common stock granted in 2001 under the 1993
Stock Incentive Plan. These shares vest over a 10 year period with no vesting
until the third anniversary of the grant, at which time the grants will be 30%
vested and on each succeeding anniversary an additional 10% will vest.

(3) Represents the closing price of shares of common stock on the Nasdaq
National Market on the date of grant for 100,000 shares of restricted common
stock granted in 2000 under the Jameson 1996 Stock Incentive Plan. Such shares
vest 10 years after the date of grant, assuming continuous employment with the
Company through the date of vesting.

                 Option Exercises in Last Fiscal Year;Aggregate
                       Fiscal Year-End Values of Options

     The named executive officer did not exercise any options during 2001. The
following table sets forth the values as of December 31, 2001, of all options
held by the named executive officer during 2001.


                                       3

<PAGE>

<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                  120,000                  70,000                  $0                   $0
</TABLE>

     On April 12, 2002, Mr. Kitchin tendered 150,000 options to the Company
pursuant to the terms of the Company's Schedule TO filed March 20, 2002, as
amended.

Employment Agreement

     On November 29, 2001, the Company entered into an employment agreement with
Thomas W. Kitchin effective as of December 1, 2001. Subject to early termination
provisions, the employment agreement is for a two-year term and is subject to an
automatic two-year renewal period unless the Company elects otherwise. The
employment agreement provides that Mr. Kitchin's base salary payable by the
Company for the first year is $338,632 multiplied by the percentage that the
time Mr. Kitchin devotes to the business of the Company bears to the time Mr.
Kitchin devotes to the business and affairs of the Company, the various Inns
owned by the Company and Kitchin Hospitality. Mr. Kitchin is also eligible under
the employment agreement to participate in Company incentive, profit sharing,
savings, retirement and welfare benefit plans, and is entitled to expense
reimbursement and other fringe benefits.

     If Mr. Kitchin's employment is terminated by the Company without cause or
by Mr. Kitchin for good reason, Mr. Kitchin is entitled to the following: (a)
two times his annual base salary then in effect and the average of his annual
bonuses for the two preceding fiscal years; (b) the vesting of any all
restricted stock and options to purchase Company common stock; (c) certain
welfare benefits for two years; (d) any other benefits Mr. Kitchin is entitled
to be paid, provided or is otherwise eligible to receive under any plan,
program, policy, contract or agreement. In the event Mr. Kitchin resigns or he
terminates his employment for other than good reason, Mr. Kitchin is entitled to
an amount equal to his base salary to the date of termination.

     The employment agreement provides that in the event the severance payments
and other compensation provided for under the agreement become subject to the
excess parachute payment excise tax under the Internal Revenue Code of 1986, as
amended, the Company will pay to Mr. Kitchin an additional amount such that the
net amount retained by Mr. Kitchin after deduction of the excise tax and any
federal, state or local taxes will equal the total benefits or amounts Mr.
Kitchin would otherwise be entitled to under the employment agreement. The
employment agreement also provides that the Company will require any successor
to all or substantially all of the business and/or assets of the Company to
assume and perform the employment agreement in the same manner that the Company
would be required to perform.

Report on Executive Compensation

     The Compensation Committee met twice during 2001. 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 and recommended such awards to the
Stock Plan Committee. All other decisions regarding the compensation of
executive officers were in practice made by Mr. Kitchin, our Chief Executive
Officer, Chairman of the Board and a director. Mr. Kitchin's base salary has not
been increased since October 1996.

     This report is made by Dr. Robert D. Hisrich, Michael E. Lawrence and
Thomas J. O'Haren who constituted the Compensation Committee during 2001.



                                       4

<PAGE>

Insider Participation in Compensation Decisions

     As noted above under "Report on Executive Compensation," Thomas W. Kitchin,
our Chief Executive Officer, Chairman of the Board and a director, made
recommendations to 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 2001 by Mr. Kitchin.

Stockholder Return Performance Graph

     Our 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 our common stock during the five year period which
commenced December 31, 1996, and ended December 31, 2001, with the cumulative
total return on the Nasdaq Market - U.S. Index and the Standard & Poors
Hotel-Motel Index.

                                PERFORMANCE CHART
<TABLE>
<CAPTION>

                                                Period Ending
                        --------------------------------------------------------
Index                   12/31/96    12/31/97    12/31/98    12/31/99    12/31/00    12/31/01
--------------------------------------------------------------------------------------------
<S>                     <C>         <C>         <C>         <C>         <C>         <C>
Jameson Inns, Inc.      100.00        94.85       79.04       69.50       65.26       51.03
NASDAQ - Total US*      100.00       122.48      172.68      320.89      193.01      153.15
SNL Hotel REITs         100.00       131.11       64.82       50.35       72.03       67.35
S&P Lodging - Hotels    100.00       139.78      113.87      113.86       92.10       86.37
</TABLE>

*Source: CRSP, Center for Research in Security Prices, Graduate School of
Business, The University of Chicago 2002. Used with permission. All rights
reserved. crsp.com


--------------------------------------------------------------------------------
           * All information provided in the graph above: (i) has been
           gathered by SNL Securities L.C. ("SNL") from sources believed
           by SNL to be reliable and (ii) is believed by SNL to be true
           and accurate in both form and content. However, although SNL
           makes every effort to ensure data accuracy, SNL does not
           guarantee or warrant the correctness, completeness,
           currentness, merchantability or fitness for a particular
           purpose of the information supplied. SNL shall not be liable
           for any loss or injury arising out of or caused, in whole or
           in part, directly or indirectly, by SNL's accidental acts or
           omissions in procuring, compiling, collecting, interpreting,
           reporting, communicating, or delivering said information. The
           graph was prepared by SNL at the special request of Jameson
           Inns, Inc. and for its own purposes.

     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 we specifically incorporate this information by
reference, and shall not otherwise be deemed filed under such Acts.



                                       5

<PAGE>

Compensation of Directors

     We pay each director other than Mr. Kitchin an annual fee of $10,000.
Payment of the annual fee is not contingent upon attendance at board or
committee meetings. We also pay $500 for each Board of Directors or board
committee meeting attended and reimbursement of expenses incurred in attending
board or committee meetings.

     Under our Director Stock Option Plan (the "1995 Director Plan"), each
director who is not otherwise an employee of the Company or an employee of any
of our subsidiaries or affiliates is granted an option to purchase 25,000 shares
of common stock upon his initial election as director. 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 options 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. Options granted under the
1995 Director Plan 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
options granted to Dr. Hisrich and Mr. Lawrence have an exercise price of $7.25
per share. Mr. O'Haren received an option to purchase 25,000 shares of common
stock on June 20, 1997, at an exercise price of $11.375.

     Under our 1997 Director Stock Option Plan (the "1997 Director Plan"), each
of our directors who is serving as a director on the first business day
following our annual meeting of stockholders and at such annual meeting was
considered as a director who was continuing in office or was reelected as a
director and is not otherwise an employee of the Company or an employee of any
of our subsidiaries or affiliates is granted an option to purchase 5,000 shares
of common stock as of the first business day following the annual meeting of our
stockholders. Options granted under the 1997 Director Plan 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. Options were granted to Dr. Hisrich, Mr.
Lawrence and Mr. O'Haren in November 1997 when the 1997 Director Plan was
adopted , with an exercise price of $11.625 per share. On June 29, 1998, May 8,
1999, June 19, 2000 and July 2, 2001, each of these directors received options
to purchase 5,000 shares of common stock at exercise prices of $10.00, $9.00,
$7.00 and $7.29 per share, respectively.



                                       6

<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information as of April 26, 2002,
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                      Series A                       Shares of
                                  Common                        Preferred                  Series S 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     of Owned (1)       of Class
------------------              -------------    ----------    ------------    ----------   -----------------    ----------
<S>                             <C>              <C>           <C>             <C>           <C>                 <C>
Thomas W. Kitchin (2)              615,041          5.19%        72,727           5.71%            --                 --
 8 Perimeter Center East,
 Suite 8050
 Atlanta, Georgia
 30346-1604

Robert D. Hisrich (3)               50,900             *           --              --              --                 --

Michael E. Lawrence (3)             50,500             *           100              *              --                 --

Thomas J. O'Haren (3)               86,396             *           --              --              --                 --

All directors and                1,077,879          8.98%       72,827           5.71%             --                 --
 executive
  officers as a group
   (8 persons) (4)
</TABLE>
-------
  *  Less than one percent (1%)

     1) The total number includes shares issued and outstanding as of April 26,
     2002, plus shares which the owner shown above has the right to acquire
     within 60 days after April 26, 2002. 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 26, 2002, 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, 168,459 shares of restricted common
     stock and 18,850 shares owned jointly with Mr. Kitchin's spouse.

     (3) Includes 50,000 shares issuable upon the exercise of currently vested
     stock options.

     (4) Includes 150,067 shares issuable upon the exercise of currently vested
     stock options and 416,207 shares of restricted common stock.


                                       7

<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The Leases. All of our operating hotel properties or Inns are leased, and
future Inns are expected to be leased, to Kitchin Hospitality under several
master leases from the various Jameson entities that hold legal title to the
Inns. Kitchin Hospitality is a limited liability company owned 100% by Thomas W.
Kitchin, our Chief Executive Officer, Chairman of the Board and director, and
members of his family.

     The master leases covering our Jameson Inns (collectively, the "Jameson
Lease") terminate December 31, 2011, 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 us 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. Kitchin 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 our Signature
Inns (collectively, the "Signature Lease") are substantially the same as the
Jameson Lease except for the rental calculation. The Signature Lease expires
December 31, 2012, subject to earlier termination upon the occurrence of certain
events. In 2001, total rent, including both base rent and percentage rent
charged to Kitchin Hospitality by us under the all master leases totaled $42.8
million.

     Turnkey Construction Contracts. All new Inns and expansions of existing
Inns were constructed by Kitchin Hospitality or by its predecessor companies. It
is anticipated that Kitchin Hospitality will act as general contractor for new
Inns we build as well as expansions of existing Jameson Inns. All Inns and Inn
expansions are constructed by Kitchin Hospitality on a turnkey basis pursuant to
construction agreements with us. Kitchin Hospitality also performs all of the
construction work for renovations of existing Inns. We paid Kitchin Hospitality
an aggregate of approximately $29.1 million for construction of new Inns,
expansions and renovations during the year ended December 31, 2001. Under the
construction agreements, if the contract price for a new Inn or group of Inns or
an Inn expansion exceeds Kitchin Hospitality's costs plus 10%, Kitchin
Hospitality is required to refund the excess amount to us. The contract price as
well as the other terms of each construction agreement submitted by Kitchin
Hospitality are subject to approval by our independent directors.

     Cost Reimbursement Agreement. Our officers and employees are also employees
of Kitchin Hospitality. Rather than duplicate payroll and certain other
administrative functions, we have entered into and are a party to a Cost
Reimbursement Agreement with Kitchin Hospitality which provides that the we will
reimburse Kitchin Hospitality, on an actual cost basis, for the employee
compensation and overhead costs attributable to us. Our officers and employees
receive their salaries, hourly wages and fringe benefits entirely from Kitchin
Hospitality, which also pays our office overhead and other general and
administrative costs. Under the Cost Reimbursement Agreement, we determine for
each officer and employee the amount that we would pay in salary and benefits if
such person devoted 100% of his or her time to our business. Kitchin Hospitality
then determines, subject to our review, the actual percentage of the person's
time devoted to our business and applies that percentage to our established
compensation amount. The resulting figure is the amount we reimburse Kitchin
Hospitality with respect to officer or employee compensation. Office overhead
and other general and administrative costs are also allocated to and borne by us
based primarily on the amount of time spent by these officers and employees on
our business. In 2001, these allocations of salary, office overhead and other
general and administrative costs to us totaled approximately $875,000.

                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, Registrant
caused this amendment to the report to be signed on its behalf by the
undersigned, thereunto duly authorized, April 30, 2002.

                                            JAMESON INNS, INC.

                                            By:  /s/ Craig R. Kitchin
                                                 -------------------------------
                                                 Craig R. Kitchin, President

                                       8