proxy2009.htm
INFORMATION
REQUIRED IN PROXY STATEMENT
Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of
1934
Filed by
the Registrant þ
Filed by
a Party other than the Registrant o
Check the
appropriate box:
o Preliminary Proxy
Statement
o Confidential, for Use
of the Commission Only (as permitted by
Rule 14a-6(e)(2))
þ Definitive Proxy
Statement
o Definitive Additional
Materials
o Soliciting Material
Under Rule 14a-12
INNSUITES HOSPITALITY
TRUST
(Name of
Registrant as Specified In Its Certificate)
(Name of
Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
|
|
|
|
o
|
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:
|
|
|
|
|
o
|
Fee
paid previously with preliminary materials.
|
|
|
|
|
o
|
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.:
|
[TRUST
LOGO]
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
Notice is
hereby given that the 2009 Annual Meeting of Shareholders of InnSuites
Hospitality Trust will be held in the Kachina Room at the InnSuites Hotels
Phoenix Best Western, 1615 E. Northern Avenue, Phoenix,
Arizona 85020 (phone: 602-997-6285) on Thursday, July 16, 2009, at 11:00
a.m., local time, for the purpose of considering and acting upon:
|
|
1.
|
The
election of the one Trustee named in the proxy statement and
recommended by the Board of Directors to hold office until the 2012 Annual
Meeting of Shareholders and until his successor shall be elected and
qualified (listed as Proposal 1 on the Proxy
Card).
|
|
|
2.
|
The
transaction of any other business that properly may come before the
meeting and any adjournments
thereof.
|
Shareholders
of the Trust of record at the close of business on May 26, 2009 are entitled to
vote at the 2009 Annual Meeting of Shareholders and any adjournments
thereof.
By order
of the Board of Trustees
MARC E.
BERG
Secretary
Phoenix,
Arizona
May 28,
2009
|
Shareholders
are requested to complete, date, sign and return the enclosed Proxy Card
in the envelope provided, which requires no postage if mailed in the
United States.
|
Important
Notice Regarding the Availability of Proxy Materials
for
the Annual Meeting of Shareholders to be held on July 16, 2009:
The proxy statement, proxy card and
Annual Report on Form 10-K for the year ended January 31, 2009 are
available at our internet website at www.innsuitestrust.com.
[TRUST
LOGO]
InnSuites
Hotels Centre
1615 E. Northern
Avenue
Suite 102
Phoenix,
Arizona 85020
PROXY
STATEMENT
Proxy
Solicitation
The
accompanying proxy is solicited by the Trustees of InnSuites Hospitality Trust
for use at the 2009 Annual Meeting of Shareholders to be held on Thursday, July
16, 2009, and any adjournments thereof. In addition to the
solicitation of proxies by mail, our Trustees, officers and regular employees
may also solicit the return of proxies by mail, telephone or personal contact,
for which they will not receive additional compensation. We will pay
all costs of soliciting proxies. We will reimburse brokers or other
persons holding our Shares of Beneficial Interest (“Shares”) in their names or
in the names of their nominees for their reasonable expenses in forwarding proxy
material to the beneficial owners of such Shares.
General
Information
Shareholders
of record at the close of business on May 26, 2009 (the record date) will be
entitled to vote at the 2009 Annual Meeting of Shareholders and at any
adjournments thereof. At that date, there were 8,965,954 Shares
issued and outstanding. Each outstanding Share is entitled to one
vote on all matters that properly come before the 2009 Annual
Meeting. A majority of the issued and outstanding Shares, or
4,482,978 Shares, must be represented at the 2009 Annual Meeting in person or by
proxy in order to constitute a quorum for the transaction of
business.
Shares
represented by properly executed proxy cards will be voted in accordance with
the specifications made thereon. If no specification is made, proxies will be
voted FOR the election
of the Trustee nominee named herein. The election of the Trustee requires the
affirmative vote of a majority of the issued and outstanding Shares entitled to
vote present in person or by proxy at the Annual Meeting. Abstentions and broker
non-votes, unless a broker’s authority to vote on a particular matter is
limited, are tabulated in determining the votes present at a meeting.
Consequently, an abstention or a broker non-vote (assuming a broker has
unlimited authority to vote on the matter) has the same effect as a vote against
a Trustee, as each abstention or broker non-vote would be one less vote for the
Trustee nominee.
This
Proxy Statement and the accompanying form of proxy are first being mailed to our
shareholders on or about June 5, 2009. We are also mailing with this
Proxy Statement our Annual Report to Shareholders for the fiscal year ended
January 31, 2009.
No
appraisal rights are available under Ohio law or under our Declaration of Trust
to any shareholder who dissents from the Proposal described below.
A proxy
may be revoked at any time before a vote is taken or the authority granted is
otherwise exercised. Revocation may be accomplished by the execution
of a later proxy with regard to the same Shares or by giving notice in writing
to our Secretary or in an open meeting.
Electronic
Access to Future Proxy Materials
If you are a registered shareholder and
would like to reduce the costs incurred by us in mailing proxy materials, you
may consent to accessing all future shareholder communications (e.g., proxy materials,
annual reports and interim communications) over the Internet instead of
receiving copies in the mail. If you choose electronic access to future
shareholder communications by checking the appropriate box on your proxy card,
we will discontinue mailing future shareholder communications to you, but you
will receive a proxy card in the mail with instructions containing the Internet
address to access shareholder communications. If you give your
consent, there is no cost to you for this service other than charges you may
incur from your Internet provider, telephone and/or cable company. Once you give
your consent, it will remain in effect until you inform us
otherwise. If your Shares are held through a bank, broker, trustee or
some other nominee, check the information provided by that entity for
instructions on how to choose to access future shareholder communications over
the Internet.
ELECTION
OF TRUSTEES
(Proposal
1 on the Proxy Card)
At the
Annual Meeting, one Trustee is to be elected to a term of three years expiring
at the 2012 Annual Meeting of Shareholders and until his respective successor is
duly elected and qualified. Accordingly, Marc E. Berg will stand for
re-election as Trustee to a term expiring at the 2012 Annual
Meeting.
Unless a
shareholder requests that voting of a proxy be withheld for the nominee for
Trustee in accordance with the instructions set forth on the proxy, it presently
is intended that Shares represented by proxies solicited hereby will be voted
FOR the election of Mr.
Berg as Trustee to a term expiring at the 2012 Annual Meeting of
Shareholders. The nominee has consented to being named in this Proxy
Statement and to serve if elected. Should the nominee subsequently
decline or be unable to accept such nomination or to serve as a Trustee, an
event that the current Trustees do not now expect, the persons voting the Shares
represented by proxies solicited hereby may vote such Shares for a substitute
nominee.
Our Board
of Trustees currently has five members and is divided into three classes, as
follows:
|
·
|
one
Trustee in the class whose term expires at the 2009 Annual Meeting of
Shareholders;
|
|
·
|
two
Trustees in the class whose terms expire at the 2010 Annual Meeting
of Shareholders; and
|
|
·
|
two
Trustees in the class whose terms expire at the 2011 Annual Meeting
of Shareholders.
|
Each of
the Trustees serves for three years and until his successor is duly elected and
qualified. The Board of Trustees has determined that a majority of
the Trustees, Messrs. Thoma, Robson and Pelegrin, are “independent” as defined
by the NYSE Amex listing standards. We request that all of our
Trustees attend our Annual Meeting of Shareholders. All incumbent
Trustees were present at the 2008 Annual Meeting of Shareholders.
Our Board of Trustees recommends a
vote FOR Marc E. Berg as
Trustee.
Nominee,
Trustees and Executive Officers
The
biographies of Mr. Berg, and each of the Trustees whose term in office will
continue after the 2009 Annual Meeting of Shareholders, are set forth
below. The information concerning our Trustees and executive officers
set forth below is based in part on information received from the respective
Trustees and executive officers and in part on our records. The
information below sets forth the name, age, term of office and principal
business experience for each Trustee, nominee for Trustee and executive officer
of the Trust, as applicable:
|
Name
|
Principal
Occupations During Past
Five
Years, Age as of May 26,
2009
and Directorships Held
|
Trustee
Since
|
|
Nominee
Whose Term Expires in 2012
|
|
|
|
Marc
E. Berg
|
Executive
Vice President, Secretary and Treasurer of the Trust since
February 10, 1999. Vice President – Acquisitions of the
Trust from December 16, 1998 to February 10,
1999. Consultant to InnSuites Hotels since
1989. Self-employed as a Registered Investment Advisor since
1985. Age: 56.
|
January
30, 1998
|
|
|
|
|
|
Trustees
Whose Terms Expire in 2011
|
|
|
|
Larry
Pelegrin(1)(2)(3)
|
Retired
marketing executive with an extensive background in travel industry
automation systems and call center sales. Director of Sales and
Marketing of ARINC, a provider of transportation communications services,
from 1994 to 2000. Previous employment included senior
marketing positions with Best Western International and Ramada
Inns. Age: 71.
|
August
25, 2005
|
|
|
|
|
|
Steven
S. Robson(1)(2)(3)
|
President
of Robson Communities, Inc. and Scott Homes, residential real estate
developers, since 1979. Age: 53.
|
June
16, 1998
|
|
Trustees
Whose Terms Expire in 2010
|
|
|
|
James
F. Wirth
|
Chairman,
President and Chief Executive Officer of the Trust since January 30,
1998. President and owner (together with his affiliates) of
Suite Hotels, LLC, Rare Earth Financial, L.L.C. and affiliated entities,
owners and operators of hotels, since 1980. President of Rare
Earth Development Company, a real estate investment company owned by Mr.
Wirth and his affiliates, since
1973. Age: 63.
|
January
30, 1998
|
|
Peter
A. Thoma(1)(2)(3)
|
Owner
and operator of A&T Verleih, Hamburg, Germany, a hospitality service
and rental company, since
1997. Age: 42.
|
April
13, 1999
|
|
______________________________________________________________________________
1 Member
of the Audit Committee.
2 Member
of the Compensation Committee.
3 Member
of the Governance and Nominating Committee.
|
|
|
Other
Executive Officers
|
|
|
Anthony
B. Waters
|
Chief
Financial Officer of the Trust since February 25,
2000. Controller of the Trust from June 17, 1999 to
February 25, 2000. Accountant and auditor with Michael
Maastricht, CPA from June 16, 1998 to June 15, 1999, performing audits for
InnSuites Hotels, Inc. Self-employed, concentrating in
computerized accounting and information systems, from 1990 to June
1998. Age: 62.
|
The
Trustees held three meetings during fiscal year 2009. The nominee,
Mr. Berg, was a member of the Board of Trustees during fiscal year
2009.
Trustee
Nominations and Qualifications
The
Governance and Nominating Committee expects to identify nominees to serve as our
Trustees primarily by accepting and considering the suggestions and nominee
recommendations made by members of the Board of Trustees and our management and
shareholders. Nominees for Trustee are evaluated based on their
character, judgment, independence, financial or business acumen, diversity of
experience, ability to represent and act on behalf of all of our shareholders,
and the needs of the Board of Trustees. In general, before evaluating
any nominee, the Governance and Nominating Committee first determines the need
for additional Trustees to fill vacancies or expand the size of the Board of
Trustees and the likelihood that a nominee can satisfy the evaluation
criteria. The Governance and Nominating Committee would expect to
re-nominate incumbent Trustees who have served well on the Board of Trustees and
express an interest in continuing to serve.
The
Governance and Nominating Committee will consider shareholder recommendations
for Trustee nominees. A shareholder who wishes to suggest a Trustee
nominee for consideration by the Governance and Nominating Committee should send
a resume of the nominee’s business experience and background to Peter Thoma,
Chairman of the Governance and Nominating Committee, InnSuites Hospitality
Trust, 1615 E. Northern Avenue, Suite 102, Phoenix,
Arizona 85020. The mailing envelope and letter must
contain a clear notation indicating that the enclosed letter is a
“Shareholder-Board of Trustees Nominee.”
Shareholder
Communications with the Board of Trustees
Shareholders
interested in communicating directly with the Board of Trustees or any
individual member thereof may do so by writing to the Secretary, InnSuites
Hospitality Trust, 1615 E. Northern Avenue, Suite 102, Phoenix,
Arizona 85020. The mailing envelope and letter must contain a clear
notation indicating that the enclosed letter is a “Shareholder-Board of Trustees
Communication.” The Secretary will review all such correspondence and
regularly forward to the Board of Trustees a log and summary of all such
correspondence and copies of all correspondence that, in the opinion of the
Secretary, deals with the functions of the Board of Trustees or Committees
thereof or that he otherwise determines requires their
attention. Trustees may at any time review a log of all
correspondence received by us that is addressed to members of the Board of
Trustees and request copies of any such correspondence. Concerns
relating to accounting, internal controls or auditing matters are immediately
brought to the attention of our accounting department and handled in accordance
with procedures established by the Audit Committee for such
matters.
BOARD
COMMITTEES
All
incumbent Trustees attended at least 75% of the aggregate number
of meetings held by the Board of Trustees and the committees on which the
Trustee served. The independent directors meet at least annually in
executive session without the presence of non-independent directors and
management.
Audit
Committee
The Audit
Committee is directly responsible for the appointment, compensation, retention
and oversight of the work of our independent auditors, including reviewing the
scope and results of audit and non-audit services. The Audit
Committee also reviews internal accounting controls and assesses the
independence of our auditors. In addition, the Audit Committee has
established procedures for the receipt, retention and treatment of any
complaints received by us regarding accounting, internal controls or auditing
matters and the confidential, anonymous submission by our employees of any
concerns regarding accounting or auditing matters. The Audit
Committee has the authority to engage independent counsel and other advisors as
it deems necessary to carry out its duties. The Audit Committee met
six times during fiscal year 2009.
All
members of the Audit Committee are “independent,” as such term is defined by
Securities and Exchange Commission (“SEC”) rules and NYSE Amex listing
standards. The Board of Trustees has determined that Mr. Pelegrin, a
member of our Audit Committee, qualifies as a “financial expert” under
applicable SEC rules. We have posted our Amended and Restated Audit Committee
Charter on our Internet website at www.innsuitestrust.com.
Audit
Committee Report
The Audit
Committee of the Board of Trustees has reviewed and discussed the audited
financial statements of the Trust for the fiscal year ended January 31,
2009 with the management of the Trust. In addition, the Audit
Committee has discussed with Moss Adams LLP (“Moss Adams”), the independent
registered public accounting firm of the Trust, the matters required by
Codification of Statements on Auditing Standards No. 61, as adopted by the
Public Company Accounting Oversight Board in Rule 3200T. The Audit
Committee has also received and reviewed the written disclosures and the letter
from Moss Adams required by the applicable requirements of the Public Company
Accounting Oversight Board concerning independence, Rule 3526 “Communication
with Audit Committees Concerning Independence,” and has discussed with Moss
Adams its independence from the Trust, including the compatibility of non-audit
services with Moss Adams’ independence. The Audit Committee has also
pre-approved the fees to be charged to the Trust by its independent auditors for
audit and non-audit services.
Based on
the foregoing, the Audit Committee recommended that such audited financial
statements be included in the Trust’s Annual Report for the fiscal year ended
January 31, 2009. The Trust’s Annual Report on Form 10-K
was filed with the SEC on April 30, 2009.
By
the Audit Committee of the Board of Trustees:
Larry
Pelegrin, Chairman
Steven
S. Robson
Peter
A. Thoma
Compensation
Committee
The
Compensation Committee has the responsibility of determining the compensation of
the Chief Executive Officer and all of our other officers, advising the Board of
Trustees on the adoption and administration of employee benefit and compensation
plans and administering our 1997 Stock Incentive and Option
Plan. A description of the Compensation Committee’s processes and
procedures for the consideration and determination of executive officer
compensation is included in this proxy statement under “Compensation of Trustees
and Executive Officers – Compensation Discussion and Analysis.” The
Compensation Committee met two times during fiscal year 2009.
All
members of the Compensation Committee are “independent,” as such term is defined
by SEC rules and NYSE Amex listing standards. We have posted our
Compensation Committee Charter on our Internet website
at www.innsuitestrust.com.
Governance
and Nominating Committee
The
Governance and Nominating Committee has the responsibility of screening and
nominating candidates for election as Trustees and recommending committee
members for appointment by the Board of Trustees. See “Election of
Trustees – Trustee Nominations and Qualifications” above for more information on
how shareholders can nominate Trustee candidates, as well as information
regarding how Trustee candidates are identified and evaluated. The
Governance and Nominating Committee also advises the Board of Trustees with
respect to governance issues and trusteeship practices, including determining
whether Trustee candidates and current Trustees meet the criteria for
independence required by Amex and the SEC. The Governance and
Nominating Committee met two times during fiscal year 2009.
All
members of the Governance and Nominating Committee are “independent,” as such
term is defined by SEC rules and NYSE Amex listing standards. We have
posted our Governance and Nominating Committee Charter on our Internet website
at www.innsuitestrust.com.
COMPENSATION
OF TRUSTEES AND EXECUTIVE OFFICERS
Compensation
Discussion and Analysis
The following discussion and analysis
relates to the compensation paid to our named executive officers listed in the
Summary Compensation Table set forth below during fiscal year 2009.
Overview
of the Compensation Committee
The Compensation Committee of the Board
of Trustees is comprised of three independent Trustees. The Committee sets the
principles and strategies that serve to guide the design of the compensation
programs for our named executive officers. The Committee annually evaluates the
performance of our Chief Executive Officer, our Chief Financial Officer and our
Executive Vice President (our “named executive officers”). Taking into
consideration the factors set forth below, the Committee then approves their
compensation levels, including equity-based and cash bonuses. The Committee does
not use an independent compensation consultant to assist it with its
responsibilities. The Committee does consider input from the Chief
Executive Officer when determining compensation for the other executive
officers.
Compensation
Philosophy and Objectives
Under the
supervision of the Compensation Committee, we have developed and implemented
compensation policies, plans and programs that seek to enhance our ability to
recruit and retain qualified management and other personnel. In
developing and implementing compensation policies and procedures, the
Compensation Committee seeks to provide rewards for the long-term value of an
individual’s contribution to the Trust. The Compensation Committee
seeks to develop policies and procedures that offer both recurring and
non-recurring, and both financial and non-financial, incentives.
Our
executive compensation program is designed to (i) attract, as needed,
executives with the skills necessary for us to achieve our business plan
priorities, (ii) reward our executives fairly over time, (iii) retain
those executives who continue to perform at or above expected levels of
performance, and (iv) align the compensation of our executives with our
performance.
Compensation
for our named executive officers has two main monetary components, salary and
bonus, as well as a benefits component. Each named executive officer
receives a base salary. In addition, each named executive officer is
eligible to receive a bonus. The bonus can consist of a grant of
restricted Shares or cash. During fiscal year 2008, our named
executive officers received cash bonuses. Our 1997 Stock Incentive
and Option Plan (the “Plan”) also permits the granting of stock options.
However, beginning in the second quarter of fiscal year 2006, the Compensation
Committee decided to utilize other types of awards available under the
Plan. As a result, we accepted the voluntary surrender of all
outstanding stock options from our executive officers, Trustees and
employees. The options were surrendered in order to reduce accounting
and overall costs and simplify our reporting and compliance obligations to the
SEC and NYSE Amex. We made no payments to the holders of the options for their
surrender and we have no obligation, explicit or implied, for the surrender of
the options, including but not limited to the reissuance of options at some time
in the future. Therefore, none of our named executive officers or
Trustees owns any stock options. In establishing future executive
officer compensation packages, the Compensation Committee may utilize other
types of awards available under the Plan, and/or adopt additional long-term
incentive and/or annual incentive plans to meet the needs of changing employment
markets and economic, accounting and tax conditions.
The Plan
provides for accelerated benefits to participants in the event of a change in
control. Generally, a change in control will be deemed to have
occurred if (i) certain corporate reorganizations take place where the
existing shareholders do not retain more than two-thirds of the combined voting
power of our outstanding securities, (ii) any person or group becomes the
beneficial owner of 15% or more of the combined voting power of our outstanding
securities, (iii) there is a change in the majority of our Board of
Trustees during any period of two consecutive years, or (iv) we announce
that a change in control has occurred or will occur in the future pursuant to a
then-existing contract or transaction. We chose these change in control triggers
based on an evaluation of market practices at the time we implemented the
Plan. In the event of a change in control, each outstanding
restricted Share award becomes fully vested as of the day before the event
occurs.
Our
compensation program does not rely to any significant extent on broad-based
benefits or perquisites. The benefits offered to our named executive
officers are those that are offered to all of our full-time employees. We do not
offer our named executive officers any perquisites.
Our
management and the Compensation Committee work in a cooperative fashion.
Management advises the Compensation Committee on compensation developments,
compensation packages and our overall compensation program. The Compensation
Committee then reviews, modifies if necessary and approves the compensation
packages for our named executive officers.
Elements
of Compensation
In
setting the compensation for each named executive officer, the Compensation
Committee considers (i) the responsibility and authority of each position
relative to other positions within the Trust, (ii) the individual
performance of each named executive officer, (iii) the experience and
skills of the named executive officer, and (iv) the importance of the named
executive officer to the Trust.
Base
Salary
We pay
base salaries to our named executive officers in order to provide a level of
assured compensation reflecting an estimate of the value in the employment
market of the named executive officer’s skills and the demands of his
position. In establishing base salaries for our named executive
officers, the Compensation Committee considers our overall performance and the
performance of each individual named executive officer, as well as market forces
and other general factors believed to be relevant, including time between salary
increases, promotion, expansion of responsibilities, advancement potential, and
the execution of special or difficult projects. Additionally, the Compensation
Committee will take into account the relative salaries of the executive officers
and determine what it believes are appropriate compensation level distinctions
between and among the executive officers, including between the Chief Executive
Officer and the Chief Financial Officer and among the other executive officers.
While the Compensation Committee considers our financial performance, there is
no specific relationship between achieving or failing to achieve budgeted
estimates or our Share or financial performance and the annual salaries
determined by the Compensation Committee for any of the executive
officers. No specific weight is attributed to any of the factors
considered by the Compensation Committee; the Compensation Committee considers
all factors and makes a subjective determination based upon the experience of
its members and the recommendations of our management.
Based
upon a review of our performance and upon the recommendation of the Compensation
Committee, during fiscal year 2009, we paid Mr. Wirth, our Chairman,
President and Chief Executive Officer, an annual salary of
$153,000. During fiscal year 2008, Mr. Wirth received a base salary
of $147,000, which was less than he was entitled to receive under the terms of
his Employment Agreement with us. Mr. Wirth’s Employment Agreement
expired in December 2007. The Compensation Committee does not rely on
any particular set of financial or non-financial factors, measures or criteria
when determining the compensation offered to Mr. Wirth. The
Compensation Committee does consider Mr. Wirth’s substantial Share ownership
when setting his base salary.
Mr.
Waters’ base salary increased from $147,000 in fiscal year 2008 to $153,000 in
fiscal year 2009. Mr. Berg’s base salary increased from $94,000 in
fiscal year 2008 to $98,000 in fiscal year 2009. For fiscal year
2010, the Compensation Committee decided to freeze base salaries for Mr. Wirth,
Mr. Waters and Mr. Berg at fiscal year 2009 levels. This decision was
based on the impact of the current global recession on our business and our
industry generally.
Bonuses
Our named
executive officers are eligible to receive bonuses in the form of equity
compensation under the Plan at the discretion of the Compensation
Committee. The Plan was established to provide an incentive for
employees, including our named executive officers, to maximize our long-term
performance and align our named executive officers’ interests with those of our
shareholders, and permits our Board of Trustees or the Compensation Committee to
grant restricted Shares to employees, including our named executive officers, on
such terms as our Board of Trustees or the Compensation Committee may
determine. The bonuses are used as a means of additional
compensation, rather than a long-term incentive. For this reason, the
vesting periods for these awards are relatively short, usually one year or
less. In fiscal year 2009, we did not grant any bonuses in the form
of equity compensation. This decision was a result of discussions
with our named executive officers regarding the sufficiency of each named
executive officer’s current Share ownership and the restrictions upon transfer
of Shares held by our named executive officers due to their affiliate
status. The Compensation Committee may decide to grant bonuses in the
form of equity compensation in future years.
Our named
executive officers are eligible to receive cash bonuses under the General
Manager Bonus Plan. As a regional manager of five of our hotels, Mr.
Berg also receives a cash bonus equal to 10% of the aggregate cash bonuses
received by the general managers of the hotels in his region. In
turn, the general managers receive a bonus based on the achievement of budgeted
gross operating profit (total revenues less operating expenses) (“GOP”) at their
hotel on a quarterly and annual basis. A general manager will receive
the maximum bonus under the plan upon achieving 104% of budgeted quarterly GOP
and 108% of budgeted annual GOP and will not receive any bonus if 96% of
budgeted quarterly and annual GOP is not achieved. Since Mr. Berg’s
bonus opportunity is tied to the performance of the general managers of the
hotels in his region, his bonus is tied to the achievement of the same
performance criteria. In Mr. Berg’s region, there are five general
managers whose aggregate bonus potential is $100,000 annually and $10,000
quarterly.
In fiscal
year 2009, each of our named executive officers received an annual cash bonus
equal to 10% of the aggregate cash bonuses received by the general managers of
all of our hotels, regardless of region. The general manager
aggregate cash bonuses for fiscal year 2009 were:
|
Period
|
GM Aggregate Cash Bonus
|
|
|
|
|
First
Quarter
|
$ 8,500
|
|
Second
Quarter
|
$ 4,000
|
|
Third
Quarter
|
$ 1,000
|
|
Fourth
Quarter
|
$ 2,000
|
|
Year
End
|
$12,000
|
Accordingly,
each of our executive officers received $2,750 for fiscal year
2009. For Mr. Berg, this bonus was in addition to the cash bonus of
$750 that he received as a regional manager. In addition, Mr. Berg
earned a $14,000 bonus for refinancing the Yuma hotel
property.
Benefits
and Other Compensation
We
maintain broad-based benefits that are provided to all employees, including
health and dental insurance, life insurance and a 401(k) plan. We also have
a mandatory matching contribution for our 401(k) plan. We do not have
a pension plan. Our executive officers are eligible to participate in
all of our employee benefit plans, in each case on the same basis as other
employees.
Compensation
Committee Report
The
Compensation Committee has reviewed and discussed with management the
Compensation Discussion and Analysis that appears in this proxy
statement. Based on such review and discussions, the Compensation
Committee recommended to the Board of Directors that the Compensation Discussion
and Analysis be included in this proxy statement.
By
the Compensation Committee of the Board of Trustees:
Steven S.
Robson, Chairman
Larry
Pelegrin
Peter
A. Thoma
Fiscal
2009 Trustee Compensation
|
Name
|
Fees
Earned or Paid
in Cash ($)
|
Stock Awards ($)
|
Total ($)
|
|
Larry
Pelegrin
|
$
0
|
$
13,080
|
$
13,080
|
|
Steven
S. Robson
|
0
|
13,080
|
13,080
|
|
Peter
A. Thoma
|
0
|
13,080
|
13,080
|
We issued
12,000 restricted Shares to each Trustee, other than Messrs. Wirth and Berg, as
compensation for services rendered during fiscal year 2009. The restricted
Shares were issued on February 1, 2008, with 10% of the Shares vesting on the
date of grant and the remaining 90% of the Shares vesting in 10% increments over
the eleven-month period following the date of grant. We do not pay
our Trustees per meeting fees or additional compensation for serving on a
committee or as a committee chairperson.
Summary
Compensation Table
The table
below shows individual compensation information for our named executive officers
whose total compensation for the fiscal years ended January 31, 2007 through
January 31, 2009 exceeded $100,000:
|
Name
and
Principal Position
|
Fiscal
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Non-Equity
Incentive Plan Compensation
($)
|
All
Other Compensation
($)(1)
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
James
F. Wirth,
President
and Chief
|
2009
|
$
153,000
|
$ 0
|
$ 0
|
$ 2,750
|
$ 500
|
$ 156,250
|
|
Executive
Officer
|
2008
|
147,000
|
0
|
0
|
7,150
|
500
|
154,650
|
|
|
2007
|
141,000
|
0
|
5,360
|
0
|
500
|
146,860
|
|
Anthony
B. Waters,
|
2009
|
153,000
|
0
|
0
|
2,750
|
500
|
156,250
|
|
Chief
Financial
|
2008
|
147,000
|
0
|
0
|
7,150
|
500
|
154,650
|
|
Officer
|
2007
|
141,000
|
0
|
15,544
|
0
|
500
|
157,044
|
|
Marc
E. Berg,
|
2009
|
98,000
|
14,000
|
0
|
3,500
|
500
|
116,000
|
|
Executive
Vice
|
2008
|
94,000
|
15,000
|
0
|
10,550
|
500
|
120,050
|
|
President
|
2007
|
90,000
|
0
|
5,360
|
8,814
|
500
|
104,674
|
|
|
______________________________
|
|
(1)
|
Matching
contributions made under our 401(k) plan to the named executive officers
during fiscal years 2009, 2008 and
2007.
|
During fiscal year 2009 we did not
issue any Shares to our named executive officers. During the second
quarter of fiscal year 2006, we accepted the voluntary surrender of all
outstanding stock options. As a result, none of our executive
officers owned any stock options at January 31, 2008.
For fiscal year 2008, each of our named
executive officers received a cash bonus of $2,750 and Mr. Berg received an
additional cash bonus of $750 pursuant to our General Manager Bonus Plan, as
more fully described in “Compensation Discussion and Analysis – Elements of
Compensation – Bonuses.” Mr. Berg also received a cash bonus of
$14,000 for refinancing the Yuma hotel property, which is reported in the
Summary Compensation Table above in the “Bonus” column.
Potential
Payments Upon Change in Control
Upon a change in control, our 1997
Stock Incentive and Option Plan provides for the acceleration of vesting of
restricted Shares. The change in control triggers are described in “Compensation
Discussion and Analysis – Compensation Philosophy and
Objectives.” This plan does not discriminate as to scope or terms in
favor of our named executive officers. All terms are generally
applicable to all participants in this plan. If a change in control
had occurred on January 31, 2009, none of our named executive officers would
have received any payment upon a change in control because none had any unvested
restricted Shares as of that date.
CERTAIN
TRANSACTIONS
Related
Party Loans and Advances to the Trust
Notes and
advances payable to related parties consist of funds provided by Mr. Wirth,
certain of his affiliates and other related parties to permit us to repurchase
Shares and additional general partnership units in RRF Limited Partnership (the
“Partnership”) and to fund working capital and capital improvement needs. The
aggregate amounts outstanding to related parties were $0 and approximately
$55,000 as of January 31, 2009 and 2008, respectively.
The notes
and advances payable to related parties are as follows as of January 31 of
the respective years:
|
|
|
|
|
|
|
|
Note
payable to The Anderson Charitable Remainder Unitrust, an affiliate of
Mason Anderson, former Trustee of the Trust, bearing interest at 7% per
annum, and secured by Shares of Beneficial Interest in the Trust. Due in
monthly principal and interest payments of $1,365 through
November 2009.
|
|
$ |
— |
|
|
$
|
28,105 |
|
|
|
|
|
|
|
|
|
|
|
Note
payable to Wayne Anderson, son of Mason Anderson, former Trustee of the
Trust, bearing interest at 7% per annum, and secured by Shares of
Beneficial Interest in the Trust. Due in monthly principal and interest
payments of $574 through June 2009.
|
|
|
— |
|
|
|
9,271 |
|
|
|
|
|
|
|
|
|
|
|
Note
payable to Karen Anderson, daughter of Mason Anderson, former Trustee of
the Trust, bearing interest at 7% per annum, and secured by Shares of
Beneficial Interest in the Trust. Due in monthly principal and interest
payments of $574 through June 2009.
|
|
|
— |
|
|
|
9,268 |
|
|
|
|
|
|
|
|
|
|
|
Note
payable to Kathy Anderson, daughter of Mason Anderson, former Trustee of
the Trust, bearing interest at 7% per annum, and secured by Shares of
Beneficial Interest in the Trust. Due in monthly principal and interest
payments of $495 through June 2009.
|
|
|
— |
|
|
|
7,989 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
$ |
54,633 |
|
We paid
interest on related party notes to Mr. Wirth and his affiliates in the
amounts of $7,475 and $26,730, for the twelve months ended January 31, 2009
and 2008, respectively. We incurred interest expense on related party
notes to Mr. Wirth and his affiliates in the amounts of $7,475 and $20,959
for the twelve months ended January 31, 2009 and 2008,
respectively.
Management
and Licensing Agreements
Under its management agreements,
InnSuites Hotels provides personnel for four hotels owned by affiliates of Mr.
Wirth, the expenses of which are reimbursed at cost, and manages the hotels’
daily operations. During fiscal year 2009, InnSuites Hotels received
a management fee of 2.5% of room revenue and an additional monthly accounting
fee of $2,000 for these four hotels. The management and accounting
fees for these hotels will remain the same in fiscal year 2010. These
agreements have no expiration date and may be cancelled by either party with
90-days written notice, or 30-days written notice in the event the property
changes ownership.
In exchange for use of the “InnSuites”
trademark, InnSuites Hotels received 1.25% of room revenue and an additional
advertising fee of 1.0% of room revenue for the four hotels owned by affiliates
of Mr. Wirth during fiscal years 2009 and 2008. These agreements have
no expiration date and may be cancelled by either party with 12-months written
notice, or 90-days written notice in the event the property changes
ownership.
Review,
Approval or Ratification of Transactions with Related Parties
We have
established procedures for reviewing transactions between us and our Trustees
and executive officers, their immediate family members and entities with which
they have a position or relationship. These procedures help us evaluate whether
any related person transaction could impair the independence of a Trustee or
presents a conflict of interest on the part of a Trustee or executive
officer. First, the related party transaction is presented to our
executive management, including our Chief Financial Officer. Our
Chief Financial Officer will discuss the transaction with our outside counsel or
our independent registered public accountants, if
appropriate. Lastly, the members of the Board of Trustees who do not
have an interest in the transaction will review the transaction and, if they
approve, will pass a resolution authorizing the transaction.
CERTAIN
INFORMATION CONCERNING THE TRUST
Ownership
of Shares
The
following table shows the persons who were known to us to be the beneficial
owner of more than 5% of our outstanding Shares as of May 26, 2009, together
with the number of Shares owned beneficially by each Trustee, nominee and
executive officer, and the Trustees, nominee and executive officers as a
group. Unless otherwise specified, each person has sole voting and
investment power of the Shares he beneficially owns.
|
Five
Percent Beneficial Owners and
Beneficial
Ownership of Trustees, Nominees and Executive Officers
|
|
Trustees,
Nominees and Executive
Officers
|
Shares
Beneficially Owned
|
Percentage
of
Outstanding Shares
|
|
James
F. Wirth (1)
|
5,573,624
|
62.2%
|
|
Marc
E. Berg
|
60,225
|
*
|
|
Steven
S. Robson
|
248,723
|
2.8%
|
|
Peter
A. Thoma
|
93,900
|
1.0%
|
|
Larry
Pelegrin (2)
|
55,870
|
*
|
|
Anthony
B. Waters
|
23,000
|
*
|
|
Trustees,
Nominees and Executive Officers as a group (seven persons)
|
6,055,342
|
67.5%
|
|
|
______________________________
|
|
(1)
|
All
Shares are owned jointly by Mr. Wirth and his spouse, except for
1,838,476 Shares that are held individually by Mr. Wirth and 1,239,079
Shares that are held individually by Mrs. Wirth. Mr. Wirth has pledged
823,669 of these shares as security. Mr. Wirth and his
spouse also own all 3,407,938 issued and outstanding Class B limited
partnership units in the Partnership, the conversion of which is
restricted and permitted only at the discretion of our Board of
Trustees. Mr. Wirth’s business address is 1615 E.
Northern Avenue, Suite 102, Phoenix, Arizona
85020.
|
|
(2)
|
Mr.
Pelegrin has shared voting power and shared investment power with respect
to all of his Shares.
|
|
*
Less than one percent (1.0%).
|
Section
16(a) Beneficial Ownership Reporting Compliance
Section 16(a)
of the Securities Exchange Act of 1934 requires our Trustees, executive officers
and holders of more than 10% of our Shares to file with the SEC initial reports
of ownership and reports of subsequent changes in ownership. Such persons are
required by the regulations of the SEC to furnish us with copies of all
Section 16(a) reports they file with the SEC. The SEC has established
specific due dates for these reports and we are required to disclose in this
proxy statement any late filings or failures to file.
Based
solely on our review of the copies of such forms (and amendments thereto)
furnished to us and written representations from certain reporting persons that
no additional reports were required, we believe that all our Trustees, executive
officers and holders of more than 10% of the Shares complied with all
Section 16(a) filing requirements during the fiscal year ended January 31,
2008, except for Messrs. Pelegrin, Robson and Thoma, who each had one late Form
4 filing to report a grant of restricted shares.
Selection
of Independent Auditors
Our
consolidated financial statements as of and for the fiscal year ended
January 31, 2009 were audited by Moss Adams. The Audit Committee
has appointed Moss Adams to serve as our independent registered public
accountants for the fiscal year ended January 31, 2010.
Representatives
of Moss Adams are
expected to be present at the 2009 Annual Meeting, will have the opportunity to
make a statement if they desire to do so and are expected to be available to
respond to appropriate questions.
Audit
Fees & Services
Audit
Fees
The
aggregate fees for professional services rendered by Moss Adams for the audit of
our annual financial statements for the fiscal years ended January 31, 2009 and
January 31, 2008 and review of our interim financial statements included in
our quarterly reports on Form 10-Q filed during the fiscal years ended January
31, 2009 and 2008 were $189,117 and $200,015, respectively.
Audit-Related
Fees
The
aggregate fees for audit-related services rendered by Moss Adams, such as
assistance with and review of quarterly press releases containing earnings
information, for the fiscal years ended January 31, 2009 and January 31, 2008
were $6,450 and $1,900, respectively.
Tax
Fees
The
aggregate fees for tax compliance, tax advice and tax planning services rendered
by Moss Adams for the fiscal years ended January 31, 2009 and January 31,
2008 were $77,489 and $53,206, respectively.
All
Other Fees
The
aggregate fees for other services, which consisted of analysis of financial
statement and tax implications of an asset sale and sales tax issues in Arizona,
during the fiscal years ended January 31, 2009 and January 31, 2008 were $0 and
$985, respectively.
Our Audit
Committee has considered whether the provision of these services, other than the
audit of our annual financial statements and the review of our interim financial
statements, is compatible with Moss Adams maintaining its respective
independence from us.
The Audit
Committee pre-approves all fees for services performed by Moss Adams. Unless a
type of service Moss Adams provided received general pre-approval, it will
require specific pre-approval by the Audit Committee. Any proposed services
exceeding pre-approved cost levels will require specific pre-approval by the
Audit Committee. The term of any pre-approval is 12 months from the date of
pre-approval, unless the Audit Committee specifically provides for a different
period.
Since
May 6, 2003, the effective date of the SEC’s rules requiring Audit
Committee pre-approval of audit and non-audit services performed by our
independent auditors, all of the services provided by our independent auditors
were approved in accordance with the policies and procedures described
above.
OTHER
MATTERS
The
Trustees know of no matters to be presented for action at the 2009 Annual
Meeting other than those described in this Proxy Statement. Should
other matters come before the meeting, the Shares represented by proxies
solicited hereby will be voted with respect thereto in accordance with the best
judgment of the proxy holders.
OTHER
INFORMATION
Shareholder
Proposals
If a
shareholder intends to present a proposal at the 2009 Annual Meeting, it must be
received by us for consideration for inclusion in our Proxy Statement and form
of proxy relating to that meeting on or before January 28, 2010. A
shareholder who wishes to present a proposal at the 2009 Annual Meeting, but not
have that proposal included in our Proxy Statement and form of proxy relating to
that meeting, must notify us of the proposal before April 24,
2010. If notice of the proposal is not received by us by that date,
then the proposal will be deemed untimely and we will have the right to exercise
discretionary voting authority and vote proxies returned to us with respect to
that proposal.
By order
of the Board of Trustees
MARC E.
BERG
Secretary
May 28,
2009
InnSuites
Hospitality Trust
c/o
National City Bank
Shareholder
Services Operations
Locator
5352
P.O. Box
94509
Cleveland,
OH 44101-4509
|
Proxy
card must be signed and dated below.
|
|
ò Please
fold and detach card at perforation before
mailing. ò
|
InnSuites
Hospitality Trust
THIS
PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES
|
The
undersigned hereby appoints MARC E. BERG and ANTHONY B. WATERS as proxies,
each with the full power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated on the reverse side, all the
Shares of Beneficial Interest of InnSuites Hospitality Trust held of
record by the undersigned on May 26, 2009 at the Annual Meeting of
Shareholders to be held on July 16, 2009 or at any adjournments
thereof. Please sign and return this
proxy whether or not you plan to attend the meeting. You may
nevertheless vote in person if you attend.
|
|
|
|
|
|
Signature
|
|
|
|
|
|
|
|
|
Signature
(if held jointly)
|
|
|
Please
sign exactly as name appears to the left. When shares are held
in joint name, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full tile 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.
|
|
|
Dated:
2009
|
PLEASE
DATE, SIGN AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
YOUR
VOTE IS IMPORTANT
PLEASE
SIGN AND DATE THIS PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE SO YOUR SHARES MAY BE REPRESENTED AT THE 2009 ANNUAL
MEETING OF SHAREHOLDERS.
|
Proxy
card must be signed and dated below.
|
|
|
ò Please
fold and detach card at perforation before
mailing. ò
|
|
|
INNSUITES
HOSPITALITY TRUST
|
PROXY
|
|
THIS
PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR THE NOMINEE LISTED BELOW.
|
|
1. Election
of Trustee:
|
|
q
|
FOR the nominee listed
below.
|
q
|
WITHHOLD
AUTHORITY
to
vote for the nominee listed below.
|
|
|
Marc
E. Berg
|
|
|
|
2. In
their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
|
|
|
|
|
|
|
|
|
|
¨ I
consent to access future shareholder communications over the Internet as stated
in the proxy statement.
(CONTINUED,
AND TO BE SIGNED, ON THE OTHER SIDE)