ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended January 31, 2012.
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to .
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Commission File No. 1-7062
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Title of Each Class
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Name of Exchange on Which Registered
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Shares of Beneficial Interest,
without par value
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NYSE MKT
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·
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local, national or international economic and business conditions, including, without limitation, conditions that may, or may continue to, affect public securities markets generally, the hospitality industry or the markets in which we operate or will operate;
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·
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fluctuations in hotel occupancy rates;
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·
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changes in room rental rates that may be charged by InnSuites Hotels in response to market rental rate changes or otherwise;
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·
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seasonality of our business;
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·
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interest rate fluctuations;
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·
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changes in governmental regulations, including federal income tax laws and regulations;
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·
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competition;
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·
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any changes in our financial condition or operating results due to acquisitions or dispositions of hotel properties;
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·
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insufficient resources to pursue our current strategy;
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·
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concentration of our investments in the InnSuites Hotels® brand;
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·
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loss of franchise contracts;
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·
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real estate and hospitality market conditions;
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·
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hospitality industry factors;
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·
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our ability to meet present and future debt service obligations;
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·
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our inability to refinance or extend the maturity of indebtedness at, prior to or after the time it matures;
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·
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terrorist attacks or other acts of war;
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·
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outbreaks of communicable diseases;
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·
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natural disasters;
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·
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data breaches; and
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·
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loss of key personnel.
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Name
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Principal Occupations During Past
Five Years, Age as of May 15, 2012
and Directorships Held
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Trustee
Since
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Trustees Whose Terms Expire in 2014
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Larry Pelegrin
(1)(2)(3)(4)
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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: 74.
Mr. Pelegrin has forty years of operational, marketing and sales, management and financial experience in the hotel, airline, travel and computer industries.
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August 25, 2005
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Steven S. Robson
(1)(2)(3)(5)
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Owner of Scott Homes, residential real estate developers. Age: 56.
Mr. Robson has strategic leadership and residential real estate development experience as well as experience in negotiating complex transactions and maintaining mission, vision and values. In addition, Mr. Robson has served on our Board for nearly 15 years.
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June 16, 1998
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Trustees Whose Terms Expire in 2013
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James F. Wirth
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Chairman and Chief Executive Officer of the Trust since January 30, 1998, also serving as President of the Trust until February 1, 2012. 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: 66.
Mr. Wirth has significant real estate and hotel industry experience and extensive experience with the Trust. He also has a significant investment in our Shares, which we believe provides him with a strong incentive to advance shareholder interests. In addition, Mr. Wirth has served on our Board for nearly 15 years.
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January 30, 1998
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Peter A. Thoma
(1)(2)(3)
(6)
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Owner and operator of A&T Verleih, Hamburg, Germany, a hospitality service and rental company, since 1997. Age: 45
Mr. Thoma brings to us years of experience in the hospitality industry. In addition, Mr. Thoma has served on our Board for more than ten years.
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April 13, 1999
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Trustee Whose Term Expires in 2012
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Marc E. Berg
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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: 59.
Mr. Berg has in-depth familiarity with the operations of the Trust and extensive experience in property acquisitions. In addition, Mr. Berg has served on our Board for nearly 15 years.
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January 30, 1998
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Other Executive Officers
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Pamela J. Barnhill
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President and Chief Operating Officer of the Trust since February 1, 2012. Ms. Barnhill joined the Trust in 2002 as General Manager and progressed with the Trust through roles in revenue management, operations, sales and trademark licensing. Prior to joining the Trust, Ms. Barnhill’s career included roles with Motorola Semiconductor, Franchise Finance Corporation of America (FFCA) and Pittiglio, Rabin, Todd & McGrath (PRTM) Management Consulting. She has served as a Board Member for the Independent Lodging Industry Association since 2011. She earned a Masters of Business Administration (MBA) from Carnegie Mellon University, and a Bachelor of Arts in Economics
and Mathematics
cum laude
with honors from the University of Arizona. Age: 37.
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Anthony B. Waters
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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: 65.
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Percentage of Budgeted
Quarterly GOP Achieved
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Cash Bonus
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Less than 95%
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$0
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95%
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$500
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98%
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$1,000
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102%
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$1,500
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106% or more
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$2,000
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Percentage of Budgeted
Annual GOP Achieved
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Cash Bonus
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Less than 95%
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$0
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95%
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$1,000
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98%
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$2,000
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102%
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$5,000
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106%
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$9,000
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108% or more
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$12,000
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Period
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GM Aggregate Cash Bonus
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First Quarter
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$3,500
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Second Quarter
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$8,000
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Third Quarter
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$4,000
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Fourth Quarter
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$6,000
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Year End
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$21,000
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Name and
Principal Position(1)
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Fiscal
Year
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Salary
($)
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Bonus
($)
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Non-Equity Incentive Plan Compensation
($)
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All Other Compensation
($)(2)
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Total
($)
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|||||||||||||||
James F. Wirth,
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2012
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$ | 91,800 | $ | 0 | $ | 4,250 | $ | 500 | $ | 96,550 | ||||||||||
Chief Executive Officer
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2011
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$ | 104,746 | $ | 0 | $ | 3,500 | $ | 500 | $ | 108,746 | ||||||||||
Anthony B. Waters,
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2012
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$ | 122,400 | $ | 0 | $ | 4,250 | $ | 0 | $ | 126,650 | ||||||||||
Chief Financial Officer
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2011
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$ | 137,700 | $ | 0 | $ | 3,500 | $ | 0 | $ | 141,200 | ||||||||||
Marc E. Berg,
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2012
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$ | 58,800 | $ | 0 | $ | 4,250 | $ | 0 | $ | 63,050 | ||||||||||
Executive Vice President
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2011
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$ | 67,092 | $ | 2,750 | $ | 3,500 | $ | 0 | $ | 73,342 |
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______________________________
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(1)
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Pamela J. Barnhill became our President and Chief Operating Officer effective as of February 1, 2012, following the end of our fiscal year 2012. She was not serving as an officer at any time during our fiscal years 2012 and 2011 and, therefore, is not included in this table. Effective February 1, 2012, in recognition of additional responsibilities, Ms. Barnhill received an $8,000 per year increase in base salary to a total of $100,000 per year. Ms. Barnhill’s expanded responsibilities include continuation of work to increase hotel operations, including continued emphasis on revenue management, cost control and all areas of marketing, including Internet marketing. Ms. Barnhill also received a matching contribution of $500 under our 401(k) plan.
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(2)
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Matching contributions made under our 401(k) plan to our executive officers.
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Name
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Fees Earned or Paid
in Cash
($)
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Stock Awards ($)(1)
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Total ($)
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|||||||||
Larry Pelegrin
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$ | 0 | $ | 17,280 | $ | 17,280 | ||||||
Steven S. Robson
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0 | 17,280 | 17,280 | |||||||||
Peter A. Thoma
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0 | 17,280 | 17,280 |
Greater-than-Five-Percent Beneficial Owners and
Beneficial Ownership of Trustees, Nominees and Executive Officers
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||||||||
Trustees, Nominees and
Executive Officers
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Shares
Beneficially Owned(1)
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Percentage of
Outstanding Shares
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||||||
James F. Wirth(2)
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5,089,632 | 60.42 | % | |||||
Pamela J. Barnhill(3)
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259,934 | 3.09 | % | |||||
Marc E. Berg
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60,225 | * | ||||||
Steven S. Robson
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278,723 | 3.31 | % | |||||
Peter A. Thoma
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123,900 | 1.47 | % | |||||
Larry Pelegrin(4)
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85,870 | 1.02 | % | |||||
Anthony B. Waters
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23,000 | * | ||||||
Trustees and Executive Officers as a group (seven persons)
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5,921,284 | 70.29 | % |
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______________________________
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(1)
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Pursuant to the SEC’s rules, “beneficial ownership” includes Shares that may be acquired within 60 days following May 15, 2012. However, none of the individuals listed in the table had the right to acquire any Shares within 60 days.
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(2)
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All Shares are owned jointly by Mr. Wirth and his spouse, except for 1,838,476 Shares that are voted separately by Mr. Wirth and 1,239,078 Shares that are voted separately by Mrs. Wirth. Mr. Wirth has pledged 1,466,153, and Mrs. Wirth has pledged 300,000, 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 RRF Limited Partnership, the conversion of which is restricted and permitted only at the discretion of our Board of Trustees. Mr. Wirth’s business address is 1625 E. Northern Avenue, Suite 105, Phoenix, Arizona 85020.
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(3)
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Includes 20,498 Shares held by minor children.
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(4)
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Mr. Pelegrin has shared voting power and shared investment power with respect to all of his Shares.
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* Less than one percent (1.0%).
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Plan Category
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Number of Securities to
be Issued Upon Exercise
of Outstanding Options,
Warrants and Rights
(a)
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Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(b)
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Number of Securities
Remaining
Available for Future
Issuance Under Equity
Compensation Plans
(Excluding Securities
Reflected in Column (a))
(c)
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|||||
Equity compensation plans approved by security holders
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0
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$
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N/A
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1,000,000 (1)
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||||
Equity compensation plans not approved by security holders
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None
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None
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None
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(a)(3)
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Exhibit List
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INNSUITES HOSPITALITY TRUST
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Dated: May 30, 2012
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By:
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/s/ James F. Wirth
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James F. Wirth, Chairman and
Chief Executive Officer
(Principal Executive Officer)
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Dated: May 30, 2012
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By:
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/s/ Anthony B. Waters
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Anthony B. Waters, Chief Financial Officer
(Principal Financial and Accounting Officer)
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Exhibit No.
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Exhibit
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3.1
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Second Amended and Restated Declaration of Trust of InnSuites Hospitality Trust dated June 16, 1998, as further amended on July 12, 1999 (incorporated by reference to Exhibit 3.1 of the Registrant’s Annual Report on Form 10-K for the fiscal year ended January 31, 2005 filed with the Securities and Exchange Commission on May 16, 2005).
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10.1
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First Amended and Restated Agreement of Limited Partnership of RRF Limited Partnership dated January 31, 1998 (incorporated by reference to Exhibit 10.1 of the Registrant’s Registration Statement on Form S-2, filed with the Securities and Exchange Commission on September 8, 1998).
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10.2*
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Form of Indemnification Agreement between InnSuites Hospitality Trust and each Trustee and executive officer (incorporated by reference to Exhibit 10.3 of the Registrant’s Annual Report on Form 10-K/A for the fiscal year ended January 31, 2006 filed with the Securities and Exchange Commission on May 12, 2006).
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10.3*
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InnSuites Hospitality Trust 1997 Stock Incentive and Option Plan (incorporated by reference to Exhibit 4(a) of the Registrant’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on September 19, 2000).
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10.4*
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Line of Credit Agreement, dated August 1, 2010, by and between RRF Limited Partnership and Rare Earth Financial, LLC (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2010 filed with the Securities and Exchange Commission on September 3, 2010).
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10.5*
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Albuquerque Suite Hospitality, LLC Restructuring Agreement, dated August 30, 2010, by and among RRF Limited Partnership, Rare Earth Financial, LLC, InnSuites Hospitality Trust, James F. Wirth, and Albuquerque Suite Hospitality, LLC (incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2010 filed with the Securities and Exchange Commission on September 3, 2010).
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10.6
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Revolving Bank Line of Credit Promissory Note, dated November 23, 2010, executed by InnSuites Hospitality Trust, Yuma Hospitality Properties Limited Partnership and RRF Limited Partnership, as Borrowers, in favor of RepublicBankAZ, N.A., as Lender (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2010 filed with the Securities and Exchange Commission on December 9, 2010).
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10.7
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Revolving Bank Line of Credit Business Loan Agreement, dated November 23, 2010, by and among InnSuites Hospitality Trust, Yuma Hospitality Properties Limited Partnership and RRF Limited Partnership, as Borrowers, and RepublicBankAZ, N.A., as Lender (incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2010 filed with the Securities and Exchange Commission on December 9, 2010).
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10.8
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Change in Terms Agreement for Bank Line of Credit, dated May 12, 2011, executed by InnSuites Hospitality Trust, Yuma Hospitality Properties Limited Partnership and RRF Limited Partnership, as Borrowers, and James F. Wirth, as Guarantor, in favor of RepublicBankAZ N.A., as Lender (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2011 filed with the Securities and Exchange Commission on June 3, 2011).
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10.9*
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Tucson Hospitality Properties LP Restructuring Agreement, dated February 17, 2011, by and among Rare Earth Financial, LLC, RRF Limited Partnership, InnSuites Hospitality Trust, Tucson Hospitality Properties LP, and James F. Wirth (incorporated by reference to Exhibit 10.1 of the Registrant’s Annual Report on Form 10-K for the fiscal year ended January 31, 2011 filed with the Securities and Exchange Commission on April 29, 2011).
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10.10* |
Ontario Hospitality Properties LP Restructuring Agreement, dated February 29, 2012, by and among Rare Earth Financial, LLC, RRF Limited Partnership, InnSuites Hospitality Trust, Ontario Hospitality Properties LP, and James F. Wirth.+
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10.11 | Change in Terms Agreement for Bank Line of Credit, dated May 25, 2012, executed by InnSuites Hospitality Trust, Yuma Hospitality Properties Limited Partnership and RRF Limited Partnership, as Borrowers, and James F. Wirth, as Guarantor, in favor of RepublicBankAZ, N.A., as Lender. | |
21
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Subsidiaries of the Registrant.+
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31.1
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Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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31.2
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Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certification of Chief Executive Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
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32.2
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Certification of Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
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101
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XBRL Exhibits: **+
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101.INS
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XBRL Instance Document**+
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101.SCH
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XBRL Schema Document**+
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101.CAL
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XBRL Calculation Linkbase Document**+
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101.LAB
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XBRL Labels Linkbase Document**+
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101.PRE
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XBRL Presentation Linkbase Document**+
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101.DEF
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XBRL Definition Linkbase Document**+
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Principal
$500,000.00
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Loan Date
11-23-2010
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Maturity
06-23-2012
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Loan No
823002500
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Call/Coll
56
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Account
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Officer
MH
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Initials
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References in the boxes above are for Lender’s use only and do not limit the applicability of this document to any particular loan or item. Any item above containing “***” has been omitted due to text length limitations
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1.
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THE MATURITY DATE OF SAID NOTE AND REVOLVING LINE OF CREDIT IS HEREBY EXTENDED FROM MAY 23, 2012 TO JUNE 23, 2012.
|
2.
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BORROWER TO BRING INTEREST CURRENT TO MAY 23, 2012 IN TH AMOUNT OF $237.83.
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Principal
$500,000.00
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Loan Date
11-23-2010
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Maturity
06-23-12
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Loan No
823002500
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Call/Coll
|
Account
|
Officer
MH
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Initials
|
References in the boxes above are for Lender’s use only and do not limit the applicability of this document to any particular loan or item. Any item above containing “***” has been omitted due to text length limitations
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Undisbursed Funds: | $ | 344,708.40 | ||
Other Disbursements: | $ | 155,291.60 | ||
$155,291.60 Current Outstanding Principal Balance | ||||
Note Principal: | $ | 500,000.00 |
Prepaid Finance Charges Paid in Cash: | $ | 0.00 | ||
Other Charges Paid in Cash: | $ | 237.83 | ||
$237.83 Interest Due to 5/23/12 | ||||
Total Charges Paid in Cash: | $ | 237.83 |
1.
|
I have reviewed this annual report on Form 10-K/A of InnSuites Hospitality Trust;
|
2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: May 30, 2012
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By:
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/s/ James F. Wirth
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|
|
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Name: James F. Wirth
Title: Chief Executive Officer
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1.
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I have reviewed this annual report on Form 10-K/A of InnSuites Hospitality Trust;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 30, 2012
|
By:
|
/s/ Anthony B. Waters
|
|
|
|
|
Name:
|
Anthony B. Waters
|
|
|
|
Title:
|
Chief Financial Officer
|
Date: May 30, 2012
|
By:
|
/s/ James F. Wirth
|
|
|
|
Name: James F. Wirth
|
|
|
|
Title: Chief Executive Officer
|
Date: May 30, 2012
|
By:
|
/s/ Anthony B. Waters
|
|
|
|
Name: Anthony B. Waters
|
|
|
|
Title: Chief Financial Officer
|