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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to___________
Commission file number 0-9032
SONESTA INTERNATIONAL HOTELS CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 13-5648107
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
116 Huntington Avenue, Boston, Massachusetts 02116
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 421-5400
Securities registered pursuant to Section 12(b) of the Act:
NONE
(Title of Class)
Securities registered pursuant to Section 12(g) of Act:
Title of each class Name of each exchange on which registered
Class A Common Stock
$ .80 par value NASDAQ
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 such
filing requirements for the past 90 days. Yes /X/ No. / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (ss.229,405 of this chapter) 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. /X/
The aggregate market value of the common stock held by non-affiliates of
the registrant as of the close of business on June 28, 2002 was $5,729,484.
The number of shares outstanding of the registrant's common stock as of the
close of business on March 15, 2003 was 3,698,230.
Documents incorporated by reference
1. Portions of the annual report to shareholders for the year ended
December 31, 2002 are incorporated by reference into Parts I, II and IV.
2. Portions of the proxy statement for the 2002 annual meeting of
stockholders are incorporated by reference into Part III.
An Index to Exhibits appears on pages 13 through 17 of this Form 10-K.
1
PART I
ITEM 1. BUSINESS
(a) General Development of Business. The Company is engaged in the
operation of hotels that it owns or leases in Boston (Cambridge),
Massachusetts; Key Biscayne, Florida; and New Orleans, Louisiana. It
also operates, under management agreements, hotels in Southampton,
Bermuda; New Orleans, Louisiana; Coconut Grove, Florida; and Cairo,
Luxor, Port Said and Sharm el Sheikh (2), Egypt; and three Nile River
cruise vessels. In April 2003, the Company will open a condominium
hotel consisting of up to 388 hotel guestrooms in Sunny Isles Beach,
in Florida, which the Company will operate under a management
contract. Under that contract, the Company will fund pre-opening costs
and working capital, and will contribute costs for the Hotel's
non-guestroom furniture, fixtures and equipment in excess of a certain
limit. In addition, the Company has agreed to purchase four
condominium units in the Hotel. The Company has also entered into
management agreements to operate new hotels being created in Biloxi,
Mississippi; and in Taba, Ras Sudr and Nuweiba, Egypt. The Company has
entered into master franchise agreements for Brazil, Peru and Italy,
and currently licenses six (7) hotels in Peru, and four (4) hotels,
including a 10th century castle, in Tuscany, Italy. A licensed
property in Sao Paulo, Brazil, is expected to open in June 2003.
(b) Refer to Note 8 to the Company's consolidated financial statements
(pages 18 and 19 of the 2002 Annual Report to Shareholders) for
information concerning the segment(s) in which the Company operates.
(c) Narrative Description of Business: The Company's business is to a
great extent dependent upon a high level of economic activity. The
hotel business is highly competitive. The facilities of competitors
are often affiliated with national or regional chains having more room
accommodations and greater financial resources than the Company. The
Company follows the practice of refurnishing and redecorating the
hotels which it operates in order to keep the properties attractive
and competitive with new hotel properties, and this requires the
Company to make substantial capital expenditures. During the two years
ended December 31, 2002, the Company made such capital expenditures
totaling approximately $21,380,000.
The Company endeavors to create individual and distinctive features
for each hotel property while utilizing common corporate
identification in order to obtain the benefits of chain operation. The
Company is using the name "Sonesta" for all of its hotels.
The Company has approximately 1560 employees. Approximately 250 of
these employees are covered by a collective bargaining agreement. The
Company considers its relations with its employees to be satisfactory.
2
Item 1 (c) (Cont'd)
While the business of the Company's individual hotels is seasonal, the
diverse locations of the three owned or leased properties tend to
mitigate the impact of this factor. Traditionally, only the third
quarter has produced significantly less revenues and operating income
than the first, second and fourth quarters, although these seasonal
fluctuations do not materially affect the Company's business
activities.
The following table reflects total revenues, annual occupancy
percentages, average room rates and revenues per available room
("REVPAR") for the Company's owned and leased properties for the years
2002, 2001, and 2000. REVPAR is calculated by dividing annual room
revenue by the total number of rooms available during the year.
TOTAL
NUMBER OF YEAR BUILT REVENUES
HOTEL ROOMS OR ACQUIRED (IN THOUSANDS)
- ----- --------- ----------- ---------------
2002 2001 2000
---- ---- ----
Sonesta Beach Resort Key Biscayne Owned 300 1998 $ 25,477 $ 26,144 $ 28,972
Royal Sonesta Hotel Boston (Cambridge) Owned 400 1963/1984 25,500 26,831 31,765
Royal Sonesta Hotel New Orleans Leased 500 1969 34,954 36,299 37,201
AVERAGE AVERAGE
OCCUPANCY DAILY
PERCENTAGE RATE
---------- --------
HOTEL 2002 2001 2000 2002 2001 2000
- ----- ----------------------------- -----------------------------
Sonesta Beach Resort Key Biscayne 64.0% 63.2% 73.9% $ 194 $ 211 $ 211
Royal Sonesta Hotel Boston (Cambridge) 68.7% 66.3% 77.1% 160 173 183
Royal Sonesta Hotel New Orleans 78.8% 83.0% 83.3% 167 167 168
3
"REVPAR"
--------
HOTEL 2002 2001 2000
- ----- ---- ---- ----
Sonesta Beach Resort Key Biscayne $ 124 $ 134 $ 156
Royal Sonesta Hotel Boston (Cambridge) 110 115 141
Royal Sonesta Hotel New Orleans 132 139 140
The Company has established and maintains trademark protection for
certain service marks it uses in conducting its business, including
the service marks "Sonesta", "Sonesta Beach", "Just Us Kids", and the
Company's stylized "S" logo. Trademarks are maintained in numerous
countries, besides the United States. Each mark is generally protected
for several years, subject to periodic renewal.
For revenues by class of service for the three years ended December
31, 2002, reference is made to the Consolidated Statements of
Operations which appear on page 9 of the 2002 Annual Report to
Shareholders.
(d) Financial Information about Foreign and Domestic Operations: This
information is incorporated by reference from Note 8 on pages 18 and
19 of the 2002 Annual Report to Shareholders.
ITEM 2. PROPERTIES
The Company's hotels are primarily metropolitan and resort hotels in popular
vacation areas which emphasize luxury accommodations and personal service.
The Company has fee ownership in two hotels: Royal Sonesta Hotel, Boston
(Cambridge), Massachusetts and Sonesta Beach Resort, Key Biscayne, Florida.
Reference is made to Note 4 of the Notes to the Consolidated Financial
Statements of the registrant which appears on page 16 of the Company's 2002
Annual Report to Shareholders for details of the mortgage liens on the Boston
(Cambridge), Massachusetts property and the Key Biscayne, Florida property.
The Company sold Sonesta Beach Resort Anguilla, in September 2002, for a sale
price of $10,450,000, of which $2,200,000 was received at closing, and the
remaining $8,250,000 was paid in November 2002. The outstanding mortgage loan
balance of $4,216,000 which encumbered the Resort was repaid at closing.
The Company operates the Royal Sonesta Hotel, New Orleans, Louisiana under a
long-term lease which expires on September 30, 2024, provided the Company
exercises its two remaining ten-year extension options.
The Company also operates under management agreements hotels in Southampton,
Bermuda; Coconut Grove (Miami), Florida; Sunny Isles Beach, Florida (opening
April 2003); New Orleans, Louisiana; and Cairo, Luxor, Port Said and Sharm el
Sheikh (2), Egypt; and three Nile River cruise vessels. The Company has granted
licenses for the use of its name to seven (7) hotels in Peru, and four (4)
hotels, including a 10th century castle, in Tuscany, Italy.
4
In addition to the properties listed above, the Company leases space for its
executive offices at 116 Huntington Avenue, Boston, Massachusetts 02116. That
lease commenced May 1, 2002, and has a 10-year term.
ITEM 3. LEGAL PROCEEDINGS
The Company is from time to time subject to routine litigation incidental to its
business, and generally covered by insurance. The Company believes that the
results of such litigation will not have a materially adverse effect on the
Company's financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of shareholders of the Company in the fourth
quarter of 2002.
5
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Common stock market prices and dividends and the number of shareholders of
record are incorporated by reference from page 2 of the 2002 Annual Report to
Shareholders.
A dividend of $ .10 per share was paid on the Company's common stock in July
2001 and a dividend of $ .10 per share was declared on the Company's common
stock in December 2001, but was paid in January 2002. A dividend of $ .10 per
share was paid in July 2002, and a dividend of $ .10 per share was declared on
the Company's common stock in December 2002, but was paid in January 2003. Other
information required by this item is incorporated by reference from the
Consolidated Statements of Stockholders' Equity which appears on page 12 of the
2002 Annual Report to Shareholders.
During the third quarter of 2001, the Company redeemed its outstanding preferred
stock at the redemption price of $27.50 per share, for a total amount of
$294,000.
ITEM 6. SELECTED FINANCIAL DATA
Selected Financial Data, on page 2 of the 2002 Annual Report to Shareholders, is
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
This information is incorporated by reference from pages 3 through 7 of the 2002
Annual Report to Shareholders.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
This information is incorporated by reference from page 7 of the 2002 Annual
Report to Shareholders.
6
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements listed in the Index to Consolidated Financial
Statements filed as part of this Annual Report on Form 10-K, together with the
report of Ernst & Young LLP dated March 5, 2003, are incorporated herein by
reference from the 2002 Annual Report to Shareholders.
Selected Quarterly Financial Data, on page 7 of the 2002 Annual Report to
Shareholders, is incorporated by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH AUDITORS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no disagreements with auditors on accounting principles or practices
or financial statement disclosures.
7
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
A. DIRECTORS OF THE COMPANY AND COMPLIANCE WITH SECTION 16 (a)
The information required by this item is incorporated herein by reference
from the proxy statement for the 2003 Annual Meeting of Stockholders, which
will be held on May 12, 2003.
B. THE EXECUTIVE OFFICERS OF THE COMPANY ARE AS FOLLOWS:
EMPLOYMENT HISTORY
NAME PRESENT POSITION AGE 1998 TO PRESENT
---- ---------------- --- ------------------
Roger P. Sonnabend Chairman of the Board and 77 Chairman and Chief Executive Officer
Chief Executive Officer
Stephanie Sonnabend President 50 President
Paul Sonnabend Chairman of the Executive 75 Chairman of the Executive Committee and
Committee and Chief Chief Financial Officer
Financial Officer
Stephen Sonnabend Senior Vice President 71 Senior Vice President
Boy van Riel Vice President and Treasurer 44 Vice President and Treasurer
Peter J. Sonnabend Vice Chairman, Vice 49 Vice Chairman, Vice President and Secretary
President and Secretary
Carol Beggs Vice President, Technology 42 Director of Information Systems until
November 1999
Felix Madera Vice President, International 54 Vice President, International
Peter Koerner Vice President, Facilities 52 Facility Director, Stardust Hotel & Casino,
until March 2001
8
Kathy Rowe Vice President, Food and 44 Director of Food and Beverage until May 1999
Beverage
Jacqueline Sonnabend Executive Vice President 48 Executive Vice President
Hans U. Wandfluh Vice President 68 Vice President; also President and General
Manager, Royal Sonesta Hotel, New Orleans,
Louisiana
Roger, Paul and Stephen Sonnabend are brothers. Stephanie Sonnabend and
Jacqueline Sonnabend are the daughters of Roger Sonnabend. Peter J. Sonnabend is
the son of Paul Sonnabend. Kathy Rowe is the daughter of Stephen Sonnabend.
The Board of Directors elects officers of the Company on an annual basis.
ITEM 11. EXECUTIVE COMPENSATION
and
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
and
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by these items is incorporated by reference from the
proxy statement for the 2003 Annual Meeting of Stockholders, which will be held
on May 12, 2003. As to Item 12, above, the issuer has no equity compensation
plans for which disclosure under Item 201(d) of Regulations S-K is required.
and
Item 14. INTERNAL CONTROLS AND PROCEDURES.
As of December 31, 2002, an evaluation was performed under the supervision and
with the participation of the Company's management, including the CEO, CFO, and
Vice President and Treasurer of the effectiveness of the design and operation of
the Company's disclosure controls and procedures. Based on that evaluation, the
Company's management, including the CEO, CFO and Vice President and Treasurer
concluded that the Company's disclosure controls and procedures were effective
as of December 31, 2002. There have been no significant changes in the Company's
internal controls or in other factors that could significantly affect internal
controls subsequent to December 31, 2002.
9
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements: The financial statements listed in the
accompanying Index to Consolidated Financial Statements are filed as
part of this Annual Report.
2. Financial Statement Schedules: The schedule listed in the accompanying
Index to Consolidated Financial Statements is filed as part of this
Annual Report.
3. Exhibits: The exhibits listed on the accompanying Index to Exhibits
are filed as part of this Annual Report.
(b) Reports on Form 8-K filed during the last quarter of 2002: None
10
SONESTA INTERNATIONAL HOTELS CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE
Item 15 (a) (1) and (2) References (Page)
2002 Annual Report
Form 10-K to Shareholders*
--------- -----------------
Consolidated Balance Sheets
at December 31, 2002 and 2001 10 - 11
For the years ended December 31, 2002, 2001, and 2000:
Consolidated Statements of
Operations 9
Consolidated Statements of
Stockholders' Equity 12
Consolidated Statements of
Cash Flows 13
Notes to Consolidated
Financial Statements 14 - 20
Consolidated Financial Statement
Schedule for the year ended
December 31, 2002:
II. Consolidated Valuation and
Qualifying Accounts 12
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted.
- ----------
*Incorporated by Reference
11
SONESTA INTERNATIONAL HOTELS CORPORATION
SCHEDULE II
CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
THREE YEARS ENDED DECEMBER 31, 2002
Balance Amounts Balance
Beginning Charged Amounts End of
of Year to Income Written Off Year
--------- --------- ----------- ---------
YEAR ENDED DECEMBER 31, 2000
Allowance for doubtful accounts $ 259,583 $ 30,006 $ (19,411) $ 270,178
========= ========= =========== =========
YEAR ENDED DECEMBER 31, 2001
Allowance for doubtful accounts $ 270,178 $ 80,312 $ (90,950) $ 259,540
========= ========= =========== =========
YEAR ENDED DECEMBER 31, 2002
Allowance for doubtful accounts $ 259,540 $ 12,395 $ 30,692 $ 241,243
========= ========= =========== =========
12
SONESTA INTERNATIONAL HOTELS CORPORATION
INDEX TO EXHIBITS
NUMBER DESCRIPTION PAGE NOS.
- ------ ----------- ---------
3.1 Certificate of Incorporation as amended to date. (5)
3.2 Company By-laws, as amended to date. (7)
10.1 Management Agreement, between Sonesta Hotels of Florida, Inc. 24 - 107
and Sunny Isles Luxury Ventures L.C., Trustee, dated as of
June 21, 2001.
10.2 Purchase and Sale Agreement, between Sonesta Hotels of Anguilla, 108 - 127
Limited, and Flag Luxury Properties (Anguilla), LLC, dated
July 26, 2002.
10.3 (a) Loan Agreement dated effective April 1, 2002, by and between Royal 128 - 152
Sonesta, Inc. ("Royal Sonesta"), Sonesta International Hotels
Corporation ("Sonesta") and Hibernia National Bank ("Hibernia").
10.3 (b) Promissory Note dated effective April 1, 2002 by Royal Sonesta in 153 - 155
favor of Hibernia in the amount of $5,000,000.00
10.3 (c) Multiple Indebtedness Mortgage by Royal Sonesta in favor of Hibernia, 156 - 172
dated March 28, 2002, effective April 1, 2002, in
the amount of $50,000,000.00.
10.3 (d) Continuing Guaranty, effective April 1, 2002, by Sonesta in favor of 173 - 179
Hibernia.
10.4 (a) Management Agreement, between Sonesta Coconut Grove, Inc. ("SCG"),
and Mutiny on the Park, Ltd. ("Mutiny"), dated December 22, 2000. (13)
10.4 (b) Letter of Amendment of Management Agreement, between SCG and Mutiny,
dated January 5, 2001. (13)
10.4 (c) Intercreditor Agreement, between SCG, Mutiny and Ricardo Dunin
Borkowsky ("Dunin"), dated December 22,2000. (13)
10.4 (d) Promissory Note ($1,000,000) in favor of SCG, dated
December 22, 2000. (13)
13
NUMBER DESCRIPTION PAGE NOS.
- ------ ----------- ---------
10.4 (e) Promissory Note ($4,000,000) in favor of SCG, dated
December 22, 2000. (13)
10.4 (f) Collateral Pledge and Escrow Agreement ($1,000,000) dated
December 22, 2000. (13)
10.4 (g) Collateral Pledge and Escrow Agreement ($4,000,000), dated
December 22, 2000. (13)
10.5 (a) Commitment Letter agreement, dated September 27,2002, between Sonesta 180 - 181
International Hotels Corporation ("Sonesta") and Citizens Bank of
Massachusetts ("Citizens").
10.5 (b) Second Allonge to $2,000,000 Commercial Promissory Note dated 182
September 29, 2000 (the "Note"), dated September 28, 2002, between
Sonesta and Citizens, extending the maturity of the Note to
September 28, 2003.
10.5 (c) Commercial Promissory Note ($2,000,000) from Sonesta to Citizens,
dated September 29, 2000. (12)
10.6 (a) Amended and Restated Promissory Note ($41,000,000), dated
May 30, 2000, from the Trustees of Charterhouse of Cambridge Trust (
"Trust") and Sonesta of Massachusetts, Inc. ("Sonesta Mass") to
SunAmerica Life Insurance Company ("SunAmerica"). (12)
10.6 (b) Mortgage and Loan Modification Agreement, dated as of May 30, 2000,
between Trust and Sonesta Mass, and SunAmerica. (12)
10.6 (c) Reaffirmation and Modification of Limited Guaranty Agreement and
Environmental Indemnity Agreement, dated as of May 30, 2000, between
Trust, Sonesta Mass, and Sonesta International Hotels Corporation
("Sonesta"), and SunAmerica. (12)
10.6 (d) Deficiency Guaranty Agreement, dated as of May 30, 2000, between
Trust, Sonesta Mass, and SunAmerica, "Escrow Agent". (12)
14
NUMBER DESCRIPTION PAGE NOS.
- ------ ----------- ---------
10.7 (a) Consolidated and Renewed Promissory Note ($31,000,000), dated
May 30, 2000, from Sonesta Beach Resort Limited Partnership
("Partnership") to SunAmerica. (12)
10.7 (b) Consolidated, Amended and Restated Mortgage, Security Agreement,
Fixture Filing, Financing Statement and Assignment of Leases and
Rents, dated as of May 30, 2000, between Partnership and SunAmerica.
(12)
10.7 (c) Mortgage, Security Agreement, Fixture Filing, Financing Statement
and Assignment of Leases and Rents, dated as of May 30, 2000,
between Partnership and SunAmerica. (12)
10.7 (d) Limited Guaranty Agreement, dated as of May 30, 2000, between Sonesta
and SunAmerica. (12)
10.7 (e) Non-Recourse Guaranty Agreement, dated as of May 30, 2000, between
the Partnership and SunAmerica. (12)
10.7 (f) Environmental Indemnity Agreement, dated as of May 30, 2000,
between the Partnership, Sonesta and SunAmerica. (12)
10.8 (a) Promissory Note ($1,116,853), from Masters of Tourism to Sonesta 183
International Hotels Limited ("SIHL"), dated July 1, 2002.
10.8 (b) Fourth Amendment to Loan Agreement, dated July 1, 2002, providing 184 - 187
for an additional $500,000 loan to Masters of Tourism for "Essential
New Facilities".
10.8 (c) Loan Agreement ($1,000,000), dated December 18, 1996, between Masters of
Tourism and SIHL. (8)
10.8 (d) (Personal) Guaranty of Hisham Aly, dated as of December 18, 1996. (8)
10.8 (e) Loan Agreement ($277,935) dated as of January 1, 1997, between Masters of
Tourism and SIHL (consolidating two (2) outstanding loan balances). (8)
10.8 (f) "Amendment to Loan Agreement", dated April 29, 1997, between Masters of
Tourism and SIHL. (9)
15
NUMBER DESCRIPTION PAGE NOS.
- ------ ----------- ---------
10.8 (g) (Personal) Guaranty of Hisham Aly, dated as of April 29, 1997. (9)
10.8 (h) Second Amendment to Loan Agreement, dated September 15, 1998, between
Masters of Tourism and SIHL. (10)
10.8 (i) Third Amendment to Loan Agreement, dated January 1, 2000, between
Masters of Tourism and SIHL. (11)
10.9 Indenture of Lease, dated March 18, 2002, between ATC 188 - 227
Realty, Inc. and Sonesta International Hotels International
Hotels Corporation.
10.10 (a) Extension of Lease by Royal Sonesta, Inc., dated August 6, 1993. (6)
10.10 (b) Agreement, dated September 9, 1993, between Royal
Sonesta, Inc. and Aetna Life Insurance Company. (6)
10.11 (a) Hotel Lease, dated December 12, 1967, between Chateau Louisiane,
Inc., as "Landlord", and The Royal Orleans, Inc., as "Tenant". (1)
10.11 (b) Hotel lease-Amendment No. 1, dated November 26, 1973, between Chateau
Louisiane, Inc. and Louisiana Sonesta Corporation. (2)
10.11 (c) Hotel Lease-Amendment No. 2, dated September 1, 1977, between Chateau
Louisiane, Inc. and Royal Sonesta, Inc. (3)
10.11 (d) Hotel Lease-Amendment No. 3, dated September 17, 1981, between Aetna Life
Insurance Company and Royal Sonesta, Inc. (4)
10.12 (a) Restated Employment Agreement, dated January 1, 1992, between the
Registrant and Paul Sonnabend, together with letter agreement regarding
permanent and total disability. (5) (Management contract under Item 601
(10)(iii) (A))
10.12 (b) Restated Employment Agreement, dated January 1, 1992,
between the Registrant and Roger P. Sonnabend, together
with letter agreement regarding permanent and total
disability. (5) (Management contract under Item 601 (10)
(iii) (A)).
16
NUMBER DESCRIPTION PAGE NOS.
- ------ ----------- ---------
10.12 (c) Restated Employment Agreement, dated January 1, 1992,
between the Registrant and Stephen Sonnabend together
with letter agreement regarding permanent and total
disability. (5) (Management contract under Item 601 (10)
(iii) (A)).
13 Annual Report to Security Holders for the calendar year ended December 228 - 249
31, 2002
21 Subsidiaries of the Registrant. 250
23 Consent of Ernst and Young LLP filed herewith. 251
99.1 Certification 252
(1) Incorporated by reference to the Company's 1967 Report on Form 10-K.
(2) Incorporated by reference to the Company's 1973 Report on Form 10-K.
(3) Incorporated by reference to the Company's 1977 Report on Form 10-K.
(4) Incorporated by reference to the Company's 1981 Report on Form 10-K.
(5) Incorporated by reference to the Company's 1992 Report on Form 10-K.
(6) Incorporated by reference to the Company's 1993 Report on Form 10-K.
(7) Incorporated by reference to the Company's 1995 Report on Form 10-K.
(8) Incorporated by reference to the Company's 1996 Report on Form 10-K.
(9) Incorporated by reference to the Company's 1997 Report on Form 10-K.
(10) Incorporated by reference to the Company's 1998 Report on Form 10-K.
(11) Incorporated by reference to the Company's 1999 Report on Form 10-K.
(12) Incorporated by reference to the Company's 2000 Report on Form 10-K.
(13) Incorporated by reference to the Company's 2001 Report on Form 10-K.
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SONESTA INTERNATIONAL HOTELS CORPORATION
(Registrant)
By: /S/ Date: March 14, 2003
--------------------------------
Boy van Riel
Vice President and Treasurer
Pursuant to the requirements of the Securities and Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
By: /S/ Date: March 14, 2003
---------------------------------
Roger P. Sonnabend
Chairman of the Board and Chief Executive Officer
By: /S/ Date: March 14, 2003
---------------------------------
Boy van Riel
Vice President and Treasurer, Principal
Financial and Accounting Officer
By: /S/ Date: March 14, 2003
---------------------------------
Paul Sonnabend
Director
By: /S/ Date: March 14, 2003
----------------------------------
Peter J. Sonnabend
Director
By: /S/ Date: March 14, 2003
----------------------------------
Stephanie Sonnabend
Director
By: /S/ Date: March 14, 2003
----------------------------------
Stephen Sonnabend
Director
18
By: /S/ Date: March 14, 2003
--------------------------------------
George S. Abrams
Director
By: /S/ Date: March 14, 2003
--------------------------------------
Vernon R. Alden
Director
By: /S/ Date: March 14, 2003
-------------------------------------
Joseph L. Bower
Director
By: /S/ Date: March 14, 2003
-----------------------------------
Jean C. Tempel
Director
19
I, Boy A. J. van Riel, certify that:
1. I have reviewed the annual report on Form 10-K for the period ending
December 31, 2002, of Sonesta International Hotels Corporation;
2. Based on my knowledge, this annual 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 annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and have:
a) designed such disclosure controls and procedures 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 annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation
Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, 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 in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: March 14, 2003 /S/
--------------------------------
Name: Boy A.J. van Riel
Title: Vice President and Treasurer
20
I, Roger P. Sonnabend, certify that:
1. I have reviewed the annual report on Form 10-K for the period ending
December 31, 2002, of Sonesta International Hotels Corporation;
2. Based on my knowledge, this annual 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 annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and have:
c) designed such disclosure controls and procedures 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 annual report is being prepared;
d) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation
Date"); and
e) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
f) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
g) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: March 14, 2003 /S/
--------------------------------
Name: Roger P. Sonnabend
Title: Chairman of the Board and
Chief Executive Officer
21
I, Paul Sonnabend, certify that:
1. I have reviewed the annual report on Form 10-K for the period ending
December 31, 2002, of Sonesta International Hotels Corporation;
2. Based on my knowledge, this annual 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 annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and have:
h) designed such disclosure controls and procedures 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 annual report is being prepared;
i) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation
Date"); and
j) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
k) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
l) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
22
6. The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: March 14, 2003 /S/
--------------------------------
Name: Paul Sonnabend
Title: Chairman of the Executive
Committee and Chief
Financial Officer
23