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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
Prime Hospitality Corp.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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[ ] Fee paid previously with preliminary materials.
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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.
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PRIME HOSPITALITY CORP.
700 ROUTE 46 EAST
FAIRFIELD, NEW JERSEY 07004
April 20, 2001
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Prime Hospitality Corp. (the "Company") to be held on May 24, 2001, at 10:00
a.m., at the Radisson Hotel, 690 Route 46 East, Fairfield, New Jersey 07004.
This year we are asking you to elect two Class III Directors of the Company to
serve until the 2004 Annual Meeting of Stockholders. THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE FOR THE TWO NOMINEES.
At the Annual Meeting, the Board of Directors also will report on the
Company's affairs and a discussion period will be provided for questions and
comments. The Board of Directors appreciates and encourages stockholder
participation.
Whether or not you plan to attend the Annual Meeting, it is important that
your shares be represented. Accordingly, we request that you complete, sign,
date and promptly return the enclosed proxy in the enclosed postage prepaid
envelope in order to make certain that your shares will be represented at the
Annual Meeting.
Thank you for your cooperation.
Sincerely,
/s/ A. F. Petrocelli
A. F. PETROCELLI
Chairman of the Board of Directors
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PRIME HOSPITALITY CORP.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 24, 2001
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To the Stockholders of
Prime Hospitality Corp.:
The Annual Meeting of Stockholders of Prime Hospitality Corp. (the
"Company") will be held on May 24, 2001, at 10:00 a.m., at the Radisson Hotel,
690 Route 46 East, Fairfield New Jersey 07004 for the following purposes:
1. To elect two Class III Directors of the Company to serve until the
2004 Annual Meeting of Stockholders; and
2. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
The close of business on April 10, 2001 has been fixed by the Board of
Directors as the record date for the determination of stockholders entitled to
notice of, and to vote at, the Annual Meeting or any adjournments thereof.
All stockholders are cordially invited to attend the Annual Meeting. If you
do not expect to be present, please promptly complete, sign and date the
enclosed proxy and mail it in the enclosed postage prepaid envelope. If you
attend the Annual Meeting, you may revoke your proxy and vote your shares in
person.
The Company's Proxy Statement is submitted herewith. The Board of Directors
recommends that you vote FOR the two Nominees.
The Company's Annual Report for the fiscal year ended December 31, 2000,
including financial statements, is also enclosed.
By Order of the Board of Directors,
/s/ Joseph Bernadino
JOSEPH BERNADINO
Secretary
Fairfield, New Jersey
April 20, 2001
YOUR VOTE IS IMPORTANT.
YOU ARE URGED TO COMPLETE, SIGN, DATE AND PROMPTLY RETURN YOUR PROXY IN THE
ENCLOSED POSTAGE PREPAID ENVELOPE SO THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE
WITH YOUR WISHES.
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PRIME HOSPITALITY CORP.
700 ROUTE 46 EAST
FAIRFIELD, NEW JERSEY 07004
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PROXY STATEMENT
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April 20, 2001
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Prime Hospitality Corp. (the "Company") for use at the Annual
Meeting of Stockholders to be held on May 24, 2001, at 10:00 a.m., at the
Radisson Hotel, 690 Route 46 East, Fairfield, New Jersey 07004 or any
adjournments thereof (the "Annual Meeting"). This Proxy Statement is being sent
to all holders of record of the Company's common stock, par value $.01 per share
(the "Common Stock"), at the close of business on April 10, 2001 (the "Record
Date"). Only stockholders of record on the Record Date will be entitled to
notice of, and to vote at, the Annual Meeting. Each share of Common Stock
outstanding on the Record Date will be entitled to one vote per share on all
matters to be voted upon at the Annual Meeting. Stockholders may revoke the
authority granted by their execution of proxies at any time prior to their use
by filing with the Secretary of the Company a written revocation or duly
executed proxy bearing a later date or by attending the Annual Meeting and
voting in person. Attendance at the Annual Meeting by a stockholder who has
executed and delivered a proxy to us shall not in and of itself constitute a
revocation of such proxy. Solicitation of proxies will be made principally
through the mails, but additional solicitation may be made by telephone or
telegram by the officers or regular employees of the Company without additional
compensation. The Company will reimburse banks, brokers and other custodians,
nominees and fiduciaries for their costs in sending the proxy material to the
beneficial owners of the Common Stock. The expenses of preparing, printing,
mailing and soliciting will be paid by the Company. This proxy statement,
together with the Company's Annual Report for the fiscal year ended December 31,
2000, are being mailed to stockholders on or about April 20, 2001.
As of the Record Date, there were 44,632,083 issued and outstanding shares
of Common Stock.
THE INTENTION OF THE PERSONS NAMED IN THE PROXY, UNLESS OTHERWISE
SPECIFICALLY INSTRUCTED IN THE PROXY, IS TO VOTE ALL PROPERLY EXECUTED PROXIES
RECEIVED BY THEM FOR THE ELECTION OF THE TWO NOMINEES NAMED HEREIN TO SERVE AS
DIRECTORS FOR THE TERMS SPECIFIED HEREIN AND UNTIL THEIR SUCCESSORS ARE ELECTED
AND QUALIFIED, AND IN ACCORDANCE WITH THE PROXYHOLDER'S BEST JUDGMENT AS TO ANY
OTHER BUSINESS WHICH MAY PROPERLY COME BEFORE THE ANNUAL MEETING. ALL SHARES
REPRESENTED BY A PROXY AT THE ANNUAL MEETING WILL BE VOTED. IF A STOCKHOLDER
SPECIFIES A CHOICE AS TO THE MATTERS TO BE ACTED UPON, THE SHARES WILL BE VOTED
IN ACCORDANCE WITH THE SPECIFICATION. ANY STOCKHOLDER DESIRING TO APPOINT
ANOTHER PERSON TO REPRESENT HIM OR HER AT THE ANNUAL MEETING MAY DO SO EITHER BY
INSERTING SUCH PERSON'S NAME IN THE BLANK SPACE PROVIDED ON THE ACCOMPANYING
FORM OF PROXY, OR BY COMPLETING ANOTHER FORM OF PROXY AND, IN EITHER CASE,
DELIVERING AN EXECUTED PROXY TO THE SECRETARY OF THE COMPANY AT THE ADDRESS
INDICATED ABOVE, BEFORE THE TIME OF THE ANNUAL MEETING. IT IS THE RESPONSIBILITY
OF THE STOCKHOLDER APPOINTING SUCH OTHER PERSON TO REPRESENT HIM OR HER TO
INFORM SUCH PERSON OF THIS APPOINTMENT.
In the event that a quorum is present at the Annual Meeting but sufficient
votes to approve any of the proposals are not received, the persons named as
proxies may propose one or more adjournments of the Annual Meeting to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Annual Meeting
in person or by proxy. If a quorum is present, the persons named as proxies will
vote those proxies that they are entitled to vote FOR any proposal in favor of
an adjournment and will vote those proxies required to be voted AGAINST any such
proposal against any adjournment. A stockholder vote may be taken on one or more
of the proposals in the Proxy Statement prior to any adjournment if sufficient
votes have been received and it is otherwise appropriate. A quorum of
stockholders is constituted by the presence in person or by proxy of the holders
of a majority of the outstanding Common Stock of the Company entitled to vote at
the Annual Meeting. Member brokerage firms of The New
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York Stock Exchange that hold shares in street name for beneficial owners that
do not receive instructions from the beneficial owner or other persons entitled
to vote shares are entitled, under the rules of The New York Stock Exchange, to
vote for the election of Directors and on each of the proposals. For purposes of
determining the presence of a quorum for transacting business at the Annual
Meeting, broker "non-votes" will be treated as shares that are not present.
Abstentions will be treated as shares that are present and as votes cast against
a particular proposal.
ITEM 1. ELECTION OF DIRECTORS
The Board of Directors is divided into three classes (Class I, Class II and
Class III) serving staggered terms in accordance with the Company's Restated
Certificate of Incorporation. The number of the full Board of Directors is seven
and Directors were initially elected on July 31, 1992. Class I Directors were
elected at the Annual Meeting held on May 19, 1999. Class II Directors were
elected at the Annual Meeting held on May 23, 2000 and Class III Directors were
elected at the Annual Meeting held on May 13, 1998.
Election for two Class III directors will be held at the Annual Meeting.
Howard M. Lorber and Allen S. Kaplan have been nominated for election as Class
III directors. The two nominees are presently Directors. The persons named in
the accompanying proxy will vote all shares for which they have received proxies
for the election of Howard M. Lorber and Allen S. Kaplan as Class III Directors,
unless authority to do so is withheld.
Approval of the nominees requires the affirmative vote of the holders of a
majority of the shares of Common Stock present or represented by proxy at the
Annual Meeting, and entitled to vote thereon.
In the event that any of the nominees should become unable or unwilling to
serve as a Director, it is intended that the proxies will be voted for the
election of such other person, if any, as shall be designated by the Board of
Directors. It is not anticipated that any of the nominees will be unable or
unwilling to serve as a Director.
NOMINEES TO SERVE AS CLASS III DIRECTORS UNTIL THE 2004 ANNUAL MEETING OF
STOCKHOLDERS
Howard M. Lorber..................... Howard M. Lorber, age 52, has been a Director of the Company
and a member since 1994 and Chairman since 1998 of the
Compensation and Audit Committee. Mr. Lorber has been
Chairman of the Board and Chief Executive Officer of
Nathan's Famous, Inc. for more than the past five years and
Chairman of the Board of Directors and Chief Executive
Officer of Hallman & Lorber Associates, Inc. for over five
years. He has been a director, President and Chief Operating
Officer of New Valley Corporation for more than five years.
He has been a director of and member of the Audit Committee
of United Capital Corp. for more than the past five years.
He also became President and Chief Operating Officer of
Vector Group Ltd. in January 2001.
Allen S. Kaplan...................... Allen S. Kaplan, age 51, has been a Director of the Company
since February, 2001. Mr. Kaplan has been Vice President and
Chief Operating Officer of Team Systems, Inc. for more than
the past five years. He also is currently Vice President of
the Metropolitan Taxicab Board of Trade and a director of
Ameritrans Capital Corp.
CLASS II DIRECTORS WHOSE TERMS EXPIRE AT THE 2003 ANNUAL MEETING OF STOCKHOLDERS
Herbert Lust, II..................... Herbert Lust, II, age 74, has been a Director since 1992 and
a member of the Compensation and Audit Committee of the
Company since 1993. Mr. Lust has been a private investor and
President of Private Water Supply Inc. for more than the
past five years. Mr. Lust is a director and member of the
Compensation Committee of BRT Realty Trust.
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Jack H. Nusbaum...................... Jack H. Nusbaum, age 60, has been a Director since 1994. Mr.
Nusbaum is Chairman of the law firm of Willkie Farr &
Gallagher, where he has been a partner for more than the
past twenty-five years. He also is a director of W.R.
Berkley Corporation, Neuberger Berman, Inc., Pioneer
Companies, Inc., Strategic Distributions, Inc., and The
Topps Company, Inc.
Lawrence N. Friedland................ Lawrence N. Friedland, age 78, has been a Director of the
Company and a member of the Compensation and Audit Committee
since 1998. Mr. Friedland has been a partner in the law firm
of Hoffinger Friedland Dobrish & Stern, P.C. for more than
the past 25 years. He has been a director of the Apple Bank
for Savings since 1990, a director of Lutron Electronics
Co., Inc. since 1961, a member of the Advisory Committee of
Brown Harris Stevens, LLC since 1995 and a general partner,
manager or director of numerous real estate entities.
CLASS I DIRECTORS WHOSE TERMS EXPIRE AT THE 2002 ANNUAL MEETING OF STOCKHOLDERS
A. F. Petrocelli..................... A. F. Petrocelli, age 57, has been a Director since 1992 and
served as a member of the Compensation and Audit Committee
from 1993 to 1998. Mr. Petrocelli has been the Chairman of
the Board of Directors, President and Chief Executive
Officer of the Company since 1998. Mr. Petrocelli has been
the Chairman of the Board of Directors and Chief Executive
Officer of United Capital Corp. for more than the past five
years. He is also a director of Nathan's Famous, Inc., Boyar
Value Fund, Inc. and Philips International Realty Corp.
Douglas W. Vicari.................... Douglas W. Vicari, age 41, has been a Director of the
Company since 1999 and a Senior Vice President and Chief
Financial Officer of the Company since 1998. Prior to that
he had been a Vice President and the Treasurer of the
Company for more than five years.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF
THE TWO NOMINEES FOR DIRECTORS.
BOARD OF DIRECTORS COMPENSATION AND BENEFITS
Directors who are employees of the Company do not receive additional
compensation for serving on the Board of Directors. Non-employee Directors
receive $30,000 annually. In addition, each non-employee Director receives
$1,500 for each Board of Directors meeting attended, $1,500 for each committee
meeting attended and $500 for each telephonic meeting if such meeting extends
beyond a period of 15 minutes. The Chairman of the Compensation and Audit
Committee receives an additional $20,000 annually. The Directors' remuneration
is paid quarterly. All Directors are reimbursed for their expenses.
In addition, on the date of the Company's Annual Meeting of Stockholders,
each non-employee Director receives an automatic grant of options to purchase
10,000 shares of the Company's Common Stock in accordance with the Company's
1995 Non-Employee Director Stock Option Plan. The options vest one year from the
date of grant at an option price equal to the mean price of a share of the
Company's Common Stock on the New York Stock Exchange for the trading day
immediately prior to the date of grant. In February 1998, Messrs. Lust, Nusbaum
and Lorber each received a discretionary grant of options for 45,000 shares of
Common Stock and agreed to forgo receipt of his automatic grant of options until
the 2002 Annual Meeting.
The Board of Directors held five meetings during 2000. All members of the
Board of Directors attended at least 75% of the aggregate number of meetings of
the Board of Directors and all committees of the Board of Directors on which
such member served.
COMPENSATION AND AUDIT COMMITTEE
The Compensation and Audit Committee presently consists of three
non-employee Directors: Messrs. Lorber (Chairman), Friedland and Lust. During
2000, the Committee held three meetings.
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As part of its compensation oversight, the Committee administers the
Company's 1992 Stock Option Plan and the 1995 Employee Stock Option Plan and in
this capacity grants options to the Company's employees and officers. In
addition, the Committee makes recommendations to the Board of Directors
regarding compensation and approves the compensation paid to the Company's Chief
Executive Officer, other executive officers and other employees. The Committee
also administers the Company's 1995 Non-Employee Director Stock Option Plan
which provides for stock option grants to each non-employee Director.
REPORT OF THE COMPENSATION AND AUDIT COMMITTEE ON AUDIT MATTERS
The information contained in this report shall not be deemed to be
"soliciting material" or to be "filed" with the Securities and Exchange
Commission, nor shall such information or report be incorporated by reference
into any future filing by us under the Securities Act of 1933, as amended, or
the Securities Act of 1934, as amended, except to the extent that we
specifically incorporate it by reference in such filing.
As part of its audit oversight, the Compensation and Audit Committee has:
- Reviewed and discussed with management the Company's audited financial
statements as of and for the year ended December 31, 2000.
- Discussed with the independent auditors the matters required to be
discussed by Statement of Auditing Standards No. 61, Communication with
Audit Committees, as amended, by the Auditing Standards Board of the
American Institute of Certified Public Accountants.
- Received and reviewed the written disclosures and the letter from the
independent auditors required by Independence Standards Board Standard
No. 1, Independence Discussions with Audit Committees, as amended, by the
Independence Standards Board, and has discussed with the independent
auditors the auditor's independence.
- Based on the reviews and discussions referenced above, recommended to the
Board of Directors that the audited financial statements be included in
the Company's Annual Report on Form 10-K for the last fiscal year for
filing with the Securities and Exchange Commission.
The Board of Directors has determined that the members of the Compensation
and Audit Committee are independent. The Compensation and Audit Committee has
adopted a written charter. The charter is included as an Appendix to this proxy
statement.
Submitted by:
COMPENSATION AND AUDIT COMMITTEE
Howard M. Lorber (Chairman)
Lawrence N. Friedland
Herbert Lust, II
NOMINATING COMMITTEE
The Company does not have a nominating or similar committee.
EXECUTIVE OFFICERS OF THE COMPANY
Set forth below are the names, ages and positions of the executive officers
of the Company:
NAME AGE POSITION
- ---- --- --------
A. F. Petrocelli..................... 57 President, Chief Executive Officer and Chairman of the
Board of Directors
Douglas W. Vicari.................... 41 Director, Senior Vice President and Chief Financial
Officer
Joseph Bernadino..................... 54 Senior Vice President/Law, Secretary and General Counsel
Stephen M. Kronick................... 46 Senior Vice President/Hotel Operations
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NAME AGE POSITION
- ---- --- --------
John Valletta........................ 49 Senior Vice President/Hotel Operations
Richard T. Szymanski................. 43 Vice President/Finance
The following is a biographical summary of the experience of the executive
officers of the Company, other than Messrs. Petrocelli and Vicari who are
described above.
Joseph Bernadino has been a Senior Vice President, Secretary and General
Counsel of the Company since 1992.
Stephen M. Kronick has been a Senior Vice President of the Company since
1999. Prior to that he held the position of Vice President of the Company for
more than five years.
John Valletta has been a Senior Vice President of the Company since 2000.
Prior to that, he was a Vice President of Midwest Regional Operations for La
Quinta Inns for more than five years.
Richard T. Szymanski has been a Vice President of the Company for more than
five years.
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the beneficial ownership of Common Stock as
of April 10, 2001 for all executive officers, all Directors, all nominees to the
Board of Directors, and all directors and executive officers as a group.
Percentages are based on 44,632,083 shares outstanding as of April 10, 2001.
Pursuant to the regulations promulgated by the Securities and Exchange
Commission (the "Commission"), shares are deemed to be "beneficially owned" by a
person if such person directly or indirectly has or shares the power to vote or
dispose of such shares whether or not such person has any pecuniary interest in
such shares or the right to acquire the power to vote or dispose of such shares
within 60 days, including any right to acquire through the exercise of any
option, warrant or right.
AMOUNT
AND NATURE PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OF OWNERSHIP CLASS(J)
- ------------------------------------ ------------ ----------
A. F. Petrocelli(a)......................................... 3,023,297 6.77%
Lawrence N. Friedland(b).................................... 41,000 *
Allen S. Kaplan............................................. 0 *
Howard M. Lorber(c)......................................... 195,000 *
Herbert Lust, II(d)......................................... 127,251 *
Jack H. Nusbaum(e).......................................... 130,000 *
Douglas W. Vicari(f)........................................ 92,733 *
Joseph Bernadino(g)......................................... 92,333 *
Stephen M. Kronick(h)....................................... 61,415 *
John Valletta............................................... 0 *
Richard T. Szymanski(i)..................................... 82,279 *
All directors and executive officers as a group (11
persons)(j)............................................... 3,845,308 8.62%
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* Less than 1.0%.
(a) Includes 45,000 shares owned by Mr. Petrocelli, 8,276 shares owned by United
Capital Corp. of which A. F. Petrocelli is a majority shareholder, Chairman
of the Board of Directors, President and Chief Executive Officer, and
2,495,021 shares owned by Metex Mfg. Corporation, a wholly-owned subsidiary
of United Capital Corp. Mr. Petrocelli expressly disclaims beneficial
ownership of the shares directly held by United Capital Corp. and by Metex
Mfg. Corporation. Also includes options held by Mr. Petrocelli to purchase
475,000 shares at an exercise price of $9.31 per share as to 10,000 shares,
$10.00 per share as to 65,000 shares and $5.91 per share as to 400,000
shares.
(b) Includes 2,000 shares owned by Mr. Friedland, 7,000 shares owned by trusts
under which Mr. Friedland is the trustee and beneficiary and 2,000 shares
owned by trusts for the benefit of Mr. Friedland's
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grandchildren. Mr. Friedland disclaims beneficial ownership of the shares
owned by the trusts for the benefit of his grandchildren. Also includes
options held by Mr. Friedland to purchase 30,000 shares at an exercise price
of $10.00 per share as to 10,000 shares, $12.00 per share, as to 10,000
shares and $8.63 per share as to 10,000 shares.
(c) Includes 90,000 shares owned by Mr. Lorber. Also includes options to
purchase 105,000 shares with an exercise price of $9.31 per share as to
10,000 shares, $9.50 per share as to 30,000 shares and $10.00 per share as
to 65,000 shares.
(d) Includes 35,000 shares owned by Mr. Lust, and 17,251 shares held by a trust
under which Mr. Lust and his wife are co-trustees and beneficiaries. Also
includes options held by Mr. Lust to purchase 75,000 shares with an exercise
price of $9.31 per share as to 10,000 shares and $10.00 per share as to
65,000 shares.
(e) Includes 25,000 shares owned by Mr. Nusbaum. Also includes options to
purchase 105,000 shares with an exercise price of $9.31 per share as to
10,000 shares, $9.50 per share as to 30,000 shares and $10.00 per share as
to 65,000 shares.
(f) Includes 2,300 shares owned by Mr. Vicari. Also includes options to purchase
90,433 shares with an exercise price of $9.63 per share as to 12,000 shares,
$9.88 per share as to 5,000 shares, $10.00 per share as to 33,000 shares,
$4.72 per share as to 14,000 shares, $11.25 per share as to 14,000 shares
and $9.16 per share as to 12,433 shares.
(g) Includes 3,700 shares owned by Mr. Bernadino. Also includes options to
purchase 88,633 shares with an exercise price of $9.63 per share as to
18,000 shares, $9.88 per share as to 5,000 shares, $10.00 per share as to
38,500 shares, $4.72 per share as to 14,000 shares, $11.25 per share as to
7,000 shares, and $9.16 per share as to 6,133 shares.
(h) Includes 82 shares owned by Mr. Kronick. Also includes options to purchase
61,333 shares with an exercise price of $9.63 per share as to 12,000 shares,
$10.00 per share as to 24,000 shares, $4.72 per share as to 8,000 shares,
$11.25 per share as to 7,000 shares, and $9.16 per share as to 10,333
shares.
(i) Includes 2,280 shares owned by Mr. Szymanski. Also includes options to
purchase 79,999 shares with an exercise price $9.63 per share as to 12,000
shares, $9.88 per share as to 5,000 shares, $10.00 per share as to 27,000
shares, $4.72 per share as to 14,000 shares, $11.25 per share as to 11,666
shares, and $9.16 per share as to 10,333 shares.
(j) With the exception of Mr. A.F. Petrocelli, who beneficially owns 6.77% of
the outstanding Common Stock, the other current directors and executive
officers each owns less than 1% of the outstanding Common Stock and
collectively own approximately 8.62% of the outstanding Common Stock as a
group. Percentages were based on 44,632,083 shares outstanding as of April
10, 2001.
PRINCIPAL HOLDERS OF SECURITIES
The following entities were known to the Company to be the beneficial
holders of more than 5% of the Common Stock as of April 10, 2001. Percentages
are based on 44,632,083 shares outstanding as of such date.
AMOUNT PERCENT
AND NATURE OF CLASS
---------- --------
Neuberger & Berman, LLC(a).................................. 3,709,881 8.31%
605 Third Avenue
New York, New York 10158-3698
Leon G. Cooperman(b)........................................ 3,244,800 7.27%
88 Pine Street
Wall Street Plaza -- 31st Floor
New York, New York 10005
Dimensional Fund Advisors Inc.(c)........................... 3,075,800 6.89%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
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AMOUNT PERCENT
AND NATURE OF CLASS
---------- --------
A.F. Petrocelli(d).......................................... 3,023,297 6.77%
c/o United Capital Corp.
9 Park Place
Great Neck, New York 11021
Donald Smith & Co., Inc.(e)................................. 2,248,600 5.04%
East 80 Route 4, Suite 360
Paramus, New Jersey 07652
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(a) Neuberger & Berman, LLC filed a Schedule 13G (Amendment No. 5) dated
February 2, 2001 with the SEC reporting ownership of 3,709,881 shares of
Common Stock, with sole voting power with respect to 2,679,981 shares,
shared voting power with respect to 441,700, and with shared dispositive
power with respect to 3,709,881 shares.
(b) Leon G. Cooperman filed a Schedule 13G (Amendment No. 2) dated February 7,
2001 with the SEC reporting ownership of 3,244,800 shares of Common Stock,
with sole voting and dispositive power with respect to 2,228,800 shares, and
shared voting and dispositive power with respect to 1,016,000 shares.
(c) Dimensional Fund Advisors Inc. filed a Schedule 13G dated February 2, 2001
with the SEC reporting ownership of 3,075,800 shares of Common Stock, with
sole voting and dispositive power with respect to all such shares.
(d) A.F. Petrocelli may be deemed to beneficially own 3,023,297 shares of Common
Stock, with sole voting and dispositive power with respect to 520,000 shares
and shared voting and dispositive power with respect to 2,503,297 shares.
Inclusive in these shares are 2,503,297 shares held by United Capital Corp.,
of which Mr. Petrocelli is a majority shareholder, Chairman of the Board of
Directors, President and Chief Executive Officer. Of the 2,503,297 shares
held by United Capital Corp., 2,495,021 shares are directly held by Metex
Mfg. Corporation, a wholly-owned subsidiary of United Capital Corp. Mr.
Petrocelli expressly disclaims beneficial ownership of the shares directly
held by United Capital Corp. and by Metex Mfg. Corporation.
(e) Donald Smith & Co., Inc. filed a Schedule 13G dated February 2, 2001 with
the SEC reporting ownership of 2,248,600 shares of Common Stock, with sole
voting and dispositive power with respect to all such shares.
ITEM 2. SELECTION OF AUDITORS
Upon the recommendation of the Compensation and Audit Committee, the Board
of Directors has selected Ernst & Young LLP, independent auditors, to serve as
independent accountants for the Company. Ernst & Young LLP will audit the
Company's consolidated financial statements for the fiscal year ending December
31, 2001; perform audit-related services; and act as consultants in connection
with various accounting and financial reporting matters. Ernst & Young LLP
provided those services to the Company for the fiscal year ended December 31,
2000.
AUDIT FEES
The aggregate fees and expenses of Ernst & Young LLP for professional
services for the audit of the Company's annual consolidated financial statements
for the fiscal year ended December 31, 2000 and the review of the consolidated
financial statements included in the Company's Forms 10-Q for 2000 were
$140,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
For the fiscal year ended December 31, 2000, Ernst & Young LLP billed no
fees to the Company for financial information systems design and implementation
services.
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ALL OTHER FEES
During 2000, the aggregate fees and expenses billed to the Company for all
other services rendered by Ernst & Young were $91,500. These other services
included audit-related services and market feasibility analysis.
All audit and non-audit services provided by Ernst & Young LLP are approved
by the Compensation and Audit Committee, which considers whether the provision
of any non-audit services is compatible with maintaining the auditor's
independence.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting and will be given the opportunity to make a statement, if they
desire to do so, and are expected to be available to respond to appropriate
questions.
ITEM 3. OTHER BUSINESS
As of this date, the Company is not aware of any business to be acted upon
at the Annual Meeting other than that which is described in this Proxy
Statement. In the event that any other business calling for a vote of the
stockholders is properly presented at the Annual Meeting, it is intended that
the holders of the proxies will vote your shares in accordance with their best
judgment.
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EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth information concerning
compensation for services in all capacities awarded to, earned by or paid to the
persons who were, at December 31, 2000, the Company's Chief Executive Officer
and the four other most highly compensated executive officers of the Company
(the "named executive officers"). The information shown reflects compensation
for services in all capacities awarded to, earned by or paid to these persons
for the years ending December 31, 1998, 1999 and 2000.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
----------------------------
ANNUAL COMPENSATION SECURITIES
NAME AND ---------------------------- UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
------------------ ---- -------- -------- ------------ ------------
A. F. Petrocelli................... 2000 $700,000 $700,000 0 $2,632(1)
President and Chief 1999 700,000 700,000 0 5,866
Executive Officer 1998 94,231 204,167 1,795,000 -0-
Douglas W. Vicari.................. 2000 188,211 114,000 37,300 1,840(2)
Senior Vice President 1999 169,847 100,000 42,000 1,840
and Chief Financial 1998 158,927 80,000 21,000 1,765
Officer
Richard T. Szymanski............... 2000 174,230 106,000 31,000 1,750(3)
Vice President -- 1999 162,912 92,000 35,000 1,750
Finance 1998 151,044 60,000 21,000 1,855
Joseph Bernadino................... 2000 178,723 110,000 18,400 3,195(4)
Senior Vice President, 1999 173,122 70,000 21,000 3,059
Secretary and General 1998 165,567 70,000 21,000 2,752
Counsel
Stephen M. Kronick................. 2000 149,296 92,000 31,000 1,960(5)
Senior Vice President 1999 141,590 13,035 21,000 1,960
1998 133,864 4,853 12,000 1,855
- ---------------
(1) Represents $1,600 related to 401k matching contributions and $1,032 for
premiums for Company-provided life insurance.
(2) Represents $1,600 related to 401k matching contributions and $240 for
premiums for Company-provided life insurance.
(3) Represents $1,600 related to 401k matching contributions and $150 for
premiums for Company-provided life insurance.
(4) Represents $1,600 related to 401k matching contributions and $552 for
premiums for Company-provided life insurance.
(5) Represents $1,600 related to 401k matching contributions and $360 for
premiums for Company-provided life insurance.
STOCK OPTION GRANTS DURING YEAR ENDED DECEMBER 31, 2000
The following table sets forth information concerning individual grants of
stock options made during the year ending December 31, 2000 to each of the named
executive officers. The Company did not grant any stock appreciation rights
during such period.
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INDIVIDUAL GRANTS POTENTIAL REALIZED
--------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE ---------------------
NAME GRANTED FISCAL YEAR PER SHARE EXPIRATION DATE 5% 10%
- ---- ---------- ------------ ----------- --------------- --------- ---------
A. F. Petrocelli............. -0- 0% $ -0- $ -0-
Douglas W. Vicari............ 37,300(1) 8.2% $9.1563 06/09/2010 214,786 544,311
Richard T. Szymanski......... 31,000(1) 6.8% 9.1563 06/09/2010 178,509 452,376
Joseph Bernadino............. 18,400(1) 4.1% 9.1563 06/09/2010 105,954 268,507
Stephen M. Kronick........... 31,000(1) 6.8% 9.1563 06/09/2010 178,509 452,376
- ---------------
(1) These stock options vest with respect to one third of the grant on each of
June 9, 2001, 2002 and 2003 and will continue to be exercisable through June
9, 2010. These options become immediately exercisable upon a change in
control of the Company.
AGGREGATED OPTION EXERCISES IN THE YEAR ENDED DECEMBER 31, 2000 AND YEAR-END
OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END AT FY-END
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
A.F. Petrocelli............... -0- $-0- 475,000 1,350,000 $2,414,750 $7,715,250
Douglas W. Vicari............. -0- -0- 78,000 72,300 188,295 150,918
Richard T. Szymanski.......... -0- -0- 69,666 61,334 177,670 133,615
Joseph Bernadino.............. -0- -0- 82,500 39,400 206,608 99,009
Stephen M. Kronick............ -0- -0- 51,000 49,000 120,865 109,400
EMPLOYMENT AGREEMENTS
A. F. Petrocelli
Mr. Petrocelli and the Company executed an employment agreement dated as of
September 14, 1998 (the "Agreement") under which Mr. Petrocelli agreed to serve
as President and Chief Executive Officer of the Company. The Agreement provides
for a term of three (3) years. The Agreement provides for an annual base salary
of $700,000, a discretionary annual bonus based on the attainment of performance
objectives set by the Compensation Committee, a life insurance policy in an
amount equal to $2,000,000, an automobile and other customary welfare and fringe
benefits. The Agreement also provides that, to the extent payments made by the
Company for life insurance or use of an automobile are subject to federal, state
or local taxes, the Company will pay Mr. Petrocelli the amount of such
additional taxes plus such additional amount as will be reasonable to hold him
harmless from the obligation to pay such taxes.
Pursuant to the Agreement, Mr. Petrocelli was granted a stock option on
October 14, 1998 to purchase 1,750,000 shares of Common Stock, having a term of
10 years. The per share exercise price for the option is $5.91, which represents
the fair market value of the Common Stock as of October 14, 1998. The option
will vest in two tranches. Tranche A covers 1,000,000 shares of Common Stock and
will vest and become exercisable in increments of 200,000 shares on each
anniversary from the date of grant beginning September 14, 1999 through
September 13, 2003. Tranche B covers 750,000 shares of Common Stock and will
vest and become exercisable upon the earlier of September 14, 2006 or the
attainment of the following price targets for the Company's Common Stock: (i)
250,000 shares on the date that the closing price for the Common Stock on the
New York Stock Exchange reaches or exceeds $20 per share; (ii) 250,000 shares on
the date that the closing price for the Common Stock on the New York Stock
Exchange reaches or exceeds $25 per share; and (iii) 250,000 shares on the date
that the closing price for the Common Stock on the New York Stock Exchange
reaches or exceeds $30 per share. All vesting is contingent on Mr. Petrocelli's
continuing status as an employee on the vesting date.
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The Agreement may be terminated by the Company at any time, with or without
cause. If the Agreement is terminated by the Company prior to the expiration of
the three year term without cause, or if Mr. Petrocelli resigns because of
circumstances amounting to constructive termination of employment, severance
would be paid in a single lump sum equal to one year's base salary, or, if
greater, the base salary that would have been payable over the remainder of the
term and benefits would be continued for the greater of one year or the
remainder of the term. Any bonus awarded for the year would not be prorated. In
addition, if Mr. Petrocelli is terminated without cause or if at the end of the
three year period the Agreement is not renewed by the Company for any additional
period, the unvested portion of Tranche A of the option shall become immediately
fully vested. If the Agreement is terminated by the Company for cause (as such
term is defined in the Agreement) or if Mr. Petrocelli resigns under
circumstances not amounting to a constructive termination of employment, no
benefits are payable other than accrued but unpaid salary and any unpaid bonus
earned but unpaid prior to such termination or resignation.
CHANGE IN CONTROL AGREEMENTS
The Company has executed change in control agreements with 10 of the
Company's employees, including certain of its named executive officers. Six of
the agreements provide that, if within two years of a change in control of the
Company, the employee's employment with the Company is terminated by the Company
without cause or if the employee resigns for good reason (as defined in the
agreements), the Company will pay the employee two and one-half times the
aggregate cash compensation earned by the employee during the fiscal year
immediately preceding the termination of employment. Such payments are to be
reduced, however, to the extent necessary to avoid characterization as "excess
parachute payments" within the meaning of Section 280G of the Internal Revenue
Code. In addition, any outstanding options to purchase shares of the Company
held by the employee will vest and become exercisable as of the date of the
change in control. The agreement with one employee contains identical terms
except that it provides for the payment of one and one-half times the aggregate
cash compensation. The agreements with the remaining three employees provide for
a payment equaling the greater of 2 weeks salary for each full year of
employment or 6 months salary.
COMPENSATION AND AUDIT COMMITTEE
HOWARD M. LORBER (CHAIRMAN)
Lawrence N. Friedland
Herbert Lust, II
COMPENSATION AND AUDIT COMMITTEE REPORT ON EXECUTIVE COMPENSATION
All members of the Compensation and Audit Committee are independent,
non-employee Directors.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Petrocelli and the Company are parties to an employment agreement dated
as of September 14, 1998 (the terms of which are more fully described under the
heading herein entitled "Employment Agreements"). The employment agreement
provides for an annual base salary of $700,000 and an option grant covering
1,750,000 shares of Common Stock. In order to incentivise Mr. Petrocelli to
increase shareholder value, early vesting with respect to 750,000 shares of the
option is tied to the attainment of certain price targets for the Common Stock.
The bonus earned by Mr. Petrocelli in 2000 was based on the overall performance
of the Company. In determining the amount of such bonus, the Compensation and
Audit Committee made a subjective determination based on Mr. Petrocelli's
contributions to the Company performance during the year.
COMPENSATION POLICIES
The Company's compensation policy with respect to all executive officers
(including the Chief Executive Officer) is designed to help the Company achieve
its business objectives by:
- setting levels of compensation designed to attract and retain qualified
executives in a highly competitive business environment;
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- providing incentive compensation that is directly linked with both the
Company's financial performance and individual initiative and achievement
contributing to such performance; and
- linking compensation to improvements in the Company's annual and
long-term share performance.
The Compensation and Audit Committee increased the base salaries for the
executive officers for 2000 based on a subjective determination of the Company's
overall performance during fiscal year 1999, including the increase in EBITDA
and operating cash flow. Bonuses earned by the executive officers in 2000 and
paid in 2001 were similarly based on the Company's overall performance in 2000.
As a part of the Company's policy to provide incentive compensation that is
directly linked to long-term share performance, the Compensation and Audit
Committee granted to its executive officers (other than Mr. Petrocelli) during
fiscal year 2000 options to purchase an aggregate of 127,700 shares of Common
Stock pursuant to the Company's 1995 Employee Stock Option Plan.
POLICY REGARDING SECTION 162(M)
Section 162(m) of the Internal Revenue Code imposes a one million dollar
ceiling on tax-deductible remuneration paid to each of the Chief Executive
Officer and the four next most highly compensated executive officers of a
publicly-held corporation. The limitation does not apply to qualified
"performance based" remuneration payable solely on account of the attainment of
one or more performance goals approved by an independent compensation committee,
nor to compensation attributable to certain options granted under
shareholder-approved stock option plans. The 1995 Employee Stock Option Plan is
structured to comply with this exception. All compensation paid to the executive
officers, other than to Mr. Petrocelli, for the Company's 2000 fiscal year was
fully deductible. While the Company intends to maximize the deductibility of
compensation to its executive officers, the Company also believes that it is
important to maintain the flexibility to take action with respect to
compensation it considers in the best interest of the Company and its
stockholders, which are necessarily based on considerations in addition to
Section 162(m). In 2000, in keeping with its goal of attracting and retaining
only the most highly qualified management personnel and taking into
consideration the extremely competitive environment for management talent, the
Company paid a bonus to Mr. Petrocelli in recognition of his outstanding
contributions to the Company, a part of which will not be deductible.
COMPENSATION AND AUDIT COMMITTEE
HOWARD M. LORBER (CHAIRMAN)
Lawrence N. Friedland
Herbert Lust, II
COMPENSATION AND AUDIT COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation and Audit Committee for the fiscal year
2000 were Howard M. Lorber (Chairman), Lawrence N. Friedland, and Herbert Lust,
II. Mr. Lorber has certain business relationships with the Company, which are
described under the heading "Certain Relationships and Related Transactions."
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
A. F. Petrocelli, President, Chief Executive Officer and Chairman of the
Board of Directors of the Company, is also the Chairman of the Board and Chief
Executive Officer of United Capital Corp., and Howard M. Lorber, a Director of
the Company, is a Director of United Capital Corp. In March 1994, the Company
entered into management agreements with the corporate owners of two hotels who
are affiliates of United Capital Corp. The Company received approximately
$164,560 in management fees for the fiscal year ended 2000.
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The Company has retained Willkie Farr & Gallagher as its legal counsel
involving certain matters during its last fiscal year and anticipates it will
continue such relationship with the firm in this fiscal year. Mr. Nusbaum, a
Director of the Company, is the Chairman of the firm.
Hallman & Lorber Associates, Inc. provided insurance services to the
Company during its last fiscal year, for which Hallman & Lorber received certain
commissions. The Company anticipates it will continue such relationship in this
fiscal year. Howard M. Lorber, a Director of the Company and Chairman of the
Company's Compensation and Audit Committee, is Chairman of the Board of
Directors and Chief Executive Officer of Hallman & Lorber Associates, Inc.
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors, executive officers, and persons who own more
than ten percent of the Common Stock, to file reports of beneficial ownership
with the SEC, the New York Stock Exchange and the Company. Specific filing dates
for these reports have been established by the SEC, and the Company is required
to disclose in this proxy statement any failure by such persons to file these
reports during the 2000 year. Based solely upon its review of the copies of such
forms received by it, the Company believes that, during fiscal year 2000, all
filing requirements applicable to such persons were complied with.
PERFORMANCE GRAPH
The SEC requires the Company to present a graph comparing the cumulative
total stockholder return on its Common Stock with the cumulative total
stockholder return (a) of a broad equity market index and (b) of a published
industry index or peer group. The following graph compares the Common Stock with
(a) the Dow Jones Industrial Average and (b) the Dow Jones U.S. Lodging Index.
For the fiscal year ended December 31, 2000, the Company is using the Dow Jones
Industrial Average and the Dow Jones U.S. Lodging Index in place of the Dow
Jones Equity Market Index and the Dow Jones Lodging Index, respectively (the
latter two indexes having been used for purposes of this performance graph for
the immediately preceding fiscal year), as the latter two indexes ceased to be
tracked as of February 14, 2000. Thus, no comparison to these two indexes can be
made for the Fiscal Year ended December 31, 2000. The following graph assumes an
investment of $100 on January 1, 1996 in each of the Common Stock, the stocks
comprising the Dow Jones Industrial Average and the Dow Jones U.S. Lodging
Index.
COMPARISON OF 1996 THROUGH 2000 CUMULATIVE TOTAL RETURN
[GRAPH]
- ----------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
- ----------------------------------------------------------------------------------------------------------------
Company $100 $161 $204 $109 $ 88 $116
- ----------------------------------------------------------------------------------------------------------------
Stock Index $100 $126 $155 $179 $225 $211
- ----------------------------------------------------------------------------------------------------------------
Industry Group Index $100 $120 $165 $126 $124 $126
- ----------------------------------------------------------------------------------------------------------------
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FINANCIAL STATEMENTS
The Company's annual report to stockholders for the year ended December 31,
2000, including audited financial statements, is being mailed to stockholders
concurrently with this Proxy Statement. The annual report is on file with the
SEC, 450 Fifth Street, N.W., Washington, D.C. 20549 and the New York Stock
Exchange.
A copy of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2000 (excluding exhibits) is available without charge to any
stockholder of the Company who requests a copy in writing. Requests for copies
of the Report should be directed to the Secretary, Prime Hospitality Corp., 700
Route 46 East, Fairfield, New Jersey 07004.
STOCKHOLDER PROPOSALS
It is presently anticipated that the 2002 Annual Meeting will be held on or
about May 23, 2002. Proposals of stockholders submitted for consideration at the
2002 annual meeting of stockholders must be received by the Company not later
than December 16, 2001 in order to be included in the Company's proxy statement
for that meeting. A stockholder desiring to submit a proposal must be a record
or beneficial owner of at least 1% of the outstanding shares or $1,000 in market
value of shares entitled to be voted at the annual meeting and must have held
such shares for at least one year. Further, the stockholder must continue to
hold such shares through the date on which the meeting is held. Documentary
support regarding the foregoing must be provided along with the proposal. There
are additional requirements regarding proposals of the stockholders, and a
stockholder contemplating submission of a proposal is referred to Rule 14a-8
promulgated under the Exchange Act. If a stockholder proposal is introduced in
the 2002 Annual Meeting without any discussion of the proposal in our proxy
statement, and the stockholder does not notify us on or before the time required
by SEC Rule 14a-4(c)(1) of the intent to raise such proposal at the annual
general meeting of stockholders, then proxies received by the Company for the
2002 Annual Meeting will be voted by the persons named as such proxies in their
discretion with respect to such proposal. Notice of such proposal is to be sent
to the above address.
In addition, the bylaws of the Company require, among other things, that
notice of proposals of stockholders be delivered to or mailed and received at
the principal executive offices of the Company not less than fifty (50) days nor
more than seventy-five (75) days prior to the meeting; provided, however, that
in the event that less than sixty-five (65) days' notice or prior public
disclosure of the date of the meeting is given or made to stockholders, notice
by the stockholder to be timely must be so received not later than the close of
business on the fifteenth (15th) day following the day on which such notice of
the date of the meeting was mailed or such public disclosure was made, whichever
first occurs.
By Order of the Board of Directors,
/s/ Joseph Bernadino
JOSEPH BERNADINO
Secretary
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APPENDIX
PRIME HOSPITALITY CORP.
AUDIT COMMITTEE CHARTER
ORGANIZATION
This charter governs the operations of the Audit Committee (the
"Committee"). The Committee shall review and reassess the charter at least
annually and obtain the approval of the board of directors. The committee shall
be appointed by the board of directors and shall comprise at least three
directors, each of whom are independent of management and the Company. Members
of the Committee shall be considered independent if they have no relationship
that may interfere with the exercise of their independence from management and
the Company. All Committee members shall be financially literate, (or shall
become financially literate within a reasonable period of time after appointment
to the Committee,) and at least one member shall have accounting or related
financial management expertise.
STATEMENT OF POLICY
The Committee shall provide assistance to the board of directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the internal audit function, the
annual independent audit of the Company's financial statements, and the legal
compliance and ethics programs as established by management and the board. In so
doing, it is the responsibility of the committee to maintain free and open
communication between the committee, independent auditors, the internal auditors
and management of the Company. In discharging its oversight role, the Committee
is empowered to investigate any matter brought to its attention with full access
to all books, records, facilities, and personnel of the Company and the power to
retain outside counsel, or other experts for this purpose.
RESPONSIBILITIES AND PROCESSES
The primary responsibility of the Committee is to oversee the Company's
financial reporting process on behalf of the board and report the results of
their activities to the board. Management is responsible for preparing the
Company's financial statements, and the independent auditors are responsible for
auditing those financial statements. The Committee in carrying out its
responsibilities believes its policies and procedures should remain flexible, in
order to best react to changing conditions and circumstances. The committee
should take the appropriate actions to set the overall corporate "tone" for
quality financial reporting, sound business risk practices, and ethical
behavior.
The following shall be the principal recurring processes of the Committee
in carrying out its oversight responsibilities. The processes are set forth as a
guide with the understanding that the Committee may supplement them as
appropriate:
- The Committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the board and the Committee, as representatives of the
Company's shareholders. The Committee shall have the ultimate authority
and responsibility to evaluate and, where appropriate, replace the
independent auditors. The Committee shall discuss with the auditors their
independence from management and the company and the matters included in
the written disclosures required by the Independence Standards Board.
Annually, the Committee shall review and recommend to the board the
selection of the Company's independent auditors.
- The Committee shall discuss with the internal auditors and the
independent auditors the overall scope and plans for their respective
audits, including the adequacy of staffing and compensation. Also, the
Committee shall discuss with management, the internal auditors, and the
independent auditors the adequacy and effectiveness of the accounting and
financial controls, including the Company's system to monitor and manage
business risk, and legal and ethical compliance programs. Further, the
Committee
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shall meet separately with the internal auditors and the independent
auditors, with and without management present, to discuss the results of
their examinations.
- The Committee shall review the interim financial statements with
management and the independent auditors prior to the filing of the
Company's Quarterly Report on Form 10-Q. Also, the Committee shall
discuss the results of the quarterly review and any other matters
required to be communicated to the Committee by the independent auditors
under generally accepted auditing standards. The chair of the Committee
may represent the entire Committee for the purposes of this review.
- The Committee shall review with management and the independent auditors
the financial statements to be included in the Company's Annual Report on
Form 10-K (or the annual report to shareholders if distributed prior to
the filing of Form 10-K), including their judgment about the quality, not
just acceptability, of accounting principles, the reasonableness of
significant judgments, and the clarity of the disclosures in the
financial statements. Also, the Committee shall discuss the results of
the annual audit and any other matters required to be communicated to the
Committee by the independent auditors under generally accepted auditing
standards.
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PRIME HOSPITALITY CORP.
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY FOR ANNUAL MEETING MAY 24, 2001
The undersigned hereby constitutes and appoints A. F. Petrocelli, Douglas W.
Vicari and Joseph Bernadino, and each of them, his true and lawful agents and
proxies with full power of substitution in each, to represent the undersigned at
the Annual Meeting of Stockholders of Prime Hospitality Corp. (the "Company") to
be held at the Radisson Hotel, 690 Route 46 East, Fairfield, New Jersey 07004,
on Thursday, May 24, 2001, at 10:00 a.m., and any adjournments thereof, on all
matters coming before said meeting, with all powers which the undersigned would
possess if personally present.
(CONTINUED ON REVERSE SIDE)
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PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
PRIME HOSPITALITY CORP.
MAY 24, 2001
Please Detach and Mail in the Envelope Provided
A /X/ Please mark your
votes as in this
example.
FOR WITHHELD
all nominees all nominees NOMINEES:
listed at right listed at right
1. ELECTION Howard M. Lorber
OF TWO Allan S. Kaplan
CLASS III DIRECTORS / / / /
FOR EXCEPT VOTE WITHHELD FROM
THE FOLLOWING NOMINEE:
_____________________________
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ELECTION
OF THE TWO NOMINEES.
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting. You are encouraged to specify
your choices by marking the appropriate boxes, but you need not mark any boxes
if you wish to vote in accordance with the Board of Directors' recommendations.
The Proxy cannot vote your shares unless you sign and return this card in the
enclosed postage prepaid envelope.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF THIS PROXY IS EXECUTED AND RETURNED BUT NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR THE TWO NOMINEES.
The signer hereby revokes all proxies heretofore given by the signer to vote at
said meeting or any adjournments thereof.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
Signature________________ Signature if held jointly____________Date______, 2001
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee,
guardian, or corporate executer, please give full title as such.