UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
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[ ] Preliminary Proxy Statement
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14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] 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)
N/A
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(Name of Person(s) Filing Proxy Statement, if Other Than Registrant)
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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
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[ ] Fee paid previously with preliminary materials.
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previously. Identify the previous filing by registration statement number,
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PRIME HOSPITALITY CORP.
700 ROUTE 46 EAST
FAIRFIELD, NEW JERSEY 07004
September 24, 2004
Dear Stockholder:
As you know, we are holding a special meeting of stockholders of Prime
Hospitality Corp. (the "Company") on Wednesday, October 6, 2004, at the Prime
Hotel & Suites located at 690 Route 46 East, Fairfield, New Jersey, at 10:00
a.m. Eastern Standard Time. At the meeting, holders of the Company's common
stock entitled to vote will be asked to adopt a merger agreement providing for
the acquisition of the Company by BREP IV Hotels Holding L.L.C., an affiliate of
The Blackstone Group. If the merger is completed, you will receive $12.25 in
cash, without interest, for each share of the Company's common stock you own.
On or about September 13, 2004, we mailed to you a detailed proxy statement
that contains a description of the proposed merger and other important
information for you to consider in connection with the proposed merger. The
attached proxy statement supplement contains certain additional information
supplementing the proxy statement. I urge you to read this proxy statement
supplement carefully together with the proxy statement we have sent to you
regarding the merger.
The additional information contained in the proxy statement supplement is
being provided in connection with the Company's entry into a memorandum of
understanding regarding the settlement of two purported class actions filed
against us, the members of our board of directors and The Blackstone Group. The
settlement will not affect the amount of merger consideration to be paid in the
merger or any other terms of the merger agreement. The actions and memorandum of
understanding are described more fully in the proxy statement supplement.
The board of directors of the Company has approved and declared the merger,
the merger agreement and the transactions contemplated by the merger agreement
advisable, and has declared that it is fair to and in the best interests of the
Company's stockholders that the Company enter into the merger agreement and
consummate the merger on the terms and conditions set forth in the merger
agreement. The board of directors recommends that the Company's stockholders
vote "FOR" the adoption of the merger agreement.
Your vote on the merger is very important. If you have not already done so,
please vote today by signing and returning the enclosed proxy in the envelope
provided. If you have any questions or need help in voting your shares, please
call Innisfree M&A Incorporated, the firm assisting us in the solicitation of
proxies, toll-free at (877) 750-9501.
Thank you for your continued support.
Very truly yours,
/S/ A.F. Petrocelli
A.F. Petrocelli
Chairman of the Board of Directors
THIS PROXY STATEMENT SUPPLEMENT IS DATED SEPTEMBER 24, 2004
AND IS FIRST BEING MAILED TO STOCKHOLDERS ON OR ABOUT SEPTEMBER 24, 2004.
PRIME HOSPITALITY CORP.
700 ROUTE 46 EAST
FAIRFIELD, NEW JERSEY 07004
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PROXY STATEMENT SUPPLEMENT
INTRODUCTION
This document supplements the proxy statement, dated September 10, 2004,
provided to you in connection with the proposed acquisition of Prime Hospitality
Corp. (the "Company") by BREP IV Hotels Holding L.L.C., an affiliate of The
Blackstone Group ("Blackstone"), pursuant to the merger agreement entered into
by the Company, BREP IV Hotels Holding L.L.C. and BREP IV Hotels Acquisition
L.L.C. on August 18, 2004. This document includes certain additional
information, which is being provided in connection with the Company's entry into
a memorandum of understanding regarding the settlement of two purported class
actions filed against us, the members of our board of directors and Blackstone.
The actions and the memorandum of understanding are described more fully below.
Except as described in this document, the information provided in the proxy
statement continues to apply.
To the extent that information in this document differs from, updates or
conflicts with information contained in the original proxy statement, the
information in this document is more current. If you need another copy of the
original proxy statement, please contact our proxy solicitation agent, Innisfree
M&A Incorporated, toll free at (877) 750-9501.
LITIGATION CONCERNING THE MERGER
As previously disclosed in the proxy statement under the heading "THE
MERGER -- Litigation Concerning the Merger," on August 19 and 20, 2004, certain
of our stockholders filed two purported class actions in the Court of Chancery
of the State of Delaware, New Castle County, against us, our directors and
Blackstone in connection with the proposed merger.
On September 20, 2004, the two purported class actions were consolidated
under the caption In re Prime Hospitality Corp. Shareholders Litigation,
Consolidated Civil Action No. 652-N. In connection with the consolidation, on
September 20, 2004, the plaintiffs filed a consolidated amended class action
complaint, which alleges, among other things, that:
- the merger consideration to be received by the Company's stockholders is
inadequate;
- the proposed merger was not the result of a full or fair sales process;
- our directors breached their fiduciary duties in connection with the
proposed merger; and
- we failed to disclose certain material information in the proxy
statement.
On September 23, 2004, the Company, Blackstone and the other defendants
entered into a memorandum of understanding with the plaintiffs regarding the
settlement of the litigation. In connection with the settlement, the Company has
agreed to make certain additional disclosures to its stockholders, which are
contained in this proxy statement supplement. Subject to the completion of
certain confirmatory discovery by counsel to the plaintiffs, the memorandum of
understanding contemplates that the parties will enter into a settlement
agreement. The settlement agreement will be subject to customary conditions
including court approval following notice to the stockholders of the Company and
consummation of the merger. In the event that the parties enter into a
settlement agreement, a hearing will be scheduled at which the court will
consider the fairness, reasonableness and adequacy of the settlement which, if
finally approved by the court, will resolve all of the claims that were or could
have been brought in the actions being settled, including all claims relating to
the merger, the merger agreement and any disclosure made in connection
therewith. In addition, in connection with the settlement, the parties
contemplate that plaintiffs' counsel will petition the court for an
1
award of attorneys' fees and expenses to be paid by the Company. The amount of
the award of attorneys' fees and expenses that will be sought by plaintiffs'
counsel has not yet been determined. The parties' respective positions on the
amount will be set forth in the notice to be sent to the Company's stockholders
prior to the hearing.
The settlement will not affect the amount of merger consideration to be
paid in the merger or any other terms of the merger agreement.
The Company, Blackstone and the other defendants vigorously deny all
liability with respect to the facts and claims alleged in the consolidated
action, and specifically deny that any further supplemental disclosure was
required under any applicable rule, statute, regulation or law. However, to
avoid the risk of delaying or otherwise imperiling the merger and to provide
additional information to the Company's stockholders at a time and in a manner
that would not cause any delay of the merger, the Company, its directors and
Blackstone agreed to the settlement described above. The Company, Blackstone and
the other defendants further considered it desirable that the consolidated
action be settled to avoid the substantial burden, expense, risk, inconvenience
and distraction of continued litigation and to fully and finally resolve the
settled claims.
SUPPLEMENTAL INFORMATION
The following information is in addition to, and is intended to supplement,
the information set forth in the proxy statement. This information should be
read in conjunction with the proxy statement, which we urge you to read in its
entirety.
VALUE OF THE TRANSACTION PER OWNED ROOM
As of August 18, 2004, the date we entered into the merger agreement, we
owned hotels comprising 14,449 rooms, including 40% of the rooms in two hotels
in which we have a 40% joint venture interest. Based upon an aggregate
transaction value of approximately $795.3 million, the merger implies a value
per owned room of approximately $55,042. The aggregate transaction value does
not take into account transaction expenses to be incurred by Blackstone and the
Company in connection with the merger, and the number of rooms does not take
into account 1,842 rooms in hotels in which we have a leasehold interest, 7,535
rooms in hotels that we operate for real estate investment trusts which have
cash flow guarantees and participations, 3,265 rooms in hotels that we manage
for third parties and 5,881 rooms in hotels that we franchise but do not
operate. Although we believe that per room values are often used as part of a
valuation of hotel companies, this measure does not take into account value,
either positive or negative, with respect to rooms leased, operated, managed or
franchised by us that are not owned by us. This calculation is being presented
for the information of our stockholders, but stockholders should note that
neither our board of directors nor Bear, Stearns & Co. Inc. ("Bear Stearns"),
our financial advisor, used this calculation in evaluating the transaction.
We calculated the transaction value by adding:
- the aggregate cash consideration to be received by our stockholders of
approximately $546.5 million and the aggregate cash consideration to be
received by the holders of in-the-money stock options of approximately
$24.1 million (based upon the per share merger consideration of $12.25
and, with respect to in-the-money stock options, after deducting the
exercise price of such stock options); and
- our total debt outstanding as of August 18, 2004, the date we entered
into the merger agreement, of approximately $224.7 million, which
includes approximately $20 million of outstanding borrowings under our
credit agreement, $178.7 million aggregate principal amount of our senior
subordinated notes, approximately $13.9 million of mortgage notes issued
by us or one of our subsidiaries and 40% of the $30.3 million aggregate
indebtedness issued by two joint ventures in which we have a 40%
interest.
COMPANY FINANCIAL PROJECTIONS
In the first quarter of 2004, our management prepared an initial 2004
budget, which was reviewed by our board of directors. In connection with Bear
Stearns' preparation of its fairness opinion as described in the Proxy Statement
under "The Merger -- Opinion of Bear, Stearns & Co. Inc.," in August 2004 the
Company
2
provided Bear Stearns with an updated 2004 budget that took into account our
results for the six months ended June 30, 2004.
We do not as a matter of course make public any projections as to future
revenue, earnings or other results. The projections set forth below have been
prepared by us and are presented below only because this information was
provided to Bear Stearns in connection with the merger.
The accompanying prospective financial information was not prepared with a
view toward public disclosure or with a view toward complying with the
guidelines established by the American Institute of Certified Public Accountants
with respect to prospective financial information. This information is not fact
and should not be relied upon as being necessarily indicative of future results,
and we caution you not to place undue reliance on the prospective financial
information.
Neither our independent auditors nor any other independent accountants have
compiled, examined, or performed any procedures with respect to the prospective
financial information contained herein, nor have they expressed any opinion or
any other form of assurance on such information or its achievability. Our
auditors assume no responsibility for, and disclaim any association with, the
accuracy, reasonableness or achievability of the prospective financial
information.
This prospective financial information is subjective in many respects and
is therefore susceptible to various interpretations. This prospective financial
information is based on a variety of assumptions relating to our business
industry, operating performance, general business and economic conditions, and
other matters, which are inherently subject to significant uncertainties and
contingencies, many of which are beyond our control. These assumptions involve
judgments with respect to, among other things, future economic and competitive
conditions and future business conditions. Therefore, actual results ultimately
may be either higher or lower than those set forth below. The inclusion of this
information should not be regarded as an indication that Bear Stearns or anyone
else who received this information considered, or now considers, it to be a
reliable prediction of future events, and this information should not be relied
on as such. Neither we, nor Blackstone nor any other person is under any
obligation to, or has any intent to, update these projections at any future
time.
The transactions contemplated by the merger agreement were not considered
in the preparation of the projections. We caution you not to place undue
reliance on this information.
2004 BUDGET (UPDATED IN AUGUST 2004)
<Table>
<Caption>
($ IN MILLIONS)
---------------
Revenues.................................................... 438.1
Operating Income............................................ 24.3
Net Income.................................................. 3.4
</Table>
ENGAGEMENT OF BEAR STEARNS
In August 2004, the Board of Directors formally engaged Bear Stearns to act
as its exclusive financial advisor with respect to exploring strategic
alternatives including a possible sale of the Company. Pursuant to the terms of
Bear Stearns' engagement letter, the Company has agreed to pay Bear Stearns a
transaction fee of 0.80% of the aggregate consideration involved in the
transaction (including the amount of any debt assumed or acquired), provided,
however, that in no event shall the transaction fee be less than $6.4 million.
The transaction fee is payable upon consummation of the transactions
contemplated by the merger agreement, except that $50,000 has previously been
paid. In addition, the Company has agreed to reimburse Bear Stearns for all
reasonable out-of-pocket expenses (up to a maximum of $50,000) incurred by Bear
Stearns in connection with its engagement and the merger and for the reasonable
fees and disbursements of its legal counsel. Also, the Company has agreed to
indemnify Bear Stearns against certain liabilities relating to or arising out of
Bear Stearns' engagement.
3
We have also retained Bear Stearns to serve as one of the two dealer
managers and solicitation agents with respect to the offer to purchase any and
all of our outstanding 8 3/8% Senior Subordinated Notes due 2012 and the related
consent solicitation in connection with the merger. We have agreed to pay Bear
Stearns up to $45,000 for its services. In addition, the Company has agreed to
reimburse Bear Stearns for all reasonable fees, costs and expenses incurred by
Bear Stearns in connection with its engagement. We have also agreed to indemnify
Bear Stearns against certain liabilities relating to or arising out of Bear
Stearns' engagement.
STOCK OPTIONS HELD BY THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS
As of the record date (September 10, 2004), there were approximately
6,024,354 shares of our common stock subject to options granted to our executive
officers and directors under our equity incentive plans and other stock option
grants. Under the terms of the merger agreement, all such stock options will
become immediately vested and exercisable effective as of the completion of the
merger. Any outstanding stock options that remain unexercised as of the
completion of the merger will be canceled, and the holder of each stock option
that has an exercise price of less than $12.25 will receive a cash payment,
subject to any required withholding taxes, equal to the product of:
- the number of shares of our common stock subject to each option as of the
effective time of the merger, multiplied by
- the excess of $12.25 over the exercise price per share of common stock
subject to such option.
The following table summarizes the vested and unvested options under our
equity incentive plans and other stock option grants with exercise prices of
less than $12.25 per share held by our executive officers and directors as of
September 10, 2004 and the consideration that each of them will receive pursuant
to the merger agreement in connection with the cancellation of their options:
<Table>
<Caption>
NO. OF SHARES WEIGHTED AVERAGE
NO. OF SHARES NO. OF SHARES UNDERLYING EXERCISE PRICE OF
UNDERLYING UNDERLYING VESTED AND VESTED AND
VESTED UNVESTED UNVESTED UNVESTED RESULTING
OPTIONS OPTIONS OPTIONS OPTIONS($) CONSIDERATION($)
------------- ------------- ------------- ----------------- ----------------
A. F. Petrocelli......... 3,074,999 1,750,001 4,825,000 7.965 20,675,625
Richard T. Szymanksi..... 123,999 26,001 150,000 9.671 386,920
Lawrence N. Friedland.... 60,000 10,000 70,000 9.753 149,850
Allen S. Kaplan.......... 30,000 10,000 40,000 9.298 88,550
Howard M. Lorber......... 95,000 10,000 105,000 9.495 261,725
Richard Reitman.......... 10,000 10,000 20,000 7.945 86,100
Stephen Seltzer.......... 0 10,000 10,000 9.540 27,100
Stephen M. Kronick....... 106,999 31,001 138,000 9.482 381,970
John Capone.............. 7,500 13,800 21,300 8.847 72,447
Arthur Manso............. 4,000 20,000 24,000 8.768 83,580
Vito Stellato............ 0 12,000 12,000 9.090 37,920
Bryan Hayes.............. 6,500 4,800 11,300 9.308 33,242
</Table>
AGREEMENTS WITH UNITED CAPITAL CORP.
We and our subsidiaries are parties to certain agreements with subsidiaries
of United Capital Corp. ("United Capital") related to two hotels owned by
subsidiaries of United Capital and to two joint ventures. United Capital is
controlled by A.F. Petrocelli, our President, Chief Executive Officer and
Chairman of the Board of Directors, who is also the Chief Executive Officer and
Chairman of the Board of Directors of United Capital. In addition, Howard M.
Lorber, a director of the Company, is also a director of United Capital. These
agreements will remain in effect upon the consummation of the merger. Summaries
of these agreements are set forth below. As described below, entities in which
United Capital has an interest pay fees for various services provided by us and
our subsidiaries with respect to four hotels, two of which are owned by joint
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ventures in which our subsidiaries and subsidiaries of United Capital have an
interest. These arrangements are similar to other arrangements we have with
third parties. We are not a party to any other joint ventures.
In December 1993, we entered into a management agreement with HJA Corp., a
wholly owned subsidiary of United Capital, pursuant to which we manage the
operations of a hotel owned by HJA Corp. located in East Point, Georgia. Under
this management agreement, we are entitled to a management fee equal to 3% of
the gross revenues of such hotel and reimbursement for all of our ordinary
course expenses. In July 2001, we entered into a franchise agreement with HJA
Corp. pursuant to which HJA Corp. was granted the right to use the brand names
"Wellesley Inn" and "Wellesley Inn & Suites" with respect to such hotel. Under
this franchise agreement, we are entitled to receive royalty fees, marketing
contribution payments and reservation system fees. For the fiscal year ended
2003, we received an aggregate of $65,060 in management fees and $85,177 in
franchise fees. The management agreement remains in force unless terminated by
either party on sixty days' written notice. HJA Corp. may terminate the
franchise agreement upon six months' prior written notice and payment of a
liquidation fee as provided therein. In the event that Mr. Petrocelli ceases to
be our President, Chief Executive Officer or Chairman of the Board of Directors,
HJA Corp. may terminate the franchise agreement upon thirty days' prior written
notice without paying a liquidation fee. Mr. Petrocelli will not be employed by
the surviving company after the effective date of the merger.
In December 1993, we entered into a management agreement with HJSC Corp., a
wholly owned subsidiary of United Capital, pursuant to which we manage the
operations of a hotel owned by HJSC Corp. located in Santa Clara, California.
Under this management agreement, we are entitled to a management fee equal to 3%
of the gross revenues of such hotel and reimbursement for all of our ordinary
course expenses. In July 2001, we entered into a franchise agreement with HJSC
Corp. pursuant to which HJSC Corp. was granted the right to use the brand names
"Wellesley Inn" and "Wellesley Inn & Suites" with respect to such hotel. Under
this franchise agreement, we are entitled to receive royalty fees, marketing
contribution payments and reservation system fees. For the fiscal year ended
2003, we received an aggregate of $31,554 in management fees and $40,149 in
franchise fees. The management agreement remains in force unless terminated by
either party on sixty days' written notice. HJSC Corp. may terminate the
franchise agreement upon six months' prior written notice and upon payment of a
liquidation fee as provided therein.
In December 2002, Prime-Meadowlands, L.L.C., a wholly owned subsidiary of
the Company, and AFP Eighteen Corp., an indirect wholly owned subsidiary of
United Capital, entered into an operating agreement pursuant to which
Prime-Meadowlands and AFP Eighteen formed East Rutherford Group, L.L.C. At that
time, both Prime-Meadowlands and AFP Eighteen Corp. held 50% of the outstanding
equity interests of East Rutherford Group. In December 2002, East Rutherford
Group acquired the Sheraton Meadowlands Hotel and Conference Center in East
Rutherford, New Jersey. Simultaneously with this acquisition, East Rutherford
Group entered into a management agreement with us pursuant to which we manage
the operation of the Sheraton Meadowlands Hotel. Under this management
agreement, we are entitled to a management fee equal to 2% of the gross revenues
of the Sheraton Meadowlands Hotel, an accounting services fee of $1,000 per
month and reimbursement for all of our ordinary course expenses. For fiscal year
2003, we received $381,224 in management fees. This management agreement expires
in December 2007. In March of 2003, Prime-Meadowlands and AFP Eighteen Corp.
each sold a ten percent interest in the company to Ark Meadowlands, Inc.,
decreasing each of their equity interests in the hotel to 40%.
In January 2003, Quebec City, Inc., a wholly owned subsidiary of the
Company, and AFP Nineteen Corp., an indirect wholly owned subsidiary of United
Capital, entered into an operating agreement pursuant to which Quebec City and
AFP Nineteen formed 3072929 Nova Scotia Company. At that time, Quebec City and
AFP Nineteen held 50% of the outstanding equity interests of 3072929 Nova Scotia
Company. In January 2003, 3072929 Nova Scotia Company acquired the Quebec City
Holiday Inn Select in Quebec City, Canada. Pursuant to the operating agreement,
Quebec City agreed to asset manage the operation of the Quebec City Holiday Inn
Select. Under this agreement, we are entitled to an asset management fee equal
to 1% of the gross revenues of the Quebec City Holiday Inn Select and
reimbursement for all of our ordinary course expenses. For fiscal year 2003, we
received $52,694 in management fees. In March of 2003, Quebec City, Inc. and AFP
Nineteen Corp. each sold a ten percent interest in the company to Ark Quebec,
Inc., decreasing each of their equity interests in the hotel to 40%.
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
Certain statements and information included in this proxy statement
supplement, including under the heading "Company Financial Projections,"
constitute "forward-looking statements" within the meaning of the Federal
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance, or achievements of the Company
to be materially different from any future results, performance or achievements
expressed or implied in such forward-looking statements. Additional discussion
of factors that could cause actual results to differ materially from
management's projections, forecasts, estimates and expectations is contained in
the proxy statement under the heading "Cautionary Statement Concerning
Forward-Looking Information" and in the Company's SEC filings.
ADDITIONAL INFORMATION
In accordance with Rule 14a-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), one proxy statement supplement will be delivered
to two or more stockholders who share an address, unless the Company has
received contrary instructions from one or more of the stockholders. Investors
and security holders may also obtain a free copy of the proxy statement and
other documents filed by the Company at the Securities and Exchange Commission's
website at www.sec.gov. The proxy statement and such other documents may also be
obtained for free from the Company by directing such request to the Company,
Attention: Investor Relations, 690 Route 46 East, Fairfield, New Jersey 07004,
with a copy to the attention of the Company's Secretary and General Counsel,
Joseph B. Bernardino, Esq., or by telephone at (973) 882-1010.
All documents that we file pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act after the date of this proxy statement supplement and prior to
the completion of the special meeting shall be deemed to be incorporated by
reference in the proxy statement, as supplemented by this proxy statement
supplement, and to be a part of the proxy statement, as supplemented by this
proxy statement supplement, from the respective dates of filing of these
documents. Any statement contained in the proxy statement, as supplemented by
this proxy statement supplement, or in a document incorporated or deemed to be
incorporated by reference in the proxy statement, as supplemented by this proxy
statement supplement, shall be deemed to be modified or superseded for purposes
of the proxy statement, as supplemented by this proxy statement supplement, to
the extent that a statement contained in any subsequently filed document that
also is or is deemed to be incorporated by reference in the proxy statement, as
supplemented by this proxy statement supplement, modifies or supersedes that
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of the proxy statement, as
supplemented by this proxy statement supplement.
No persons have been authorized to give any information or to make any
representations other than those contained in this proxy statement supplement
and, if given or made, such information or representations must not be relied
upon as having been authorized by us or any other person. The information
contained in this document speaks only as of the date of this document, unless
the information specifically indicates that another date applies. The mailing of
this proxy statement supplement to stockholders shall not create any implication
to the contrary.
The Company and its directors, executive officers and other members of its
management and employees may be deemed to be participants in the solicitation of
proxies from its shareholders in connection with the proposed merger.
Information concerning the interests of Company's participants in the
solicitation is set forth in the Company's proxy statements and Annual Reports
on Form 10-K, previously filed with the Securities and Exchange Commission, and
in the proxy statement relating to the merger.
6
PRIME HOSPITALITY CORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS ON OCTOBER 6, 2004, AT 10 A.M.
PROXY The undersigned hereby appoints A.F. Petrocelli or Richard
Szymanski, or each of them, with full power of substitution, to act
as proxies for the undersigned, and to vote all shares of Common
Stock of Prime Hospitality Corp. (the "Company") that the
undersigned would be entitled to vote if personally present at the
Special Meeting of Stockholders of the Company to be held on
Wednesday, October 6, 2004, at 10 a.m., Eastern Standard Time, at
Prime Hotel & Suites, 690 Route 46 East, Fairfield, New Jersey,
07004, and at any and all postponements or adjournments thereof as
follows:
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE
PROPOSAL TO ADOPT THE AGREEMENT AND PLAN OF MERGER, DATED AS OF
AUGUST 18, 2004, BY AND AMONG THE COMPANY, BREP IV HOTELS HOLDING
L.L.C. AND BREP IV HOTELS ACQUISITION L.L.C. IF ANY OTHER BUSINESS
IS PROPERLY PRESENTED AT THE SPECIAL MEETING, INCLUDING A MOTION TO
ADJOURN OR POSTPONE THE SPECIAL MEETING FOR THE PURPOSE OF
SOLICITING ADDITIONAL PROXIES, THIS PROXY WILL BE VOTED BY THOSE
NAMED IN THIS PROXY AT THEIR DISCRETION. AT THE PRESENT TIME, THE
BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT
THE SPECIAL MEETING.
YOUR VOTE IS IMPORTANT!
PLEASE MARK, SIGN, DATE, AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on the reverse side)
SEE REVERSE SIDE
================================================================================
TO VOTE BY MAIL, PLEASE DETACH HERE
================================================================================
X VOTES MUST BE THE BOARD RECOMMENDS A VOTE "FOR" ITEM 1.
INDICATED (X) IN
BLACK OR BLUE INK
THE BOARD OF DIRECTORS RECOMMENDS I PLAN TO ATTEND THE SPECIAL MEETING. [ ]
A VOTE FOR THE PROPOSAL TO ADOPT
THE AGREEMENT AND PLAN OF MERGER,
DATED AS OF AUGUST 18, 2004, BY TO CHANGE YOUR ADDRESS, PLEASE MARK
AND AMONG THE COMPANY, BREP IV THIS BOX. [ ]
HOTELS HOLDING L.L.C. AND BREP IV
HOTELS ACQUISITION L.L.C.
1. To adopt the Agreement FOR AGAINST ABSTAIN WHERE NO VOTING INSTRUCTIONS
and Plan of Merger, [ ] [ ] [ ] ARE GIVEN, THE SHARES
dated as of August 18, REPRESENTED BY THIS PROXY
2004, by and among the WILL BE VOTED FOR ITEM 1.
Company, BREP IV Hotels
Holding L.L.C. and BREP
IV Hotels Acquisition
L.L.C.
2. If any other matter is
properly presented at
the Special Meeting,
this proxy when properly
executed will be voted
by those named in this
proxy in their
discretion.
Each signatory to this Date:_____2004
proxy acknowledges
receipt from the Company
prior to execution of
this proxy of a Notice
of Special Meeting of
Stockholders and a proxy
statement dated
September 10, 2004.
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Share Owner sign here
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Co-owner sign here
IMPORTANT: Please sign exactly
as your name or names appear on
this proxy. Where shares are held
jointly, both holders must sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If
holder is a corporation, execute in
full corporate name by authorized
officer, giving full title. If holder
is a partnership, please sign in full
partnership name by authorized person,
giving full title.
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
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TO VOTE BY MAIL, PLEASE DETACH HERE
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