<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
</TABLE>
PRIME HOSPITALITY CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
<PAGE> 2
PRIME HOSPITALITY CORP.
700 ROUTE 46 EAST
FAIRFIELD, NEW JERSEY 07004
April 21, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Prime Hospitality Corp. (the "Company") to be held on May 23, 2000, at 10:00
a.m., at the Hilton Hasbrouck Heights, 650 Terrace Avenue, Hasbrouck Heights,
New Jersey 07604. This year we are asking you to elect three Class II Directors
of the Company to serve until the 2003 Annual Meeting of Stockholders and to
ratify the Board of Directors' selection of independent auditors for the year
ending December 31, 2000. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
THE THREE NOMINEES AND FOR RATIFICATION OF THE INDEPENDENT AUDITORS.
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
<PAGE> 3
PRIME HOSPITALITY CORP.
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 23, 2000
------------------
To the Stockholders of
Prime Hospitality Corp.:
The Annual Meeting of Stockholders of Prime Hospitality Corp. (the
"Company") will be held on May 23, 2000, at 10:00 a.m., at the Hilton Hasbrouck
Heights, 650 Terrace Avenue, Hasbrouck Heights, New Jersey 07604 for the
following purposes:
1. To elect three Class II Directors of the Company to serve until the
2003 Annual Meeting of Stockholders;
2. To ratify the Board of Directors' selection of Ernst & Young LLP to
serve as the Company's independent auditors for the fiscal year ending
December 31, 2000 and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
The close of business on April 10, 2000 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 three Nominees and FOR ratification of the
independent auditors.
The Company's Annual Report for the fiscal year ended December 31, 1999,
including financial statements, is also enclosed.
By Order of the Board of Directors,
/s/ Joseph Bernadino
JOSEPH BERNADINO
Secretary
Fairfield, New Jersey
April 21, 2000
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.
<PAGE> 4
PRIME HOSPITALITY CORP.
700 ROUTE 46 EAST
FAIRFIELD, NEW JERSEY 07004
------------------
PROXY STATEMENT
------------------
April 21, 2000
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 23, 2000, at 10:00 a.m., at the Hilton
Hasbrouck Heights, 650 Terrace Avenue, Hasbrouck Heights, New Jersey 07604 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, 2000 (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. 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, 1999, are being
mailed to stockholders on or about April 21, 2000.
As of the Record Date, there were 46,344,582 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 (1) FOR THE ELECTION OF THE THREE NOMINEES NAMED HEREIN TO
SERVE AS DIRECTORS FOR THE TERMS SPECIFIED HEREIN AND UNTIL THEIR SUCCESSORS ARE
ELECTED AND QUALIFIED, (2) FOR THE RATIFICATION OF THE BOARD OF DIRECTORS'
SELECTION OF ERNST & YOUNG LLP TO SERVE AS THE COMPANY'S INDEPENDENT AUDITORS
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000, 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 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.
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 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.
<PAGE> 5
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 12, 1997 and Class III Directors were
elected at the Annual Meeting held on May 13, 1998.
Election for three Class II directors will be held at the Annual Meeting.
Herbert Lust, II, Jack H. Nusbaum and Lawrence N. Friedland have been nominated
for election as Class II directors. The three 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 Herbert Lust, II, Jack H. Nusbaum and
Lawrence N. Friedland as Class II 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 II DIRECTORS UNTIL THE 2003 ANNUAL MEETING OF
STOCKHOLDERS
<TABLE>
<S> <C>
Herbert Lust, II..................... Herbert Lust, II, age 73, 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 of BRT Realty Trust.
Jack H. Nusbaum...................... Jack H. Nusbaum, age 59, 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 77, 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.
</TABLE>
CLASS I DIRECTORS WHOSE TERMS EXPIRE AT THE 2002 ANNUAL MEETING OF STOCKHOLDERS
<TABLE>
<S> <C>
A. F. Petrocelli..................... A. F. Petrocelli, age 56, was a Director since 1992 and 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 40, became a Director of the Company
in 1999 and became a Senior Vice President and Chief
Financial Officer of the Company in 1998. Prior to that he
had been a Vice President and the Treasurer of the Company
for more than five years.
</TABLE>
2
<PAGE> 6
CLASS III DIRECTOR WHOSE TERMS EXPIRES AT THE 2001 ANNUAL MEETING OF
STOCKHOLDERS
<TABLE>
<S> <C>
Howard M. Lorber..................... Howard M. Lorber, age 51, 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
and he has been a director of PLM International, Inc. since
January 1999.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF
THE THREE 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 eight meetings during 1999. 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
1999, the Committee held five meetings.
As part of its audit oversight, the Committee meets with representatives of
the Company's independent auditors and with representatives of senior
management. In addition, the Committee reviews the plans and results of the
independent auditors, the scope and results of the Company's internal auditing
and procedures and systems of internal accounting and financial control.
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.
NOMINATING COMMITTEE
The Company does not have a nominating or similar committee.
3
<PAGE> 7
EXECUTIVE OFFICERS OF THE COMPANY
Set forth below are the names, ages and positions of the executive officers
of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
A. F. Petrocelli..................... 56 President, Chief Executive Officer and Chairman of the
Board of Directors
Douglas W. Vicari.................... 40 Director, Senior Vice President and Chief Financial
Officer
Joseph Bernadino..................... 53 Senior Vice President/Law, Secretary and General Counsel
J. Edward Dykes...................... 49 Senior Vice President/Hotel Operations
Stephen M. Kronick................... 45 Senior Vice President/Hotel Operations
John H. Leavitt...................... 47 Senior Vice President/Sales and Marketing
Terry P. O'Leary..................... 44 Senior Vice President/Franchising
J. David Johnson..................... 50 Senior Vice President/Administration
Richard T. Szymanski................. 42 Vice President/Finance
</TABLE>
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.
J. Edward Dykes 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.
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 H. Leavitt has been a Senior Vice President of the Company since 1992.
Terry P. O'Leary has been a Senior Vice President of the Company since 1998
and was Vice President of Food and Beverage since 1995. Mr. O'Leary was an area
manager and corporate director with B.F. Saul Co. from 1993 to 1995.
J. David Johnson has been a Senior Vice President of the Company since
1999. Prior to that he held the position of Vice President of Hotel Operation
Services from 1997 to 1999. Prior to that he was Vice President of Strategic
Sourcing for Crown Vantage for more than five years.
Richard T. Szymanski became Vice President -- Finance of the Company in
1998. Prior to that Mr. Szymanski had been a Vice President and Corporate
Controller of the Company for more than five years.
4
<PAGE> 8
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the beneficial ownership of Common Stock as
of April 18, 2000 for all executive officers, all Directors, all nominees to the
Board of Directors, and all directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OF OWNERSHIP CLASS(P)
------------------------------------ ----------------- ----------
<S> <C> <C>
A. F. Petrocelli(a)......................................... 2,808,297 6.26%
Lawrence N. Friedland(b).................................... 21,000 *
Howard M. Lorber(c)......................................... 180,000 *
Herbert Lust, II(d)......................................... 128,151 *
Jack H. Nusbaum(e).......................................... 115,000 *
Douglas W. Vicari(f)........................................ 60,300 *
Joseph Bernadino(g)......................................... 73,200 *
J. Edward Dykes(h).......................................... 44,908 *
Stephen M. Kronick(i)....................................... 43,082 *
John H. Leavitt(j).......................................... 70,398 *
Terry P. O'Leary(k)......................................... 36,332 *
J. David Johnson(l)......................................... 15,385 *
Richard T. Szymanski(m)..................................... 55,280 *
All directors and executive officers as a group (13
persons)(n)............................................... 3,651,333 8.14%
</TABLE>
- ---------------
* 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. Also includes options held by Mr.
Petrocelli to purchase 260,000 shares at an exercise price of $9.31 per
share as to 10,000 shares, $10.00 per share as to 50,000 shares and $5.91
per share as to 200,000 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 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 10,000 shares at an exercise price of $10.00 per
share.
(c) Includes 75,000 shares owned by Mr. Lorber. Also includes options to
purchase 105,000 shares with an exercise price of $7.25 per share as to
15,000 shares, $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 50,000 shares.
(d) Includes 45,000 shares owned by Mr. Lust, and 23,151 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 60,000 shares with an
exercise price of $9.31 per share as to 10,000 shares and $10.00 per share
as to 50,000 shares.
(e) Includes 10,000 shares owned by Mr. Nusbaum. Also includes options to
purchase 105,000 shares with an exercise price of $7.25 per share as to
15,000 shares, $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 50,000 shares.
(f) Includes 2,300 shares owned by Mr. Vicari. Also includes options to
purchase 58,000 shares with an exercise price of $7.63 per share as to
7,000 shares, $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 and $4.72 per share as
to 7,000 shares.
(g) Includes 3,700 shares owned by Mr. Bernadino. Also includes options to
purchase 69,500 shares with an exercise price of $7.63 per share as to
8,000 shares, $9.63 per share as to 18,000 shares, $9.88 per share as to
5,000 shares, and $10.00 per share as to 31,500 shares and $4.72 per share
as to 7,000 shares.
5
<PAGE> 9
(h) Includes 576 shares owned by Mr. Dykes. Also includes options to purchase
44,332 shares with an exercise price of $7.63 per share as to 1,500 shares,
$9.63 per share as to 10,500 shares, $10.00 per share as to 25,332 shares
and $4.72 per share as to 7,000 shares.
(i) Includes 82 shares owned by Mr. Kronick. Also includes options to purchase
43,000 shares with an exercise price of $7.63 per share as to 7,000
shares, $9.63 per share as to 12,000 shares, $10.00 per share as to 20,000
shares and $4.72 per share as to 4,000 shares.
(j) Includes 2,566 shares owned by Mr. Leavitt. Also includes options to
purchase 67,832 shares with an exercise price of $7.63 per share as to
8,000 shares, $9.63 per share as to 18,000 shares, $10.00 per share as to
34,832 shares and $4.72 per share as to 7,000 shares.
(k) Includes options to purchase 36,332 shares with an exercise price of $9.63
per share as to 4,000 shares, $10.00 per share as to 25,332 shares $4.72
per share as to 7,000 shares.
(l) Includes 385 shares owned by Mr. Johnson. Also includes options to
purchase 15,000 shares with an exercise price of $10.00 per share as to
10,000 shares and $4.72 per share as to 5,000 shares.
(m) Includes 2,280 shares owned by Mr. Szymanski. Also includes options to
purchase 53,000 shares with an exercise price of $7.63 per share as to 7,000
shares, $9.63 per share as to 12,000 shares, $9.88 per share as to 5,000
shares, $10.00 per share as to 22,000 shares and $4.72 per share as to 7,000
shares.
(n) With the exception of Mr. A.F. Petrocelli, who beneficially owns 6.26% 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 8.14% of the outstanding Common Stock as a
group. Percentages were based on 44,832,582 shares outstanding as of April
18, 2000.
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 18, 2000. Percentages
are based on 44,832,582 shares outstanding as of such date.
<TABLE>
<CAPTION>
PERCENT
AMOUNT AND NATURE OF CLASS
----------------- --------
<S> <C> <C>
Franklin Resources, Inc.(a)................................. 3,982,500 8.88%
777 Mariners Island Boulevard
San Mateo, California 94404
Leon G. Cooperman(b)........................................ 3,610,300 8.05%
88 Pine Street
Wall Street Plaza -- 31st Floor
New York, New York 10005
Neuberger & Berman, LLC(c).................................. 3,297,636 7.36%
605 Third Avenue
New York, New York 10158-3698
FMR Corp.(d)................................................ 3,240,000 7.23%
82 Devonshire Street
Boston, Massachusetts 02109
A.F. Petrocelli(e).......................................... 2,808,297 6.26%
c/o United Capital Corp.
9 Park Place
Great Neck, New York 11021
</TABLE>
- ---------------
(a) Franklin Resources, Inc. filed a Schedule 13G, dated January 12, 2000, with
the SEC reporting ownership of 3,982,500 shares of Common Stock, with sole
voting and dispositive power with respect to 3,982,500 shares. Inclusive in
these shares are 3,490,500 held by Franklin Advisors, Inc., a subsidiary of
Franklin Resources, Inc., in which that subsidiary has sole voting and
dispositive power with respect to 3,490,500 shares, and 492,000 shares held
by Templeton Investment Counsel, Inc., a subsidiary of
6
<PAGE> 10
Franklin Resources, Inc., in which that subsidiary has sole voting and
dispositive power with respect to 492,000 shares.
(b) Leon G. Cooperman filed a Schedule 13G, dated February 9, 2000 with the SEC
reporting ownership of 3,610,300 shares of Common Stock, with sole voting
and dispositive power with respect to 2,638,100 shares, and shared voting
and dispositive power with respect to 972,200 shares.
(c) Neuberger & Berman, LLC filed a Schedule 13G, dated January 28, 2000 with
the SEC reporting ownership of 3,297,636 shares of Common Stock, with sole
voting power with respect to 2,212,486 shares, shared voting power with
respect to 831,000, and with shared dispositive power with respect to
3,297,636 shares.
(d) FMR Corp. filed a Schedule 13G, dated February 14, 2000 with the SEC
reporting ownership of 3,240,000 shares of Common Stock, with sole voting
power with respect to 1,638,800 shares, and with sole dispositive power
with respect to 3,240,000 shares.
(e) A.F. Petrocelli may be deemed to beneficially own 2,808,297 shares of
Common Stock, with sole voting and dispositive power with respect to
305,000 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.
ITEM 2. RATIFICATION OF 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, 2000; 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,
1999.
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. Although it is not required to do so, the Board of Directors is
submitting the selection of auditors for ratification at the Annual Meeting. If
this selection is not ratified, the Board of Directors will reconsider its
choice.
Ratification of the selection of Ernst & Young LLP 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.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION
OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2000.
ITEM 3. OTHER BUSINESS
The Company is not aware of any business to be acted upon at the Annual
Meeting other than that which is explained 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, the holders of the proxies will vote your
shares in accordance with their best judgment.
7
<PAGE> 11
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, 1999, the Company's Chief Executive Officer
and the four other most highly compensated executive officers of the Company
(the "named executive officers"). In addition, the Summary Compensation Table
also reflects information with respect to Mr. Paul H. Hower, who would have been
among the named executive officers but for the fact that he retired prior to
December 31, 1999. 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, 1997, 1998 and 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
NAME AND -------------------------- UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
------------------ ---- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
A. F. Petrocelli............................ 1999 $700,000 $700,000 0 $ 5,866(1)
President and Chief 1998 94,231 204,167 1,795,000 -0-
Executive Officer 1997 -0- -0- 10,000 -0-
Douglas W. Vicari........................... 1999 169,847 100,000 42,000 1,840(2)
Senior Vice President 1998 158,927 80,000 21,000 1,765
and Chief Financial 1997 143,843 60,000 18,000 1,633
Officer
Richard T. Szymanski........................ 1999 162,912 92,000 35,000 1,750(3)
Vice President - 1998 151,044 60,000 21,000 1,855
Finance 1997 139,308 60,000 15,000 1,651
Terry P. O'Leary............................ 1999 129,904 150,000 21,000 240(4)
Senior Vice President 1998 124,777 34,000 21,000 1,420
1997 113,749 27,000 20,000 1,008
John H. Leavitt............................. 1999 174,760 94,000 21,000 1,960(5)
Senior Vice President 1998 170,000 48,000 21,000 2,296
1997 160,047 34,000 -0- 26,000
Paul H. Hower............................... 1999 103,742 -0- -0- 238,221(6)
Former Officer 1998 231,753 110,000 35,000 4,408
1997 221,541 100,000 35,000 2,202
</TABLE>
- ---------------
(1) Represents $1,600 related to 401k matching contributions and $4,266 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 $240 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.
(6) Represents $1,600 related to 401k matching contributions, $1,524 for
Company-provided life insurance and $235,097 in severance payments in
connection with his retirement.
8
<PAGE> 12
STOCK OPTION GRANTS DURING YEAR ENDED DECEMBER 31, 1999
The following table sets forth information concerning individual grants of
stock options made during the year ending December 31, 1999 to each of the named
executive officers. The Company did not grant any stock appreciation rights
during such period.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------ POTENTIAL REALIZED
% OF TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM
OPTIONS IN FISCAL PRICE PER EXPIRATION ------------------------
NAME GRANTED YEAR SHARE DATE 5% 10%
- ---- ---------- ---------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
A. F. Petrocelli............ -0- 0% $ -0- $ -0-
Douglas W. Vicari........... 42,000(1) 7.7% $11.250 06/29/2009 297,153 753,043
Richard T. Szymanski........ 35,000(1) 6.4% 11.250 06/29/2009 247,627 627,536
Terry P. O'Leary............ 21,000(1) 3.9% 11.250 06/29/2009 148,576 376,522
John H. Leavitt............. 21,000(1) 3.9% 11.250 06/29/2009 148,576 376,522
Paul H. Hower............... -0- 0% -0- -0-
</TABLE>
- ---------------
(1) These stock options vest with respect to one third of the grant on each of
June 29, 2000, 2001 and 2002 and will continue to be exercisable through
June 29, 2009. These options become immediately exercisable upon a change in
control of the Company.
AGGREGATED OPTION EXERCISES IN THE YEAR ENDED DECEMBER 31, 1999 AND YEAR-END
OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END AT FY-END
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
A.F. Petrocelli............... -0- $ -0- 260,000 1,565,000 $580,500 $4,571,438
Douglas W. Vicari............. 5,000 40,313 58,000 62,000 36,960 57,295
Richard T. Szymanski.......... 5,000 40,313 53,000 54,000 36,960 57,295
Terry P. O'Leary.............. -0- -0- 36,333 41,667 28,648 57,295
John H. Leavitt............... -0- -0- 67,833 43,667 38,148 57,295
Paul H. Hower................. 20,000 144,430 120,999 35,001 65,560 95,494
</TABLE>
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
9
<PAGE> 13
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.
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 13 of the
Company's employees, including each named executive officer. The agreements with
eight of the Company's employees, including all of the named executive officers,
provide that, if within two years of a change in control of the Company, the
officer's employment with the Company is terminated by the Company without cause
or if the officer resigns for good reason (as defined in the agreements), the
Company will pay the officer two and one-half times the aggregate cash
compensation earned by the officer 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 officer 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 four 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 1999 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.
10
<PAGE> 14
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;
- 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 1999 based on a subjective determination of the Company's
overall performance during fiscal year 1998, including the increase in EBITDA
and operating cash flow. Bonuses earned by the executive officers in 1999 and
paid in 2000 were similarly based on the Company's overall performance in 1999.
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 1999 options to purchase an aggregate of 231,000 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 1999 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 1999, 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
1999 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
$136,000 in management fees for the fiscal year ended 1999.
11
<PAGE> 15
The Company has a note receivable from John H. Leavitt, Senior Vice
President of Sales and Marketing, with a balance of approximately $32,500 at
December 31, 1999. The note bears interest at 8.5% and is due in 2011.
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 1999 year. Based solely upon its review of the copies of such
forms received by it, the Company believes that, during fiscal year 1999, 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 graph compares the Common Stock with (a) the
Dow Jones Equity Market Index and (b) the Dow Jones Lodging Index. Furthermore,
the following graph assumes an investment of $100 on January 1, 1995 in each of
the Common Stock, the stocks comprising the Dow Jones Equity Market Index and
the Dow Jones Lodging Index.
COMPARISON OF 1995 THROUGH 1999 CUMULATIVE TOTAL RETURN
COMPARISON 1994 THROUGH 1999
<TABLE>
<CAPTION>
COMPANY STOCK INDEX INDUSTRY GROUP INDEX
------- ----------- --------------------
<S> <C> <C> <C>
1994 100 100 100
1995 133 134 123
1996 215 162 148
1997 272 213 205
1998 145 270 154
1999 118 321 152
</TABLE>
12
<PAGE> 16
FINANCIAL STATEMENTS
The Company's annual report to stockholders for the year ended December 31,
1999, 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, 1999 (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 2000 Annual Meeting will be held on or
about May 22, 2001. Proposals of stockholders submitted for consideration at the
2001 annual meeting of stockholders must be received by the Company not later
than December 14, 2000 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. 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
13
<PAGE> 17
PRIME HOSPITALITY CORP.
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY FOR ANNUAL MEETING MAY 23, 2000
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 Hilton Hasbrouck Heights, 650 Terrace Avenue, Hasbrouck Heights,
New Jersey 07604, on Tuesday, May 23, 2000, 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.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
ELECTION OF THE THREE NOMINEES AND "FOR" RATIFICATION OF THE INDEPENDENT
AUDITORS.
1. ELECTION OF THREE CLASS II DIRECTORS.
FOR nominees listed below [ ] N WITHHOLD authority to vote for nominees.
HERBERT LUST, II, JACK H. NUSBAUM AND LAWRENCE N. FRIEDLAND
FOR except vote withheld from the following nominee(s)
_____________________ .
2. RATIFICATION OF THE INDEPENDENT AUDITORS.
RATIFICATION of Ernst & Young LLP to serve as the Company's independent
auditors for the fiscal year ending December 31, 2000 [ ]
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued and to be signed, on other side)
<PAGE> 18
(continued from other side)
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 THREE NOMINEES AND FOR RATIFICATION OF THE
INDEPENDENT AUDITORS.
Dated: , 2000
--------------------------------
SIGNATURE
--------------------------------
SIGNATURE IF HELD JOINTLY
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.
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.
