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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __________)*
Promus Hotel Corporation
- ------------------------------------------------------------------------------
(Name of Issuer
Common Stock, par value $.01 per share
- ------------------------------------------------------------------------------
(Title of Class of Securities)
74342P 10 6
-----------------------------------------------------------
(CUSIP Number)
Michael M. Pastore, General Electric Investment Corporation, 3003 Summer
Street, Stamford, CT 06904, (203) 326-2312
Robert Healing, General Electric Company, 3135 Easton Turnpike, Fairfield CT
06431
- ------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notes and
Communications)
DECEMBER 19, 1997
-----------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. |_|
Check the following box if a fee is being paid with the statement. |_| (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SEC 1746 (12-91)
<PAGE>
SCHEDULE 13D
- ---------------------------- --------------------------
CUSIP NO. 74342P 10 6 PAGE 2 OF 94 PAGES
------------------
- ---------------------------- --------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
DTPT Investment Corporation
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX OF A MEMBER OF A GROUP*
(A) / /
(B) |X|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
STATE OF DELAWARE
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
-------------------------------------------------------------
8 SHARED VOTING POWER
NUMBER OF 2,890,287 (includes 262,753 shares issuable upon
SHARES exercise of warrants at any time before
BENEFICIALLY November 8, 2001)
OWNED BY
EACH -------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,890,287 (includes 262,753 shares issuable upon
exercise of warrants at any time before
November 8, 2001)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,890,287 (includes 262,753 shares issuable upon exercise of
warrants at any time before November 8, 2001)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
Page 2 of 94 Pages
<PAGE>
SCHEDULE 13D
- ---------------------------- -----------------------
CUSIP NO. 74342P 10 6 PAGE 3 OF 94 PAGES
------------------
- ---------------------------- -----------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GE Investment Hotel Partners I, Limited Partnership
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX OF A MEMBER OF A GROUP*
(A) / /
(B) |X|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR (e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
STATE OF DELAWARE
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
-------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 6,064,226
OWNED BY
EACH -------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
6,064,226
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,064,226
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
Page 3 of 94 Pages
<PAGE>
SCHEDULE 13D
- ---------------------------- ----------------------
CUSIP NO. 74342P 10 6 PAGE 4 OF 94 PAGES
------------------
- ---------------------------- ----------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GE Investment Management Incorporated
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX OF A MEMBER OF A GROUP*
(A) / /
(B) |X|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
STATE OF DELAWARE
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,755
-------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 6,064,226
OWNED BY
EACH -------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 1,755
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
6,064,226
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,065,981
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 4 of 94 Pages
<PAGE>
SCHEDULE 13D
- ---------------------------- -----------------------
CUSIP NO. 74342P 10 6 PAGE 5 OF 94 PAGES
------------------
- ---------------------------- -----------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
General Electric Company
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX OF A MEMBER OF A GROUP*
(A) / /
(B) |X|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Note applicable
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) |X|
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
STATE OF NEW YORK
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
Disclaimed (see 11 below)
-------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON Disclaimed (see 11 below)
WITH
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Beneficial ownership of all shares disclaimed by General
Electric Company
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Not applicable (see 11 above)
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
Page 5 of 94 Pages
<PAGE>
SCHEDULE 13D
- ---------------------------- -----------------------
CUSIP NO. 74342P 10 6 PAGE 6 OF 94 PAGES
------------------
- ---------------------------- -----------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Trustees of General Electric Pension Trust
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX OF A MEMBER OF A GROUP*
(A) / /
(B) |X|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
STATE OF NEW YORK
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
-------------------------------------------------------------
8 SHARED VOTING POWER
NUMBER OF
SHARES 3,027,521 (including 2,627,534 shares owned of record by
BENEFICIALLY a wholly owned subsidiary of the reporting person and
OWNED BY 262,753 shares issuable upon exercise of warrants owned
EACH by such subsidiary)
REPORTING
PERSON
WITH -------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,027,521 (including 2,627,534 shares owned of record by
a wholly owned subsidiary of the reporting person and
262,753 shares issuable upon exercise of warrants owned
by such subsidiary)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,027,521 (including 2,627,534 shares owned of record by a
wholly owned subsidiary of the reporting person and 262,753
shares issuable upon exercise of warrants owned by such
subsidiary)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
EP
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 6 of 94 Pages
<PAGE>
SCHEDULE 13D
- ---------------------------- ----------------------
CUSIP NO. 74342P 10 6 PAGE 7 OF 94 PAGES
------------------
- ---------------------------- ----------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
General Electric Investment Corporation
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX OF A MEMBER OF A GROUP*
(A) / /
(B) |X|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
STATE OF DELAWARE
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
-------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES 3,027,521
BENEFICIALLY
OWNED BY
EACH -------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,027,521
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,027,521
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
Page 7 of 94 Pages
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, par value $.01 per share
("Common Stock") of Promus Hotel Corporation (the "Issuer"), having its
principal executive offices at 755 Crossover Lane, Memphis, TN 38117.
The entities identified in the first paragraph of the response to
Item 2 (the "Reporting Persons") have entered into a Joint Filing Agreement,
dated December 29, 1997, a copy of which is attached hereto as Schedule I.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is filed on behalf of GE Investment Hotel Partners I,
Limited Partnership, a Delaware limited partnership ("GEHOP"), General Electric
Company, a New York corporation ("GE"), GE Investment Management Incorporated, a
Delaware corporation and a wholly owned subsidiary of GE ("GEIM"), Trustees of
General Electric Pension Trust, a New York common law trust ("GEPT"), General
Electric Investment Corporation, a Delaware corporation and a wholly owned
subsidiary of GE ("GEIC"), and DTPT Investment Corporation, a Delaware
corporation and a wholly owned subsidiary of GEPT ("DTPT"). GEIM is the general
partner of GEHOP. GEIC acts as an Investment Adviser to GEPT.
GEPT administers the pension assets held for the benefit of
employees of GE. DTPT acquires and holds title to property, collects income
therefrom and remits the entire amount of such income, less expenses, to an
organization exempt under Section 501(a) of the Internal Revenue Code of 1986.
GE is a diversified manufacturing and financial corporation. GEIM is a
registered investment adviser. GEIC is a registered investment adviser. GEHOP is
a limited partnership engaged in investing in hotel assets.
The address of the principal offices of GEHOP, GEPT, DTPT, GEIC and
GEIM is 3003 Summer Street, Stamford, Connecticut 06904. The address of the
principal offices of General Electric Company is 3135 Easton Turnpike, Fairfield
CT 06431.
For information with respect to the identity and principal
occupation of each (i) executive officer and director of the general partner of
GEHOP see Schedule II attached hereto; (ii) executive officer and director of
GEIM see Schedule II attached hereto; (iii) executive officer and director of GE
see Schedule III attached hereto; (iv) executive officer and director of DTPT
see Schedule IV attached hereto; (v) Trustee of GEPT see Schedule V attached
hereto; and (vi) executive officer and director of GEIC see Schedule VI attached
hereto.
Except as set forth below, during the last five years, neither any
Reporting Person nor, to the best knowledge of each Reporting Person, any person
identified in Schedules II, III, IV, V or VI has (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such a proceeding was or is subject to
a judgement, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
HER MAJESTY'S INSPECTORATE OF POLLUTION V. IGE MEDICAL SYSTEMS
LIMITED (St. Albans Magistrates Court, St. Albans, Hersfordshire, England, Case
No. 04/00320181).
In April, 1994, General Electric Medical System's U.K. subsidiary,
IGE Medical Systems Limited ("IGEMS") discovered the loss of a radioactive
barium source at the Radlett, England, facility. The lost source, used to
calibrate nuclear camera detectors, emits a very low level of radiation. IGEMS
immediately reported the loss as required by the U.K. Radioactive Substances
Act. An ensuing investigation, conducted in
Page 8 of 94 Pages
<PAGE>
cooperation with government authorities, failed to locate the source. On July
21, 1994, Her Majesty's Inspectorate of Pollution ("HMIP") charged IGEMS with
violating the Radioactive Substances Act by failing to comply with a condition
of registration. The Act provides that a registrant like IGEMS, which "does not
comply with a limitation or condition subject to which (it) is so
registered...shall be guilty of (a criminal) offense." Condition 7 of IGEMS'
registration states that it "shall so far as is reasonably practicable
prevent...loss of any registered source."
At the beginning of trial on February 24, 1995, IGEMS entered a
guilty plea and agreed to pay a fine of (pound)5,000 and assessed costs of
(pound)5,754. The prosecutor's presentation focused primarily on the 1991 change
in internal IGEMS procedures and, in particular, the source logging procedure.
The prosecutor complimented IGEMS' investigation and efforts to locate the
source and advised the court that IGEMS had no previous violations of the
Radioactive Substances Act. He also told the court that the Radlett plant had
been highlighted as an exemplary facility to HMIP inspectors as part of their
training. In mitigation, IGEMS emphasized the significant infrastructure and
expense undertaken by IGEMS to provide security for radiation sources and the
significant effort and expense incurred in attempting to locate the missing
source.
All Reporting Persons and, to the best knowledge of each
Reporting Person, all persons identified in Schedule II, III, IV, V and VI
are United States citizens, except Paolo Fresco, Vice Chairman of the Board
and an Executive Officer of GE, who is an Italian citizen, and Claudio X.
Gonzalez, a Director of GE, who is a Mexican citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION.
The Reporting Persons beneficially owned shares of common stock of
Doubletree Corporation, a Delaware corporation ("Doubletree"). GEHOP held an
option to purchase 20,000 shares (of which 15,000 vested) of Doubletree common
stock granted to it on June 30, 1994 ("GEHOP Option"). DTPT held warrants which
entitled it to purchase 262,753 shares of Doubletree common stock ("DTPT
Warrants"). On September 1, 1997, Doubletree, Promus Hotel Corporation ("Old
Promus"), and the Issuer (a newly formed corporation jointly owned by Doubletree
and Promus) entered into an Agreement and Plan of Merger (the "Merger
Agreement"), pursuant to which the Issuer formed two subsidiaries that merged
with and into Doubletree and Old Promus such that Doubletree and Old Promus
became wholly owned subsidiaries of the Issuer (the "Mergers"). Pursuant to the
Merger Agreement, upon the consummation of the Mergers on December 19, 1997, (i)
each outstanding share of common stock of Doubletree has been converted into the
right to receive one share of Common Stock of the Issuer, (ii) each
outstanding share of common stock of Old Promus has been converted into the
right to receive 0.925 shares of Common Stock of the Issuer, and (iii) each
outstanding warrant or option to purchase shares of Doubletree common stock or
Old Promus common stock has been converted into an option to purchase shares of
Common Stock of the Issuer on a 1:1 and 0.925:1 basis, respectively. As a
result of the foregoing, Doubletree and Old Promus became wholly owned
subsidiaries of the Issuer.
Pursuant to the Assignment and Assumption Agreement and Section 5.23
of the Merger Agreement, Doubletree assigned and transferred to the Issuer and
the Issuer assumed any and all rights and obligations Doubletree had under the
DTPT Warrants. Pursuant to the Merger Agreement, the Issuer assumed any and all
rights and obligations Doubletree had under the GEHOP Option.
Upon consummation of the Mergers, the shares of common stock of
Doubletree beneficially owned by the Reporting Persons prior to the Mergers were
converted into the shares of Common Stock of the Issuer on a 1:1 basis.
ITEM 4. PURPOSE OF TRANSACTION.
Page 9 of 94 Pages
<PAGE>
The Reporting Persons acquired the securities of the Issuer reported
herein as a result of the Mergers described in the first paragraph of Item 3.
The Reporting Persons intend to reexamine their investment in the
Issuer from time to time and, depending on market considerations and other
factors, may purchase or sell shares of Common Stock, if appropriate
opportunities to do so are available, on such terms and at such time as they
consider advisable.
Subject to the foregoing, the Reporting Persons do not have any
present plans or proposals which relate to or would result in:
(a) The acquisition by any person of additional securities of the Issuer, or
the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger, reorganization
or liquidation, involving the Issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer or any
of its subsidiaries;
(d) Any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number of
directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend policy of
the Issuer;
(f) Any other material change in the Issuer's business or corporate
structure;
(g) Changes in the Issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of
the Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted
in an inter-dealer quotation system of a registered national securities
association;
(i) A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934, as amended; or
(j) Any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
According to the latest information received from the Issuer,
presently there are 85,992,425 shares of Common Stock outstanding. The Reporting
Persons together beneficially own an aggregate of 9,093,402 shares of Common
Stock (including 262,753 shares issuable upon exercise of the DTPT Warrants and
15,000 shares issuable upon exercise of the GEHOP Option), or 10.5% of the total
number of shares of Common Stock outstanding.
(a) DTPT has shared voting and dispositive power over 2,890,287 shares of
Common Stock, representing 3.3% of the total number of outstanding
shares of Common Stock of the Issuer. This number includes 2,627,534
shares of Common Stock received by DTPT on December 19, 1997, in
exchange for 2,627,534 shares of common stock of Doubletree and 262,753
shares issuable upon exercise of the DTPT Warrants assumed by the Issuer
pursuant to the Merger Agreement and Assignment and Assumption
Agreement.
Page 10 of 94 Pages
<PAGE>
GEPT has shared voting and dispositive power over 3,027,421 shares of
Common Stock, representing 3.5% of the total number of outstanding
shares of Common Stock of the Issuer. This number includes 2,890,287
shares of Common Stock beneficially owned by DTPT, which is a wholly
owned subsidiary of GEPT, as well as 137,134 shares of Common Stock held
by GEPT directly. GEIC, as the Investment Adviser of GEPT, has shared
voting and dispositive power over the shares beneficially owned by GEPT.
GEHOP has shared voting and dispositive power over 6,064,226 shares of
Common Stock, representing 7% of the total number of outstanding shares
of Common Stock of the Issuer. This number includes 6,049,226 shares of
Common Stock held by GEHOP and 15,000 shares subject to the vested
portion of the GEHOP Option assumed by the Issuer pursuant to the Merger
Agreement. GEIM, the General Partner of GEHOP, has sole voting and
dispositive power over 1,755 shares of Common Stock, representing less
than 0.1% of the total number of outstanding shares of Common Stock of
the Issuer and shares voting and dispositive power over 6,064,226 shares
of Common Stock held by GEHOP.
GE expressly disclaims beneficial ownership of the shares of Common
Stock held beneficially and of record by GEIM, GEHOP, GEPT, GEIC and
DTPT. GEIM and GEHOP expressly disclaim ownership of shares held by
GEPT, DTPT and GEIC. GEPT, DTPT and GEIC expressly disclaim ownership of
shares held by GEIM and GEHOP.
(b) To the best knowledge of the Reporting Persons, no person other than the
Reporting Persons has voting or dispositive power over the securities
which any of the Reporting Persons may be deemed to beneficially own,
except that (i) GEHOP and GEIM, its General Partner, share voting and
dispositive power over the shares held by GEHOP; (ii) GEPT and DTPT, its
wholly owned subsidiary, share voting and dispositive power over the
shares held by DTPT; and (iii) GEPT and GEIC, its Investment Adviser,
share voting and dispositive power over the shares beneficially owned by
GEPT.
(c) Except for the transactions effected by the Reporting Persons on
December 19, 1997 pursuant to the Merger Agreement, no Reporting Person
has effected any transaction in shares of Common Stock during the
preceding sixty days and to the best knowledge of each Reporting Person,
no person identified in Schedules II, III, IV, V or VI, beneficially
owns any shares of Common Stock or has effected any transaction in
shares of Common Stock during the preceding sixty days.
(d) No other person except for the Reporting Persons are known to have the
rights to receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of, the shares of Common Stock
beneficially owned by the Reporting Persons and covered by this Schedule
13D.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONS WITH RESPECT TO
SECURITIES OF THE ISSUER.
There are no contracts, arrangements, understandings or
relationships, except the Letters of Affiliates (a copy of which is attached
hereto as Exhibit 1), the Promus Hotel Corporation Registration Rights
Agreement (a copy of which is attached hereto as Exhibit 2), the Assignment
and Assumption Agreement (a copy of which is attached hereto as Exhibit 3),
the DTPT Warrant Certificate (a copy of which is attached hereto as Exhibit
4), and the original GEHOP Option granted to GEHOP by Doubletree (a copy of
which is attached hereto as Exhibit 5), among GEHOP, GEIM, GE, GEPT, GEIC or
DTPT or, to the best of their knowledge, any executive officer or director of
any of them and any other person with respect to any securities of the
Issuer, including any contract, arrangement, understanding or relationship
concerning the transfer or the voting of any securities of the Issuer,
finders fees, joint ventures, loan or option arrangements, puts or calls,
guarantees or profits, division of profits or loss, or the giving or
withholding of parcels.
Page 11 of 94 Pages
<PAGE>
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 Letters of Affiliates
Exhibit 2 Promus Hotel Company Registration Rights Agreement
Exhibit 3 Assignment and Assumption Agreement
Exhibit 4 Warrant Certificate
Exhibit 5 Option to purchase 20,000 shares of Common Stock held by GEHOP
Page 12 of 94 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
GE INVESTMENT HOTEL PARTNERS I,
LIMITED PARTNERSHIP
By: GE Investment Management Incorporated, Its General
Partner
By: /s/ Michael M. Pastore
----------------------------------------
Name: Michael M. Pastore
Title: Vice President
Dated: December 29, 1997
Page 13 of 94 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
GENERAL ELECTRIC COMPANY
By: /s/ John H. Myers
--------------------------------
Name: John H. Myers
Title: Vice President
Dated: December 29, 1997
Page 14 of 94 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
GE INVESTMENT MANAGEMENT INCORPORATED
By: /s/ Michael M. Pastore
---------------------------------
Name: Michael M. Pastore
Title: Vice President
Dated: December 29, 1997
Page 15 of 94 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
GENERAL ELECTRIC PENSION TRUST
By: General Electric Investment Corporation,
Its Investment Adviser
By: /s/ Michael M. Pastore
-------------------------------
Name: Michael M. Pastore
Title: Vice President
Dated: December 29, 1997
Page 16 of 94 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
DTPT INVESTMENT CORPORATION
By: /s/ Michael M. Pastore
-------------------------------
Name: Michael M. Pastore
Title: Vice President
Dated: December 29, 1997
Page 17 of 94 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
GENERAL ELECTRIC INVESTMENT CORPORATION
By: /s/ Michael M. Pastore
-------------------------------
Name: Michael M. Pastore
Title: Vice President
Dated: December 29, 1997
Page 18 of 94 Pages
<PAGE>
Schedule I
JOINT FILING AGREEMENT
The undersigned parties hereby agree that the Schedule 13D filed
herewith (and any amendments thereto) relating to Common Stock of Promus Hotel
Corporation is being filed jointly with the Securities and Exchange Commission
pursuant to Section 13-d-1(f) on behalf of each such person.
Dated: December 29, 1997
GE INVESTMENT HOTEL PARTNERS,
LIMITED PARTNERSHIP
By: GE Investment Management Incorporated, Its
General Partner
By: /s/ Michael M. Pastore
-------------------------------
Name: Michael M. Pastore
Title: Vice President
GENERAL ELECTRIC COMPANY
By: /s/ John M. Myers
--------------------------------------
Name: John M. Myers
Title: Vice President
GE INVESTMENT MANAGEMENT
INCORPORATED
By: /s/ Michael M. Pastore
--------------------------------------
Name: Michael M. Pastore
Title: Vice President
TRUSTEES OF GENERAL ELECTRIC PENSION TRUST
By: General Electric Investment
Corporation, Its Investment Adviser
By: /s/ Michael M. Pastore
--------------------------------------
Name: Michael M. Pastore
Title: Vice President
Page 19 of 94 Pages
<PAGE>
DTPT INVESTMENT CORPORATION
By: /s/ Michael M. Pastore
--------------------------------------
Name: Michael M. Pastore
Title: Vice President
GENERAL ELECTRIC INVESTMENT CORPORATION
By: /s/ Michael M. Pastore
--------------------------------------
Name: Michael M. Pastore
Title: Vice President
Page 20 of 94 Pages
<PAGE>
Schedule II
GE INVESTMENT MANAGEMENT INCORPORATED, General Partner of GE
Investment Hotel Partners I, Limited Partnership
The business address of each of the persons listed below is 3003
Summer Street, P.O. Box 7900, Stamford, Connecticut 06904.
The names and principal occupations of the Officers of GE Investment
Management Incorporated ("GEIM") are as follows:
OFFICERS POSITION(S)
John H. Myers Chairman of the Board and President
Eugene K. Bolton Executive Vice President
Michael J. Cosgrove Executive Vice President
Ralph R. Layman Executive Vice President
Alan M. Lewis Executive Vice President, General Counsel
and Secretary
Robert A. MacDougall Executive Vice President
Geoffrey R. Norman Executive Vice President
Thomas J. Szkutak Executive Vice President - Chief
Financial Officer
Donald W. Torey Executive Vice President
Mark A. Dunham Senior Vice President
Ronald I. Felmus Senior Vice President
H. Michael Mears Senior Vice President
Philip A. Mercurio Senior Vice President
Philip A. Riordan Senior Vice President
Steven M. Beringer Vice President
Brian D. Brooks Vice President
Mark A. Davis Vice President
Page 21 of 94 Pages
<PAGE>
Constance K. Doyle Vice President
Gerald M. Goz Vice President
Michael E. Hogan Vice President
Christopher P. Mullahy Vice President
Keith G. Smith Vice President
Sheila M. Welsh Vice President
Matthew J. Witkos Vice President
Michael D. Wright Vice President
William R. Wright Vice President
Robert Bernstein Regional Vice President
Frank E. Calvaruso Regional Vice President
Robert P. Mulligan Regional Vice President
Kevin J. Sheehan Regional Vice President
Jeanne M. La Porta Vice President and Assistant Secretary
Michael M. Pastore Vice President and Assistant
Secretary
Scott A. Silberstein Vice President and Assistant
Secretary
Matthew J. Simpson Vice President and Assistant
Secretary
Michael J. Strone Vice President and Assistant Secretary
Robert Zalucki Vice President - Tax Counsel
The names and principal occupations of the Directors of GEIM are as
follows:
Eugene K. Bolton Executive Vice President of
GEIC and GEIM and Trustee of GEPT
Michael J. Cosgrove Executive Vice President of GEIC and
GEIM and Trustee of GEPT
Page 22 of 94 Pages
<PAGE>
John H. Myers Vice President of General Electric
Company, Chairman of the Board and
President of GEIC and GEIM and Trustee
of GEPT
Ralph R. Layman Executive Vice President of GEIC and
GEIM and Trustee of GEPT
Alan M. Lewis Executive Vice President, General
Counsel and Secretary of GEIC and GEIM
and Trustee of GEPT
Robert A. MacDougall Executive Vice President of GEIC and
GEIM and Trustee of GEPT
Geoffrey R. Norman Executive Vice President of GEIC and
GEIM
Thomas J. Szkutak Executive Vice President - Finance and
Administration of GEIC and Executive
Vice President - Chief Financial Officer
of GEIM and Trustee of GEPT
Donald W. Torey Executive Vice President of GEIC and
GEIM and Trustee of GEPT
Page 23 of 94 Pages
<PAGE>
SCHEDULE III
GENERAL ELECTRIC COMPANY EXECUTIVE OFFICERS
The business address of each of the persons listed below is 3135
Easton Turnpike, Fairfield, Connecticut 06431.
The names and principal occupations of the Officers of General
Electric Company are as follows:
OFFICERS POSITION(S)
J.F. Welch, Jr. Chairman of the Board and Chief Executive Officer
P. Fresco Vice Chairman of the Board and Executive Officer
P.D. Ameen Vice President and Comptroller
J.R. Bunt Vice President and Treasurer
D.L. Calhoun Vice President - GE Transportation Systems
W.J. Conaty Senior Vice President - Human Resources
D.M. Cote Vice President - GE Appliances
D.D. Dammerman Senior Vice President - Finance
L.S. Edelheit Senior Vice President - Corporate Research and
Development
B.W. Heineman, Jr. Senior Vice President - General Counsel and
Secretary
J.R. Immelt Senior Vice President - GE Medical Systems
W.J. Lansing Vice President - Corporate Business Development
W.J. McNerney, Jr. Senior Vice President - GE Lighting
E.F. Murphy Senior Vice President - GE Aircraft Engines
R.L. Nardelli Senior Vice President - GE Power Systems
R.W. Nelson Vice President - Corporate Financial Planning and
Analysis
J.D. Opie Vice Chairman of the Board and Executive Officer
G.M. Reiner Senior Vice President - Chief Information Officer
G.L. Rogers Senior Vice President - GE Plastics
Page 24 of 94 Pages
<PAGE>
J.W. Rogers Vice President - GE Motors
L.G. Trotter Vice President - GE Electrical Distribution
and Control
The names and principal occupations of Directors of General Electric
Company are as follows:
D.W. Calloway Chairman of the Board, Chief
Executive Officer and Director,
PepsiCo, Inc.
S.S. Cathcart Retired Chairman, Illinois Tool Works
D.D. Dammerman Senior Vice President-Finance,
General Electric Company
P. Fresco Vice Chairman of the Board and
Executive Officer, General Electric
Company
C.X. Gonzalez Vice Chairman of the Board and
Managing Director, Kimberly-Clark de
Mexico, S.A. de C.V.
R.E. Mercer Retired Chairman of the Board and
former Director, the Goodyear Tire &
Rubber Company
G.G. Michelson Former Director, Federated Department
Stores
J.O. Opie Vice Chairman of the Board and
Executive Officer, General Electric
Company
R.S. Penske President, Penske Corporation
B.S. Prieskel Former Senior Vice President, Motion
Picture Association of America
F.H.T. Rhodes President Emeritus, Cornell University
A.C. Sigler Retired Chairman of the Board and CEO
and former Director, Champion
International Corporation
D.A. Warner III Chairman of the Board, President, and
Chief Executive Officer, J.P. Morgan
& Co. Incorporated and Morgan
Guaranty Trust Company
J.F. Welch, Jr. Chairman of the Board and Chief
Executive Officer, General Electric
Company
CITIZENSHIP
(other than United States)
C.X. Gonzalez Mexico
P. Fresco Italy
Page 25 of 94 Pages
<PAGE>
Schedule IV
DTPT INVESTMENT CORPORATION
The business address of each of the persons listed below is 3003
Summer Street, P.O. Box 7900, Stamford, Connecticut 06904.
The names and principal occupations of each of the Executive
Officers of DTPT Investment Corporation are as follows:
Donald W. Torey President
Robert J. Zalucki Vice President and Assistant
Secretary and Assistant Treasurer
David W. Wiederecht Vice President and Treasurer
Michael M. Pastore Vice President and Secretary
The names and principal occupations of each of the directors of DTPT
Investment Corporation are as follows:
Alan M. Lewis Executive Vice President, General
Counsel and Secretary of GEIM and
GEIC, Trustee of GEPT
Donald W. Torey Executive Vice President of GEIM and
GEIC, Trustee of GEPT
Page 26 of 94 Pages
<PAGE>
SCHEDULE V
GENERAL ELECTRIC PENSION TRUST
The business address of each of the persons listed below is 3003
Summer Street, P.O. Box 7900, Stamford, Connecticut 06904.
The names and principal occupations of each of the Trustees of the
General Electric Pension Trust are as follows:
Eugene K. Bolton Executive Vice President of GEIC
and GEIM
Michael J. Cosgrove Executive Vice President of GEIC
and GEIM
John H. Myers Vice President of General Electric
Company, Chairman of the Board and
President of GEIC and GEIM
Ralph R. Layman Executive Vice President of GEIC and
GEIM
Alan M. Lewis Executive Vice President, General
Counsel and Secretary of GEIC and GEIM
Robert A. MacDougall Executive Vice President of GEIC
and GEIM
Thomas J. Szkutak Executive Vice President of GEIC
and GEIM
Donald W. Torey Executive Vice President of GEIC
and GEIM
Page 27 of 94 Pages
<PAGE>
Schedule VI
GENERAL ELECTRIC INVESTMENT CORPORATION
3003 Summer Street, P.O. Box 7900
Stamford, Connecticut 06904
The business address of each of the persons listed below is 3003 Summer
Street, P.O. Box 7900, Stamford, Connecticut 06904.
The names and principal occupations of the Officers of General Electric
Investment Corporation are as follows:
John H. Myers Chairman of the Board and President
Eugene K. Bolton Executive Vice President - Domestic
Equity Investments
Michael J. Cosgrove Executive Vice President
Ralph R. Layman Executive Vice President
Alan M. Lewis Executive Vice President, General
Counsel and Secretary
Robert A. MacDougall Executive Vice President
Geoffrey R. Norman Executive Vice President
Thomas J. Szkutak Executive Vice President
Donald W. Torey Executive Vice President
Peter J. Hathaway Senior Vice President
Elaine G. Harris Senior Vice President
Paul C. Reinhardt Senior Vice President
Christopher W. Smith Senior Vice President
David B. Carlson Senior Vice President
Christopher D. Brown Senior Vice President
Richard L. Sanderson Senior Vice President
Philip A. Mercurio Senior Vice President
Robert R. Kaelin Senior Vice President
Philip A. Riordan Senior Vice President
Stephen B. Hoover Senior Vice President
Judith A. Studer Senior Vice President
Page 28 of 94 Pages
<PAGE>
Brian Hopkinson Senior Vice President
Michael J. Caufield Senior Vice President
James M. Mara Senior Vice President
Makoto F. Sumino Vice President
Daniel J. Barker Vice President
Michael J. Solecki Vice President
Daizo Motoyoshi Vice President
Damian J. Maroun Vice President
Gerald L. Igou Vice President
Tara K. Holbrook Vice President
Ralph E. Whitman Vice President
Jane E. Hackney Vice President
Heather A. Kang Vice President
Anthony J. Sirabella Vice President
Jeffrey A. Groh Vice President
Andrew C. Warren Vice President
Stella V. Lou Vice President
William R. Wright Vice President
David J. Beck Vice President
Robert W. Aufiero Vice President
Kathleen S. Brooks Vice President
William M. Healey Vice President
Michael A. Sullivan Vice President
Susan M. Courtney Vice President
B. Bradford Barrett Vice President
Robert P. Gigliotti Vice President
Preston R. Sargent Vice President
David W. Wiederecht Vice President
Wolfe H. Bragin Vice President
Page 29 of 94 Pages
<PAGE>
Andreas T. Hildebrand Vice President
Anthony J. Mariani Vice President
Jeanne M. La Porta Vice President, General Counsel and
Assistant Secretary
Michael M. Pastore Vice President, Associate General
Counsel and Assistant Secretary
Scott A. Silberstein Vice President, Associate General
Counsel and Assistant Secretary
Matthew J. Simpson Vice President, Associate General
Counsel and Assistant Secretary
Michael J. Strone Vice President, Associate General
Counsel and Assistant Secretary
Robert J. Zalucki Vice President - Tax Counsel
The names and principal occupations of the Directors of GEIC are as
follows:
Eugene K. Bolton Executive Vice President of GEIC and
GEIM and Trustee of GEPT
Michael J. Cosgrove Executive Vice President of GEIC and
GEIM and Trustee of GEPT
John H. Myers Vice President of General Electric
Company, Chairman of the Board and
President of GEIC and GEIM and Trustee
of GEPT
Ralph R. Layman Executive Vice President of GEIC and
GEIM and Trustee of GEPT
Alan M. Lewis Executive Vice President, General
Counsel and Secretary of GEIC and GEIM
and Trustee of GEPT
Robert A. MacDougall Executive Vice President of GEIC and
GEIM and Trustee of GEPT
Geoffrey R. Norman Executive Vice President of GEIC and
GEIM
Thomas J. Szkutak Executive Vice President - Finance and
Administration of GEIC and Executive
Vice President - Chief Financial Officer
of GEIM and Trustee of GEPT
Donald W. Torey Executive Vice President of GEIC and
GEIM and Trustee of GEPT
Page 30 of 94 Pages
<PAGE>
EXHIBIT 1
October 24, 1997
Parent Holding Corp.
755 Crossover Lane
Memphis, TN 38117
Attention: Ralph B. Lake
Ladies and Gentlemen:
The undersigned has been advised that, as of the date of this
letter, he may be deemed to be an "affiliate" of Doubletree Corporation, a
Delaware corporation ("Doubletree"), as the term "affiliate" is (i) defined for
purposes of paragraphs (c) and (d) of Rule 145 of the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and/or
(ii) used in, and for purposes of, Accounting Series, Releases 130 and 135, as
amended, of the Commission. Pursuant to the terms of the Agreement and Plan of
Merger dated as of September 1, 1997 (the "Agreement"), by and among Doubletree,
Parent Holding Corp., a Delaware corporation ("Parent"), and Promus Hotel
Corporation, a Delaware corporation ("Promus"), a wholly-owned subsidiary of
Parent will be merged with and into Doubletree (the "Doubletree Merger"), and
another wholly-owned subsidiary of Parent will be merged with and into Promus
(the "Promus Merger" and, together with the Doubletree Merger, the "Mergers"),
such that Doubletree and Promus will become wholly-owned subsidiaries of Parent.
As a result of the Mergers, the undersigned may receive shares of
common stock, par value $0.01 per share, of Parent (such common stock, along
with associated purchase rights, collectively referred to as the "Parent Common
Stock") in exchange for shares owned by him of common stock, par value $0.01 per
share, of Doubletree (the "Doubletree Common Stock").
The undersigned represents, covenants and warrants to, and agrees
with, Parent as set forth below and recognizes that Doubletree, Parent and
Promus are relying upon this letter in consummating the Mergers.
1. COMPLIANCE WITH THE ACT. In compliance with the Act and the Rules and
Regulations thereunder, the undersigned represents, warrants and covenants that:
(a) The undersigned shall not make any sale, transfer or other
disposition of Parent Common Stock in violation of the Act or Rules and
Regulations.
Page 31 of 94 Pages
<PAGE>
(b) The undersigned has carefully read this letter and the Agreement and
discussed the requirements of such documents and other applicable limitations
upon his ability to sell, transfer or otherwise dispose of the Parent Common
Stock to the extent the undersigned felt necessary, with his counsel or counsel
for Doubletree.
(c) The undersigned has been advised that the issuance of Parent Common
Stock to him pursuant to the Agreement has been registered with the Commission
under the Act on a Registration Statement on Form S-4. However, the undersigned
has also been advised that, since at the time the Doubletree Merger was
submitted for a vote of the stockholders of Doubletree, the undersigned may be
deemed to have been an affiliate of Doubletree and the distribution by him of
the Parent Common Stock has not been registered under the Act, the undersigned
may not sell, transfer or otherwise dispose of the Parent Common Stock issued to
him in the Doubletree Merger unless (i) such sale, transfer or other disposition
has been registered under the Act, (ii) such sale, transfer or other disposition
is made in conformity with Rule 145 promulgated by the Commission under the Act,
or (iii) in the opinion of counsel reasonably acceptable to Parent, or pursuant
to a "no action" letter obtained by the undersigned from the staff of the
Commission, such sale, transfer or other disposition is otherwise exempt from
registration under the Act.
(d) The undersigned understands that, except as may be provided in any
registration rights agreement entered into by Parent and the undersigned, Parent
is under no obligation to register the sale, transfer or other disposition of
the Parent Common Stock by him or on his behalf under the Act or to take any
other action necessary in order to make compliance with an exemption from such
registration available.
(e) The undersigned also understands that stop transfer instructions
will be given to Parent's transfer agents with respect to the Parent Common
Stock and that there will be placed on the certificates for the Parent Common
Stock issued to him, or any substitutions therefor, a legend stating in
substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION
TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES AND
MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933."
(f) The undersigned also understands that unless the transfer by him of
his Parent Common Stock has been registered under the Act or is a sale made in
conformity with Rule 145, Parent reserves the right to put the following legend
on the certificates issued to his transferee:
Page 32 of 94 Pages
<PAGE>
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM A PERSON WHO RECEIVED
SUCH SHARES IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
SECURITIES ACT OF 1933 APPLIES. THE SHARES HAVE BEEN ACQUIRED BY THE
HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 AND
MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933."
It is understood and agreed that the legends set forth in paragraphs
(e) and (f) above will be removed by delivery of substitute certificates without
such legend if such legend is not required for purposes of the Act or this
letter agreement. It is understood and agreed that such legends and the stop
orders referred to above will be removed if (i) one year shall have lapsed from
the date the undersigned acquired the Parent Common Stock received in the
Doubletree Merger and the provisions of Rule 145(d)(2) are then available to the
undersigned, (ii) two years shall have elapsed from the date the undersigned
acquired the Parent Common Stock received in the Doubletree Merger and the
provisions of Rule 145(d)(3) are then available to the undersigned, or (iii)
Parent has received either an opinion of counsel, which opinion and counsel
shall be reasonably satisfactory to Parent, or a "no action" letter obtained by
the undersigned from the staff of the Commission, to the effect that the
restrictions imposed by Rule 145 under the Act no longer apply to the
undersigned.
2. POOLING REQUIREMENTS. The undersigned will not sell, assign, transfer
or otherwise dispose of or encumber (i) any shares of Doubletree Common Stock,
whether now owned or hereafter acquired by the undersigned, (ii) any options,
warrants, or other rights to receive such stock, whether now owned or hereafter
acquired by the undersigned (or exercise such pursuant to any cashless exercise
provisions thereof), (iii) any shares of Parent Common Stock, whether now owned
or hereafter acquired by the undersigned or (iv) any options, warrants, or other
rights to receive such Parent Common Stock, whether now owned or hereafter
acquired by the undersigned (or exercise such pursuant to any cashless exercise
provisions hereof), in each of the foregoing cases, from 30 days prior to the
closing of the Mergers until such time as results covering at least 30 days of
combined operations of Doubletree and Promus have been published by Parent in
the form of a quarterly earnings report, an effective registration statement
filed with the Commission, a report to the Commission on Form 10-K, 10-Q or 8-K,
or any other public filing or announcement which includes the combined results
of operations.
3. CERTAIN TAX MATTERS. In connection with the qualification of the
receipt of Parent Common Stock in the Doubletree Merger as a reorganization
described in Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and/or, taken together with the Promus Merger, a transfer of
property to Parent by holders of
Page 33 of 94 Pages
<PAGE>
Doubletree Common Stock described in Section 351 of the Code, the undersigned
hereby represents and warrants to Parent as follows:
(a) The undersigned is currently the owner of that number of shares
of Doubletree Common Stock set forth on Schedule "A" attached hereto and has not
acquired or made any Sale (as defined below) of Doubletree Common Stock since
October 24, 1997 or otherwise in contemplation of the Mergers. These shares
constitute the entire interest of the undersigned (as defined below).
(b) Except with respect to (i) the exchange of Doubletree Common
Stock for Parent Common Stock pursuant to the Doubletree Merger, the undersigned
has no current plan or intent to engage in any Sale (as defined below) of any
Doubletree Common Stock on, or prior to, the Doubletree Merger.
(c) The undersigned has no current plan or intent to engage in a
sale, exchange, transfer, pledge, distribution (including a distribution by a
partnership to its partners or by a corporation to its stockholders), redemption
or any other transaction which reduces in any way the undersigned's risk of
ownership, by short sale or otherwise, or other disposition, directly or
indirectly (collectively, a "Sale"), with respect to any of the Parent Common
Stock to be received by the undersigned in the Doubletree Merger.
(d) The undersigned is not aware of, or participating in, any plan
or intent on the part of Doubletree's stockholders (a "Plan") to engage in sales
of Parent Common Stock to be issued in Doubletree Merger such that the aggregate
fair market value, as of the Effective Time of the shares subject to such Sales
would exceed twenty percent (20%) of the aggregate fair market value of all
shares of Doubletree Common Stock outstanding immediately prior to the
Doubletree Merger (the "Outstanding Doubletree Stock"). A Sale of Parent Common
Stock shall be considered to have occurred pursuant to a Plan if, among other
things, such Sale occurs in a transaction that is in contemplation of, or
related to, the Mergers or the Agreement (a "Related Transaction").
Additionally, for purposes of the foregoing, shares of Doubletree Common Stock
with respect to which a pre-Doubletree Merger Sale occurs in a Related
Transaction, shall be considered to be shares of Outstanding Doubletree Stock
that are exchanged for shares of Parent Common Stock which are disposed of
pursuant to a Plan.
(e) Notwithstanding the foregoing provisions, the undersigned
acknowledges that he will hold the Parent Common Stock with an investment intent
and, therefore, in the event of a change of circumstances (including a change in
financial circumstances or a change in value of Parent Common Stock), the
undersigned may at some time in the future engage in a Sale of some or all of
his shares of Parent Common Stock. The undersigned does not intend to take a
position on any federal or state income tax return that is inconsistent with the
treatment of the receipt of Parent Common Stock in the Doubletree Merger as a
reorganization described in Section 368(a) of the Code and/or, taken together
with the Promus Merger, a transfer of property to Parent by holders of
Doubletree Common Stock described in Section 351 of the Code.
Page 34 of 94 Pages
<PAGE>
(f) The undersigned shall immediately notify Parent in writing via
facsimile if, at any time prior to the Effective Time, any of the foregoing
representations are untrue.
The representation, covenants and agreements contained herein shall
be true and correct at all times from the date hereof. The obligations of the
undersigned thereunder shall attach to and be binding upon any person or entity
to whom legal or beneficial ownership of the undersigned's shares of Doubletree
Common Stock (and shares of Parent Common Stock following the Doubletree Merger)
shall pass by operation of law or otherwise.
The execution and delivery to you of this letter agreement shall not
be deemed an admission that the undersigned is an "affiliate" of Doubletree as
described in the first paragraph of this letter or as a waiver of any rights the
undersigned may have to object to any claim that the undersigned is such an
affiliate on or after the date of this letter.
TRUSTEES OF GENERAL ELECTRIC
PENSION TRUST
By: /s/ Donald W. Torey
-------------------------
Name: Donald W. Torey
Title: Trustee
Agreed to and accepted this
25TH day of OCTOBER, 1997
PARENT HOLDING CORP.
By: /s/ Richard M. Kelleher
-----------------------------
Name: Richard M. Kelleher
Title: President & COO
Page 35 of 94 Pages
<PAGE>
October 24, 1997
Parent Holding Corp.
755 Crossover Lane
Memphis, TN 38117
Attention: Ralph B. Lake
Ladies and Gentlemen:
The undersigned has been advised that, as of the date of this
letter, it may be deemed to be an "affiliate" of Doubletree Corporation, a
Delaware corporation ("Doubletree"), as the term "affiliate" is (i) defined for
purposes of paragraphs (c) and (d) of Rule 145 of the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and/or
(ii) used in, and for purposes of, Accounting Series, Releases 130 and 135, as
amended, of the Commission. Pursuant to the terms of the Agreement and Plan of
Merger dated as of September 1, 1997 (the "Agreement"), by and among Doubletree,
Parent Holding Corp., a Delaware corporation ("Parent"), and Promus Hotel
Corporation, a Delaware corporation ("Promus"), a wholly-owned subsidiary of
Parent will be merged with and into Doubletree (the "Doubletree Merger"), and
another wholly-owned subsidiary of Parent will be merged with and into Promus
(the "Promus Merger" and, together with the Doubletree Merger, the "Mergers"),
such that Doubletree and Promus will become wholly-owned subsidiaries of Parent.
As a result of the Mergers, the undersigned may receive shares of
common stock, par value $0.01 per share, of Parent (such common stock, along
with associated purchase rights, collectively referred to as the "Parent Common
Stock") in exchange for shares owned by it of common stock, par value $0.01 per
share, of Doubletree (the "Doubletree Common Stock").
The undersigned represents, covenants and warrants to, and agrees
with, Parent as set forth below and recognizes that Doubletree, Parent and
Promus are relying upon this letter in consummating the Mergers.
1. COMPLIANCE WITH THE ACT. In compliance with the Act and the Rules and
Regulations thereunder, the undersigned represents, warrants and covenants that:
(a) The undersigned shall not make any sale, transfer or other
disposition of Parent Common Stock in violation of the Act or Rules and
Regulations.
(b) The undersigned has carefully read this letter and the Agreement
and discussed the requirements of such documents and other applicable
limitations upon
Page 36 of 94 Pages
<PAGE>
its ability to sell, transfer or otherwise dispose of the Parent Common Stock to
the extent the undersigned felt necessary, with its counsel or counsel for
Doubletree.
(c) The undersigned has been advised that the issuance of Parent
Common Stock to it pursuant to the Agreement has been registered with the
Commission under the Act on a Registration Statement on Form S-4. However, the
undersigned has also been advised that, since at the time the Doubletree Merger
was submitted for a vote of the stockholders of Doubletree, the undersigned may
be deemed to have been an affiliate of Doubletree and the distribution by it of
the Parent Common Stock has not been registered under the Act, the undersigned
may not sell, transfer or otherwise dispose of the Parent Common Stock issued to
it in the Doubletree Merger unless (i) such sale, transfer or other disposition
has been registered under the Act, (ii) such sale, transfer or other disposition
is made in conformity with Rule 145 promulgated by the Commission under the Act,
or (iii) in the opinion of counsel reasonably acceptable to Parent, or pursuant
to a "no action" letter obtained by the undersigned from the staff of the
Commission, such sale, transfer or other disposition is otherwise exempt from
registration under the Act.
(d) The undersigned understands that, except as may be provided in
any registration rights agreement entered into by Parent and the undersigned,
Parent is under no obligation to register the sale, transfer or other
disposition of the Parent Common Stock by it or on its behalf under the Act or
to take any other action necessary in order to make compliance with an exemption
from such registration available.
(e) The undersigned also understands that stop transfer instructions
will be given to Parent's transfer agents with respect to the Parent Common
Stock and that there will be placed on the certificates for the Parent Common
Stock issued to it, or any substitutions therefor, a legend stating in
substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION
TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES AND
MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933."
(f) The undersigned also understands that unless the transfer by it
of its Parent Common Stock has been registered under the Act or is a sale made
in conformity with Rule 145, Parent reserves the right to put the following
legend on the certificates issued to its transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM A PERSON WHO RECEIVED
SUCH SHARES IN A TRANSACTION TO WHICH RULE 145
Page 37 of 94 Pages
<PAGE>
PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES. THE SHARES HAVE BEEN
ACQUIRED BY THE HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION
WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF
1933 AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933."
It is understood and agreed that the legends set forth in paragraphs
(e) and (f) above will be removed by delivery of substitute certificates without
such legend if such legend is not required for purposes of the Act or this
letter agreement. It is understood and agreed that such legends and the stop
orders referred to above will be removed if (i) one year shall have lapsed from
the date the undersigned acquired the Parent Common Stock received in the
Doubletree Merger and the provisions of Rule 145(d)(2) are then available to the
undersigned, (ii) two years shall have elapsed from the date the undersigned
acquired the Parent Common Stock received in the Doubletree Merger and the
provisions of Rule 145(d)(3) are then available to the undersigned, or (iii)
Parent has received either an opinion of counsel, which opinion and counsel
shall be reasonably satisfactory to Parent, or a "no action" letter obtained by
the undersigned from the staff of the Commission, to the effect that the
restrictions imposed by Rule 145 under the Act no longer apply to the
undersigned.
2. POOLING REQUIREMENTS. The undersigned will not sell, assign, transfer
or otherwise dispose of or encumber (i) any shares of Doubletree Common Stock,
whether now owned or hereafter acquired by the undersigned, (ii) any options,
warrants, or other rights to receive such stock, whether now owned or hereafter
acquired by the undersigned (or exercise such pursuant to any cashless exercise
provisions thereof), (iii) any shares of Parent Common Stock, whether now owned
or hereafter acquired by the undersigned or (iv) any options, warrants, or other
rights to receive such Parent Common Stock, whether now owned or hereafter
acquired by the undersigned (or exercise such pursuant to any cashless exercise
provisions hereof), in each of the foregoing cases, from 30 days prior to the
closing of the Mergers until such time as results covering at least 30 days of
combined operations of Doubletree and Promus have been published by Parent in
the form of a quarterly earnings report, an effective registration statement
filed with the Commission, a report to the Commission on Form 10-K, 10-Q or 8-K,
or any other public filing or announcement which includes the combined results
of operations.
3. CERTAIN TAX MATTERS. In connection with the qualification of the
receipt of Parent Common Stock in the Doubletree Merger as a reorganization
described in Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and/or, taken together with the Promus Merger, a transfer of
property to Parent by holders of Doubletree Common Stock described in Section
351 of the Code, the undersigned hereby represents and warrants to Parent as
follows:
Page 38 of 94 Pages
<PAGE>
(a) The undersigned is currently the owner of that number of shares
of Doubletree Common Stock set forth on Schedule "A" attached hereto and has not
acquired or made any Sale (as defined below) of Doubletree Common Stock since
October 24, 1997 or otherwise in contemplation of the Mergers. These shares
constitute the entire interest of the undersigned (as defined below).
(b) Except with respect to (i) the exchange of Doubletree Common
Stock for Parent Common Stock pursuant to the Doubletree Merger, the undersigned
has no current plan or intent to engage in any Sale (as defined below) of any
Doubletree Common Stock on, or prior to, the Doubletree Merger.
(c) The undersigned has no current plan or intent to engage in a
sale, exchange, transfer, pledge, distribution (including a distribution by a
partnership to its partners or by a corporation to its stockholders), redemption
or any other transaction which reduces in any way the undersigned's risk of
ownership, by short sale or otherwise, or other disposition, directly or
indirectly (collectively, a "Sale"), with respect to any of the Parent Common
Stock to be received by the undersigned in the Doubletree Merger.
(d) The undersigned is not aware of, or participating in, any plan
or intent on the part of Doubletree's stockholders (a "Plan") to engage in sales
of Parent Common Stock to be issued in Doubletree Merger such that the aggregate
fair market value, as of the Effective Time of the shares subject to such Sales
would exceed twenty percent (20%) of the aggregate fair market value of all
shares of Doubletree Common Stock outstanding immediately prior to the
Doubletree Merger (the "Outstanding Doubletree Stock"). A Sale of Parent Common
Stock shall be considered to have occurred pursuant to a Plan if, among other
things, such Sale occurs in a transaction that is in contemplation of, or
related to, the Mergers or the Agreement (a "Related Transaction").
Additionally, for purposes of the foregoing, shares of Doubletree Common Stock
with respect to which a pre-Doubletree Merger Sale occurs in a Related
Transaction, shall be considered to be shares of Outstanding Doubletree Stock
that are exchanged for shares of Parent Common Stock which are disposed of
pursuant to a Plan.
(e) Notwithstanding the foregoing provisions, the undersigned
acknowledges that it will hold the Parent Common Stock with an investment intent
and, therefore, in the event of a change of circumstances (including a change in
financial circumstances or a change in value of Parent Common Stock), the
undersigned may at some time in the future engage in a Sale of some or all of
its shares of Parent Common Stock. The undersigned does not intend to take a
position on any federal or state income tax return that is inconsistent with the
treatment of the receipt of Parent Common Stock in the Doubletree Merger as a
reorganization described in Section 368(a) of the Code and/or, taken together
with the Promus Merger, a transfer of property to Parent by holders of
Doubletree Common Stock described in Section 351 of the Code.
(f) The undersigned shall immediately notify Parent in writing via
facsimile if, at any time prior to the Effective Time, any of the foregoing
representations are untrue.
Page 39 of 94 Pages
<PAGE>
The representation, covenants and agreements contained herein shall
be true and correct at all times from the date hereof. The obligations of the
undersigned thereunder shall attach to and be binding upon any person or entity
to whom legal or beneficial ownership of the undersigned's shares of Doubletree
Common Stock (and shares of Parent Common Stock following the Doubletree Merger)
shall pass by operation of law or otherwise.
The execution and delivery to you of this letter agreement shall not
be deemed an admission that the undersigned is an "affiliate" of Doubletree as
described in the first paragraph of this letter or as a waiver of any rights the
undersigned may have to object to any claim that the undersigned is such an
affiliate on or after the date of this letter.
GE INVESTMENT MANAGEMENT, INC.
By: /s/ Donald W. Torey
---------------------------
Name: Donald W. Torey
Title: Executive Vice President
Agreed to and accepted this
25TH day of OCTOBER, 1997
PARENT HOLDING CORP.
By: /s/ Richard M. Kelleher
------------------------------
Print Name: Richard M. Kelleher
Title: President & COO
Page 40 of 94 Pages
<PAGE>
SCHEDULE A - OWNERSHIP OF DOUBLETREE COMMON STOCK
---------------------------------------------------------
PERSON SHARES OF COMMON STOCK
GE Investment Management, Inc. 6,050,981
---------------------------------------------------------
Trustees of General Electric 2,764,688
Pension
---------------------------------------------------------
Putnam Investments, Inc. 3,282,156
---------------------------------------------------------
Red Lion, L.P. 3,882,283
---------------------------------------------------------
RCM Capital Management, L.L.C. 3,094,700
---------------------------------------------------------
James P. Evans 0
---------------------------------------------------------
Richard J. Ferris 1,562,432
---------------------------------------------------------
William R. Fatt 0
---------------------------------------------------------
James J. Flynn III 0
---------------------------------------------------------
Dale F. Frey 0
---------------------------------------------------------
Ronald K. Gamey 0
---------------------------------------------------------
Edward A. Gilhuly 0
---------------------------------------------------------
Richard M. Kelleher 31,442
---------------------------------------------------------
Norman B. Leventhal 10,000
---------------------------------------------------------
Michael W. Michelson 0
---------------------------------------------------------
R. David Moon 0
---------------------------------------------------------
John H. Myers 0
---------------------------------------------------------
Anupam Narayan 0
---------------------------------------------------------
William L. Perocchi 15,759
---------------------------------------------------------
Stephen D. Pletcher 0
---------------------------------------------------------
Margaret Ann Rhoades 1,038
---------------------------------------------------------
David A . Sherf 0
---------------------------------------------------------
David L. Stivers 0
---------------------------------------------------------
Thomas W. Storey 0
---------------------------------------------------------
Richard L. Trueblood 0
---------------------------------------------------------
Peter V. Ueberroth 1,110,432
---------------------------------------------------------
Page 41 of 94 Pages
<PAGE>
EXHIBIT 2
PROMUS HOTEL CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement, dated as of December __, 1997,
is made by and among Promus Hotel Corporation, a Delaware corporation formerly
named Parent Holding Corp. (the "Company"), GE Investment Hotel Partners I,
Limited Partnership, a Delaware limited partnership ("GEHOP"), GE Investment
Management Incorporated, a Delaware corporation ("GEIM"), the Trustees of
General Electric Pension Trust ("GEPT"), MetPark Funding, Inc., a Delaware
corporation ("Met Sub"), The Ueberroth Family Trust ("Ueberroth"), The Ueberroth
Investment Trust ("Investment"), Mr. Richard J. Ferris ("Ferris"), Ridge
Partners, L.P., a Delaware limited partnership ("Ridge"), and Red Lion, a
California Limited Partnership (the "RL Partnership").
WHEREAS, the stockholders of the Company who are parties hereto (the
"Parties") were parties to an Incorporation and Registration Rights Agreement
dated as of December 16, 1993, as amended, with Doubletree Corporation, a
Delaware corporation ("Doubletree") (the "Doubletree Registration Rights
Agreement") pursuant to which such Parties had certain registration rights with
respect to shares of common stock of Doubletree held by them; and
WHEREAS, Doubletree and Promus Hotel Corporation, a Delaware
corporation ("Old Promus") have combined their businesses (the "Merger") and
formed the Company as a new holding company pursuant to the terms of the
Agreement and Plan of Merger dated as of September 1, 1997 among Doubletree, Old
Promus and the
Page 42 of 94 Pages
<PAGE>
Company; and
WHEREAS, pursuant to the Merger, the outstanding shares of
Doubletree common stock have been converted into shares of common stock, par
value $.01 per share, of the Company ("Common Stock"); and
WHEREAS, the Company has agreed to provide the Parties registration
rights substantially identical to those held by such Parties pursuant to the
Doubletree Registration Rights Agreement;
NOW, THEREFORE, in consideration of the foregoing and intending to
be legally bound, the Parties agree as follows: . As used in this Agreement, the
following terms shall have the following respective meanings:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective meanings:
"COMMISSION" means the United States Securities and Exchange
Commission, or any other federal agency administering the Securities Act at the
time.
"ELIGIBLE SECURITIES" means the shares of Common Stock held by the
Parties as of the date hereof, or acquired by them pursuant to (i) the exercise
of options to purchase an aggregate of 20,000 shares of Doubletree Common Stock,
issued on June 30, 1994, to GEHOP (the "GEHOP Options") and (ii) the Warrants to
purchase an aggregate of 262,753 shares of Doubletree Common Stock, issued on
November 8, 1996, to PT Investments Inc. (the "GEPT Warrant"), it being
understood that pursuant to the terms of the Merger Agreement, all obligations
of Doubletree under the GEHOP Options and the GEPT Warrant shall have been
assumed by the Company pursuant to the terms set forth in the Merger Agreement.
Any shares of Common Stock issued pursuant to the GEHOP Options and/or the GEPT
Warrant will be aggregated together with shares of Common
Page 43 of 94 Pages
<PAGE>
Stock owned by GEHOP in order to determine the amount of Eligible Securities or
shares of Common Stock owned by GEHOP.
"HOLDER" means the Parties and those successors, assigns and
transferees entitled to the benefits, and bound by the terms of, this Agreement
who are registered holders of outstanding Eligible Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
2. DEMAND REGISTRATION RIGHTS.
(a) At any time after the date of this Agreement, GEHOP, Met Sub or
the RL Partnership may deliver to the Company a written request that the Company
file and use its best efforts to cause to become effective a registration
statement under the Securities Act with respect to such number of the Eligible
Securities (a "Registration Request") owned by such Holder (the "Requesting
Holder"). Promptly following receipt of a Registration Request, the Company
shall deliver to all Holders (other than the Requesting Holder) a notice (the
"Initiation Notice") of such receipt providing the identity of the Requesting
Holder and the number of shares included in such Registration Request. Except as
otherwise provided in Section 2(b)(i)(A) hereof, the Company shall not be
required to file and use its best efforts to cause to become effective, pursuant
to a Registration Request under this Section 2, more than two registration
statements at the demand of GEHOP, more than one registration statement at the
demand of Met Sub, or more than four registration statements at the request of
the RL Partnership.
(b) Within 20 days after the date on which the Company delivers the
Page 44 of 94 Pages
<PAGE>
Initiation Notice to all Holders, such date to be determined by the notice
provisions of Section 12(b) of this Agreement, the Company will use its best
efforts to register under the Securities Act, for public sale in accordance with
the method of disposition specified in such Registration Request, the number of
shares of Eligible Securities specified in such Registration Request (and in all
notices received from Holders within 20 days after their receipt of the
applicable Initiation Notice); PROVIDED, HOWEVER, that, in the case of a
Registration Request, the proportion that the number of Eligible Securities
requested for inclusion in the registration statement by any Holder (other than
the Requesting Holder) bears to the total number of Eligible Securities then
owned by such Holder shall not exceed the proportion that the number of Eligible
Securities specified in such Registration Request bears to the total number of
Eligible Securities then owned by the Requesting Holder. The Company will also
be entitled to include in any registration statement filed pursuant to a
Registration Request, for sale in accordance with the method of disposition
specified in such Registration Request, such number of shares of Common Stock as
the Company shall desire to sell for its own account. If the method of sale
designated is an underwritten public offering, the managing underwriter or
underwriters must be reasonably acceptable to both the Requesting Holder (if
any) and the Company, which acceptance shall not be unreasonably withheld.
Notwithstanding the foregoing provisions of this paragraph (b), to the extent
that, in the opinion of the managing underwriter or underwriters (if the method
of disposition shall be an underwritten public offering), marketing
considerations require the reduction of the number of shares of Common Stock
covered by any such registration, the number of shares of Common Stock to be
registered and sold pursuant to such registration shall be reduced as follows:
Page 45 of 94 Pages
<PAGE>
(i) if the Requesting Holder shall be GEHOP and the
Registration Request is not the last to which GEHOP is entitled under
Section 2(a) and this Section 2(b)(i), or if the Requesting Holder shall
be the RL Partnership and the Registration Request is not the first or
last such request to which the RL Partnership is entitled under Section
2(a) and this Section 2(b)(i):
(A) the number of shares of Eligible Securities to
be registered on behalf of each Holder shall be
reduced (to zero, if necessary) pro rata
according to the number of shares requested to
be registered by each Holder; provided,
however, that in the case of the first
Registration Request made by GEHOP and any
registration request made by the RL Partnership
(other than its first or last such Registration
Request) if the number of shares of Eligible
Securities requested to be registered by GEHOP
or the RL Partnership, as the case may be,
shall be reduced as a result of this Section
2(b)(i) by 20% or more, such Requesting Holder
shall be entitled to request one registration
in addition to (I) in the case of GEHOP, the
two registration requests GEHOP is entitled to
under Section 2(a) of this Agreement and (II)
in the case of the RL Partnership, the four
registration requests the RL Partnership is
entitled to under Section 2(a) of this
Agreement; and
(B) the number of shares of Common Stock to be registered on
Page 46 of 94 Pages
<PAGE>
behalf of the Company, if any, shall not be reduced;
(ii) if the Requesting Holder shall be Met
Sub, or if the Requesting Holder shall be GEHOP exercising the last
Registration Request to which it is entitled under Section 2(a) and
Section 2(b)(i) of this Agreement, or if the Requesting Holder shall be
the RL Partnership exercising the first or last Registration Request to
which it is entitled under Section 2(a) and this Section 2(b)(i) of this
Agreement:
(A) the number of Eligible Securities to be registered on
behalf of each Holder (excluding the Requesting Holder)
shall be reduced (to zero, if necessary) pro rata
according to the number of shares requested to be
registered by each Holder (excluding the Requesting
Holder);
(B) if any additional reduction in the number of shares of
Common Stock to be registered shall be necessary, in the
opinion of the managing underwriter or underwriters, the
number of shares of Common Stock to be registered on
behalf of the Company shall be reduced (to zero, if
necessary); and
(C) the number of shares of Eligible Securities to
be registered on behalf of the Requesting
Holder shall not be reduced; and
(c) Notwithstanding the foregoing provisions of this Section 2, the
Company shall not be obligated to file a registration statement at the demand of
any
Page 47 of 94 Pages
<PAGE>
Holder pursuant to this Section 2 within 90 days following any underwritten
public offering of Common Stock or of securities of the Company convertible into
or exercisable or exchangeable for Common Stock.
(d) Notwithstanding the foregoing provisions of this Section 2, the
Company may elect, by written notice given to M et Sub within 20 days after the
Company's receipt of a Registration Request from Met Sub, in lieu of filing a
registration statement at the demand of Met Sub, to purchase from Met Sub the
number of Eligible Securities specified in Met Sub's Registration Request for
cash equal to the Net Proceeds thereof. "Net Proceeds" shall mean the estimated
proceeds that Met Sub would have received from a public offering of the number
of Eligible Securities specified in Met Sub's Registration Request, net of all
underwriting discounts and selling commissions applicable to the sale of such
Eligible Securities and the fees and expenses of counsel for Met Sub, determined
pursuant to the following procedure:
(i) Met Sub may reach an agreement with the
Company as to the amount of the Net Proceeds.
(ii) If Met Sub and the Company cannot reach agreement
as to the amount of the Net Proceeds within 30 days after the Company's
receipt of Met Sub's Registration Request, either party may request that
the Net Proceeds be determined according to the procedure set forth below.
(iii) Met Sub and the Company shall select an appraiser
to determine the amount of the Net Proceeds as soon as practicable. The
appraiser shall be an investment banking firm of national reputation
having expertise and experience in public offerings of securities of
companies engaging in businesses
Page 48 of 94 Pages
<PAGE>
similar to that of the Company. The appraiser shall not be an affiliate of
any Party. If Met Sub and the Company are unable to agree on such
selection, each of them shall select one appraiser meeting the criteria
set forth in the two immediately preceding sentences, and such appraisers
shall select a third appraiser meeting such criteria who shall determine
the amount of the Net Proceeds as soon as practicable. The fees and
expenses of all appraisers shall be paid by the Company. All other
expenses of such appraisal shall be paid by the Holder incurring the same
or as the Holders shall otherwise agree.
(iv) The Company shall pay the amount of the Net
Proceeds to Met Sub within 30 days after such amount has been determined
by agreement or by appraisal, as the case may be.
(e) A Holder shall be deemed not to have exercised a Registration
Request to which it is entitled under Section 2 if (i) the registration
statement relating to such Registration Request does not become effective, or
after it has become effective, is interfered with by any stop order, injunction
or other order or requirement of the Commission or other governmental agency or
court, in each case by reason of an act or omission by the Company, or (ii) the
conditions to closing specified in the purchase agreement, or underwriting
agreement entered into in connection with such registration statement are not
satisfied, and the offering and sale of Eligible Securities to which such
Registration Request relates is not consummated, because of an act or omission
by the Company (other than a failure of the Company or any of its
representatives to execute or deliver any closing certificate by reason of facts
or circumstances not within the control of the Company or such representatives)
or (iii) at any time after a Party delivers a
Page 49 of 94 Pages
<PAGE>
Registration Request and prior to the effectiveness of the registration
statement relating thereto, the preparation of such registration statement is
discontinued or such registration statement is withdrawn or abandoned, in each
case at the request of the Requesting Holder, and such Requesting Holder has
elected to pay and has paid to the Company in full all of the registration
expenses (including, without limitation, Company registration expenses)
referenced in Section 5 in connection with such registration statement.
3. PIGGYBACK REGISTRATION.
(a) If the Company at any time proposes to register Common Stock
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements subject to Section 2 or registration statements on Form
S-8, S-4 or another form not available for registering the Eligible Securities
for sale to the public), each such time it will give written notice to all
Holders of its intention to do so. Upon the written request of any Holder (a
"Piggyback Request"), given within 20 days after the date on which the Company
delivers the notice of proposed registration to all Holders, such date to be
determined by the notice provisions of Section 12(b) of this Agreement, the
Company will use its best efforts to cause the Eligible Securities as to which
registration shall have been so requested to be covered by the registration
statement proposed to be filed by the Company.
(b) In the event that any registration statement described in this
Section 3 shall relate, in whole or in part, to an underwritten public offering
of shares of Common Stock, the Eligible Securities to be registered must be sold
through the same underwriters as have been selected by the Company or any other
person who initiated the filing of the
Page 50 of 94 Pages
<PAGE>
registration statement by exercising a right to require the Company to do so (a
"Requesting Non-Party Stockholder"). Otherwise, the method of distribution of
the Eligible Securities to be sold by any Holder making a Piggyback Request
shall be as specified therein. The number of shares of Common Stock to be
included in such registration statement on account of any person (other than the
Company and any Requesting Non-Party Stockholder) may be reduced if and to the
extent that the managing underwriter or underwriters shall be of the opinion
that such inclusion would adversely affect the marketing of the total number of
shares of Common Stock proposed to be sold, and the number of shares to be
registered and sold by each person (other than the Company and any Requesting
Non-Party Stockholder) shall be reduced pro rata according to the number of
shares requested to be registered by such person. Notwithstanding the foregoing
provisions of this Section 3, the Company may withdraw any registration
statement referred to in this Section 3 without thereby incurring any liability
to any requesting Holder.
4. REGISTRATION PROCEDURES. If and whenever the Company is required
by the provisions of Section 2 to effect the registration of any Eligible
Securities under the Securities Act, the Company shall:
(a) prepare and file with the Commission a registration statement
with respect to such securities which will permit the public sale thereof in
accordance with the method of distribution specified in the applicable
Registration Request, and the Company shall use its best efforts (i) to cause
such registration statement to be filed within 60 days of receipt of the same,
(ii) to cause such registration statement to be declared effective as promptly
as practicable and (iii) to maintain the effectiveness of such registration
Page 51 of 94 Pages
<PAGE>
statement for a period of not less than 90 days;
(b) promptly prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to effect and maintain the
effectiveness of such registration statement for the period specified in Section
4(a) and as to comply with the provisions of the Securities Act with respect to
the disposition of all Eligible Securities covered by such registration
statement in accordance with the intended method of disposition set forth in
such registration statement for such period, including such amendments or
supplements as are necessary to cure any untrue statement or omission referred
to in Section 4(e)(vi);
(c) provide to the managing underwriter or underwriters and not more
than one counsel for all underwriters and to the Holders of Eligible Securities
to be included in such registration statement and not more than one counsel for
all such Holders (such counsel to be reasonably acceptable to the Company) the
opportunity to participate in the preparation of (i) such registration
statement, (ii) each prospectus relating thereto and included therein or filed
with the Commission and (iii) each amendment or supplement thereto;
(d) make available for inspection by the parties referred to in
Section 4(c) such financial and other information and books and records of the
Company, and cause the officers, directors and employees of the Company, and
counsel and independent certified public accountants of the Company, to respond
to such inquiries, as shall be reasonably necessary, in the judgment of
respective counsel to such Holders and such underwriter or underwriters, to
conduct a reasonable investigation within the meaning of
Page 52 of 94 Pages
<PAGE>
the Securities Act; PROVIDED, HOWEVER, that each such person shall be required
to maintain in confidence and not to disclose to any other person any
information or records reasonably designated by the Company in writing as being
confidential until such time as (i) such information becomes a matter of public
record (whether by virtue of its inclusion in such registration statement or
otherwise), (ii) such person shall be required to disclose such information
pursuant to the subpoena or order of any court or other governmental agency or
body having jurisdiction over the matter or (iii) such information is required
to be set forth in such registration statement or the prospectus included
therein or in an amendment to such registration statement or an amendment or
supplement to such prospectus in order that such registration statement,
prospectus, amendment or supplement, as the case may be, shall not contain an
untrue statement of a material fact or omit to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and such information has not been so set forth after the request by
a Holder to such effect; and PROVIDED, FURTHER, that the Company need not make
such information available, nor need it cause any officer, director or employee
to respond to such inquiry, unless each such Holder and such counsel, upon the
Company's request, execute and deliver to the Company an undertaking to
substantially the same effect contained in the immediately preceding PROVISO;
(e) immediately notify the persons referred to in Section 4(c) and
(if requested by any such person) confirm such advice in writing, (i) when such
registration statement or any prospectus included therein or any amendment or
supplement thereto has been filed and, with respect to such registration
statement or any such amendment, when the same has become effective, (ii) of any
material comments by the Commission
Page 53 of 94 Pages
<PAGE>
with respect thereto or any request by the Commission for amendments or
supplements to such registration statement or prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or the initiation of
any proceedings for that purpose, (iv) if at any time the representations and
warranties of the Company contemplated by Section 4(l)(i) cease to be true and
correct in all material respects, (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any Eligible
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose or (vi) at any time when a prospectus is required to
be delivered under the Securities Act, of the occurrence or failure to occur of
any event, or any other change in law, fact or circumstance, as a result of
which such registration statement, prospectus or any amendment or supplement
thereto, or any document incorporated by reference in any of the foregoing,
contains an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
(f) take reasonable efforts to obtain the withdrawal at the earliest
practicable date of any order suspending the effectiveness of such registration
statement or any post-effective amendment thereto;
(g) if requested by the managing underwriter or underwriters or the
Holders of at least a majority of the Eligible Securities being sold in
connection with an underwritten public offering, promptly incorporate in a
prospectus supplement or post-effective amendment such information as such
managing underwriter or underwriters or such Holders reasonably specify should
be included therein relating to the terms of the
Page 54 of 94 Pages
<PAGE>
sale of such Eligible Securities, including, without limitation, information
with respect to the number of Eligible Securities being sold to such
underwriters, the names and descriptions of such Holders, the purchase price
being paid therefor by such underwriters and any other terms of the underwritten
(or best efforts underwritten) offering of the Eligible Securities to be sold in
such offering; and make all required filings of such prospectus supplement or
post-effective amendment promptly after notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment;
(h) furnish to each Holder of Eligible Securities included in such
registration and each managing underwriter, if any, thereof an executed copy of
such registration statement, each such amendment and supplement thereto (in each
case including all exhibits thereto, whether or not such exhibits are
incorporated by reference therein) and such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and any summary prospectus) and each amendment or supplement thereto, in
conformity with the requirements of the Securities Act, as such Holder and
managing underwriter, if any, may reasonably request in order to facilitate the
disposition of such Eligible Securities by such Holder or by the participating
underwriters;
(i) use its best efforts to (i) register or qualify the Eligible
Securities to be included in such registration statement under such other
securities laws or blue sky laws of such jurisdictions as any Holder of such
Eligible Securities and each managing underwriter, if any, thereof shall
reasonably request, (ii) keep such registrations or qualifications in effect for
so long as is necessary to effect the disposition of such Eligible Securities in
the manner contemplated by the registration statement, the prospectus
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included therein and any amendment or supplement thereto and (iii) take any and
all such actions as may be reasonably necessary or advisable to enable such
Holder and any participating underwriter or underwriters to consummate the
disposition in such jurisdictions of such Eligible Securities; PROVIDED,
HOWEVER, that the Company shall not be required for any such purpose to (A)
qualify generally to do business as a foreign corporation or a broker-dealer in
any jurisdiction wherein it would not otherwise be required to qualify but for
the requirements of this Section 4(i), (B) subject itself to taxation in any
such jurisdiction or (C) consent to general service of process in any such
jurisdiction;
(j) cooperate with the Holders of the Eligible Securities included
in such registration and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing Eligible Securities
to be sold, which certificates shall be printed, lithographed or engraved, or
produced by any combination of such methods, on steel engraved borders and which
shall not bear any restrictive legends; and, in the case of an underwritten
public offering, enable such Eligible Securities to be registered in such names
as the managing underwriter or underwriters may request at least two business
days prior to any sale of such Eligible Securities;
(k) provide not later than the effective date of the registration
statement a CUSIP number for all Eligible Securities;
(l) enter into an underwriting agreement, engagement letter, agency
agreement, "best efforts" underwriting agreement or similar agreement, as
appropriate, and take such other actions in connection therewith as the Holders
of at least a majority of the Eligible Securities to be included in such
registration shall reasonably request in
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order to expedite or facilitate the disposition of such Eligible Securities, and
in connection therewith, whether or not an underwriting agreement is entered
into and whether or not the registration is an underwritten public offering, (i)
make such representations and warranties to the Holders of such Eligible
Securities included in such registration and the underwriters, if any, in form,
substance and scope as are customarily made in an underwritten public offering;
(ii) obtain an opinion of counsel to the Company in customary form and covering
such matters as are customarily covered by such an opinion as the Holders of at
least a majority of such Eligible Securities and the managing underwriters, if
any, may reasonably request, addressed to each selling Holder and the
underwriters, if any, and dated the effective date of such registration
statement (or, if such registration includes an underwritten public offering,
dated the date of the closing under the underwriting agreement); (iii) obtain a
"cold comfort" letter from the independent certified public accountants of the
Company addressed to the Holders of the Eligible Securities included in such
registration and the underwriters, if any, dated the effective date of such
registration statement (and, if such registration includes an underwritten
public offering, also dated the date of the closing under the underwriting
agreement), such letter to be in customary form and covering such matters as are
customarily covered by such letters; (iv) deliver such documents and
certificates as may be reasonably requested by the Holders of at least a
majority of the Eligible Securities included in such registration and the
managing underwriter or underwriters, if any, to evidence compliance with clause
(i) above and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company; and (v) undertake such
obligations relating to expense reimbursement, indemnification and
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contribution as are provided in Sections 5, 6 and 7 hereof;
(m) make available to its security holders, as soon as reasonably
practicable after the sale of Eligible Securities, an earnings statement
covering a period of at least twelve months which shall satisfy the provisions
of Section 11(a) of the Securities Act (including, at the option of the Company,
pursuant to Rule 158 thereunder); and
(n) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission.
The provisions of subsections (b) through (n) of this Section 4
shall also apply to registrations pursuant to Section 3; PROVIDED, HOWEVER,
that, for the purposes of this paragraph, the time period set forth in Section
4(b) during which the Company must file amendments or supplements to the
registration statement and prospectus to keep such registration effective shall
also be deemed to be 90 days.
Notwithstanding the provisions of Section 4(a), the Company's
obligation to file a registration statement, or cause such registration
statement to become effective, shall be suspended for a period not to exceed 90
days if there exists at the time material non-public information relating to the
Company that, in the reasonable opinion of the Company, should not be disclosed.
In such an event, the Company shall promptly inform all Holders of the Company's
decision to defer filing of a registration statement and shall notify all
Holders promptly (but in any event not later than upon the expiration of the
90-day period specified in the immediately preceding sentence) of the
recommencement of the Company's efforts to file the registration statement and
to cause the registration statement to become effective.
In connection with each registration of Eligible Securities
hereunder, the
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Holders thereof will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as shall be
reasonably necessary in order to assure compliance with applicable federal and
state securities laws. Each such Holder also agrees to notify the Company as
promptly as practicable of any inaccuracy or change in information previously
furnished by such Holder to the Company or of the occurrence of any other event,
in either case as a result of which any prospectus relating to such registration
contains an untrue statement of a material fact regarding such Holder or the
distribution of such Eligible Securities or omits to state any material fact
regarding such Holder or the distribution of such Eligible Securities required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing, and promptly to furnish to the
Company any additional information required to correct and update such
previously furnished information or required so that such prospectus shall not
contain, with respect to such Holder or the distribution of such Eligible
Securities, an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing. Each such Holder
further agrees that upon giving any notice referred to in the immediately
preceding sentence, or upon receipt of any notice from the Company pursuant to
Section 4(e)(vi) hereof, such Holder shall forthwith discontinue the disposition
of Eligible Securities pursuant to the registration statement applicable to such
Eligible Securities until such Holder shall have received copies of an amended
or supplemented registration statement or prospectus, and if so directed by the
Company, such Holder shall deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Holder's possession of
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the prospectus covering such Eligible Securities at the time of receipt of such
notice.
Notwithstanding anything to the contrary contained herein, in no
event shall the Company permit any entity to be an underwriter of securities
(including being a member of any underwriting syndicate) in any public offering
in which any Eligible Securities of a Holder are included if such Holder that is
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and such Holder or any affiliate of such Holder, owns 5% or more of
the equity of such entity and the Company shall have been notified of such
relationship and such ERISA status.
5. EXPENSES. The Company shall pay all expenses incurred in
complying with Sections 2 and 3, including without limitation all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses (including
counsel fees) incurred in connection with complying with state securities or
"blue sky" laws (other than those which by law must be paid by the selling
security holders), fees of the National Association of Securities Dealers, Inc.,
transfer taxes, fees of transfer agents and registrars and stock exchange
listing fees, but excluding all underwriting discounts and selling commissions
applicable to the sale of Eligible Securities and fees and expenses of counsel
for the selling Holders. All expenses of participating sellers other than those
assumed by the Company in this Agreement shall be borne by such sellers in
proportion to the number of shares sold by each seller or as they may otherwise
agree.
6. INDEMNIFICATION.
(a) In the event of a registration of Eligible Securities under the
Securities Act pursuant to Section 2 or 3, the Company shall indemnify and hold
harmless each
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selling Holder, each underwriter of such Eligible Securities thereunder and each
other person, if any, who controls such selling Holder or underwriter within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such selling Holder, underwriter or
controlling person may become subject under the Securities Act or otherwise, and
will reimburse each such selling Holder, underwriter and controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action, as
such expenses are incurred, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such Eligible Securities were registered
under the Securities Act pursuant to Section 2 or 3, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; PROVIDED, HOWEVER, that the Company shall not
be liable to any such selling Holder, underwriter or controlling person in any
such case if and to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in conformity with information furnished by
such selling Holder, underwriter or controlling person in writing specifically
for use in such registration statement or prospectus.
(b) In the event of a registration of any of the Eligible Securities
under the Securities Act pursuant to Section 2 or 3, each selling Holder of such
Eligible Securities,
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severally and not jointly, will indemnify and hold harmless the Company, each
underwriter and each person, if any, who controls the Company or any underwriter
within the meaning of the Securities Act, each officer of the Company who signs
the registration statement, each director of the Company, each other seller of
securities registered by the registration statement covering such Eligible
Securities and each person, if any, who controls such seller, against all
losses, claims, damages or liabilities, joint or several, to which the Company
or any such officer, director, underwriter, other seller or controlling person
may become subject under the Securities Act or otherwise, and shall reimburse
the Company and each such officer, director, underwriter, other seller and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action, but only to the extent that any such loss, claim, damage or
liability (or action in respect thereof) arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with information pertaining to such
Holder furnished in writing to the Company by such Holder specifically for use
in the registration statement or prospectus relating to such Eligible
Securities. Notwithstanding the immediately preceding sentence, the liability of
each such Holder hereunder shall not in any event exceed the net proceeds
received by such Holder from the sale of Eligible Securities covered by such
registration statement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party, if a claim in
respect thereof is to be made against an indemnifying party hereunder, shall
notify such indemnifying party in writing thereof, but the omission so to notify
such indemnifying party shall not relieve
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such indemnifying party from any liability that it may have to any indemnified
party other than under this Section 6 and, unless the failure to so provide
notice materially adversely affects or prejudices such indemnifying party's
defense against any action, shall not relieve such indemnifying party from any
liability that it may have to any indemnified party under this Section 6. In
case any such action shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, such indemnifying
party shall be entitled to participate in and, to the extent it shall wish, to
assume and undertake the defense thereof with counsel reasonably satisfactory to
such indemnified party, and, after notice from such indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, such indemnifying party shall not be liable to such indemnified party
under this Section 6 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected; PROVIDED,
HOWEVER, that, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it that are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed to conflict with
the interests of the indemnifying party, the indemnified party shall have the
right to select a separate counsel and to assume and undertake the defense of
such action, with the expenses and fees of such separate counsel and other
expenses related to such defense to be reimbursed by the indemnifying party as
incurred.
(d) No indemnifying party shall be liable for any amounts paid in a
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settlement effected without the consent of such indemnifying party, which
consent shall not be withheld unreasonably. No indemnifying party shall consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to the
indemnified party of a release from all liability in respect of such claim or
litigation.
(e) The reimbursements required by this Section 6 shall be made by
periodic payments during the course of the investigation or defense, as and when
bills are received and expenses incurred.
7. CONTRIBUTION. If for any reason the indemnity set forth in
Section 6 is unavailable or is insufficient to hold harmless an indemnified
party, then the indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the aggregate losses, claims,
damages, liabilities and expenses of the nature contemplated by said indemnity
(i) in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and such indemnified party on the other
(determined by reference to, among other things, whether the untrue statement of
a material fact or omission to state a material fact relates to information
supplied by the indemnifying party or such indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission), or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law or provides a lesser sum
to such indemnified party than the amount hereinafter calculated, in such
proportion as is appropriate to reflect not only the relative fault of the
indemnifying party and such indemnified party but also the relative benefits
received by the indemnifying party
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on the one hand and such indemnified party on the other, as well as any other
relevant equitable considerations.
The Company and the Parties agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by PRO RATA
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses referred to in such paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, a Holder shall not be required to contribute any
amount in excess of the amount by which the net proceeds of the sale of Eligible
Securities sold by such Holder and distributed to the public exceeds the amount
of any damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
which is not guilty of such fraudulent misrepresentation.
In the event that any terms of an indemnification or contribution
provision contained in an underwriting agreement executed by or on behalf of the
Company and a Holder differs from a provision in Section 6 or this Section 7,
the provisions in such underwriting agreement shall determine the rights and
obligations of the Company, such Holder and each underwriter that is a party
thereto.
8. UNDERWRITING AGREEMENT. If Eligible Securities are to be sold
pursuant
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to a registration statement in an underwritten offering pursuant to Section 2 or
3, the Company and each selling Holder of Eligible Securities agrees to enter
into a written agreement with the managing underwriter or underwriters selected
in the manner herein provided in such form and containing such provisions as are
reasonably satisfactory to the Company and each such selling Holder and as are
customary in the securities business for such an arrangement among such
underwriter or underwriters, each such selling Holder and companies of the
Company's size and investment stature. No Holder of Eligible Securities may
participate in any underwritten sale of Eligible Securities pursuant to Section
2 or 3 hereof unless such Holder (i) agrees to sell such Holder's securities in
accordance with any underwriting arrangements approved by the persons entitled
hereunder to specify the method of distribution of the securities being
registered and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
9. LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. If, subsequent to
the date hereof, the Company grants to any holders or prospective holders of the
Company's securities the right to require that the Company register any
securities of the Company under the Securities Act, such registration rights
shall be granted subject to the rights of the Holders to include all or part of
their Eligible Securities in any such registration on the terms and conditions
set forth in Section 3.
10. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Holders as follows:
(a) The execution, delivery and performance of this Agreement by the
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Company have been duly authorized by all requisite action and will not violate
any provision of law, any order of any court or other agency of government, the
certificate of incorporation or By-laws of the Company or any provision of any
indenture, agreement or other instrument by which the Company or any of its
properties or assets is bound and will not conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
such indenture, agreement or other instrument or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms.
11. RULE 144. The Company hereby covenants with the Holders of
Eligible Securities that if and to the extent it shall be required to do so
under the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, as the same may be amended and in effect at the time
(the "Exchange Act"), the Company shall timely file the reports required to be
filed by it under the Exchange Act or the Securities Act (including, but not
limited to, the reports under Sections 13 and 15(d) of the Exchange Act referred
to in subparagraph (c)(1) of Rule 144 adopted by the Commission under the
Securities Act) and shall take such further action as any Holder of Eligible
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell Eligible Securities without registration under the
Securities Act within the limitations of the exemption provided by Rule 144
under the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter
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adopted by the Commission. Upon the request of any Holder of Eligible
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements
12. MISCELLANEOUS
(a) All covenants and agreements contained in this Agreement by or
on behalf of any of the signatories shall bind and inure to the benefit of the
respective successors and assigns of the signatories, whether so expressed or
not. If any transferee of any Holder of Eligible Securities shall acquire
Eligible Securities in any manner (other than by way of a registered public
offering), whether by operation of law or otherwise, such Eligible Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Eligible Securities such transferee shall be entitled to receive
the benefits of and be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement. The benefits to which
any such transferee shall be entitled shall include, without limitation, the
rights to register Eligible Securities under Sections 2 and 3 hereof; PROVIDED,
HOWEVER, that any such transferee shall not be entitled to deliver to the
Company a Registration Request pursuant to Section 2 hereof unless such
transferee acquired from its transferor at least a majority of the Eligible
Securities owned by such transferor at the time of the transfer. If the Company
shall so request, any such successor or assign shall agree in writing to acquire
and hold the Eligible Securities subject to all of the terms hereof. One or more
transferees of Eligible Securities owned by the RL Partnership may deliver a
Registration Request pursuant to Section 2 if (i) such transferees have received
such Eligible Securities in compliance with applicable Federal and state
securities laws and (ii) such transferees have agreed in a
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writing, in form and substance reasonably satisfactory to the Company, to be
bound by this Agreement, with the same duties and obligations as a Holder
thereunder and (iii) the transferee or transferees that deliver such
Registration Request hold at least a majority of the then outstanding Eligible
Securities owned by the RL Partnership which have not been sold pursuant to a
registered public offering. This Section 12(a) shall not be deemed to create any
right on the part of any Holder to transfer Eligible Securities in contravention
of any restriction thereon contained in any other agreement to which such Holder
is a party.
(b) All notices, consents and other communications under this
Agreement required or permitted to be transmitted to the parties named below
shall be in writing and shall be deemed to have been duly given when (a)
delivered by hand, (b) sent by telecopier (with receipt confirmed), provided
that a copy is mailed by registered mail, return receipt requested, or (c) when
received by the addressee, if sent by Express Mail, Federal Express or other
express delivery service (receipt requested), in each case to the appropriate
addresses and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate as to itself by notice to the other
parties):
(i) if to the Company, to it at Promus
Hotel Corporation, 755 Crossover Lane, Memphis, TN 38117,
Attention: General Counsel (telecopy: (901) 374-5050;
(ii) if to GEHOP, GEIM or GEPT c/o General
Electric Investment Hotel Partners I, Limited Partnership, c/o
General Electric Investment Corporation, 3003 Summer Street, P.O.
Box 7900, Stamford CT 06905,
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Attention: Asset Manager-Real Estate (telecopier no. (203) 326-4179),
with a copy to General Electric Investment Corporation,
3003 Summer Street, P.O. Box 7900, Stamford CT 06905, Attention:
General Counsel-Real Estate (telecopier no. (203) 326-4179, a copy
to Wolf, Block, Schorr and Solis-Cohen, Packard Building, 12th
Floor, S. E. Corner of 15th and Chestnut Streets, Philadelphia, PA
19102, Attention: Alvin H. Dorsky, Esq. (telecopier no.
(215) 977-2346), and a copy to Dewey Ballantine, 1301 Avenue of
the Americas, New York, NY 10019, Attention: Sanford W.
Morhouse, Esq. (telecopier no. (212) 259-6333);
(iii) if to Met Sub, c/o Metropolitan Life
Insurance Company, One Madison Avenue, New York, NY 10010,
Attention: Mr. John C. Morrison, Jr. (telecopier no. (212)
578-3910), with a copy to Law Department, Metropolitan Life
Insurance Company, One Madison Avenue, New York, NY 10010,
Attention: John C. Kelsh, Esq. (telecopier no. (212) 779-1490);
(iv) if to Ferris, to Mr. Richard J.
Ferris, 14363 Ridge Road, Northbrook, IL 60062 (telecopier no.
(708) 498-2575);
(v) if to Ridge, to it c/o Mr. Richard J.
Ferris, 1436 Ridge Road, Northbrook, IL 60062 (telecopier no.
(708) 498-2575);
(vi) if to Investment, to it c/o Mr. Peter
Ueberroth, Contrarian Group, Inc., 500 Newport Center Drive,
Suite 900, Newport Beach, CA 92660 (telecopier no. (714)
720-9123);
(vii) if to the RL Partnership to Red Lion, a California
Limited Partnership, c/o Kohlberg Kravis Roberts & Co., 2800 Sand Hill
Road, Suite 200, Menlo Park, CA 94025; telephone (415) 233-6560
(telecopier no. (415) 233-
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6561) ; and
(viii) if to Ueberroth, to Mr. Peter V.
Ueberroth, Contrarian Group, Inc., 500 Newport Center Drive,
Suite 900, Newport Beach, CA 92660 (telecopier no. (708) 720-9123).
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
(d) This Agreement may not be amended or modified, and no provision
hereof may be waived, except in writing, and such writing shall only be
effective with respect to a Party who has executed such writing; PROVIDED,
HOWEVER that any such amendment, modification or waiver shall only be required
to be so executed by a Party the rights of which under this Agreement would be
adversely affected in any material respect by such amendment, modification or
waiver. The failure of any of the Parties to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver of that
term or deprive such Party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
(e) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(f) The Parties acknowledge that there may be no adequate remedy at
law if any Party fails to perform any of its obligations hereunder and that each
Party may be irreparably harmed by any such failure, and accordingly agree that
each Party, in addition to any other remedy to which it may be entitled in law
or in equity, shall be entitled to compel specific performance of the
obligations of any other Party under this Agreement
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in accordance with the terms and conditions of this Agreement in any court of
the United States or any state thereof having jurisdiction. The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(g) In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be in any way impaired thereby,
it being intended that all of the rights and privileges of the Holders shall be
enforceable to the fullest extent permitted by law.
(h) This Agreement is intended by the parties as a final expression
of their agreement and a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings other
than those set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the Parties with respect to such subject
matter, including without limitation the Doubletree Registration Rights
Agreement.
(i) EXCEPT AS OTHERWISE PROVIDED IN SECTION 12(f) HEREOF, EACH PARTY
IRREVOCABLY AGREES THAT ALL DISPUTES IN ANY WAY, MANNER OR RESPECT ARISING OUT
OF OR FROM OR RELATED TO THIS AGREEMENT SHALL BE RESOLVED BY ARBITRATION IN THE
CITY OF NEW YORK, STATE OF NEW YORK, UNDER THE RULES OF THE AMERICAN ARBITRATION
ASSOCIATION. The arbitrator to resolve any such dispute shall be selected by the
Parties who are involved in the dispute, shall have expertise and
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experience in the resolution of disputes similar to the dispute to be resolved
and shall not be an affiliate of any Party. If such Parties are unable to agree
on such selection, each such Party select one arbitrator meeting the criteria
set forth in the immediately preceding sentence and such arbitrators shall
select an arbitrator meeting such criteria to resolve such dispute as soon as
practicable. The fees and expenses of any arbitrator selected by a Party shall
be paid by such Party; the fees and expenses of any other arbitrators shall be
shared equally by the Parties who are involved in the dispute. All other
expenses of such arbitration shall be paid by the Party incurring the same.
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EXHIBIT 3
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is made
as of December ___, 1997 by and between Doubletree Corporation, a Delaware
corporation ("Doubletree") and Parent Holding Corp., a Delaware corporation
("New Promus"), with reference to the following:
WHEREAS, pursuant to that certain Securities Purchase Agreement
dated as of October 31, 1996 by and between Doubletree and the Trustees of the
General Electric Pension Trust, a New York common law trust ("GEPT"), on
November 8, 1996, Doubletree issued to PT Investments Inc., a Delaware
corporation and an affiliate of GEPT, warrants to purchase an aggregate of
262,753 shares of Doubletree Common Stock (the "GEPT Warrant"); and
WHEREAS, on December 16, 1996, PT Investments Inc. filed an
amendment to its Certificate of Incorporation with the Secretary of State of the
State of Delaware, changing its name to "DTPT Investment Corporation ("DTPT");
and
WHEREAS, pursuant to that certain Agreement and Plan of Merger dated
as of September 1, 1997 among Doubletree, Promus Hotel Corporation, a Delaware
corporation ("Promus") and New Promus (the "Merger Agreement"), the parties to
the Merger Agreement have agreed that at the Effective Time (as defined in the
Merger Agreement), New Promus shall assume all obligations of Doubletree under
the GEPT Warrant, and the holder of the GEPT Warrant thereafter shall have the
right to acquire shares of common stock, par value $.01 per share, of New Promus
("New Promus Common Stock") under the terms set forth herein; and
WHEREAS, New Promus wishes to assume all of Doubletree's obligations
under the GEPT Warrant and any of Doubletree's rights related thereto or arising
therefrom:
NOW, THEREFORE, in consideration of the premises, the mutual
covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. ASSUMPTION OF OBLIGATIONS. Effective as of the date hereof, New
Promus hereby assumes all of Doubletree's obligations under the GEPT Warrant,
from and after the Effective Date in the place and stead of Doubletree and
agrees to be bound by the terms of the GEPT Warrant and by all of Doubletree's
obligations thereunder.
ASSIGNMENT OF RIGHTS (IF ANY). Doubletree hereby assigns and
transfers to New Promus, its successors, and its assigns, effective as of the
date hereof, any and all of Doubletree's rights under the GEPT Warrant, whether
now existing or hereafter arising.
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TERMS OF THE GEPT WARRANT. Pursuant Section 5.23 of the Merger
Agreement, and in accordance with Section 1D of the GEPT Warrant, from and after
the Effective Time, the holder of the GEPT Warrant shall have the right to
acquire, on the same pricing and payment terms and conditions as were applicable
under the GEPT Warrant immediately prior to the Effective Time, as the same may
be adjusted hereafter pursuant to the terms of the GEPT Warrant, the same number
of shares of New Promus Common Stock as the holder of the GEPT Warrant would
have been entitled to receive pursuant to the Doubletree Merger (as defined in
the Merger Agreement) had such holder exercised the GEPT Warrant in full
immediately prior to the Effective Time (rounded downward to the nearest whole
number), at the price per share (rounded down to the nearest whole cent) equal
to (a) the aggregate exercise price for the shares of Doubletree Common Stock
purchasable pursuant to the GEPT Warrant immediately prior to the Effective Time
divided by (b) the number of full shares of New Promus Common Stock deemed
purchasable pursuant to the GEPT Warrant in accordance with the foregoing, it
being understood that, as of the Effective Date, the GEPT Warrant shall, after
giving effect to this Agreement, evidence the right to purchase an aggregate of
262,753 shares of New Promus Common Stock subject to adjustment hereafter as set
forth in the GEPT Warrant.
NOTICE TO HOLDER OF GEPT WARRANT. In accordance with Section ID of
the GEPT Warrant, promptly following the Effective Time New Promus shall deliver
an original counterpart of this Agreement to DTPT or its successor as the holder
of the GEPT Warrant.
FURTHER ASSURANCES. Doubletree shall, at any time and from time to
time after the date hereof upon the request of New Promus, execute, acknowledge,
and deliver all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney, and assurances, and take all such further actions, as shall
be necessary or desirable to give effect to the transactions hereby
contemplated. New Promus shall, at any time and from time to time after the date
hereof upon the request of Doubletree, execute, acknowledge, and deliver all
such further acts, deeds, assignments, transfers, conveyances, powers of
attorney, and assurances, and take all such further actions, as shall be
necessary or desirable to give effect to the transactions hereby contemplated.
COUNTERPARTS. This Agreement may be executed in counterparts with
the same effect as if all parties hereto had executed the same document. All
counterparts shall be construed together and shall constitute a single
Agreement.
GOVERNING LAW. This Agreement shall be construed and interpreted in
accordance with and governed and enforced in all respects by the laws of the
State of New York without giving effect to the conflict of laws and principles
of such state.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
and Assumption Agreement as of the date first above written.
DOUBLETREE CORPORATION
By:
---------------------------
Name:
Title:
PARENT HOLDING CORP.
By:
---------------------------
Name:
Title:
Acknowledged and Agreed:
DTPT INVESTMENT CORPORATION
By:
------------------------------
Name:
Title:
Page 76 of 94 Pages
<PAGE>
EXHIBIT 4
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND NEITHER THE SECURITIES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION UNDER SUCH ACT
AND THE RULES AND REGULATIONS THEREUNDER.
Void after 5:00 P.M., November 8, 2002 Warrants to Purchase Common
(unless previously terminated under the Stock Dated:
circumstances described herein) November 8, 1996
WARRANT CERTIFICATE REPRESENTING
WARRANTS TO PURCHASE COMMON STOCK OF
DOUBLETREE CORPORATION
--------------------------------------------------------------
FOR VALUE RECEIVED, Doubletree Corporation, a Delaware corporation (the
"Company"), hereby certifies that, PT Investments, Inc. ("Holder"), the holder
of these Warrants (the "Warrants", and each right to purchase a share of Common
Stock, a "Warrant") is entitled, subject to the terms set forth below, at any
time on or after November 8, 1996, or from time to time thereafter, but not
later than November 8, 2001 to purchase from the Company 262,753 fully paid and
nonassessable shares of Common Stock, par value $.01 per share ("Common Stock"),
of the Company. These Warrants and all rights hereunder, to the extent such
rights shall not have been exercised, shall terminate and become null and void
at 5:00 p.m., New York time, on November 8, 2001.
These Warrants shall be subject to the terms set forth in the
Securities Purchase Agreement dated as of October 31, 1996 by and between the
Company and the Trustees of General Electric Pension Trust, pursuant to which
these Warrants are being issued, and to the following terms and conditions:
SECTION 1. EXERCISE OF WARRANTS; EXERCISE PRICE; ADJUSTMENTS
RELATIVE TO EXERCISE OF WARRANTS
1A. EXERCISE OF WARRANTS. (a) Subject to the conditions of this
Section 1, the holder of any Warrant at the holder's option may exercise such
holder's rights under all or any part of the Warrants to purchase Common Stock
(the "Warrant Shares") at a price per share equal
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<PAGE>
to $38.06 (the "Exercise Price") at any time on or after the date hereof. The
Warrant Shares and the Exercise Price are subject to certain adjustments as set
forth in this Section 1 and the terms Warrant Shares and Exercise Price as used
herein shall as of any time be deemed to include all such adjustments to be
given effect as of such time in accordance with the terms hereof.
1B. STOCK DIVIDENDS. In case at any time the Company shall declare a
dividend or make any other distribution upon any class or series of stock of the
Company payable in shares of Common Stock or any stock or securities convertible
into or exchangeable for Common Stock (such convertible or exchangeable stock or
securities being herein called "Convertible Securities"), the Exercise Price in
effect on the record date for such dividend or distribution shall be
proportionately reduced. In case the Company shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive a dividend or
other distribution payable in shares of Common Stock or in Convertible
Securities, then such record date shall be deemed to be the date of the issue of
the shares of Common Stock deemed to have been issued as a result of the
declaration of such dividend or the making of such other distribution, as the
case may be, unless such dividend or other distribution is to be measured by the
market price of the Common Stock in effect on the date such dividend or other
distribution is made, in which case such date shall be deemed to be the date of
the issue of the shares of Common Stock deemed to have been so issued. For
purposes of such adjustment, the number of shares of Common Stock outstanding at
any given time shall not include shares owned or held by or for the account of
the Company.
SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall at
any time subdivide its outstanding shares of Common Stock into a greater number
of shares, the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced and the number of shares of Common Stock
issuable upon exercise of each Warrant shall be proportionately increased, and
conversely, in case the outstanding shares of Common Stock of the Company shall
be combined into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination shall be proportionately increased and the
number of shares of Common Stock issuable upon exercise of each Warrant shall be
proportionately decreased.
CHANGES IN COMMON STOCK. If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with another corporation, or sale, transfer or other disposition
of all or substantially all of its properties to another corporation, shall be
effected, then, as a condition of such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition, lawful and adequate
provision shall be made whereby each holder of Warrants shall thereafter have
the right to purchase and receive upon the basis and upon the terms and
conditions herein specified and in lieu of the shares of the Common Stock of the
Company immediately theretofore issuable upon exercise of the Warrants, such
shares of stock, securities or properties, if any, as may be issuable or payable
with respect to or in exchange for a number of outstanding shares of such Common
Stock equal to the number of shares of such Common Stock immediately theretofore
issuable upon exercise of the Warrants had such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition not
taken place, and in any such case appropriate provisions shall be made with
respect to the rights and interests of each holder of Warrants to the end that
the provisions hereof (including without limitation provisions for adjustment of
the Exercise
Page 78 of 94 Pages
<PAGE>
Price) shall thereafter be applicable, as nearly equivalent as may be
practicable in relation to any shares of stock, securities or properties
thereafter deliverable upon the exercise thereof. The Company shall not effect
any such consolidation, merger, sale, transfer or other disposition, unless
prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Company) resulting from such consolidation or
merger or the corporation purchasing or otherwise acquiring such properties
shall assume, by written instrument executed and mailed or delivered to the
holders of Warrants at the last address of such holders appearing on the books
of the Company, the obligation to deliver to such holders such shares of stock,
securities or properties as, in accordance with the foregoing provisions, such
holders may be entitled to acquire. The above provisions of this subparagraph
shall similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, sales, transfers, or other dispositions.
OTHER ADJUSTMENTS. In case (i) the Company shall issue or sell any
shares of its Common Stock for a consideration per share less than the fair
market value thereof at the time of such issue or sale, or issue or grant any
rights to subscribe for or to purchase, or any options for the purchase of,
Common Stock or Convertible Securities at an exercise price per share of Common
Stock less than the fair market value thereof on the date of such issue or
grant, or issue or sell any Convertible Securities having a conversion or
exchange price per share of Common Stock less than the fair market value thereof
on the date of such issue or sale, or (ii) any other corporate event or
transaction of the Company, outside the ordinary course of business consistent
with past practice, not specified or contemplated by this Section 1 occurs which
equitably requires an anti-dilutive adjustment to the Warrants represented
hereby, then the Board of Directors of the Company shall make such appropriate
adjustments to the Warrants as it may determine in its reasonable business
judgment.
NOTICE OF ADJUSTMENT. Upon any adjustment of the Exercise Price or
the number of shares issuable upon exercise of any Warrants represented hereby,
then and in each such case the Company shall promptly deliver to the Holder a
certificate of the chief financial officer of the Company setting forth the
Exercise Price resulting from such adjustment and the increase or decrease, if
any, in the number of shares of Common Stock issuable upon exercise of the
Warrant or Warrants held by each holder of Warrants, and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
PROHIBITION OF CERTAIN ACTIONS. The Company will not (i) authorize
or issue, or agree to authorize or issue, any shares of its capital stock of any
class preferred as to dividends or as to the distribution of assets upon
voluntary or involuntary liquidation, dissolution or winding-up of the Company
unless the rights of the holders thereof shall be limited to a fixed sum or
percentage of par value in respect of participation in dividends and in the
distribution of such assets or (ii) take any action which would result in any
adjustment of the Exercise Price if the total number of shares of Common Stock
issuable after such action upon exercise of all of the Warrants would exceed the
total number of shares of Common Stock then authorized by the Company's
Certificate of Incorporation.
STOCK TO BE RESERVED. The Company will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issue
upon the exercise of Warrants as herein provided, such number of shares of
Common Stock as shall then be issuable upon the exercise of all outstanding
Warrants, and the Company will maintain at all times all
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other rights and privileges sufficient to enable it to fulfill all its
obligations hereunder. The Company covenants that all shares of Common Stock
which shall be so issuable shall, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable, free from preemptive or similar rights on
the part of the holders of any shares of capital stock or securities of the
Company, and free from all Liens and charges with respect to the issue thereof;
and without limiting the generality of the foregoing, the Company covenants that
it will from time to time take all such action as may be required to assure that
the par value, if any, per share of the Common Stock is at all times equal to or
less than the then effective Exercise Price. The Company will take all such
action as may be necessary to assure that such shares of Common Stock may be so
issued without violation by the Company of any applicable law or regulation, or
of any requirements of any domestic securities exchange upon which the Common
Stock may be listed.
REGISTRATION AND LISTING OF COMMON STOCK. If any shares of Common
Stock required to be reserved for purposes of exercise of Warrants hereunder
require registration with or approval of any governmental authority under any
Federal or state law (other than the Securities Act) before such shares may be
issued upon exercise, the Company will, at its expense and as expeditiously as
possible, use its best efforts to cause such shares to be duly registered or
approved, as the case may be. Shares of Common Stock issuable upon exercise of
the Warrants shall be registered by the Company under the Securities Act or
similar statute then in effect if required by paragraph 11 and subject to the
conditions stated in such paragraph. If and so long as the Common Stock is
listed on The Nasdaq Stock Market's National Market or any national securities
exchange, the Company will, at its expense, obtain promptly and maintain the
approval for listing on each such exchange upon official notice of issuance, of
shares of Common Stock issuable upon exercise of the then outstanding Warrants
and maintain the listing of such shares after their issuance; and the Company
will also list on such national securities exchange, will register under the
Securities Exchange Act of 1933, as amended (the "Exchange Act"), and will
maintain such listing of, any other securities that at any time are issuable
upon exercise of the Warrants, if and at the time that any securities of the
same class shall be listed on such national securities exchange by the Company
or shall require registration under the Exchange Act.
CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any Warrant or of any shares of Common Stock
issued or issuable upon the exercise of any Warrant in any manner which
interferes with the timely exercise of such Warrant.
NO RIGHTS OR LIABILITIES AS SHAREHOLDERS. No Warrant shall entitle
any holder thereof to any of the rights of a shareholder of the Company. No
provision of this Warrant, in the absence of the actual exercise of such Warrant
or any part thereof by the holder thereof into Common Stock issuable upon such
exercise, shall give rise to any liability on the part of such holder as a
shareholder of the Company, whether such liability shall be asserted by the
Company or by creditors of the Company.
SECTION 2. METHOD OF EXERCISE OF WARRANTS
The Warrants may be exercised by the surrender of this Certificate,
with the Form of Subscription attached hereto duly executed by the holder, to
the Company at its principal
Page 80 of 94 Pages
<PAGE>
office, accompanied by payment of the Exercise Price for the number of shares of
Common Stock specified. The Warrants may be exercised for less than the full
number of shares of Common Stock called for hereby by surrender of this
Certificate in the manner and at the place provided above, accompanied by
payment for the number of shares of Common Stock being purchased. If the
Warrants should be exercised in part only, the Company shall, upon surrender of
this Warrant Certificate for cancellation, execute and deliver a new Warrant
Certificate evidencing the right of the holder to purchase the balance of the
shares purchasable hereunder. Upon receipt by the Company of this Warrant
Certificate at the office of the Company, in proper form for exercise,
accompanied by the full Exercise Price in cash or certified or bank cashier's
check, the holder shall be deemed to be the holder of record of the shares of
Common Stock issuable upon such exercise, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such Common Stock shall not then be actually delivered to the
holder.
Alternatively, at the option of the Holder, the Warrants may be
exercised by the exchange of all of or part of the Warrants (a "Warrant
Exchange"), into the number of shares of Common Stock determined in accordance
with this Section 2(b), by surrendering this Certificate, with the Form of
Subscription attached hereto duly executed by the Holder, to the Company at its
principal office. If the Warrants should be exercised in part only, the Company
shall, upon surrender of this Warrant Certificate for cancellation, execute and
deliver a new Warrant Certificate evidencing the right of the Holder to purchase
the balance of the shares purchasable hereunder. Upon receipt by the Company of
this Warrant Certificate at the office of the Company, in proper form for
exercise, the Holder shall be deemed to be the holder of record of the shares of
Common Stock issuable upon such exercise, notwithstanding that the stock
transfer books of the Company shall then be closed or the certificates
representing such Common Stock shall not then be actually delivered to the
Holder. In connection with any Warrant Exchange, this Warrant Certificate shall
represent the right to subscribe for and acquire the number of shares of Common
Stock (rounded to the next highest integer) equal to (i) the number of shares
specified by the Holder in its Form of Subscription (the "Total Number") less
(ii) the number of shares equal to the quotient obtained by dividing (A) the
product of the Total Number and the existing Exercise Price by (B) the
"volume-weighted average quote" of the reported sales prices per share of Common
Stock quoted on The Nasdaq Stock Market's National Market ("NASDAQ"), as
reported by Bloomberg L.P., for the ten consecutive trading days immediately
preceding the exercise of the Warrant (or the comparable closing price if the
Common Stock shall not then be quoted on NASDAQ or reported by Bloomberg L.P.).
As soon as practicable after the exercise of these Warrants in whole
or in part and, in any event, within ten days thereafter, the Company at its
expense will cause to be issued in the name of and delivered to the holder a
certificate or certificates for the number of fully paid and nonassessable
shares of Common Stock (and any new Warrants) to which the holder shall be
entitled upon such exercise. Each certificate for shares of Common Stock so
delivered shall be in such denominations as may be requested by the holder and
shall be registered in the name of the holder or such other name as the holder
may designate.
Page 81 of 94 Pages
<PAGE>
SECTION 3. PAYMENT OF TAXES
The issuance of certificates for shares of Common Stock upon
exercise of the Warrants shall be made without charge to the holders of the
Warrants exercised for any issuance tax in respect thereto; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any certificate
in a name other than that of the holder of the Warrant or Warrants exercised.
SECTION 4. MUTILATED OR MISSING WARRANT CERTIFICATES
Upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant Certificate,
and (in the case of loss, theft or destruction) of reasonably satisfactory
indemnification and upon surrender and cancellation of this Warrant Certificate,
if mutilated, the Company will execute and deliver a new Warrant Certificate of
like tenor and date.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
to be duly executed, as of the day and year first above written.
DOUBLETREE CORPORATION
By:
-----------------------------------
Name:
Title:
Page 83 of 94 Pages
<PAGE>
FORM OF SUBSCRIPTION
DATE: _____________, 19
TO: DOUBLETREE CORPORATION
The Undersigned, the holder of the within Warrants, hereby
irrevocably elects to exercise all or part of the purchase right represented by
such Warrants for, and to purchase thereunder, [______________ shares of Common
Stock of DOUBLETREE CORPORATION (the "Company") and herewith makes payment of
$____________ to the Company, evidenced by delivery of ______________________,]
[alternatively, pursuant to Section 2(b) of the Warrants: [___ (the "Total
Number") number of shares of Common Stock of DOUBLETREE CORPORATION (the
"Company") in a Warrant Exchange described in Section 2(b) of the Warrants,] and
requests that the certificate of such shares be issued in the name of, and be
delivered to _________________________, whose address is
___________________________.
--------------------------------------
(Name of Holder)
--------------------------------------
(Authorized Signatory)
--------------------------------------
(Address)
Page 84 of 94 Pages
<PAGE>
EXHIBIT 5
EXHIBIT 4
OPTION AGREEMENT
THIS AGREEMENT, dated as of June 30, 1994, is made by and between
Doubletree Corporation, a Delaware corporation hereinafter referred to as the
"Company," and GE Investment Hotel Partners I, Limited Partnership ("GEHOP"), an
affiliate of the Company or Subsidiary of the Company, hereinafter referred to
as "Optionholder":
WHEREAS, the Company wishes to afford the Optionholder the
opportunity to purchase an option to purchase 20,000 shares of its $.01 par
value Common Stock (the "Option"); and
WHEREAS, the Board of Directors (the "Board") of the Company has
determined that it would be to the advantage and best interest of the Company
and its stockholders to grant the Option, and has advised the Company thereof
and instructed the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
SECTION 1.1 - BOARD
"Board" shall mean the Board of Directors of the Company.
SECTION 1.2 - COMMON STOCK
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"Common Stock" shall mean the Common Stock of the Company, par value
$.01 per share, and any equity security of the Company issued or authorized to
be issued in the future, but excluding any warrants, options or other rights to
purchase Common Stock. Debt securities of the Company convertible into Common
Stock shall be deemed equity securities of the Company.
SECTION 1.3 - COMPANY
"Company" shall mean Doubletree Corporation, a Delaware
corporation.
SECTION 1.4 - EXCHANGE ACT
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
SECTION 1.5 - FAIR MARKET VALUE
"Fair Market Value" of a share of Common Stock as of a given date
shall be (i) the mean between the highest and lowest selling price of a share of
Common Stock on the principal exchange on which shares of Common Stock are then
trading, if any, on such date, or if shares were not traded on such date, then
on the closest preceding date on which a trade occurred, or (ii) if Common Stock
is not traded on an exchange, the mean between the closing representative bid
and asked prices for the Common Stock on such date as reported by NASDAQ or, if
NASDAQ is not then in existence, by its successor quotation system; or (iii) if
Common Stock is not publicly traded, the Fair Market Value of a share of Common
Stock as established by the Committee acting in good faith.
SECTION 1.6 - GEHOP
"GEHOP" shall mean GE Investment Hotel Partners I, Limited
Partnership.
SECTION 1.7 - SECRETARY
"Secretary" shall mean the Secretary of the Company.
SECTION 1.8 - SECURITIES ACT
"Securities Act" shall mean the Securities Act of 1933, as
amended.
SECTION 1.9 - SUBSIDIARY
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50 percent
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
SECTION 1.10 - OPTION
"Option shall mean an option granted under this Agreement.
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<PAGE>
SECTION 1.11 - OPTIONHOLDER "Optionholder" shall mean GEHOP.
ARTICLE II
SALE OF OPTION
SECTION 2.1 - SALE OF OPTION
In consideration of the payment of the amount set forth in Section
2.2 hereof, and for other good and valuable consideration, on the date hereof
the Company irrevocably grants to the Optionholder the option to purchase any
part or all of an aggregate of 20,000 shares of its $.01 par value Common Stock
upon the terms and conditions set forth in this Agreement.
SECTION 2.2 - CONSIDERATION TO THE COMPANY
In consideration of the granting of the Option by the Company, the
Optionholder shall pay to the Company an aggregate amount of $200.00 in cash
upon the execution of this Agreement.
SECTION 2.3 - EXERCISE PRICE
The purchase price of the shares of stock covered by the Option
shall be $13.00 per share without commission or other charge.
SECTION 2.4 - ADJUSTMENTS IN OPTION
(a) In the event that the outstanding shares of the stock subject to
the Option are changed into or exchanged for a different number or kind of
shares of the Company or other securities of the Company, or of another
corporation, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split up, stock dividend or
combination of shares, the Board shall make an appropriate and equitable
adjustment in the number and kind of shares as to which the Option, or portions
thereof then unexercised, shall be exercisable, to the end that after such event
the Optionholder's proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in the Option may include any
necessary corresponding adjustment in the Option price per share, but shall be
made without change in the total price applicable to the unexercised portion of
the Option (except for any change in the aggregate price resulting from
rounding-off of share quantities or prices). Any such adjustment made by the
Board shall be final and binding upon the Optionholder, the Company and all
other interested persons.
(b) Notwithstanding the foregoing, in the event of such a
reorganization, merger, consolidation, recapitalization, reclassification, stock
split up, stock dividend or combination, or other adjustment or event which
results in shares of Common Stock being
Page 87 of 94 Pages
<PAGE>
exchanged for or converted into cash, securities or other property, the Company
will have the right to terminate this Agreement as of the date of the exchange
or conversion, in which case all options, rights and other awards under this
Agreement shall become the right to receive such cash, securities or other
property, net of any applicable exercise price.
(c) In the event of a "spin-off" or other substantial distribution
of assets of the Company which has a material diminutive effect upon the Fair
Market Value of the Company's Common Stock, the Board may in its discretion make
an appropriate and equitable adjustment to the Option to reflect such
diminution.
ARTICLE III
PERIOD OF EXERCISEABILITY
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
The Option shall become exercisable in four (4) cumulative
installments as follows:
(a) The first installment shall consist of twenty-five percent (25%)
of the shares covered by the Option and shall become exercisable on the
first anniversary of the date the Option is granted.
(b) The second installment shall consist of twenty-five percent
(25%) of the shares covered by the Option and shall become exercisable on
the second anniversary of the date the Option is granted.
(c) The third installment shall consist of twenty-five percent (25%)
of the shares covered by the Option and shall become exercisable on the
third anniversary of the date the Option is granted.
(d) The fourth installment shall consist of twenty-five percent
(25%) of the shares covered by the Option and shall become exercisable on
the fourth anniversary of the date the Option is granted.
SECTION 3.2 - DURATION OF EXERCISABILITY
The installments provided for in Section 3.1 are cumulative. Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
SECTION 3.3 - EXPIRATION OF OPTION
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
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(a) The expiration of ten (10) years from the date the Option
was granted;
(b) The effective date of either the merger or consolidation of the
Company with or into another corporation, the exchange of all or substantially
all of the assets of the Company for the securities of another corporation, the
acquisition by another corporation or person of all or substantially all of the
Company's assets or fifty percent (50%) or more of the Company's then
outstanding voting stock (other than an acquisition by the General Electric
Pension Trust or its affiliates, by Canadian Pacific or its affiliates, by
Richard Ferris or by Peter Ueberroth of more than 50% of the Company's then
outstanding voting stock), or the liquidation or dissolution of the Company,
unless the Board waives this provision in writing. At least ten (10) days prior
to the effective date of such merger, consolidation, exchange, acquisition,
liquidation or dissolution, the Board shall give the Optionholder notice of such
event if the Option has then neither been fully exercised nor become
unexercisable under this Section 3.3.
SECTION 3.4 - ACCELERATION OF EXERCISABILITY
In the event of the merger or consolidation of the Company with or
into another corporation, the exchange of all or substantially all of the assets
of the Company for the securities of another corporation, the acquisition by
another corporation or person of all or substantially all of the Company's
assets or fifty percent (50%) or more of the Company's then outstanding voting
stock (other than an acquisition by the General Electric Pension Trust or its
affiliates, by Canadian Pacific or its affiliates, by Richard Ferris or by Peter
Ueberroth of more than 50% of the Company's then outstanding voting stock), or
the liquidation or dissolution of the Company, this Option shall be exercisable
as to all the shares covered hereby, notwithstanding that this Option may not
yet have become fully exercisable under Section 3.1(a); provided, however, that
this acceleration of exercisability shall not take place if:
(a) Such acceleration of exercisability would be inconsistent
with the requirements of Rule 16b-3;
(b) This Option becomes unexercisable under Section 3.3 prior
to said effective date; or
(c) In connection with such an event, provision is made for an
assumption of this Option or a substitution therefor of a new option by the
succeeding employer corporation or a parent or subsidiary of such corporation.
The Board may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of exercisability, including, but not by way of
limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction.
ARTICLE IV
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EXERCISE OF OPTION
SECTION 4.1 - PARTIAL EXERCISE
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
one hundred (100) shares (or the minimum installment set forth in Section 3.1,
if a smaller number of shares) and shall be for whole shares only.
SECTION 4.2 - MANNER OF EXERCISE
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.3:
(a) Notice in writing signed by the Optionholder stating that the
Option or portion is thereby exercised, such notice complying with all
applicable rules established by the Board; and
(b) (i) Full payment (in cash) for the shares with respect to
which such Option or portion is exercised; or
(ii) With the consent of the Board, (A) shares of the Company's
Common Stock owned by the Optionholder duly endorsed for transfer to the Company
or (B) subject to the timing requirements of Section 4.3, shares of the
Company's Common Stock issuable to the Optionholder upon exercise of the Option,
with a Fair Market Value on the date of Option exercise equal to the aggregate
purchase price of the shares with respect to which such Option or portion is
exercised; or
(iii) With the consent of the Board, any combination of the
consideration provided in the foregoing subparagraphs (i) and (ii); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Board, signed by the Optionholder, stating that the shares
of stock are being acquired for the Optionholder's own account, for investment
and without any present intention of distributing or reselling said shares or
any of them except as may be permitted under the Securities Act and then
applicable rules and regulations thereunder, and that the Optionholder will
indemnify the Company against and hold it free and harmless from any loss,
damage, expense or liability resulting to the Company if any sale or
distribution of the shares by such person is contrary to the representation and
agreement referred to above. The Board may, in its absolute discretion, take
whatever additional actions it deems appropriate to insure the observance and
performance of such representation and agreement and to effect compliance with
the Securities Act and any other federal or state securities laws or
regulations. Without limiting the generality of the foregoing, the Board may
require an opinion of counsel acceptable to it to the effect that any subsequent
transfer of shares acquired on an Option exercise does not violate the
Securities Act, and may issue stop-transfer orders covering such shares. Share
certificates evidencing stock
Page 90 of 94 Pages
<PAGE>
issued on exercise of this Option shall bear an appropriate legend referring to
the provisions of this subsection (c) and the agreements herein. The written
representation and agreement referred to in the first sentence of this
subsection (c) shall, however, not be required if the shares to be issued
pursuant to such exercise have been registered under the Securities Act, and
such registration is then effective in respect of such shares; and
(d) Full payment to the Company (or other employer corporation) of
all amounts which, under federal, state or local tax law, it is required to
withhold upon exercise of the Option; with the consent of the Board, (i) shares
of the Company's Common Stock owned by the Optionholder duly endorsed for
transfer, or (ii) subject to the timing requirements of Section 4.3, shares of
the Company's Common Stock issuable to the Optionholder upon exercise of the
Option, having a Fair Market Value at the date of Option exercise equal to the
sums required to be withheld, may be used to make all or part of such payment.
SECTION 4.3 - CERTAIN TIMING REQUIREMENTS
Shares of the Company's Common Stock issuable to the Optionholder
upon exercise of the Option may be used to satisfy the Option price or the tax
withholding consequences of such exercise only (i) during the period beginning
on the third (3rd) business day following the date of release of the quarterly
or annual summary statement of sales and earnings of the Company and ending on
the twelfth (12th) business day following such date or (ii) pursuant to an
irrevocable written election by the Optionholder to use shares of the Company's
Common Stock issuable to the Optionholder upon exercise of the Option to pay all
or part of the Option price or the withholding taxes (subject to the approval of
the Board) made at least six (6) months prior to the payment of such Option
price or withholding taxes.
SECTION 4.4 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed; and
(b) The completion of any registration or other qualification of
such shares under any state or federal law or under rulings or regulations of
the Securities and Exchange Commission or of any other governmental regulatory
body, which the Board shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Board shall, in its absolute
discretion, determine to be necessary or advisable; and
Page 91 of 94 Pages
<PAGE>
(d) The receipt by the Company of full payment for such shares,
including payment of all amounts which, under federal, state or local tax law,
it is required to withhold upon exercise of the Option; and
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Board may from time to time establish for reasons
of administrative convenience, provided, however, that the Company shall
undertake and diligently pursue satisfaction of the foregoing conditions within
a reasonable time after exercise of the Option.
SECTION 4.5 - RIGHTS AS SHAREHOLDER
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
ARTICLE V
OTHER PROVISIONS
SECTION 5.1 - ADMINISTRATION
The Board shall have the power to interpret this Agreement and to
adopt such rules for the administration, interpretation and application of this
Agreement as are consistent therewith and to interpret or revoke any such rules.
All actions taken and all interpretations and determinations made by the Board
in good faith shall be final and binding upon the Optionholder, the Company and
all other interested persons. No member of the Board shall be personally liable
for any action, determination or interpretation made in good faith with respect
to this Agreement or the Option.
SECTION 5.2 - OPTION NOT TRANSFERABLE
Neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the Optionholder or
his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution, and provided, further, that Optionholder shall have the right to
assign or distribute the Option, in whole or in part, to Optionholder's partners
upon Optionholder's dissolution or liquidation, whereupon each assignee or
distributee shall be entitled to all rights hereunder as to the portion of the
Option conveyed to it.
SECTION 5.3 - SHARES TO BE RESERVED
Page 92 of 94 Pages
<PAGE>
The Company shall at all times during the term of the Option reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
SECTION 5.4 - NOTICES
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionholder shall be addressed to GEHOP at P.O. Box
7900, 3003 Summer Street, Stamford, Connecticut 06904-7900, Attention: General
Counsel, with a copy to Dewey Ballantine, 1301 Avenue of the Americas, New York,
New York 10019, Attn: Sanford W. Morhouse, Esq. (WCS/49376). By a notice given
pursuant to this Section 5.4, either party may hereafter designate a different
address for notices to be given to him. Any notice shall be deemed duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.
SECTION 5.5 - TITLES
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
SECTION 5.6 - CONSTRUCTION
This Agreement shall be administered, interpreted and enforced under
the laws of the State of Delaware.
SECTION 5.7 - CONFORMITY TO SECURITIES LAWS
The Optionholder acknowledges that this Agreement is intended to
conform to the extent necessary with all provisions of the Securities Act and
the Exchange Act and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder. Notwithstanding anything herein
to the contrary, this Agreement shall be administered, and the Option is granted
and may be exercised, only in such a manner as to conform to such laws, rules
and regulations. To the extent permitted by applicable law, this Agreement shall
be deemed amended to the extent necessary to conform to such laws, rules and
regulations.
Page 93 of 94 Pages
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed
and delivered by the parties hereto.
Doubletree Corporation
By:
------------------------------------
WILLIAM L. PEROCCHI,
EXECUTIVE VICE PRESIDENT,
CHIEF FINANCIAL OFFICER AND
SECRETARY
GE Investment Hotel Partners I, Limited Partnership
By: GE Investment Management Incorporated, its general partner
By:
---------------------------------
Title:
------------------------------
Taxpayer Identification Number:
- --------------------------------
Page 94 of 94 Pages
