-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MwxURRhPCrJAbTyDzCo6x9+fhjVbU+ciEblstk0pEH4uVmSlrYlgiKSDdiVURnvI PvlVvMJY0eY8WDXETYhwkA== 0001047469-97-009034.txt : 19971230 0001047469-97-009034.hdr.sgml : 19971230 ACCESSION NUMBER: 0001047469-97-009034 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19971229 SROS: NONE GROUP MEMBERS: DTPT INVESTMENT CORPORATION GROUP MEMBERS: G E INVESTMENT MANAGEMENT INC GROUP MEMBERS: GE INVESTMENT HOTEL PARTNERSHIP I, LP GROUP MEMBERS: GENERAL ELECTRIC COMPANY GROUP MEMBERS: GENERAL ELECTRIC INVESTMENT CORPORATION GROUP MEMBERS: TRUSTEES OF GENERAL ELECTRIC PENSION TRUST SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PROMUS HOTEL CORP CENTRAL INDEX KEY: 0000944647 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 621596939 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-44357 FILM NUMBER: 97745856 BUSINESS ADDRESS: STREET 1: 6800 POPLAR AVENUE STREET 2: STE 200 CITY: MEMPHIS STATE: TN ZIP: 38138 BUSINESS PHONE: 9013745103 MAIL ADDRESS: STREET 1: 6800 POPLAR AVENUE STREET 2: STE 200 CITY: MEMPHIS STATE: TN ZIP: 38138 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: G E INVESTMENT MANAGEMENT INC CENTRAL INDEX KEY: 0000936839 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 3003 SUMMER STREET STREET 2: P O BOX 7900 CITY: STAMFORD STATE: CT ZIP: 06904-7900 BUSINESS PHONE: 2033262300 SC 13D 1 SCH13D OMB APPROVAL ---------------------------- OMB Number: 3235-0145 Expires: December 31, 1997 Estimated average burden hours per response.....14.90 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) 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 EX-1 2 AFFILIATES LETTER 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 (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 "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 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 (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 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 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 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 (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 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 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 EX-2 3 REGISTRATION RIGHTS AGREEMENT 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 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 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 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 (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 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 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 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 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 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 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 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 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 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 Page 55 of 94 Pages 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 Page 56 of 94 Pages 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 Page 57 of 94 Pages 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 Page 58 of 94 Pages 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 Page 59 of 94 Pages 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 Page 60 of 94 Pages 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, Page 61 of 94 Pages 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 Page 62 of 94 Pages 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 Page 63 of 94 Pages 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 Page 64 of 94 Pages 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 Page 65 of 94 Pages 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 Page 66 of 94 Pages 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 Page 67 of 94 Pages 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 Page 68 of 94 Pages 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, Page 69 of 94 Pages 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- Page 70 of 94 Pages 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 Page 71 of 94 Pages 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 Page 72 of 94 Pages 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. Page 73 of 94 Pages EX-3 4 ASSIGNMENT & ASSUMPTION AGREEMENT 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. Page 74 of 94 Pages 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. Page 75 of 94 Pages 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 EX-4 5 WARRANT CERTIFICATE 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 Page 77 of 94 Pages 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 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 Page 79 of 94 Pages 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 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 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. Page 82 of 94 Pages 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 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 EX-5 6 OPTION AGREEMENT 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 Page 85 of 94 Pages "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. Page 86 of 94 Pages 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 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: Page 88 of 94 Pages (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 Page 89 of 94 Pages 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 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 (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 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 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 -----END PRIVACY-ENHANCED MESSAGE-----