EXHIBIT 5
EXHIBIT 4
OPTION AGREEMENT
THIS AGREEMENT, dated as of June 30, 1994, is made by and between
Doubletree Corporation, a Delaware corporation hereinafter referred to as the
"Company," and GE Investment Hotel Partners I, Limited Partnership ("GEHOP"), an
affiliate of the Company or Subsidiary of the Company, hereinafter referred to
as "Optionholder":
WHEREAS, the Company wishes to afford the Optionholder the
opportunity to purchase an option to purchase 20,000 shares of its $.01 par
value Common Stock (the "Option"); and
WHEREAS, the Board of Directors (the "Board") of the Company has
determined that it would be to the advantage and best interest of the Company
and its stockholders to grant the Option, and has advised the Company thereof
and instructed the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
SECTION 1.1 - BOARD
"Board" shall mean the Board of Directors of the Company.
SECTION 1.2 - COMMON STOCK
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"Common Stock" shall mean the Common Stock of the Company, par value
$.01 per share, and any equity security of the Company issued or authorized to
be issued in the future, but excluding any warrants, options or other rights to
purchase Common Stock. Debt securities of the Company convertible into Common
Stock shall be deemed equity securities of the Company.
SECTION 1.3 - COMPANY
"Company" shall mean Doubletree Corporation, a Delaware
corporation.
SECTION 1.4 - EXCHANGE ACT
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
SECTION 1.5 - FAIR MARKET VALUE
"Fair Market Value" of a share of Common Stock as of a given date
shall be (i) the mean between the highest and lowest selling price of a share of
Common Stock on the principal exchange on which shares of Common Stock are then
trading, if any, on such date, or if shares were not traded on such date, then
on the closest preceding date on which a trade occurred, or (ii) if Common Stock
is not traded on an exchange, the mean between the closing representative bid
and asked prices for the Common Stock on such date as reported by NASDAQ or, if
NASDAQ is not then in existence, by its successor quotation system; or (iii) if
Common Stock is not publicly traded, the Fair Market Value of a share of Common
Stock as established by the Committee acting in good faith.
SECTION 1.6 - GEHOP
"GEHOP" shall mean GE Investment Hotel Partners I, Limited
Partnership.
SECTION 1.7 - SECRETARY
"Secretary" shall mean the Secretary of the Company.
SECTION 1.8 - SECURITIES ACT
"Securities Act" shall mean the Securities Act of 1933, as
amended.
SECTION 1.9 - SUBSIDIARY
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50 percent
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
SECTION 1.10 - OPTION
"Option shall mean an option granted under this Agreement.
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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
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exchanged for or converted into cash, securities or other property, the Company
will have the right to terminate this Agreement as of the date of the exchange
or conversion, in which case all options, rights and other awards under this
Agreement shall become the right to receive such cash, securities or other
property, net of any applicable exercise price.
(c) In the event of a "spin-off" or other substantial distribution
of assets of the Company which has a material diminutive effect upon the Fair
Market Value of the Company's Common Stock, the Board may in its discretion make
an appropriate and equitable adjustment to the Option to reflect such
diminution.
ARTICLE III
PERIOD OF EXERCISEABILITY
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
The Option shall become exercisable in four (4) cumulative
installments as follows:
(a) The first installment shall consist of twenty-five percent (25%)
of the shares covered by the Option and shall become exercisable on the
first anniversary of the date the Option is granted.
(b) The second installment shall consist of twenty-five percent
(25%) of the shares covered by the Option and shall become exercisable on
the second anniversary of the date the Option is granted.
(c) The third installment shall consist of twenty-five percent (25%)
of the shares covered by the Option and shall become exercisable on the
third anniversary of the date the Option is granted.
(d) The fourth installment shall consist of twenty-five percent
(25%) of the shares covered by the Option and shall become exercisable on
the fourth anniversary of the date the Option is granted.
SECTION 3.2 - DURATION OF EXERCISABILITY
The installments provided for in Section 3.1 are cumulative. Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
SECTION 3.3 - EXPIRATION OF OPTION
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
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(a) The expiration of ten (10) years from the date the Option
was granted;
(b) The effective date of either the merger or consolidation of the
Company with or into another corporation, the exchange of all or substantially
all of the assets of the Company for the securities of another corporation, the
acquisition by another corporation or person of all or substantially all of the
Company's assets or fifty percent (50%) or more of the Company's then
outstanding voting stock (other than an acquisition by the General Electric
Pension Trust or its affiliates, by Canadian Pacific or its affiliates, by
Xxxxxxx Xxxxxx or by Xxxxx Xxxxxxxxx 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 Xxxxxxx Xxxxxx or by Xxxxx
Xxxxxxxxx of more than 50% of the Company's then outstanding voting stock), or
the liquidation or dissolution of the Company, this Option shall be exercisable
as to all the shares covered hereby, notwithstanding that this Option may not
yet have become fully exercisable under Section 3.1(a); provided, however, that
this acceleration of exercisability shall not take place if:
(a) Such acceleration of exercisability would be inconsistent
with the requirements of Rule 16b-3;
(b) This Option becomes unexercisable under Section 3.3 prior
to said effective date; or
(c) In connection with such an event, provision is made for an
assumption of this Option or a substitution therefor of a new option by the
succeeding employer corporation or a parent or subsidiary of such corporation.
The Board may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of exercisability, including, but not by way of
limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction.
ARTICLE IV
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EXERCISE OF OPTION
SECTION 4.1 - PARTIAL EXERCISE
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
one hundred (100) shares (or the minimum installment set forth in Section 3.1,
if a smaller number of shares) and shall be for whole shares only.
SECTION 4.2 - MANNER OF EXERCISE
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.3:
(a) Notice in writing signed by the Optionholder stating that the
Option or portion is thereby exercised, such notice complying with all
applicable rules established by the Board; and
(b) (i) Full payment (in cash) for the shares with respect to
which such Option or portion is exercised; or
(ii) With the consent of the Board, (A) shares of the Company's
Common Stock owned by the Optionholder duly endorsed for transfer to the Company
or (B) subject to the timing requirements of Section 4.3, shares of the
Company's Common Stock issuable to the Optionholder upon exercise of the Option,
with a Fair Market Value on the date of Option exercise equal to the aggregate
purchase price of the shares with respect to which such Option or portion is
exercised; or
(iii) With the consent of the Board, any combination of the
consideration provided in the foregoing subparagraphs (i) and (ii); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Board, signed by the Optionholder, stating that the shares
of stock are being acquired for the Optionholder's own account, for investment
and without any present intention of distributing or reselling said shares or
any of them except as may be permitted under the Securities Act and then
applicable rules and regulations thereunder, and that the Optionholder will
indemnify the Company against and hold it free and harmless from any loss,
damage, expense or liability resulting to the Company if any sale or
distribution of the shares by such person is contrary to the representation and
agreement referred to above. The Board may, in its absolute discretion, take
whatever additional actions it deems appropriate to insure the observance and
performance of such representation and agreement and to effect compliance with
the Securities Act and any other federal or state securities laws or
regulations. Without limiting the generality of the foregoing, the Board may
require an opinion of counsel acceptable to it to the effect that any subsequent
transfer of shares acquired on an Option exercise does not violate the
Securities Act, and may issue stop-transfer orders covering such shares. Share
certificates evidencing stock
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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
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(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
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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 X.X. Xxx
0000, 0000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000-0000, Attention: General
Counsel, with a copy to Xxxxx Xxxxxxxxxx, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attn: Xxxxxxx X. Xxxxxxxx, 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.
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IN WITNESS WHEREOF, this Agreement has been executed
and delivered by the parties hereto.
Doubletree Corporation
By:
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XXXXXXX X. XXXXXXXX,
EXECUTIVE VICE PRESIDENT,
CHIEF FINANCIAL OFFICER AND
SECRETARY
GE Investment Hotel Partners I, Limited Partnership
By: GE Investment Management Incorporated, its general partner
By:
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Title:
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Taxpayer Identification Number:
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