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Exhibit 10.2
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, 2001 Warrants to Purchase Common Stock
(unless previously terminated under Dated: November 8, 1996
the circumstances described herein)
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
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"Warrant Shares") at a price per share equal 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.
1C. 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.
1D. 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 corpora-
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tion, 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 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.
1E. 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
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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.
1F. 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.
1G. 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.
1H. 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 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
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Company of any applicable law or regulation, or of any requirements of any
domestic securities exchange upon which the Common Stock may be listed.
1I. 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.
1J. 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.
1K. 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
(a) 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
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principal 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.
(b) 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
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Stock shall not then be quoted on NASDAQ or reported by Bloomberg L.P.).
(c) 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.
SECTION 3. PAYMENT OF TAXES
The issuance of certificates for shares of Common Stock upon
exercise of the Warrants shall be made without charge to the holders of the
Warrants exercised for any issuance tax in respect thereto; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the holder of the Warrant or Warrants
exercised.
SECTION 4. MUTILATED OR MISSING WARRANT CERTIFICATES
Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant Certificate, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification and upon surrender and cancellation of
this Warrant Certificate, if mutilated, the Company will execute and deliver a
new Warrant Certificate of like tenor and date.
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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: /s/ David L. Stivers
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Name: David L. Stivers
Title: Senior Vice President, General
Counsel and Secretary
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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)