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PRELIMINARY COPY -- SUBJECT TO COMPLETION
RED LION HOTELS, INC.
4001 MAIN STREET
VANCOUVER, WASHINGTON 98663
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER , 1996
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To the Stockholders of Red Lion Hotels, Inc.:
A Special Meeting of stockholders (the "Special Meeting") of Red Lion
Hotels, Inc., a Delaware corporation ("Red Lion"), will be held on
, November , 1996, at 9:00 a.m. (local time), at ,
for the following purposes:
(1) to consider and vote upon a proposal to approve and adopt an
Agreement and Plan of Merger dated as of September 12, 1996 (the "Merger
Agreement"), by and among Red Lion, Doubletree Corporation, a Delaware
corporation ("Doubletree"), and RLH Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Doubletree ("Merger Sub"), and
the merger of Merger Sub with and into Red Lion upon the terms and subject
to the conditions thereof (the "Merger"), pursuant to which, among other
things, each share of Common Stock, par value $.01 per share, of Red Lion
("Red Lion Common Stock") which is outstanding immediately prior to the
Merger (other than shares as to which appraisal rights have been perfected,
and not withdrawn or lost, under the Delaware General Corporation Law) will
be converted into the right to receive (i) $21.30 in cash (plus, if the
Merger does not occur on or prior to November 18, 1996, interest accruing
at a fluctuating rate per annum equal to the prime interest rate from time
to time of Bankers Trust Company, compounded daily, on $30.106 plus such
accrued interest, for the period commencing on November 18, 1996 and ending
on the day on which the Merger occurs) and (ii) 0.2398 shares (the
"Exchange Ratio") of common stock, par value $.01 per share, of Doubletree
("Doubletree Common Stock"); provided, however, that in the event that the
"volume-weighted average quote" of the reported sales prices per share of
the Doubletree Common Stock quoted on The Nasdaq Stock Market's National
Market, as reported by Bloomberg L.P., for the 10 consecutive trading days
(on which shares of the Doubletree Common Stock are actually traded)
immediately preceding the second business day prior to the effective time
of the Merger (the "Final Doubletree Stock Price"), is equal to or less
than $34.89, or equal to or greater than $38.56, the Exchange Ratio shall
be subject to adjustment as follows: (a) if the Final Doubletree Stock
Price is equal to or less than $31.22, then the Exchange Ratio shall be
equal to the sum of 0.2398 plus the quotient obtained by dividing $0.8806
by the Final Doubletree Stock Price ; (b) if the Final Doubletree Stock
Price is greater than $31.22 and equal to or less than $34.89, then the
Exchange Ratio shall be equal to the quotient obtained by dividing $8.3657
by the Final Doubletree Stock Price; (c) if the Final Doubletree Stock
Price is equal to or greater than $38.56 but less than $42.23, then the
Exchange Ratio shall be equal to the quotient obtained by dividing $9.2463
by the Final Doubletree Stock Price; (d) if the Final Doubletree Stock
Price is equal to or greater than $42.23 but less than $44.07, then the
Exchange Ratio shall be equal to the difference of 0.2398 minus the
quotient obtained by dividing $0.8806 by the Final Doubletree Stock Price;
and (e) if the Final Doubletree Stock Price is equal to or greater than
$44.07, then the Exchange Ratio shall be equal to the quotient obtained by
dividing $9.6866 by the Final Doubletree Stock Price; and
(2) to consider and transact such other business as may properly come
before the Special Meeting or any adjournments or postponements thereof.
The Board of Directors of Red Lion has fixed the close of business on
, 1996 as the record date for the determination of stockholders
entitled to notice of and to vote at the Special Meeting and any adjournment or
postponement thereof, and only stockholders of record at such time will be
entitled to notice of and to vote at the Special Meeting and any adjournment or
postponement thereof. The affirmative vote of the holders of not less than a
majority of the outstanding shares of Red Lion Common Stock will be necessary
for approval and adoption of the Merger Agreement and the Merger.
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IN ORDER TO ENSURE THAT YOUR INTERESTS ARE REPRESENTED AT THE SPECIAL
MEETING, PLEASE COMPLETE, SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED PROXY, WHICH
IS BEING SOLICITED BY THE BOARD OF DIRECTORS, WHETHER OR NOT YOU PLAN TO ATTEND
THE SPECIAL MEETING. A PRE-ADDRESSED, STAMPED RETURN ENVELOPE WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED FOR THAT PURPOSE.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND THE MERGER.
By Order of the Board of Directors,
Beth A. Ugoretz
Secretary
October , 1996
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