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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-K/A

AMENDMENT NO. 1


|  |  |                                                                                     
|- |  | ------------------------------------------------------------------------------------
|x |  | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|  |  | For the fiscal year ended December 31, 2002                                         

or

|  |  |                                                                                         
|- |  | ----------------------------------------------------------------------------------------
|o |  | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File No. 0-12708

CANDLEWOOD HOTEL COMPANY, INC.

(Exact name of registrant as specified in its charter)


|                                                                        |  |                                                
|----------------------------------------------------------------------- |  | -----------------------------------------------
|Delaware
(State or other jurisdiction of
incorporation or organization) |  | 48-1188025
(I.R.S. Employer
Identification No.)

8621 East 21st Street North, Suite 200, Wichita, Kansas 67206
(Address of principal executive offices and Zip Code)

Registrants telephone number, including area code: (316) 631-1300

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01 par value

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes x     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. o

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).

Yes o     No x

The aggregate market value of common stock held by non-affiliates of the
registrant, as of June 28, 2002, was $8,769,434 based on the closing sales
price of $1.35 on such date.

The number of shares outstanding of the registrants common stock, as of
March 24, 2003, was 9,025,000.





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TABLE OF CONTENTS



|                                                                           |                                                                         |  |  |  |  |  |  | 
|-------------------------------------------------------------------------- | ----------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART III                                                                  
|                                                                           | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT            
|EXECUTIVE OFFICERS                                                        
|SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE                   
|                                                                           | ITEM 11. EXECUTIVE COMPENSATION                                        
|Summary Compensation Table                                                
|Option Grants in Last Fiscal Year                                         
|Aggregated Option Exercises in Last Fiscal Year and Year-End Option Values
|COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION               
|                                                                           | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|Equity Compensation Plan Information As of December 31, 2002              
|                                                                           | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                
|Signatures                                                                
|CERTIFICATIONS                                                            



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PART III

Items 10, 11, 12 and 13 to the Annual Report on Form 10-K of Candlewood
Hotel Company, Inc. (the Company) for the year ended December 31, 2002, as
filed with the Securities and Exchange Commission on March 31, 2003, are hereby
amended and restated in their entirety as follows:




ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS

The directors of the Company are as follows:

|                    |  |     |    |                                  |  |                                                                                |  |              |      | 
|------------------- |  | --- | -- | -------------------------------- |  | ------------------------------------------------------------------------------ |  | ------------ | ---- | 
|                    |  |     |    |                                  |  |                                                                                |  | First Became
|Name                |  | Age |    | Principal Occupation or Position |  | a Director                                                                    
|                    |  |     |    |                                  |  |                                                                               
|Jack P. DeBoer      |  |     | 72 |                                  |  | Chief Executive Officer and Chairman of
the Board of the Company               |  |              | 1996 | 
|Warren D. Fix       |  |     | 64 |                                  |  | Executive Vice President, Chief
Financial Officer and Secretary of the
Company |  |              | 1996 | 
|Tony M. Salazar     |  |     | 51 |                                  |  | Executive Vice President of McCormack
Baron Salazar, Inc.                      |  |              | 1997 | 
|Robert J. Cresci    |  |     | 59 |                                  |  | Managing Director of Pecks Management
Partners Ltd.                            |  |              | 1997 | 
|Robert S. Morris    |  |     | 48 |                                  |  | Managing Partner of Olympus Partners                                           |  |              | 1997 | 
|Frank J. Pados, Jr. |  |     | 59 |                                  |  | Executive Vice President of Desai
Capital Management Inc.                      |  |              | 1997 | 
|Thomas H. Nielsen   |  |     | 72 |                                  |  | Principal of The Nielsen Company                                               |  |              | 1998 | 
|James E. Roos       |  |     | 51 |                                  |  | President and Chief Operating Officer
of the Company                           |  |              | 2001 | 
|Seth E. Schofield   |  |     | 63 |                                  |  | Chairman and Owner of Base International                                       |  |              | 2001 | 
|J. Michael Issa     |  |     | 52 |                                  |  | Vice Chairman, Ballenger Cleveland &
Issa, LLC                                 |  |              | 2002 | 
|Richard M. Kelleher |  |     | 53 |                                  |  | Principal of Pyramid Advisors, LLC                                             |  |              | 2002 | 

Jack P. DeBoerhas served as Chairman of the Board and Chief Executive
Officer of the Company since its inception. From October 1993 to September
1995, Mr. DeBoer was self-employed and was engaged in the development of the
Candlewood extended-stay hotel concept. From 1988 to 1993, Mr. DeBoer
co-founded and developed Summerfield Hotel Corporation, an upscale
extended-stay hotel chain. In 1975, Mr. DeBoer founded the Residence Inn
Company, an upscale extended-stay chain, which he built to 100 hotels before
selling the company to Marriott Corporation in 1987. Mr. DeBoer is a member of
the Board of Trustees of Innkeepers USA Trust, a publicly held lodging real
estate investment trust.

Warren D. Fixhas served as a director and the Executive Vice-President,
Chief Financial Officer and Secretary of the Company since its inception. From
July 1994 to October 1995, Mr. Fix was a consultant to Doubletree, primarily
developing debt and equity sources of capital for hotel acquisitions and
refinancings. Additionally, Mr. Fix was a partner in The Contrarian Group, a
business management company, from December 1992 to October 1995. From 1989 to
December 1992, Mr. Fix served as President of the Pacific Company, a real
estate investment and development company. From 1964 to 1989, Mr. Fix held
numerous positions within The Irvine Company, a California-based real estate
and development company, including most recently, Chief Financial Officer.

Tony M. Salazarhas served as a director of the Company since February
1997. Mr. Salazar is the Executive Vice President of McCormack Baron Salazar,
Inc., a privately held real estate development and property management company,
a position which he has held since 1985. He previously served as the

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Executive Director of the Kansas City Neighborhood Alliance, a community
development and financing agency.

Robert J. Crescihas served as a director of the Company since November
1997. Mr. Cresci has been a Managing Director of Pecks Management Partners
Ltd., an investment management firm, since 1990. Mr. Cresci currently serves
on the Board of Directors of Sepracor, Inc., Luminex Corporation, Aviva
Petroleum Ltd., Film Roman, Inc., j2 Global Communications, Inc., SeraCare Life
Sciences, Inc., Continucare Corporation, LTWC Corporation and several private
companies.

Robert S. Morrishas served as a director of the Company since November
1997. Mr. Morris founded Olympus Partners in 1989 and serves as the Managing
Partner of Olympus Private Placement Fund, L.P., Olympus Growth Fund II, L.P.,
Olympus Executive Fund, and Olympus Growth Fund III, L.P. Olympus manages
approximately $1 billion in capital. Mr. Morris is currently a director of
several Olympus portfolio companies, including Shemin Acquisition Corporation,
Client Distribution Services, Inc. and Symmetry Medical Inc. He has served on
the boards of several divested Olympus portfolio companies. He also serves on
the Board of Directors of Hamilton College Endowment Fund. Mr. Morris received
his A.B. from Hamilton College and his M.B.A. from the Amos Tuck School of
Business at Dartmouth College.

Frank J. Pados, Jr.has served as a director of the Company since November
1997. Mr. Pados is the Executive Vice President of Desai Capital Management
Inc., an institutionally funded private equity investment firm with
approximately $700 [million] under management, a position he has held since
September 1995. From October 1983 to September 1995, he served as Managing
Director of Trust Company of the West and Senior Partner of TCW Capital, an
investment management firm.

Thomas H. Nielsenhas served as a director of the Company since his
appointment in December 1998. Mr. Nielsen currently serves as Principal of The
Nielsen Company, a position he has held since 1990. From 1996 to 2000, Mr.
Nielsen served as Consulting Director of U.S. Trust of California, an
investment management and private banking firm. From 1993 to 1996, Mr. Nielsen
served as Managing Director of U.S. Trust of California. In 1978, Mr. Nielsen
joined the Irvine Company, a California-based real estate and development
company, and held several positions including President and Vice Chairman. He
remains active with the Irvine Company as a Director Emeritus.

James E. Rooshas served as a director of the Company since his
appointment in April 2001. Mr. Roos has served as President and Chief
Operating Officer of the Company since June 1997. From 1993 to 1997, Mr. Roos
was Executive Vice President of Posadas USA, Inc., a division of Grupo Posadas,
S.A. de C.V., a Mexico City-based Latin American hotel company. From 1991 to
1993, Mr. Roos served as Vice President of Operations for the Western Region of
Holiday Inns, Inc. From 1987 to 1991, Mr. Roos was Vice President of
Operations and Development for Hampton Inns, Inc., a division of Promus
Companies/Holiday Inns, Inc. From 1981 to 1987, Mr. Roos was Director of
Operations for Holiday Inns, Inc.

Seth E. Schofieldhas served as a director of the Company since May 2000.
From 1960 to 1996, Mr. Schofield held several corporate positions with
USAirways, including Chairman of the Board, President and Chief Executive
Officer of USAir Group, Inc. and USAir, Inc. from 1991 to 1996. Mr. Schofield
currently serves on the Board of Directors of USS Corporation, Marathon Oil and
Calgon Carbon Corporation. Mr. Schofield is a member of the Desai Capital
Management Advisory Board.

J. Michael Issahas served as a director of the Company since his
appointment in March 2002. Mr. Issa is currently Vice Chairman and Executive
Managing Director of Ballenger Cleveland & Issa, LLC, a corporate consulting
and turnaround firm. From 1987 to 2002, Mr. Issa served as a principal with
Kibel Green Issa, Inc., a corporate consulting firm, and held several positions
including Vice Chairman, Managing Director for the firms Orange County,
California region. During the past five years, as part of his consulting
practice, Mr. Issa has routinely assumed interim management roles, including
executive

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management or court appointed responsible officer positions. He also
manages the firms real estate and financial restructuring, and bankruptcy
reorganization practices.

Richard M. Kelleherhas served as a director of the Company since his
appointment in May 2002. Mr. Kelleher has served as Principal of Pyramid
Advisors, LLC, a hotel management and advisory firm he founded, since March
1999. From 1997 to 1999, Mr. Kelleher was the President and Chief Operating
Officer of Promus Hotel Corporation, the successor company to the Doubletree
and Guest Quarters hotel operating entities. From 1992 through 1997, Mr.
Kelleher was the President and Chief Executive Officer of Doubletree Hotel
Corporation.

Stockholders Agreement

Following the completion of the Companys Series B Preferred Stock in
July, 1998 (the Series B Private Placement), the Company, Mr. Jack P. DeBoer,
Doubletree, the Alexander John DeBoer Trust dated March 14, 1995 and the
Christopher Scott DeBoer Trust dated March 14, 1995 (the DeBoer Trusts), the
Warren D. Fix Family Partnership, L.P. (the Fix Partnership) (collectively,
the Initial Stockholders) and certain holders of Preferred Stock entered into
an Amended and Restated Stockholders Agreement dated as of July 10, 1998 (the
Stockholders Agreement). The Stockholders Agreement replaced that certain
Stockholders Agreement dated as of September 22, 1997. The Stockholders
Agreement provides that, subject to certain conditions described below and so
long as each entity holds at least 20% of the Series A Preferred Stock that it
originally purchased, Olympus Growth Fund II, L.P. (Olympus), Desai Capital
Management, Inc. (Desai) and Pecks Management Partners Ltd. (Pecks,
collectively, the Series A Purchase Group) are each entitled to designate a
single individual for nomination to stand for election to the Board of
Directors (for a total of three directors selected by the Series A Purchaser
Group). In addition, subject to certain conditions described below and so long
as each entity holds at least 20% of the Series B Preferred Stock originally
purchased, the holders of at least a majority of the Series B Preferred Stock
are entitled to designate a single individual for nomination to stand for
election to the Board of Directors. The Stockholders Agreement also provides
that, subject to certain conditions, Doubletree shall be entitled to designate
two individuals for nomination to stand for election to the Board of Directors,
and that Mr. DeBoer, the DeBoer Trusts and the Fix Partnership (collectively,
the DeBoer/Fix Holders) (or a permitted transferee) are entitled to
collectively designate two individuals for nomination to stand for election to
the Board of Directors. Finally, the Stockholders Agreement permits, subject
to certain conditions, Doubletree, together with the DeBoer/Fix Holders to
designate the remaining independent directors for nomination to stand for
election to the Board of Directors and to designate the president of the
Company for nomination to stand for election to the Board of Directors. Each
of the parties to the Stockholders Agreement have agreed to vote its shares in
favor of the individuals nominated by the other parties to the Stockholders
Agreement.

The rights and obligations of the holders of the Preferred Stock under the
Stockholders Agreement terminate as follows:



| |  |  | In the case of the holders of the Series A Preferred Stock,
upon the failure of all such holders to collectively hold,
beneficially or of record, at least 20% of the Series A Preferred
Stock or Common Stock equivalents purchased in the initial offering
of the Series A Preferred Stock.                                                                        
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | In the case of the holders of the Series B Preferred Stock,
upon the failure of all such holders to collectively hold,
beneficially or of record, at least 20% of the Series B Preferred
Stock or Common Stock equivalents purchased in the initial offering
of the Series B Preferred Stock.                                                                        
|
| |  |  | In the case of any holder of Preferred Stock, on the date
that the Common Stock resulting from the conversion of Preferred
Stock held by such holders into Common Stock have been sold pursuant
to an effective registration statement in accordance with the rules
and regulations of the Securities and Exchange Commission or a sale
pursuant to Rule 144 thereof.

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| |  |  | In addition, the rights and obligations of any of Olympus,
Desai or Pecks under the Stockholders Agreement terminate if such
entity holds, beneficially or of record, less than 20% of the Series
A Preferred Stock or Common Stock equivalents purchased by such
entity in the initial offering of the Series A Preferred Stock.                                                                                                  
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Finally, the rights and obligations of Doubletree and the
DeBoer/Fix Holders under the Stockholders Agreement terminate upon
both the failure of such holders or their permitted transferees,
collectively, to hold, beneficially or of record, at least 20% of
the outstanding voting interests of the Company, and the termination
of the rights of the holders of the Series A Preferred Stock and the
Series B Preferred Stock.




EXECUTIVE OFFICERS

The executive officers of the Company are as follows:

|                          |  |     |    |          |  |                                                                          
|------------------------- |  | --- | -- | -------- |  | -------------------------------------------------------------------------
|Name                      |  | Age |    | Position
|                          |  |     |    |         
|Jack P. DeBoer            |  |     | 72 |          |  | Chief Executive Officer and Chairman of the Board                        
|James E. Roos             |  |     | 51 |          |  | President, Chief Operating Officer and Director                          
|Warren D. Fix             |  |     | 64 |          |  | Executive Vice President, Chief Financial Officer,
Secretary and Director
|Charles H. Armstrong, Jr. |  |     | 45 |          |  | Vice President  Franchise Sales                                         
|Tim D. Johnson            |  |     | 35 |          |  | Vice President  Treasurer and Assistant Secretary                       
|Thomas R. Kennalley       |  |     | 46 |          |  | Vice President  Controller and Assistant Secretary                      
|H. Steven Meadows         |  |     | 49 |          |  | Vice President  Operations                                              
|David A. Redfern          |  |     | 37 |          |  | Vice President  Sales and Marketing                                     

For a description of the business background of Messrs. DeBoer, Roos and
Fix, see DIRECTORS above.

Charles H. Armstrong, Jr.has served as Vice President  Franchise Sales
of the Company since May 1999. From September 1997 to April 1999, he was Vice
President of Franchise Sales for Wingate Inns, a subsidiary of Cendant
Corporation. From May 1995 to August 1997, Mr. Armstrong was Director of
Franchise Sales for Wingate Inns. From April 1993 to April 1995, he was
Director of Franchise Sales for Hospitality Franchise Systems, which offers the
Days Inn, Ramada Inn and Howard Johnson brands.

Tim D. Johnsonhas served as Vice President  Treasurer and Assistant
Secretary of the Company since November 1999. From July 1998 to November 1999,
Mr. Johnson was Director of Strategic and Financial Planning of the Company.
From March 1997 to July 1998, he held the position of Manager of Financial
Reporting of the Company. From May 1995 to March 1997, Mr. Johnson was a
Financial Analyst for THORN Americas, Inc., an operator of a national chain of
rent-to-own stores. From January 1995 to May 1995, he was an accountant for
RCM, a regional public accounting firm. From May 1994 to December 1994, Mr.
Johnson was an Adjunct Instructor at the University of Oklahoma.

Thomas R. Kennalleyhas served as Vice President  Controller and
Assistant Secretary of the Company since December 1997. From 1996 to 1997, Mr.
Kennalley was Director of Financial Reporting for THORN Americas, Inc., an
operator of a national chain of rent-to-own stores. From 1991 to 1996, he held
the position of Treasurer of Advantage Companies, Inc., the largest publicly
held franchisor of Rent-A-Center stores. Mr. Kennalley also has ten years of
experience in the audit department of a national firm of certified public
accountants.

H. Steven Meadowshas served as Vice President  Operations since November
1998. From August 1993 to November 1998, Mr. Meadows held several positions
with Posadas USA, Inc., a division of Grupo Posadas, S.A. de C.V., a Mexico
City-based Latin American hotel company, including most recently, Vice
President, Operations. From August 1991 to August 1993, he served as a General
Manager

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for a hotel operated by Holiday Inns, Inc. From November 1990 to August
1991, Mr. Meadows served as a General Manager of a Ramada Hotel, a hotel
operated by Hospitality Unlimited Investments.

David A. Redfernhas served as Vice President  Sales and Marketing of the
Company since December 1995. From August 1994 to December 1995, Mr. Redfern
served as the National Sales Director for the Summerfield Suites Hotel chain,
an up-scale extended-stay hotel chain. From June 1993 to January 1995, Mr.
Redfern served as a Task Force Manager for Summerfield Suites. From September
1991 to June 1993, Mr. Redfern attended the University of
California  Irvine,
where he received his M.B.A. degree. From January to June 1993, Mr. Redfern
was also employed by Cruttenden & Co., Inc., an investment banking firm, as a
research analyst. From August 1990 to September 1991, Mr. Redfern served as
Director of Sales for the Summerfield Suites hotel in San Francisco,
California. From 1988 to August 1990, Mr. Redfern was a Sales Manager for the
Residence Inn by Marriott in La Jolla, California.




SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Companys directors and executive officers and persons who own more than
10% of a registered class of the Companys equity securities to file initial
reports of ownerships and reports of changes in ownership with the Securities
and Exchange Commission (SEC) and The Nasdaq Stock Market. Such persons are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.

Based solely on its review of copies of such forms received by it with
respect to fiscal year 2002, or written representations from certain reporting
persons, the Company believes that all of its directors and executives officers
and persons who own more than 10% of the Companys Common Stock have complied
with the reporting requirements of Section 16(a); exceptthat Richard M.
Kelleher failed to timely file a Form 3 reporting his election as a director of
the Company.

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ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth certain information regarding the annual
and long-term compensation for services in all capacities to the Company for
the fiscal years ended December 31, 2000, December 31, 2001 and December 31,
2002 of those persons who were either:



| |  |  | the chief executive officer of the Company;                                                                                                                                                                                                                             
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | one of the other four most highly compensated executive
officers of the Company whose annual salary and bonuses exceeded
$100,000; or                                                                                                                                   
|
| |  |  | any other executive officer who would have qualified under
the previous two categories but for the fact that the individual was
not serving as an executive officer of the registrant at the end of
the 2002 fiscal year (collectively, the Named Executive Officers).




Summary Compensation Table

|                            |                             |      |      |        |  |       |                        |                  |              |                 |   |         |  |  |              |        |           |   |       |       | 
|--------------------------- | --------------------------- | ---- | ---- | ------ |  | ----- | ---------------------- | ---------------- | ------------ | --------------- | - | ------- |  |  | ------------ | ------ | --------- | - | ----- | ----- | 
|                            |                             |      |      |        |  |       | Annual Compensation(1) |                  | Long Term    |                 |   |         | 
|                            |                             |      |      |        |  |       |                        |                  | Compensation |                 |   |         | 
|                            |                             |      |      |        |  |       |                        |                  |              |                 |   |         |  |  | Awards Stock |        | All Other
|Name and Principal Position |                             | Year |      | Salary |  | Bonus |                        | Options (Shares) |              | Compensation(2)
|                            |                             |      |      |        |  |       |                        |                  |              |                
|Jack P. DeBoer              |                             |      | 2002 |        |  | $     | 390,000                |                  |              | $               |  |         |  |  | 80,000       |        |           | $ | 5,850 |      
|                            | Chief Executive Officer and |      |      | 2001   |  |       |                        | 390,000          |              |                 |   |        |  |  |              | 95,000 |           |   |       | 5,100 | 
|                            | Chairman of the Board       |      |      | 2000   |  |       |                        | 365,000          |              |                 |   | 175,000 |  |  |              |       |           |   |       | 5,100 | 
|James E. Roos               |                             |      | 2002 |        |  |       | 235,000                |                  |              |                 |  |         |  |  | 40,000       |        |           |   | 5,741 |      
|                            | President and Chief         |      |      | 2001   |  |       |                        | 235,000          |              |                 |   |        |  |  |              | 96,000 |           |   |       | 2,100 | 
|                            | Operating Officer           |      |      | 2000   |  |       |                        | 215,000          |              |                 |   | 100,000 |  |  |              |       |           |   |       | 5,100 | 
|Warren D. Fix               |                             |      | 2002 |        |  |       | 235,000                |                  |              |                 |  |         |  |  | 40,000       |        |           |   | 5,152 |      
|                            | Executive Vice President,   |      |      | 2001   |  |       |                        | 235,000          |              |                 |   |        |  |  |              | 71,000 |           |   |       | 5,100 | 
|                            | Chief Financial Officer and |      |      | 2000   |  |       |                        | 215,000          |              |                 |   | 100,000 |  |  |              |       |           |   |       | 5,100 | 
|                            | Secretary                   |      |      |        |  |       |                        |                  |              |                 |   |         |  |  |              |        |           |   |       |       | 
|Charles H. Armstrong, Jr.   |                             |      | 2002 |        |  |       | 189,000                | (3)              |              |                 |  |         |  |  | 20,000       |        |           |   | 5,526 |      
|                            | Vice President -            |      |      | 2001   |  |       |                        | 235,000          | (3)          |                 |   |        |  |  |              | 20,000 |           |   |       | 5,040 | 
|                            | Franchise Sales             |      |      | 2000   |  |       |                        | 234,000          | (3)          |                 |   |        |  |  |              |       |           |   |       | 4,980 | 
|H. Steven Meadows           |                             |      | 2002 |        |  |       | 150,000                |                  |              |                 |  |         |  |  | 20,000       |        |           |   | 4,500 |      
|                            | Vice President -            |      |      | 2001   |  |       |                        | 150,000          |              |                 |   |        |  |  |              | 20,000 |           |   |       | 5,100 | 
|                            | Operations                  |      |      | 2000   |  |       |                        | 130,000          |              |                 |   | 40,000  |  |  |              |       |           |   |       | 4,713 | 



---

|(1) |  | Amounts of other annual compensation are not shown because such
compensation did not exceed the lesser of $50,000 or 10% of the total
salary and bonus of the Named Executive Officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | For fiscal year 2002, represents matching contributions paid by the
Company under the Companys 401(k) plan of $5,850, $5,741, $5,152,
$5,526 and $4,500 for Messrs. DeBoer, Roos, Fix, Armstrong and Meadows,
respectively. For fiscal year 2001, represents matching contributions
paid by the Company under the Companys 401(k) plan of $5,100, $2,100,
$5,100, $5,040 and $5,100 for Messrs. DeBoer, Roos, Fix, Armstrong and
Meadows, respectively. For fiscal year 2000, represents matching
contributions paid by the Company under the Companys 401(k) plan of
$5,100, $5,100, $5,100, $4,980 and $4,713 for Messrs. DeBoer, Roos, Fix,
Armstrong and Meadows, respectively.
|   
|(3) |  | Represents a base salary of $125,000 on an annualized basis plus sales
commissions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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Options

The following table sets forth certain information with respect to grants
of stock options during 2002 to the Named Executive Officers pursuant to the
Companys 1996 Equity Participation Plan.




Option Grants in Last Fiscal Year

|                          |  |            |        |            |  |          |   |            |  |                      |   |     |  |  |   |  |  |   |   |  |  |   |   | 
|------------------------- |  | ---------- | ------ | ---------- |  | -------- | - | ---------- |  | -------------------- | - | --- |  |  | - |  |  | - | - |  |  | - | - | 
|                          |  |            |        |            |  |          |   |            |  | Potential           
|                          |  |            |        | Percentage |  |          |   |            |  | Realizable Value at 
|                          |  |            |        | of Total   |  |          |   |            |  | Assumed Annual      
|                          |  | Number of  |        | Options    |  | Exercise |   |            |  | Rates of Stock Price
|                          |  | Securities |        | Granted to |  | of Base  |   |            |  | Appreciation        
|                          |  | Underlying |        | Employees  |  | Price    |   |            |  | for Option Term(1)  
|                          |  | Options    |        | in Fiscal  |  | per      |   | Expiration |  |                     
|Name                      |  | Granted    |        | Year       |  | Share)   |   | Date       |  | 5%                   |   | 10%
|                          |  |            |        |            |  |          |   |            |  |                      |   |    
|Jack P. DeBoer            |  |            | 80,000 |            |  |          |  | %          |  | $                    |  |     |  |  |  |  |  | $ |  |  |  | $ |  | 
|James E. Roos             |  |            | 40,000 |            |  |          |  |            |  |                      |  |     |  |  |  |  |  |   |  |  |  |   |  | 
|Warren D. Fix             |  |            | 40,000 |            |  |          |  |            |  |                      |  |     |  |  |  |  |  |   |  |  |  |   |  | 
|Charles H. Armstrong, Jr. |  |            | 20,000 |            |  |          |  |            |  |                      |  |     |  |  |  |  |  |   |  |  |  |   |  | 
|H. Steven Meadows         |  |            | 20,000 |            |  |          |  |            |  |                      |  |     |  |  |  |  |  |   |  |  |  |   |  | 



---

|(1) |  | Assumed annual rates of return are for illustrative purposes only.
Actual stock price will vary from time to time based upon market factors and
the Companys financial performance. No assurance can be given that such rates
will be achieved.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table sets forth certain information with respect to
unexercised options held by the Named Executive Officers as of December 31,
2002 pursuant to the Companys 1996 Equity Participation Plan. No options were
exercised by any of the Named Executive Officers during 2002.




Aggregated Option Exercises in Last Fiscal Year and Year-End Option Values

|                          |  |                       |         |                       |  |             |         |               |  |                      |   |  |  |  |   | 
|------------------------- |  | --------------------- | ------- | --------------------- |  | ----------- | ------- | ------------- |  | -------------------- | - |  |  |  | - | 
|                          |  |                       |         |                       |  |             |         |               |  | Value of Unexercised
|                          |  | Number of Unexercised |         | In-the-Money         
|                          |  | Options at            |         | Options at           
|                          |  | December 31, 2002     |         | December 31, 2002 (1)
|                          |  |                       |         |                      
|                          |  | Exercisable           |         | Unexercisable         |  | Exercisable |         | Unexercisable
|                          |  |                       |         |                       |  |             |         |              
|Jack P. DeBoer            |  |                       | 106,250 |                       |  |             | 168,750 |               |  |                      |  |  |  |  |  | 
|James E. Roos             |  |                       | 168,250 |                       |  |             | 122,750 |               |  |                      |  |  |  |  |  | 
|Warren D. Fix             |  |                       | 112,000 |                       |  |             | 104,000 |               |  |                      |  |  |  |  |  | 
|Charles H. Armstrong, Jr. |  |                       | 23,750  |                       |  |             | 41,250  |               |  |                      |  |  |  |  |  | 
|H. Steven Meadows         |  |                       | 30,000  |                       |  |             | 35,000  |               |  |                      |  |  |  |  |  | 



---

|(1) |  | Based on the closing sales price of the Companys Common Stock on the
Nasdaq National Stock Market on December 31, 2002 ($0.53), minus the
exercise price of the option, multiplied by the number of shares to which
the option relates, none of the exercisable or unexercisable options were
in-the-money.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Agreements Relating to Employment and Change in Control Benefits

The Company has entered into an employment agreement with Mr. DeBoer under
which he has agreed, subject to certain conditions, to continue to serve as the
Companys Chief Executive Officer. The contract renews annually unless earlier
terminated. Mr. DeBoer will receive annual cash compensation and shall be
eligible for a bonus to be set by the Compensation Committee. The contract
provides that upon a change of control of the Company or termination of
employment under certain circumstances, Mr. DeBoer will be entitled to a
payment equal to three times his average annual salary for the previous three
years. The contract provides that, during the term of the contract, except
with respect to certain passive investments in lodging companies and hotel
properties and activities related to properties held at

7



---



##### Table of Contents



the time of the offering, Mr. DeBoer will not engage in the acquisition,
founding, development, operation or management of any hotel company or chain.
The contract also provides that for two years after Mr. DeBoers contract ends,
subject to the aforementioned exceptions, Mr. DeBoer will not engage in the
acquisition, founding, development, operation, or management of any new hotel
company or chain.

The Company has entered into change in control letters agreements with
Messrs. Fix, Roos, Kennalley, Johnson, Armstrong, Meadows and
Redfern. The agreements
provides enhanced benefits in the case of a change in control of the Company
and are available if, within two years of the change in control, the
participant is terminated other than for cause (as defined) or as a result of a
disability or if the participant terminates his employment for good reason (as
defined), or if, within 30 days of a change in control, the participant
terminates or resigns his employment for any reason. Upon a qualifying
termination following a change in control, the participants are entitled to
severance compensation and benefits, including a multiple of base salary,
certain target bonus benefits, health medical, disability and dental benefits
and full vesting of stock options.

The Company has adopted the Candlewood Hotel Company, Inc. Senior
Executive Transaction Bonus Plan pursuant to which certain senior executive of
the Company are eligible to receive a bonus upon completion of a change in
control of the Company. The Companys chief executive officer is responsible
for awarding bonuses under the plan, but no awards have been designated as of
the date of this filing. The aggregate amount of bonuses that may be awarded
under the plan is $600,000.

Board Compensation and Benefits

The Companys Independent Directors receive directors fees of (i) $4,000
for each regularly scheduled Board of Directors meeting attended in-person or
(ii) $1,000 for each regularly scheduled Board of Directors Meeting at which
participation is by telephone; provided, however, that no Independent Director
receives a fee for any Board of Directors meeting conducted by unanimous
written consent. Each Independent Director receives directors fees of $500
for participation at a meeting of the Board of Directors which has not been
regularly scheduled, such fee to be paid for participation either in-person or
by telephone. In addition, each Independent Director who is also a member of
the Compensation Committee, Audit Committee, Hotel Development Committee or
Strategic Alternative Committee of the Company receives a fee of $500 for a
committee meeting which has not been regularly scheduled or is scheduled on a
day the Board of Directors is not otherwise meeting, such fee to be paid for
participation either in-person or by telephone. Pursuant to the Companys 1996
Equity Participation Plan, each of the Companys existing directors (other than
Messrs. DeBoer, Fix and Roos) was entitled to receive immediately prior to the
commencement of the Companys initial public offering a grant of non-qualified
stock options to purchase 10,000 shares of Common Stock at the initial public
offering price. Also pursuant to the 1996 Equity Participation Plan, each
person who became a director subsequent to the Companys initial public
offering will receive a grant of non-qualified stock options to purchase 10,000
shares of Common Stock at the fair market value of the Common Stock on the date
such person becomes a member of the Board of Directors. Each director may be
reimbursed for certain expenses incurred in connection with attendance at Board
and committee meetings.




COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company has implemented a policy requiring any material transaction or
agreement with a related party to be approved by a majority of the directors
not interested in such transaction or agreement, provided that they determine
that the terms of any such transaction or agreement are no less favorable to
the Company than those that could be obtained from an unaffiliated third party.
Compensation and benefit practices of the Company are established and governed
by the Compensation Committee comprised exclusively of independent members of
the Board of Directors. The Compensation Committee currently consists of Tony
M. Salazar, Seth E. Schofield and J. Michael Issa. Mr. Fix is a non-voting ex
officio member of the Audit and Compensation Committees. No member of the
Compensation
Committee has a relationship that would constitute an interlocking
relationship with executive officers or directors of another entity.

8



---



##### Table of Contents






ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of April 24, 2003, the amount and
percentage of the outstanding shares of the Companys Common Stock, Preferred
Stock and Common Share Equivalents (the Common Stock together with the
Preferred Stock on an as-converted basis) which, according to the information
supplied to the Company, are beneficially owned by:



| |  |  | each person who, to the knowledge of the Company, is the
beneficial owner of more than 5% of such securities,           
| | - |  | ------------------------------------------------------------------------------------------------------------------------
|
| |  |  | each person who is a director of the Company (each of whom is
also a nominee for election as a director of the Company),
|
| |  |  | each Named Executive Officer (as defined on page 7), and                                                                
|
| |  |  | all current directors and executive officers of the Company as a group.                                                 

Except to the extent indicated in the footnotes to the following table, the
person or entity listed has sole voting or dispositive power with respect to
the shares that are deemed beneficially owned by such person or entity.

|                                                                                                                                |  |                           |  |                    |  |        |  |                |  |           |  |          |  |            |  |         
|------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- |  | ------------------ |  | ------ |  | -------------- |  | --------- |  | -------- |  | ---------- |  | --------
|                                                                                                                                |  | Shares Beneficially Owned |  |                   
|                                                                                                                                |  |                           |  | Common Share      
|                                                                                                                                |  | Series A Preferred        |  | Series B Preferred |  | Common |  | Equivalents(3)
|                                                                                                                                |  |                           |  |                    |  |        |  |               
|Name and Address of                                                                                                             |  |                           |  | Percent            |  |        |  | Percent        |  |           |  | Percent  |  |            |  | Percent 
|Beneficial Owner (1)                                                                                                            |  | Number                    |  | of Class           |  | Number |  | of Class       |  | Number(2) |  | of Class |  | Number     |  | of Class
|                                                                                                                                |  |                           |  |                    |  |        |  |                |  |           |  |          |  |            |  |         
|Directors/Nominees and
Named Executive Officers:                                                                                |  |                           |  |                    |  |        |  |                |  |           |  |          |  |            |  |         
|Charles H. Armstrong, Jr. (4)                                                                                                   |  | 0                         |  |                   |  | 0      |  |               |  | 43,500    |  | *        |  | 43,500     |  | *       
|Robert J. Cresci (5)(6)                                                                                                         |  | 0                         |  |                   |  | 0      |  |               |  | 10,000    |  | *        |  | 10,000     |  | *       
|Jack P. DeBoer (6)(7)                                                                                                           |  | 1,000                     |  | 1.54               |  | 0      |  |               |  | 2,271,099 |  | 24.71    |  | 2,404,432  |  | 10.25   
|Warren D. Fix (6)(8)                                                                                                            |  | 250                       |  | *                  |  | 0      |  |               |  | 425,465   |  | 4.64     |  | 458,798    |  | 1.96    
|J. Michael Issa (9)                                                                                                             |  | 0                         |  |                   |  | 0      |  |               |  | 2,500     |  | *        |  | 2,500      |  | *       
|Richard M. Kelleher (10)                                                                                                        |  | 0                         |  |                   |  | 0      |  |               |  | 2,500     |  | *        |  | 2,500      |  | *       
|H. Steven Meadows (11)                                                                                                          |  | 0                         |  |                   |  | 0      |  |               |  | 40,000    |  | *        |  | 40,000     |  | *       
|Robert S. Morris (6)(12)                                                                                                        |  | 0                         |  |                   |  | 0      |  |               |  | 10,000    |  | *        |  | 10,000     |  | *       
|Thomas H. Nielsen (13)                                                                                                          |  | 0                         |  |                   |  | 0      |  |               |  | 10,000    |  | *        |  | 10,000     |  | *       
|Frank J. Pados, Jr. (6)(14)                                                                                                     |  | 0                         |  |                   |  | 0      |  |               |  | 10,000    |  | *        |  | 10,000     |  | *       
|James E. Roos (15)                                                                                                              |  | 0                         |  |                   |  | 0      |  |               |  | 237,000   |  | *        |  | 237,000    |  | *       
|Tony M. Salazar (16)                                                                                                            |  | 0                         |  |                   |  | 0      |  |               |  | 10,000    |  | *        |  | 10,000     |  | *       
|Seth E. Schofield (17)                                                                                                          |  | 0                         |  |                   |  | 0      |  |               |  | 5,000     |  | *        |  | 5.000      |  | *       
|All directors and executive officers as a
group (16 persons) (4)(5)(7)(8)(9)(10)
(11)(12)(13)(14)(15)(16)(17)                   |  | 1,250                     |  | 1.92               |  | 0      |  |               |  | 3,239,919 |  | 32.78    |  | 3,406,586  |  | 14.11   
|5% Beneficial Holders:                                                                                                          |  |                           |  |                    |  |        |  |                |  |           |  |          |  |            |  |         
|Stockholders Group (6)                                                                                                          |  | 64,250                    |  | 98.85              |  | 41,790 |  | 99.50%         |  | 5,732,860 |  | 59.24    |  | 19,871,527 |  | 82.99   
|Doubletree Corporation (6)
Hilton Hotels Corporation
World Headquarters
9336 Civic Center Drive
Beverly Hills, California 90210 |  | 0                         |  |                   |  | 0      |  |               |  | 2,587,500 |  | 22.28    |  | 2,587,500  |  | 11.11   
|Olympus Growth Fund, II, L.P. (6)(18)
One Station Place
Stamford, Connecticut 06430                                             |  | 9,900                     |  | 15.23              |  | 4,841  |  | 11.53          |  | 38,728    |  | *        |  | 2,004,195  |  | 8.59    
|Whiting & Co. (6)(19)
c/o J.P. Morgan Investment Mgmt.
522 Fifth Avenue, 6th Floor
New York, New York 10036                     |  | 10,000                    |  | 15.38              |  | 0      |  |               |  | 0         |  |         |  | 1,333,333  |  | 5.72    

9



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##### Table of Contents



|                                                                                                                                                   |  |                           |  |                    |  |        |  |                |  |           |  |          |  |           |  |         
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- |  | ------------------ |  | ------ |  | -------------- |  | --------- |  | -------- |  | --------- |  | --------
|                                                                                                                                                   |  | Shares Beneficially Owned |  |                   
|                                                                                                                                                   |  |                           |  | Common Share      
|                                                                                                                                                   |  | Series A Preferred        |  | Series B Preferred |  | Common |  | Equivalents(3)
|                                                                                                                                                   |  |                           |  |                    |  |        |  |               
|Name and Address of                                                                                                                                |  |                           |  | Percent            |  |        |  | Percent        |  |           |  | Percent  |  |           |  | Percent 
|Beneficial Owner (1)                                                                                                                               |  | Number                    |  | of Class           |  | Number |  | of Class       |  | Number(2) |  | of Class |  | Number    |  | of Class
|                                                                                                                                                   |  |                           |  |                    |  |        |  |                |  |           |  |          |  |           |  |         
|Chase Venture Capital Associates (6)(19)
380 Madison Avenue, 12th Floor
New York, New York 10017                                                   |  | 7,000                     |  | 10.77              |  | 0      |  |               |  | 0         |  |         |  | 933,333   |  | 4.01    
|Arbor Lake Club, Ltd. (6)(20)
760 N.W. 107th Avenue, Suite 300
Miami, Florida 33172                                                                |  | 7,000                     |  | 10.77              |  | 0      |  |               |  | 0         |  |         |  | 933,333   |  | 4.01    
|Pecks Management Partners Ltd. (6)(21)
One Rockefeller Plaza, Suite 900
New York, New York 10020                                                   |  | 7,000                     |  | 10.77              |  | 7,900  |  | 18.81          |  | 63,200    |  | *        |  | 2,049,867 |  | 8.78    
|Private Equity Investors III, L.P. (6)(22)
540 Madison Avenue, 36th Floor
New York, New York 10022                                                 |  | 3,500                     |  | 5.38               |  | 12,000 |  | 28.57          |  | 96,000    |  | 1.05     |  | 2,162,667 |  | 9.25    
|Equity-Linked Investors-II, L.P. (6)(23)
540 Madison Avenue, 36th Floor
New York, New York 10022                                                   |  | 3,500                     |  | 5.38               |  | 12,000 |  | 28.57          |  | 96,000    |  | 1.05     |  | 2,162,667 |  | 9.25    
|Advance Capital Associates, L.P. (6)(24)
660 Madison Avenue, 15th Floor
New York, New York 10021                                                   |  | 3,250                     |  | 5.00               |  | 2,000  |  | 4.77           |  | 16,000    |  | *        |  | 716,000   |  | 3.07    
|The FFJ Nominee Trust (6)(19)
Samuel T. Byrne, Trustee
c/o Boston Capital Institutional Advisors
One Boston Place
Boston, Massachusetts 02108-4406 |  | 3,250                     |  | 5.00               |  | 0      |  |               |  | 0         |  |         |  | 433,333   |  | 1.86    
|Mutual Life Insurance Company of
New York (6)(25)
1740 Broadway
New York, New York 10019                                                           |  | 3,250                     |  | 5.00               |  | 3,000  |  | 7.14           |  | 24,000    |  | *        |  | 857,333   |  | 3.68    
|Allied Capital Corporation (6)(26)
1919 Pennsylvania Avenue, Third Floor
Washington, DC 20006                                                      |  | 3,250                     |  | 5.00               |  | 0      |  |               |  | 0         |  |         |  | 433,333   |  | 1.86    



---

|*   |  | Less than one percent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) |  | The address of each of the
directors and officers listed in the table is c/o Candlewood Hotel Company, 8621 E. 21st Street North, Suite 200,
Wichita, Kansas 67206.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(2) |  | Includes options exercisable within 60 days of April 24, 2003 and assumes
the conversion of certain warrants issued by the Company in connection
with the issuance of the Series B Preferred Stock (the Series B
Warrants) for Common Stock on a one-to-one basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(3) |  | Includes Common Stock (including options exercisable within 60 days of
April 24, 2003), shares of Series A Preferred Stock and Series B Preferred
Stock (after giving effect to the conversion at a ratio of 133.333333
shares of Common Stock per share of Preferred Stock), and the conversion
of the Series B Warrants on a one-to-one basis into shares of Common
Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(4) |  | Includes 40,000 shares of Common Stock subject to options exercisable
within 60 days of April 24, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(5) |  | Includes 10,000 shares of Common Stock subject to options exercisable
within 60 days of April 24, 2003. Excludes 7,000 shares of Series A
Preferred Stock, 7,900 shares of Series B Preferred Stock and 63,200
Series B Warrants beneficially owned by Pecks Management Partners, Ltd.
(Pecks). Mr. Cresci is a Managing Director of Pecks and disclaims
beneficial ownership of such shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(6) |  | On July 10, 1998, an Amended and Restated Stockholders Agreement (the
Stockholders Agreement) was executed by and between the Company, Messrs.
DeBoer and Fix, Doubletree and certain other parties signatory thereto in
connection with the issuance of the Companys Series B Preferred Stock
(collectively, the Stockholders Group). The Stockholders Group may be
deemed to be a group for purposes of 13(d)(3) of the Securities Exchange
Act of 1934, as amended. Messrs. DeBoer, Fix, Cresci (through his
association with Pecks), Morris (through his association with Olympus
Growth Fund II, L. P. (OGF-II) and Olympus Executive Fund, L.P. (OEF),
Pados (through his association with Private Equity Investors III, L.P.
(PEI-III) and Equity-Linked Investors-II (ELI-II), Doubletree and the
other parties to the Stockholders Agreement may therefore be deemed to
beneficially own those shares listed as beneficially owned by the
Stockholders Group. The Stockholders Agreement provides for certain
rights and obligations regarding the nomination and election of directors.
See Stockholders Agreement. The listed holders disclaim beneficial
ownership of the shares except to the extent that they have a pecuniary
interest therein.
|   
|(7) |  | Includes 167,500 shares of Common Stock subject to options exercisable
within 60 days of April 24, 2003. Excludes 114,476 shares of Common Stock
held by the Alexander John DeBoer Trust dated March 14, 1995 and the
Christopher Scott DeBoer Trust dated March 14, 1995 (collectively, the
DeBoer Trusts). Mr. DeBoer has no interest in the DeBoer Trusts and
disclaims beneficial ownership of such shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(8) |  | Includes 250 shares of Series A Preferred Stock held by Mr. Fix as
Trustee for the Warren D. Fix Defined Benefit Plan Trust. Includes
274,965 shares of Common Stock held by the Warren D. Fix Family
Partnership, L.P. (the Fix Partnership). Mr. Fix disclaims beneficial
ownership of these shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

10



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##### Table of Contents



|     |  | except to the extent of his interest in the Fix Partnership. Includes
150,500 shares of Common Stock subject to options exercisable within 60
days of April 24, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(9)  |  | Includes 2,500 shares of Common Stock subject to options exercisable
within 60 days of April 24, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|(10) |  | Includes 2,500 shares of Common Stock subject to options exercisable
within 60 days of April 24, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|(11) |  | Includes 40,000 shares of Common Stock subject to options exercisable
within 60 days of April 24, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    
|(12) |  | Includes 10,000 shares of Common Stock subject to options exercisable
within 60 days of April 24, 2003. Excludes 100 shares of Series A
Preferred Stock, 49 shares of Series B Preferred Stock and 392 Series B
Warrants beneficially owned by OEF. Excludes 9,900 shares of Series A
Preferred Stock, 4,841 shares of Series B Preferred Stock and 38,728
Series B Warrants beneficially owned by OGF-II. Mr. Morris is an
executive officer of the general partners of both OEF and OGF-II and
disclaims beneficial ownership of the shares held by such entities.                                                                                                                                                                                                                                                                                                                                                                     
|    
|(13) |  | Includes 10,000 shares of Common Stock subject to options exercisable
within 60 days of April 24, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    
|(14) |  | Includes 10,000 shares of Common Shares subject to options exercisable
within 60 days of April 24, 2003. Excludes 3,500 shares of Series A
Preferred Stock, 12,000 shares of Series B Preferred Stock and 96,000
Series B Warrants beneficially owned by ELI-II. Excludes 3,500 shares of
Series A Preferred Stock, 12,000 shares of Series B Preferred Stock and
96,000 Series B Warrants beneficially owned by PEI-III. Mr. Pados is an
executive officer of Desai Capital Management Incorporated (DCMI) and
disclaims beneficial ownership of such shares. DCMI acts as an investment
advisor to PEI-III and ELI-II and, with the respective general partners of
PEI-III and ELI-II, has the power to vote or to direct the vote and to
dispose or to direct the disposition of such shares under an investment
and advisory agreement between PEI-III and ELI-II.                                                                 
|    
|(15) |  | Includes 237,000 shares of Common Stock subject to options exercisable
within 60 days of April 24, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    
|(16) |  | Includes 10,000 shares of Common Stock subject to options exercisable
within 60 days of April 24, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    
|(17) |  | Includes 5,000 shares of Common Stock subject to options exercisable
within 60 days of April 24, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|(18) |  | Based on Schedule 13D filed October 23, 1997 and Schedule 13D/A filed
December 11, 1998 by OGF-II and OEF. OEF, an affiliate of OGF-II,
beneficially owns an additional 100 shares of Series A Preferred Stock, 49
shares of Series B Preferred Stock and 392 Series B Warrants, and, as a
party to the Stockholders Agreement, may therefore be deemed to
beneficially own those shares listed as beneficially owned by the
Stockholders Group.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    
|(19) |  | The listed holder is known by the Company to have purchased shares of the
Companys Preferred Stock and to have entered into the Stockholders
Agreement. The Company is unaware of any other stockholdings of the
holder.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    
|(20) |  | Based on Schedule 13D filed on June 4, 1998 and Schedule 13D/A filed on
September 10, 1998 by LNR Candlewood Holdings, Inc. (LNR), Leisure
Colony Management Corp. and LNR Property Corporation (LNR Property).
According to information provided to the Company by its stock transfer
agent, the shares issued to LNR were transferred to Arbor Lake Club, Ltd.
(Arbor). Both LNR and Arbor are indirectly wholly-owned and controlled
by LNR Property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    
|(21) |  | Based on Schedule 13D filed on June 4, 1998, and Schedule 13D/A filed on
September 10, 1998 by Pecks Management Partners, Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    
|(22) |  | Based on Schedule 13D filed on June 4, 1998 and Schedule 13D/A filed on
September 10, 1998 by ELI-II, PEI-III, DCMI and Rohit Mujilal Desai (Mr.
Desai). The power to vote or to direct the vote and to dispose of, or to
direct the disposition of, the shares held by PEI-III is vested in its
general partner Rohit M. Desai Associates-III, LLC (RMDA-III), however,
such decisions may also be made by DCMI under an investment and advisory
agreement between PEI-III and DCMI. Accordingly, RMDA-III and DCMI may be
deemed to beneficially own the shares held by PEI-III. Mr. Desai is the
managing member of RMDA-III and the Chairman, President and Treasurer of
DCMI, and may be deemed to share the power to vote or to direct the vote
and to dispose of, or to direct the disposition of, the shares held by
PEI-III.                                                                                                
|    
|(23) |  | Based on Schedule 13D filed on June 4, 1998 and Schedule 13D/A filed on
September 10, 1998 by ELI-II, PEI-III, DCMI and Mr. Desai. The power to
vote or to direct the vote and to dispose of, or to direct the disposition
of, the shares held by ELI-II is vested in general partner Rohit M. Desai
Associates-II (RMDA-II), however, such decisions may also be made by
DCMI under an investment and advisory agreement between ELI-II and DCMI.
Accordingly, RMDA-II and DCMI may be deemed to beneficially own the shares
held by ELI-II. Mr. Desai is the general partner of RMDA-II and the
Chairman, President and Treasurer of DCMI, and may be deemed to share the
power to vote or to direct the vote and to dispose of, or to direct the
disposition of, the shares held by ELI-II.                                                                                                                                         
|    
|(24) |  | Based on Schedule 13D filed on June 4, 1998 and Schedule 13D/A filed on
September 10, 1998 by Advance Capital Associates L.P. (Advance L.P.),
Advance Capital Management, LLC (Advance LLC), Advance Capital Partners,
L.P. (Advance Capital) and Advance Capital Offshore Partners, L.P.
(Advance Offshore). The shares beneficially owned by Advance L.P. and
Advance LLC are held by Advance Capital (2,457 shares of Series A
Preferred Stock, 1,523 shares of Series B Preferred Stock and 12,184
Series B Warrants) and Advance Offshore (793 shares of Series A Preferred
Stock, 477 shares of Series B Preferred Stock and 3,816 Series B
Warrants). With respect to the shares issued to them, respectively,
Advance Capital and Advance Offshore each has shared power to vote or to
direct the vote and to dispose of, or to direct the disposition of, the
shares beneficially owned by Advance L.P. and Advance LLC.
|    
|(25) |  | Based on Schedule 13D filed on June 4, 1998 and Schedule 13D/A filed on
September 10, 1998 by The Mutual Life Insurance Company of New York
(MONY). The shares beneficially owned by MONY are held by J. Romeo &
Co.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|(26) |  | Based on Schedule 13D filed on June 4, 1998 and Schedule 13D/A filed on
September 10, 1998 by Allied Capital Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

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Equity Compensation Plan Information

The following table sets forth information regarding outstanding options
and shares reserved for future issuance under the equity compensation plans as
of December 31, 2002.




Equity Compensation Plan Information
As of December 31, 2002

|                                                           |       |            |                   |            |                   |                    |                     |      |           |  |         |         | 
|---------------------------------------------------------- | ----- | ---------- | ----------------- | ---------- | ----------------- | ------------------ | ------------------- | ---- | --------- |  | ------- | ------- | 
|                                                           |       |            | Number of         |            |                   |                    |                     |      |           |  |        
|                                                           |       |            | securities to be  |            |                   |                    |                     |      | Number of
|                                                           |       |            | issued upon       |            | Weighted-average  |                    | securities         
|                                                           |       |            | exercise of       |            | exercise price of |                    | remaining available
|                                                           |       |            | outstanding       |            | outstanding       |                    | for future issuance
|                                                           |       |            | options, warrants |            | options, warrants |                    | under equity       
|Plan category                                              |       | and rights |                   | and rights |                   | compensation plans
|Equity compensation
plans approved by
security holders(1)  |       |            | 1,712,585         |            |                   | $                  | 4.24                |      |           |  | 964,125 |        
|Equity compensation
plans not approved
by security holders |       |            | 0                 |            |                   | $                  | 0                   |      |           |  | 0       |        
|                                                           | Total |            |                   | 1,712,585  |                   |                    | $                   | 4.24 |           |  |         | 964,125 | 



---

|(1) |  | Based on the Companys 1996 Equity Participation Plan.
|--- |  | ------------------------------------------------------

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##### Table of Contents






ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company purchases property and casualty insurance, workers
compensation coverage, and builders risk insurance through Manning & Smith
Insurance, an insurance agency in which Mr. DeBoer previously owned a minority
interest. On June 1, 2002, Manning & Smith Insurance was sold to Arthur
Gallagher & Company, an unaffiliated third party. The sale agreement included
a three-year earnout period in which annual payments, calculated on the pre-tax
profits of the agency, are paid to the former owners, including Mr. DeBoer, in
proportion to their ownership interest in the agency. The earnout period ends
on June 1, 2005. The Company awarded the insurance contracts through a
competitive bid process. For the years ended December 31, 2002, 2001 and 2000,
the Company paid insurance premiums to Manning & Smith Insurance for such
coverage in the amount of $2,205,000, $1,628,000 and $990,000, respectively.

In February 1999, the Company purchased a 0.1% interest in an airplane in
which a company owned by Mr. DeBoer owns a majority interest for a nominal
amount of cash. The Company purchases corporate air travel through Wichita Air
Services, a Wichita, Kansas based air travel service, owned by Mr. DeBoer. For
the years ended December 31, 2002, 2001 and 2000, the Company purchased
corporate air travel from Wichita Air Services in the amounts of $106,000,
$275,000 and $160,000,respectively.

The Company entered into a management agreement with Wichita Downtown
Residence Associates in April 1997 to provide management services to Cambridge
Suites by Candlewood, located in Wichita, Kansas. In exchange for providing
all management services as specified in the agreement, the Company receives
management fees equal to 3.0% of room revenue and 4.5% of gross operating
profit. In addition, the Company receives accounting fees equal to $500 per
month. The current agreement expires in April 2008 and is renewable annually
thereafter upon mutual consent. Mr. DeBoer is a majority partner in Wichita
Downtown Residence Associates. For the years ended December 31, 2002, 2001 and
2000, the Company received fees of $72,000, $50,000 and $62,000, respectively.

In April 1998, the Company entered into a management agreement with The
Hotel At Old Town, Inc., located in Wichita, Kansas to provide management
services to The Hotel At Old Town. The hotel opened in March 1999. In
exchange for providing all management services as specified in the agreement,
the Company receives management fees equal to 3.0% of room revenue and 4.5% of
gross operating profit. In addition, the Company receives accounting fees
equal to $500 per month. The term of the agreement is five years and expires
in March 2004. The agreement is renewable for additional multi-year terms upon
mutual consent of the parties. Mr. DeBoer is a majority partner in The Hotel
at Old Town, Inc. For the years ended December 31, 2002, 2001 and 2000, the
Company received fees of $163,000, $166,000 and $161,000, respectively.

Mr. Armstrong
holds a limited partner interest and a general partner
interest in one of the Companys franchise hotels. Pursuant to the franchise
agreement, the Company received franchise income of $52,885 for the
year ended December 31, 2002. In 2002, the Company made two
payments in the aggregate of $135,000 representing a one time
incentive payment to the hotel upon the
attainment of franchise incentives set forth in the franchise agreement.

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##### Table of Contents






Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

|                     |  |                                |  |                                      |  |  | 
|-------------------- |  | ------------------------------ |  | ------------------------------------ |  |  | 
|DATE: April 29, 2003 |  | CANDLEWOOD HOTEL COMPANY, INC. |  |                                     
|                     |  |                                |  |                                      |  | 
|                     |  | By:                            |  | /s/ Jack P. DeBoer                   |  | 
|                     |  |                                |  |                                      |  | 
|                     |  |                                |  | Jack P. DeBoer                       |  | 
|                     |  |                                |  | Chairman and Chief Executive Officer |  | 
|                     |  |                                |  | (Principal Executive Officer)        |  | 

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##### Table of Contents






CERTIFICATIONS

I, Jack P. DeBoer, Chairman and Chief Executive Officer, certify that:

1.     I have reviewed this annual report on Form 10-K/A of Candlewood Hotel
Company, Inc.;

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the Evaluation Date); and

c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the Audit
Committee of the registrants Board of Directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                      |  |                                      |  |  | 
|--------------------- |  | ------------------------------------ |  |  | 
|Dated: April 29, 2003 |  | /s/ Jack P. DeBoer                   |  | 
|                      |  |                                      |  | 
|                      |  | Jack P. DeBoer                       |  | 
|                      |  | Chairman and Chief Executive Officer |  | 
|                      |  | (Principal Executive Officer)        |  | 

15



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##### Table of Contents



I, Warren D. Fix, Executive Vice President and Chief Financial Officer,
certify that:

1.     I have reviewed this annual report on Form 10-K/A of Candlewood Hotel
Company, Inc.;

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the Evaluation Date); and

c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the Audit
Committee of the registrants Board of Directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                      |  |                                    |  |  | 
|--------------------- |  | ---------------------------------- |  |  | 
|Dated: April 29, 2003 |  | /s/ Warren D. Fix                  |  | 
|                      |  |                                    |  | 
|                      |  | Warren D. Fix                      |  | 
|                      |  | Executive Vice President and Chief |  | 
|                      |  | Financial Officer                  |  | 
|                      |  | (Principal Financial Officer)      |  | 

16