Chartwell Leisure Inc · DEF 14A · For 3/16/98

Filed On 2/9/98   ·   SEC File 0-24794   ·   Accession Number 940180-98-112

Definitive Proxy Solicitation Material   ·   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Statement                           118    792K 

Document Table of Contents

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SECURITIES AND EXCHANGE COMMISSION  
WASHINGTON, D.C. 20549  

SCHEDULE 14A INFORMATION  

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 
1934, AS AMENDED  

Filed by the Registrant [X]                                                     
Filed by a Party other than the Registrant [_]                                  
Check the appropriate box:                                                      
[_] Preliminary Proxy Statement                                                 
[_] Confidential, for Use of the Commission Only (as permitted by               
Rule 14a-6(e)(2))                                                   
[X] Definitive Proxy Statement                                                  
[_] Definitive Additional Materials                                             
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12         

CHARTWELL LEISURE INC.  
------------------------------------------------------------------------------- 
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)  

------------------------------------------------------------------------------- 
(NAME OF PERSON(S) FILING PROXY STATEMENT IF OTHER THAN THE REGISTRANT) 

Payment of Filing Fee (Check the appropriate box):                              
[_] No fee required                                                             
[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.    

1) Title of each class of securities to which transaction applies:          
Common Stock, $.01 par value, of Chartwell Leisure Inc. ("Chartwell 
Common Stock")                                                      

2) Aggregate number of securities to which transaction applies:             
15,734,136 shares of Chartwell Common Stock                         

3) Per unit price or other underlying value of transaction computed         
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the 
filing fee is calculated and state how it was determined):            
$17.25                                                              

4) Proposed maximum aggregate value of transaction:                         
$271,413,846                                                        

Pursuant to Reg. (S) 240.0-11(c)(1) under the Exchange Act, a fee of
$54,306.92 has been paid herewith, which is equal to 1/50th of 1% of
$271,534,596 (the value to be transferred to security holders in the
transaction).                                                       

5) Total fee paid:                                                          
$54,306.92                                                          

[X] Fee paid previously with preliminary materials.                             
[_] Check box if any part of the fee is offset as provided by Exchange Act      
Rule 0-11-(a)(2) and identify the filing for which the offsetting fee was   
paid previously. Identify the previous filing by registration statement     
number, or the Form or Schedule and the date of its filing.                 

1) Amount Previously Paid: _________________________________________________

2) Form, Schedule or Registration Statement No.: ___________________________

3) Filing Party: ___________________________________________________________

4) Date Filed: _____________________________________________________________

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CHARTWELL LEISURE INC.  
10 ROCKEFELLER PLAZA, SUITE 1250  
NEW YORK, NEW YORK 10020  

                                                              February 9, 1998

Dear Stockholder:                                                               

You are cordially invited to attend a Special Meeting of Stockholders       
(together with any postponement or adjournment thereof, the "Special Meeting")  
of Chartwell Leisure Inc. (the "Company") to be held on Monday, March 16, 1998  
at 10:00 a.m., local time, at the offices of Battle Fowler LLP, 75 East 55th    
Street, New York, New York. A Notice of the Special Meeting, a Proxy Statement  
containing information about the matters to be acted upon at the Special        
Meeting and a proxy card are enclosed.                                          

At the Special Meeting, you will be asked to consider and vote upon a       
proposal to approve and adopt the Agreement and Plan of Merger, dated as of     
November 13, 1997, as amended (the "Merger Agreement"), by and between the      
Company, Whitehall Street Real Estate Limited Partnership IX ("Parent"), and    
CLI Properties Acquisition Corp., currently a subsidiary of Parent ("Sub"),     
pursuant to which, among other things, Sub will merge with and into the         
Company (the "Merger"). The surviving corporation after the Merger will be a    
subsidiary of Parent. Pursuant to the Merger Agreement, each outstanding share  
of common stock, par value $.01 per share, of the Company (the "Shares"),       
other than Shares as to which dissenters' rights of appraisal have been duly    
asserted and perfected under Delaware law and Shares owned by the Company or    
by Parent, Sub or any other subsidiary of Parent (which will be canceled),      
will be converted into the right to receive $17.25 per Share in cash, without   
interest. The accompanying Proxy Statement provides a detailed description of   
the proposed Merger, and a copy of the Merger Agreement is attached as Annex A  
thereto. You are urged to read this material in its entirety and consider it    
carefully.                                                                      

The Board of Directors has fixed the close of business on February 4, 1998  
as the record date for determining the holders of Shares entitled to notice     
of, and to vote at, the Special Meeting (the "Record Date"). Only holders of    
record of Shares at the close of business on the Record Date are entitled to    
notice of, and to vote at, the Special Meeting.                                 

THE BOARD OF DIRECTORS UNANIMOUSLY HAS DETERMINED THAT THE MERGER IS FAIR TO
AND IN THE BEST INTERESTS OF STOCKHOLDERS, HAS APPROVED THE MERGER AGREEMENT    
AND RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL AND ADOPTION OF THE MERGER   
AGREEMENT. In determining to approve and recommend adoption of the Merger       
Agreement, the Board of Directors carefully reviewed and considered the terms   
and conditions of the proposed Merger, as well as a number of other factors.    
In addition, the Board of Directors has received the opinions of Lehman         
Brothers and Chase Securities Inc. as to the fairness, from a financial point   
of view, of the consideration to be received by the holders of Shares pursuant  
to the Merger. The full text of each of the opinions of Lehman Brothers and     
Chase Securities Inc., each of which is dated November 13, 1997, and which      
sets forth the assumptions made, matters considered and limits on review        
undertaken, is attached as Annex B and Annex C, respectively, to the            
accompanying Proxy Statement.                                                   

Approval and adoption of the Merger Agreement requires the affirmative vote 
of the holders of a majority of the outstanding Shares entitled to vote         
thereon.                                                                        

I URGE YOU TO FILL IN, DATE AND SIGN THE ENCLOSED PROXY CARD AND PROMPTLY   
RETURN IT IN THE ENCLOSED ENVELOPE SO THAT AS MANY SHARES AS POSSIBLE MAY BE    
REPRESENTED AT THE SPECIAL MEETING. NO POSTAGE IS NEEDED IF THE PROXY CARD IS   
MAILED IN THE UNITED STATES. PLEASE DO NOT SEND ANY STOCK CERTIFICATES WITH     
THE ENCLOSED PROXY CARD.                                                        

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If you plan to attend the Special Meeting, please check the appropriate box 
on your proxy card. You may attend the Special Meeting whether or not you have  
previously returned your proxy card.                                            

              Sincerely,

                         /s/ RICHARD L. FISHER

                     Richard L. Fisher
                                      Chairman of the Board of Directors
                               and Chief Executive Officer

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CHARTWELL LEISURE INC.  
10 ROCKEFELLER PLAZA, SUITE 1250  
NEW YORK, NEW YORK 10020  

----------------  

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS 
MONDAY, MARCH 16, 1998  

----------------  

To: The Stockholders of Chartwell Leisure Inc.                                  

Notice is Hereby Given that a special meeting of stockholders of Chartwell  
Leisure Inc. (the "Company") will be held on Monday, March 16, 1998 at 10:00    
a.m. local time, at the offices of Battle Fowler LLP, 75 East 55th Street, New  
York, New York (the "Special Meeting"), for the following purposes:             

1. To consider and vote upon a proposal to approve and adopt the        
Agreement and Plan of Merger, dated as of November 13, 1997, as amended     
(the "Merger Agreement"), by and between the Company, Whitehall Street Real 
Estate Limited Partnership IX, a Delaware limited partnership ("Parent"),   
and CLI Properties Acquisition Corp., a Delaware corporation and currently  
a subsidiary of Parent ("Sub"), pursuant to which:                          

a. Sub will be merged with and into the Company (the "Merger"); the 
Company will be the surviving corporation in the Merger and will be a   
subsidiary of Parent; and                                               

b. At the effective time of the Merger (the "Effective Time"), each 
outstanding share of common stock, $.01 par value per share, of the     
Company (the "Shares"), other than Shares as to which dissenters'       
rights of appraisal have been duly asserted and perfected under the     
Delaware General Corporation Law (the "DGCL") and Shares owned by the   
Company or by Parent, Sub or any other subsidiary of Parent (which will 
be canceled), will be converted into the right to receive $17.25 per    
Share in cash, without interest.                                        

2. To transact such other business as may properly come before the      
Special Meeting or any adjournment or postponement thereof.                 

Additional information relating to these matters is set forth in the        
accompanying Proxy Statement which should be read carefully and in its          
entirety.                                                                       

THE BOARD OF DIRECTORS UNANIMOUSLY HAS DETERMINED THAT THE MERGER IS FAIR TO
AND IN THE BEST INTERESTS OF STOCKHOLDERS, HAS APPROVED THE MERGER AGREEMENT    
AND RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL AND ADOPTION OF THE MERGER   
AGREEMENT.                                                                      

If the Company's stockholders approve and adopt the Merger Agreement at the 
Special Meeting and the Merger is consummated, from and after the Effective     
Time and until their successors are duly elected or appointed and qualified in  
accordance with applicable law, the directors and officers of Sub will become   
the directors and officers of the Company, as the surviving corporation in the  
Merger.                                                                         

Only holders of record of Shares at the close of business on February 4,    
1998 (the "Record Date") are entitled to notice of and to vote at the Special   
Meeting or any adjournment or postponement thereof.                             

The enclosed proxy is solicited by the Board of Directors of the Company.   
Reference is made to the attached Proxy Statement for further information with  
respect to the business to be transacted at the Special Meeting. You are        
cordially invited to attend the Special Meeting in person. THE BOARD OF         
DIRECTORS URGES YOU TO DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY   
IN THE POSTAGE PAID                                                             

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ENVELOPE. A reply envelope is enclosed for your convenience. Please do not send 
any stock certificates with the enclosed proxy card. The return of the enclosed 
proxy will not affect your right to vote if you attend the Special Meeting.     

                                       By order of the Board of Directors,

                          /s/  Douglas H. Verner

                               DOUGLAS H. VERNER
                       Secretary

Dated: February 9, 1998                                                         

IF YOU HAVE ANY QUESTIONS, OR NEED ASSISTANCE IN VOTING YOUR SHARES, PLEASE 
CALL CHASEMELLON SHAREHOLDER SERVICES, WHICH IS ASSISTING US, TOLL-FREE AT    
1-888-224-2745.       

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 

Information contained in this Proxy Statement contains "forward-looking     
statements" relating to, without limitation, future economic performance,       
plans and objectives of management for future operations and projections of     
revenue and other financial items, which can be identified by the use of        
forward-looking terminology such as "may," "will," "should," "expect,"          
"anticipate," "estimate" or "continue" or the negative thereof or other         
variations thereon or comparable terminology. The cautionary statements set     
forth in this Proxy Statement identify important factors with respect to such   
forward-looking statements, including certain risks and uncertainties that      
could cause actual results to differ materially from those in such forward-     
looking statements.                                                             

Certain statements under the captions "SUMMARY" and "SPECIAL FACTORS--      
Financial Advisors; Fairness Opinion" and elsewhere in this Proxy Statement     
constitute "forward-looking statements." Such forward-looking statements        
involve known and unknown risks and uncertainties which may cause the actual    
results, performance and achievements of the Company, or industry results, to   
be materially different from any future results, performance or achievements    
expressed or implied by such forward-looking statements.                        

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CHARTWELL LEISURE INC.  
10 ROCKEFELLER PLAZA, SUITE 1250  
NEW YORK, NEW YORK 10020  

--------------- 

PROXY STATEMENT 

--------------- 

INTRODUCTION  

This Proxy Statement is being furnished to the stockholders of Chartwell    
Leisure Inc., a Delaware corporation (the "Company"), in connection with the    
solicitation of proxies by the Board of Directors of the Company (the "Board")  
from the holders of shares of the common stock, par value $.01 per share, of    
the Company (the "Shares") for use at a Special Meeting of Stockholders of the  
Company to be held on Monday, March 16, 1998, at 10:00 a.m. local time, at the  
offices of Battle Fowler LLP, 75 East 55th Street, New York, New York, and at   
any adjournment or postponement thereof (the "Special Meeting"). This Proxy     
Statement and the enclosed proxy card are first being mailed to holders of      
Shares on or about February 9, 1998.                                            

At the Special Meeting, holders of Shares on the Record Date (as defined    
below) will be asked to consider and vote upon a proposal to approve and adopt  
the Agreement and Plan of Merger, dated as of November 13, 1997, as amended     
(the "Merger Agreement"), by and between the Company, Whitehall Street Real     
Estate Limited Partnership IX, a Delaware limited partnership ("Parent"), and   
CLI Properties Acquisition Corp., a Delaware corporation and currently a        
subsidiary of Parent ("Sub"), pursuant to which, among other things, Sub will   
merge with and into the Company (the "Merger"). The Company will be the         
surviving corporation after the Merger (the "Surviving Corporation") and will   
be a subsidiary of Parent. Pursuant to the Merger Agreement, each outstanding   
Share, other than Shares as to which dissenters' rights of appraisal have been  
duly asserted and perfected under the Delaware General Corporation Law (the     
"DGCL") and shares held by the Company, Parent, Sub or any other subsidiary of  
Parent (which will be canceled), will be converted into the right to receive    
$17.25 in cash, without interest (the "Merger Consideration"). Accordingly,     
the total amount of Merger Consideration, together with the amounts to be paid  
to the holders of options to purchase Shares of the Company, to be paid by      
Parent and Sub in the Merger will be approximately $271 million in cash. As of  
February 5, 1998, the last trading day before the printing of this Proxy        
Statement, the closing per Share price of the Company was $16 15/16. As a       
result of the Merger, the Shares will no longer be publicly traded and Parent   
will become the sole stockholder of the Surviving Corporation. Following the    
Merger, persons who were stockholders of the Company immediately prior to the   
Merger will no longer have an opportunity to continue their interests in the    
Company as an ongoing corporation and therefore will not share in its future    
earnings and potential growth. See "STOCKHOLDERS' RIGHTS OF APPRAISAL" and      
"THE MERGER AGREEMENT--Merger Consideration; Conversion of Shares."             

Only holders of record of Shares at the close of business on February 4,    
1998, the record date for the Special Meeting (the "Record Date"), are          
entitled to notice of, and to vote at, the Special Meeting. At the close of     
business on the Record Date, 13,485,999 Shares were issued and outstanding,     
which constituted the only issued and outstanding class of voting securities    
of the Company.                                                                 

Consummation of the Merger is conditioned upon, among other things, approval
and adoption of the Merger Agreement by the affirmative vote of the holders of  
a majority of the issued and outstanding Shares entitled to vote thereon and    
the receipt of certain other approvals and consents. Two of the Company's       
principal stockholders, Chartwell Leisure Associates L.P. II ("CL Associates")  
and FSNL LLC ("FSNL"), which collectively beneficially own 44.74% of the        
outstanding Shares, are parties to an agreement with the Company which          
requires such stockholders to vote their Shares for and against approval and    
adoption of the Merger Agreement in the same proportion as the Shares held by   
the other stockholders of the Company voted for and against approval of the     
Merger. CL Associates is a limited partnership consisting of members of the     
Fisher Brothers family and a trust for the benefit of Gordon Getty and members  
of his family. Richard L. Fisher, Chairman and Chief Executive Officer of the   
Company, Martin L. Edelman, President and a director of the Company, and Marc   
E. Leland and Arnold Fisher, both of whom are directors of the Company, are     
beneficial owners of CL Associates. FSNL is a limited liability company owned   
principally by a trust for the benefit of Charles de Gunzberg. Guido Goldman,   
a director of the Company, is a Manager and beneficial owner of FSNL and a      
beneficiary of a trust that is a member of FSNL. See "SPECIAL FACTORS--         
Interests of Certain Persons in the Merger; Potential Conflicts of Interest."   
The Special Meeting may be postponed or adjourned from time to time until such  
conditions are satisfied. There can be no assurance that the conditions to the  
Merger will be satisfied or, where permissible, waived, or that the Merger      
will be consummated. See "THE MERGER AGREEMENT--Conditions to Consummation of   
the Merger" and "THE SPECIAL MEETING--Record Date, Voting Rights and Vote       
Required."                                                                      

--------------- 

THIS TRANSACTION HAS NOT BEEN  APPROVED OR DISAPPROVED BY THE SECURITIES AND  
EXCHANGE  COMMISSION NOR  HAS THE  COMMISSION PASSED  UPON THE  FAIRNESS  
OR MERITS  OF SUCH TRANSACTION NOR UPON THE ACCURACY OR  ADEQUACY OF  
THE INFORMATION  CONTAINED IN THIS DOCUMENT.  ANY REPRESENTATION  
TO THE CONTRARY IS UNLAWFUL.                                  

--------------- 

The date of this Proxy Statement is February 9, 1998. 

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AVAILABLE INFORMATION 

The Company is subject to the informational requirements of the Securities  
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance        
therewith files reports, proxy statements and other information with the        
Securities and Exchange Commission (the "Commission"). Copies of such reports,  
proxy statements and other information can be inspected and copied at the       
public reference facilities of the Commission at its principal office at        
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549,     
and at its regional offices at Citicorp Center, 500 West Madison Street, Suite  
1400, Chicago, Illinois 60661-2511, and at 7 World Trade Center, Suite 1300,    
New York, New York 10048. Any interested party may obtain copies of such        
material at prescribed rates from the Public Reference Section of the           
Commission at its principal office at Judiciary Plaza, 450 Fifth Street, N.W.,  
Room 1024, Washington, D.C. 20549. The Company files information                
electronically with the Commission, and the Commission maintains a Web Site     
that contains reports, proxy and information statements and other information   
regarding registrants (including the Company) that file electronically with     
the Commission. The address of the Commission's Web Site is                     
(http://www.sec.gov). Such reports, proxy statements and other information      
concerning the Company can also be inspected at the offices of the National     
Association of Securities Dealers, 1735 K Street, N.W., Washington, D.C.        
20006, which supervises the NASDAQ National Market on which the Shares are      
traded.                                                                         

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY        
REPRESENTATIONS OTHER THAN THOSE CONTAINED, OR INCORPORATED BY REFERENCE, IN    
THIS PROXY STATEMENT IN CONNECTION WITH THE SOLICITATION OF PROXIES MADE        
HEREBY, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS SHOULD NOT    
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON.    
ALL INFORMATION CONTAINED IN THIS PROXY STATEMENT RELATING TO THE COMPANY HAS   
BEEN SUPPLIED BY THE COMPANY, AND ALL INFORMATION CONTAINED IN THIS PROXY       
STATEMENT RELATING TO PARENT AND SUB, EACH OF THEIR RESPECTIVE AFFILIATES AND   
THE PLANS FOR THE SURVIVING CORPORATION FOLLOWING THE MERGER HAS BEEN SUPPLIED  
BY PARENT. THE DELIVERY OF THIS PROXY STATEMENT SHALL NOT, UNDER ANY            
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE       
AFFAIRS OF THE COMPANY, PARENT OR SUB SINCE THE DATE HEREOF OR THAT THE         
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.            

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TABLE OF CONTENTS 

                                                                · Download Table

                                                                          PAGE
                                                                          ----
                                                                              
SUMMARY..................................................................   1 
  The Company............................................................   1 
  Parent and Sub.........................................................   1 
  Failure to Consummate the Merger.......................................   1 
  The Special Meeting....................................................   1 
  The Merger.............................................................   2 
  Interests of Certain Persons in the Merger; Potential Conflicts of          
   Interest..............................................................   4 
  Stockholders' Rights of Appraisal......................................   9 
  Market Prices and Dividends............................................   9 
  Selected Consolidated Financial Data...................................  10 
  Certain Company Projections............................................  13 
THE SPECIAL MEETING......................................................  15 
  Date, Time and Place; Purpose of the Special Meeting...................  15 
  Record Date, Voting Rights and Vote Required...........................  15 
  Proxies................................................................  16 
  Stockholders' Rights of Appraisal......................................  17 
SPECIAL FACTORS..........................................................  17 
  Background of the Merger...............................................  17 
  Recommendation of the Board; Fairness of the Merger....................  22 
  Financial Advisors; Fairness Opinions..................................  23 
  Purpose and Structure of the Merger....................................  30 
  Certain Effects of the Merger..........................................  30 
  Interests of Certain Persons in the Merger; Potential Conflicts of          
   Interest..............................................................  31 
  Indemnification of Directors and Officers..............................  38 
  Accounting Treatment of the Merger.....................................  38 
  Certain Federal Income Tax Consequences to Stockholders................  38 
SOURCE AND AMOUNT OF FUNDS...............................................  39 
STOCKHOLDERS' RIGHTS OF APPRAISAL........................................  39 
THE MERGER AGREEMENT.....................................................  43 
  Effective Time.........................................................  43 
  Merger Consideration; Conversion of Shares.............................  43 
  Stock Options..........................................................  43 
  Procedure for Payment..................................................  43 
  Dissenting Shares......................................................  45 
  Certain Representations and Warranties.................................  45 
  Conduct of Business Pending the Closing................................  46 
  No Solicitation of Proposals...........................................  47 
  Directors' and Officers' Insurance and Indemnification.................  48 
  Certain Other Covenants................................................  49 
  Conditions to Consummation of the Merger...............................  51 
  Termination............................................................  54 
REGULATORY MATTERS.......................................................  56 
  HSR Act................................................................  56 
  Canadian Acts..........................................................  56 
  Other Foreign Regulatory Matters.......................................  56 

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                                                                · Download Table

                                                                          PAGE
                                                                          ----
                                                                              
CERTAIN INFORMATION CONCERNING THE COMPANY...............................  56 
  The Company............................................................  56 
  Directors and Executive Officers.......................................  57 
  Certain Relationships and Related Transactions with Directors and           
   Officers..............................................................  59 
CERTAIN INFORMATION CONCERNING PARENT AND SUB............................  59 
FEES AND EXPENSES........................................................  59 
MARKET PRICES AND DIVIDENDS..............................................  60 
  Market Prices..........................................................  60 
  Dividends..............................................................  60 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...........  60 
  Security Ownership of Certain Beneficial Owners........................  60 
OTHER BUSINESS...........................................................  63 
INDEPENDENT ACCOUNTANTS..................................................  63 
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING............................  63 
INCORPORATION BY REFERENCE...............................................  63 
ANNEX A--Agreement and Plan of Merger, as amended                             
ANNEX B--Opinion of Lehman Brothers                                           
ANNEX C--Opinion of Chase Securities Inc.                                     
ANNEX D--Section 262 of the DGCL                                              

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SUMMARY 

 The following is a summary of certain information contained elsewhere in this
Proxy Statement and is presented herein solely to furnish limited introductory  
information regarding the proposed Merger and the parties thereto. This Summary 
is not intended to be complete and is qualified in its entirety by the more     
detailed information contained, or incorporated by reference, in this Proxy     
Statement and the Annexes hereto, to which reference is made for a complete     
statement of the matters discussed below. Stockholders are urged to read this   
Proxy Statement, including the Annexes hereto, and the documents incorporated   
herein by reference, in their entirety and to consider them with care. Unless   
otherwise defined herein, capitalized terms used in this summary have the       
respective meanings ascribed to them elsewhere in the Proxy Statement.          

THE COMPANY                                                                     

Chartwell Leisure Inc., a Delaware corporation (the "Company"), is a hotel  
and motel owner, operator, developer and acquiror. The Company owns, directly   
or with joint venture partners, 123 hotel properties in both the full-service   
and limited-service segments, including approximately 10,900 guest rooms,       
located in 25 states and six Canadian provinces. In the full-service segment,   
the Company operates 29 hotels aggregating approximately 5,700 guest rooms. The 
Company's remaining 94 hotels, consisting of approximately 5,200 rooms, operate 
in the limited-service segment, principally under the Travelodge(R) brand. See  
"CERTAIN INFORMATION CONCERNING THE COMPANY."                                   

PARENT AND SUB                                                                  

Parent is a Delaware limited partnership that engages in the business of    
investing in debt and equity interests in real estate related assets and        
businesses. WH Advisors, L.L.C. IX, a Delaware limited liability company ("WH   
Advisors, L.L.C."), acts as the sole general partner of Parent, and Whitehall   
IX/X, Inc., a Delaware corporation, acts as the managing member of WH Advisors, 
L.L.C.  Parent, Sub, WH Advisors, L.L.C. and Whitehall IX/X, Inc. are all       
affiliates of The Goldman Sachs Group, L.P., a Delaware limited partnership     
("GS Group"). See "CERTAIN INFORMATION CONCERNING PARENT AND SUB." Sub, a       
Delaware corporation and currently a subsidiary of Parent, was incorporated on  
November 12, 1997 for the purpose of acquiring the Company and has not engaged  
in any business activity except in connection with the Merger. Parent intends   
to enter into arrangements with affiliates of Westmont Hospitality Group, Inc.  
(collectively, "Westmont") pursuant to which, among other things, Westmont      
would acquire a minority interest in the Company. If such arrangements are      
effected prior to the closing of the Merger, Westmont could acquire a direct    
interest in Sub. Westmont is a hotel investment and management group active in  
the United States, Canada and Europe which has a long-standing relationship     
with, and has engaged in a number of hotel acquisitions in cooperation with,    
members of the GS Group.                                                        

FAILURE TO CONSUMMATE THE MERGER                                                

In the event that the Merger does not occur, the Company intends to use its 
available cash, which totaled approximately $50 million as of December 31,      
1997, to pay down its bank debt and/or pursue the development of certain of its 
properties. In addition, the Company will also explore the possibility of       
selling individual properties or groups of properties, although, at this time,  
the Company has had no discussions with third parties concerning such sales. In 
certain instances, if the Merger Agreement is terminated, the Company will pay  
Parent certain fees. See "--The Merger--The Company's Right to Accept           
Alternative Transactions;" "THE MERGER AGREEMENT--Termination."                 

THE SPECIAL MEETING                                                             

 Date, Time and Place. The Special Meeting of stockholders of the Company will
be held on Monday, March 16, 1998 at 10:00 a.m., local time, at the offices of  
Battle Fowler LLP, 75 East 55th Street, New York, New York and at any           
adjournment or postponement thereof (the "Special Meeting").                    

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Purpose. At the Special Meeting, holders of common stock, par value $.01 per
share, of the Company (the "Shares") will be asked to consider and vote upon a  
proposal to approve and adopt the Merger Agreement, pursuant to which, among    
other things, Sub will merge with and into the Company. The Company will be the 
surviving corporation in the Merger (the "Surviving Corporation") and will be a 
subsidiary of Parent. See "THE SPECIAL MEETING--Date, Time and Place; Purpose   
of the Special Meeting."                                                        

Record Date; Stockholders Entitled to Vote. Only holders of record of Shares
issued and outstanding at the close of business on February 4, 1998 (the        
"Record Date"), are entitled to notice of, and to vote at, the Special Meeting. 
At the close of business on the Record Date, 13,485,999 Shares were issued and  
outstanding and were held by 124 holders of record, which constituted the only  
issued and outstanding class of voting securities of the Company. See "THE      
SPECIAL MEETING--Record Date, Voting Rights and Vote Required."                 

Quorum; Vote Required. The presence at the Special Meeting, either in person
or by proxy, of the holders of a majority of the Shares entitled to vote on the 
Merger Agreement will constitute a quorum at the Special Meeting. Approval and  
adoption of the Merger Agreement requires the affirmative vote of the holders   
of a majority of the outstanding Shares entitled to vote thereon. Two of the    
Company's principal stockholders, which collectively beneficially own 44.74% of 
the outstanding Shares, are parties to an agreement with the Company which      
requires such stockholders to vote their Shares for and against approval and    
adoption of the Merger Agreement in the same proportion as the Shares held by   
the other stockholders of the Company voted for and against approval of the     
Merger. See "SPECIAL FACTORS--Interests of Certain Persons in the Merger;       
Potential Conflicts of Interest" and "THE SPECIAL MEETING--Record Date, Voting  
Rights and Vote Required."                                                      

 Proxies. The enclosed proxy provides that each stockholder of the Company may
specify that his or her Shares be voted "for" or "against" approval and         
adoption of the Merger Agreement or that the proxy holder be directed to        
"abstain" from voting with respect thereto. If properly executed and returned   
in time for the Special Meeting, the enclosed proxy will be voted in accordance 
with the choice specified. If a properly executed proxy is returned, but no     
choice is specified, the Shares will be voted FOR approval and adoption of the  
Merger Agreement. Votes cast against the approval and adoption of the Merger    
Agreement will not be voted in favor of any adjournment of the Special Meeting  
for the purpose of additional solicitation of approval and adoption of the      
Merger Agreement.                                                               

Any stockholder who executes and returns a proxy may revoke it at any time  
before it is voted at the Special Meeting by (i) delivering to the Secretary of 
the Company at the Company's principal offices before the Special Meeting an    
instrument of revocation bearing a later date or time than the date or time of  
the proxy being revoked; (ii) submitting a duly executed proxy bearing a later  
date or time than the date or time of the proxy being revoked; or (iii) voting  
in person at the Special Meeting. A stockholder's attendance at the Special     
Meeting will not by itself revoke a proxy given by such stockholder. See "THE   
SPECIAL MEETING--Proxies."                                                      

THE MERGER                                                                      

General. Following approval and adoption of the Merger Agreement by the     
stockholders of the Company and the satisfaction or waiver of certain other     
conditions, Sub will merge with and into the Company, and the separate          
corporate existence of Sub will cease. As a result of the Merger, the Surviving 
Corporation will be a subsidiary of Parent. See "SPECIAL FACTORS--Certain       
Effects of the Merger."                                                         

As a result of the Merger, each outstanding Share, other than Shares as to  
which dissenters' rights of appraisal have been duly asserted and perfected     
under the Delaware General Corporation Law (the "DGCL") or Shares held by the   
Company or by Parent, Sub or any other subsidiary of Parent (which will be      
canceled), will be converted into the right to receive $17.25 in cash, without  
interest (the "Merger Consideration"), upon surrender of the certificate        
formerly representing such Share. As a result of the Merger, the Shares will no 
longer be publicly traded and Parent will become the sole stockholder of the    
Surviving Corporation. Following the Merger, persons who were stockholders of   
the Company immediately prior to the Merger will no longer have an opportunity  
to continue their interests in the Company as an ongoing corporation and,       
therefore, will not share in its future earnings and potential growth. See "THE 
MERGER AGREEMENT--Procedure for Payment."                                       

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Effective Time. The Merger will become effective when the Certificate of    
Merger is filed with the Secretary of State of the State of Delaware or at such 
later time as is specified in such Certificate (the "Effective Time"). It is    
currently anticipated that such filing will be made on or as promptly as        
practicable following the closing date under the Merger Agreement, which will   
take place only after the satisfaction or waiver of all of the conditions set   
forth in the Merger Agreement. Accordingly, there can be no assurance as to if  
or when the Merger will be consummated. See "THE MERGER AGREEMENT--Effective    
Time" and "THE MERGER AGREEMENT--Conditions to Consummation of the Merger."     

Exchange of Shares. As soon as reasonably practicable after the Effective   
Time, a paying agent selected by Parent ("Paying Agent") will mail to each      
record holder of a stock certificate that immediately prior to the Effective    
Time represented outstanding Shares, other than Shares as to which dissenters'  
rights of appraisal have been duly asserted and perfected under the DGCL (the   
"Certificates"), a form of letter of transmittal and instructions for use in    
effecting the surrender of Certificates for payment pursuant to the Merger.     
Stockholders should not surrender their Certificates together with their proxy  
cards for the Special Meeting. Upon surrender to the Paying Agent of a          
Certificate, together with such letter of transmittal, duly executed, and any   
other required documents, and upon acceptance thereof by the Paying Agent, the  
holder of such Certificate will be entitled to receive in exchange therefor     
cash in the amount equal to the product of the number of Shares represented by  
such Certificate multiplied by $17.25 less any withholding taxes and such       
Certificate will then be cancelled. No interest will be paid or accrued on the  
cash payable upon surrender of the Certificate. See "THE MERGER AGREEMENT--     
Merger Consideration; Conversion of Shares."                                    

The Company's Right to Accept Alternative Transactions. The Company has the 
right to terminate the Merger Agreement under certain circumstances if it has   
received a proposal for an Acquisition Transaction which the Board of Directors 
of the Company (the "Board") determines represents a more favorable financial   
alternative to the Company's stockholders than the Merger and that failure to   
accept such proposal would be reasonably expected to be a breach of, or would   
be inconsistent with, the Board's fiduciary duties under applicable law. An     
"Acquisition Transaction" means, generally, a transaction involving any of the  
following: (i) an acquisition of more than 10% of any class of equity           
securities of the Company; (ii) a merger, consolidation, share exchange,        
recapitalization, business combination or other similar transaction; (iii) a    
sale or other disposition of assets (other than immaterial assets) of the       
Company or any of its subsidiaries in a single transaction or series of related 
transactions; or (iv) a tender offer or exchange offer for 25 percent or more   
of the outstanding Shares of capital stock of the Company. Among other          
requirements, the Company is required to pay Parent a fee of $8,145,000 before  
the Company can terminate the Merger Agreement because of the receipt of such a 
proposal. See "THE MERGER AGREEMENT--Termination." If within one year following 
the date of such termination, any other Acquisition Transaction is consummated  
by the Company, then the Company will pay to Parent, simultaneously with the    
consummation of such other Acquisition Transaction, a fee equal to 3% of the    
aggregate amount of the consideration paid to the Company or its stockholders,  
as applicable, pursuant to such Acquisition Transaction.                        

Conditions to Consummation of the Merger. The obligations of the Company,   
Parent and Sub to consummate the Merger are subject to a number of conditions,  
including, among others, approval and adoption of the Merger Agreement by the   
affirmative vote of the holders of a majority of the outstanding Shares         
entitled to vote thereon. Two of the Company's principal stockholders, which    
collectively beneficially own 44.74% of the outstanding Shares, are parties to  
an agreement with the Company which requires such stockholders to vote their    
Shares for and against approval and adoption of the Merger Agreement in the     
same proportion as the number of Shares held by the other stockholders of the   
Company voted for and against approval and adoption of the Merger. See "SPECIAL 
FACTORS--Interests of Certain Persons in the Merger; Potential Conflicts of     
Interest" and "THE SPECIAL MEETING--Record Date, Voting Rights and Vote         
Required." For a more complete discussion of the conditions to the obligations  
of the Company, Parent and Sub to consummate the Merger, see "THE MERGER        
AGREEMENT--Conditions to Consummation of the Merger." There can be no assurance 
that the conditions to the Merger will be satisfied or, where permissible,      
waived, or that the Merger will be consummated.                                 

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 Background. For a description of the events leading to approval of the Merger
Agreement by the Board, see "SPECIAL FACTORS--Background of the Merger."        

Recommendation of the Board. On November 13, 1997, the Board, pursuant to   
action by written consent, unanimously authorized and approved the Merger       
Agreement and the transactions contemplated thereby, determined that the Merger 
is fair to and in the best interests of the stockholders of the Company and     
determined to recommend to the stockholders that they vote for approval and     
adoption of the Merger Agreement. See "SPECIAL FACTORS--Background of the       
Merger." For a discussion of the factors the Board considered in arriving at    
its determination that the Merger is fair to and in the best interests of the   
stockholders of the Company, see "SPECIAL FACTORS--Recommendation of the Board; 
Fairness of the Merger." THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR        
APPROVAL AND ADOPTION OF THE MERGER AGREEMENT.                                  

Opinion of Financial Advisors. The Company engaged Bear Stearns & Co. Inc.  
("Bear Stearns"), Lehman Brothers Inc. ("Lehman Brothers") and Chase Securities 
Inc. ("Chase") to act as its financial advisors to assist the Company in        
considering strategic alternatives with respect to the Company. The fee payable 
to Bear Stearns and Lehman Brothers upon consummation of the Merger will total  
approximately $1.36 million each. The fee payable to Chase upon consummation of 
the Merger will total approximately $679,000. At the November 11, 1997 meeting  
of the Board, each of Chase and Lehman Brothers delivered their oral opinion    
(which each subsequently confirmed in writing) as to the fairness, from a       
financial point of view, of the consideration to be received by the holders of  
Shares pursuant to the Merger. Lehman Brothers' analysis indicated ranges of    
imputed values of the Company from a low of $10.87 to a high of $24.23 per      
Share on a fully-diluted basis. Chase's analysis indicated ranges of imputed    
values of the Company from a low of $15.37 to a high of $20.49 per Share on a   
fully-diluted basis. The full text of the opinions of Lehman Brothers and       
Chase, which set forth the assumptions made, matters considered and limits on   
review undertaken, are attached hereto as Annex B and Annex C, respectively,    
and are incorporated herein by reference. STOCKHOLDERS MAY READ SUCH OPINIONS   
FOR A DISCUSSION OF ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS ON THE 
REVIEWS UNDERTAKEN BY LEHMAN BROTHERS AND CHASE, IN RENDERING THEIR RESPECTIVE  
OPINIONS. For a discussion of certain of the factors that Lehman Brothers and   
Chase considered in reaching their respective opinions, see "SPECIAL FACTORS--  
Financial Advisors; Fairness Opinions" and "SPECIAL FACTORS--Background of the  
Merger."                                                                        

Purpose and Structure of the Merger. The purpose of the Merger is for Parent
to acquire control of, and the entire equity interest in, the Company. Parent   
and Westmont may enter into certain agreements by which Westmont would hold an  
equity interest in the Company. Subsequent to the Merger, Parent intends for    
the Company or its stockholder to take certain actions, including the transfer  
of certain of their assets to related entities, and the election of the Company 
or its stockholder to be treated as a real estate investment trust for federal  
income tax purposes. See "SPECIAL FACTORS--Certain Effects of the Merger." The  
acquisition of the Shares from the holders of such Shares is structured as a    
cash merger in order to transfer ownership of the Company to Parent in one      
transaction and to provide cash to the holders of such Shares. The Merger has   
been structured as a merger of Sub with and into the Company, with the Company  
to be the Surviving Corporation. As a result of the Merger, stockholders of the 
Company will not have an opportunity to continue their equity interest in the   
Company as an ongoing concern and therefore will not share in the future        
earnings and potential growth of the Company, if any.                           

INTERESTS OF CERTAIN PERSONS IN THE MERGER; POTENTIAL CONFLICTS OF INTEREST     

Certain members of the Company's management and the Board may be deemed to  
have certain interests in the Merger that are in addition to their interests as 
stockholders of the Company generally. The Board was aware of these interests   
when it considered and approved the Merger Agreement. In the aggregate, the     
directors and the executive officers of the Company will receive approximately  
$11.6 million in benefits as a result of the Merger, exclusive of the receipt   
of the Merger Consideration for their Shares. For a more detailed description   
of all benefits to be received by the directors and executive officers of the   
Company, see "SPECIAL FACTORS--Interests of Certain Persons in the Merger;      
Potential Conflicts of Interest."                                               

Stock Options. All options under the Company's 1994 Stock Option Plan (the  
"Stock Option Plan"), including options which are not yet vested, will be       
terminated immediately prior to the Effective Time, and the                     

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Company will pay to holders of options ("Options") under the Stock Option Plan  
an amount equal to the excess, if any, of the Merger Consideration over the     
exercise price of such Option, multiplied by the number of Shares subject to    
such Option, without any interest thereon (the "Option Consideration"). For a   
description of the outstanding Options held by the executive officers and       
directors of the Company as of the Record Date, see "SPECIAL FACTORS--Interests 
of Certain Persons in the Merger; Potential Conflicts of Interest--Stock        
Options."                                                                       

 Sale of Mexican Joint Venture Interest. In July 1996, Chartwell Mexico Corp.,
a Delaware corporation and a subsidiary of the Company, entered into a joint    
venture, Grupo Chartwell de Mexico, S.A. de C.V. (the "Mexican Joint Venture"), 
with a subsidiary of Grupo Piasa, S.A. de C.V., a diversified Mexican real      
estate and development company ("Grupo Piasa"), for the purpose of developing   
and operating, or franchising others to operate, lodging facilities in Mexico.  
The Mexican Joint Venture has one hotel nearing completion with 129 rooms,      
representing approximately 1% of the Company's rooms and hotels. In addition,   
it has started construction on a second hotel with 123 rooms which is expected  
to result in the addition of approximately 1% of the Company's rooms and        
hotels. The Mexican Joint Venture is a party to a master license agreement,     
dated as of September 18, 1996 (the "Master License Agreement"), with           
Travelodge Hotels, Inc. ("Travelodge"), a subsidiary of Cendant Corporation, a  
Delaware corporation ("Cendant"). Cendant is the successor to HFS Incorporated  
("HFS"). Pursuant to the Master Lease Agreement, Travelodge granted the Mexican 
Joint Venture an exclusive 30-year license to franchise the Travelodge system   
throughout Mexico. In addition, the Mexican Joint Venture has entered into a    
memorandum of understanding with Hilton Hotels to develop certain Hilton Hotel  
products in Mexico. The Mexican Joint Venture has not accounted for any of the  
Company's revenue, and accounts for approximately 2% of the Company's assets as 
measured by book value.                                                         

Grupo Piasa has the right to purchase the Company's interest in the Mexican 
Joint Venture at its fair market value in the event of a "change of control" in 
the Company. The Merger and the transactions contemplated by the Merger         
Agreement constitute a "change of control" for purposes of Grupo Piasa's right  
to purchase the Company's interest in the Mexican Joint Venture. Grupo Piasa    
has informed the Company that, as a result of the Merger, Grupo Piasa will      
exercise its right to acquire the Company's interest in the Mexican Joint       
Venture unless the Fisher, Getty and/or de Gunzberg families (or at least the   
Fisher family) and Martin L. Edelman acquire the Company's interest in the      
Mexican Joint Venture. See "SPECIAL FACTORS--Background of the Merger." An      
entity, Rio Grande Partners (the "Mexican JV Buyer"), to be formed by the       
principals of CL Associates and FSNL has agreed to purchase the Company's       
interest in the Mexican Joint Venture for a cash purchase price equal to 110%   
of all amounts expended and accrued by the Company as of the Effective Time in  
connection with or related to the Mexican Joint Venture and to indemnify the    
Company for all liabilities and expenses related to the Mexican Joint Venture.  
The Mexican JV Buyer will fund the purchase of the Company's interest in the    
Mexican Joint Venture with capital contributions from the personal funds and    
working capital of its equity owners. As of the date of the mailing of this     
Proxy Statement, the purchase price for the Company's interest in the Mexican   
Joint Venture would be $6,403,000, or approximately $0.475 per Share. The       
Company expects that this amount will increase as a result of additional        
expenditures and accruals by the Company in connection with the Mexican Joint   
Venture prior to the Effective Time, although the Company cannot predict the    
amount of that increase. The Merger Agreement does not permit the proceeds of   
the sale of the Company's interest in the Mexican Joint Venture to be           
distributed by the Company prior to the Effective Time. Those proceeds are one  
of the assets of the Company on which Parent based its bid for the Company.     
Changes in the purchase price of the Company's interest in the Mexican Joint    
Venture will not affect the amount of the Merger Consideration received by the  
Company's stockholders.                                                         

Pursuant to the Merger Agreement, Parent, Sub and the Company have agreed   
that, as a condition of the obligations of Parent and Sub to effect the Merger, 
the Company will sell its interest in the Mexican Joint Venture, and such sale  
will be for a purchase price of not less than all amounts expended or accrued   
by the Company and its subsidiaries in connection with or related to the        
Mexican Joint Venture, which amount will in no event be less than $3,750,000    
(the approximate amount expended and accrued by the Company as of the date of   
the Merger Agreement), and the Company will have no further obligations or      
liabilities with respect to its investment in the Mexican Joint Venture.        

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The Board established a special committee (the "Special Committee"),        
consisting of Rachel Robinson and Michael J. Kennedy, non-employee directors of 
the Company who are not affiliated with CL Associates or FSNL, in order to      
negotiate and oversee the proposed sale by the Company of the Company's         
interest in the Mexican Joint Venture to the Mexican JV Buyer. The Special      
Committee retained the law firm of Solovay Marshall & Edlin, P.C. ("Special     
Counsel") to assist in the sale of the Mexican Joint Venture. Special Counsel   
had previously represented special committees of the Board on various           
transactions. Pursuant to the terms of the Amended and Restated Stock Purchase  
Agreement, dated as of March 14, 1996 (the "Stock Purchase Agreement"), by and  
among the Company, National Lodging Corp., CL Associates and FSNL, have agreed  
that, for so long as CL Associates, FSNL and their affiliates continue to own,  
in the aggregate, at least 20% of the outstanding Shares, CL Associates and     
FSNL will not, and will not permit any of their affiliates to, enter into any   
transaction or series of related transactions, or grant or consent to, or       
otherwise permit, any amendment to, supplement of or waiver under, any          
agreement or contract, with the Company or any of its subsidiaries (any of the  
foregoing, an "Affiliate Transaction") unless: (i) it has been determined by a  
committee of the Board comprised of one or more non-employee directors (the     
"Independent Committee") that the Affiliate Transaction is in the best          
interests of the Company and is on fair and reasonable terms, no less favorable 
to the Company than terms that the Company and a non-affiliated person in a     
similar situation would agree to in an arms' length transaction; and (ii) if    
the Affiliate Transaction has a total value in excess of $10,000, the           
Independent Committee has received a favorable fairness opinion from an         
appropriate independent party relating to the transaction. In accordance with   
the Stock Purchase Agreement, the Special Committee retained Chase and Lehman   
Brothers to advise, and render fairness opinions to, the Special Committee with 
respect to the sale of the Mexican Joint Venture. Rather than retain a separate 
independent financial adviser, the Special Committee retained Chase and Lehman  
Brothers because of the relatively small anticipated purchase price for the     
sale of the Company's interest in the Mexican Joint Venture and their           
familiarity with the Company. On January 21, 1998, the Special Committee (i)    
determined that the sale of the Company's interest in the Mexican Joint Venture 
to the Mexican JV Buyer is in the best interests of the Company and is on fair  
and reasonable terms, no less favorable to the Company than terms that the      
Company and a non-affiliated person in a similar situation would agree to in an 
arms' length transaction, and (ii) received favorable fairness opinions from    
Lehman Brothers and Chase to the effect that such transaction is fair to the    
Company from a financial point of view. Stockholders are not being asked to     
vote upon the sale of Company's interest in the Mexican Joint Venture.          
Stockholder approval of the Merger Agreement will not constitute an explicit or 
implicit approval of that transaction should there occur a subsequent challenge 
to the fairness of that transaction to the Company despite approval of the      
transaction by the Special Committee and the receipt of the Lehman Brothers and 
Chase opinions. See "SPECIAL FACTORS--Background of the Merger" and "THE MERGER 
AGREEMENT--Conditions to Consummation of the Merger--Parent and Sub."           

Relationships with Cendant. Prior to November 22, 1994, the Company was a   
wholly-owned subsidiary of HFS, a predecessor to Cendant. On November 22, 1994, 
HFS distributed all of the Company's outstanding Shares to HFS' stockholders    
(the "Distribution"). Messrs. Edelman, Holmes and Silverman are directors of    
Cendant. Additionally, Mr. Edelman is a member of Cendant's Executive           
Committee, Mr. Silverman is the Chairman of the board and Chief Executive       
Officer of Cendant, and Mr. Holmes is Vice Chairman of Cendant. Due to such     
commonality of management, certain conflicts of interest may exist with respect 
to various matters related to the consummation of the Merger. As a result of    
the Merger, Cendant will receive, in the aggregate, a total of $9,771,000 in    
repayment of a development advance and a promissory note, as described below.   
In addition, certain of the directors, officers and employees of Cendant,       
including Messrs. Edelman, Holmes and Silverman, hold options to purchase       
Shares, including options granted under the Stock Option Plan, and will receive 
a total of $5,812,733 from the cancellation of those options in the Merger.     
Cendant may receive compensation in consideration for the consent of            
Travelodge, a subsidiary of Cendant (subject to Parent's approval) under the    
Master License Agreement (the "Master License Agreement") for the Terr