8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 13, 2017

CHOICE HOTELS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-13393	52-1209792
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)
1 Choice Hotels Circle, Suite 400, Rockville, Maryland		20850
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (301) 592-5000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On July 13, 2017, the Board of Directors (the “Board”) of Choice Hotels International, Inc. (the “Company”) appointed Patrick S. Pacious as the Company’s Chief Executive Officer, effective January 1, 2018. Mr. Pacious, age 51, has served as the Company’s President and Chief Operating Officer since May 2016. Mr. Pacious will also remain as President following his promotion. Mr. Pacious previously served as the Company’s Chief Operating Officer since January 2014, as the Company’s Executive Vice President, Global Strategy & Operations from February 2012 to January 2014, as the Company’s Executive Vice President, Strategy, Distribution & Technology from February 2011 to February 2012, as the Company’s Senior Vice President, Distribution & Technology from October 2010 to February 2011, as the Company’s Senior Vice President, Corporate Strategy & Information Technology from November 2008 to October 2010, and as the Company’s Senior Vice President, Corporate Development and Strategy from December 2007 to November 2008.

In connection with his promotion and effective upon his becoming Chief Executive Officer, the Compensation & Management Development Committee of the Board approved the following adjustments to Mr. Pacious’ compensation: (i) annual base salary will be increased from $750,000 to $925,000, (ii) target incentive opportunity under the Company’s short-term incentive plan will increase from 100% to 150% of his annual base salary, and (iii) target annual equity grant award value under the Company’s long-term incentive program will be increased from 225% to 325% of his annual base salary.

Mr. Pacious will succeed Stephen P. Joyce as Chief Executive Officer, who will step down as Chief Executive Officer, effective December 31, 2017 and will assume the position of Vice Chairman of the Board, effective January 1, 2018.

A copy of the press release regarding this announcement is furnished as Exhibit 99.1 hereto.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1—Press Release issued by Choice Hotels International, Inc., dated July 13, 2017.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 13, 2017	/s/ Simone Wu
	Simone Wu
	Senior Vice President, General Counsel, Corporate Secretary & External Affairs

EX-99.1

Exhibit 99.1

Contact: Scott Carman

301-592-6361

scott.carman@choicehotels.com

Choice Hotels Announces Senior Leadership Succession Plan

Patrick Pacious to Succeed Stephen Joyce as Chief Executive Officer in January 2018

ROCKVILLE, Md. (July 13, 2017) – Choice Hotels International, Inc., (NYSE:CHH) today announced that its Board of Directors appointed Patrick Pacious as President and Chief Executive Officer, effective January 1, 2018. Pacious currently serves as President and Chief Operating Officer, and will succeed Chief Executive Officer Stephen Joyce. Joyce will continue in his role as CEO through the end of the year, after which he will assume the role of Vice Chairman of the Board. Pacious is expected to join the Board of Directors in September.

The appointment of Pacious as President and CEO is the culmination of a thoughtful, deliberate, long-term succession planning process, focused on maintaining leadership continuity, while driving new ideas that result in continued positive business growth now and into the future. Over the past several years, Joyce has collaborated with the Board of Directors to identify and prepare his successor. The Board and Joyce identified Pacious as the right person to lead Choice into the future.

“Under Steve’s tenure as CEO, Choice Hotels has grown stronger. We are grateful for Steve’s leadership, passion for talent development, and his legacy of innovation and growth over the better part of a decade,” said Stewart Bainum, Jr., Chairman of the Board of Directors. “When Steve joined Choice as CEO, he was immediately impressed with Pat’s strengths and talents, and by enhancing Pat’s roles over the years, Steve ensured that Pat is the clear choice to succeed him. Pat demonstrates exceptional vision, and has spearheaded innovations that cement our position as a hospitality and technology leader and pioneer, while further strengthening our strategic differentiation and our core values.”

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Pacious joined Choice in 2005 and has created significant value for shareholders and franchisees. Under Pacious’ direction, Choice built industry-leading global technology platforms that resulted in improved profitability and efficiencies for the company’s franchised hotel owners. He has led strategies and innovative growth initiatives around brand, marketing, development, franchise services, revenue management and performance analytics. This includes the company’s significant growth in the upscale segment with both Cambria Hotels and The Ascend Hotel Collection, as well as the successful transformation of the Comfort Brand. During his successful tenure at Choice Hotels, Pacious has held roles of increasing responsibility, was appointed Chief Operating Officer in January 2014 and additionally became President in May 2016. Previously, he held senior management consulting positions with BearingPoint and Arthur Andersen, during which time he was engaged on several projects for Choice, and is a former U.S. Navy officer.

“Choice is in a great position with an amazing leadership team, and I am proud of the outstanding achievements that we have accomplished during my tenure. I expect the company will continue to lead the industry with innovations and technology with Pat as CEO,” Joyce stated. “Pat is a natural leader, and I fully endorse the Board’s decision to appoint him to the helm of Choice Hotels at this time. We have worked closely together since I joined the company in 2008. I believe his strategic thinking and vision will continue to drive growth and profitability for the company. Our shareholders, franchisees, developers, partners and associates are in good hands.”

Bainum added, “In essence, we have two executives at the top of their games, one who is agreeing to stay on the board as Vice Chairman, and another stepping in to take the reins of the company. As a result, Choice benefits from a deliberate and well-executed long-term succession planning strategy coming to fruition.”

“This is an exciting time at Choice. We have a strong performance-based culture that focuses on agility and speed, creating momentum and opportunity for the company, franchisees, associates and shareholders. I am honored by the confidence that the Board and Steve have placed in me, and I look forward to strengthening Choice Hotels’ position as an industry leader,” said Pacious. “Business is strong. Our upper midscale and midscale brands – Comfort and Sleep Inn – are experiencing their strongest growth in recent history. We have solidified our place in the upscale market with Cambria Hotels and The Ascend Hotel Collection. Most importantly, we remain focused on embracing digital disruption and creating innovative technology solutions that improve our franchisees’ return on investment, expand our customer reach, and serve the broader industry.”

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About Choice Hotels

Choice Hotels International, Inc. (NYSE: CHH) is one of the world’s largest hotel companies. With more than 6,500 hotels franchised in more than 40 countries and territories, Choice Hotels International represents more than 500,000 rooms around the globe. As of March 31, 2017, 795 hotels were in our development pipeline. Our company’s Ascend Hotel Collection^®, Cambria^®, Comfort Inn^®, Comfort Suites^®, Sleep Inn^®, Quality^®, Clarion^®, MainStay Suites^®, Suburban Extended Stay Hotel^®, Econo Lodge^®, Rodeway Inn^®, and Vacation Rentals by Choice Hotels^® brands provide a spectrum of lodging choices to meet guests’ needs. With more than 31 million members and counting, our Choice Privileges^® rewards program enhances every trip a guest takes, with benefits ranging from instant, every day rewards to exceptional experiences, starting right when they join. All hotels and vacation rentals are independently owned and operated. Visit us at www.choicehotels.com for more information.

Forward-Looking Statements

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, our use of words such as “expect,” “estimate,” “believe,” “anticipate,” “should,” “will,” “forecast,” “plan,” “project,” “assume” or similar words of futurity identify such forward-looking statements. These forward-looking statements are based on management’s current beliefs, assumptions and expectations regarding future events, which in turn are based on information currently available to management. Such statements may relate to projections of the company’s revenue, earnings and other financial and operational measures, growth and business prospects, market share, future operations, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other factors.

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