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): September 13, 2006

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)

10750 Columbia Pike, Silver Spring, Maryland	20901
(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))

Item 1.01. Entry into a Material Definitive Agreement.

On September 13, 2006, Choice Hotels International, Inc. (the “Company”) entered into an Agreement and Amendment to the Employment Agreement dated August 18, 2000 with Wayne W. Wielgus (the “Amendment”), the Company’s EVP and Chief Marketing Officer.

The Amendment, effective September 13, 2006, includes the following amended terms: (a) the term of the agreement is 6 months from the effective date of the Amendment, and will renew automatically for successive six months terms unless the Company gives Mr. Wielgus written notice at least thirty days prior to the end of the then current term that it elects not to renew; (b) if, during the term of the Amendment, Mr. Wielgus is Constructively Terminated (as that term is defined in the Employment Agreement dated August 18, 2000), such termination shall not be effective for six months from the notice of termination, following which time Mr. Wielgus shall be entitled to a severance payment equal to 18 months of base salary and bonuses.

The foregoing description of the Agreement is not complete and is qualified in its entirety by reference to the Amended Employment Agreement, attached hereto as Exhibit 10.1 and incorporated herein by reference.

Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

Effective September 13, 2006, Charles A. Ledsinger, Jr. (56), formerly President and Chief Executive Officer, has been named Vice Chairman and Chief Executive Officer; Joseph M. Squeri (41), formerly Executive Vice President, Operations and Chief Financial Officer, has been named President and Chief Operating Officer; and David White (38), formerly Vice President and Controller, has been named Chief Financial Officer. Mr. Ledsinger’s and Mr. Squeri’s employment agreements remain unchanged. A copy of the press release announcing the elections is furnished as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits

(a) Exhibits. The following exhibits are filed with this report:

Exhibit 10.1	Agreement and Amendment to Employment Agreement
Exhibit 99.1	Press Release Dated September 13, 2006

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: September 15, 2006	/s/ Joseph M. Squeri
	Joseph M. Squeri
	President and Chief Operating Officer

Exhibit Index

Exhibit No.	Description
10.1	Agreement and Amendment to Employment Agreement
99.1	Press Release Dated September 13, 2006

EX-10.1

Exhibit 10.1

AGREEMENT AND AMENDMENT

TO EMPLOYMENT AGREEMENT

This Agreement and Amendment (“Agreement”) dated this 13th day of September 2006 (“Effective Date”) between Choice Hotels International, Inc. (“Employer”), a Delaware corporation with principal offices at 10750 Columbia Pike, Silver Spring, Maryland 20901, and Wayne Wielgus (“Employee”), sets forth certain terms and conditions governing the employment relationship between Employee and Employer and amends that certain Employment Agreement dated August 18, 2000 (“Employment Agreement”).

In consideration of the mutual covenants and promises herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Term. This Agreement shall commence on the Effective Date and shall continue for a period of six months (“Initial Term”) and shall automatically renew for successive six- month periods (each a “Renewal Term” which together with the Initial Term shall be the “Term”), unless Employer gives Employee written notice at least thirty (30) days before the end of the then current Term that it elects not to renew. The termination of this Agreement shall not be deemed a termination of the Employment Agreement.

2. Amendment to Employment Agreement. During the Term of this Agreement, the following provisions of the Employment Agreement shall be deemed superseded by the terms of this Agreement and of no force or effect: the last sentence of Section 7(a) and Section 7(b). Also, the first sentence of Section 1 shall be amended to read: “hereby employs Employee as Executive Vice President,” and the last sentence of Section 1 shall be amended to read: “Employee reports directly to Employer’s President and COO.” In addition, the first sentences of Section 3 (a), (b) and (c) shall be amended to reflect (a) a base salary of $373,000; (b) an incentive bonus of 55%, and (c) an automobile allowance of $1,000.

3. Severance. If during the Term, Employee is Constructively Terminated (as defined in Section 7(c) of the Employment Agreement), the following shall apply:

(a) Such termination shall not be effective until the date which is six (6) months from the date that Employer gives Employee written notice of the termination (“Transition Period”). During the Transition Period, the Employee will continue to provide services to Employer to such extent as Employer requires.

(b) At the end of the Transition Period, Employee shall be entitled to severance equal to 18 months (“Severance Period”) of pay equal to Employee’s base salary as of the termination date, less standard withholdings for federal, state and local taxes. Such amount shall be paid in bi-weekly installments in accordance with Employer’s payroll practices.

(c) Employee shall also be paid an amount equal to any bonuses that are paid out to Employer’s executives during the Severance Period that Employee would have been entitled to if his employment had not been terminated. Such bonuses shall be paid out based solely on earnings per share performance. Payment of such bonuses shall be made at such time as Employer’s officers are paid their bonuses.

(d) During the Severance Period, all stock options and restricted stock awards outstanding on the Termination Date shall continue to vest and be exercisable. Employee acknowledges that he shall not be entitled to new stock option or restricted stock grants during or after the Severance Term.

(e) During the Severance Period, Employer will pay all premiums for supplemental executive life insurance. At the conclusion of the Severance Period, Employer, at Employee’s request, shall assign the supplemental life insurance policy to Employee if permissible under the policy.

(f) During the Severance Period, Employee is entitled to continue to receive medical and dental benefits and Employee may continue deductions for medical and dental benefits, and Employee consents to the customary deductions for such benefits from the payments under Section 3(b). Employer will continue to pay employer contributions to Employee’s medical and dental benefits during the Severance Period. Employer will stop optional deductions for items such as retirement plans with Employee’s last paycheck for regular hours worked through the Transition Period. Employee will be eligible for COBRA benefits after the Severance Period ends in accordance with and to the extent required by applicable law.

(g) Payment of amounts under Sections 3(b) and 3(c) are subject to Employee executing Employer’s standard employment release (copy attached hereto). Additionally, if required by IRS regulations, the payment of amounts under Sections 3(b) and 3(c) shall be deferred for a period of six months from Employee’s last day of employment, at which time Employee will be paid a lump sum amount for the six month period and bi-weekly payments shall then commence for the remainder of the severance period.

4. All provisions of the Employment Agreement not amended hereby remain in full force and effect.

5. This Agreement shall be governed and construed in accordance with the laws of the State of Maryland. without reference to its conflicts of law principles.

6. This Agreement, together with the Employment Agreement, represents the entire agreement of the parties, and supersedes all other agreements, discussions or understandings, concerning its subject matter. This Agreement may only be modified by a written document signed by both parties.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first set forth above.

Employer:
CHOICE HOTELS INTERNATIONAL, INC.
By:	/s/ Michael J. DeSantis
	Michael J. DeSantis
	Senior Vice President
Employee:
/s/ Wayne W. Wielgus
Wayne Wielgus

Form of Release

This Release (“Release”) dated as of                                         , is made by Wayne Wielgus (“Employee”) in favor of Choice Hotels International Services Corp. (“Choice”).

WHEREAS, Employee and Choice have previously entered into that certain Agreement and Amendment to Employment Agreement dated September     , 2006 (“Agreement”) under which certain benefits are conditioned upon Employee executing this Release.

NOW, THEREFORE, in consideration of the promises contained in this Release, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree:

1. Employee agrees to irrevocably and unconditionally release Choice, Choice Hotels International, Inc. and their associates, owners, and subsidiaries and any of their related companies, divisions, subsidiaries, affiliates, predecessors, successors, heirs and assigns and each of their respective officers, directors, shareholders, partners, employees, agents, insurers, lawyers, representatives, employee welfare benefit plans and pension or deferred compensation plans under Section 401 of the Internal Revenue Code of 1954, as amended, and their trustees, administrators and other fiduciaries; and all persons acting by, through, under or in concert with them, or any of them (collectively “Choice Releasees”), of and from any and all manner of action or actions, cause or causes of action, in law or equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, grievances, damages, loss, cost or expense, of any nature, known or unknown, fixed or contingent, which Employee now has or may later have against the Choice Releasees, or any one of them, by reason of any matter, cause, or thing from the beginning of time to the date of this Agreement arising out of, based on, or relating to the hire, employment, termination, remuneration (including any severance, salary, bonus, incentive or other compensation; vacation sick leave or medical insurance benefits; or any benefits from any employee stock ownership, profit-sharing and/or any deferred compensation plan under Section 401 of the Internal Revenue Code of 1954, as amended), from any and all claims or demands Employee may have based on Employee’s employment with Choice or the separation from that employment (“Claims”). The Claims which Employee is releasing include, but are not limited to, a release of any rights or claims Employee may have under the Age Discrimination in Employment Act, which prohibits age discrimination in employment; Title VII of the Civil Rights Act of 1964, which prohibits discrimination in employment based on race, color, national origin, religion or sex; the Civil Rights Act of 1991; the Equal Pay Act, which prohibits paying men and women unequal pay for equal work; the Americans with Disabilities Act; the Family and Medical Leave Act; and any other federal, state or local laws or regulations prohibiting employment discrimination. Employee also releases Claims for wrongful discharge, compensation and benefits, expenses, bonuses, or any other employee rights or benefits, or any other actions sounding in tort or contract relating to Employee’s employment and termination from Choice. This Agreement covers both Claims Employee knows about and those Employee may not know about. Employee assumes the risk of any and all unknown Claims which may exist at the time Employee signs this Agreement, and Employee agrees that this Agreement shall apply to any and all known and unknown Claims.

2. Lawsuits. Employee promises never to file a lawsuit, claim, administrative proceeding or agency action (collectively “Lawsuit”) asserting any Claims that are released in this Release. Employee agrees to withdraw with prejudice all Lawsuits, if any, Employee has filed against any Choice Releasee with any agency or court. Employee further agrees not to assist any other person in bringing any Lawsuit against any Choice Releasee, unless compelled to do so pursuant to a valid court order or subpoena. Employee agrees not to make derogatory remarks about any Choice Releasee. Employee agrees to assist Choice in any Lawsuit arising from circumstances that took place during Employee’s employment, to the extent reasonably necessary to protect Choice’s interests and at Choice’s expense. Likewise, Choice will not file a Lawsuit nor assist another in doing so against Employee except for any Lawsuits involving Employee’s fraud or dishonesty, or unless compelled to do so pursuant to a valid court order or subpoena.

3. Period for Review and Consideration. Employee has 21 days from the date Employee receives this Release to review and consider this document before signing it. Employee may use as much of this 21 day period as Employee wishes before signing this Release. Choice encourages Employee to consult with an attorney before signing this Release; whether to do so is Employee’s decision. If Employee wishes to sign this Release and thereafter be eligible to receive the severance under the Agreement, Employee must deliver both fully executed originals of this Release (including witness signature), to Choice Hotels International, Inc., 10750 Columbia Pike, Silver Spring, Maryland 20901, Senior Vice President—Administration, no later than the close of business on the 21^st day after Employee receives this Release. Employee’s failure to deliver timely the executed Release will nullify the Agreement, and Employee will not be entitled to receive the severance benefits set forth in the Agreement.

4. Revocation of Release. Employee may revoke this Release within 7 days after signing it. If Employee wishes to revoke this Release after signing it, Employee must deliver a written notice of revocation to Choice Hotels International, Inc., 10750 Columbia Pike, Silver Spring, Maryland 20901, Attention: Senior Vice President—Administration. Choice must receive this revocation no later than the close of business on the 7th day after Employee signs this Release. If Employee revokes this Release, it shall not be effective or enforceable and Employee will not receive the severance benefits under the Agreement.

5. Governing Law. This Agreement is governed by Maryland law, without regard to the principles of conflicts of laws. If a dispute arises under this Agreement, any Lawsuit must be brought exclusively in the courts for Montgomery County, Maryland. Employee and Choice voluntarily submit to this jurisdiction.

6. Binding. Employee agrees and acknowledges this Agreement binds Employee’s heirs, administrators, representatives, executors, successors, and assigns, and will inure to the benefit of all Choice Releasees and their respective heirs, administrators, representatives, executors, successors, and assigns.

7. Severability. Any invalidity, in whole or in part, of any provision of this Agreement shall not affect the validity of any other of its provisions.

EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS HAD AN OPPORTUNITY TO REVIEW AND CONSIDER THIS AGREEMENT WITH AN ATTORNEY, AND THAT EMPLOYEE HAS HAD SUFFICIENT TIME TO CONSIDER IT. AFTER SUCH CAREFUL CONSIDERATION, EMPLOYEE KNOWINGLY AND VOLUNTARILY ENTERS INTO THIS AGREEMENT WITH FULL UNDERSTANDING OF ITS MEANING AND EFFECT.

Employee

Wayne Wielgus

EX-99.1

Exhibit 99.1

For Immediate Release

CHOICE HOTELS ANNOUNCES EXECUTIVE PROMOTIONS

Chief Executive Officer Charles A. Ledsinger, Jr. Named Vice Chairman

Joseph M. Squeri Promoted to President and Chief Operating Officer

New CFO and General Counsel Appointments Made

SILVER SPRING, Md. (September 13, 2006) – The board of directors of Choice Hotels International, Inc., (NYSE:CHH) today announced a series of executive promotions as part of a new corporate organizational structure designed to better support and facilitate the company’s strategies, long-term growth, and continuity for future leadership.

Effective immediately, Chief Executive Officer Charles A. “Chuck” Ledsinger, Jr., (56) has been named vice chairman of the company; and Joseph M. Squeri (41), formerly executive vice president, operations and chief financial officer, has been elected president and chief operating officer.

“Joe has been integral to the growth and success of our company, and I have every confidence Choice will continue to prosper with his new operational responsibilities,” said Charles A. Ledsinger, Jr., vice chairman and CEO. “In promoting Joe to the position of president and COO, and making the other related organizational moves, the board is taking a very important step in our plan to build upon our bench strength within the top leadership of the company and to ensure the company’s continued growth and success,” Ledsinger added.

As vice chairman and CEO, Ledsinger will be focused on furthering Choice’s strategy and growth objectives, initiatives to enhance profitability for the company’s franchisee base, and innovations that drive growth through expansion. In this regard, Ledsinger will oversee the growth and innovation and real estate functions of the corporation, as well as finance, legal, human resources and administration.

In his new position as president and COO, Squeri will have accountability and operating responsibility for the entire franchising operation, creating a seamless oversight in all of the various operating units, including international, marketing and reservations, information technology, brand management, franchise development, field hotel services and Choice’s business-to-business procurement processes.

Ledsinger and Squeri will work together developing and leading the company’s growth and innovation strategies, to include internal innovations that optimize and strengthen the company’s core franchising business, as well as external innovations that drive growth in response to market trends and through expansion into adjacent and complementary businesses.

“I am extremely excited to take on an even larger role in the leadership of the company,” said Squeri. “Over the past eight years, I have had the honor of working with and learning from Chuck, during which time we developed a hotel franchising business model that has led to solid growth and helped establish Choice as one of the best performing companies in the lodging industry.”

Squeri added, “Our new organizational structure is designed to build collaboration across the entire franchising operation, which will enable us to leverage the company’s strengths and related synergies for the benefit of our shareholders, franchisees and associates.”

Related Organizational Moves

In related moves, the board of directors also announced the following changes:

• Michael DeSantis named senior vice president, senior strategic advisor and corporate secretary

In addition to oversight of the legal function, former General Counsel Michael DeSantis will oversee the company’s corporate real estate development group, which has been established to seek investment and business opportunities for Choice, especially in the company’s growth brands of Cambria Suites and Suburban Extended Stay Hotel, and to stimulate new and innovative ideas for the company’s core business. In addition, he will continue to serve as corporate secretary and as the principal liaison with the company’s Board of Directors. DeSantis continues to report to Chuck Ledsinger.

• Paul Mamalian named general counsel

Formerly assistant general counsel for Choice, Paul Mamalian will report to Michael DeSantis and be responsible for the day-to-day management of the legal function, including SEC and corporate filings, acquisitions, franchise issues, risk management, litigation and labor law.

• David White named chief financial officer

Formerly controller for the company, David White will report to Chuck Ledsinger and provide critical oversight and leadership of the finance organization, including treasury, tax and internal audit.

• Scott Oaksmith named controller

Formerly assistant controller for Choice, Scott Oaksmith will report to David White and be responsible for the company’s corporate reporting and accounting.

Additional Background

Joseph M. Squeri

Since joining the company in 1997 as vice president and controller, Joe Squeri has served in a number of positions of increasing scope and responsibility. As controller, he led Choice’s efforts to establish itself as a separate public company after a spin-off. In 1999, he was promoted to senior vice president and chief financial officer. In this capacity, Squeri led Choice through an aggressive recapitalization program. In 2002, Squeri was promoted to executive vice president, development and chief financial officer, and in 2004, he assumed responsibility for the organization’s brand strategy and new product function. In 2005, he was promoted to executive vice president, operations and chief financial officer. Squeri is a graduate of the University of Virginia, McIntire School of Commerce and is a certified public accountant. He began his professional career in July 1987 with Arthur Andersen. In 1997, Squeri joined The Carlyle Group, a leading investment firm in Washington, DC.

Michael DeSantis, Senior Vice President, Senior Strategic Advisor and Corporate Secretary

As Choice’s senior legal officer, DeSantis has successfully overseen all legal issues affecting the company including SEC and corporate filings, acquisitions, franchise issues, risk management, litigation and labor law. Prior to joining Choice, DeSantis was vice president and associate general counsel at Caterair International Corporation, the former in-flight catering division of Marriott Corporation. Prior to Caterair, he was an associate at the law firms of Arent, Fox, Kintner, Plotkin and Kahn in Washington and Kutak Rock in Denver.

Paul Mamalian, General Counsel

Mamalian joined the company in 2003 and has provided sound counsel in the areas of corporate, securities, mergers and acquisitions, financing and trademark law. Prior to joining Choice, Mamalian was an attorney with two major multinational law firms, Pillsbury Winthrop and Reed Smith, and was in-house counsel at Sallie Mae. He earned his bachelors degree from The George Washington University and his juris doctor from The George Washington University Law School.

David White, Chief Financial Officer

Formerly vice president and controller for Choice, David White joined the company in 2002 as vice president, financial/SEC reporting and has provided strong leadership in handling the company’s SEC reporting, as well as in the budgeting and analysis function. In addition, he worked closely with both external auditors and the company’s internal disclosure review committee to ensure that Choice had strong disclosure controls and procedures. Prior to joining Choice Hotels, White worked for Ernst & Young, where he supervised financial statement audits and managed special projects for both public and private companies in a wide range of industries. He is a graduate of the University of Virginia, McIntire School of Commerce and is a certified public accountant.

Scott Oaksmith, Controller

Oaksmith joined Choice in 2002 as director, marketing and reservation finance. During his tenure at the company, Oaksmith has successfully upgraded the company’s corporate reporting processes. Prior to joining Choice Hotels, Oaksmith worked for American Express Tax & Business Services, Inc. in Baltimore from 1994 to 2002. A certified public accountant, he earned his bachelors degree in accounting from Towson University in Maryland and his masters of business administration with a concentration in finance from Johns Hopkins University in Baltimore.

About Choice Hotels

Choice Hotels International franchises more than 5,200 hotels, representing more than 430,000 rooms, in the United States and more than 40 countries and territories. As of June 30, 2006, 687 hotels are under development in the United States, representing 53,765 rooms, and an additional 65 hotels, representing 5,993 rooms, are under development in more than 20 countries and territories. The company’s Cambria Suites, Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites and Suburban Extended Stay Hotel brands serve guests worldwide.

Additional corporate information may be found on Choice Hotels’ Internet site, which may be accessed at www.choicehotels.com.

Forward-Looking Statements

Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities law. Such statements are based on management’s beliefs, assumptions and expectations, which in turn are based on information currently available to management. Actual performance and results could differ from those expressed in or contemplated by the forward-looking statements due to a number of risks, uncertainties and other factors, many of which are beyond Choice’s ability to predict or control. The company’s Form 10-K for the year ended December 31, 2005 details some of the important risk factors that you should review.

Contacts

Anne Madison, Vice President, Corporate Communications

(301) 592-6723

David Peikin, Senior Director, Corporate Communications

(301) 592-6361

Cambria Suites, Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge, and Rodeway Inn are proprietary trademarks and service marks of Choice Hotels International, Inc.

© 2006 Choice Hotels International, Inc. All rights reserved.