Document:

ex10-2.htm

Exhibit 10.2

ARQULE, INC.

 

Amended and Restated 1996 Director Stock Option Plan

 

The purpose of this Amended and Restated 1996 Director Stock Option Plan (the “Plan”) of ArQule, Inc. (the “Company”) is to attract and retain highly qualified non-employee directors of the Company and to encourage ownership of stock of the Company by such directors so as to provide additional incentives to promote the success of the Company.

 

	
1.

	
ADMINISTRATION OF THE PLAN.

 

Grants of stock options under this Plan shall be automatic as provided in Section 6. However, all questions of interpretation with respect to this Plan and options granted under it shall be determined by the Board of Directors of the Company (the “Board”) or by a committee consisting of one or more directors appointed by the Board and such determination shall be final and binding upon all persons having an interest in this Plan.

 

	
2.

	
PERSONS ELIGIBLE TO PARTICIPATE IN THE PLAN.

 

Each director of the Company who is not an employee of the Company or of any subsidiary of the Company shall be eligible to participate in this Plan unless such director irrevocably elects not to participate.

 

	
3.

	
SHARES SUBJECT TO THE PLAN.

 

(a)           The aggregate number of shares of the Company’s Common Stock, $0.01 par value (“Common Stock”) which may be optioned under this Plan is 950,000 shares. Shares issued under this Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

 

(b)           In the event of a stock dividend, split-up, combination or reclassification of shares, recapitalization or other similar capital change relating to the Company’s Common Stock, the maximum aggregate number and kind of shares or securities of the Company as to which options may be granted under this Plan and as to which options then outstanding shall be exercisable, and the option price of such options shall be appropriately adjusted so that the proportionate number of shares or other securities as to which options may be granted and the proportionate interest of holders of outstanding options shall be maintained as before the occurrence of such event.

 

(c)           In the event of a consolidation or merger of the Company with another corporation where the Company’s stockholders do not own a majority in interest of the surviving or resulting corporation, or the sale or exchange of all or substantially all of the assets of the Company, or a reorganization or liquidation of the Company, any deferred exercise period shall be automatically accelerated and each holder of an outstanding option shall be entitled to receive upon exercise and payment in accordance with the terms of the option the same shares, securities or property as he would have been entitled to receive upon the occurrence of such event if he had been, immediately prior to such event, the holder of the number of shares of Common Stock purchasable under his or her option; provided, however, that in lieu of the foregoing the Board may upon written notice to each holder of an outstanding option or right under this Plan, provide that such option or right shall terminate on a date not less than 20 days after the date of such notice unless theretofore exercised.

 

(d)           Whenever options under this Plan lapse or terminate or otherwise become unexercisable the shares of Common Stock which were subject to such options may again be subjected to options under this Plan. The Company shall at all times while this Plan is in force reserve such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Plan.

 

	
4.

	
NON-STATUTORY STOCK OPTIONS.

 

All options granted under this Plan shall be non-statutory options not entitled to special tax treatment under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

	
5.

	
FORM OF OPTIONS.

 

Options granted hereunder shall be in substantially the form of the attached EXHIBIT A or in such other form as the Board or any committee appointed pursuant to Section 1 above may from time to time determine.

 

 

1.

 

 

	
6.

	
GRANT OF OPTIONS AND OPTION TERMS

 

(a)           AUTOMATIC GRANT OF OPTIONS. Upon the initial election or appointment of any person as a member of the Board who is an eligible director (whether or not such election is at an annual meeting of stockholders or otherwise), such person shall automatically be granted (i) an option to purchase 30,000 shares of Common Stock (an “Initial Option”). In addition, at each annual meeting of stockholders, each eligible director serving as a member of the Board (other than the Chairman of the Board) prior to and immediately after such annual meeting (whether or not such director was reelected at such meeting) shall automatically be granted an annual option to purchase 15,000 shares of Common Stock (an “Annual Option”). Upon the initial election or appointment of any person who is an eligible director (whether or not such election is at an annual meeting of stockholders or otherwise) as the Chairman of the Board of Directors, such person shall automatically be granted (i) an option to purchase 25,000 shares of Common Stock (the “Initial Chairman Option”). In addition, at each annual meeting of stockholders, such eligible director serving as Chairman of the Board prior to and immediately after such annual meeting (whether or not such director was reelected at such meeting) shall automatically be granted an annual option to purchase 25,000 shares of Common Stock (the “Annual Chairman Option” and, together with the Initial Chairman Option, (the “Chairman Options”). The Annual Options together with the Initial Options and Chairman Options are sometimes collectively referred to as “Options”). No Options shall be granted hereunder after May 18, 2016. (1)

 

(b)           DATE OF GRANT. The “Date of Grant” for Options granted under this Plan shall be the date of initial election as a director or appointment as Chairman or the date of the annual stockholder meeting at which such Option was granted, as the case may be in accordance with Section 6(a).

 

(c)           OPTION PRICE. The option price for each Option granted under this Plan shall be not be less than 100% of the Fair Market Value of the Company’s Common Stock on the Date of Grant. For purposes of this Plan, “Fair Market Value” means, unless otherwise determined by the Board, the closing price for the Company’s Common Stock as reported by the NASDAQ Stock Market, Inc. on the Date of Grant; provided, however, that in all events shall Fair Market Value be determined pursuant to a method that complies with Proposed Treasury Regulation §1.409A-1(b) (5) or any successor provision. (2)

 

(d)           TERM OF OPTION. The term of each Option granted under this Plan shall be ten years from the Date of Grant.

 

(e)            EXERCISABILITY OF OPTIONS.

 

(1)           The Initial Options granted under this Plan shall become exercisable with respect to 10,000 shares on the date of each of the Company’s next three annual meetings of stockholders following the Date of Grant, but in all cases if, and only if, the Option holder is a member of the Board at the opening of business on that date. The Initial Chairman Options granted under this Plan shall become exercisable with respect to 8,334 shares on the date of the Company’s next annual meeting of stockholders from the Date of Grant and with respect to 8,333 shares on the date of each of the next two annual meetings of stockholders following such annual meeting of stockholders, but in all cases if, and only if, the Option holder is a member of the Board at the opening of business on that date.

 

(2)           The Annual Options and Annual Chairman Options granted under this Plan shall become exercisable with respect to all shares on the Date of Grant.

 

(f)            GENERAL EXERCISE TERMS. Directors holding exercisable Options under this Plan who cease to serve as members of the Board may, during their lifetime, exercise the rights they had under such Options at the time they ceased being a director for the full unexpired term of such Option. Any rights that have not yet become exercisable shall terminate upon cessation of membership on the Board. Upon the death of a director, those entitled to do so shall have the right, at any time within twelve months after the date of death, to exercise in whole or in part any rights which were available to the director at the time of his or her death. The rights of the Option holder may be exercised by the holder’s guardian or legal representative in the case of disability and by the beneficiary designated by the holder in writing delivered to the Company or, if none has been designated, by the holder’s estate or his or her transferee in accordance with this Plan, in the case of death. Options granted under this Plan shall terminate, and no rights thereunder may be exercised, after the expiration of the applicable exercise period. Notwithstanding the foregoing provisions of this section, no rights under any Options may be exercised after the expiration of ten years from their Date of Grant.

 

	
(1)

	
This Plan was amended by the Board to extend the period during which Options may be granted to ten years after May 18, 2006, the date of the 2006 Annual Meeting of Stockholders of the Company at which the stockholders approved the amendment.

 

	
(2)

	
This section was amended by the Board on January 16, 2007 to make the date of determination of Fair Market Value, the Date of Grant.

 

 

2.

 

 

(g)           METHOD OF EXERCISE AND PAYMENT. Options may be exercised only by written notice to the Company at its principal office accompanied by payment of the full Option price for the shares of Common Stock as to which they are exercised. The Option price shall be paid in cash or by check or in shares of Common Stock of the Company, or in any combination thereof. Shares of Common Stock surrendered in payment of the Option price shall have been held by the person exercising the Option for at least six months, unless otherwise permitted by the Board. The value of shares delivered in payment of the Option price shall be their fair market value, as determined in accordance with Section 6(c) above, as of the date of exercise. Upon receipt of such notice and payment, the Company shall promptly issue and deliver to the optionee (or other person entitled to exercise the Option) a certificate or certificates for the number of shares as to which the exercise is made.

 

(h)           NON-TRANSFERABILITY. Options granted under this Plan shall not be transferable by the holder thereof otherwise than by will or the laws of descent and distribution or as permitted by Rule 16b-3 (or any successor provision) under the Securities Exchange Act of 1934, as amended (“Rule 16b-3”).

 

	
7.

	
LIMITATION OF RIGHTS.

 

(a)           NO RIGHT TO CONTINUE AS A DIRECTOR. Neither this Plan, nor the granting of an Option or any other action taken pursuant to this Plan, shall constitute an agreement or understanding, express or implied, that the Company will retain an Option holder as a director for any period of time or at any particular rate of compensation.

 

(b)           NO STOCKHOLDERS’ RIGHTS FOR OPTIONS. A director shall have no rights as a stockholder with respect to the shares covered by Options until the date the director exercises such Options and pays the Option price to the Company, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such Option is exercised and paid for.

 

	
8.

	
AMENDMENT OR TERMINATION.

 

The Board may amend or terminate this Plan at any time, provided that, to the extent necessary or desirable to comply with Rule 16b-3, this Plan shall not be amended more than once every six months, other than to comport with changes in the Code, ERISA or the rules thereunder.

 

	
9.

	
STOCKHOLDER APPROVAL.

 

The 1996 Director Stock Option Plan was approved by the stockholders of the Company by an affirmative vote of the holders of a majority of the shares of Common Stock present, or represented and entitled to vote, at the Company’s 1997 annual meeting of stockholders. Any further amendments hereto shall be subject to stockholder approval to the extent (i) required by law, (ii) required by Nasdaq or stock exchange listing requirements, as determined by the Board of Directors, or (iii) as desirable, as determined by the Board of Directors, to comply with Rule 16b-3. In the event any amendment to increase the number of shares of Common Stock which may be optioned under this Plan is not approved by the stockholders, all Options granted under this Plan with respect to shares from an increase not approved by stockholders shall be void and without effect.

 

	
10.

	
GOVERNING LAW.

 

This Plan shall be governed by and interpreted in accordance with the laws of the State of Delaware.

 

	
11.

	
COMPLIANCE WITH SECTION 409A OF THE CODE.

 

Notwithstanding any other provision of this Plan to the contrary, to the extent any grant (or a modification of a grant) of options under this Plan results in the deferral of compensation (for purposes of Section 409Aof the Code), the terms and conditions of the grant shall comply with Section 409A of the Code.

 

  

3.

  

 

The Board of Directors amended and restated this Plan on March 16, 2000.

 

The amendment and restatement was approved by the stockholders at the Annual Meeting of Stockholders on May 18, 2000.

 

The Board of Directors amended and restated this Plan on March 21, 2002.

 

The amendment and restatement was approved by the stockholders at the Annual Meeting of Stockholders on May 16, 2002.

 

The Board of Directors amended and restated this Plan on March 14, 2003.

 

The amendment and restatement was approved by the stockholders at the Annual Meeting of Stockholders on May 21, 2003.

 

The Board of Directors amended and restated this Plan on April 7, 2004.

 

The amendment and restatement was approved by the stockholders at the Annual Meeting of Stockholders on May 19, 2004.

 

The Board of Directors amended and restated this Plan on April 4, 2005.

 

The amendment and restatement was approved by the stockholders at the Annual Meeting of Stockholders on May 18, 2005.

 

The Board of Directors amended and restated this Plan on March 13, 2006.

 

The amendment and restatement was approved by the stockholders at the Annual Meeting of Stockholders on May 18, 2006.

 

The Board of Directors amended and restated this Plan on January 16, 2007.

 

The amendment and restatement was approved by the stockholders at the Annual Meeting of Stockholders on May 18, 2007.

 

Pursuant to Section 13 (d) of this Plan, the Board of Directors amended and restated this Plan on January 21, 2010.

 

The Board of Directors determined that, in accordance with the terms of this Plan, applicable securities laws and regulations and Nasdaq market rules it was not necessary to obtain the stockholder approval for the amendment and restatement.

 

The Board of Directors amended and restated this Plan on March 14, 2011.

 

The amendment and restatement was approved by the stockholders at the Annual Meeting of Stockholders on June 1, 2011.

 

4.Non-Competition, Non-Solicitation & Severance Benefit Agreement

 Exhibit 10.1 
 Non-Competition, Non-Solicitation & Severance Benefit Agreement 
 This Non-Competition, Non-Solicitation & Severance Benefit Agreement (“Agreement”) is entered into this 1st day of August, 2011 between Choice Hotels International, Inc. (“Choice”), a Delaware corporation with
principal offices at 10750 Columbia Pike, Silver Spring, Maryland 20901, and David White (“Employee”). 
 Recitals

 A. Employee is a management-level employee of Choice or a subsidiary of Choice (collectively, “Choice”); 

B. Choice devotes significant time, resources and effort to the training and advancement of its management employees, and its management team constitutes
a significant asset and important competitive edge; 
 C. Choice has determined that it is in the best interest of the company and its
shareholders to enter into an agreement with Employee whereby Employee agrees to certain non-competition, non-solicitation and confidentiality restrictions in consideration of, among other things, certain severance benefits. 

NOW, THEREFORE, in consideration of the promises contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree to the following terms: 
 1. Definitions. As used in this Agreement, the following
terms shall have the ascribed meaning: 
 (a) “Board” means the Board of Directors of Choice. 

(b) “Cause” means any one or more of the following, whether occurring before or after the date hereof: (i) Employee’s deliberate and
continued refusal to carry out duties and instructions of the Board and CEO consistent with the position following notice by Choice and a five business days cure period; (ii) Employee’s commission of an act materially detrimental to the
financial condition, operations and/or goodwill of Choice; (iii) Employee’s gross negligence or willful misconduct in the performance of duties to Choice; (iv) Employee’s commission of any act of theft, fraud, dishonesty, breach
of trust or breach of fiduciary duty involving Choice; (v) Employee’s conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude, fraud or embezzlement; (vi) any breach by Employee of the
covenants contained in this Agreement, or (vii) the material violation by Employee of any Choice policy or any statutory or common law duty to Choice. 
 (c) “Change in Control” means the happening of the earliest of the following to occur: 

(i) Any “person” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (other than
(i) Choice, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of Choice, (iii) any corporations owned, directly or indirectly, by the stockholders of Choice in substantially the same proportions as
their 

  
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ownership of stock, or (iv) Stewart Bainum, his wife, their lineal descendants and their spouses (so long as they remain spouses) and the estate of any of the foregoing persons, and any
partnership, trust, corporation or other entity to the extent shares of common stock (or their equivalent) are considered to be beneficially owned by any of the persons or estates referred to in the foregoing provisions of this subsection 1(c)
or any transferee thereof) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Choice representing 33% or more of the combined voting power of Choice’s then
outstanding voting securities. 
 (ii) Individuals constituting the Board on the date of this Agreement and the successors of such individuals
(“Continuing Directors”) cease to constitute a majority of the Board. For this purpose, a director shall be a successor if and only if he or she was nominated by a Board (or a Nominating Committee thereof) on which individuals constituting
the Board on the date of this Agreement and their successors (determined by prior application of this sentence) constituted a majority. 
 (iii)
The stockholders of Choice approve a plan of merger or consolidation (“Combination”) with any other corporation or legal person, other than a Combination which would result in stockholders of Choice immediately prior to the Combination
owning, immediately thereafter, more than sixty-five percent (65%) of the combined voting power of either the surviving entity or the entity owning directly or indirectly all of the common stock, or its equivalent, of the surviving entity;
provided, however, that if stockholder approval is not required for such Combination, the Change in Control shall occur upon the consummation of such Combination. 
 (iv) The stockholders of Choice approve a plan of complete liquidation of Choice or an agreement for the sale or disposition by Choice of all or substantially all of Choice’s stock and/or assets, or
accept a tender offer for substantially all of Choice’s stock (or any transaction having a similar effect); provided, however, that if stockholder approval is not required for such transaction, the Change in Control shall occur upon
consummation of such transaction. 
 (d) “Change in Control Termination” means and includes the termination of Employee’s
employment with Choice at any time during the twelve (12) month period after a Change in Control if such termination is (i) by Choice for any reason other than Cause, (ii) by Employee for Good Reason. 

(e) “Competing Business” means any business or enterprise that: (i) is engaged in the mid-market or economy hotel franchising business,
(ii) competes in the same upscale, select service segment as Cambria Suites or any successor or substantially similar Choice brand, or (iii) competes in any other line of business in which Choice is materially engaged at the time of the
Termination Date. 
 (f) “Confidential Information” means any non-public information, in any format, relating to the
business of Choice, including, but not limited to, present or prospective operating, marketing and development plans, training manuals, training policies and procedures, financial and technical information, passwords, source codes, personnel
information, franchisee information, business systems, trade secrets, pricing and cost information, contact lists, strategic plans or strategies, operating data or Choice policies. 

(g) “Disability” means if Employee is unable to perform the essential functions of Employee’s position, after any legally
required reasonable accommodation, for more than 180 days (whether or not consecutive) in any period of 365 consecutive days. 

  
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 (h) “Good Reason” means a voluntary termination by Employee following a material,
substantial change in either Employee’s compensation or position and responsibilities, provided such termination occurs within forty-five days of the change in compensation or position. Employee must provide Choice with at least thirty
(30) days’ prior written notice of electing a Good Reason termination. 
 (i) “Non-Renewal” shall have the
meaning set forth in Section 2. 
 (j) “Release Agreement” means the release of claims attached as Exhibit A. 

(k) “Severance Benefits” means the benefits specified in Section 6. 

(l) “Severance Benefit Period” means the seventy (70) week period following the Termination Date. 

(m) “Termination Date” means the date the Employee’s employment with Choice ends. 

(n) “Works” means any ideas, concepts, methods of operation, processes, programs or other materials (including training
manuals, policies and procedures) that Employee conceived, created, developed or wrote while employed by Choice that relate in any manner to the business of Choice. 
 2. Term. The initial term of this Agreement shall be for a period commencing on August 1st, 2011 and will remain in effect until August 1st, 2014. The term of this Agreement shall be automatically extended for an additional three year period on
August 1st, 2014 and each subsequent three year
anniversary thereof, unless and until Choice or the Employee provides written notice to the other party in accordance with Section 10 hereof not less than one hundred eighty (180) days before such date that such party is electing not to
extend the term of this Agreement (“Non-Renewal”). Anything herein to the contrary notwithstanding, if on the date of a Change in Control, the remaining term of this Agreement is less than twelve (12) months, the term of the Agreement
shall be automatically extended to the end of the twelve (12) month period following such Change in Control. References herein to the term of this Agreement shall include the initial term and any additional period for which this Agreement is
extended. 
 3. Confidentiality. Employee acknowledges that Confidential Information and Works are valuable and unique assets belonging
to Choice. During employment and after the Termination Date, Employee shall not, except as required by law or by Employee’s duties for Choice and for the benefit of Choice, directly or indirectly, or cause others to, make use of or disclose to
others any Confidential Information or Works. Notwithstanding the foregoing, Confidential Information does not include information which was or becomes generally available to the public other than as a result of a disclosure by Employee. Works
constitute works made for hire and in all circumstances shall be and remain the sole and exclusive property of Choice, whether or not protectable under any laws, including patent, trademark, copyright or trade secret laws. 

4. Non-Solicitation. During employment and for a period of seventy (70) weeks following the Termination Date, Employee agrees, except as
required by Employee’s duties for Choice and for the benefit of Choice or with the prior written consent of Choice, not to solicit or attempt to solicit, directly or indirectly, on Employee’s behalf or on behalf of any other person or
entity, any person or entity who then is or who was as of the Termination Date, an employee, business partner or franchisee of Choice, or was actively solicited to have such a relationship with Choice

  
 3 

 
within six (6) months prior to the Termination Date, to cease, curtail or refrain from entering into such a relationship with Choice. Nothing in the foregoing shall be construed as
preventing Employee from otherwise lawfully soliciting business from any then current or prospective business partner or franchisee that is for a line of business other than any Competing Business. 

5. Non-Competition. During employment and for a period of seventy (70) weeks after the Termination Date, Employee will not, except as
required by Employee’s duties for Choice and for the benefit of Choice, or with the prior written consent of the Board, directly or indirectly, own, manage, operate, join, control, finance or participate in the ownership, management, operation,
control or financing of, or be connected as an officer, director, employee, partner, principal, agent, representative, consultant or in any other capacity, or use or permit Employee’s name to be used in connection with, any business or
enterprise that is engaged in a Competing Business in the U.S. or Canada; provided, however, that the foregoing shall not be construed as preventing Employee from otherwise lawfully (i) investing Employee’s assets in (A) the
securities of any Competing Business that is a public company, or (B) the securities of any Competing Business that is a privately-held corporation, limited partnership, limited liability company or other business entity, if such holdings are
passive investments of one percent (1%) or less of such entity’s outstanding securities or (ii) becoming an employee, agent or representative of, consultant to, or otherwise connected with, any business entity that has multiple lines
of business, some of which are not a Competing Business, if Employee’s services for such entity are restricted so that Employee will provide no services or other assistance in support of, and will not otherwise be involved with, any such
Competing Business conducted by such entity. 
 6. Severance Benefits. If Employee terminates for Good Reason or is terminated by Choice
for any reason other than Cause, Change in Control Termination, Disability or death and Employee executes the Release Agreement within twenty-one (21) days of the Termination Date (or forty-five (45) days if such longer review period is
required by the ADEA) and has not revoked the Release Agreement as permitted therein, Choice shall provide to Employee, in consideration of Employee’s promises and covenants contained in this Agreement and the Release Agreement, a Severance
Benefit equal to: 
 (a) During the Severance Benefit Period, a bi-weekly payment equal to Employee’s bi-weekly base salary rate on the
Termination Date, less standard deductions, payable in installments in accordance with Choice’s normal payroll practices (“Discretionary Pay”); 
 (b) If the Termination Date occurs after June 30 in a given year, then Employee shall be eligible for full payout of the bonus for that fiscal year based on the actual attainment level for the
company objectives and at 100% of the individual Management Bonus Objectives. The bonus will be paid out, if at all, at such time as the other corporate officers receive their bonus. 
 (c) Stock option and stock awards granted under Choice’s Long-Term Incentive Plan after the date of this Agreement shall continue to vest and be exercisable during the Severance Benefit Period. At
the end of the Severance Benefit Period, vesting shall cease and Employee shall have 90 days thereafter to exercise all stock options that are vested at the end of the Severance Benefit Period. 

(d) During the Severance Benefit Period, Choice will provide Employee at its expense with its standard outplacement services for executive level
employees. Upon obtaining other employment, Employee will be ineligible to continue receiving these outplacement services at Choice’s expense. 

  
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 (e) During the Severance Benefit Period, (i) Employee may continue deductions for medical, dental, and
pre-tax spending accounts while receiving Discretionary Pay, and Employee consents to the customary deductions for such benefits from Discretionary Pay, and (ii) Choice will continue to pay employer contributions to Employee’s medical and
dental insurance, and pre-tax spending accounts while Employee is receiving Discretionary Pay. Choice will stop optional deductions for items such as retirement plans and life insurance with Employee’s last paycheck for regular hours worked
through the Termination Date. Employee will be eligible to continue group health and dental benefits at Employee’s own expense in accordance with and to the extent required by the federal COBRA law. 

7. Re-employment. After the Termination Date, Employee shall not be required to mitigate damages as a condition to receiving Severance Benefits,
but nevertheless shall be entitled to pursue other employment as permitted by this Agreement. If Employee chooses to pursue and accept other employment or consulting during the Severance Benefit Period, Choice shall be entitled to receive as an
offset, and thereby reduce its payment under Sections 5(a) and (b), the amounts received by Employee from any other active employment. Employee agrees to notify Choice within seven (7) days of accepting such employment by sending such notice to
Choice Hotels International, 10750 Columbia Pike, Silver Spring, Maryland 20901, Attention: Vice President — Human Resources. As a condition to Employee receiving the Severance Benefits from Choice, Employee agrees to permit verification of
Employee’s employment records and Federal income tax returns by an independent attorney or accountant, selected by Choice but reasonably acceptable to Employee, who agrees to preserve the confidentiality of the information disclosed by Employee
except to the extent required to permit Choice to verify the amounts received by Employee from other active employment. Choice shall receive credit for unemployment insurance benefits, social security insurance or like amounts actually received by
Employee. 
 8. Change in Control. 
 (a) If, within twelve (12) months after a Change in Control, there occurs a Change in Control Termination, Employee shall receive as severance compensation a lump sum payment in an amount equal to
200% of Employee’s base salary at the rate in effect as of the Termination Date, plus 200% of the amount of Employee’s eligible full year bonus for that fiscal year based on a 100% attainment level for the company objectives and a 100%
attainment level for the individual Management Bonus Objectives. Additionally, all unvested restricted stock, performance vested restricted stock units and stock option awards granted after the date of this Agreement and then held by Employee shall
automatically become fully vested as of the date of the Change of Control Termination. 
 (b) Employee’s right to receive the benefits
described in Section 8(a) shall be conditioned upon Employee executing the Release Agreement. 
 9. Acknowledgments. Employee and
Choice acknowledge and agree as follows: 
 (a) The restrictions contained in Sections 2, 3 and 4 are reasonable and necessary to protect and
preserve the legitimate interests, properties, goodwill and business of Choice, that Choice would not have entered into this Agreement in the absence of such restrictions and that irreparable injury will be suffered by Choice should the Employee
breach any of those provisions. Employee represents and acknowledges that (i) the Employee has been advised by Choice to consult Employee’s own legal counsel at Employee’s expense prior to executing this Agreement, and (ii) that
the Employee has had full opportunity, prior to execution of this Agreement, to review thoroughly this Agreement with the Employee’s counsel. 

  
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 (b) A breach of any of the restrictions in this Agreement cannot be adequately compensated by monetary
damages and Choice shall be entitled to seek preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as any other appropriate equitable relief, which rights shall be cumulative and in addition to any
other rights or remedies to which Choice may be entitled. 
 (c) In the event that any of the provisions of this Agreement should ever be
adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, it is the intention of the parties that the provision shall be amended to the extent of the maximum time, geographic, service,
or other limitations permitted by applicable law, that such amendment shall apply only within the jurisdiction of the court that made such adjudication and that the provision otherwise be enforced to the maximum extent permitted by law. The
invalidity of any provision of this Agreement shall not effect the validity of the remaining provisions of this Agreement. 
 (d) This Agreement
supersedes and extinguishes any rights Employee may have under Choice’s standard Severance Benefit Plan. 
 (e) This Agreement shall not be
construed as giving the Employee the right to be retained in the service of Choice for any definite period or otherwise to change Employee’s status as an at-will employee. 
 (f) If required under Section 409A of the Internal Revenue Code of 1986, as amended, any Severance Benefit or Change of Control payment will made six (6) months following the Termination Date.

 (g) Employee agrees that Employee is not entitled to any unemployment benefits, and, to the extent permitted by law, that Employee does not
intend to seek any unemployment benefits, during the Severance Benefit Period. Choice will not contest Employee’s claim for unemployment benefits after the Severance Benefit Period. 

10. Notices. For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when hand delivered, sent by overnight courier, or mailed by first-class, registered or certified mail, return receipt requested, postage prepaid, or transmitted by telegram, telecopy, or telex,
addressed as follows: 
 If to the Company: 
 Choice Hotels International, Inc. 
 10750 Columbia Pike 

Silver Spring, Maryland 20901 
 Attn: General
Counsel 
 Fax: 301-592-6795 

  
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 If to the Executive: 
 David White 
 10813 Glen Mist Lane 
 Fairfax, Virginia 22030 
 Tel: 703-627-5076 

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt. 
 11. Miscellaneous.  
 (a) This Agreement contains the entire agreement of the parties, and supersedes all other agreements, discussions or understandings concerning the subject matter. It may be changed only by an agreement in
writing signed by both parties. 
 (b) This Agreement shall be governed by the laws of the State of Maryland, and any disputes arising out of or
relating to this Agreement shall be brought and heard in any court of competent jurisdiction in the State of Maryland. Each party submits to the venue and jurisdiction of said courts. 
 (c) No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver.

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

 

			
	CHOICE HOTELS INTERNATIONAL, INC.
		
	By:	 	 /s/ Stephen P. Joyce

	
	Employee:
	
	 /s/ David L. White

  
 7 

 EXHIBIT A 
 RELEASE AGREEMENT 
 This Release Agreement (“Release Agreement”)
is made as of             , 20     by                     
(“Employee”) in favor of Choice Hotels International, Inc. and its subsidiaries (collectively “Choice”). 

WHEREAS, Employee and Choice have previously entered into a Non-Competition, Non-Solicitation and Severance Benefit Agreement dated
            , 20     (“Agreement”); and 
 WHEREAS, in consideration for certain covenants and benefits under the Agreement, Employee is obligated to execute this Release Agreement upon termination of employment; 

NOW, THEREFORE, in consideration of the promises contained in this Agreement, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree to the following terms: 
 1. Last Day Worked.
Employee’s employment terminated, or will terminate, on             , 20     (“Termination Date”). Employee will return to Choice, no later than the close
of business on the Termination Date, any Choice property, including original and copied computer hardware or software, credit cards, long distance telephone cards, and keys or passcards to Choice buildings, and all other property in Employee’s
possession, custody or control. 
 2. Release. Employee agrees, in exchange for the benefits set forth in the Agreement,
to irrevocably and unconditionally release Choice and its parents, subsidiaries and affiliated entities, and each of their respective officers, directors, shareholders, employees, agents, representatives, insurers, attorneys, employee welfare
benefit plans and pension or deferred compensation plans under Section 401 of the Internal Revenue Code of 1986, as amended, and their trustees, administrators and other fiduciaries; and all persons acting by, through, under or in concert with
them, and each of their predecessors, successors and assigns 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 Effective Date of this Agreement, including without limitation those 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 1986, as amended (“Claims”). The Claims that 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; 

  
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	 	•	 	 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, harassment or retaliation.

 Employee also releases any Claims for wrongful discharge or breach of contract, Claims for any personal injury or tort,
Claims for any compensation, benefits, expenses, bonuses, or any other employee rights or benefits, Claims for employment or reinstatement, Claims for attorneys’ fees and costs, and all other Claims under any applicable statute, contract or
other cause of action. 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. 
 3. No Release of Rights Under
Agreement. By signing this Release Agreement, Employee does not waive or release Employee’s right to enforce the Agreement. Employee does not release claims for or rights to earned compensation, vested benefits or indemnification under
Choice’s bylaws. 
 4. Lawsuits. To the fullest extent permitted by law, Employee promises never to file a lawsuit,
claim, complaint, charge, demand, administrative proceeding, agency action or any other legal proceeding (collectively “Lawsuit”) asserting any Claims that are released in this Agreement. Employee agrees to withdraw with prejudice all
Lawsuits, if any, Employee has filed against any Choice Releasee asserting any Claims with any agency or court. Employee also waives the right to seek or receive any monetary benefits with respect to Lawsuits asserted by administrative agencies or
other third parties on Employee’s behalf. 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 any derogatory remarks or provide and disparaging information about any Choice Releasee. Employee agrees to reasonably 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. Choice will reimburse Employee for all reasonable and necessary expenses Employee incurs in complying with the foregoing sentence, provided they are approved by Choice in writing prior to
being incurred. 
 5. No Admission. Employee agrees that this Release Agreement is not an admission of guilt or
wrongdoing by the Choice Releasees, and Employee acknowledges that the Choice Releasees do not believe or admit that they have done anything wrong. Employee acknowledges that Employee has not suffered any wrongful treatment by any Choice Releasee.

  
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 6. Breach. If Employee breaches this Release Agreement and files a Lawsuit against
any Choice Releasee on Claims that Employee released in this Release Agreement, Employee agrees to pay for all costs incurred by the Choice Releasee, including reasonable attorneys’ fees, in defending against Employee’s Lawsuit. 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 subpoena or court order. If Employee breaches the promises in this Release Agreement, Choice may
terminate all Severance Benefits under the Agreement that are still owed to Employee. 
 7. 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 the jurisdiction and venue of said court. 
 8. Binding. Employee agrees and acknowledges this Release
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. 
 9. Severability. Any invalidity, in whole or in part, of any provision of this Release Agreement shall not
affect the validity of any other of its provisions. 
 10. Period for Review and Consideration. Employee has 21 days from
the date Employee receives this Release Agreement 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 Agreement. Choice advises Employee to consult
with an attorney at Employee’s own expense before signing this Release Agreement; whether to do so is Employee’s decision. If Employee wishes to sign this Release Agreement and thereafter be eligible to receive the Severance Benefits under
the Agreement, Employee must deliver one fully executed original of this Release Agreement, to Choice Hotels International, 10750 Columbia Pike, Silver Spring, Maryland 20901, Senior Vice President— Human Resources, no later than the close of
business on the 21st day after Employee receives this Release Agreement. Employee’s failure to deliver timely the executed Release Agreement will nullify the Agreement, and Employee will not be entitled to receive the Severance Benefits.

 11. Revocation of Release Agreement. Employee may revoke this Release Agreement within 7 days after signing it (the
“Revocation Period”). If Employee wishes to revoke this Release Agreement after signing it, Employee must deliver a written notice of revocation to Choice Hotels International, 10750 Columbia Pike, Silver Spring, Maryland 20901, Attention:
Senior Vice President, Human Resources. Choice must receive this revocation no later than the close of business on the 7th day after Employee signs this Release Agreement. If Employee revokes this Release Agreement, it shall not be effective or
enforceable and Employee will not receive the Severance Benefits under the Agreement.] This Agreement will not become effective or enforceable until such date that is signed by both parties and the Revocation Period expires without Employee
exercising Employee’s right of revocation (the “Effective Date”). 

  
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 EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS HAD AN OPPORTUNITY TO REVIEW AND CONSIDER THIS
RELEASE 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 RELEASE AGREEMENT WITH FULL UNDERSTANDING OF ITS MEANING AND EFFECT.

  

	
	Employee:
	
	  

  
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