CHOICE HOTELS INTERNATIONAL, INC.
CORPORATE ETHICS POLICY
PURPOSE AND SCOPE
The Board of Directors of Choice Hotels International, Inc. and its
subsidiaries ("Choice") established and updates this Corporate Ethics Policy
("Policy") to aid each director, officer and employee in each Choice operating
unit, facility, and department, in making ethical and legal decisions in your
daily work. Please direct all your questions on the Policy and how to use it
effectively to Choice's Corporate Compliance Officer ("CCO"), appointed by the
Chief Executive Officer.
Choice requires you to conduct our Company's business using good
judgment and the highest legal and ethical standards including the ethical
handling of actual or apparent conflicts on interest between personal and
professional relationships. Although the Policy is based on common sense and
courtesy, Choice understands that you often encounter work situations that
challenge your judgment. As a Choice director, officer or employee faced with
such challenges, you should refer to the Policy's consistent and uniform
guidelines to evaluate and respond in a way that meets Choice's moral and legal
standards. Use this Policy frequently to ensure that you act within the Policy's
spirit and that you react to challenges facing you in compliance with each
principle and standard. Your consistently ethical behavior helps Choice prosper
by earning the trust and respect of our customers, suppliers, shareholders,
competitors, and community.
STANDARDS OF CONDUCT
Each Choice director, officer and employee must:
1. Comply with all laws, rules and regulations. Compliance with
applicable governmental laws, rules and regulations does not comprise our entire
ethical responsibility. Rather, it is a minimum, essential condition for
performance of your duties. If you suspect that you, a co-worker or Choice may
have done or may be about to do something that violates this Policy, other
Choice policies, or any regulation or law, immediately contact your supervisor,
the CCO, or the Legal Department. They are there to help you interpret the
Policy, applicable laws, rules and regulations before you act. If you don't
notify one of these people when you know or suspect a violation, you may
jeopardize yourself, your employment, and Choice.
2. Be honest and true. You must always give accurate information to
Choice's customers and vendors, and to the public. If you are involved in
proposals, bid preparations, or contract negotiations, you must be certain that
all statements, communications, and representations to prospective customers are
accurate and truthful. Do not misrepresent Choice's services when you sell, or
Choice's needs when you buy, or any other information in your negotiations,
contracts and daily work. Your estimates and projections should be reasonably
based on available facts and logical
assumptions, and formulated without bias that could skew your results.
Generally, avoid giving estimates and projections in public disclosures. If you
are issuing information to the public or media, clear it first with Choice's
Legal Department and Chief Financial Officer.
3. Honor individual and corporate obligations. Make commitments to
customers, suppliers, business partners and your co-workers that you and Choice
expect to fulfill. Recognize also that Choice makes corporate commitments, and
communicate with other departments to make sure your proposed commitments
support, and do not conflict with, established ones. Meeting your commitments is
an individual accomplishment, while meeting Choice's commitments enhances our
corporate integrity.
4. Obtain and Use Choice Assets Wisely. Proper use of Choice property,
electronic communications systems, information resources, material facilities
and equipment is your responsibility. Use and maintain these assets with the
utmost care and respect, guarding against theft, waste and abuse, and never
borrow or remove them from Choice property without management's permission.
While these assets are intended to be used for Choice business, occasional
personal use by employees may be permitted if it does not adversely affect the
interests of Choice and permission is given. Personal use of Choice assets must
always be in accordance with other Choice policies--consult your supervisor for
guidance and permission. (See also Communications System and Internet Services
Policy).
5. Negotiate fairly and quickly. Solicit, buy and sell on the basis of
quality, service and price. Refrain from negotiating reciprocal agreements or
coercing vendors to deal with Choice. Report to the CCO any party negotiating
with Choice who infers that a Choice board member, officer, or employee demands
a certain deal outcome.
6. Compete fairly and do not disrupt free trade or restrict
competition. Antitrust laws prohibit agreements and practices "in restraint of
trade" such as price fixing and boycotting suppliers or customers. They also bar
pricing intended to run a competitor out of business; disparaging,
misrepresenting or harassing a competitor; stealing trade secrets; bribery; and
kickbacks. Unless you have a legitimate and legal purpose, do not discuss with,
or reveal Choice prices, rate establishing methods, terms, or service schedules
to parties outside Choice. Avoid using misrepresentation or innuendo that
injures or discredits a legitimate competitor.
To ensure that our customers can purchase goods or services at the
same or better price as others in similar conditions, use price variances only
if there are differences in the quantity or cost of providing the goods or
services, if you are matching a competitor's price in good faith, or if
conditions change that effect the marketability of the goods or services.
7. Do Not Usurp Business Opportunities. You are prohibited from (a)
taking for yourself personally opportunities or benefits that are discovered
through the use of
your position or Choice property or information, (b) using your position or
Choice property or information for personal gain, and (c) competing with Choice.
You owe a duty to Choice to advance its legitimate interests when the
opportunity to do so arises.
8. Generally avoid gifts. Choice's business dealings should always be
free from even the perception that favorable treatment was sought, received, or
given in exchange for gifts or favors. You must neither give nor accept business
courtesies that constitute, or could be reasonably perceived as constituting,
unfair business inducements or that would violate law, regulation or policies of
Choice or a customer, or could cause embarrassment to or reflect negatively on
Choice's reputation. As a matter of respect for the rich and diverse customs
practiced among our business relations internationally, permissive conduct may
differ somewhat in accordance with applicable policy or upon guidance from the
Legal Department.
Report immediately to your supervisor and the CCO any actual or
apparent offer of a gift to you or a co-worker that appears to be an attempt to
commercially or politically bribe you or Choice in the form of money, goods or
services.
GIFTS, GRATUITIES, AND BUSINESS COURTESIES TO U.S., STATE, AND LOCAL
GOVERNMENT EMPLOYEES
Federal, state and local government departments and agencies are
governed by law and regulations concerning acceptance by their employees of
entertainment, meals, gifts, gratuities, and other things of value from firms
and persons with whom those government departments and agencies do business or
over whom they have regulatory authority. It is the policy of Choice to comply
strictly with those laws and regulations.
BUSINESS COURTESIES TO NON-GOVERNMENT PERSONS
Meals, Refreshments and Entertainment
It is an acceptable practice for Choice employees to provide meals,
refreshments, entertainment, and other business courtesies of
reasonable value to non-government persons in support of business
activities, provided:
. The practice does not violate any law or regulation or the
standards of conduct of the recipient's organization. It is
your responsibility to inquire about prohibitions or
limitations of the recipient's organization before offering
any business courtesy; and
. The business courtesy must be consistent with marketplace
practices, infrequent in nature, and may not be lavish or
extravagant. While it is difficult to define "lavish or
extravagant" by means of a specific dollar amount, a common
sense determination should be made consistent with
reasonable marketplace practices.
GIFTS
Choice employees are prohibited from offering or giving tangible gifts
(including tickets to sporting, recreational, or other events) having
a market value of $100.00 or more, to a person or entity with whom the
Company does or seeks to do business, unless specifically approved by
his or other supervisor, and the CCO.
BUSINESS COURTESIES TO FOREIGN GOVERNMENT PERSONNEL AND PUBLIC
OFFICIALS
Choice may be restricted from giving meals, gifts, gratuities,
entertainment, or other things of value to personnel of foreign
governments and foreign public officials by the Foreign Corrupt
practices Act and by laws of other countries. You must obtain prior
Legal Department approval.
9. Tread carefully in political matters. Choice encourages its
employees to become involved in civic affairs and to participate in the
political process. You must understand, however, that your involvement and
participation must be on an individual basis, on your own time, and at your own
expense. Federal law prohibits Choice from donating corporate funds, goods or
services, directly or indirectly to candidates for federal office--this includes
employee work time. Local and state laws also govern political contributions and
activities by corporations.
Report immediately to the CCO or your supervisor any efforts by Choice
or co-workers to coerce or influence your decision to make political
contributions.
10. Keep outside interests from conflicting with your job. The Board
of Directors must approve any material transactions between Choice and its
directors, officers, stockholders, employees, agents or affiliates, and members
of their immediate family. This includes any transactions with third parties
(e.g., vendors, franchisees) in which such persons have a material interest. If
you encounter any such transactions, forward them to the Legal Department.
Conflicts of interest can arise when you or a member of your family
receive improper personal benefit because of your position with Choice. Do not
take actions, conduct business, or make statements that create real or potential
conflicts with Choice's interests, including taking a personal, proprietary or
financial interest in an entity with which Choice does business or competes, or
which could adversely, or appear to adversely, influence you in your Choice
employment.
You may not have an outside job, business, financial interest or
activity that, because of its size, significance or nature, adversely affects
your job performance or that conflicts or appears to conflict with Choice's
interests. Get the approval of the CEO, or, in some cases, the Board of
Directors, before you get a job outside Choice that pays you money or other
consideration.
You may invest in entities that supply or purchase goods or services
to or from Choice so long as the entity is listed on a national securities
exchange or regularly traded by national securities dealers and you purchase
only 1% or less of the market value of the entity's outstanding securities. If
you want to purchase from entities not meeting this standard, or in greater
quantities, you must receive the Board of Director's approval before investing.
You may invest in Manor Care, Inc. or Sunburst Hospitality Corporation and their
affiliates without such limitation or prior approval.
11. Keep confidential information here. In your daily work, you will
receive information about Choice, other companies, or individuals that the
public does not know. That information is confidential, and unless the
information is public knowledge or is required to be disclosed by law, you must
not share the information outside of Choice.
Never use confidential information that you get at work for your
personal gain or to give or get an unfair advantage in a personal or competitive
business transaction. You may not trade on, share or disclose information that
may affect the value of Choice stock until that information is made public. If
you do so, you could be criminally prosecuted for insider trading.
You may also receive confidential information and data about Choice's
business plans, trademarks, new products, revenues, expenses, profits, methods,
systems, franchisee lists, employee rosters and/or vendor lists. If so, you have
access to a trade secret that is Choice's valuable asset, and that, if you
disclosed it outside the company, may harm Choice. For this reason, you may not
disclose trade secrets to the public or use them for purposes other than as
required in your work at Choice.
12. Respect individual dignity. Be fair and impartial with co-workers
and those outside Choice, offering everyone an equal opportunity to achieve
their full business potential. Do not discriminate against or harass any fellow
employee, franchisee, or any other outside person. You and Choice must never
discriminate on the basis of race, color, creed, religion, sex, sexual
preference, national origin, disability or any other status recognized by civil
rights law. While everyone who works for Choice must comply with these
provisions, our executives and supervisors assume a special responsibility for
fostering a work environment that is free from discrimination, harassment and
the fear or retribution. Supervisors must be careful in words and conduct to
avoid placing, or seeming to place, pressure on subordinates that could cause
them to deviate from acceptable ethical behavior.
Report immediately and completely to your supervisor, Human Resources
and the CCO any action, word, or practice you believe is discrimination,
harassment or retaliation. (See also, Anti-Harassment Policy).
13. Know the rules in government contracts. If you assist Choice in
fulfilling a government contract, know and comply with that contract and the
contracting
agency's applicable laws, rules and regulations. If you have a question
concerning compliance with a government contract, contact your supervisor or the
CCO.
Choice will not employ or contract for services with any person who
Choice knows was convicted of a criminal offense related to a government program
or who Choice knows was debarred or excluded from participating in a government
program.
14. Maintain clear and accurate records. Maintain complete, clear and
dated financial and other records. Choice relies on the trustworthiness and
professionalism of your accounting, record keeping, and reporting. Never
misstate, exaggerate or fabricate files that pertain to Choice's business.
15. Special Obligations of the CEO and Certain Financial Officers. The
CEO, the chief financial officer, the chief accounting officer, and the
controller have an obligation to ensure that all publicly filed reports and
other public communications related to Choice's financial condition or results
of operations contain full, fair, accurate, timely and understandable
disclosures of all material facts.
OTHER POLICIES
Choice maintains and publishes other policies that supplement many of
the obligations in this Policy. Such policies include:
. Insider Trading Policy
. Anti-Harassment Policy
. Communications Systems and Internet Services Policy
You may obtain copies of these policies from the CCO or www.choicecentral.com
under the link Departments--Legal.
SEEKING GUIDANCE/REPORTING A VIOLATION
You are encouraged to talk to your supervisor, the Legal Department or
the CCO if you have when you have questions about this Policy or are in doubt of
the best course of action. Additionally, it is your obligation to report
suspected violations of laws or this Policy. You will not be retaliated against
for any report made in good faith.
CONTACT INFORMATION:
CCO - Michael DeSantis, Sr. Vice President & General Counsel
OR
Employee Hotline: (888) xxx-xxxx or [e-mail address]
If, after 30 days, you do not believe that your report of a violation
has been sufficiently responded to, you should contact the Audit Committee of
the Choice Board of Directors by e-mailing to [e-mail address].
SANCTIONS
Recognizing that employee ethics violations can mean extensive court
costs, lost business and diminished goodwill, Choice will investigate any
reported ethical violation promptly and completely. If Choice determines that
you violated the Policy, you will be punished in proportion to the severity of
your violation, which may include terminating your employment.
IMPLEMENTATION
Choice believes in and adheres to this Policy and requires you to
read, use and adhere to the Policy as well. To ensure that you are always aware
of the current Policy, Choice:
1. Provides you with the current form of this Policy when you start
working at Choice. You must sign a document saying that you have read and
understand the Policy, and that you agree to work under the Policy rules. Choice
will keep that document in your employee file.
2. Posts the Policy on intranet and internet web sites.