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Item 1A. Risk Factors

2025-02-20 compared with 2024-02-20 · 45 added, 272 removed, 294 unchanged (52% of the section changed)

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and its subsidiaries are subject to various risks, which could have a negative effect on the Company and its financial condition, results of operations, and cash flows.

These risks could cause actual operating results to differ from those expressed in certain “forward looking statements” contained in this Form 10-K as well as in other Company communications.

These risks could cause actual results to differ from those expressed in certain “Forward-Looking Statements” contained in this Form 10-K as well as in other Company communications.

Before you invest in our securities, you should carefully consider these risk factors together with all other information included in our publicly filed documents.

Risk Factors Summary

The following is a summary of the principal risks that could adversely affect our business, operations, and financial results.

Business and Operational Risks

We are subject to the operating risks common in the lodging and franchising industries.

• We depend on the skill, ability, and decisions of third-party operators.

• We are subject to certain risks related to our indebtedness.

• We are subject to certain risks related to litigation filed by or against us.

• Our international operations are subject to political and monetary risks.

• Labor shortages could restrict our ability and the ability of franchisees to operate hotel properties or grow our business or result in increased labor costs that could adversely affect the results of operations.

• Climate change and sustainability related concerns could have a material adverse effect on our business and results of operations.

Risks Related to Our Franchise System

• We may not grow our franchise system or we may lose business by failing to compete effectively or by failing to manage the reputations of our brands.

• We may not achieve our objectives for growth in the number of franchised hotels.

• We may have disputes with the owners of our franchised hotels or their representative franchisee associations.

• Under certain circumstances our franchisees may terminate our franchise contracts.

• Deterioration in the general financial condition of our franchisees may adversely affect our results.

• We may not be able to recover advances for system services that we may at certain times provide to our franchisees.

• Our franchisees may fail to make the investments necessary to maintain or improve their properties, preference for our brands and our reputation could suffer and our franchise agreements with these franchisees could terminate.

• We and our franchisees are reliant upon information technology systems to operate our business and remain competitive, and any disruption or malfunction or failure to adapt to technological developments could adversely affect our business.

Risks Related to Our Brands

• We are subject to the risks relating to the acquisition of new brands or lines of business.

• New brands may not be accepted by franchisees and consumers.

• Increasing use by consumers of alternative internet reservation channels may decrease loyalty to our brands and our existing distribution channels, and may influence our distribution strategies, in ways that may adversely affect us.

• Development and brand support activities that involve our co-investment or financing and guaranty support for third parties or development of hotels may result in losses.

• Our involvement in hotel ownership and hotel development activities to stimulate the development of new brands may result in exposure to losses and be disruptive to our asset-light business model.

• Failure to protect our trademarks and other intellectual property could impact our business.

Risks Related to Different Lines of Business

• We may not be able to generate significant procurement services revenue from our platform business.

• Our investment in new business lines is inherently risky and could disrupt our core business.

• Investing jointly through affiliates decreases our ability to manage risk.

Risks Related to Cybersecurity and Data Privacy

• We are subject to the risks related to cybersecurity.

• Failure to maintain the integrity of internal or customer data could result in faulty business decisions, damage of reputation, and/or subject us to costs, fines or lawsuits.

• Privacy laws and regulations could adversely affect our ability to transfer guest data and market our products effectively and could be applied to impose costs, fines and operational conditions on our business in the event of perceived non-compliance, and could otherwise impact our results from operations.

Legal and Regulatory Risks

• Government franchise and tax regulation could impact our business.

• We may be deemed to be a joint employer with our franchisees under certain new laws, rules and regulations.

Anti-takeover and Control Risks

• Anti-takeover provisions may prevent a change in control.

• The concentration of share ownership may influence the outcome of certain matters.

Risk Factors Relating to the Offer and the Second-Step Mergers

• Because the market price of our common stock that Wyndham stockholders may receive in the proposed Offer will fluctuate, Wyndham stockholders cannot be sure of the value of the common stock they may receive.

• We must obtain governmental and regulatory approvals to consummate the Offer, which, if delayed or not granted, may delay, jeopardize or prohibit the Offer and the Second-Step Mergers.

• Our stock price may be adversely affected if the Offer and the Second-Step Mergers are not completed.

• The Offer is subject to other conditions that we do not control.

• Uncertainties associated with the Offer and the Second-Step Mergers may affect our future business and operations.

• We have not negotiated the price or terms of the Offer or Second-Step Mergers with Wyndham.

• You may be unable to assert a claim against Wyndham’s independent registered public accounting firm under Section 11 of the Securities Act of 1933, as amended (the “Securities Act”).

Risk Factors Relating to Choice Following Acceptance of the Offer and the Second-Step Mergers

• Wyndham and Choice may not successfully integrate.

• We may not realize the financial benefits expected following the consummation of the Proposed Combination.

• We have only conducted a review of Wyndham’s publicly available information and have not had access to Wyndham’s non-public information.

Therefore, we may not be able to retain certain agreements and may be subject to liabilities of Wyndham unknown to us, which may have a material adverse effect on our profitability, financial condition and results of operations and which may result in a decline in the market value of our common stock.

• We expect to incur a substantial amount of indebtedness to acquire the shares of Wyndham Common Stock pursuant to the Offer and the Second-Step Mergers and, as a result, will increase its outstanding indebtedness.

• All of our debt obligations, and any future indebtedness we may incur, will have priority over our common stock with respect to payment in the event of a liquidation, dissolution or winding up.

• The consummation of the Offer and the Second-Step Mergers may result in ratings organizations and/or securities analysts taking actions which may adversely affect the combined companies’ business, financial condition and operating results, as well as the market price of our common stock.

• The Offer could trigger certain provisions contained in Wyndham’s equity plan or award agreements and certain employee benefit plans or agreements that could require us to vest outstanding equity awards, make change of control or severance payments or accelerate vesting and payment of certain deferred compensation amounts.

• Our future results may differ materially from the unaudited pro forma condensed combined financial statements of Choice and Wyndham presented in the Exchange Offer.

• Resales of our common stock following the Offer may cause the market price of our common stock to fall.

• The trading price of our common stock may be affected by factors different from those affecting the price of Wyndham Common Stock.

Business and Operational Risks

We are subject to the operating risks common in the lodging and franchising industries.

A significant portion of our revenue is derived from fees based on room revenues at hotels franchised under our brands.

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• increases in corporate-level operating costs, including increases in employee compensation and benefits, resulting in lower operating margins;

• over-building in one or more sectors of the hotel industry and/or in one or more geographic regions, could lead to excess supply compared to demand, and to decreases in hotel occupancy and/or room rates;

• the availability and cost of capital to allow hotel owners and developers to build new hotels and fund investments;

• changes in travel patterns;

• travelers’ fears of exposure to contagious diseases, such as the recent coronavirus, or insect infestations in hotel rooms and certain geographic areas;

• global health developments, public health crises, pandemics, or epidemics;

• travelers’ fears of exposure to contagious diseases or to insect infestations in hotel rooms and certain geographic areas;

• the impact of earthquakes, hurricanes, fires, floods, and other natural disasters;

• changes in governmental regulations that influence or determine wages, benefits, prices or increase operating, maintenance or construction costs of us and our franchisees;

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• franchisors’ ability to develop and maintain positive relations with current and potential franchisees;

• changes in exchange rates or economic weakness in the United States (affecting domestic travel) and internationally could also unfavorably impact future results.

• changes in exchange rates or economic weakness in the United States (affecting domestic travel) and internationally.

We depend on the skill, ability, and decisions of third-party operators.

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however, there is no guarantee that we would be insulated from liability in all cases.

Moreover, we may be involved in matters such as class actions, administrative proceedings, employment and personal injury claims, and litigation with or involving our relationship with franchisees and the legal distinction between our franchisees and us for employment law or general liability purposes, for which the cost and other effects of defense, settlements or judgments may require us to make disclosures or take other actions that may affect perceptions of our brand and products and adversely affect our business results.

Moreover, we may be involved in matters such as class actions,

administrative proceedings, employment and personal injury claims, and litigation with or involving our relationship with franchisees and the legal distinction between our franchisees and us for employment law or general liability purposes, for which the cost and other effects of defense, settlements or judgments may require us to make disclosures or take other actions that may affect perceptions of our brand and products and adversely affect our business results.

Our international operations are subject to political and monetary risks.

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foreign policy interests.

If we are found liable for violations of anti-corruption or sanctions laws, we could incur criminal or civil liabilities which could have a material and adverse effect on our results of operations, our financial condition and our reputation.

From time to time, we may face audits or investigations by one or more domestic or foreign governmental agencies relating to our international business activities, compliance with which could be costly and time-consuming, and could divert our management and key personnel from our business operations.

Further, investigations by regulatory agencies have been increasing and, therefore, it may become increasingly costly and time-consuming to maintain proper internal controls.

If we are found liable for violations of anti-corruption or sanctions laws, we could incur criminal or civil liabilities which could have a material adverse effect on our results of operations, our financial condition and our reputation.

Furthermore, the creation of new restrictions in these areas could increase our cost of operations, reduce our profits, or cause us to forgo development opportunities that would otherwise contribute to our profitability.

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Our selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others.

Methodologies for reporting these data may be updated and previously reported data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations (including from acquisitions and divestitures), and other changes in circumstances, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.

Methodologies for reporting these data may be updated and previously reported data may be adjusted to reflect improvement in availability and quality of third-party data, changing

assumptions, changes in the nature and scope of our operations (including from acquisitions and divestitures), and other changes in circumstances, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals.

If we fail to achieve, or are perceived to have failed or been delayed in achieving, or improperly report our progress toward achieving these targets, it could negatively affect customer preference for our brands or investor confidence in our stock, as well as expose us to enforcement actions and litigation.

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We may not grow our franchise system or we may lose business by failing to compete effectively or by failing to manage the reputations of our brands.

Our success and growth prospects depend on the strength and desirability of our brands, particularly in the midscale and upper midscale hotel franchise chains which represents a significant portion of our business.

Our success and growth prospects depend on the strength and desirability of our brands, particularly in the extended stay, midscale, and upper midscale hotel franchise chains which represents a significant portion of our business.

We believe that hotel operators choose lodging franchisors based primarily on the value and quality of each franchisor’s brand and services, the extent to which affiliation with that franchisor may increase the hotel operator’s reservations and profits, and the franchise fees charged.

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As a result, the terms of new franchise agreements may not be as favorable as our current franchise agreements.

For example, competition may require us to reduce or change fee structures, make greater use of financial incentives such as loans and guaranties to acquire franchisees and/or reduce the level of property improvements required before operating under our brand names.

This could potentially impact our margins negatively.

For example, competition may require us to reduce or change fee structures, make greater use of financial incentives, including franchise agreement acquisition costs, loans and guaranties to acquire franchisees and/or reduce the level of property improvements required before operating under our brand names.

This could potentially impact our cash flows and margins negatively.

New competition may also emerge using different business models with a lesser reliance on franchise fees.

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Our business faces increasing scrutiny related to environmental, social and governance activities and the risk of damage to our reputation and the value of our hotel brands if we (or our franchisees) fail to act responsibly or comply with regulatory requirements in a number of areas, such as safety and security, responsible tourism, environmental stewardship, supply chain management, climate change, human trafficking, diversity, human rights, philanthropy and support for local communities.

The considerable increase in the use of social media over recent years has greatly accelerated the speed at which negative publicity could spread and the scope of its dissemination, and could lead to litigation, increase our costs or result in a loss of consumer confidence in our brands.

The considerable increase in the use of social media over recent years has greatly accelerated the speed at which negative publicity, feedback, criticism and other information, whether or not based in fact, could spread and the scope of its dissemination, which could lead to litigation, increase our costs, or result in a negative impact on our reputation or loss of consumer confidence in our brands.

We may not achieve our objectives for growth in the number of franchised hotels.

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• our ability to attract and retain qualified domestic and international franchisees.

In addition, as a result of the Radisson transaction, we have expanded our international operations in several markets.

We are currently planning to further expand in many of the international markets where we currently operate, as well as in select new markets.

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An extended period of occupancy or room rate declines may adversely affect the operating results and financial condition of our franchisees.

These negative operating conditions could result in the financial failure of our owners and result in a termination of the franchisee for non-payment of franchise fees or require the transfer of ownership of the franchise.

These negative operating conditions could result in the financial failure of our owners and result in a termination of

the franchisee for non-payment of franchise fees or require the transfer of ownership of the franchise.

In those instances where ownership is transferred, there can be no assurance that the new owners will choose to affiliate with our brands.

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In addition, at times, the Company provides financial support to our franchisees via notes and guaranties.

Factors that may

adversely affect the operating results and financial condition of these franchisees may result in the Company incurring losses related to this financial support.

Factors that may adversely affect the operating results and financial condition of these franchisees may result in the Company incurring losses related to this financial support.

We may not be able to recover advances for system services that we may at certain times provide to our franchisees.

The Company is obligated to use the system fees it collects from the current franchisees comprising its various hotel brands to provide system services, such as marketing and reservations services, appropriate to fulfill our obligations under the Company’s franchise agreements.

The Company is obligated to use the marketing and reservation system fees it collects from the current franchisees comprising its various hotel brands to provide system services, such as marketing and reservations services, that are appropriate to fulfill our obligations under the Company’s franchise agreements.

In discharging our obligation to provide sufficient and appropriate system services, the Company has the right to expend funds in an amount reasonably necessary to ensure the provision of such services, regardless of whether or not such amount is currently available to the Company for reimbursement.

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• power losses, computer systems failures, internet and telecommunications or data network failures, service provider negligence, improper operation by or supervision of employees, user error, physical and electronic losses of data and similar events;

• earthquakes, fires, floods, and other natural disasters.

• earthquakes, hurricanes, fires, floods, and other natural disasters.

Disruptions, failures, or malfunctions in technology can impact our revenue as well as our ability to retain existing franchisees and attract new franchisees to our system.

Further, rewards earned through our customer loyalty programs are vulnerable to fraud, misuse and unauthorized access for financial gain or other improper purposes.

Any loss of data or funds, security breaches or even unsuccessful attempts at unauthorized access could harm our reputation, our relationship with our customer

loyalty program members and our relationship with co-branded credit card companies.

Any loss of data or funds, security breaches or even unsuccessful attempts at unauthorized access could harm our reputation, our relationship with our customer loyalty program members and our relationship with co-branded credit card companies.

Further, such events could expose us to potential litigation as well as expenses associated with remediation and other impacts.

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We have developed and launched additional hotel brands, such as Cambria Hotels, Clarion Pointe, and Everhome Suites, and may develop and launch additional brands in the future.

To achieve long-term success for new brands, we may be required to provide capital support to incentivize franchisee development and/or to make direct investments, and these extensions of capital support and direct investments may not yield expected or anticipated returns and may be disruptive to our asset-light business model.

To achieve long-term success for new brands, we may be required to provide capital support to incentivize franchisee development and/or to make direct investments, and these extensions of capital support and direct investments may not yield the expected or anticipated returns and may be disruptive to our asset-light business model.

There can be no assurance regarding the level of acceptance of new brands in the development and consumer marketplaces, that costs incurred to develop and grow the brands will be recovered or that the anticipated benefits from these new brands will be realized.

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Relatedly, we may not be able to negotiate mutually acceptable agreements or renegotiate extensions of agreements with existing internet travel intermediaries upon their expiration, and any such renegotiated or extended agreement may not be entered into on terms as favorable as the provisions that existed before such expiration, replacement or renegotiation.

An increase in the use of AI enabled third-party internet services to book online hotel reservations could adversely impact our business.

Some of our hotel rooms are booked by internet travel intermediaries and other online travel service providers.

AI is being used to book hotels through targeted in-feed ads that leverage user data to display relevant hotel options based on interests and location, as well as through AI-powered chatbots that can answer booking questions directly within an app, allowing users to seamlessly initiate the booking process while watching videos on the app platform.

In addition, AI can be used to personalize the hotel booking experience by showing users ads for hotels they may be interested in based on their in-app activity.

Our business and profitability could be harmed to the extent that online intermediaries succeed in significantly shifting loyalties from our brands to their travel services utilizing these AI tools, diverting bookings away from our direct online channels, or through their fees, increasing the overall cost of internet bookings for our hotels.

Development and brand support activities that involve our co-investment or financing and guaranty support for third parties or development of hotels may result in losses.

As a result of our program to make financial support available to developers in the form of loans, credit support, such as guaranties, and equity investments, we are subject to investment and credit risks that we would not otherwise be exposed to as a franchisor.

As a result of our program to make financial support available to developers in the form of franchise agreement acquisition costs, loans, credit support, such as guaranties, and equity investments, we are subject to investment and credit risks that we would not otherwise be exposed to as a franchisor.

In particular, when we make loans to franchisees, agree to provide loan guaranties for the benefit of franchisees, or make equity investments in franchisees, we are subject to all generally applicable credit and investment risks, such as:

• construction delays, cost overruns, or acts of God such as earthquakes, hurricanes, floods or fires that may increase overall project costs or result in project cancellations;

• construction delays, cost overruns, or acts of God, such as earthquakes, hurricanes, fires, floods, or other natural disasters that may increase overall project costs or result in project cancellations;

• the possibility that the parties with which we have entered into a co-investment, hotel development, financing, or guaranty relationships could become bankrupt or otherwise lack the financial resources to meet their obligations, or could have or develop business interests, policies, or objectives that are inconsistent with ours;

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Our involvement in hotel ownership and hotel development activities to stimulate the development of new brands may result in exposure to losses and be disruptive to our asset-light business model.

While our business model is primarily asset-light, franchising focused business, there are instances where, typically to support the growth of new hotel brands, we may acquire existing operating hotels and acquire real estate for the purpose of developing new hotels.

Of the open hotels in our system, we currently own seven Cambria hotels and three legacy Radisson Hotels Americas hotels.

We are also developing Cambria hotels and Everhome Suites on a stand alone basis and with joint venture partners.

As a result, fluctuations in values could require us to record a significant non-cash impairment charge in our financial statements in a particular period which may negatively impact our results of operations and shareholders' equity.

While our business model is primarily an asset-light, franchising focused business, there are instances where, typically to support the growth of new hotel brands, we may acquire existing operating hotels and acquire real estate for the purpose of developing new hotels.

Of the open hotels in our system, we currently own eight Cambria hotels, one Everhome Suites hotel, one Radisson RED hotel, one Radisson Blu hotel, and one Country Inn & Suites hotel.

We are also developing Cambria hotels and Everhome Suites hotels on a standalone basis and with joint venture partners.

As a result, fluctuations in fair market values could require us to record a significant non-cash impairment charge in our financial statements in a particular period which may negatively impact our results of operations and shareholders' equity.

As a result of our hotel acquisition, development, and ownership programs, we are subject to the real estate-based investment risk that we would not otherwise be exposed to as a franchisor.

In particular, we face specific risks stemming from (1) our ability to assess the fair market value of the real estate;

(2) the location’s suitability for development as a hotel;

(3) the availability of zoning or other local approvals needed for development;

and (4) the availability and pricing of capital.

In particular, we face specific risks stemming from (1) our ability to assess the fair value of the real estate, (2) the location’s suitability for development as a hotel, (3) the availability of zoning or other local approvals needed for development, and (4) the availability and pricing of capital.

Although we actively seek to minimize these risks prior to acquiring real estate, there is no assurance that we will be able to recover the costs of our investments, in which case we will experience losses which could be material.

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Litigation has been and may continue to be necessary to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others.

Litigation of this type could result in substantial costs and diversion of resources, may result in counterclaims or other claims against us and could significantly harm our results of

Litigation of this type could result in substantial costs and diversion of resources, may result in counterclaims or other claims against us and could significantly harm our results of operations.

In addition, the laws of some foreign countries do not protect our proprietary rights to the same extent as do the laws of the United States.

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Our investment in new business lines is inherently risky and could disrupt our core business.

In the past, we have both acquired and launched internally developed business divisions that develop and market technology products to the hotel industry.

In the past, we have both acquired and launched internally developed business divisions.

We expect to continue to invest in alternate lines of business and may in the future invest in other new business strategies, products, services, and technologies.

Such investments generally involve significant risks and uncertainties, including distraction of management from our core franchising operations, unanticipated expenses, inadequate return of capital on our investments, losses of key customers or contracts, and unidentified issues and risks not discovered in our development or analysis of such strategies and offerings.

For our SaaS technology solutions division, additional specific risks and uncertainties include, among others, a limited history as a stand-alone operating business, the willingness of our potential competitors to enter into a business relationship with one of our operating divisions, the ability to develop and offer innovative products that appeal to hoteliers, continuing market acceptance of the division's enterprise cloud-based technology products, security threats to processed and stored data, intense competition in the technology industry, protection of intellectual property rights, and claims of infringement of the intellectual property of third parties.

Because these ventures are software and technology businesses, they are inherently risky, and there can be no assurance that our investments will be successful.

Because these new ventures are inherently risky, there can be no assurance that our investments will be successful.

If we do not realize the financial or strategic goals that are contemplated at the time we commit to significant investments in support of these ventures, our reputation, financial condition, operating results, and growth trajectory may be impacted.

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Because of the scope and complexity of our information technology systems and those of our franchisees, our reliance on third-party vendors, and the nature of the cyber threat landscape, our systems may be vulnerable to intrusions, disruptions, and other significant malicious cyber-enabled incidents, including through viruses, malware, ransomware, denial of service attacks, phishing, hacking, deepfake or malicious social engineering schemes, and similar attacks by criminal actors, foreign governments, activists, and terrorists.

Cybercriminals have increasingly demonstrated advanced capabilities, such as use of zero-day vulnerabilities, and rapid integration of new technology such as generative artificial intelligence.

Cybercriminals have increasingly demonstrated advanced capabilities, such as use of zero-day vulnerabilities, and rapid integration of new technology such as generative artificial intelligence and machine learning technologies.

Our systems may also be vulnerable to human error, negligence, fraud, or other misuse.

These attacks can be deliberate attacks or unintentional events that could result in theft, unauthorized access, unauthorized alteration, loss, fraudulent or unlawful use of sensitive information or cause interruptions, outages, or delays in

our business, loss of data, or render us unable to operate our business.

Accordingly, an extended interruption in any of our systems or the systems of our franchisees could significantly curtail, directly and indirectly, our ability to conduct our business and generate revenue.

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Incidents can be difficult to detect for long periods of time and can involve complex or extended assessment and remediation periods, which could magnify the severity of an incident.

Accordingly, there are no guarantees that our cybersecurity practices and our efforts to implement appropriate risk reduction measures will be sufficient to prevent or mitigate all attacks.

Accordingly, there are no guarantees that our cybersecurity practices and our efforts to implement appropriate risk reduction measures will be sufficient to prevent or mitigate attacks, and our defense strategies may ultimately prove ineffective as threat actors evolve and become more sophisticated.

While we carry cyber breach, property, and business operation interruption insurance, we may not be sufficiently compensated for all losses we may incur.

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or international privacy and data protection laws could adversely affect our operations, including our ability to transfer guest data, which could adversely impact guest bookings.

For example, the California Privacy Rights Act (CPRA), which went into effect on January 1, 2023, imposes new compliance requirements on businesses that collect personal information from California residents.

For example, the California Privacy Rights Act (CPRA) imposes new compliance requirements on businesses that collect personal information from California residents.

Compliance with requirements imposed by the CPRA, the European Union General Data Protection Regulation (GDPR) and similar laws, or any future changes in such laws or additional restrictions, could result in significant costs and require us to change some of our business practices.

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Anti-takeover provisions may prevent a change in control.

Our restated certificate of incorporation and the Delaware General Corporation Law each contain provisions that could have the effect of making it more difficult for a party to acquire, and may discourage a party from attempting to acquire, control of our Company without approval of our Board of Directors.

These provisions, together with the concentration of our share ownership, could discourage tender offers or other bids for our common stock at a premium over market price.

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The concentration of share ownership by our directors and affiliates allows them to substantially influence the outcome of matters requiring shareholder approval.

As a result, acting together, they may be able to control or substantially influence the outcome of matters requiring approval by our shareholders, including the elections of directors and approval of significant corporate transactions, such as mergers, acquisitions and equity compensation plans.

Risk Factors Relating to the Offer and the Second-Step Mergers

Because the market price of our common stock that Wyndham stockholders may receive in the proposed Offer will fluctuate, Wyndham stockholders cannot be sure of the value of the common stock they may receive.

Upon consummation of the proposed offer to exchange (“Exchange Offer”) and the related letter of election and transmittal (the Exchange Offer and such letter, together the “Offer”), each issued and outstanding share of Wyndham common stock (“Wyndham Common Stock”) tendered and accepted for exchange by us pursuant to the Offer will be converted into the right to receive consideration consisting of, at the election of each Wyndham stockholder, (1) $49.50 in cash and 0.324 shares of our common stock (the “Standard Election Consideration”), (2) an amount in cash (the “Cash Election Consideration”), equal to the equivalent market value of the Standard Election Consideration (based on the volume-weighted average price as reported by Bloomberg, L.P.

(“VWAP”) of our common stock as quoted on the New York Stock Exchange (the “NYSE”), over the five NYSE trading days ending on the 10th business day preceding the date of expiration of the Offer or (3) a number of shares of our common stock (the “Stock Election Consideration”) having a value equal to the equivalent market value of the Standard Election Consideration (in each case based on the VWAP of our common stock as quoted on the NYSE over the five NYSE trading days ending on the 10th business day preceding the date of expiration of the Offer, subject, in each case, to the election and proration procedures described in the Offer and the Additional Consideration (as defined in the Offer), if any.

of the Offer is for us to acquire all of the outstanding shares of Wyndham Common Stock in order to combine the businesses of Choice and Wyndham (the “Proposed Combination”).

We intend, promptly after consummation of the Offer, to cause WH Acquisition Corporation (“Purchaser”), our wholly owned subsidiary, to merge with and into Wyndham with Wyndham as the surviving corporation (the “First Merger”), immediately following which Wyndham will merge with and into our newly formed wholly-owned subsidiary (“NewCo”) with NewCo as the surviving corporation (together with the First Merger, the “Second-Step Mergers”), after which Wyndham would be our direct or indirect wholly owned subsidiary.

The market value of the consideration Wyndham stockholders will receive in the Offer (if they receive our common stock) will be based in whole or in part on the value of our common stock at the time the consideration in the Offer is received.

If the price of our common stock declines, Wyndham stockholders could receive less value for their shares of Wyndham Common Stock upon the consummation of the Offer than the value calculated on the date the first public offer was announced, as of the date of the filing of the Exchange Offer, as of the date of the filing of this Annual Report on Form 10-K or as of the date such Wyndham stockholder made its election and tendered shares into the Offer.

Stock price changes may result from a variety of factors, many of which are beyond the companies’ control, including general market and economic conditions, changes in business prospects, catastrophic events, both natural and man-made, and regulatory considerations.

In addition, the ongoing businesses of Choice and Wyndham may be adversely affected by actions taken by us or by Wyndham in connection with the Offer, including payment by the companies of certain expenses relating to the Offer, including certain legal, accounting, financing and financial and other advisory fees.

Because the Offer and the Second-Step Mergers will not be completed until certain conditions have been satisfied or, where relevant, waived, a significant period of time is likely to pass between the commencement of the Offer and the time the Purchaser accepts shares of Wyndham Common Stock for exchange.

Therefore, at the time when Wyndham stockholders tender their shares of Wyndham Common Stock pursuant to the Offer, they will not know the exact market value of our common stock that they may receive if Purchaser accepts such shares of Wyndham Common Stock for exchange.

However, tendered shares of Wyndham Common Stock may be withdrawn at any time prior to the expiration time of the Offer and, unless we have already accepted the tendered shares for exchange, at any time following 60 calendar days from commencement of the Offer, which is February 10, 2024.

We must obtain governmental and regulatory approvals to consummate the Offer, which, if delayed or not granted, may delay, jeopardize or prohibit the Offer and the Second-Step Mergers.

The Offer is conditioned on the waiting period (or any extension thereof) applicable to the Offer and the Second-Step Mergers under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) and any other applicable antitrust laws and regulations having expired or been terminated, and any approvals or clearances, including those required by any international bodies, if applicable, and, in each case as determined by us to be required or advisable thereunder having been obtained.

If we do not receive these approvals, then we will not be obligated to accept shares of Wyndham Common Stock for exchange in the Offer.

On December 12, 2023, we filed the notification required for the consummation of the Proposed Combination by the HSR Act.

On January 11, 2024, we received a Request for Additional Information and Documentary Materials ("Second Request") from the U.S.

Federal Trade Commission (“FTC”).

We expect to continue cooperating with the FTC during the Second Request process, and intend to take all actions required to obtain the requisite regulatory approvals so long as such actions would not have a material adverse effect on the combined company.

We remain confident that we can complete the Proposed Combination within a one-year customary timeframe.

Due to the fact that Wyndham has refused to provide information to us, at this time, our analysis of required antitrust filings in non-U.S.

jurisdictions is based solely on the limited publicly available information about Wyndham and, as a result, our analysis remains incomplete.

Based on the limited information currently available to us, it is possible the consummation of the Offer and the Second-Step Mergers will necessitate an antitrust filing in certain non-U.S.

jurisdictions.

However, given the incomplete nature of our non-U.S.

antitrust analysis, it is possible that no antitrust filing will be required in any foreign jurisdictions.

If Wyndham’s Board of Directors (the “Wyndham Board”) engages in a due diligence process with respect to the Proposed Combination, we expect to receive additional non-public information that will enable us to complete a fulsome analysis and refine the list of non-U.S.

jurisdictions, if any, where an antitrust filing will be required.

If the Wyndham Board does not engage us in a due diligence process with respect to the Proposed Combination, then, prior to the expiration of the Offer, we will make a good-faith determination based on the information available to us as to which non-U.S.

jurisdictions, if any, will require antitrust filings.

Given the limited information available to us and the preliminary nature of our analysis, we cannot provide a precise estimation of the time periods that will be required to obtain antitrust approval in any non-U.S.

jurisdictions, if any such filings are required.

Based on information available to date, we believe that it can obtain all necessary regulatory approvals without Wyndham’s cooperation with us.

We intend to take all actions required to obtain the requisite regulatory approvals so long as such actions would not have a material adverse effect on the combined company.

Additionally, due to the fact that Wyndham has refused to provide information to us, at this time, our analysis of whether any non-antitrust approvals may be required by the Proposed Combination is based solely on the limited publicly available

information about Wyndham and, as a result, our analysis remains incomplete.

Based on the limited information currently available to us, we are not aware of any such non-antitrust approvals that will be required or advisable as a result of the Proposed Combination.

If the Wyndham Board engages in a due diligence process with respect to the Proposed Combination, we expect to receive additional non-public information that will enable us to complete a fulsome analysis to determine which, if any, non-antitrust approvals will be advisable or required.

Based on information available to date, we believe that we can obtain all necessary regulatory approvals without Wyndham’s cooperation with us.

We intend to take all actions required to obtain the requisite regulatory approvals so long as such actions would not have a material adverse effect on the combined company.

We remain confident that it can complete the Proposed Combination within a one-year customary timeframe.

The governmental and regulatory agencies from which we will seek these approvals have broad discretion in administering the applicable governing regulations.

As a condition to their approval of the transactions contemplated by the Exchange Offer, those agencies may impose requirements, limitations or costs or require divestitures or place restrictions on the conduct of the combined company’s business and we have committed to take any action requested to be taken by such regulators so long as such action would not have a material adverse effect on the combined company.

These requirements, limitations, costs, divestitures or restrictions could jeopardize or delay the consummation of the exchange offer or may reduce the anticipated benefits of the Proposed Combination contemplated by the exchange offer.

Although we believe that we will obtain all necessary approvals, no assurance can be given that the required approvals will be obtained or that the required conditions to the Offer will be satisfied, and, if all required approvals are obtained and the conditions to the consummation of the Offer are satisfied, no assurance can be given as to the terms, conditions and timing of the approvals.

If we agree to any material requirements, limitations, costs, divestitures or restrictions in order to obtain any consents or approvals required to consummate the Exchange Offer, these requirements, limitations, additional costs or restrictions could adversely affect our ability to integrate the operations of Choice and Wyndham or reduce the anticipated benefits of the Proposed Combination contemplated by the Exchange Offer and the Second-Step Mergers.

This could have a material adverse effect on the business, financial condition and results of operations of the combined company and the market value of our common stock after the acquisition.

In addition, a third party could attempt to intervene in any governmental or regulatory filings to be made by us or otherwise object to the granting to us of any such governmental or regulatory authorizations, consents, orders or approvals, which may cause a delay in obtaining, or the imposition of material requirements, limitations, costs, divestitures or restrictions on, or the failure to obtain, any such authorizations, consents, orders or approvals.

Our stock price may be adversely affected if the Offer and the Second-Step Mergers are not completed.

If the Offer and the Second-Step Mergers are not completed, the price of our common stock may decline to the extent that the current market prices of our common stock reflect a market assumption that the Offer and the Second-Step Mergers will be completed.

The Offer is subject to other conditions that we do not control.

The Offer is subject to other conditions.

No assurance can be given that all of the conditions to the Offer will be satisfied, including, but not limited to, the ability to obtain the necessary financing, or, if they are, as to the timing of such satisfaction.

In addition, Wyndham and the Wyndham Board may seek to take actions and put in place obstacles that will delay, or frustrate, the satisfaction of one or more conditions, such as, but not limited to, adopting a “poison pill.” If the conditions to the Offer are not satisfied, then we may allow the Offer to expire, or could amend or extend the Offer.

Uncertainties associated with the Offer and the Second-Step Mergers may affect our future business and operations.

Uncertainty about the effect of the Offer and the Second-Step Mergers on franchisees, associates, development partners, employees and others may have an adverse effect on us and consequently on the combined company following the Second-Step Mergers.

These uncertainties may impair the ability to attract, retain and engage current and prospective franchisees and motivate key personnel during the pendency, and following the consummation, of the Offer and/or the Second-Step Mergers, and could cause franchisees, development partners, associates and others that deal with us and/or Wyndham to defer entering into contracts, including franchisee agreements, with us and/or Wyndham or making other decisions concerning Wyndham or seek to change existing business relationships with Wyndham.

If key employees of Wyndham depart because of uncertainty about their future roles, Wyndham may not be able to hire replacements for departed key employees to the same extent that they have been able to in the past and Wyndham’s business and, as a result, the combined company’s business following the Offer and the Second-Step Mergers could be harmed.

We have not negotiated the price or terms of the Offer or Second-Step Mergers with Wyndham.

In evaluating the Offer, you should be aware that we have not negotiated the price or terms of the Offer or the Second-Step Mergers with Wyndham, and neither Wyndham nor the Wyndham Board has approved the Offer or the Second-Step Mergers.

We intend, promptly after consummation of the Offer, to cause Purchaser to merge with and into Wyndham with Wyndham as the surviving corporation, immediately following which Wyndham will merge with and into NewCo with NewCo as the surviving corporation, after which Wyndham would be our direct or indirect, wholly owned subsidiary.

We made numerous attempts to engage the Wyndham Board, making three private proposals between April and September 2023, increasing our proposed purchase price each time.

As the Wyndham Board rejected each private proposal and refused to engage in meaningful discussions, we announced our offer to acquire Wyndham publicly on October 17, 2023.

Following Wyndham’s public rejection of that proposal, we made a fourth proposal privately to Wyndham on November 14, 2023, reaffirming the economic and other terms of the prior proposal.

We also offered a mutual non-disclosure agreement to allow the parties to conduct confirmatory due diligence.

On November 21, 2023, Wyndham publicly rejected the proposed terms of our offer made November 14, 2023.

On December 12, 2023, representatives of Wyndham reached out to representatives of our company to discuss the reverse termination fee and other aspects of our offer.

Despite the representatives from Wyndham indicating that our proposed construct for the reverse termination fee would be acceptable, Wyndham’s representatives abruptly ended those discussions, consistent with past practices.

On December 18, 2023, Wyndham filed a solicitation/recommendation statement on Schedule 14D-9 with respect to the Offer, in which the Wyndham Board recommended that Wyndham stockholders reject the Offer and not tender their shares of Wyndham Common Stock pursuant to the Offer.

Subsequent to December 18, 2023, Wyndham amended its Schedule 14D-9 to, among other things, disclose conversations that occurred between the parties following the filing of this Offer and the filing of the Schedule 14D-9.

Choice recommends that you review the Schedule 14D-9 and any amendments thereto.

You may be unable to assert a claim against Wyndham’s independent registered public accounting firm under Section 11 of the Securities Act.

Section 11(a) of the Securities Act provides that if part of a registration statement at the time it becomes effective contains an untrue statement of a material fact or omits a material fact required to be stated therein or necessary to make the statements therein not misleading, any person acquiring a security pursuant to such registration statement (unless it is proved that at the time of such acquisition such person knew of such untruth or omission) may assert a claim against, among others, any accountant or expert who has consented to be named as having certified any part of the registration statement or as having prepared any report for use in connection with the registration statement.

Although audit reports were issued on Wyndham’s historical financial statements and are included in Wyndham’s filings with the SEC, Wyndham’s independent registered public accounting firm has not permitted the use of its reports in our registration statement of which the Exchange Offer forms a part.

We requested but have not, as of the date hereof, received the consent of such independent registered public accounting firm.

We have requested dispensation pursuant to Rule 437 under the Securities Act from this requirement.

If we receive the consent of Wyndham’s independent registered public accounting firm, we will promptly file it as an exhibit to our registration statement of which the Exchange Offer forms a part.

Accordingly, if we are unable to obtain the consent of Wyndham’s independent registered public accounting firm, you may not be able to assert a claim against Wyndham’s independent registered public accounting firm under Section 11 of the Securities Act.

Risk Factors Relating to Choice Following Acceptance of the Offer and the Second-Step Mergers

Wyndham and Choice may not successfully integrate.

If we consummate the Offer and the Second-Step Mergers, achieving the anticipated benefits of the Proposed Combination with Wyndham will depend in part upon whether the two companies integrate their businesses in an effective and efficient manner.

The companies may not be able to accomplish this integration process successfully, including as a result of actions that Wyndham may continue to take to frustrate the Offer.

The integration of any business may be complex and time-consuming.

The difficulties that could be encountered include the following:

• integration of personnel, internal systems, technology, programs, and controls;

• application of different accounting policies, assumptions, or judgments to Wyndham’s operational results than Wyndham applied in the past;

• changes in laws and regulations that may impact our or Wyndham’s business, financial condition, results of operations, or growth prospects;

• potential unknown liabilities and unforeseen increased expenses, delays, or regulatory conditions associated with the acquisition;

• coordinating the geographically dispersed organizations;

• distraction of management and employees from operations;

• the loss of franchisees, sales and other commercial relationships;

• failure to retain key employees who may be difficult to replace;

• maintaining business relationships;

• other complexities associated with the integration of the operations of the combined company.

We may not realize the financial benefits expected following the consummation of the Proposed Combination.

As we have not been given access to Wyndham’s non-public information related to Wyndham’s business, assets, and liabilities, we may be unaware of significant issues with respect to the business of Wyndham that, following the consummation of the Proposed Combination, may prevent the realization of the financial benefits expected in connection therewith.

An inability to realize the full extent of the anticipated benefits of the Proposed Combination with Wyndham, including the approximately $150 million in estimated cost-driven synergies, as well as any delays encountered in the integration process and realizing such benefits, could have an adverse effect upon our revenues, level of expenses and operating results, which may affect adversely the value of our common stock after the consummation of the Offer and the Second-Step Mergers.

There will also be integration costs and non-recurring transaction costs (such as fees paid to legal, financial, accounting and other advisors and other fees paid in connection with the Offer and the Second-Step Mergers, including financing fees) associated with the Proposed Combination with Wyndham, combining the operations of Choice and Wyndham and achieving the synergies we expect to obtain, and such costs are expected to be significant.

We have only conducted a review of Wyndham’s publicly available information and have not had access to Wyndham’s non-public information.

To date, we have only conducted a due diligence review of Wyndham’s publicly available information.

As a result, after the consummation of the Offer and the Second-Step Mergers, we may be subject to liabilities of Wyndham unknown to us or Wyndham, which may have a material adverse effect on the business, financial condition and results of operations of the combined company and the market value of our common stock after the consummation of the Offer and the Second-Step Mergers.

The consummation of the Offer or the Second-Step Mergers may constitute a breach or default, or an event that, with or without notice or lapse of time or both, would constitute a breach or default, or result in the acceleration or other change of any right or obligation (including, without limitation, any payment obligation) or termination of an agreement under agreements of Wyndham that are not publicly available.

If this happens, we may have liabilities relating to the breach or default and may have to seek to replace that agreement with a new agreement.

We cannot provide assurance that we will be able to replace a terminated agreement on comparable terms or at all.

Depending on the importance of a terminated agreement to Wyndham’s business, failure to replace that agreement on similar terms or at all may increase the costs to us of operating Wyndham’s business or prevent us from operating part or all of Wyndham’s business.

In addition, Wyndham may be committed to arrangements or agreements of which we are not aware.

Based upon a review of Wyndham’s public filings with the SEC, pursuant to the Credit Agreement among Wyndham, Bank of America, N.A., as administrative agent, the several lenders from time to time party thereto, and the other parties thereto, dated as of May 30, 2018, as amended on each of April 30, 2020, August 10, 2020, April 8, 2022 and May 25, 2023 (the “Credit Agreement”), the Offer and the Second-Step Mergers could result in an event of default under the Credit Agreement, thereby permitting the lenders thereunder to terminate their commitments and declare any outstanding principal and accrued interest amounts immediately due and payable.

Wyndham could also seek a waiver of any such event of default, which would require the approval of the lenders under the Credit Agreement.

As of December 31, 2023, Wyndham’s outstanding long-term debt obligations totaled approximately $2.178 billion, inclusive of certain term loans and the revolving credit facility provided for under the Credit Agreement, as well as approximately $500 million outstanding principal amount of Wyndham’s 4.375% senior unsecured notes due August 2028 (“Notes”).

The Notes are governed by that certain Fifth Supplemental Indenture, dated as of August 13, 2020 (“Supplemental Indenture”).

In accordance with the provisions of the Supplemental Indenture, in the event that the consummation of the Offer constitutes a change of control under the Supplemental Indenture and such change of control is accompanied by a downgrade of the Notes by each of Moody’s and Standard and Poor’s ("S&P") rating of the Notes within a specified period, (i.e., starting from the earlier of (i) date of the first public announcement of the consummation of the Offer and

(ii) the occurrence thereof, until 60 days following the consummation of the Offer), such that the rating of the Notes on any day during such period is below the lower of the rating (i) immediately before the public announcement;

and (ii) the date on which the Notes were originally issued under the Supplemental Indenture, the holders of the Notes would have the right to cause Wyndham to repurchase all or any part of the outstanding Notes.

We may not be able to obtain sufficient capital to repurchase or refinance the Notes in these circumstances.

For a further discussion of the risks relating to our indebtedness, see “— We expect to incur a substantial amount of indebtedness to acquire the shares of Wyndham Common Stock pursuant to the Offer and the Second-Step Mergers and, as a result, will increase its outstanding indebtedness.

Our failure to meet our debt service obligations, including a failure to comply with the restrictive covenants contained in the related agreements, could have a material adverse effect on its business, financial condition and results of operations ” and “— The consummation of the Offer and the Second-Step Mergers may result in ratings organizations and/or securities analysts taking actions which may adversely affect the combined companies’ business, financial condition and operating results, as well as the market price of our common stock .”

In respect of all information relating to Wyndham presented in, incorporated by reference into or omitted from, the Exchange Offer, we have relied upon publicly available information, including information publicly filed by Wyndham with the SEC.

Although we have no knowledge that would indicate that any statements contained herein regarding Wyndham’s condition, including its financial or operating condition (based upon such publicly filed reports and documents) are inaccurate, incomplete or untrue, we were not involved in the preparation of such information and statements.

For example, we made adjustments and assumptions in preparing the pro forma financial information presented in the Exchange Offer that have necessarily involved our estimates with respect to Wyndham’s financial information that, given the lack of information received, could be materially different than currently presented.

Any financial, operating or other information regarding Wyndham that may be detrimental to us following the consummation of the Offer and the Second-Step Mergers that has not been publicly disclosed by Wyndham, or errors in our estimates due to the lack of cooperation and information from Wyndham, may have a material adverse effect on the business, financial condition and results of operations of the combined company and the market value of our common stock after the consummation of the Offer and the Second-Step Mergers.

In the alternative, if we have not been given access to Wyndham’s non-public information related to Wyndham’s business, assets, and liabilities to complete its confirmatory due diligence review, we may elect not to consummate the Offer in accordance with the terms described herein.

We expect to incur a substantial amount of indebtedness to acquire the shares of Wyndham Common Stock pursuant to the Offer and the Second-Step Mergers and, as a result, will increase its outstanding indebtedness.

We anticipate that we will need to borrow approximately $6.0 billion to complete the Offer and the Second-Step Mergers.

Our increased indebtedness following consummation of the Offer and the Second-Step Mergers could adversely affect our operations and liquidity.

Our anticipated level of indebtedness could, among other things:

• make it more difficult for us to pay or refinance our debts as they become due during adverse economic and industry conditions because we may not have sufficient cash flows to make our scheduled debt payments;

• cause us to use a larger portion of our cash flow to fund interest and principal payments, reducing the availability of cash to fund working capital, capital expenditures, research and development and other business activities;

• cause us to be less able to take advantage of significant business opportunities, such as acquisition opportunities, and to react to changes in market or industry conditions;

• cause us to be more vulnerable to general adverse economic and industry conditions;

• cause us to be disadvantaged compared to competitors with less leverage;

• result in a downgrade in our credit rating or any indebtedness of us or our subsidiaries, which is likely to increase the cost of further borrowings;

• limit our ability to borrow additional monies in the future to fund working capital, capital expenditures, research and development and other general corporate purposes.

In addition, the terms of our indebtedness following the consummation of the Offer are expected to restrict certain actions by us and our subsidiaries, including financial, affirmative and negative covenants, including limitations on the ability to incur indebtedness, create liens, and merge, amalgamate and consolidate with other companies, in each case, subject to exceptions

and baskets to be mutually agreed upon by us and the other parties thereto, the exact terms of which are to be negotiated prior to consummation of the Offer.

We also may incur additional long-term debt and working capital lines of credit to meet future financing needs, subject to certain restrictions under its existing debt, which would increase its total indebtedness.

Although the terms of our existing credit agreements and of the indentures governing our existing debt (collectively, the “Existing Debt Documents”) contain restrictions on the incurrence of additional debt, including secured debt, these restrictions are subject to a number of important exceptions and debt incurred in compliance with these restrictions could be substantial.

In addition, if the restrictions in the Existing Debt Documents limit our ability to incur additional indebtedness necessary to finance the acquisition of Wyndham, or if the incurrence of such additional indebtedness would lead to a breach of, or default under, the Existing Debt Documents, we may be required to seek an amendment or waiver with respect to certain provisions of the Existing Debt Documents, and there can be no assurance that we will be able to obtain such amendment or waiver.

If we and our restricted subsidiaries incur significant additional debt, the related risks that we face could intensify.

We cannot guarantee that the combined company will be able to generate sufficient cash flow to make all of the principal and interest payments under its indebtedness following the consummation of the Offer and the Second-Step Mergers when such payments are due or that it will be able, if necessary, to refinance such indebtedness.

All of our debt obligations, and any future indebtedness we may incur, will have priority over our common stock with respect to payment in the event of a liquidation, dissolution or winding up.

In any liquidation, dissolution or winding up of our company, our common stock would rank below all debt claims against us.

In addition, any convertible or exchangeable securities or other equity securities that we may issue in the future may have rights, preferences and privileges more favorable than those of our common stock.

As a result, holders of our common stock will not be entitled to receive any payment or other distribution of assets upon the liquidation or dissolution until after our obligations to our debt holders and holders of equity securities that rank senior to our common stock have been satisfied.

The consummation of the Offer and the Second-Step Mergers may result in ratings organizations and/or securities analysts taking actions which may adversely affect the combined companies’ business, financial condition and operating results, as well as the market price of our common stock.

Our current corporate credit rating is BBB- for S&P’s and Baa3 for Moody’s.

In connection with the consummation of the Offer and/or the Second-Step Mergers, one or both of these ratings agencies may reevaluate our ratings.

A downgrade may increase our cost of borrowing, may negatively impact our ability to raise additional debt capital, may negatively impact our ability to successfully compete in the marketplace and may negatively impact the willingness of counterparties to deal with us, each of which could have a material adverse effect on the business, financial condition and results of operations of the combined company and the market value of our common stock.

In addition, the trading market for shares of our common stock depends in part on the research and reports that third-party securities analysts publish about us and our industry.

In connection with the consummation of the Offer and/or the Second-Step Mergers, one or more of these analysts could downgrade our common stock or issue other negative commentary about us or our industry, which could cause the trading price of our common stock to decline.

The Offer could trigger certain provisions contained in Wyndham’s equity plan or award agreements and certain employee benefit plans or agreements that could require us to vest outstanding equity awards, make change of control or severance payments or accelerate vesting and payment of certain deferred compensation amounts.

Certain of Wyndham’s equity plan or award agreements and employee benefit plans or agreements contain change of control clauses providing for outstanding equity awards to vest or compensation to be paid to certain members of Wyndham senior management either upon a change of control, or if, following a change of control, Wyndham terminates the employment relationship between Wyndham and these employees under certain circumstances, or if these employees terminate the employment relationship because of certain adverse changes.

In addition, certain of Wyndham’s non-qualified deferred compensation plans contain change of control clauses providing for vesting and payment of deferred compensation amounts under such plans.

If consummated, the Offer would constitute a change of control of Wyndham, thereby giving rise to potential vesting of outstanding equity awards and change of control, severance or other compensatory payments described above.

Our future results may differ materially from the unaudited pro forma condensed combined financial statements of Choice and Wyndham presented in the Exchange Offer.

Our future results following the consummation of the Offer and the Second-Step Mergers may be materially different than those shown in the Unaudited Pro Forma Condensed Combined Financial Statements presented in the Exchange Offer, which show only a combination of Choice’s and Wyndham’s standalone historical results after giving effect to the Offer and the Second-

Step Mergers, subject to the matters noted therein.

We have estimated that we will record approximately $90 million in transaction expenses (excluding fees paid in connection with obtaining any necessary financing).

In addition, the final amount of any charges relating to acquisition accounting adjustments that we may be required to record will not be known until following the consummation of the Offer and the Second-Step Mergers.

These and other expenses and charges may be significantly higher or lower than estimated.

Resales of our common stock following the Offer may cause the market price of our common stock to fall.

We expect that we will issue approximately 27.5 million shares of our common stock in connection with the Offer and the Second-Step Mergers.

The issuance of these new shares and the sale of additional shares that may become eligible for sale in the public market from time to time upon exercise of options could have the effect of depressing the market price for shares of our common stock.

The increase in the number of shares of our common stock may lead to sales of such shares or the perception that such sales may occur, either of which may adversely affect the market for, and the market price of, our common stock.

The trading price of our common stock may be affected by factors different from those affecting the price of Wyndham Common Stock.

Upon consummation of the Offer and the Second-Step Mergers, Wyndham stockholders (other than those that receive only the Cash Election Consideration and those we elect to pay any Additional Consideration solely in cash) will become holders of our common stock.

Our business differs from that of Wyndham, and our results of operations, as well as the trading price of our common stock, may be affected by factors different from those affecting Wyndham’s results of operations and the price of Wyndham Common Stock.

As a result, acting together, they may be able to control or substantially influence the outcome of matters requiring approval by our shareholders, including the elections of directors and the approval of significant corporate transactions, such as mergers, acquisitions, and equity compensation plans.

In addition, if directors and affiliates are acquiring and holding more shares, our share repurchase program may further concentrate our share ownership in our directors and affiliates.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors