What are the new 'double trigger' severance benefits for executives?

The company has amended its Stock and Cash Incentive Plan and Executive Deferred Compensation Plan to provide that if a covered executive officer's employment is terminated involuntarily (without misconduct) within three months before or twelve months after a change in control, their unvested equity awards and deferred compensation balances will immediately vest. Stock options and SARs will be exercisable for a specified period, and other stock awards will be distributed. Cash incentives will be paid based on target performance, pro-rated for the year of termination.

How have the rules for electing directors changed?

In a contested election, a plurality voting standard will now apply, replacing the previous majority standard. The Bylaws also introduce a deadline of five days before the proxy statement filing to determine if an election is contested. Language concerning directors offering to resign after not receiving a majority vote has been removed from the Bylaws.

What are the new deadlines for shareholders wanting to present business at the annual meeting?

For business not included in the proxy statement, shareholder notice must be given no earlier than the 120th day and no later than the 90th day before the anniversary of the prior year's annual meeting. For the 2009 Annual Meeting, this means notice must be received between January 2, 2009, and February 1, 2009. Proposals for inclusion in the proxy statement under Rule 14a-8 must be received by November 28, 2008.

Are there any new disclosure requirements for shareholders proposing business?

Yes, shareholders must now provide more detailed information in their notice about any agreements, arrangements, or understandings that mitigate loss, manage risk, benefit from share price changes, or affect voting power. This includes details on derivative positions, hedging transactions, and borrowed or loaned shares. A written update of this information is also required within five business days after the record date of the meeting.

MAR 8-K: Leadership Changes & Corporate Changes

Summary

Marriott International, Inc. filed an 8-K report on November 12, 2008, detailing significant amendments to its executive compensation and corporate governance policies. The most impactful change for investors concerns the "double trigger" severance benefits now included in the Stock and Cash Incentive Plan and the Executive Deferred Compensation Plan. These amendments ensure that covered executive officers will receive accelerated vesting of their unvested equity awards and deferred compensation balances if their employment is terminated without cause within a specified period (three months prior to 12 months after) a change in control occurs. In addition to executive compensation adjustments, the company also amended and restated its Bylaws. Key revisions include changes to the designation of shareholder meeting locations, dates, and times, and modifications to the director election process. Notably, the standard for electing directors will shift to a plurality vote in contested elections, and the process for director resignations after failing to receive a majority vote has been removed. Furthermore, the advance notice requirements for shareholders wishing to present business at annual meetings have been clarified and adjusted, with specific deadlines set for both general business proposals and those intended for inclusion in the company's proxy materials.

Key Highlights

1Introduction of "double trigger" severance benefits for executive officers, providing accelerated vesting of equity and deferred compensation upon termination in connection with a change of control.
2Severance benefits are structured to avoid excise taxes under Internal Revenue Code provisions.
3Amendments to Bylaws regarding the location, date, and time of shareholder meetings, granting the Board discretion.
4Changes to the director election standard: plurality voting in contested elections, with a deadline for determining contest status.
5Removal of language regarding director resignation offers after failing a majority vote, to be reflected in Governance Principles.
6Revised advance notice periods for shareholders intending to present business at annual meetings, with specific deadlines for the 2009 Annual Meeting.
7Increased disclosure requirements for shareholder proposals regarding agreements, arrangements, or understandings related to mitigating loss, managing risk, or affecting share price and voting power.

MARRIOTT INTERNATIONAL INC /MD/ 8-K Report, Executive Changes (Nov 12, 2008)

Summary

Key Highlights

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