What is the main reason for amending the Executive Deferred Compensation Plan?

The primary reason for the amendments is to coordinate executive compensation arrangements with projected changes to the Marriott International, Inc. Employees' Profit Sharing, Retirement and Savings Plan, which are expected to take effect in the 2010 plan year.

How does the vesting of new matching contributions change?

Previously, annual discretionary company matching contributions vested over a four-year service period. Under the amendment, these new discretionary matching contributions will be immediately 100% vested upon allocation to the participant's account.

What flexibility do executives have regarding the distribution of these contributions?

For discretionary matching contributions made from 2010 onwards, participants will have the option to receive distributions either after termination of employment or while still employed (in-service distributions). Prior to this amendment, such contributions could only be paid out after employment termination.

How will hypothetical earnings be calculated on account balances going forward?

Beginning December 29, 2009, all existing account balances and future contributions to the EDC will be credited with hypothetical earnings at an annual interest rate designated by the Company before the start of each year. For 2010, this rate is set at 5.5%. This replaces the previous system where earnings were based on participant-elected investment benchmarks or a company-designated rate.

MAR 8-K: Leadership Changes

Summary

Marriott International, Inc. filed an 8-K on August 6, 2009, detailing amendments to its Executive Deferred Compensation Plan (EDC). The primary purpose of these changes, effective for 2009 and subsequent years, is to adjust executive compensation arrangements in anticipation of changes to the company's broader profit-sharing plan starting in 2010. Key modifications include the introduction of a new annual discretionary matching contribution for participants' elective contributions, capped at 2% of compensation up to IRS limits. Notably, these new discretionary matching contributions will be immediately 100% vested upon allocation, a significant change from the previous four-year vesting schedule. Furthermore, for contributions made from 2010 onwards, participants will have the option for post-termination or in-service distributions, offering greater flexibility than the previous requirement of post-termination payouts only. The plan also adjusts how hypothetical earnings are calculated, moving to a fixed company-designated rate (5.5% for 2010) from participant-chosen investment benchmarks or a company rate.

Key Highlights

1Marriott International amended its Executive Deferred Compensation Plan (EDC) on August 6, 2009.
2A new annual discretionary matching contribution will be made on up to 2% of participant compensation (up to IRS limit for 2009: $245,000).
3These new discretionary matching contributions will have immediate 100% vesting upon allocation.
4For 2010 and beyond, these contributions can be distributed either post-termination or during employment (in-service).
5Hypothetical earnings for existing balances and future contributions will be credited at a fixed company-designated annual interest rate (5.5% in 2010), replacing previous participant-chosen investment options or company rate.
6These amendments are designed to align with anticipated changes to the Marriott International, Inc. Employees' Profit Sharing, Retirement and Savings Plan starting in 2010.
7The company does not expect these amendments to significantly increase total annual company contributions to the EDC and Profit Sharing Plan combined under current law.

MARRIOTT INTERNATIONAL INC /MD/ 8-K Report, Executive Changes (Aug 6, 2009)

Summary

Key Highlights

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