Exhibit 99.(a)(14)
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
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MARGARET ALESSI, individually and on behalf : C.A. No.: 18644
of all others similarly situated, :
:
Plaintiff, :
:
v. : CLASS ACTION
: COMPLAINT
WILLIAM J. SHAW; DANIEL J. ALTOBELLO; :
PIERRE BELLON; BERNARD CARTON; :
EDOARD DE ROYERE; MICHAEL LANDEL; :
JOHN W. MARRIOTT III; MARY S. METZ; :
SODEXHO MARRIOTT, INC. and SODEXHO :
ALLIANCE S.A., :
:
Defendants. :
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INTRODUCTION
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Plaintiff alleges on information and belief, except for those allegations
which pertain to plaintiff which are alleged upon personal knowledge, as
follows:
1. This action arises out of an unlawful scheme and plan by Sodexho
Alliance, S.A. ("Alliance"), to acquire the remaining ownership of Sodexho
Marriott Services Inc. ("Marriott" or the "Company") for grossly inadequate
consideration and without full and complete disclosure of all material
information, in breach of defendants' fiduciary duties.
THE PARTIES
2. Plaintiff is and has been at all relevant times the owner of Marriott
common stock.
3. Defendant William J. Shaw ("Shaw") is and has been at all relevant
times Chairman and a director of Marriott. Shaw is also President and Chief
Operating Officer of
Marriott International, Inc., which is a party to a number of agreements with
the Company pursuant to which Marriott International receives substantial
benefits.
4. Defendant Pierre Bellon ("Bellon") is and has been at all relevant
times a director of Marriott. Bellon also is Chairman and Chief Executive
Officer of Alliance. Bellon together with members of his family, is the majority
shareholder of Bellon, S.A., which is the majority shareholder of defendant
Alliance.
5. Defendant Bernard Carton ("Carton") is and has been at all relevant
times a director of Marriott. Carton also is Senior Vice President and Chief
Financial Officer of Sodexho.
6. Defendant Edward de Royere ("Royere") is and has been at all relevant
times a director of Marriott. de Royere is also a director of Sodexho.
7. Defendant Michael Landel ("Landel") is and has been at all relevant
times President, Chief Executive Officer and a director of Marriott. Landel
previously served as President and Chief Executive Officer of Sodexho North
America.
8. Defendants Daniel J. Altobello, John W. Marriott, III, and Mary S.
Metz are and have been at all relevant times directors of Marriott.
9. Defendants John W. Marriott, III is a director of Marriott. Marriott
is also an executive officer of Marriott International and a member of the
Marriott family with substantial interests in Marriott concerns.
10. Defendant Mary S. Metz is a director of Marriott.
11. The defendants named in (P)(P) 3-8 above (the "Individual
Defendants"), as officers and/or directors of the Company, owe the highest
fiduciary duties of good faith, loyalty, fair dealing, due care, and candor to
plaintiff and the other members of the Class (as defined below).
12. Defendant Marriott is a corporation organized and existing under the
laws of
the Delaware with its principal executive offices located at 9801 Washingtonian
Boulevard in Gaithersburg, Maryland. Marriott provides outsourced food and
facilities management services in North America, offering food services,
housekeeping, grounds keeping, plant operations and maintenance, and integrated
facilities management.
13. Defendant Alliance is the beneficial owner of approximately 48% of
Marriott's outstanding shares as of October 31, 2000.
CLASS ACTION ALLEGATIONS
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14. Plaintiff brings this action pursuant to Rule 23 of the Rules of
the Court of Chancery, individually and on behalf of all other shareholders of
the Company (except the defendants herein and any persons, firm, trust,
corporation, or other entity related to or affiliated with them and their
successors in interest), who are or will be threatened with injury arising from
defendants' actions, as more fully described herein (the "Class").
15. This action is properly maintainable as a class action for the
following reasons:
(a) The Class is so numerous that joinder of all members is
impracticable. As of November 15, 2000, there were approximately 63.3 million
shares of Marriott common stock issue and outstanding, held by thousands of
shareholders of record and likely many more beneficial owners.
(b) There are questions of law and fact which are common to the Class
and which predominate over questions affecting any individual class member. The
common questions include, inter alia, the following:
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(c) whether defendants have engaged and are continuing to engage in a
plan and scheme to benefit themselves at the expense of the members of the
Class;
(d) whether the defendants have fulfilled, and are capable of
fulfilling, their fiduciary duties to plaintiff and the other members of the
Class, including their duties of entire
fairness, fair dealing, loyalty, due care, and candor;
(e) whether defendants have disclosed all material facts in connection
with the challenged transaction; and
(f) whether plaintiff and the other members of the Class would be
irreparably damaged if defendants are not enjoined from the conduct described
herein;
16. The claims of plaintiff are typical of the claims of the other
members of the Class in that all members of the Class will be damaged by
defendants' actions.
17. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. Plaintiff is an
adequate representative of the Class.
18. A class action is superior to any other method available for the
fair and efficient adjudication of this controversy since it would be
impractical and undesirable for each of the members of the Class, who has
suffered or will suffer damages, to bring separate actions.
19. Moreover, Defendants have acted and will continue to act on grounds
generally applicable to the Class, thereby making appropriate final injunctive
or corresponding declaratory relief with respect to the Class as a whole.
BACKGROUND AND SUBSTANTIVE ALLEGATIONS
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21. Marriott, formerly known as Marriott International, Inc. On March
27, 1998, Marriott International, Inc. ("Old Marriott") completed the
distribution to its shareholders of a new company consisting of its lodging,
senor living services and distribution services businesses. This new company
adopted the name Marriott International, Inc. The remaining business of Old
Marriott, which was comprised primarily of the operations of Marriott Management
Services, combined its food service and facilities management business with the
North American operations of defendant Sodexho Alliance, S.A. and changed its
name to Sodexho Marriott Services, Inc.
21. On or about January 25, 2001, Alliance announced a plan to acquire
the remaining 52% of Marriott it does not already own for $27.00 in a
transaction valued at $900 million (the "Offer").
22. Marriott, which reported losses for the past two years, has only
just recently moved into profitability. On January 11, 2001, the Company issued
a press release reporting net income of $36 million, or $0.56 per diluted share
for the 13 weeks ended December 1, 2000, up 29% compared with net income of $28
million, or $0.44 per share, for the corresponding period in 1999. Revenues for
the first quarter of fiscal year 2001 reportedly totaled $1.36 billion, an
increase of $71 million, or 6% over the same period in 1999. According to the
January 11 press release, Marriott benefited from "continued favorable
outsourcing trends in the North American markets, in addition to continued
growth in sales to existing clients and expanding its relationships with its
clients through competitive add-on services."
23. Defendant Landel made the following comments in the January 11
press release with respect to Marriott's performance and its outlook for the
future:
We had a great quarter to start our new fiscal year . . . The Education
division did an outstanding job in improving the results of several
accounts that were underperforming last year, while our other divisions
enjoyed solid results for the quarter. We continue to focus on adding
value for our existing clients and the new relationships we enter.
Looking ahead, we reiterate this year's financial goals of 5%-6% top
line and mid-teens bottom line growth.
24. Marriott's shares, which are only just beginning to reflect the
Company's improved performance and inherent value, have risen nearly 20 percent
from $20.81 on December 22, 2000, but do not yet fully reflect the Company's
earnings potential.
25. The $27 price offered by Alliance is thus grossly inadequate in
light of Marriott's recent share price and its future financial prospects,
representing only a 9% premium to Marriott's closing price of $24-7/8 on January
24, 2001.
26. As noted above, Alliance and its affiliates beneficially own
approximately 48%
of Marriott's outstanding shares.
27. Defendants are intent on paying the lowest possible price to Class
members, even though they are duty-bound to maximize shareholder value. While
defendants have announced the plan they cannot commence the Offer until March
2001 under the terms of a standstill agreement with the government.
Consequently, the meager premium has been locked in. Defendants have clear and
material conflicts of interest in the Offer.
28. Because of their control over the Company, defendants are in a
position to dictate the terms of the Offer. Defendants have conflicts of
interest and thus cannot represent or protect the interests of the Company's
public shareholders with impartiality and vigor.
29. The Offer is in furtherance of an unfair plan to take Marriott
private, which, if not enjoined, will result in the elimination of the public
stockholders of Marriott in a transaction that is inherently unfair to them and
that is the product of the defendants' conflict of interest, as described
herein. More particularly, the Offer is in violation of defendants' fiduciary
duties and has been timed and structured unfairly in that:
(a) the Offer is designed and intended to eliminate members of
the Class as stockholders of the Company from continued equity participation in
the Company at a price per share which defendants know or should know is grossly
unfair and inadequate;
(b) defendants, by virtue of, among other things, their voting
and ownership power, control and dominate Marriott's Board of Directors;
(c) defendants have unique knowledge of the Company and have
access to information denied or unavailable to the class. Without all material
information, Class members are unable to determine whether the price offered in
the Offer is fair; and
(d) defendants have violated their duty of fair dealing by
manipulating the timing of the Offer to benefit themselves at the expense of the
plaintiff and the class.
30. Unless enjoined by this Court, defendants will continue to breach
their fiduciary duties owed to plaintiff and the Class and will consummate the
Offer to the irreparable harm of plaintiff and the Class.
31. Plaintiff and the other members of the Class have no adequate
remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
A. Declaring this to be a proper class action and naming plaintiff as
Class representative;
B. Granting preliminary and permanent injunctive relief against the
consummation of the Offer as described herein;
C. In the event the Offer is consummated, rescinding the Offer and
awarding rescissionary damages;
D. Ordering defendants to pay to plaintiff and to other members of the
Class all damages suffered and to be suffered by them as the result of the acts
and transactions alleged herein;
E. Awarding plaintiff the costs and disbursements of the action
including allowances for plaintiff's reasonable attorneys and experts fees; and
F. Granting such other and further relief as may be just and proper.
Dated: January 25, 2001 CHIMICLES & TIKELLIS LLP
By: ____________________________________
Pamela S. Tikellis
Robert J. Kriner, Jr.
Timothy R. Dudderar
One Rodney Square
Wilmington, DE 19899
(302) 656-2500
Attorneys for Plaintiff
OF COUNSEL:
GOODKIND LABATON RUDOFF &
SUCHAROW LLP
100 Park Avenue
New York, New York 10017
(212) 907-0700