-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PR9m6oD6y+TIFeVC1bOcqApYwdzErPW4cYBHhEC89+sSUXt+an3WbmWXBGIj653z FUu5zt+iqFklP72Rsvj14g== 0000905036-99-000006.txt : 19990630 0000905036-99-000006.hdr.sgml : 19990630 ACCESSION NUMBER: 0000905036-99-000006 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SODEXHO MARRIOTT SERVICES INC CENTRAL INDEX KEY: 0000905036 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 520936594 STATE OF INCORPORATION: DE FISCAL YEAR END: 0828 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-12188 FILM NUMBER: 99655648 BUSINESS ADDRESS: STREET 1: 9801 WASHINGTONIAN BOULEVARD CITY: GAITHERSBURG STATE: MD ZIP: 20878 BUSINESS PHONE: 3019874431 MAIL ADDRESS: STREET 1: 9801 WASHINGTONIAN BOULEVARD CITY: GAITHERBURG STATE: MD ZIP: 20878 FORMER COMPANY: FORMER CONFORMED NAME: MARRIOTT INTERNATIONAL INC DATE OF NAME CHANGE: 19930517 11-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ COMMISSION FILE NUMBER 1-12188 SODEXHO SAVINGS PLUS PLAN ------------------------- (Full title of the plan) 9801 WASHINGTONIAN BOULEVARD, GAITHERSBURG, MARYLAND 20878 ---------------------------------------------------- ---------- (Address of the plan) (Zip Code) SODEXHO MARRIOTT SERVICES, INC. ------------------------------------------------------------ (Name of issuer of the securities held pursuant to the plan) 9801 WASHINGTONIAN BOULEVARD, GAITHERSBURG, MARYLAND 20878 ---------------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) FINANCIAL STATEMENTS AND EXHIBITS - --------------------------------- (a) Financial statements and supplemental schedules as of December 31, 1998 and 1997 and for the year ended December 31, 1998, prepared in accordance with financial reporting requirements of ERISA. Beginning at the next page of this document. (b) Exhibits The following exhibit is furnished to this Form 11-K: (23) Consent of Independent Accountants SIGNATURES ---------- THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the administrative committee (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. SODEXHO SAVINGS PLUS PLAN Date: JUNE 29, 1999 /s/LAWRENCE E. HYATT ------------- -------------------------- Lawrence E. Hyatt Senior Vice President and Chief Financial Officer Sodexho Marriott Services, Inc. THE SODEXHO SAVINGS PLUS PLAN FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION DECEMBER 31, 1998
THE SODEXHO SAVINGS PLUS PLAN TABLE OF CONTENTS TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES - ------------------------------------------------------------------------------------------------------------------- Financial Statements: Report of Independent Accountants 1-2 Statement of Net Assets Available for Benefits as of December 31, 1998 and 1997 3 Statement of Changes in Net Assets Available for Benefits (with Fund Information) for the year ended December 31, 1998 4-5 Notes to Financial Statements 6-10 Supplemental Schedules:* Schedule I - Schedule of Assets Held for Investment Purposes as of December 31, 1998 11-16 Schedule II - Schedule of Reportable Transactions for the year ended December 31, 1998 17 * Other schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.
[PRICEWATERHOUSECOOPERS LLP LOGO] PricewaterhouseCoopers LLP 1301 K Street, N.W. 800W Washington, DC 20005-3333 Telephone (202) 414 1000 REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of The Sodexho Savings Plus Plan We have audited the accompanying statement of net assets available for benefits of the Sodexho Savings Plus Plan (the "Plan") as of December 31, 1998 and 1997 and the related statement of changes in net assets available for benefits for the year ended December 31, 1998. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our report dated October 9, 1998, we were unable to, and did not, express an opinion on the 1997 financial statements because, at the instruction of the plan administrator, we did not perform any auditing procedures with respect to the information summarized in Note 3 to those financial statements. In conjunction with our audit of the 1998 financial statements, the plan administrator instructed us to perform, and we did perform, an audit of the 1997 financial statements in accordance with generally accepted auditing standards. Accordingly, we are now able to express an opinion on the 1997 financial statements. In our opinion, the financial statements referred to in the first paragraph of this report present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1998 and 1997, and the changes in net assets available for benefits for the year ended December 31, 1998 in conformity with generally accepted accounting principles. [PRICEWATERHOUSECOOPERS LLP LOGO] To the Participants and Administrator of The Sodexho Savings Plus Plan Page 2 Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes and reportable transaction are presented for purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labors' Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the changes in net assets available for benefits of each fund. These supplemental schedules and the fund information are the responsibility of the Plan's management. The supplemental schedules and the fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/PRICEWATERHOUSECOOPERS LLP PricewaterhouseCoopers LLP Washington, D.C. June 25, 1999
THE SODEXHO SAVINGS PLUS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS - --------------------------------------------------------------------------------------------------------------------------------- December 31, 1998 December 31, 1997 Non-participant Participant Non-participant Participant Directed Directed Directed Directed ASSETS Profit Sharing 401(k) Total Profit Sharing 401(k) Total Investments, at fair value: U.S. Government and agency obligations $ 2,103,758 $ -- $ 2,103,758 $ 1,788,588 $ -- $ 1,788,588 Corporate bonds 3,201,628 -- 3,201,628 2,914,620 -- 2,914,620 Common stocks and convertible issues 8,861,722 -- 8,861,722 7,638,699 800,556 8,439,255 Bank pooled funds 471,902 -- 471,902 308,113 -- 308,113 Pooled separate accounts: CIGNA Lifetime 20 Fund -- 122,216 122,216 -- 39,781 39,781 CIGNA Lifetime 30 Fund -- 119,356 119,356 -- 52,045 52,045 CIGNA Lifetime 40 Fund -- 124,707 124,707 -- 56,931 56,931 CIGNA Lifetime 50 Fund -- 53,230 53,230 -- 23,146 23,146 CIGNA Lifetime 60 Fund -- 50,744 50,744 -- 23,747 23,747 Fidelity Advisor Growth Opportunity Fund -- 13,329,754 13,329,754 -- 10,268,037 10,268,037 Fidelity Contrafund -- 7,800,012 7,800,012 -- 5,168,832 5,168,832 Fidelity Puritan Fund -- 4,312,681 4,312,681 -- 3,166,185 3,166,185 Invesco Total Return Fund -- 4,514,195 4,514,195 -- 3,818,896 3,818,896 Janus Worldwide Fund -- 564,778 564,778 -- 52,287 52,287 Neuberger & Berman Guardian Trust Fund -- 122,491 122,491 -- 39,757 39,757 PBHG Growth Fund -- 114,057 114,057 -- 40,198 40,198 SSGA Intermediate Bond Fund -- 99,005 99,005 -- 22,713 22,713 Twentieth Century Ultra Investors Fund -- 6,154,424 6,154,424 -- 3,620,709 3,620,709 Warburg Pincus International Equity Fund -- 37,685 37,685 -- 6,195 6,195 Sodexho Marriott Services, Inc. common stock -- 173,282 173,282 -- -- -- Participant loans -- 2,377,829 2,377,829 -- 1,723,359 1,723,359 CIGNA Charter Guaranteed Income Fund -- 12,773,175 12,773,175 -- 10,542,784 10,542,784 ----------- ----------- ----------- ----------- ----------- ----------- Total investments 14,639,010 52,843,621 67,482,631 12,650,020 39,466,158 52,116,178 ----------- ----------- ----------- ----------- ----------- ----------- Receivables: Employer contributions -- 728,387 728,387 -- 622,173 622,173 Participants' contributions -- 676,201 676,201 -- 758,342 758,342 Accrued investment income 95,673 -- 95,673 85,649 -- 85,649 ----------- ----------- ----------- ----------- ----------- ----------- Total receivables 95,673 1,404,588 1,500,261 85,649 1,380,515 1,466,164 ----------- ----------- ----------- ----------- ----------- ----------- Total assets 14,734,683 54,248,209 68,982,892 12,735,669 40,846,673 53,582,342 ----------- ----------- ----------- ----------- ----------- ----------- LIABILITIES Excess contributions payable to participants -- -- -- 9,866 -- 9,866 Accrued expenses 2,000 2,000 4,000 2,000 2,000 4,000 ----------- ----------- ----------- ----------- ----------- ----------- Total liabilities 2,000 2,000 4,000 11,866 2,000 13,866 ----------- ----------- ----------- ----------- ----------- ----------- Net assets available for benefits $14,732,683 $54,246,209 $68,978,892 $12,723,803 $40,844,673 $53,568,476 =========== =========== =========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements. 3
THE SODEXHO SAVINGS PLUS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (WITH FUND INFORMATION) FOR THE YEAR ENDED DECEMBER 31, 1998 - ----------------------------------------------------------------------------------------------------------------------------------- Participant Directed ------------------------------------------------------------------------------------------------------ Non- Fidelity Participant Advisor Invesco Directed CIGNA CIGNA CIGNA CIGNA CIGNA Growth Fidelity Total Janus Profit Lifetime Lifetime Lifetime Lifetime Lifetime Opportunity Fidelity Puritan Return Worldwide Sharing 20 Fund 30 Fund 40 Fund 50 Fund 60 Fund Fund Contrafund Fund Fund Fund ADDITIONS TO NET ASSETS ATTRIBUTED TO Interest and dividends $ 429,619 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Net appreci- ation in fair value of invest- ments 2,734,272 11,050 11,880 12,662 4,772 5,037 2,548,292 1,806,964 587,665 534,482 62,113 Loan repayments 2,280 2,946 2,721 423 29 24 225,146 164,774 104,998 99,146 11,205 Contributions: Employer 121,069 14,227 8,270 9,609 2,678 3,281 504,837 401,492 246,125 228,575 35,453 Participant 10,491 49,914 34,021 32,385 10,777 14,534 1,444,805 1,229,551 772,050 662,103 143,909 Rollover - 6,459 3,793 6,512 - 1,227 116,134 118,423 106,548 14,805 23,256 ----------- --------- --------- --------- -------- -------- ----------- ----------- ----------- ----------- -------- Total additions 3,297,731 84,596 60,685 61,591 18,256 24,103 4,839,214 3,721,204 1,817,386 1,539,111 275,936 ----------- --------- --------- --------- -------- -------- ----------- ----------- ----------- ----------- -------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO Benefit payments (1,200,372) (4,946) (3,849) (3,593) (8,431) (191) (1,078,654) (786,962) (370,651) (513,944) (23,875) Forfeitures (468) (561) (1,489) (476) - - (24,407) (22,999) (12,735) (13,795) (919) Other expenses (85,978) (89) (30) (113) - (61) (6,849) (4,306) (3,318) (3,088) (342) Net participant loans issued (2,033) (3,688) (2,087) (2,511) (107) (725) (394,691) (232,787) (189,996) (180,817) (13,619) ----------- --------- --------- --------- -------- -------- ----------- ----------- ----------- ----------- -------- Total deductions (1,288,851) (9,284) (7,455) (6,693) (8,538) (977) (1,504,601) (1,047,054) (576,700) (711,644) (38,755) ----------- --------- --------- --------- -------- -------- ----------- ----------- ----------- ----------- -------- Interfund transfers - 7,123 14,081 12,878 20,366 3,871 (272,896) (42,970) (94,190) (132,168) 275,310 ----------- --------- --------- --------- -------- -------- ----------- ----------- ----------- ----------- -------- Net increase in net assets 2,008,880 82,435 67,311 67,776 30,084 26,997 3,061,717 2,631,180 1,146,496 695,299 512,491 NET ASSETS AVAILABLE FOR BENEFITS Beginning of year 12,723,803 39,781 52,045 56,931 23,146 23,747 10,268,037 5,168,832 3,166,185 3,818,896 52,287 ----------- --------- --------- --------- -------- -------- ----------- ----------- ----------- ----------- -------- End of year $14,732,683 $122,216 $119,356 $124,707 $53,230 $50,744 $13,329,754 $7,800,012 $4,312,681 $4,514,195 $564,778 ============ ========= ========= ========= ======== ======== =========== =========== =========== =========== ========
The accompanying notes are an integral part of these financial statements. 4
THE SODEXHO SAVINGS PLUS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (WITH FUND INFORMATION) (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 1998 - ------------------------------------------------------------------------------------------------------------------------------------ PARTICIPANT DIRECTED TOTAL ------------------------------------------------------------------------------------------------------------ TWENTIETH WARBURG SODEXHO CIGNA Neuberger SSGA Century Pincus MARRIOTT CHARTER & Berman PBHG Inter- Inter- GUARAN- Guardian mediate Ultra national SERVICES TEED PARTI- 401(K) TOTAL Trust Growth Bond Investors Equity COMMON INCOME CIPANT COMMON PARTICIPANT Fund Fund Fund Fund Fund STOCK FUND LOANS STOCKS OTHER DIRECTED ADDI- TIONS TO NET ASSETS ATTRI- BUTED TO Inter- est and divi- dends $ - $ - $ - $ - $ - $ - $ 674,106 $ - $ 9,385 $ - $ 683,491 $ 1,113,110 Net ap- preci- ation (depre- ciation) in fair value of in- vest- ments (5,994) 2,795 3,571 1,462,030 (1,251) (8,835) - - 101,576 - 7,138,809 9,873,081 Loan repay- ments 6,655 6,055 115 128,494 275 1,626 271,499 (886,633) - - 139,498 141,778 Contri- butions: Em- ploy- er 17,172 10,985 4,005 384,727 4,835 967 661,597 - (603) 106,214 2,644,446 2,765,515 Parti- cipant 62,490 53,572 19,846 1,096,863 18,381 10,674 1,811,882 - (22) (82,141) 7,385,594 7,396,085 Roll- over 485 9,777 674 104,696 771 4,899 107,788 - - - 626,247 626,247 -------- -------- ------- ---------- ------- -------- ----------- ---------- --------- ---------- ----------- ----------- Total addi- tions 80,808 83,184 28,211 3,176,810 23,011 9,331 3,526,872 (886,633) 110,336 24,073 18,618,085 21,915,816 -------- -------- ------- ---------- ------- -------- ----------- ---------- --------- ---------- ----------- ----------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO Benefit payments (3,951) (1,430) (727) (465,717) (1,170) - (1,425,388) - (100,274) - (4,793,753) (5,994,125) Forfei- tures (277) (162) (49) (22,926) (101) - (44,091) - (591) - (145,578) (146,046) Other expenses (241) (95) (38) (3,779) (6) (532) (13,547) - (748) - (37,182) (123,160) Net partici- pant loans issued (21,220) (4,414) (691) (189,774) (154) (1,783) (534,805) 1,541,103 (7,270) - (240,036) (242,069) -------- -------- ------- ---------- ------- -------- ----------- ---------- --------- ---------- ----------- ----------- Total deduc- tions (25,689) (6,101) (1,505) (682,196) (1,431) (2,315) (2,017,831) 1,541,103 (108,883) - (5,216,549) (6,505,400) -------- -------- ------- ---------- ------- -------- ----------- ---------- --------- ---------- ----------- ----------- Interfund transfers 27,615 (3,224) 49,586 39,101 9,910 166,266 721,350 - (802,009) - - - -------- -------- ------- ---------- ------- -------- ----------- ---------- --------- ---------- ----------- ----------- Net in- crease (de- crease) in net assets 82,734 73,859 76,292 2,533,715 31,490 173,282 2,230,391 654,470 (800,556) 24,073 13,401,536 15,410,416 NET ASSETS AVAILABLE FOR BENE- FITS Begin- ning of year 39,757 40,198 22,713 3,620,709 6,195 - 10,542,784 1,723,359 800,556 1,378,515 40,844,673 53,568,476 -------- -------- ------- ---------- ------- -------- ----------- ---------- --------- ---------- ----------- ----------- End of year $122,491 $114,057 $99,005 $6,154,424 $37,685 $173,282 $12,773,175 $2,377,829 $ - $1,402,588 $54,246,209 $68,978,892 ======== ======== ======= ========== ======= ======== =========== ========== ========= ========== =========== ============
The accompanying notes are an integral part of these financial statements. 5 THE SODEXHO SAVINGS PLUS PLAN NOTES TO FINANCIAL STATEMENTS - ------------------------------------------------------------------------------- 1. DESCRIPTION OF PLAN The following description of the Sodexho Savings Plus Plan (the "Plan") established September 1, 1990 and most recently as amended and restated on March 1, 1996, provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. The amended and restated Plan is intended to continue to qualify as a profit-sharing plan and trust under Internal Revenue Code (the "Code") Sections 401(a) and Section 501(a), and the cash or deferred arrangement part of the Plan is intended to continue to qualify under Code Section 401(k). On March 27, 1998, the parent company of Sodexho USA, Sodexho Alliance S.A., combined its food service businesses in North America with the food service and facilities management business of Marriott International, Inc. into a separate public entity named "Sodexho Marriott Services, Inc." (the "Company"). GENERAL The Plan is a defined contribution plan covering all full-time employees of the Company who have one year of service and are age twenty-one or older. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). CONTRIBUTIONS 401(K) Each year participants may elect to contribute up to 16% of pretax annual compensation as defined in the Plan in multiples of one percentage subject to Internal Revenue Service limitations. The Company makes, at its discretion, matching contributions in an amount equal to 50% of a participant's elective contributions, but not to exceed 2% of the participant's eligible compensation subject to certain Internal Revenue Service limitations. The participant's must; (a) have made elective contributions during the year, (b) worked at least 1,000 hours during the year, and (c) be employed on the last day of the Plan year. PROFIT SHARING Prior to March 1, 1996, Company profit sharing contributions to the Plan were determined and invested at the discretion of the Board of Directors for each Plan year. Effective March 1, 1996, the profit sharing contribution was discontinued except that certain employees are still be eligible for a contribution of 2% of eligible Plan compensation, subject to the Company's discretion. 6 THE SODEXHO SAVINGS PLUS PLAN NOTES TO FINANCIAL STATEMENTS - ------------------------------------------------------------------------------- PARTICIPANT ACCOUNTS 401(K) Each participant's account is credited with the participant's contribution and allocations of (a) the Company's matching contribution, (b) any increases or decreases in the value of the Plan's investments, (c) expenses and, (d) increases or decreases related to participant loan activity, if any. Forfeitures are used to reduce future employer contributions. The benefit to which a participant is entitled is that vested benefit that can be provided from the participant's account. PROFIT SHARING Each participant's account is credited with an allocation of (a) the Company's contribution, (b) any increases or decreases in the value of the Plan's investments and (c) forfeitures of terminated participants' nonvested accounts. Investment income or losses are allocated to participants' accounts in proportion to each participant's percentage interest in the entire account fund. Forfeitures are reallocated to participant accounts. The benefit to which a participant is entitled is the vested benefit that can be provided from the participant's account. VESTING Participants are immediately vested in any balances related to amounts transferred in from other terminated employee retirement plans plus actual earnings thereon. Vesting in the remainder of their account is based on retirement or years of continuous service in accordance with the following schedule: PERCENTAGE VESTED Fewer than 3 years 0 % 3 years, but fewer than 4 years 60 % 4 years, but fewer than 5 years 80 % 5 or more years 100 % INVESTMENT OPTIONS 401(K) Assets are primarily invested in products sold by CG Life, an ultimate wholly-owned subsidiary of Connecticut General Life Insurance Company (CIGNA). Upon enrollment in the Plan, a participant may direct employee contributions in 10 percent increments in the following investment options: CIGNA Lifetime Funds - funds invest in units of separate accounts that invest in shares of registered investment companies. Each of the Lifetime Funds represents a balanced portfolio of bonds, stocks, and cash-equivalent instruments depending on progressive age groups, time horizons, and investment risk tolerance. The CIGNA Lifetime Funds sponsored by the Plan are as follows: Lifetime - 20 Lifetime - 50 Lifetime - 30 Lifetime - 60 Lifetime - 40 7 THE SODEXHO SAVINGS PLUS PLAN NOTES TO FINANCIAL STATEMENTS - ------------------------------------------------------------------------------- Fidelity Advisor Growth Opportunity Fund - funds are invested in units of the CIGNA Fidelity Advisor Growth Opportunity account which in turn invests in the Fidelity Advisor Growth Opportunity Fund. Fidelity Contrafund - funds are invested in units of the CIGNA Fidelity Contrafund account which in turn invests in the Fidelity Contrafund. Fidelity Puritan Fund - funds are invested in units of the CIGNA Fidelity Puritan account which in turn invests in the Fidelity Puritan Fund. Invesco Total Return Fund - funds are invested in units of the CIGNA Invesco Total Return Account, which in turn invests in shares of the Invesco Total Return Fund. Janus Worldwide Fund - funds are invested in units of the CIGNA Janus Worldwide Fund which in turn invests in the Janus Worldwide Fund. Neuberger & Berman Guardian Trust Fund - funds are invested in units of the CIGNA Neuberger & Berman Guardian Trust Fund which in turn invests in the Neuberger & Berman Guardian Trust Fund. PBHG Growth Fund - funds are invested in units of the CIGNA PBHG Growth Fund which in turn invests in the PBHG Growth Fund. SSGA Intermediate Bond Fund - funds are invested in units of the CIGNA SSGA Intermediate Bond Fund which in turn invests in the SSGA Intermediate Bond Fund. Twentieth Century Ultra Investors Fund - funds are invested in units of the CIGNA Twentieth Century Ultra Investors Account which in turn invests in shares of the Twentieth Century Ultra Investors Fund. Warburg Pincus International Equity Fund - funds are invested in units of the CIGNA Warburg Pincus International Equity Fund which in turn invests in the Warburg Pincus International Equity Fund. CIGNA Charter Guaranteed Income Fund - funds are invested in the CIGNA Charter Guaranteed Income Fund which provides a guaranteed rate of return which is reset annually (See Note 3). Effective October 1, 1998, participants have the option of directing their 401(k) investments into Sodexho Marriott Services, Inc. common stock. The 401(k) Common Stock option represented former options of a plan that were previously merged into the Plan. Balances were transferred to the other options during 1998. PROFIT SHARING The profit sharing portion of the Plan is invested at the discretion of the investment advisor as appointed by an investment committee. Investments include: U.S. Government and agency obligations, corporate bonds, common stock and convertible issues, and bank pooled funds. State Street Bank and Trust Company ("SSBT") is the trustee for the profit sharing portion of the Plan. 8 THE SODEXHO SAVINGS PLUS PLAN NOTES TO FINANCIAL STATEMENTS - ------------------------------------------------------------------------------- PARTICIPANT LOANS Participants may borrow from their 401(k) fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested interest in their account. Loan terms can vary but cannot exceed 5 years unless the loan is being applied toward the purchase of a principal residence. The loans are evidenced by a note, are secured by the participant's vested interest in their account and bear interest at a rate commensurate with local prevailing rates as determined by the Plan administrator. Principal and interest are paid ratably over a period not less frequently than quarterly through payroll deductions. PAYMENT OF BENEFITS On termination of service due to death, disability, retirement or other reasons, a participant will be paid in a lump-sum amount equal to the value of the participant's vested interest. In certain specified circumstances, a participant may elect to receive an annuity. 2. SUMMARY OF ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements of the Plan are prepared under the accrual basis of accounting. USE OF ESTIMATES The preparation of financial statements requires management to make certain estimates regarding the amounts and disclosures in the financial statements. Actual results could differ from those estimates. INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments are stated at fair value. Bank pooled funds and general/pooled separate accounts are stated at net asset value per unit as reported by the bank or insurance company. The Company stock is valued at its quoted market price. Participant notes receivable are valued at cost which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. EXPENSES All expenses incurred in the administration of the Plan are charged to and paid by the Plan, except for the audit fee which is charged to and paid by the Company. 3. DEPOSITS WITH INSURANCE COMPANY The Plan participates in contracts with CG Life investments via the CIGNA Charter Guaranteed Income Fund. CG Life commingles the assets of this investment with other assets. For the Plan's investment in the CIGNA Charter Guaranteed Income Fund, the Plan is credited with interest at the rate specified in the contract which was 5.9% at December 31, 1998 and 1997. The CIGNA Charter Guaranteed Income Fund is included in the financial statements at fair value which, principally because of the periodic rate reset process, approximates contract value. 9 THE SODEXHO SAVINGS PLUS PLAN NOTES TO FINANCIAL STATEMENTS - ------------------------------------------------------------------------------- 4. INVESTMENT INCOME BY INVESTMENT CLASS The profit sharing investments (including gains and losses on investments bought and sold during the year) appreciated in value by approximately $2,734,272 during the year ended December 31, 1998. NET APPRECIATION IN THE FAIR VALUE OF INVESTMENTS U.S. Government and agency obligations $ 84,794 Corporate bonds 67,381 Common stocks and convertible issues 2,582,097 ------------ $2,734,272 ============ 5. TAX STATUS The IRS has determined and informed the Company by a letter dated December 23, 1998, that the Plan is qualified and the trust established under the Plan is tax-exempt, under the appropriate section of the Code. The Plan administrator and the Plan's tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. Therefore, they believe that the Plan was qualified and the related trust was tax-exempt as of the financial statement date. 6. FORFEITURE ALLOCATION As of December 31, 1998 and 1997 unallocated forfeitures included in the Plan were approximately $96,380 and $155,905, respectively. Subsequent to each year-end the recordkeeper allocated the respective amount to the applicable participant accounts based on the Plan's terms. 7. SUBSEQUENT EVENTS On January 1, 1999, the Plan was frozen and all participants were made participants in the Sodexho Marriott Services, Inc. 401(k) Employees Retirement Savings Plan and Trust. On April 9, 1999, the Plan was merged into the Sodexho Marriott Services, Inc. 401(k) Employees Retirement Savings Plan and Trust. 10
THE SODEXHO SAVINGS PLUS PLAN ITEM 27A FORM 5500 - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1998 SUPPLEMENTAL SCHEDULE I - ------------------------------------------------------------------------------------------------------------------------- SHARES/ CURRENT DESCRIPTION PRINCIPAL COST VALUE IDENTITY OF ISSUE U.S. GOVERNMENT AND AGENCY OBLIGATIONS U.S. Treasury Notes 5.875% 2/15/04 DTD 2/15/94 $ 150,000 $ 147,391 $ 158,295 U.S. Treasury Notes 7.25% 8/15/04 DTD 8/15/94 150,000 152,695 168,705 U.S. Treasury Notes 6.875% 5/15/06 DTD 5/15/96 150,000 150,129 169,545 U.S. Treasury Notes 6.625% 5/15/07 DTD 5/15/97 200,000 201,469 224,940 U.S. Treasury Bonds 7.25% 5/15/16 DTD 5/15/86 125,000 126,133 151,638 U.S. Treasury Bonds 6.50% 11/15/26 DTD 11/15/96 125,000 123,809 145,475 Federal Home Loan Mtg. Corp. 6.13% 8/19/99 DTD 8/19/92 100,000 100,266 100,690 Tennessee Valley Authority 6.375% 6/15/05 DTD 6/20/95 125,000 123,428 132,188 Federal Nat'l Mtg. Assn. MTN 6.625% 3/21/06 DTD 3/21/96 200,000 199,494 216,880 Federal Nat'l Mtg. Assn. MTN 6.42% 7/14/08 Callable 2000 125,000 126,797 126,162 Tennessee Valley Authority 6.25% 12/15/17 DTD 12/15/97 200,000 202,472 202,760 Federal Home Loan Mtg. Corp. 6.005% 7/28/28 DTD 7/28/98 300,000 301,107 306,480 --------------- ---------------- 1,955,190 2,103,758 --------------- ----------------
11
THE SODEXHO SAVINGS PLUS PLAN ITEM 27A FORM 5500 - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (CONTINUED) DECEMBER 31, 1998 SUPPLEMENTAL SCHEDULE I - ---------------------------------------------------------------------------------------------------------------------- SHARES/ CURRENT DESCRIPTION PRINCIPAL COST VALUE IDENTITY OF ISSUE CORPORATE BONDS BellSouth Telecommunications, Inc. 6.375% 6/1/28 DTD 6/4/98 $ 250,000 $ 245,942 $ 260,000 US West Communications Inc. 6.625% 9/15/05 DTD 9/15/95 100,000 97,156 107,391 AT&T Corp. 7.50% 6/1/06 DTD 6/1/94 100,000 97,187 112,625 Ohio Power Co. MTN 6.875% 6/1/03 Callable 1998 100,000 100,000 101,062 Baltimore Gas & Electric Co. 6.125% 7/1/03 DTD 7/1/93 100,000 86,828 102,594 Duke Energy Corp. 6.25% 5/1/04 Callable 1998 125,000 124,801 126,406 WMX Technologies Inc. 8.25% 11/15/99 DTD 11/28/94 100,000 99,904 101,969 Pepsico, Inc. 6.25% 9/1/99 DTD 9/1/92 100,000 99,416 100,719 International Business Machines Corp. 6.375% 6/15/00 DTD 6/15/93 100,000 100,098 101,250 Sears Roebuck Accep. Corp. 6.70% 11/15/06 DTD 11/25/96 125,000 124,991 131,406 RJR Nabisco Inc. 7.625% 9/15/03 DTD 9/15/92 100,000 98,100 100,000 General Motors Corp. 7.10% 3/15/06 DTD 3/20/96 100,000 99,186 108,656 Union Pacific Corp. (Callable 1/15/01) 6.125% 1/15/04 DTD 1/25/94 100,000 99,270 99,672
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THE SODEXHO SAVINGS PLUS PLAN ITEM 27A FORM 5500 - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (CONTINUED) DECEMBER 31, 1998 SUPPLEMENTAL SCHEDULE I - ----------------------------------------------------------------------------------------------------------------------- SHARES/ CURRENT DESCRIPTION PRINCIPAL COST VALUE IDENTITY OF ISSUE CORPORATE BONDS - (CONTINUED) Keycorp 7.50% 6/15/06 DTD 6/10/96 $ 100,000 $ 99,121 $ 109,828 Chase Manhattan Corp. 6.375% 2/15/08 DTD 2/11/98 200,000 198,894 206,969 Nations Bank Corp. 7.25% 10/15/25 DTD 10/23/95 100,000 97,065 108,656 Heller Financial Inc. 5.625% 3/15/00 DTD 9/20/93 100,000 98,476 99,484 Associates Corp. North America 6.25% 9/15/00 DTD 9/19/95 100,000 101,423 101,297 Ford Motor Cr. Corp. 6.25% 11/8/00 DTD 11/8/95 200,000 200,850 202,969 General Electric Cap Corp. 8.375% 3/1/01 100,000 98,750 106,187 Ford Motor Cr. Corp. 8.2% 2/15/02 DTD 2/24/95 100,000 99,983 107,344 Norwest Financial Inc. 7.00% 1/15/03 DTD 1/24/93 150,000 150,450 151,500 General Motors Accept. Corp. 6.625% 10/15/05 DTD 10/15/95 100,000 99,604 102,375 Hydro Quebec Deb. Ser. 7.375% 2/1/03 DTD 2/3/93 125,000 116,511 132,988 Svenska Handelsbanken NY Sub. 8.35% 7/15/04 DTD 7/9/92 100,000 103,699 111,203 ABN Amro BKN V Chicago Brh. 7.25% 5/31/05 DTD 5/31/95 100,000 101,931 107,078 --------------- ---------------- 3,039,636 3,201,628 --------------- ----------------
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THE SODEXHO SAVINGS PLUS PLAN ITEM 27A FORM 5500 - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (CONTINUED) DECEMBER 31, 1998 SUPPLEMENTAL SCHEDULE I - ---------------------------------------------------------------------------------------------------------------------- SHARES/ CURRENT PRINCIPAL COST VALUE IDENTITY OF ISSUE COMMON STOCK AND CONVERTIBLE ISSUES CISCO Systems, Inc. 3,750 $ 197,188 $ 348,047 MediaOne Group, Inc. 3,000 140,190 141,000 Microsoft Corp. 2,200 34,223 305,113 EMC Corp. 2,000 117,120 170,000 Lucent Technologies Inc. 1,900 33,432 208,881 Intel Corp. 1,800 26,738 213,413 Applied Materials Inc. 3,500 146,188 149,406 Dell Computer Corp. 1,600 51,900 117,100 General Electric 3,000 137,730 306,000 Illinois Tool Works Inc. 3,300 135,049 191,400 Air Products & Chemical Inc. 4,800 153,468 192,000 Aptargroup Inc. 6,600 122,494 185,213 Home Depot Inc. 4,400 65,068 269,225 Staples Inc. 7,000 100,150 305,813 WalMart Stores, Inc. 3,000 170,387 244,313 Walt Disney Co. 7,500 116,819 225,000 Pepsico Inc. 3,000 105,191 122,625 Automatic Data Processing, Inc. 2,000 88,890 160,375 Procter & Gamble Co. 2,700 97,250 246,544 Best Foods 4,200 93,933 223,650 Sysco Corp. 4,000 69,890 109,750 Carnival Corp. 4,000 142,240 192,000 Philip Morris Co., Inc. 3,000 132,565 160,500 Bristol Myers Squibb Co. 2,500 159,389 334,531 Elan Plc. ADR 2,000 93,352 139,875 Merck & Co. Inc. 1,700 71,290 250,750 Pfizer, Inc. 2,000 117,765 250,000 Air Touch Communications, Inc. 1,200 67,710 86,925 Johnson & Johnson 1,500 76,605 125,812 Exxon Corp. 2,300 68,061 168,187 Mobil Corp. 3,000 213,673 261,375 Northern Trust Corp. 3,600 143,468 314,325 BankAmerica Corp. 2,000 116,350 120,250 Associates First Capital Corp. 6,000 182,222 254,250 Vodafone Group Plc. ADR 600 18,679 96,675 Alltel Corp. 4,300 139,401 257,194 First Union Corp. 4,500 238,815 273,656 Halliburton Co. 4,500 84,224 133,312
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THE SODEXHO SAVINGS PLUS PLAN ITEM 27A FORM 5500 - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (CONTINUED) DECEMBER 31, 1998 SUPPLEMENTAL SCHEDULE I - ---------------------------------------------------------------------------------------------------------------------- SHARES/ CURRENT PRINCIPAL COST VALUE IDENTITY OF ISSUE COMMON STOCK AND CONVERTIBLE ISSUES - (CONTINUED) Wells Fargo & Co. 7,000 $ 176,275 $ 279,562 T. Rowe Price & Assocs. 2,000 67,250 68,500 American International Group Inc 1,800 29,977 173,925 Century Tel Enterprises, Inc. 4,000 166,075 270,000 MCI Worldcom, Inc. 3,000 142,875 215,250 --------------- --------------- 4,851,559 8,861,722 --------------- --------------- BANK POOLED FUNDS State Street Daily Bond Market Fund* 9,195 150,000 150,211 State Street Short-Term Investment Fund for Employee Trusts* 321,691 321,691 321,691 --------------- --------------- 471,691 471,902 --------------- --------------- TOTAL PROFIT SHARING $ 10,318,076 $ 14,639,010 --------------- ---------------
* Denotes party-in-interest. 15
THE SODEXHO SAVINGS PLUS PLAN ITEM 27A FORM 5500 - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (CONTINUED) DECEMBER 31, 1998 SUPPLEMENTAL SCHEDULE I - ---------------------------------------------------------------------------------------------------------------------- SHARES/ CURRENT PRINCIPAL COST VALUE IDENTITY OF ISSUE COMMON STOCK Sodexho Marriott Services, Inc.* 6,257 $ 181,710 $ 173,282 ------------- ------------- POOLED SEPARATE ACCOUNTS CIGNA Lifetime 20 Fund* 6,459 109,139 122,216 CIGNA Lifetime 30 Fund* 6,348 104,695 119,356 CIGNA Lifetime 40 Fund* 6,840 107,242 124,707 CIGNA Lifetime 50 Fund* 2,991 46,775 53,230 CIGNA Lifetime 60 Fund* 3,118 45,605 50,744 Fidelity Advisor Growth Opportunity Fund* 171,236 8,779,937 13,329,754 Fidelity Contrafund* 95,816 5,244,834 7,800,012 Fidelity Puritan Fund* 137,195 3,314,690 4,312,681 Invesco Total Return Fund* 114,696 2,909,772 4,514,195 Janus Worldwide Fund* 10,373 507,739 564,778 Neuberger & Berman Guardian Trust Fund* 6,249 122,714 122,491 PBHG Growth Fund* 4,465 108,113 114,057 SSGA Intermediate Bond Fund* 1,146 94,828 99,005 Twentieth Century Ultra Investors Fund* 114,736 4,372,629 6,154,424 Warburg Pincus International Equity Fund* 1,605 38,685 37,685 ------------- ------------- 25,907,397 37,519,335 ------------- ------------- CIGNA Charter Guaranteed Income Fund* 5.9% annual interest 430,355 12,773,175 12,773,175 ------------- ------------- Participant loans* 8.25% annual interest N/A 2,377,829 2,377,829 ------------- ------------- TOTAL $ 51,558,187 $ 67,482,631 ============= =============
* Denotes party-in-interest. 16
THE SODEXHO SAVINGS PLUS PLAN SCHEDULE OF REPORTABLE TRANSACTIONS* (ITEM 27D - FORM 5500) YEAR ENDED DECEMBER 31, 1998 SUPPLEMENTAL SCHEDULE II - ------------------------------------------------------------------------------------------------------------------------------------ COST OF COST OF PROCEEDS ASSETS CURRENT NET GAIN DESCRIPTION OF ASSET PURCHASES FROM SALES DISPOSED VALUE (LOSS) CIGNA Guaranteed Income Fund $ 4,527,363 $ - $ - $ 4,527,363 $ - CIGNA Guaranteed Income Fund - 2,971,079 2,971,079 2,971,079 - Fidelity Contrafund 2,226,616 - - 2,226,616 - Fidelity Contrafund - 1,484,155 1,148,934 1,484,155 335,221 Twentieth Century Ultra Investors Fund 2,006,460 - - 2,006,460 - Twentieth Century Ultra Investors Fund - 937,801 754,496 937,801 183,305 Fidelity Advisor Growth Opportunity Fund 2,648,814 - - 2,648,814 - Fidelity Advisor Growth Opportunity Fund - 2,135,494 1,561,862 2,135,494 573,632 Invesco Total Return Fund 1,507,844 - - 1,507,844 - Invesco Total Return Fund - 1,346,817 1,174,867 1,346,817 171,950 State Street Short-Term Investment Fund for Employee Trusts 2,703,519 - - 2,703,519 - State Street Short-Term Investment Fund for Employee Trusts - 1,327,318 1,327,347 1,327,318 (29) * Transactions or series of transactions in excess of 5 percent of the current value of the Plan's assets as of December 31, 1997 as defined in Section 2520.103-6 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under ERISA.
17 INDEX TO EXHIBITS ----------------- EXHIBIT NUMBER DESCRIPTION - ------- ----------- (23) Consent of Independent Accountants Exhibits omitted are not required or not applicable. EX-23 2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 of the Sodexho Savings Plus Plan of our report dated June 25, 1999 relating to the financial statements of the Sodexho Savings Plus Plan for the year ended December 31, 1998 included with this Form 11-K. /s/ PRICEWATERHOUSECOOPERS LLP PricewaterhouseCoopers LLP Washington, D.C. June 28, 1999 -----END PRIVACY-ENHANCED MESSAGE-----