EXHIBIT (a)(5)(viii)
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE
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THOMAS GRILLO, )
) C.A. No. 18718-NC
)
Plaintiff, ) COMPLAINT
vs. )
)
BARRETT RESOURCES CORPORATION, C. )
ROBERT BUFORD, DERRILL CODY, PETER )
A. DEA, JAMES M. FITZGIBBONS, HENNIE )
L.J.M. GIESKES, WILLIAM W. GRANT, III )
and PHILIPPE S.E. SCHREIBER, )
)
Defendants. )
)
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Plaintiff alleges on information and belief, except as to paragraph 1
which is alleged on knowledge, as follows:
THE PARTIES
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1. Plaintiff owns and has owned shares of the common stock of Barrett
Resources Corporation ("Barrett" or the "Company") at all relevant times.
2. Barrett is a Delaware corporation with principal executive offices
located at 1515 Arapahoe Street, Denver, Colorado. Barrett is an independent gas
and crude oil exploration and production company.
3. Defendant C. Robert Buford ("Buford") is Chairman of the Board of
Directors of Barrett.
4. Defendant Derrill Cody is a director of the Company
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5. Defendant Peter A. Dea ("Dea") is Chief Executive Officer, Vice
Chairman and a director of Barrett.
6. Defendant James M. Fitzgibbons is a director of the Company.
7. Defendant William W. Grant, III is a director of Barrett.
8. Defendant Hennie L.J.M. Gieskes is a director of the Company.
9. Defendant Philippe S.E. Schreiber is a director of the Company.
10. As directors of the Company, the individual defendants
(collectively referred to hereinafter as the "Individual Defendants") are in a
fiduciary relationship with plaintiff and the other public stockholders of
Barrett and owe them the highest obligations of good faith, fair dealing, due
care, loyalty and full and candid disclosure.
CLASS ACTION ALLEGATIONS
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11. Plaintiff brings this action behalf of himself and as a class
action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of
all public stockholders of Barrett, and their successors in interest, who are or
will be threatened with injury arising from defendants' actions as more fully
described herein (the "Class"). Excluded from the Class are defendants herein
and any person, firm, trust, corporation, or other entity related to or
affiliated with any of the defendants.
12. This action is properly maintainable as a class action because:
(a) The Class is so numerous that joinder of all members is
impracticable. There are approximately 33 million shares of Barrett common stock
outstanding, held by hundreds of stockholders of record. Barrett's shares are
actively traded on the New York Stock Exchange. Members of the Class are
scattered throughout the United States;
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(b) There are questions of law and fact which are common to the
Class and which predominate over questions affecting any individual Class
member;
(c) Defendants have acted and will continue to act on grounds
generally applicable to the Class, thereby making appropriate final in
injunctive or corresponding declaratory relief with respect to the Class as a
whole;
(d) Plaintiff is committed to the prosecution of this action and
has retained competent counsel experienced in litigation of this nature.
Plaintiffs claims are typical of the claims of other members of the Class and
plaintiff has the same interests as the other members of the Class. Accordingly,
plaintiff is an adequate representative of the Class and will fairly and
adequately protect the interests of the Class.
(e) Defendants have acted and are about to act on grounds
generally applicable to the Class, thereby making appropriate final injunctive
relief with respect to the Class as a whole.
SUBSTANTIVE ALLEGATIONS
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The Offer
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13. On March 7, 2001, Shell Oil Company ("Shell") announced that it
had offered to acquire Barrett for $55 per share, plus the assumption of $400
million in debt, for a total acquisition price of $1.8 billion (the "Offer").
14. According to a separate report dated March 7, 2001, Barrett had
previously rejected one or more prior approaches by Shell.
15. Under the circumstances, the Individual Defendants are obligated
to adequately inform themselves about the Offer and consider strategic
alternatives designed to
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provide class members with equivalent or greater value. Shell has indicated that
it was and remains willing to meet with Barrett, presumably to negotiate an even
higher price for Barrett shares. Thus, without negotiations with Shell, the
Individual Defendants cannot fulfill their duty to inform themselves adequately
about the Offer and its parameters.
The Poison Pill and Invalid Bylaws
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16. Barrett has in place a shareholder rights plan (the "poison
pill"), with a 15% "trigger" which makes a takeover of Barrett prohibitively
expensive unless the Individual Defendants approve the transaction. Thus, the
Individual Defendants have veto power over an acquisition proposal, even one
highly favorable to class members.
17. Barrett also has in place certain Bylaws which contain invalid
provisions designed to thwart the exercise of the stockholders' statutory right
to act by written consent.
18. Section 3 of Article III of the Bylaws (the "Advance Notice
Bylaw") provides, in part:
Nominations by stockholders for directors to be elected by
written consent of stockholders shall be made by notice in
writing, delivered or mailed by first class United States
mail, postage prepaid, to the secretary of the corporation
not less than 60 days nor more than 90 days prior to the
first solicitation of any written consents of stockholders
for the election of those nominees.
The Advance Notice Bylaw also provides that "[n]o person shall be
eligible for election as a director of the Corporation unless nominated in
accordance with procedure set forth in this Section."
19. Article III, Section 3 of the Bylaws purports to restrict the
ability of the stockholders to act by written consent. Article III, Section 3
requires stockholders wishing to act
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20. This purported limitation on the ability of the stockholders to
act by written consent in the Bylaws violates 8 Del. C. (S) 228.
21. The Bylaws also further attempt to restrict the ability of the
stockholders to act by written consent. Article IX, Section 4 of the Bylaws
provides, in part:
These bylaws may be altered, amended or repealed or new bylaws
may be adopted by the board of directors or by the stockholders
in the manner provided in this Article IX, Section 4 at any
meeting, but not by written consent, of the stockholders. In
order for the board of directors to effect an alteration,
amendment or repeal of these bylaws or to adopt new bylaws,
written notice containing the proposed alteration, amendment,
repeal, or new bylaws must be provided to all the directors of
the corporation not less than 30 days prior to the meeting of
directors at which the proposal is to be considered unless the
proposal is approved by at least 75 percent of all directors
including 80 percent of Independent Directors (as defined in
Article IX of these bylaws). In order for the stockholders to
effect an alteration, amendment, or repeal of these bylaws or to
adopt new bylaws, written notice containing the proposed
alteration, amendment, repeal, or new bylaws has been provided to
the secretary and all the directors of the corporation not more
than seven days after the corporation gives notice of the meeting
of stockholders at which the proposal is to be considered.
(emphasis added).
22. Thus, Barrett purports to limit the right of the stockholders to
act by written consent through the Company's bylaws, not its certificate of
incorporation. Such a restriction in the Bylaws violates Delaware law.
23. Article IX, Section 4 of the Bylaws also purports to deny the
right of the stockholders of Barrett to act by written consent to amend the
Bylaws.
24. The poison pill and the Bylaws restrain and impair the ability of
Barrett
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stockholders to affect corporate policy by, inter alia, impeding shareholder
ability to accumulate shares and associate together to replace incumbent
management, oppose management initiatives, or otherwise affect corporate policy
through stockholder action, particularly by written consent. By effectively
preventing any single party from owning and thereby voting greater than 15% of
the outstanding common shares, management clearly has a significant advantage in
any proxy contest which might threaten to eliminate or diminish their control
over Barrett. The poison pill and the Bylaws thereby serve to perpetuate senior
management's control over the business and operations of the Company and to
frustrate potential bidders of Barrett.
25. The Shell Offer represents an opportunity to effect a change of
control of Barrett, its business and affairs. In a change of control
transaction, the Individual Defendants necessarily and inherently suffer from a
conflict of interest between their own personal desires to retain their offices
in Barrett, with the emoluments and prestige which accompany those offices, and
their fiduciary obligation to maximize shareholder value in a change of control
transaction. Because of such conflict of interest, the Individual Defendants are
unable to represent the interests of Barrett's public stockholders with the
impartiality that their fiduciary duties require, nor are they able to ensure
that their conflicts of interest will be resolved in the best interests of
Barrett's public stockholders.
26. Defendants' fiduciary obligations require them to:
(a) undertake an appropriate evaluation of any bona fide offers, and
take appropriate steps to solicit all potential bids for the Company or its
assets or consider strategic alternatives; and
(b) adequately ensure that no conflicts of interest exist between
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defendants' own interests and their fiduciary obligations to the public
stockholders of Barrett.
27. The Individual Defendants' failure to adequately negotiate with
Shell, auction the Company and/or invite other bidders, constitutes a violation
of their fiduciary duties owed to the public stockholders of Barrett.
28. By virtue of the acts and conduct alleged herein, the Individual
Defendants, who direct the actions of the Company, are carrying out a
preconceived plan and scheme, through the poison pill and the invalid Bylaws,
among other things, to entrench themselves in office and to protect and advance
their own parochial interests at the expense of the Class.
29. Plaintiff and other Class members are immediately threatened by
the wrongs complained of herein which have caused and will cause irreparable
injury to them.
30. Unless enjoined by this Court, the Individual Defendants will
continue to breach their fiduciary duties owed to plaintiff and the other
members of the Class to the irreparable harm of 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 appointing
plaintiff as class representative;
(b) ordering the Individual Defendants to carry out their
fiduciary duties to plaintiff and the other members of the Class by announcing
their intention to undertake an appropriate evaluation of alternatives designed
to maximize value for Barrett's public
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stockholders including negotiating with Shell or any other bona fide offeror;
(c) preliminarily and permanently enjoining defendants from deploying
the poison pill except to maximize shareholder value;
(d) declaring that the Advance Notice Bylaw is invalid and enjoining
the Company or anyone acting on its behalf or in concert with it from enforcing
the Advance Notice Bylaw;
(e) declaring that the purported prohibition on the ability of the
stockholders to amend the Bylaws by written consent is invalid and enjoining the
Company or anyone acting on its behalf or in concert with it from enforcing such
provision;
(f) ordering defendants, jointly and severally, to account to
plaintiff and the other members of the Class for all damages suffered and to be
suffered by them as a result of the wrongs complained of herein;
(g) awarding plaintiff the costs and disbursements of this action,
including a reasonable allowance for plaintiff's attorney's fees and experts'
fees; and
(h) granting such other and further relief as this Court may deem to
be just and proper.
ROSENTHAL, MONHAIT GROSS
& GODDESS, P.A.
By
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Suite 1401, Mellon Bank Center
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OF COUNSEL
GOODKIND LABATON RUDOFF
& SUCHAROW LLP
100 Park Avenue, 12th floor
New York, NY 10017
(212) 907-0700
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