1
Exhibit (a)(1)
OFFER TO PURCHASE FOR CASH
16,730,502 SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
BARRETT RESOURCES CORPORATION
AT
$73.00 NET PER SHARE
BY
RESOURCES ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
THE WILLIAMS COMPANIES, INC.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, EASTERN TIME, ON MONDAY, JUNE 11, 2001,
UNLESS THE OFFER IS EXTENDED.
The Offer (as defined herein) is being made pursuant to an Agreement and
Plan of Merger, dated as of May 7, 2001, by and among The Williams Companies,
Inc. ("Williams"), Resources Acquisition Corp. ("Purchaser") and Barrett
Resources Corporation ("Barrett Resources"). The Board of Directors of Barrett
Resources has unanimously approved the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger (as defined herein),
and has unanimously determined that the Offer and the Merger are advisable and
fair to, and in the best interests of, Barrett Resources' stockholders and
unanimously recommends that stockholders accept the Offer and tender their
Shares (as defined herein) pursuant to the Offer and approve the Merger at the
time of the Barrett Resources Special Meeting (as defined herein). If the Offer
and the Merger are completed, Purchaser will purchase 16,730,502 Shares in the
Offer at a price of $73.00 per Share and holders of the remaining Shares
(including any Shares returned to tendering stockholders as a result of
proration) will receive 1.767 shares of Williams Common Stock (as defined
herein) for each Share in the Merger.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED HEREIN) AT
LEAST 16,730,502 SHARES, AND (2) THE EXPIRATION OR TERMINATION OF THE WAITING
PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER. THE OFFER IS ALSO
SUBJECT TO THE OTHER CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE. THE OFFER
IS NOT SUBJECT TO A FINANCING CONDITION. SEE SECTION 14.
A summary of the principal terms of the Offer appears on pages (iii)
through (viii). You should read this entire document carefully before deciding
whether to tender your Shares.
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
May 14, 2001
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IMPORTANT
If you want to tender all or some of your Shares, you should either (i)
complete and sign the enclosed Letter of Transmittal (or facsimile thereof) by
following the Instructions in the Letter of Transmittal, have your signature on
the Letter of Transmittal guaranteed (if required by Instruction 1 to the Letter
of Transmittal), mail or deliver the Letter of Transmittal (or a facsimile
thereof) and any other required documents to the Depositary (as defined herein)
and either deliver the certificates for the Shares you are tendering to the
Depositary or tender the Shares by book-entry transfer as described in Section 3
of this Offer to Purchase or (ii) request that your broker, dealer, commercial
bank, trust company or other nominee tender your Shares for you. If your Shares
are registered in the name of a broker, dealer, commercial bank, trust company
or other nominee, you must contact that broker, dealer, commercial bank, trust
company or other nominee in order for them to tender your Shares.
If you want to tender Shares but the certificates for your Shares are not
immediately available, or if you cannot tender by book-entry transfer or cannot
deliver all required documents to the Depositary before the Offer expires, you
can tender your Shares by following the procedures for guaranteed delivery that
are described in Section 3 of this Offer to Purchase.
Questions and requests for assistance can be made to the Dealer Manager or
the Information Agent at their respective address and telephone numbers on the
back cover of this Offer to Purchase. Requests for additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
and other tender offer materials can be made to the Dealer Manager or the
Information Agent or brokers, dealers, commercial banks or trust companies.
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TABLE OF CONTENTS
PAGE
----
SUMMARY TERM SHEET.......................................... -iii-
INTRODUCTION................................................ -1-
1. TERMS OF THE OFFER................................... -4-
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES;
PRORATION............................................ -6-
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING
SHARES............................................... -7-
4. WITHDRAWAL RIGHTS.................................... -10-
5. MATERIAL UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES......................................... -11-
6. PRICE RANGE OF THE SHARES; DIVIDENDS................. -14-
7. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE
SHARES; NYSE LISTING; EXCHANGE ACT REGISTRATION;
MARGIN REGULATIONS................................... -14-
8. CERTAIN INFORMATION CONCERNING BARRETT RESOURCES..... -16-
9. CERTAIN INFORMATION CONCERNING WILLIAMS AND
PURCHASER............................................ -22-
10. BACKGROUND OF THE OFFER.............................. -23-
11. PURPOSE OF THE OFFER AND THE MERGER; THE MERGER
AGREEMENT; EFFECTS OF INABILITY TO CONSUMMATE THE
MERGER; STATUTORY REQUIREMENTS; APPRAISAL RIGHTS;
PLANS FOR BARRETT RESOURCES; CONFIDENTIALITY
AGREEMENTS; "GOING PRIVATE" TRANSACTIONS............. -28-
12. SOURCE AND AMOUNT OF FUNDS........................... -42-
13. DIVIDENDS AND DISTRIBUTIONS.......................... -43-
14. CONDITIONS OF THE OFFER.............................. -43-
15. LEGAL MATTERS; REQUIRED REGULATORY APPROVALS......... -45-
16. FEES AND EXPENSES.................................... -47-
17. MISCELLANEOUS........................................ -48-
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
WILLIAMS AND PURCHASER.................................... -49-
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SUMMARY TERM SHEET
The Williams Companies, Inc. ("Williams"), through its wholly-owned
subsidiary, Resources Acquisition Corp. ("Purchaser", "we" or "us"), is offering
to purchase (the "Offer") 16,730,502 shares of the common stock, par value $0.01
per share (including the associated preferred stock purchase rights, the
"Shares") of Barrett Resources Corporation ("Barrett Resources") for $73.00 per
Share, net to you in cash, pursuant to an Agreement and Plan of Merger, dated as
of May 7, 2001, by and among Williams, Purchaser and Barrett Resources (the
"Merger Agreement"). The following are some of the questions you, as a
stockholder of Barrett Resources, may have and answers to those questions. You
should carefully read this Offer to Purchase and the accompanying Letter of
Transmittal in their entirety because the information in this summary term sheet
is not complete and additional important information is contained in the
remainder of this Offer to Purchase and the Letter of Transmittal.
WHO IS OFFERING TO BUY MY SECURITIES? WHY?
Our name is Resources Acquisition Corp. We are a Delaware corporation
formed for the purpose of making a tender offer for the Shares and consummating
the acquisition of Barrett Resources. We are a wholly-owned subsidiary of The
Williams Companies, Inc., a Delaware corporation whose shares of common stock
are listed on the New York Stock Exchange ("NYSE"). This tender offer is the
first step in Williams' plan to acquire all of the outstanding Shares of Barrett
Resources on the terms provided for in the Merger Agreement. See "Introduction".
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
We are seeking to purchase 16,730,502 of the outstanding Shares of Barrett
Resources for $73.00 per Share, net to you in cash. See "Introduction".
WHAT IS THE PURPOSE OF THE OFFER?
The purpose of the Offer is to enable Williams to acquire approximately
50% of the outstanding Shares. Following the Offer, Purchaser and Williams
intend to acquire the remaining capital stock of Barrett Resources that was not
acquired in the Offer in a merger transaction. See "Introduction" and Section
11, "Purpose of the Offer and the Merger" and "-- Plans for Barrett Resources".
IF PURCHASER SUCCEEDS IN PURCHASING THE SHARES OF BARRETT RESOURCES IT IS
SEEKING TO BUY IN THE OFFER, WHAT WILL HAPPEN TO MY REMAINING SHARES AFTER THE
OFFER?
If we accept for payment and pay for 16,730,502 Shares, Barrett Resources
is expected to be merged with and into us. Additionally, if we accept for
payment and pay for 16,730,502 Shares, we would effectively have sufficient
voting power to approve the merger without the affirmative vote of other
stockholders of Barrett Resources. Barrett Resources, as a result, would become
a wholly-owned subsidiary of Williams. If the merger takes place, Williams will
own all of the capital stock of Barrett Resources and all remaining stockholders
(other than Barrett Resources, Williams, Purchaser, or other subsidiaries of
Williams) will receive shares of Williams common stock in exchange for each of
their Shares.
WHAT WILL BE PAID TO STOCKHOLDERS OF BARRETT RESOURCES IN THE MERGER AND WHAT IS
THE FORM OF PAYMENT?
Williams will issue 1.767 shares of its common stock in the merger in
exchange for each Share. Based on the closing sale price of the Williams common
stock on the NYSE on Friday, May 4, 2001, the last full trading day before the
date of announcement of the execution of the Merger Agreement, the 1.767 shares
of Williams common stock that would be issued for each Share in the merger had a
value of $73.63. Based on the closing sale price of Williams common stock on the
NYSE on Friday, May 11, 2001, the last full NYSE trading day before the date of
this Offer to Purchase, the 1.767 shares of Williams common stock that would be
issued for each Share in the merger had a value of $71.09.
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THE MARKET VALUE OF THE SHARES OF WILLIAMS COMMON STOCK THAT YOU AS A BARRETT
RESOURCES STOCKHOLDER WOULD RECEIVE IN THE MERGER WILL VARY AS A RESULT OF THE
FIXED EXCHANGE RATIO AS THE WILLIAMS COMMON STOCK PRICE FLUCTUATES.
The exchange ratio of 1.767 shares of Williams common stock per Barrett
Resources Share is a fixed ratio that will not be adjusted as a result of any
increase or decrease in the market price of either shares of Williams common
stock or Barrett Resources Shares. The market price of shares of Williams common
stock at the time the merger is completed may be higher or lower than the price
on the date of this document, on the date of completion of the Offer and on the
date of the special meeting of stockholders of Barrett Resources to be held to
vote on the merger. Various factors may affect the price of shares of Williams
common stock, including:
- changes in the business, operations, or prospects of Barrett Resources
or Williams;
- market assessments of the benefits of the merger and of the likelihood
that the merger will be completed; and
- general market, industry and economic conditions.
To a large extent, these factors are beyond our control, Williams' control or
the control of Barrett Resources.
Because the merger will be completed only after the special meeting of
Barrett Resources stockholders, there is no way to be sure that the price of the
shares of Williams common stock now, at the time of the completion of the Offer
or on the date of the special meeting, will be indicative of its price when the
merger is completed. The market price of Williams common stock may increase and
decrease significantly before and after completion of the merger. As a result,
the Williams common stock you as a Barrett Resources stockholder receive in the
merger may be worth more or less than the price being offered for the Shares in
the Offer. WE URGE YOU TO OBTAIN CURRENT MARKET QUOTATIONS FOR BOTH BARRETT
RESOURCES SHARES AND SHARES OF WILLIAMS COMMON STOCK BEFORE DECIDING WHETHER TO
TENDER YOUR SHARES.
WHAT WILL HAPPEN IF MORE THAN 16,730,502 SHARES ARE VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION DATE OF THE OFFER?
If more than 16,730,502 Shares are validly tendered and not withdrawn
prior to the expiration date of the Offer (the "Expiration Date"), we will
accept for payment and pay for only 16,730,502 Shares on a pro rata basis (with
appropriate adjustments to avoid purchase of fractional Shares) based on the
number of Shares properly tendered by each stockholder prior to or on the
Expiration Date.
HOW MUCH ARE YOU OFFERING TO PAY FOR MY SHARES IN THE OFFER AND WHAT IS THE FORM
OF PAYMENT? WILL I HAVE TO PAY ANY FEES OR COMMISSIONS?
We are offering to pay $73.00 per Share in the Offer, net to you in cash.
If you tender your Shares to us in the Offer, you will not have to pay brokerage
fees, commissions or similar expenses. However, if you own your Shares through a
broker or other nominee, and your broker tenders your Shares on your behalf,
your broker or nominee may charge you a fee for doing so. You should consult
your broker or nominee to determine whether any charges will apply.
WHAT ARE THE TAX CONSEQUENCES OF THE SALE OF SHARES TO PURCHASER THROUGH THE
OFFER?
The sale of Shares to Purchaser through the Offer is a taxable transaction
for United States federal income tax purposes, and may also be taxable under
applicable state, local and other tax laws. If you sell all of your Shares to
Purchaser through the Offer, you will recognize a gain or loss equal to the
difference between the amount of cash that you receive from Purchaser for the
Shares and your tax basis in such Shares.
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Even if you tender all of your Shares in the Offer, you may have some but
not all of your tendered Shares accepted for purchase by us pursuant to the
terms of the Offer, as a result of proration. Where you sell some of your Shares
to us through the Offer and exchange the rest of your Shares for Williams common
stock pursuant to the merger of Barrett Resources with and into us, you will
recognize gain (but not loss) equal to the lesser of (i) the amount of cash you
receive pursuant to the Offer and (ii) an amount equal to the excess, if any, of
(a) the sum of the amount of cash you receive pursuant to the Offer and the fair
market value of the Williams common stock you receive pursuant to the merger
over (b) the tax basis of your Shares.
If certain conditions relating to the United States federal income tax
treatment of the Offer and the merger of Barrett Resources with and into us are
not met, then we may, at Williams' reasonable discretion, be merged with and
into Barrett Resources. In this case, instead of the tax consequences described
in the immediately preceding paragraph, you will recognize all of your gain or
loss on the disposition of your Shares in the Offer and/or such a reverse
merger.
We encourage you to consult your own tax advisor about the effect the
Offer will have on you. See Section 5, "Material United States Federal Income
Tax Consequences".
WHAT ARE THE TAX CONSEQUENCES OF THE MERGER?
In general, if you do not sell any of your Shares to us through the Offer
and exchange all of your Shares for Williams common stock pursuant to the merger
of Barrett Resources with and into us, you will not recognize any gain or loss
on the exchange except with respect to any cash you receive in lieu of a
fractional share of Williams common stock. If you sell some of your Shares to us
through the Offer and exchange the rest of your Shares for Williams common stock
pursuant to the merger of Barrett Resources with and into us, you will recognize
gain (but not loss) equal to the lesser of (i) the amount of cash you receive
pursuant to the Offer and (ii) an amount equal to the excess, if any, of (a) the
sum of the amount of cash you receive pursuant to the Offer and the fair market
value of the Williams common stock you receive pursuant to the merger over (b)
the tax basis of your Shares.
If certain conditions relating to the United States federal income tax
treatment of the Offer and the merger of Barrett Resources with and into us are
not met, then Purchaser may, at Williams' reasonable discretion, be merged with
and into Barrett Resources. In this case, instead of the tax consequences
described in the immediately preceding paragraph, you will recognize all of your
gain or loss on the disposition of your Shares in the Offer and/or such a
reverse merger.
We encourage you to consult your own tax advisor about the effect the
merger will have on you. See Section 5, "Material United States Federal Income
Tax Consequences".
DOES PURCHASER HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
Yes. We will need approximately $1.23 billion to purchase the 16,730,502
Shares we are seeking to buy in the Offer and to pay related fees and expenses.
In addition, Barrett Resources has agreed in the Merger Agreement to seek the
consent of the bank lenders under its credit agreement to permit it to
consummate the transactions contemplated by the Merger Agreement without
repaying the indebtedness under its credit agreement. If such bank consents are
not obtained, Williams would need approximately $145 million of additional funds
to repay the indebtedness under the credit agreement. It is anticipated that
such funds will be obtained by Williams under its existing commercial paper
program and revolving credit agreements. If we are unable to utilize the
foregoing financing arrangements, Williams will seek alternative financing. See
Section 12, "Source and Amount of Funds".
IS WILLIAMS' FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
Because the form of payment in the Offer consists solely of cash and the
Offer is not subject to a financing condition, we do not think Williams'
financial condition is material to your decision as to whether to tender in the
Offer. However, as noted above, if the Offer is completed you would receive, for
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each Share you continue to hold after the Offer, 1.767 shares of Williams common
stock in the subsequent merger, which may have a market value higher or lower
than $73.00 at the time of the merger. If you would like additional information
about Williams' financial condition, please see Section 9, "Certain Information
Concerning Williams and Purchaser".
HAS THE BOARD OF DIRECTORS OF BARRETT RESOURCES APPROVED THE MERGER?
Yes. The Board of Directors of Barrett Resources convened a meeting on May
7, 2001 and unanimously approved the Offer and merger on the terms set forth in
the Merger Agreement. Barrett Resources' financial advisors, Goldman, Sachs &
Co. and Petrie Parkman & Co., Inc., each delivered a written opinion dated May
7, 2001 to the Board of Directors that, as of that date and on the basis of and
subject to the matters described in such opinion, the consideration to be
received by Barrett Resources' stockholders in the Offer and merger, taken
together, was fair from a financial point of view to those stockholders.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You have until at least 12:00 midnight, eastern time, on Monday, June 11,
2001, to tender your Shares in the Offer. If you cannot deliver everything
required to make a valid tender to EquiServe Trust Company, N.A. ("EquiServe"),
the depositary for the Offer, prior to such time, you may be able to use a
guaranteed delivery procedure, which is described in Section 3, "Procedures for
Accepting this Offer and Tendering Shares".
CAN THE OFFER BE EXTENDED AND, IF SO, UNDER WHAT CIRCUMSTANCES?
Unless the Merger Agreement is previously terminated in accordance with
its terms, if the conditions to the Offer are not satisfied on the scheduled
Expiration Date of the Offer, the Expiration Date would be extended to a later
date, but in no event later than August 31, 2001. See Section 14, "Conditions of
the Offer". Such conditions include that (i) there be validly tendered and not
withdrawn at least 16,730,502 Shares (we call this condition the "Minimum
Condition") and (ii) the waiting period under applicable antitrust laws shall
have expired or been terminated.
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If we decide to extend the Offer, at the time the Offer is currently
scheduled to expire we will inform EquiServe, the depositary for the Offer, of
that fact and will make a public announcement of the extension not later than
9:00 a.m., eastern time, on the next business day after the day on which the
Offer was previously scheduled to expire.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
We are not obligated to purchase any Shares which are validly tendered
unless at least 16,730,502 Shares are validly tendered and not withdrawn. In
addition, our obligation to purchase Shares in the Offer is conditioned upon,
among other things, the expiration or termination of the applicable waiting
period under applicable antitrust laws. See Section 14, "Conditions of the
Offer".
HOW DO I TENDER MY SHARES?
To tender Shares, you must deliver the certificates representing your
Shares, together with a completed Letter of Transmittal, to EquiServe, the
depositary for the Offer, not later than the Expiration Date. If your Shares are
held in street name by your broker, dealer, bank, commercial bank, trust company
or other nominee, such nominee can tender your Shares for you. If you cannot
deliver everything required to make a valid tender to the depositary prior to
the Expiration Date, you may have a limited amount of additional time to tender
by having a broker, a bank or other fiduciary which is a member of the
Securities Transfer Agents Medallion Program or other eligible institution
guarantee that the missing items will be received by the depositary within three
NYSE trading days. However, the depositary must
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receive the missing items within that three trading day period. See Section 3,
"Procedure for Tendering Shares".
UNTIL WHAT TIME CAN I WITHDRAW TENDERED SHARES?
You can withdraw tendered Shares at any time until the Offer has expired
and, if we have not agreed to accept your Shares for payment by Friday, July 13,
2001, you can withdraw your tendered Shares at any time after July 13, 2001
until we accept Shares for payment. See Section 4, "Withdrawal Rights".
HOW DO I WITHDRAW TENDERED SHARES?
To withdraw Shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to EquiServe, the depositary,
while you have the right to withdraw the Shares.
WHEN AND HOW WILL I BE PAID FOR MY TENDERED SHARES?
Subject to the terms and conditions of the Offer, we will pay for
16,730,502 Shares tendered and not withdrawn as soon as practicable after the
Expiration Date, subject to the satisfaction or waiver of the conditions to the
Offer, as set forth in Section 14, "Conditions of the Offer". We do, however,
reserve the right, in our sole discretion and subject to applicable law, to
delay payment for Shares in order to comply with applicable law. All Shares not
purchased in the Offer, including as a result of proration, will be returned to
their respective holders.
In all cases, payment for tendered Shares will be made only after timely
receipt by EquiServe of certificates for such Shares (or of a confirmation of a
book-entry transfer of such shares as described in Section 3, "Procedures for
Accepting the Offer and Tendering Shares"), a properly completed and duly
executed Letter of Transmittal (or an Agent's Message (as defined in Section 3)
in connection with a book-entry transfer) and any other required documents for
such Shares.
We will pay for 16,730,502 Shares validly tendered and not withdrawn by
depositing the aggregate purchase price for such Shares with EquiServe, the
depositary, which will act as your agent for the purpose of receiving payments
from us and transmitting such payments to you.
As noted earlier, if more than 16,730,502 Shares are validly tendered and
not withdrawn, we will accept for payment and pay for only 16,730,502 Shares on
a pro rata basis (with appropriate adjustments to avoid purchase of fractional
Shares) based on the number of Shares properly tendered by each stockholder.
Because of the difficulty of determining the precise number of Shares properly
tendered and not withdrawn (due in part to the guaranteed delivery procedures
described in Section 3), Williams does not expect that it will be able to
announce the final results of proration or pay for any Shares until at least
five NYSE trading days after the Expiration Date. Preliminary results of
proration will be announced by press release as promptly as practicable after
the Expiration Date. You may obtain such preliminary information from the
Information Agent and may be able to obtain such information from your broker.
HAVE ANY STOCKHOLDERS OF BARRETT RESOURCES AGREED TO VOTE IN FAVOR OF THE
MERGER?
No. However, if the Offer is completed, Barrett Resources will hold a
special meeting of its stockholders to vote on the approval of the merger. At
that special meeting, we will vote the Shares purchased by us in the Offer in
favor of the merger and the adoption of the Merger Agreement.
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IF 16,730,502 SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WHAT WILL HAPPEN TO
BARRETT RESOURCES AFTER THE OFFER?
The Merger Agreement provides for Barrett Resources to merge with and into
us, unless certain conditions relating to the United States federal income tax
treatment of the Offer and the merger of Barrett Resources with and into us are
not met, in which case Purchaser may, at Williams' reasonable discretion, be
merged with and into Barrett Resources. The merger is dependent on Barrett
Resources stockholders that own at least a majority of the Shares outstanding on
the record date (set to determine those persons entitled to vote on the merger)
voting in favor of the merger. If the Offer is successful, Williams will
beneficially own at least 16,730,502 Shares, which amount of Shares is expected
to constitute approximately 50% of the outstanding Shares, which would
effectively give us the voting power to approve the merger without the
affirmative vote of other stockholders. We have agreed to vote all these Shares
in favor of the merger.
Therefore, if we acquire 16,730,502 Shares pursuant to the Offer or
otherwise, Barrett Resources and Purchaser will merge. Once the merger takes
place, Barrett Resources will no longer be publicly owned and will instead
become a wholly-owned subsidiary of Williams and Shares of Barrett Resources
will no longer be traded through the NYSE or on any other securities exchange.
See "Introduction" and Section 7, "Possible Effects of the Offer on the Market
for the Shares; NYSE Listing; Exchange Act Registration; Margin Regulations".
IF I DECIDE NOT TO TENDER AND THE OFFER IS COMPLETED, HOW WILL MY SHARES BE
AFFECTED?
If the Offer is completed and the merger takes place, stockholders not
tendering in the Offer (other than Barrett Resources, Williams, Purchaser, and
any other subsidiary of Williams) will receive, for each Share they hold, 1.767
shares of Williams common stock. Therefore, if the Offer is completed and the
merger takes place, the difference to you between tendering your Shares and not
tendering your Shares is that (i) if you tender you will be paid cash for at
least half (or more, depending on proration) of the Shares that you tender in
the Offer and (ii) if you do not tender you will receive only shares of Williams
common stock in exchange for your Shares that you do not tender in the Offer.
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On May 4, 2001, the last full NYSE trading day before we announced the
execution of the Merger Agreement, the closing price of the Shares of Barrett
Resources reported on the NYSE was $67.30 per Share. On May 11, 2001, the last
full trading day before the date of this Offer to Purchase, the closing price of
the Shares reported on the NYSE was $71.08 and on March 6, 2001, the last full
trading day before Shell Oil Company disclosed its unsolicited bid for Barrett
Resources, the closing price of the Shares reported on the NYSE was $45.62. We
advise you to obtain a recent quotation for Shares before deciding whether to
tender your Shares.
WHAT HAPPENED TO THE SHELL OFFER?
On May 7, 2001, the day Williams and Barrett Resources announced that they
had executed the Merger Agreement, Shell Oil Company and its subsidiary, SRM
Acquisition Company, terminated their offer to acquire Barrett Resources.
WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER?
You can call Georgeson Shareholder Communications, Inc., the information
agent for the Offer, at (800) 223-2064 (toll free) or banks and brokers can call
(212) 440-9800 (call collect) or Merrill Lynch & Co., the dealer manager for the
Offer, at (212) 236-3790 (call collect).
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To: All Holders of Shares of Common Stock
of Barrett Resources Corporation:
INTRODUCTION
Resources Acquisition Corp. ("Purchaser", "we" or "us"), a wholly-owned
subsidiary of The Williams Companies, Inc. ("Williams"), hereby offers to
purchase a total of 16,730,502 shares of common stock, par value $0.01 per share
(including the associated Barrett Resources Rights (as defined herein), the
"Shares"), of Barrett Resources Corporation ("Barrett Resources") at a purchase
price of $73.00 per Share, net to the seller in cash, without interest (the
"Offer Price"), on the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which, as amended or
supplemented from time to time, together constitute the "Offer").
Tendering stockholders whose Shares are registered in their own name and
who tender directly to the Depositary (as described below) will not be required
to pay brokerage fees or commissions or, except as described in Instruction 6 of
the Letter of Transmittal, stock transfer taxes on the sale of Shares in the
Offer. However, if you do not complete and sign the Substitute Form W-9 that is
included in the Letter of Transmittal, you may be subject to a required backup
federal income tax withholding of 31% of the gross proceeds payable to you. See
Section 3. We will pay all charges and expenses of Merrill Lynch & Co. ("Merrill
Lynch"), as dealer manager (the "Dealer Manager"), EquiServe Trust Company,
N.A., as depositary (the "Depositary"), and Georgeson Shareholder
Communications, Inc., as information agent (the "Information Agent"), incurred
in connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF BARRETT RESOURCES HAS UNANIMOUSLY APPROVED THE OFFER,
THE MERGER (AS DEFINED HEREIN) AND THE MERGER AGREEMENT (AS DEFINED HEREIN), HAS
DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND THE MERGER, ARE ADVISABLE AND ARE FAIR TO AND IN THE
BEST INTERESTS OF THE STOCKHOLDERS OF BARRETT RESOURCES AND RECOMMENDS THAT
STOCKHOLDERS OF BARRETT RESOURCES ACCEPT THE OFFER, TENDER THEIR SHARES PURSUANT
TO THE OFFER AND APPROVE AND ADOPT THE MERGER AGREEMENT AND THE MERGER AT THE
TIME OF THE BARRETT RESOURCES SPECIAL MEETING (AS DEFINED HEREIN).
For a discussion of the Barrett Resources Board's recommendation, see Item
4, "The Solicitation or Recommendation" set forth in Barrett Resources'
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"),
which is being mailed to stockholders with this Offer to Purchase.
To the extent that more than 16,730,502 Shares are tendered in the Offer,
Purchaser will purchase 16,730,502 Shares in the Offer on a pro rata basis (with
appropriate adjustments to avoid purchase of fractional Shares) based on the
number of Shares properly tendered by each stockholder prior to or on the
Expiration Date (as defined below) and not withdrawn. See Sections 2 and 3.
We are not required to purchase any Shares unless at least 16,730,502
Shares are validly tendered and not withdrawn prior to the expiration of the
Offer (the "Minimum Condition"). Unless Barrett Resources consents, we may not
waive or reduce the Minimum Condition or elect to purchase all tendered Shares
if the Minimum Condition is not met. See Sections 1, 14 and 15.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, APPLICABLE TO
THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN TERMINATED.
THE OFFER IS NOT SUBJECT TO A FINANCING CONDITION. THE OFFER IS ALSO SUBJECT TO
CERTAIN OTHER TERMS AND CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE. SEE
SECTIONS 1, 14 AND 15.
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We are making the Offer pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of May 7, 2001, by and among Williams, Purchaser
and Barrett Resources. Following the consummation of the Offer and the
satisfaction or waiver of the conditions set forth in the Merger Agreement,
Barrett Resources will merge with and into Purchaser with Purchaser continuing
as the surviving corporation, unless certain conditions related to the United
States federal income tax treatment of the Offer and the merger of Barrett
Resources with and into Purchaser are not satisfied, in which case Purchaser
may, at Williams' reasonable discretion, merge with and into Barrett Resources
with Barrett Resources continuing as the surviving corporation. Whichever merger
shall occur, as described above, is referred to herein as the "Merger". In the
Merger, stockholders of Barrett Resources will have each of their Shares (other
than Shares held by Barrett Resources, Williams, Purchaser or any other
subsidiary of Williams) converted into 1.767 shares of Williams common stock,
par value $1.00 per share (including the associated Williams Rights (as defined
herein), the "Williams Common Stock"), with cash in lieu of fractional shares.
Section 11 contains a more detailed description of the Merger Agreement and the
consideration payable in the Merger in respect of the Shares. Section 5
describes the principal United States federal income tax consequences of the
sale or exchange of Shares in the Offer and the Merger. As used herein,
"Williams Rights" means the Series A Junior Participating Preferred Stock
purchase rights issued pursuant to the Rights Agreement dated as of February 6,
1996, between Williams and First Chicago Trust Company of New York, as amended.
As noted above, each Share will be converted into 1.767 shares of Williams
Common Stock in the Merger. Based on the closing sale price of the Williams
Common Stock reported on the New York Stock Exchange ("NYSE") on Friday, May 4,
2001, the last full trading day before the date of announcement of the execution
of the Merger Agreement, the 1.767 shares of Williams Common Stock that would be
issued for each Share in the Merger had a value of $73.63. Based on the closing
sale price of Williams Common Stock reported on the NYSE on Friday, May 11,
2001, the last full trading day before the date of this Offer to Purchase, the
1.767 shares of Williams Common Stock that would be issued for each Share in the
Merger had a value of $71.09.
THE MARKET VALUE OF THE SHARES OF WILLIAMS COMMON STOCK THAT BARRETT RESOURCES
STOCKHOLDERS WILL RECEIVE IN THE MERGER WILL VARY AS A RESULT OF THE FIXED
EXCHANGE RATIO AS THE WILLIAMS COMMON STOCK PRICE FLUCTUATES.
The exchange ratio of 1.767 shares of Williams Common Stock per Barrett
Resources Share is a fixed ratio that will not be adjusted as a result of any
increase or decrease in the market price of either shares of Williams Common
Stock or the Shares. The market price of shares of Williams Common Stock at the
time the Merger is completed may be higher or lower than the price on the date
of the Merger Agreement, the date of this Offer, the date of completion of this
Offer or the date of the Barrett Resources Special Meeting to be held to vote on
the Merger. If the market price of Williams Common Stock decreases before the
Merger, no additional shares of Williams Common Stock will be received by
Barrett Resources' stockholders to make up for the decrease in the market value
of the Williams Common Stock, and accordingly, the market value of the Williams
Common Stock to be received by Barrett Resources' stockholders would decrease.
Various factors may affect the prices of shares of Williams Common Stock,
including:
- changes in the business, operations, or prospects of Barrett Resources
or Williams;
- market assessments of the benefits of the Merger and of the likelihood
that the Merger will be completed; and
- general market, industry and economic conditions.
To a large extent, these factors are beyond our control, Williams' control or
the control of Barrett Resources.
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Because the Merger will be completed only after the Barrett Resources
Special Meeting, there is no way to be sure that the price of the shares of
Williams Common Stock now, or at the time of the completion of the Offer, will
be indicative of its price on the date the Merger is completed. The market price
of Williams Common Stock may increase and decrease significantly before and
after completion of the Merger. As a result, the $73.00 per Share that a Barrett
Resources stockholder receives in the Offer may be worth more or less than the
shares of Williams Common Stock to be received in the Merger. WE URGE YOU TO
OBTAIN CURRENT MARKET QUOTATIONS FOR BOTH THE SHARES AND THE WILLIAMS COMMON
STOCK BEFORE DECIDING WHETHER TO TENDER YOUR SHARES IN THE OFFER.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF THE
STOCKHOLDERS OF BARRETT RESOURCES OR ANY OFFER TO SELL OR SOLICITATION OF OFFERS
TO BUY WILLIAMS COMMON STOCK OR OTHER SECURITIES. ANY SUCH SOLICITATION WILL BE
MADE ONLY PURSUANT TO SEPARATE PROXY MATERIALS PURSUANT TO THE REQUIREMENTS OF
SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE
ACT"), AND ANY SUCH OFFER WILL BE MADE ONLY THROUGH A REGISTRATION STATEMENT AND
PROSPECTUS PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), WHICH PROSPECTUS WILL ALSO CONSTITUTE A PROXY
STATEMENT FOR THE BARRETT RESOURCES SPECIAL MEETING OF STOCKHOLDERS TO BE HELD
TO VOTE UPON THE MERGER AND THE MERGER AGREEMENT.
Goldman, Sachs & Co. ("Goldman Sachs") and Petrie Parkman & Co., Inc.
("Petrie Parkman"), Barrett Resources' financial advisors, each delivered to the
Board of Directors of Barrett Resources its written opinion, dated May 7, 2001,
that as of that date and on the basis of and subject to the matters described in
such opinion, the consideration to be received by holders of Shares in the Offer
and the Merger, taken together, was fair from a financial point of view to such
holders. Copies of the Goldman Sachs and Petrie Parkman opinions are included
with Barrett Resources' Solicitation/Recommendation Statement on Schedule 14D-9,
which is being mailed with this Offer to Purchase. Stockholders are urged to
read both opinions in their entirety, each of which sets forth the procedures
followed, matters reviewed and assumptions made by Goldman Sachs and Petrie
Parkman in preparing their respective opinions.
The consummation of the Merger is subject to the satisfaction of certain
conditions, including the approval and adoption of the Merger Agreement and the
Merger by the affirmative vote of a majority of the outstanding Shares (the
"Barrett Resources Stockholder Approval"). Barrett Resources has agreed to
convene a special meeting of its stockholders for such purpose (the "Barrett
Resources Special Meeting") as promptly as practicable after the consummation of
the Offer and after the registration statement for the Williams Common Stock to
be exchanged for Shares pursuant to the Merger becomes effective. If Purchaser
acquires (pursuant to the Offer or otherwise) approximately 50% of the
outstanding Shares (which is expected to occur if the Minimum Condition is met),
Purchaser will effectively have sufficient voting power to approve and adopt the
Merger Agreement and the Merger without the vote of other stockholders of
Barrett Resources.
The Merger Agreement provides that, promptly upon the purchase of Shares
by Purchaser pursuant to the Offer, we will be entitled to designate a number of
directors to the Barrett Resources Board, rounded up to the next whole number,
which equals the product obtained by multiplying the total number of directors
on Barrett Resources' Board (giving effect to the directors designated by us
pursuant to the provisions of the Merger Agreement) by the percentage that the
number of Shares accepted for payment pursuant to the Offer bears to the total
number of Shares then outstanding. In the Merger Agreement, Barrett Resources
has agreed to increase the size of its Board or exercise its best efforts to
secure the resignations of incumbent directors or both as is necessary to enable
Williams' designees to be elected to the Barrett Resources Board. Following the
Offer, it is anticipated that representatives of Williams will constitute at
least one-half of the members of the Barrett Resources Board of Directors.
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Barrett Resources has informed us that, as of May 3, 2001, there were (a)
33,461,004 Shares issued and outstanding and (b) 2,302,073 Shares subject to
issuance under outstanding options.
Pursuant to the Merger Agreement, Barrett Resources has amended the Rights
Agreement, dated as of August 5, 1997, as amended (the "Barrett Resources Rights
Agreement"), between Barrett Resources and Fleet National Bank, as successor to
BankBoston, N.A., as Rights Agent, in accordance with the terms of the Barrett
Resources Rights Agreement to provide that neither Williams nor Purchaser,
individually or collectively, shall be deemed an "Acquiring Person" and no
"Distribution Date" (as such terms are defined in the Barrett Resources Rights
Agreement) shall be deemed to occur solely as a result of (i) the announcement,
approval, execution or delivery of the Merger Agreement, (ii) the consummation
of the Offer and/or the Merger or (iii) the consummation of the other
transactions contemplated by the Merger Agreement. As used herein, the term
"Barrett Resources Rights" means the Series A Junior Participating Preferred
Stock purchase rights issued pursuant to the Barrett Resources Rights Agreement.
THE OFFER IS CONDITIONED UPON THE FULFILLMENT OF ALL OF THE CONDITIONS DESCRIBED
IN SECTION 14 BELOW. THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON
MONDAY, JUNE 11, 2001, UNLESS WE EXTEND IT.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH YOU SHOULD READ CAREFULLY BEFORE YOU MAKE ANY DECISION WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), we will purchase 16,730,502 Shares validly tendered and not
withdrawn in accordance with the procedures set forth in Section 4 of this Offer
to Purchase on or prior to the Expiration Date. To the extent more than
16,730,502 Shares are validly tendered and not withdrawn in the Offer, we will
purchase 16,730,502 Shares in the Offer on a pro rata basis (with appropriate
adjustments to avoid the purchase of fractional Shares) based on the number of
Shares properly tendered and not withdrawn by each stockholder prior to or on
the Expiration Date. In the event that proration of tendered Shares is required,
because of the difficulty of determining the precise number of Shares properly
tendered and not withdrawn (due in part to the guaranteed delivery procedure
described under Section 3), Purchaser does not expect that it will be able to
announce the final results of such proration or pay for any Shares until at
least five NYSE trading days after the Expiration Date. Preliminary results of
the proration will be announced by a press release as promptly as practicable
after the Expiration Date. Stockholders may obtain preliminary proration
information from the Information Agent and may also be able to obtain such
proration information from their brokers. Tendering stockholders will not
receive payment for Shares accepted for payment pursuant to the Offer, or Share
certificates for Shares returned as a result of proration or otherwise, until
the final proration factor is known. Because we are only offering to purchase a
fixed number of Shares in the Offer, there will be no subsequent offering
period.
Williams and Purchaser have agreed with Barrett Resources that we will not
terminate the Offer between scheduled Expiration Dates and that, in the event
that we would otherwise be entitled to terminate the Offer at any scheduled
Expiration Date due to the failure of one or more of the conditions to the
Offer, unless the Merger Agreement shall have been terminated pursuant to its
terms, Purchaser will, and Williams will cause Purchaser to, extend the Offer
for such period or periods as may be determined by Purchaser until such date as
the conditions to the Offer have been satisfied or such later date as required
by applicable law; provided, however, that Purchaser will not be required to
extend the Offer beyond August 31, 2001. Each of Williams and Barrett Resources
may also terminate the Merger Agreement if any or all of such conditions are not
satisfied on or before August 31, 2001, unless the failure to consummate the
Offer is the result of a willful and material breach of the Merger Agreement by
the party seeking to terminate the Merger Agreement. We may also extend the
Offer for any period required
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by applicable rules, regulations, interpretations or positions of the Securities
and Exchange Commission ("SEC") or its staff applicable to the Offer or for any
period required by applicable law. If we extend the Offer under any
circumstances, the term "Expiration Date" will mean the time and date on which
the Offer, as so extended, will expire.
If at the Expiration Date any or all the conditions to the Offer described
in Section 14 have not been satisfied or waived, then, subject to the provisions
of the Merger Agreement, unless the Merger Agreement is terminated, we will
extend the Expiration Date for an additional period or periods of time, by
giving oral or written notice of the extension to the Depositary. However, there
can be no assurance that we will exercise our right to extend the Offer (other
than as may be required by the Merger Agreement or by applicable law). During
any such extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer and subject to your right to withdraw Shares previously
tendered. See Section 4.
Subject to the applicable regulations of the SEC and the terms of the
Merger Agreement, we also reserve the right, in our sole discretion, at any time
or from time to time, to: (a) delay purchase of, or payment for, any Shares
pending receipt of any regulatory or governmental approvals specified in Section
15; (b) terminate the Offer if any condition referred to in Section 14 has not
been satisfied or upon the occurrence of any event specified in Section 14; and
(c) except as set forth in the Merger Agreement, waive any condition or
otherwise amend the Offer in any respect, in each case, by giving oral or
written notice of the delay, termination, waiver or amendment to the Depositary
by making a public announcement thereof. We acknowledge (i) that Rule 14e-1(c)
under the Exchange Act requires us to pay the consideration offered or return
the Shares tendered promptly after the termination or withdrawal of the Offer
and (ii) that we may not delay purchase of, or payment for, any Shares upon the
occurrence of any event specified in Section 14 without extending the period of
time during which the Offer is open.
The rights we reserve in the preceding paragraph are in addition to our
rights described in Section 14. Any extension, delay, termination or amendment
of the Offer will be followed as promptly as practicable by a public
announcement. An announcement in the case of an extension will be made no later
than 9:00 a.m., eastern time, on the next business day after the previously
scheduled Expiration Date. Without limiting the manner in which we may choose to
make any public announcement, subject to applicable law (including Rules
14d-4(d) and 14d-6(c) under the Exchange Act, which require that material
changes be promptly disseminated to holders of Shares), we will have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to the Dow Jones News Service.
In the Merger Agreement, we have agreed that, without the prior written
consent of Barrett Resources, we will not (a) decrease the Offer Price or change
the form of consideration payable in the Offer; (b) seek to purchase fewer than
16,730,502 Shares; (c) impose additional conditions to the Offer; or (d) amend
any other term or condition of the Offer in any manner materially adverse to the
holders of Shares.
If we make a material change in the terms of the Offer or if we waive a
material condition to the Offer, we will extend the Offer and disseminate
additional tender offer materials to the extent required by Rules 14d-4(d),
14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which a
tender offer must remain open following material changes in the terms of the
Offer, other than a change in price or a change in percentage of securities
sought, depends upon the facts and circumstances, including the materiality of
the changes. In the SEC's view, an offer should remain open for a minimum of
five business days from the date the material change is first published, sent or
given to stockholders, and, if material changes are made with respect to
information that approaches the significance of price and the percentage of
securities sought, a minimum of ten business days may be required to allow for
adequate dissemination and investor response. With respect to a change in price,
a minimum of ten business days from the date of the change is generally required
to allow for adequate dissemination to stockholders. Accordingly, if, prior to
the Expiration Date, we increase or decrease the number of Shares being sought,
or increase or decrease the consideration offered pursuant to the Offer, and if
the Offer is scheduled to
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expire at any time earlier than the period ending on the tenth business day from
the date that notice of the increase or decrease is first published, sent or
given to holders of Shares, we will extend the Offer at least until the
expiration of such period of ten business days. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or a federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, eastern
time.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition. Consummation of the Offer is also conditioned upon expiration
or termination of all waiting periods imposed by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the regulations thereunder (the "HSR
Act"), and the other conditions set forth in Section 14. Subject to the terms of
the Merger Agreement, we reserve the right (but are not obligated), in
accordance with applicable rules and regulations of the SEC, to waive any or all
of those conditions. If, by the Expiration Date, any or all of those conditions
have not been satisfied, we may, without the consent of Barrett Resources, elect
to (a) extend the Offer and, subject to applicable withdrawal rights, retain all
tendered Shares until the expiration of the Offer, as extended, subject to the
terms of the Offer and the Merger Agreement; (b) waive all of the unsatisfied
conditions, subject to the terms of the Offer and the Merger Agreement and,
subject to complying with the applicable rules and regulations of the SEC, and
accept for payment the 16,730,502 Shares so tendered; or (c) subject to our
obligations to extend the Offer until August 31, 2001 unless the Merger
Agreement has been terminated in accordance with its terms, terminate the Offer
and not accept for payment any Shares and return all tendered Shares to
tendering stockholders. See Section 11. In the event that we waive any condition
set forth in Section 14, the SEC may, if the waiver is deemed to constitute a
material change to the information previously provided to the stockholders,
require that the Offer remain open for an additional period of time and/or that
we disseminate information concerning such waiver.
Barrett Resources has provided us with its stockholder lists and security
position listings for the purpose of disseminating the Offer to holders of
Shares. We will mail this Offer to Purchase, the related Letter of Transmittal
and other relevant materials to record holders of Shares and we will furnish the
materials to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the
securityholder lists or, if applicable, who are listed as participants in a
clearing agency's security position listing, for forwarding to beneficial owners
of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES; PRORATION.
Upon the terms and subject to the conditions of the Offer (including, if
we extend or amend the Offer, the terms and conditions of the Offer as so
extended or amended), we will purchase, by accepting for payment, and will pay
for 16,730,502 Shares validly tendered and not withdrawn (as permitted by
Section 4) prior to the Expiration Date promptly after the later of (a) the
Expiration Date and (b) the satisfaction or waiver of all the conditions to the
Offer set forth in Section 14. In addition, subject to applicable rules of the
SEC, we reserve the right to delay acceptance for payment of or payment for
Shares pending receipt of any regulatory or governmental approvals specified in
Section 15. For information with respect to regulatory approvals that we are
required to obtain prior to the completion of the Offer, see Section 15.
In all cases, we will pay for Shares purchased in the Offer only after
timely receipt by the Depositary of (a) certificates representing the Shares
("Share Certificates") or timely confirmation (a "Book-Entry Confirmation") of
the book-entry transfer of the Shares into the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in Section 3; (b) the Letter of Transmittal (or a
facsimile), properly completed and duly executed, with any required signature
guarantees or an Agent's Message (as defined herein) in connection with a
book-entry transfer; and (c) any other documents that the Letter of Transmittal
requires.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-
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Entry Transfer Facility tendering the Shares which are the subject of the
Book-Entry Confirmation that the participant has received and agrees to be bound
by the terms of the Letter of Transmittal and that we may enforce that agreement
against the participant.
For purposes of the Offer, we will be deemed to have accepted for payment,
and purchased, Shares validly tendered and not withdrawn if and when we give
oral or written notice to the Depositary of our acceptance of the Shares for
payment pursuant to the Offer. In all cases, upon the terms and subject to the
conditions of the Offer, payment for Shares purchased pursuant to the Offer will
be made by deposit of the aggregate purchase price for the Shares with the
Depositary, which will act as agent for tendering stockholders for the purpose
of receiving payment from us and transmitting payment to validly tendering
stockholders.
UNDER NO CIRCUMSTANCES WILL WE PAY INTEREST ON THE PURCHASE PRICE FOR SHARES,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
If we do not purchase any tendered Shares pursuant to the Offer for any
reason, including proration, or if you submit Share Certificates representing
more Shares than you wish to tender, we will return Share Certificates
representing unpurchased or untendered Shares, without expense to you (or, in
the case of Shares delivered by book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility pursuant to the procedures set forth
in Section 3, the Shares will be credited to an account maintained within the
Book-Entry Transfer Facility), as promptly as practicable following the
expiration, termination or withdrawal of the Offer.
IF, PRIOR TO THE EXPIRATION DATE, WE INCREASE THE PRICE OFFERED TO HOLDERS OF
SHARES IN THE OFFER, WE WILL PAY THE INCREASED PRICE TO ALL HOLDERS OF SHARES
THAT WE PURCHASE IN THE OFFER, WHETHER OR NOT THE SHARES WERE TENDERED BEFORE
THE INCREASE IN PRICE.
We reserve the right, subject to the provisions of the Merger Agreement,
to transfer or assign, in whole or from time to time in part, to one or more of
Williams' wholly-owned subsidiaries the right to purchase all or any portion of
the Shares tendered in the Offer, but any such transfer or assignment will not
relieve us of our obligations under the Offer or prejudice your rights to
receive payment for Shares validly tendered and accepted for payment in the
Offer.
If more than 16,730,502 Shares are validly tendered prior to the
Expiration Date and are not properly withdrawn, we will, upon the terms and
subject to the conditions of the Offer, accept for payment and pay for only
16,730,502 Shares, on a pro rata basis, with adjustments to avoid purchases of
fractional Shares, based upon the number of Shares validly tendered prior to the
Expiration Date and not properly withdrawn. Because of the difficulty of
determining precisely the number of Shares validly tendered and not withdrawn,
Purchaser would not expect to be able to announce the final results of proration
or pay for Shares until at least five NYSE trading days after the Expiration
Date. Preliminary results of proration will be announced by press release as
promptly as practicable after the Expiration Date. Holders of Shares may obtain
such preliminary information from the Information Agent and may also be able to
obtain such preliminary information from their brokers.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
VALID TENDER OF SHARES. Except as set forth below, in order for you to
tender Shares in the Offer, the Depositary must receive the Letter of
Transmittal (or a facsimile), properly completed and signed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry delivery of Shares, and any other documents that the Letter of
Transmittal requires at one of the Depositary's addresses set forth on the back
cover of this Offer to Purchase on or prior to the Expiration Date and either
(a) you must deliver Share Certificates representing tendered Shares to the
Depositary or you must cause your Shares to be tendered pursuant to the
procedure for book-entry transfer set forth
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below and the Depositary must receive Book-Entry Confirmation, in each case on
or prior to the Expiration Date, or (b) you must comply with the guaranteed
delivery procedures set forth below.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT YOUR OPTION AND SOLE RISK, AND DELIVERY WILL BE CONSIDERED MADE
ONLY WHEN THE DEPOSITARY ACTUALLY RECEIVES THE SHARE CERTIFICATES OR
CONFIRMATION OF A BOOK-ENTRY TRANSFER OF THE SHARES TENDERED. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY
DELIVERY.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with
respect to the Shares at the Book-Entry Transfer Facility for purposes of the
Offer within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in the system of the Book-Entry
Transfer Facility may make book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer the Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures. However, although Shares may be delivered
through book-entry transfer into the Depositary's account at the Book-Entry
Transfer Facility, the Depositary must receive the Letter of Transmittal (or
facsimile), properly completed and signed, with any required signature
guarantees, or an Agent's Message, and any other required documents, at one of
its addresses set forth on the back cover of this Offer to Purchase on or before
the Expiration Date, or you must comply with the guaranteed delivery procedure
set forth below.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE
BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
SIGNATURE GUARANTEES. A bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program (an "Eligible Institution") must guarantee
signatures on all Letters of Transmittal, unless the Shares tendered are
tendered (a) by a registered holder of Shares who has not completed either the
box labeled "Special Payment Instructions" or the box labeled "Special Delivery
Instructions" on the Letter of Transmittal or (b) for the account of an Eligible
Institution. See Instruction 1 of the Letter of Transmittal.
If the Share Certificates are registered in the name of a person other
than the signer of the Letter of Transmittal, or if payment is to be made to, or
Share Certificates for unpurchased Shares are to be issued or returned to, a
person other than the registered holder, then the tendered certificates must be
endorsed or accompanied by appropriate stock powers, signed exactly as the name
or names of the registered holder or holders appear on the Share Certificates,
with the signatures on the Share Certificates or stock powers guaranteed by an
Eligible Institution as provided in the Letter of Transmittal. See Instructions
1 and 5 of the Letter of Transmittal.
If the Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or facsimile) must
accompany each delivery of Share Certificates.
GUARANTEED DELIVERY. If you want to tender Shares in the Offer and your
Share Certificates are not immediately available or time will not permit all
required documents to reach the Depositary on or before the Expiration Date or
the procedures for book-entry transfer cannot be completed on time, your
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Shares may nevertheless be tendered if you comply with all of the following
guaranteed delivery procedures:
(1) your tender must be made by or through an Eligible Institution;
(2) the Depositary must receive, as described below, a properly completed
and signed Notice of Guaranteed Delivery, substantially in the form
made available by us, on or before the Expiration Date; and
(3) the Depositary must receive the Share Certificates (or a Book-Entry
Confirmation of transfer of the Shares tendered) representing all
tendered Shares, in proper form for transfer together with a properly
completed and duly executed Letter of Transmittal (or facsimile), with
any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message) and any other documents required by the
Letter of Transmittal within three trading days after the date of
execution of the Notice of Guaranteed Delivery. A "trading day" is any
day on which the NYSE is open for business.
You may deliver the Notice of Guaranteed Delivery by hand, mail or
facsimile transmission to the Depositary. The Notice of Guaranteed Delivery must
include a guarantee by an Eligible Institution in the form set forth in the
Notice of Guaranteed Delivery.
Notwithstanding any other provision of the Offer, we will pay for Shares
only after timely receipt by the Depositary of Share Certificates for, or of
Book-Entry Confirmation with respect to, the Shares tendered, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof)
together with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message) and any other documents required by the Letter of
Transmittal. Accordingly, payment might not be made to all tendering
stockholders at the same time, and will depend upon when the Depositary receives
Share Certificates or Book-Entry Confirmation that the Shares have been
transferred into the Depositary's account at the Book-Entry Transfer Facility.
BACKUP FEDERAL INCOME TAX WITHHOLDING. Under the backup federal income
tax withholding laws applicable to certain stockholders (other than certain
exempt stockholders, including, among others, all corporations and certain
foreign individuals), the Depositary may be required to withhold 31% of the
amount of any payments made to those stockholders pursuant to the Offer. To
prevent backup federal income tax withholding, you must provide the Depositary
with your correct taxpayer identification number and certify that you are not
subject to backup federal income tax withholding by completing the Substitute
Form W-9 included in the Letter of Transmittal (or, if you are a foreign
stockholder, an appropriate Form W-8). See Instruction 11 of the Letter of
Transmittal.
TENDERING STOCKHOLDER'S REPRESENTATION AND WARRANTY; PURCHASER'S
ACCEPTANCE CONSTITUTES AN AGREEMENT. A tender of Shares pursuant to any of the
procedures described above will constitute the tendering stockholder's
acceptance of the terms and conditions of the Offer, as well as the tendering
stockholder's representation and warranty to Purchaser that (a) such stockholder
has a net long position in the Shares being tendered within the meaning of Rule
14e-4 promulgated by the SEC under the Exchange Act and (b) the tender of such
Shares complies with Rule 14e-4. It is a violation of Rule 14e-4 for a person
acting alone or in concert with others, directly or indirectly, to tender Shares
for such person's own account unless at the time of tender and at the Expiration
Date such person has a "net long position" equal to or greater than the amount
tendered in (i) Shares and will deliver or cause to be delivered such Shares for
the purpose of tendering to Purchaser within the period specified in the Offer,
or (ii) other securities immediately convertible into, exercisable for or
exchangeable into Shares ("Equivalent Securities") and, upon the acceptance of
such tender, will acquire such Shares by conversion, exchange or exercise of
such Equivalent Securities to the extent required by the terms of the Offer and
will deliver or cause to be delivered such Shares so acquired for the purpose of
tender to Purchaser within the period specified in the Offer. Rule 14e-4
provides a similar restriction applicable to the tender or guarantee of a tender
on behalf of another person. Purchaser's acceptance for payment of Shares
tendered pursuant to the
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Offer will constitute a binding agreement between the tendering stockholder and
Purchaser upon the terms and subject to the conditions of the Offer.
APPOINTMENT AS PROXY. By executing the Letter of Transmittal (including
through delivery of an Agent's Message), you irrevocably appoint our designees,
and each of them, as your agents, attorneys-in-fact and proxies, with full power
of substitution, in the manner set forth in the Letter of Transmittal, to the
full extent of your rights with respect to the Shares that you tender and that
we accept for payment and with respect to any and all other Shares and other
securities or rights issued or issuable in respect of those Shares on or after
the date of this Offer to Purchase. All such powers of attorney and proxies will
be considered irrevocable and coupled with an interest in the tendered Shares.
This appointment will be effective when we accept your Shares for payment in
accordance with the terms of the Offer. Upon such acceptance for payment, all
other powers of attorney and proxies given by you with respect to your Shares
and such other securities or rights prior to such payment will be revoked,
without further action, and no subsequent powers of attorney and proxies may be
given by you (and, if given, will not be deemed effective). Our designees will,
with respect to the Shares and such other securities and rights for which the
appointment is effective, be empowered to exercise all your voting and other
rights as they in their sole discretion may deem proper at any annual or special
meeting of Barrett Resources' stockholders, or any adjournment or postponement
thereof, or by consent in lieu of any such meeting or otherwise. In order for
Shares to be deemed validly tendered, immediately upon the acceptance for
payment of such Shares, we or our designees must be able to exercise full
voting, consent and other rights with respect to such Shares and other
securities, including voting at any meeting of stockholders.
DETERMINATION OF VALIDITY. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by us, in our sole discretion, which
determination will be final and binding on all parties. We reserve the absolute
right to reject any or all tenders determined by us not to be in proper form or
the acceptance of or payment for which may, in the opinion of our counsel, be
unlawful. Subject to the terms of the Merger Agreement and applicable law, we
also reserve the absolute right to waive any of the conditions of the Offer or
any defect or irregularity in any tender of Shares of any particular stockholder
whether or not similar defects or irregularities are waived in the case of other
stockholders.
Our interpretation of the terms and conditions of the Offer will be final
and binding. No tender of Shares will be deemed to have been validly made until
all defects and irregularities with respect to the tender have been cured or
waived by us. None of Barrett Resources, Williams, Purchaser or any of their
affiliates or assigns, the Dealer Manager, the Depositary, the Information Agent
or any other person or entity will be under any duty to give any notification of
any defects or irregularities in tenders or incur any liability for failure to
give any such notification.
BINDING AGREEMENT. Our acceptance for payment of Shares tendered pursuant
to any of the procedures described above will constitute a binding agreement
between us and you upon the terms and subject to the conditions of the Offer.
If you have any questions about the procedure for tendering Shares or need
additional copies of the Offer to Purchase, the Letter of Transmittal or other
documents, please telephone the Information Agent at (800) 223-2064 (banks and
brokers can call (212) 440-9800, collect).
4. WITHDRAWAL RIGHTS.
Except as described in this Section 4, tenders of Shares made in the Offer
are irrevocable. You may withdraw Shares that you have previously tendered in
the Offer at any time on or before the Expiration Date only as described in this
Section 4.
If, for any reason, acceptance for payment of any Shares tendered in the
Offer is delayed, or we are unable to accept for payment or pay for Shares
tendered in the Offer, then, without prejudice to our rights set forth in this
document, the Depositary may, nevertheless, on our behalf, retain Shares that
you have tendered, and you may not withdraw your Shares except to the extent
that you are entitled to and duly
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exercise withdrawal rights as described in this Section 4. Any such delay will
be by an extension of the Offer to the extent required by applicable law.
In order for your withdrawal to be effective, you must deliver a written
or facsimile transmission notice of withdrawal to the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase. Any such notice
of withdrawal must specify your name, the number of Shares that you want to
withdraw, and (if Share Certificates have been tendered) the name of the
registered holder of the Shares as shown on the Share Certificate, if different
from your name. If Share Certificates have been delivered or otherwise
identified to the Depositary, then prior to the physical release of such Share
Certificates, you must submit the serial numbers shown on the particular Share
Certificates evidencing the Shares to be withdrawn and an Eligible Institution
must guarantee the signature on the notice of withdrawal, except in the case of
Shares tendered for the account of an Eligible Institution. If Shares have been
tendered pursuant to the procedures for book-entry transfer set forth in Section
3, the notice of withdrawal must also specify the name and number of the account
at the Book-Entry Transfer Facility to be credited with the withdrawn Shares, in
which case a notice of withdrawal will be effective if delivered to the
Depositary by any method of delivery described in the first sentence of this
paragraph. You may not rescind a withdrawal of Shares. Any Shares that you
withdraw will be considered not validly tendered for purposes of the Offer;
however, you may tender your Shares again at any time before the Expiration Date
by following any of the procedures described in Section 3 of this document.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by us, in our sole discretion, which
determination will be final and binding. None of Barrett Resources, Williams,
Purchaser or any of their affiliates or assigns, the Dealer Manager, the
Depositary, the Information Agent or any other person or entity will be under
any duty to give any notification of any defects or irregularities in any notice
of withdrawal or incur any liability for failure to give any such notification.
5. MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of the material United States federal income
tax consequences of the Offer and the Merger. This discussion is based upon the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations,
judicial authorities, published positions of the Internal Revenue Service
("IRS") and other applicable authorities, all as in effect on the date hereof
and all of which are subject to change or differing interpretations (possibly
with retroactive effect). This discussion is limited to United States persons
that hold their Shares as capital assets for United States federal income tax
purposes (generally, assets held for investment). This discussion does not
address all of the tax consequences that may be relevant to a particular holder
of Shares or to a holder of Shares that is subject to special treatment under
United States federal income tax laws. If a holder of Shares has differing tax
bases and/or holding periods in respect of its Shares, it should consult its own
tax advisor prior to tendering in the Offer or voting on the Merger about
possibly identifying the particular Shares to be tendered pursuant to the Offer
and exchanged in the Merger and the tax bases and/or holding periods of the
particular Williams Common Stock that it receives pursuant to the Merger. No
ruling has been or will be sought from the IRS regarding any matter discussed
herein. No assurance can be given that the IRS would not assert, or that a court
would not sustain, a position contrary to any of the tax aspects set forth
below. HOLDERS OF SHARES MUST CONSULT THEIR OWN TAX ADVISORS AS TO THE UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER AND THE MERGER, AS WELL AS
THE EFFECTS OF STATE, LOCAL AND NON-UNITED STATES TAX LAWS.
Purchaser expects that the Offer and the Merger will be treated as a
single integrated transaction for United States federal income tax purposes. If
the Offer and the Merger are so treated and assuming that the Merger is effected
as a merger of Barrett Resources with and into Purchaser ("Forward Merger"),
then the Offer and the Forward Merger will be treated as a "reorganization"
within the
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meaning of Section 368(a) of the Code. As such a "reorganization", the United
States federal income tax consequences of the Offer and the Forward Merger can
be generally summarized as follows:
Exchange of Shares Solely for Cash. A holder of Shares that
tenders all of its Shares and has all of its Shares accepted for tender in
the Offer will recognize capital gain or loss in an amount equal to the
difference between the amount of cash received pursuant to the Offer and
the holder's tax basis in such Shares. The capital gain or loss will be
long-term capital gain or loss if the holder has held the Shares sold
pursuant to the Offer for more than one year at the time such Shares are
sold in the Offer.
Exchange of Shares Solely for Williams Common Stock. A holder of
Shares that exchanges all of its Shares for Williams Common Stock pursuant
to the Forward Merger will not recognize any gain or loss except with
respect to cash received in lieu of a fractional share of Williams Common
Stock (as described below).
Exchange of Shares for Cash and Williams Common Stock. A holder of
Shares that has some of its Shares accepted for tender in the Offer and
exchanges some of its Shares for Williams Common Stock pursuant to the
Forward Merger will recognize gain (but not loss) in an amount equal to
the lesser of (i) the amount of cash received pursuant to the Offer and
(ii) an amount equal to the excess, if any, of (a) the sum of the amount
of cash received pursuant to the Offer and the fair market value of the
Williams Common Stock received pursuant to the Forward Merger over (b) the
holder's tax basis in its Shares. The gain recognized will be capital gain
unless the receipt of cash by the holder has the effect of a distribution
of a dividend, in which case such gain will be treated as ordinary
dividend income to the extent of the holder's ratable share of accumulated
earnings and profits as calculated for United States federal income tax
purposes. For purposes of determining whether the receipt of cash by the
holder has the effect of the distribution of a dividend, a holder will be
treated as if the holder first exchanged all of its Shares solely for
Williams Common Stock and then Williams immediately redeemed a portion of
such stock for the cash that such holder actually received pursuant to the
Offer. The IRS has indicated in rulings that any reduction in the interest
of a minority stockholder that owns a small number of shares in a publicly
and widely held corporation and that exercises no control over corporate
affairs would receive capital gain (as opposed to dividend) treatment. In
determining whether the receipt of cash has the effect of a distribution
of a dividend, certain constructive ownership rules must be taken into
account. Holders that exchange Shares for cash pursuant to the Offer and
Williams Common Stock pursuant to the Forward Merger must consult their
own tax advisors as to the character of any gain recognized.
Tax Basis for Williams Common Stock. A holder of Shares will have
an aggregate tax basis in Williams Common Stock received pursuant to the
Forward Merger equal to the holder's aggregate tax basis in its Shares
surrendered pursuant to the Offer and the Forward Merger, (i) reduced by
(a) the portion of the holder's tax basis in its Shares surrendered in the
Forward Merger that is allocable to a fractional share of Williams Common
Stock for which cash is received and (b) the amount of cash, if any,
received by the holder pursuant to the Offer, and (ii) increased by the
amount of gain (including any portion of such gain that is treated as a
dividend as described above), if any, recognized by the holder in the
Offer (but not by gain recognized upon the receipt of cash in lieu of a
fractional share of Williams Common Stock pursuant to the Forward Merger).
Holding Period for Williams Common Stock. The holding period for
Williams Common Stock received by a holder of Shares pursuant to the
Forward Merger will include the holding period for the Shares surrendered
in the Offer and the Forward Merger.
Cash Received in Lieu of a Fractional Share of Williams Common
Stock. If a holder of Shares receives cash in lieu of a fractional share
of Williams Common Stock in the Forward Merger, the holder will generally
recognize capital gain or loss equal to the difference between the amount
of cash received in lieu of the fractional share and the portion of the
holder's tax basis in its Shares surrendered in the Forward Merger that is
allocable to the fractional share. The capital
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gain or loss will be long-term capital gain or loss if the holder's
holding period for the portion of the Shares deemed exchanged for the
fractional share is more than one year at the Effective Time (as defined
in the Merger Agreement) of the Forward Merger.
Treatment of the Entities. No gain or loss will be recognized by
Williams, Purchaser or Barrett Resources as a result of the Offer or the
Merger.
Under the Merger Agreement, Williams has agreed to use its reasonable best
efforts to obtain an opinion ("Tax Opinion") of Skadden, Arps, Slate, Meagher &
Flom, LLP (which includes its affiliated law practice entities) or another
nationally recognized United States federal income tax counsel or "Big Five"
accounting firm that, based on the facts and customary representations and
assumptions, the Offer and the Forward Merger will be treated as a
"reorganization" within the meaning of Section 368(a) of the Code. Williams
expects to be able to obtain the Tax Opinion if (i) the Offer is consummated
and, as expected, the proposed Forward Merger occurs in the ordinary course
after consummation of the Offer, (ii) Williams and Barrett Resources are able to
deliver customary representations to such counsel or "Big Five" accounting firm,
(iii) there is no adverse change in United States federal income tax law and
(iv) at the Effective Time of the Forward Merger, the aggregate fair market
value of the Williams Common Stock delivered as consideration pursuant to the
Forward Merger is greater than 40% of the sum of (a) the aggregate fair market
value of such Williams Common Stock and (b) the aggregate amount of cash paid
pursuant to the Offer and the Forward Merger.
The Tax Opinion is not a condition to consummating the Offer or the
Merger. If Williams obtains the Tax Opinion, then the Merger will be effected as
a Forward Merger (and the United States federal income tax consequences will be
as summarized above). An opinion of counsel or "Big Five" accounting firm is not
binding on the IRS or any court. If Williams is not able to obtain the Tax
Opinion, then Williams may, at its reasonable discretion, change the Merger in
form from a Forward Merger to a merger of Purchaser (or another direct or
indirect wholly-owned subsidiary of Williams) with and into Barrett Resources
("Reverse Merger"), which, as summarized below, will be a fully taxable
transaction for all holders of Shares (but not for Williams, Purchaser or
Barrett Resources). It is anticipated that Williams will exercise its discretion
to change the Merger to a Reverse Merger from a Forward Merger if Williams is
unable to obtain the Tax Opinion.
In the event of the Reverse Merger, the tax consequences to holders of
Shares would differ materially from those summarized above. In particular,
although a holder of Shares that has all of its Shares accepted for tender in
the Offer will recognize gain or loss for United States federal income tax
purposes (as summarized above) regardless of whether the Merger is effected as a
Forward Merger or a Reverse Merger or is otherwise treated as part of a
"reorganization", all other holders of Shares would be taxed as follows: Each
holder of Shares that has any of its tendered Shares accepted for tender in the
Offer will recognize capital gain or loss in an amount equal to the difference
between the amount of cash received and the holder's tax basis in such Shares.
The capital gain or loss will be long-term capital gain or loss if the holder
has held such Shares for more than one year at the time such Shares are
purchased in the Offer. Each holder of Shares that exchanges any of its Shares
for Williams Common Stock pursuant to the Reverse Merger will recognize capital
gain or loss in an amount equal to the difference between the fair market value
of the Williams Common Stock received pursuant to the Reverse Merger (including
any cash received in lieu of a fractional share of Williams Common Stock) and
the holder's tax basis in such Shares. The capital gain or loss will be
long-term capital gain or loss if the holder has held the Shares surrendered in
the Reverse Merger for more than one year at the Effective Time of the Reverse
Merger.
The determination by counsel or a "Big Five" accounting firm as to whether
the Offer and the proposed Forward Merger will be treated as a "reorganization"
within the meaning of Section 368(a) of the Code will depend upon the facts and
law existing at the Effective Time of the proposed Forward Merger. It is
possible that Williams will not be able to obtain the Tax Opinion. THUS, NO
ASSURANCE CAN BE GIVEN THAT THE FORM OF THE MERGER WILL BE A FORWARD MERGER AS
OPPOSED TO A FULLY TAXABLE REVERSE MERGER.
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6. PRICE RANGE OF THE SHARES; DIVIDENDS.
According to Barrett Resources' Annual Report on Form 10-K for the fiscal
year ended December 31, 2000 (the "Barrett Resources 10-K"), the Shares are
principally traded on the NYSE under the symbol "BRR." The following table sets
forth, for the periods indicated, the reported high and low sale prices for the
Shares on the NYSE as reported in the Barrett Resources 10-K with respect to
periods occurring in fiscal 1999 and 2000, and as reported by published
financial sources with respect to the first fiscal quarter in 2001 and the
current fiscal quarter.
QUARTER ENDED HIGH LOW
- ------------- ------ ------
March 31, 1999............................................. $28.00 $15.44
June 30, 1999.............................................. $39.81 $24.31
September 30, 1999......................................... $41.25 $32.25
December 31, 1999.......................................... $37.31 $23.06
March 31, 2000............................................. $34.31 $19.19
June 30, 2000.............................................. $41.63 $27.31
September 30, 2000......................................... $39.19 $26.69
December 31, 2000.......................................... $59.81 $35.63
March 31, 2001............................................. $63.00 $42.75
June 30, 2001 (through May 11, 2001)....................... $72.00 $59.41
According to the Barrett Resources 10-K, Barrett Resources has not paid
any cash dividends since its inception. Under the terms of the Merger Agreement,
Barrett Resources is not permitted to declare or pay dividends with respect to
the Shares, without the prior written consent of Williams and Purchaser.
On May 4, 2001, the last full day of trading of Shares prior to the
announcement of the execution of the Merger Agreement, the reported closing
price per Share on the NYSE was $67.30 and on March 6, 2001, the last full
trading day before Shell Oil Company disclosed its unsolicited offer for Barrett
Resources, the reported closing price per Share on the NYSE was $45.62. On May
11, 2001, the last full day of trading of Shares prior to the commencement of
the Offer, the reported closing price per Share on the NYSE was $71.08.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
7. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES; NYSE LISTING;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES. The purchase
of Shares pursuant to the Offer will reduce the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public. The purchase of Shares
pursuant to the Offer can also be expected to reduce the number of holders of
Shares. We cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on the
market price for, or marketability of, the Shares or whether it would cause
future market prices to be more than or less than the Offer Price.
As discussed earlier, if the Offer is completed and the Barrett Resources'
stockholders approve and adopt the Merger Agreement and the Merger, Williams
will issue 1.767 shares of Williams Common Stock in the Merger upon the exchange
of each then remaining Share of Barrett Resources (other than Shares held by
Barrett Resources, Williams, Purchaser or any other subsidiary of Williams),
including Shares not purchased as a result of proration. The exchange ratio of
1.767 shares of Williams Common Stock per Share is a fixed ratio that will not
be adjusted as a result of any increase or decrease in the price of either the
shares of Williams Common Stock or the Shares. AS A RESULT OF THE FIXED EXCHANGE
RATIO, FLUCTUATIONS IN THE MARKET VALUE OF THE WILLIAMS COMMON STOCK WILL LIKELY
AFFECT THE MARKET VALUE OF THE BARRETT RESOURCES SHARES OUTSTANDING AFTER
COMPLETION OF THE OFFER.
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As described above, various factors may affect the market price of shares
of Williams Common Stock, including changes in the business, operations, or
prospects of Barrett Resources or Williams and general market and economic
conditions. To a large extent, these factors are beyond our control or that of
Williams or Barrett Resources. See "Introduction".
NYSE LISTING. We do not anticipate that the Shares would be subject to
delisting by the NYSE as a result of completion of the Offer. According to the
NYSE's published guidelines, the NYSE would consider delisting the Shares if,
among other things, (a) the number of record holders of 100 or more Shares
should fall below 1,200; (b) the number of publicly held Shares (exclusive of
holdings of Purchaser and Williams and any other subsidiaries or affiliates of
Barrett Resources and of officers or directors of Barrett Resources or their
immediate families or other concentrated holdings of 10% or more ("Excluded
Holdings")) should fall below 600,000; or (c) the aggregate market value of such
publicly held Shares (exclusive of Excluded Holdings) should fall below
$5,000,000. If, as a result of the purchase of Shares pursuant to the Offer or
otherwise, the Shares no longer meet the requirements of the NYSE for continued
listing and the listing of the Shares is discontinued, the market for the Shares
could be adversely affected.
If the NYSE were to delist the Shares, it is possible that the Shares
would trade on one or more securities exchanges or in the over-the-counter
market and that price or other quotations would be reported by such exchanges or
through the Nasdaq National Market ("NASDAQ") or other sources. The extent of
the public market for the Shares and the availability of such quotations would
depend upon such factors as (i) the number of stockholders and/or the aggregate
market value of the publicly traded Shares remaining at such time, (ii) the
interest in maintaining a market in the Shares on the part of securities firms,
(iii) the possible termination of registration under the Exchange Act, as
described below, and (iv) other factors. We cannot predict whether the reduction
in the number of Shares that might otherwise trade publicly would have an
adverse or beneficial effect on the market price for, or marketability, of the
Shares or whether it would cause future market prices to be greater or less than
the Offer Price.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Purchaser does not anticipate that such registration will be
subject to termination as a result of completion of the Offer. Registration of
the Shares may be terminated upon application by Barrett Resources to the SEC if
the Shares are not listed on a "national securities exchange" and there are
fewer than 300 record holders of Shares. Termination of registration of the
Shares under the Exchange Act would substantially reduce the information that
Barrett Resources would be required to furnish to its stockholders and the SEC
and would make certain provisions of the Exchange Act, such as the short-swing
profit recovery provisions of Section 16(b) and the requirements of furnishing a
proxy statement in connection with stockholders' meetings pursuant to Section
14(a) or 14(c) and the related requirement of an annual report to stockholders,
no longer applicable to Barrett Resources. If the Shares were no longer
registered under the Exchange Act, the requirements of Rule 13e-3 under the
Exchange Act with respect to "going private" transactions would no longer be
applicable to Barrett Resources. In addition, the ability of "affiliates" of
Barrett Resources and persons holding "restricted securities" of Barrett
Resources to dispose of such securities pursuant to Rule 144 promulgated under
the Securities Act may be impaired or, with respect to certain persons,
eliminated. If registration of the Shares under the Exchange Act were
terminated, the Shares would no longer be "margin securities" or eligible for
stock exchange listing or NASDAQ reporting.
If registration of the Shares is not terminated prior to the Merger, then
the registration of the Shares under the Exchange Act and the listing of the
Shares on the NYSE will be terminated following the completion of the Merger.
MARGIN REGULATIONS. The Shares are currently "margin securities" under
the regulations of the Board of Governors of the Federal Reserve System, which
have the effect, among other things, of allowing brokers to extend credit on the
collateral of the Shares for the purpose of buying, carrying or trading in
securities ("Purpose Loans"). Depending upon factors such as the number of
record holders of the Shares and the number and market value of publicly held
Shares, following the purchase of Shares pursuant to
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the Offer, the Shares may no longer constitute "margin securities" for purposes
of the Federal Reserve Board's margin regulations and, therefore, could no
longer be used as collateral for Purpose Loans made by brokers. In addition, if
registration of the Shares under the Exchange Act were terminated, the Shares
would no longer constitute "margin securities". Purchaser does not anticipate
that the Shares would not constitute "margin securities" as a result of the
completion of the Offer.
8. CERTAIN INFORMATION CONCERNING BARRETT RESOURCES.
Barrett Resources' principal executive offices are located at 1515
Arapahoe Street, Tower 3, Suite 1000, Denver, CO 80202. Its telephone number at
such offices is (303) 572-3900. The following description of Barrett Resources
and its business and the selected financial information set forth below have
been taken from the Barrett Resources 10-K and are qualified in their respective
entireties by reference to the Barrett Resources 10-K. None of Purchaser,
Williams, the Dealer Manager or the Information Agent assumes any responsibility
for the accuracy or completeness of the information concerning Barrett Resources
contained in such documents and records or for any failure by Barrett Resources
to disclose events that may have occurred or may affect the significance or
accuracy of any such information.
Barrett Resources is an independent gas and oil exploration and production
company. Barrett Resources' core areas of activity are in the Rocky Mountain
Region of Colorado, Wyoming and Utah and the Mid-Continent Region of Kansas and
Oklahoma. At December 31, 2000, Barrett Resources' estimated proved reserves
were 1,372 billion cubic feet of natural gas equivalent ("Bcfe") (96% natural
gas and 4% crude oil) with an implied reserve life of 11.6 years based on total
production in 2000 of 117.6 Bcfe. On April 24, 2001, Barrett Resources issued a
press release announcing that, after a review by independent reservoir
engineers, the estimate of Barrett Resources' proved gas and oil reserves had
been raised from 1,372 Bcfe to approximately 2,100 Bcfe. See "-- Certain
Financial Projections And Other Information (Unaudited) -- Gas and Oil Reserve
Information", below. Barrett Resources' net daily production averaged 321
million cubic feet of gas equivalent ("Mcfe") per day for the year ended
December 31, 2000. As of December 31, 2000, Barrett Resources owned an interest
in 4,284 wells, of which 3,441 were producing. Of these producing wells, 2,680
were operated by Barrett Resources. These operated wells contributed
approximately 91% of Barrett Resources' natural gas and oil production for the
year ended December 31, 2000. Barrett Resources also owns and operates a natural
gas gathering system, a 27-mile pipeline and a natural gas processing plant in
the Piceance Basin. Barrett Resources markets all of its own natural gas and oil
production from wells that it operates. In addition, Barrett Resources engages
in natural gas trading activities, which involve purchasing natural gas from
third parties and selling natural gas to other parties at prices and volumes
that management anticipates will result in profits to Barrett Resources.
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SELECTED FINANCIAL INFORMATION
Set forth below is certain selected consolidated financial information
relating to Barrett Resources and its subsidiaries with respect to the twelve
months ended December 31, 2000, 1999, and 1998 that has been excerpted or
derived from the financial statements contained in the Barrett Resources 10-K.
Also set forth below is certain unaudited consolidated summary information
relating to Barrett Resources and its subsidiaries with respect to the three
months ended March 31, 2001 that has been excerpted or derived from the
financial statements contained in the soliciting material on Schedule 14A filed
by Barrett Resources on May 1, 2001 pursuant to Rule 14a-12 under the Exchange
Act and certain unaudited consolidated summary information with respect to the
three months ended March 31, 2000 that has been excerpted or derived from the
financial statements contained in the Form 10-Q filed by Barrett Resources on
May 15, 2000. More comprehensive information is included in the Barrett
Resources 10-K and other documents filed by Barrett Resources with the SEC. The
financial information that follows is qualified in its entirety by reference to
such reports and other documents, including the financial statements and related
notes contained therein. Such reports and other documents may be examined and
copies may be obtained from the SEC in the manner set forth below.
BARRETT RESOURCES CORPORATION
CONSOLIDATED INCOME STATEMENT
THREE MONTHS ENDED
MARCH 31,
---------------------- YEAR ENDED DECEMBER 31,
(UNAUDITED) ----------------------------------
2001 2000 2000 1999 1998
---------- -------- ---------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Operating Revenues............... $ 164,983 $ 69,111 $ 376,432 $215,000 $211,768
Net income (loss)................ $ 57,012 $ 7,826 $ 27,674 $ 20,828 $(93,743)
Net income (loss) per share...... $ 1.67 $ 0.24 $ 0.83 $ 0.64 $ (2.95)
Total assets at the end of each
period......................... $1,162,770 $967,358 $1,253,833 $884,301 $838,879
Long-term debt at the end of each
period......................... $ 295,005 $384,595 $ 406,269 $355,250 $334,067
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CONSOLIDATED BALANCE SHEET
MARCH 31, DECEMBER 31, DECEMBER 31,
2001 2000 1999
----------- ------------ ------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
Current assets:
Cash and cash equivalents........................... $ 22,830 $ 25,454 $ 20,634
Receivables, net.................................... 177,519 297,766 99,906
Gas inventory held for sale, at market.............. 855 27,418 19,907
Deferred income tax assets.......................... 26,372 -- --
Other current assets................................ 18,436 29,042 14,075
---------- ---------- --------
Total current assets........................ 246,012 379,680 154,522
Other assets:
Net property and equipment (full cost method)......... 907,494 869,606 726,489
Other assets, net..................................... 9,264 4,547 3,290
---------- ---------- --------
Total Assets................................ $1,162,770 $1,253,833 $884,301
========== ========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................... $ 147,352 $ 234,739 $ 94,293
Amounts payable to oil and gas property owners...... 13,144 18,672 5,879
Production taxes payable............................ 44,039 39,229 22,981
Accrued and other liabilities....................... 20,571 20,917 16,610
Unrealized mark to market transactions.............. 81,793 47,745 --
---------- ---------- --------
Total current liabilities................... 306,899 361,302 139,763
Long term debt........................................ 295,005 406,269 355,250
Deferred income taxes................................. 52,560 39,003 25,640
Unrealized mark to market transactions................ 87,779 31,446 --
Other long-term liabilities........................... 20,000 -- --
---------- ---------- --------
Total liabilities........................... 762,243 838,020 520,653
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value: 45,000,000 shares
authorized and 33,461,004 shares issued and
outstanding at March 15, 2001 (33,394,063 at
December 31, 2000)............................... 335 334 326
Additional paid-in capital.......................... 298,534 296,043 271,560
Retained earnings................................... 176,446 119,436 91,762
Accumulated other comprehensive loss................ (74,525) -- --
Treasury Stock, at cost............................. (263) -- --
---------- ---------- --------
Total stockholders' equity.................. 400,527 415,813 363,648
---------- ---------- --------
Total liabilities and stockholders'
equity.................................... $1,162,770 $1,253,833 $884,301
========== ========== ========
Barrett Resources files annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
reports, statements or other information filed at the SEC's public reference
room at 450 Fifth Street, N.W., Washington, D.C. 20549, or at the SEC's public
reference rooms in New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Barrett
Resources' SEC filings are also available to
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the public from commercial document retrieval services and at the Internet world
wide web site maintained by the SEC at http://www.sec.gov.
Although we have no knowledge that any such information is untrue, we take
no responsibility for the accuracy or completeness of information contained in
this Offer to Purchase with respect to Barrett Resources or any of its
subsidiaries or affiliates or for any failure by Barrett Resources to disclose
events which may occur or may have occurred or may affect the significance or
accuracy of any such information.
CERTAIN FINANCIAL PROJECTIONS AND OTHER INFORMATION (UNAUDITED)
In the course of Williams' due diligence review of Barrett Resources,
Barrett Resources provided to Williams a Five-Year Strategic Projection as part
of Barrett Resources' March 2001 plan detailing Barrett Resources' forecasts for
certain operational and financial items (the "Projections"). The Projections
were based on numerous assumptions and management estimates. The Projections
also assumed a reserve development scenario contained in an internal reserve
report which included Barrett Resources' estimates of proved and unproved gas
and oil reserves. The actual results may vary materially from the Projections.
Certain information derived from the Projections has been set forth below for
the limited purpose of giving stockholders access to certain projections and
other information provided by Barrett Resources' management to Williams in
connection with its due diligence review of Barrett Resources. In addition, in
connection with Williams' due diligence review of Barrett Resources, Barrett
Resources also provided Williams access in its data room to a set of projections
prepared by Barrett Resources in February 2001, which projections were less
optimistic than the projections included in the Projections described below.
THE PROJECTED FINANCIAL, GAS AND OIL RESERVE AND OTHER INFORMATION SET FORTH
BELOW NECESSARILY REFLECTS NUMEROUS ASSUMPTIONS WITH RESPECT TO GENERAL BUSINESS
AND ECONOMIC CONDITIONS AND OTHER MATTERS, INCLUDING ESTIMATES OF FUTURE PRICES
AND GAS AND OIL RESERVES, MANY OF WHICH ARE INHERENTLY UNCERTAIN OR BEYOND
BARRETT RESOURCES', WILLIAMS' OR PURCHASER'S CONTROL, AND DOES NOT TAKE INTO
ACCOUNT ANY CHANGES IN BARRETT RESOURCES' OPERATIONS OR CAPITAL STRUCTURE WHICH
MAY RESULT FROM THE OFFER AND THE MERGER. IT IS NOT POSSIBLE TO PREDICT WHETHER
THE ASSUMPTIONS MADE IN PREPARING THE PROJECTIONS WILL BE VALID, AND ACTUAL
PRICES, GAS AND OIL RESERVE AMOUNTS AND RESULTS MAY PROVE TO BE MATERIALLY
HIGHER OR LOWER THAN THOSE CONTAINED IN THE PROJECTIONS. THE INCLUSION OF
INFORMATION FROM THE PROJECTIONS SHOULD NOT BE REGARDED AS AN INDICATION THAT
WILLIAMS OR BARRETT RESOURCES CONSIDERED IT A RELIABLE PREDICTOR OF FUTURE
EVENTS, AND THIS INFORMATION SHOULD NOT BE RELIED ON AS SUCH BY BARRETT
RESOURCES' STOCKHOLDERS. NONE OF BARRETT RESOURCES, PURCHASER, WILLIAMS, THE
DEALER MANAGER, THE INFORMATION AGENT OR ANY OF THEIR RESPECTIVE REPRESENTATIVES
ASSUMES ANY RESPONSIBILITY FOR THE VALIDITY, REASONABLENESS, ACCURACY OR
COMPLETENESS OF THE PROJECTIONS, AND BARRETT RESOURCES HAS MADE NO
REPRESENTATIONS OR WARRANTIES TO WILLIAMS OR PURCHASER REGARDING SUCH
INFORMATION.
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Financial Projections.
BARRETT RESOURCES CORPORATION
SELECTED INCOME STATEMENT INFORMATION
2001 2002 2003 2004 2005
-------- -------- ---------- ---------- ----------
(THOUSANDS OF DOLLARS)
Revenue......................... $420,890 $657,847 $1,012,964 $1,285,639 $1,541,345
Production costs................ 231,846 317,075 446,187 569,970 686,634
Operating profit................ 189,044 340,773 566,776 715,669 854,711
Net income before taxes......... 208,361 315,479 551,683 708,794 855,211
Net income...................... 129,184 195,597 342,044 439,452 530,231
SELECTED BALANCE SHEET INFORMATION
2001 2002 2003 2004 2005
---------- ---------- ---------- ---------- ----------
(THOUSANDS OF DOLLARS)
ASSETS
Current Assets............... $ 388,157 $ 393,023 $ 401,289 $ 565,288 $1,087,212
Property and equipment,
net........................ 1,037,083 1,303,675 1,534,218 1,627,375 1,639,533
Other assets................. 4,547 4,547 4,547 4,547 4,547
---------- ---------- ---------- ---------- ----------
Total assets............ $1,429,787 $1,701,245 $1,940,054 $2,197,210 $2,731,293
LIABILITIES AND STOCKHOLDERS
EQUITY
Current Liabilities.......... $ 331,568 $ 326,494 $ 326,494 $ 326,494 $ 326,495
Long-term debt............... 405,000 405,000 210,000 -- --
Deferred income taxes
payable.................... 116,777 217,711 309,477 337,181 341,032
Other long-term
liabilities................ 31,446 11,446 11,446 11,446 11,446
Total stockholders' equity... 544,997 740,593 1,082,637 1,522,089 2,052,320
---------- ---------- ---------- ---------- ----------
Total liabilities and
stockholder's
equity................ $1,429,787 $1,701,245 $1,940,054 $2,197,210 $2,731,293
PROJECTED SELECTED ITEMS
2001 2002 2003 2004 2005
---- ---- ----- ----- -----
Production (Bcfe).................................... 129 188 257 326 393
Reserve additions (Bcfe)............................. 381 1138 703 713 787
Capital investment ($ millions)...................... 273 413 417 327 285
Production taxes (% of revenue)...................... 9.0% 9.6% 9.6% 9.9% 10.0%
Total revenue ($ millions)........................... 421 658 1,013 1,286 1,541
EBITDA ($ millions).................................. 294 488 753 950 1,128
Financial Assumptions.
In preparing the Projections, Barrett Resources made numerous assumptions,
including, without limitation, those assumptions set forth in the following
table. Such assumptions were based upon Barrett Resources' management's
forecasts and estimates of future conditions. In addition to estimating items
such as gas prices, costs, tax rates and depletion, depreciation and
amortization, Barrett Resources' management also relied on production estimates
based on development drilling at higher rates than that currently taking place,
as well as other projects that Williams may or may not choose to pursue. It is
not possible to
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predict whether these assumptions made in preparing the Projections will be
valid, and actual items assumed may prove to be materially different than those
contained in these assumptions.
CERTAIN FINANCIAL ASSUMPTIONS
2001 2002 2003 2004 2005
------ ------ ------ ------ ------
NYMEX gas price per Mcf....................... $ 4.50 $ 4.50 $ 4.50 $ 4.50 $ 4.50
Realized gas sales price per Mcf.............. $ 3.22 $ 3.46 $ 3.93 $ 3.94 $ 3.92
Realized oil sales price per bbl.............. $24.00 $24.00 $24.00 $24.00 $24.00
Average lease operating expenses per Mcfe
(including transportation & gathering)...... $ 0.48 $ 0.47 $ 0.45 $ 0.47 $ 0.49
Average production tax rate................... 9.00% 9.60% 9.60% 9.90% 10.00%
Average total production costs per Mcfe....... $ 0.83 $ 0.84 $ 0.84 $ 0.86 $ 0.89
Depletion, depreciation & amortization rate
per Mcfe.................................... $ 0.82 $ 0.78 $ 0.72 $ 0.72 $ 0.70
Gas and Oil Reserve Information.
As part of the due diligence process, Barrett Resources provided Williams
with certain information related to its "booked/proved" gas and oil reserves, as
well as certain estimates of "unbooked/unproved" reserves. Barrett Resources
indicated in information provided during the due diligence process that it had
booked/proved gas and oil reserves of 1,372 Bcfe and 8,008 Bcfe in
unbooked/unproved reserves. Of the 8,008 Bcfe of unbooked/unproved reserves,
approximately 5,385 Bcfe of the unbooked/unproved reserves were attributable to
the Piceance and Powder River Basins, and approximately 1,629 Bcfe of the
unbooked/unproved reserves were attributable to exploration activities. On April
24, 2001 and subsequent to Williams' receipt of the foregoing reserve estimates,
Barrett Resources issued a press release announcing that, after a review by
independent reservoir engineers, the estimate of Barrett Resources' proved gas
and oil reserves had been raised from 1,372 Bcfe to approximately 2,100 Bcfe; no
further information was provided to Williams by Barrett Resources regarding how
and to what extent the booking of these additional proved reserves would affect
the estimates of unbooked/unproven reserves. According to Barrett Resources, the
estimates of "unbooked/unproved" reserves that Barrett Resources provided to
Williams were attributable to Barrett Resources' belief in the potential for
significant growth in its natural gas reserves and production due to, among
other things, its large acreage position in the Piceance Basin (134,000 net
acres) and the Powder River Basin (476,000 net acres), geological and reservoir
engineering data, increases in production and its exploration activities.
Proved reserves are the estimated quantities of crude oil, natural gas and
natural gas liquids which geological and engineering data demonstrate with
reasonable certainty to be recoverable in future years from known reservoirs
under existing economic and operating conditions. Proved reserves are limited to
those quantities of oil and gas which can be expected, with little doubt, to be
recoverable commercially at current prices and costs, under existing regulatory
practices and with existing conventional equipment and operating methods.
Estimates of unbooked/unproved reserves are based upon analysis of geological
and engineering data which does not demonstrate such reserves to be proved under
existing economic and operating conditions, but indicates where such analysis
suggests some likelihood of their existence and future recovery. ESTIMATES OF
UNPROVED RESERVES ARE HIGHLY SPECULATIVE, SHOULD NOT BE REGARDED AS AN
INDICATION THAT WILLIAMS OR BARRETT RESOURCES CONSIDERS THEM A RELIABLE
PREDICTOR OF FUTURE PROVED RESERVES AND THIS INFORMATION SHOULD NOT BE RELIED ON
AS SUCH. IN ADDITION, IT MAY NOT BE ECONOMICAL TO RECOVER UNBOOKED/UNPROVED
RESERVES IF THERE IS A DECLINE IN THE MARKET PRICE IN OIL AND GAS. THE ABILITY
TO PRODUCE UNBOOKED/UNPROVED RESERVES IS ALSO HIGHLY DEPENDENT ON GOVERNMENTAL
REGULATIONS RELATING TO DRILLING OF OIL AND GAS WELLS.
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS. Certain
matters discussed herein, including without limitation, the Projections and the
reserve information, are forward-looking statements that involve risks and
uncertainties. Such information has been included in this Offer to Purchase for
the limited purpose of giving Barrett Resources' stockholders access to
projections and other information prepared by Barrett Resources' management that
were made available to Williams. The Projections were based on assumptions
concerning Barrett Resources' operations and business prospects in 2001 through
2005, including the assumption that Barrett Resources would continue to operate
under the same ownership structure as existed at the time the Projections were
prepared. The Projections were also based on other revenue, expense and
operating assumptions. Information of this type is based on estimates and
assumptions that are inherently subject to significant economic and competitive
uncertainties and contingencies, all of which are also difficult to predict and
many of which are beyond Barrett Resources' and Williams' control. Such
uncertainties and contingencies include, but are not limited to, the following
factors: changes in the economic conditions in which Barrett Resources operates,
including fluctuations in demand, seasonally and otherwise; greater than
anticipated competition or price pressures; changes in market prices for gas and
oil; new or alternative product offerings; better or worse than expected
customer consumption resulting in the need to expand operations and make capital
investments; the availability of resources to recover gas and oil reserves and
the impact of investments required to enter new markets or remain competitive in
established markets. Accordingly, there can be no assurance that the projected
results would be realized or that actual results would not be significantly
higher or lower than those set forth above. In addition, the Projections and
other forward-looking information were not prepared with a view to public
disclosure or compliance with the published guidelines of the SEC or the
guidelines established by the American Institute of Certified Public Accountants
regarding projections and forecasts, and are included in this Offer to Purchase
only because such information was made available to Williams by Barrett
Resources. Neither Williams', Purchaser's nor Barrett Resources' independent
accountants or independent reservoir engineers have examined, compiled or
applied any agreed upon procedures to this information, and, accordingly, do not
express an opinion or any form of assurance with respect thereto and assume no
responsibility for this information. Neither Williams, Purchaser nor Barrett
Resources intends to provide any updated information with respect to the
Projections, reserve information or any forward-looking statements.
9. CERTAIN INFORMATION CONCERNING WILLIAMS AND PURCHASER
Williams is a Delaware corporation with its principal executive offices
located at One Williams Center, Tulsa, OK 74172. Its telephone number at such
offices is (918) 573-2000. Williams, together with its subsidiaries, is a
leading company in the energy sector. Williams and its subsidiaries are
principally dedicated to energy-related activities, including transportation and
storage of natural gas and related activities; exploration and production of oil
and gas; natural gas gathering, processing and treating activities; natural gas
liquids transportation; transportation of petroleum products and related
terminal services; light hydrocarbon/olefin transportation; ethylene production;
production and marketing of ethanol and bio-products; refining of petroleum
products; retail marketing; and energy commodity marketing and trading. The
name, business address, citizenship, present principal occupation and employment
history for the past five years of each of the directors and executive officers
of Williams are set forth in Schedule I.
Purchaser is a Delaware corporation with its principal executive offices
located at One Williams Center, Tulsa, OK 74172. Its telephone number at such
offices is (918) 573-2000. Purchaser is a wholly-owned subsidiary of Williams.
Purchaser has not carried on any activities other than in connection with the
Offer and the Merger. The name, business address, citizenship, present principal
occupation and employment history for the past five years of each of the
directors and executive officers of Purchaser are set forth in Schedule I.
On April 23, 2001, Williams completed the spinoff (the "Spinoff") of
Williams Communications Group, Inc. ("WCG"), Williams' former telecommunications
business, through a tax-free distribution of 398.5 million WCG shares to
Williams' stockholders. This distribution amounted to approximately 95 percent
of the WCG shares held by Williams. After the close of market on April 23, 2001,
Williams
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stockholders were issued 0.822399 of a share of WCG common stock for each share
of Williams Common Stock held, with cash in lieu of fractional shares. On or
before May 15, 2001, Williams expects to file with the SEC its Quarterly Report
on Form 10-Q for the quarter ended March 31, 2001, which will contain financial
disclosure and other information regarding the Spinoff.
Williams is subject to the information and reporting requirements of the
Exchange Act and is required to file periodic reports, proxy statements and
other information with the SEC relating to its business, financial condition and
other matters. Certain information, as of particular dates, concerning Williams'
business, principal physical properties, capital structure, material pending
legal proceedings, operating results, financial condition, directors and
officers (including their remuneration and stock options granted to them), the
principal holders of Williams' securities, any material interests of such
persons in transactions with Williams and certain other matters is required to
be disclosed in proxy statements and annual reports distributed to Williams'
stockholders and filed with the SEC. You may inspect or copy these reports,
proxy statements and other information at the SEC's public reference facilities
and they should also be available for inspection in the same manner as set forth
above with respect to Barrett Resources in Section 8 of this document.
Except as set forth elsewhere in this Offer to Purchase or Schedule I
hereto: (a) neither Williams, Purchaser nor, to our knowledge, any of the
persons listed in Schedule I hereto or any associate or majority-owned
subsidiary of ours or of any of the persons so listed, beneficially owns or has
a right to acquire any Shares or any other equity securities of Barrett
Resources; (b) neither Williams, Purchaser, nor, to our knowledge, any of the
persons or entities referred to in clause (a) above or any of their executive
officers, directors or subsidiaries has effected any transaction in the Shares
or any other equity securities of Barrett Resources during the past 60 days; (c)
neither Williams, Purchaser nor, to our knowledge, any of the persons listed in
Schedule I hereto, has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of Barrett Resources
(including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any such securities, joint
ventures, loan or option arrangements, puts or calls, guaranties of loans,
guaranties against loss or the giving or withholding of proxies, consents or
authorizations); (d) since May 7, 1999, there have been no transactions which
would require reporting under the rules and regulations of the SEC between
Williams or any of its subsidiaries or, to our knowledge, any of the persons
listed in Schedule I hereto, on the one hand, and Barrett Resources or any of
its executive officers, directors or affiliates, on the other hand; and (e)
since May 7, 1999, there have been no contacts, negotiations or transactions
between Williams or any of its subsidiaries or, to our knowledge, any of the
persons listed in Schedule I hereto, on the one hand, and Barrett Resources or
any of its subsidiaries or affiliates, on the other hand, concerning a merger,
consolidation or acquisition, a tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets.
10. BACKGROUND OF THE OFFER.
As a part of ongoing business development activities, for several months
prior to mid-March 2001, a strategic team within Williams evaluated several
natural gas exploration and production companies as possible acquisition
candidates to complement Williams' other business activities. Barrett Resources
was one of the potential acquisition candidates identified in that process.
On March 7, 2001, Shell Oil Company ("Shell") issued a press release
announcing an unsolicited proposal to acquire Barrett Resources for $55 per
Share in cash. On March 8, 2001, Barrett Resources issued a press release
announcing that its Board of Directors had reviewed and rejected Shell's
unsolicited proposal and that the Board had authorized management of Barrett
Resources to pursue strategic alternatives, including seeking acquisition
proposals from qualified parties.
On March 8, 2001, following Shell's announcement of its unsolicited
proposal to acquire Barrett Resources, representatives of Williams contacted a
senior officer of Barrett Resources to indicate Williams' interest in acquiring
Barrett Resources. Thereafter, Barrett Resources' financial advisors, Goldman
Sachs
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and Petrie Parkman, contacted representatives of Williams in regards to
Williams' participation in Barrett Resources' process.
On March 9, 2001, Williams entered into a Confidentiality Agreement with
Barrett Resources (the "Confidentiality Agreement") which provided, among other
things, that Williams would keep confidential information it received from
Barrett Resources and would abide by certain "standstill" restrictions until May
11, 2001.
On March 12, 2001, Shell and a wholly-owned subsidiary of Shell commenced
a cash tender offer for all outstanding Shares at $55 per Share (the "Shell
Offer"). Also on March 12, 2001, Shell filed with the SEC preliminary consent
solicitation materials, pursuant to which Shell stated it would seek to remove
all of Barrett Resources' directors without cause and replace them with three
nominees selected by Shell (the "Shell Consent Solicitation"). A record date of
April 19, 2001 was eventually set by Barrett Resources' Board for the proposed
Shell Consent Solicitation.
On March 22, 2001, Barrett Resources' Board held a special meeting at
which the Board reviewed the Shell Offer and unanimously concluded that the
Shell Offer was inadequate and not in the best interests of Barrett Resources'
stockholders.
Commencing in mid-March 2001 and continuing through May 6, 2001, Williams
and its representatives conducted a due diligence review of the business and
financial condition of Barrett Resources. During such period, representatives of
Williams held several discussions with representatives of Barrett Resources
about Williams' interest in Barrett Resources and Barrett Resources' strategic
fit with Williams, including, among others, a few conversations held prior to
the May 2, 2001 bid deadline between Mr. Keith Bailey, Chairman, President and
Chief Executive Officer of Williams, and C. Robert Buford, a director of Barrett
Resources and an acquaintance of Mr. Bailey.
On or about April 11, 2001, Barrett Resources sent to each party
(including Williams) who signed a confidentiality agreement and visited the data
room (i) a detailed instruction letter for submitting binding proposals to
acquire or merge with Barrett Resources and (ii) two forms of merger agreement
(one for cash proposals and one for stock proposals). The letter indicated that
each party's proposal was due on May 2, 2001 along with any comments and
revisions that each party required to the relevant form(s) of merger agreement.
On April 26, 2001, Shell announced that it was increasing the price
offered in the Shell Offer from $55 to $60 per Share (the "Revised Shell
Offer"). On April 30, 2001, Barrett Resources announced that it had rejected the
Revised Shell Offer as inadequate and reiterated that Barrett Resources had
invited competing offers as part of a process to review its strategic
alternatives. In response to Shell's request that Barrett Resources consider
Shell's Revised Offer on an equal basis with any other offers, Barrett Resources
invited Shell to participate in the auction process and submit its "best and
final" offer by 12:00 noon, on Wednesday, May 2, 2001, the deadline which
Barrett Resources had established for other interested parties participating in
the "auction process". Barrett Resources also furnished Shell's financial
advisors with the forms of merger agreements it had furnished to other potential
bidders, and advised Shell of the "ground rules" which were also applicable to
other potential bidders.
On May 1, 2001, the Williams Board of Directors, together with Williams'
financial advisors, held a telephonic meeting for the purpose of considering the
authorization of an acquisition proposal for Barrett Resources. At the beginning
of the telephonic meeting, outside individuals were mistakenly connected by a
conference call vendor. Before this error was discovered, officers of Williams
stated that the Board meeting had been called to consider Williams' potential
proposal to acquire Barrett Resources. As a result of this non-intentional,
inadvertent disclosure, Williams filed a Form 8-K disclosing this event on May
1, 2001.
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Following approval by the Williams Board of Directors to submit a proposal
to acquire Barrett Resources in accordance with the bid procedures established
by Barrett Resources, Williams sent a proposal letter to Barrett Resources'
financial advisors on May 2, 2001, the form of which is set forth below:
May 2, 2001
VIA OVERNIGHT MAIL and FACSIMILE
Ray Strong Jon Hughes
Vice President Principal
Goldman, Sachs & Co. Petrie Parkman & Co.
85 Broad Street, 19th Floor 600 Travis St., Suite 7400
New York, NY 10004 Houston, TX 77002
Fax: 212-346-3895 Fax: 713-650-8461
Re: Proposal to Acquire all of the outstanding equity securities of
Barrett Resources Corporation ("Company")
Dear Messrs. Strong and Hughes:
In response to your invitation to bid dated April 11, 2001, The Williams
Companies, Inc. ("Williams") hereby submits this bid proposal to acquire 100% of
the outstanding common stock of Barrett Resources Corporation ("Shares") on the
terms set forth in this letter. Except as set forth in that certain
confidentiality agreement dated March 9, 2001 between Williams and Barrett
Resources, neither Williams nor any of its affiliates have any obligation to
Barrett Resources based on this letter or otherwise unless and until each of the
conditions set forth below has been satisfied.
The material terms and conditions of Williams' proposal are as follows:
1. SHARE PRICE. Williams will pay a price per Share equivalent to
$71.00 for each outstanding Share.
2. STRUCTURE. The consideration for the Shares will be composed
of 50% Williams common stock and 50% cash. If desired by Barrett's Board
of Directors, Williams will increase the common stock component of its
offer up to 100% of the consideration. The exchange ratio will be fixed at
the time of the execution of the definitive agreements and be determined
by the market price of Williams common stock, such market price to be the
average closing price of Williams stock on the New York Stock Exchange
("NYSE") for 10 consecutive days preceding the execution of the definitive
agreements. Williams believes that an exchange of stock not only provides
the potential for significant value appreciation but also an attractive
tax deferral to Barrett stockholders. In the event that Barrett Resources
desires a combination of cash and Williams common stock, we would propose
to structure the transaction as a cash tender offer followed by a stock
for stock merger. The transaction is intended to qualify as a tax-free
reorganization.
3. SOURCE OF FUNDS. Williams has committed lines of capital
and/or cash on hand in amount sufficient to pay any cash portion of the
consideration at the closing.
4. COMPANY EMPLOYEES. Williams admires Barrett and realizes that
Barrett Resources' success is a direct result of its dedicated, highly
competent employees. Williams plans on retaining a substantial majority of
Barrett's employees and maintaining Barrett's offices in Denver. We also
expect that Williams' northern Rocky Mountain assets, including interests
in the prolific Jonah Field, will be integrated with Barrett's assets and
operated out of Denver. Since there is very little
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overlap between Barrett's and Williams' core properties, most of Barrett's
employees can expect to continue in the same capacity in which they
currently act, with expanded opportunities for future advancement.
5. CONDITIONS. Williams' proposal contained herein is subject to
the following conditions:
a. DEFINITIVE AGREEMENT. Williams and Barrett Resources
shall have entered into a mutually acceptable definitive merger
agreement containing the terms set forth in this letter and in the
attached form of merger agreement, as revised.
b. APPROVALS. The proposal provided herein has been approved
by the Williams Board of Directors. The following additional
approvals shall have been obtained: (i) the approval of the board of
directors of Barrett Resources, (ii) the applicable waiting period
under the Hart-Scott-Rodino Act shall have expired or been
terminated, (iii) the Williams common stock to be issued in
connection with this proposal shall have been registered by the SEC
and approved for listing on the NYSE, and (iv) the stockholders of
Barrett Resources shall have tendered at least 50% of the Shares.
6. CONFIDENTIALITY. This Proposal and the price, terms and
conditions herein are subject to Barrett Resources' agreement that the
proposal and the price, terms and conditions herein will not be made
public or otherwise disclosed without the prior consent of Williams.
7. NO SOLICITATION; TERMINATION FEE. Barrett Resources will agree
to customary non-solicitation of acquisition proposals, including notice
provisions of third party offers and proposed termination of the merger
agreement. The merger agreement will provide for a termination fee equal
to three percent of the value of 100% of the Shares, payable to Williams
if, among other things, Barrett Resources accepts a "superior" proposal,
Barrett Resources' board withdraws its recommendation, there is a change
in the majority of Barrett Resources' board or the minimum tender
condition is not met and a competing acquisition proposal has been made.
8. MANAGEMENT PRESENTATION. Williams would be pleased to meet as
soon as practical with the Barrett Board of Directors to describe
Williams' plans and expectations for the future, the compelling value
inherent in our common stock, and the reasons we expect our stock to
continue to perform well relative to the market and industry as a whole.
We appreciate your consideration of this proposal. In order to help you
understand the upside value of Williams common stock as consideration in an
exchange offer, we have included some backup material to this letter containing
recent analyst comments, earnings estimates, recommendations on Williams, and a
graph showing Williams as a compelling stock value in relation to other
comparable stocks. Williams common stock (ticker: WMB) achieved a total return
of 1345% from January 1, 1990 to April 30, 2001, a compound annual return of
28%. We are including this material solely for informational purposes, and we
assume no responsibility for the accuracy of the factual information contained
therein. As a matter of policy, we do not generally comment on analysts'
projections or estimates and our inclusion of this material should not in any
matter be viewed as agreement or acquiescence on our part with the projections
or opinions set forth in such material.
Please direct any questions or comments regarding this proposal to Mark
Wilson, Vice President of Corporate Development, at the office at (918)
573-9236, facsimile number (918) 573-2334, at home at . . ., or cell phone at .
. . We have engaged Skadden, Arps, Slate, Meagher & Flom, LLP as our legal
advisors and Merrill Lynch & Co., Inc. as our financial advisors in connection
with this process.
We would like to begin negotiation of definitive agreements immediately
and be in a position to sign a definitive merger agreement within one week. This
offer will remain in effect until 5:00 p.m. Central
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Time on May 9, 2001, whereupon it will automatically expire unless extended by
Williams in its sole discretion.
Sincerely,
THE WILLIAMS COMPANIES, INC.
By: /s/ KEITH E. BAILEY
------------------------------------
Keith E. Bailey
Chairman of the Board, President and
CEO
The proposal letter was accompanied by proposed changes to the form of
merger agreement relating to a stock proposal furnished by Barrett Resources to
Williams during the "auction process".
On May 2, 2001, Shell announced that it would maintain its revised offer
price for the Shares at $60 per Share and that is was prepared to negotiate all
terms of its proposal, including price. Shell also announced that it was
submitting a merger agreement to Barrett Resources' financial advisors and that
such merger agreement did not include a "breakup fee."
On the afternoon of May 4, 2001, representatives of Barrett Resources
advised representatives of Williams that Williams was one of two final bidders
in Barrett Resources' auction process and requested that Williams submit an
amended proposal, if it chose to do so, by 2:00 p.m. (Denver time) on Saturday,
May 5, 2001, and that Williams consider providing more certainty as to value
with respect to the stock portion of its proposal. Commencing on the evening of
May 4, 2001, counsel for Barrett Resources provided to Williams and counsel for
Williams a revised form of merger agreement and related schedules. The revised
merger agreement reflected Barrett Resources' response to the form of merger
agreement which had been submitted by Williams with its May 2(nd) proposal
letter.
On Saturday, May 5, 2001, representatives of Williams advised Barrett
Resources that Williams was increasing its proposal from $71 to $73 per Share,
while maintaining the structure and other terms set forth in its May 2(nd)
proposal letter, and accepting Barrett Resources' proposed maximum expense
reimbursement amount of $15 million. In addition, counsel for Williams provided
Barrett Resources and its counsel a revised form of merger agreement that
responded to the May 4(th) draft of the merger agreement. During the evening of
May 5, 2001, representatives of Barrett Resources advised Williams that it was
the prevailing bidder in Barrett Resources' auction process. Negotiations with
respect to the draft merger agreement continued through May 6, 2001 and the
early morning hours of May 7.
On May 6, 2001, representatives of Barrett Resources and its legal and
financial advisors traveled to Williams' headquarters in Tulsa, Oklahoma and
conducted an on-site due diligence review of Williams.
On the evening of May 6, 2001, the Board of Directors of Williams held a
telephonic meeting at which the Merger Agreement and the transactions
contemplated thereby were approved. At such meeting, Merrill Lynch, financial
advisor to Williams, rendered an oral opinion (which was subsequently confirmed
in writing) that as of the date of the opinion the consideration to be paid in
the Offer and Merger, taken together, was fair from a financial point of view to
Williams. Barrett Resources' Board of Directors held a meeting early in the
morning of May 7, 2001 at which the Merger Agreement and related transactions
were approved. The Merger Agreement was executed on the morning of May 7, 2001
and separate press releases announcing the transaction were issued by each of
Williams and Barrett Resources.
On May 7, 2001, Shell publicly announced that it was withdrawing its offer
to acquire Barrett Resources.
On May 14, 2001, Williams and Purchaser commenced the Offer.
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11. PURPOSE OF THE OFFER AND THE MERGER; THE MERGER AGREEMENT; EFFECTS OF
INABILITY TO CONSUMMATE THE MERGER; STATUTORY REQUIREMENTS; APPRAISAL
RIGHTS; PLANS FOR BARRETT RESOURCES; CONFIDENTIALITY AGREEMENTS; "GOING
PRIVATE" TRANSACTIONS.
Purpose of the Offer
The purpose of the Offer and the Merger is to acquire control of, and the
entire equity interest in, Barrett Resources. The Offer, as the first step in
the acquisition of Barrett Resources, is intended to facilitate the transaction
by permitting Williams, through Purchaser, to acquire 50% of the Shares on an
expeditious basis. The purpose of the Merger is to acquire all capital stock of
Barrett Resources not purchased pursuant to the Offer or otherwise. Assuming
that all the conditions to the Merger are satisfied, Barrett Resources will
merge with and into Purchaser with Purchaser continuing as the surviving
corporation, unless certain conditions related to the United States federal
income tax treatment of the Offer and the merger of Barrett Resources with and
into Purchaser are not satisfied, in which case Purchaser may, in Williams'
reasonable discretion, merge with and into Barrett Resources with Barrett
Resources as the surviving corporation (whichever shall survive the Merger in
accordance with the foregoing, the "Surviving Corporation"). The Offer is being
made pursuant to the Merger Agreement.
Under the Delaware General Corporation Law (the "DGCL"), the approval of
Barrett Resources' Board and the affirmative vote of the holders of a majority
of the outstanding Shares are required to approve and adopt the Merger Agreement
and the transactions contemplated thereby, including the Merger. The Board of
Directors of Barrett Resources has unanimously approved the Merger Agreement and
the transactions contemplated thereby and determined that the Merger Agreement
and the terms contemplated thereby, including the Offer and the Merger, are
advisable and are fair to and in the best interests of, Barrett Resources and
its stockholders. The only remaining required corporate action of Barrett
Resources is the Barrett Resources Stockholder Approval. In the Merger
Agreement, Barrett Resources has agreed to convene the Barrett Resources Special
Meeting to seek Barrett Resources Stockholder Approval and the adoption of the
Merger Agreement and the transactions contemplated thereby as promptly as
practicable after the consummation of the Offer and such time as the
registration statement for the conversion of Williams Common Stock for Shares
pursuant to the Merger becomes effective. If Purchaser has acquired (pursuant to
the Offer or otherwise) 50% of the outstanding Shares (which is expected to
occur if the Minimum Condition is met), Purchaser will effectively have
sufficient voting power to approve and adopt the Merger Agreement and the
Merger.
Purchaser has agreed that all Shares owned by it and any of its affiliates
will be voted in favor of the Merger at the Barrett Resources Special Meeting.
If Purchaser purchases Shares pursuant to the Offer, the Merger Agreement
provides that Purchaser will be entitled to designate representatives to serve
on the Board of Barrett Resources substantially in proportion to Purchaser's
ownership of Shares following such purchases. See "The Merger Agreement", below.
If Purchaser purchases 16,730,502 Shares in the Offer, Purchaser expects that
such representation would permit Williams to appoint at least one-half of the
members of the Barrett Resources Board.
The Merger Agreement
The following summary description of the Merger Agreement is qualified in
its entirety by reference to the Merger Agreement itself, filed as an exhibit to
the Tender Offer Statement on Schedule TO that we filed with the SEC, which you
may examine and copy at the offices of the SEC as set forth in Section 8 (except
that it will not be available at the regional offices of the SEC).
THE OFFER. The Merger Agreement provides for the making of the Offer. Our
obligation to accept for payment and pay for Shares tendered pursuant to the
Offer is subject to the satisfaction or waiver of the Minimum Condition and
certain other conditions that are described in Section 14 (collectively, the
"Offer Conditions"). Subject to the provisions of the Merger Agreement, we may
waive any Offer Condition; however, without the prior written consent of Barrett
Resources we can not waive the
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Minimum Condition. We reserve the right to modify the terms of the Offer, except
that, without the prior written consent of Barrett Resources, we may not (i)
reduce the number of Shares sought in the Offer, (ii) decrease the price per
Share, (iii) impose any conditions to the Offer in addition to the Offer
Conditions or modify the Offer Conditions in a manner adverse to the holders of
Shares (other than to waive any Offer Conditions to the extent permitted by the
Merger Agreement), (iv) except as expressly provided in the Merger Agreement
extend the Offer, (v) change the form of consideration payable in the Offer
(other than by adding consideration) or (vi) make any other change or
modification in any of the terms of the Offer in any manner that is adverse to
the holders of Shares. See Section 14, "Conditions of the Offer".
On the date of commencement of the Offer, Williams and Purchaser will file
with the SEC a Tender Offer Statement on Schedule TO (the "Schedule TO") with
respect to the Offer and the related Letter of Transmittal, and Williams and
Purchaser will disseminate the Offer Documents (as defined herein) to holders of
Shares. On the date the Offer Documents are filed with the SEC, Barrett
Resources will file with the SEC the Schedule 14D-9 containing the
Recommendations (as defined herein) (subject to the right of the Board of
Directors of Barrett Resources to make a Subsequent Determination (as defined
herein)) and Barrett Resources will disseminate the Schedule 14D-9 to its
stockholders. This Offer to Purchase, the Letter of Transmittal, a Notice of
Guaranteed Delivery and certain related documents are referred to herein as the
"Offer Documents."
RECOMMENDATION. The Board of Directors of Barrett Resources duly adopted
resolutions by unanimous vote (i) determining that the Merger Agreement and the
transactions contemplated thereby are advisable and fair to and in the best
interest of Barrett Resources' stockholders, (ii) approving the Merger Agreement
and the transactions contemplated thereby, including the Offer and the Merger,
(iii) waiving the application of Barrett Resources' bylaws (the "Bylaws") with
respect to the Merger Agreement, the Offer and the Merger and (iv) resolving to
recommend acceptance of the Offer and that stockholders of Barrett Resources
tender their Shares in the Offer (collectively, the "Recommendations").
THE MERGER. The Merger Agreement provides that the purchase of Shares in
the Offer will be followed by a merger of Barrett Resources with and into
Purchaser in the Forward Merger. However, if Williams is unable (using its
reasonable best efforts) to obtain a written opinion of its legal counsel, or
another nationally recognized United States federal income tax counsel or "Big
Five" accounting firm, that the Offer and the Forward Merger will be treated as
a "reorganization" within the meaning of Section 368(a) of the Code, then in
Williams' reasonable discretion the Merger may be accomplished through the
merger of Purchaser (or another direct or indirect wholly-owned subsidiary of
Williams, as determined by Williams in its reasonable discretion) with and into
Barrett Resources in the Reverse Merger. In each case the Surviving Corporation
of the Merger will become a direct or indirect wholly-owned subsidiary of
Williams.
If the Forward Merger is effected, then following the Effective Time, the
separate existence of Barrett Resources will cease and Purchaser will continue
as the Surviving Corporation. If the Reverse Merger is effected, then, following
the Effective Time, the separate existence of Purchaser will cease and Barrett
Resources will continue as the Surviving Corporation. The Surviving Corporation
will succeed to and assume all the rights and obligations of Purchaser and
Barrett Resources in accordance with the DGCL.
The Merger Agreement provides that (i) in the event of the Forward Merger,
each issued and outstanding share of capital stock of Purchaser will remain as
one validly issued, fully paid and nonassessable share of common stock, no par
value, of the Surviving Corporation and (ii) in the event of the Reverse Merger,
each issued and outstanding share of capital stock of Purchaser will be
converted into and become one validly issued, fully paid and non-assessable
share of common stock of the Surviving Corporation.
As of the Effective Time, each Share (other than Shares held directly or
indirectly by Williams or Barrett Resources or their subsidiaries or by
Purchaser) will be converted into the right to receive 1.767 (the "Exchange
Ratio") duly authorized, validly issued, fully paid and non-assessable shares of
Williams
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Common Stock (the "Merger Consideration"). As of the Effective Time, all such
Shares, when converted, shall no longer be outstanding and will automatically be
cancelled and retired, and each holder of a certificate representing any such
Shares will cease to have any rights with respect thereto, except (upon the
surrender of certificates for such Shares or book-entry transfer of such Shares)
(i) the right to receive dividends paid to holders of Williams Common Stock
after the Effective Time, (ii) certificates representing the Williams Common
Stock into which such Shares are converted, and (iii) any cash, without
interest, in lieu of fractional shares of Williams Common Stock to be issued or
paid in consideration therefor.
No fractional shares of Williams Common Stock will be issued, nor shall
dividends or interest be paid on fractional shares of Williams Common Stock.
Instead of any fractional share of Williams Common Stock that would otherwise be
issuable, cash adjustments will be paid to holders in respect of any fractional
share of Williams Common Stock, and the amount of such cash adjustment will be
equal to the product of (x) such stockholder's fractional share of Williams
Common Stock that would otherwise be issuable to such holder and (y) the closing
price per share of Williams Common Stock on the NYSE on the Closing Date (as
defined in the Merger Agreement) of the Merger.
REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, Barrett
Resources has made customary representations and warranties to Purchaser and
Williams, including representations relating to its organization and
qualification and subsidiaries; its certificate of incorporation and bylaws;
capital structure; corporate authorizations; absence of conflicts; required
filings and consents; compliance with laws; information supplied; SEC filings;
voting requirements; absence of certain changes or events; absence of
undisclosed liabilities; litigation; employee benefit plans; tax matters;
intellectual property; environmental matters; conditions of assets; and other
matters.
Pursuant to the Merger Agreement, Purchaser and Williams have made
customary representations and warranties to Barrett Resources, including
representations relating to corporate organization; absence of certain changes
or events; capital structure; SEC filings; corporate authorizations; Williams
Common Stock; information supplied; compliance with laws; absence of conflicts;
financial statements; litigation; and other matters.
Certain of the representations and warranties contained in the Merger
Agreement are qualified as to "materiality", "Material Adverse Change" or
"Material Adverse Effect". When used in connection with Barrett Resources or
Williams, as the case may be, "Material Adverse Change" or "Material Adverse
Effect" means any change or effect (or any development that, insofar as can
reasonably be foreseen, is likely to result in any change or effect) that is
materially adverse to the business, properties, assets, condition (financial or
otherwise) or results of operations of Barrett Resources and its subsidiaries
taken as a whole, or Williams and its subsidiaries taken as a whole, as the case
may be; provided, however, that (i) any adverse change, effect or development
that is caused by or results from conditions affecting the United States economy
generally or the economy of any nation or region in which Barrett Resources or
Williams, as the case may be, or their respective subsidiaries, conducts
business that is material to the business of Barrett Resources or Williams, as
the case may be, and their respective subsidiaries, taken as a whole, shall not
be taken into account in determining whether there has been (or whether there
could reasonably be foreseen) a "Material Adverse Change" or "Material Adverse
Effect" with respect to Barrett Resources or Williams, as the case may be, (ii)
any adverse change, effect or development that is caused by or results from
conditions generally affecting the industries (including the oil and gas
industry) in which Barrett Resources or Williams, as the case may be, conducts
its business shall not be taken into account in determining whether there has
been (or whether there could be reasonably be foreseen) a "Material Adverse
Change" or "Material Adverse Effect" with respect to Barrett Resources or
Williams, as the case may be, and (iii) any adverse change, effect or
development that is caused by or results from the announcement or pendency of
the Merger Agreement, the Offer, the Merger or the transactions contemplated
thereby will not be taken into account in determining whether there has been (or
whether there could reasonably be foreseen) a "Material Adverse Change" or
"Material Adverse Effect" with respect to Barrett Resources or Williams, as the
case may be.
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COVENANTS OF WILLIAMS. Pursuant to the Merger Agreement, Williams has
agreed to comply with various covenants, including:
Williams' Conduct of Business. During the period from the date of
the Merger Agreement until the Effective Time, Williams will, and will
cause each of its subsidiaries to, in all material respects, except as
contemplated by the Merger Agreement, carry on its business in the
ordinary course as currently conducted. During such period, Williams will
not, and will not permit any of its subsidiaries to, without the prior
written consent of Barrett Resources (which consent will not be
unreasonably withheld or delayed):
(i) amend Williams' certificate of incorporation in a manner
that changes any material term or provision of the Williams Common
Stock;
(ii) materially amend Purchaser's certificate of
incorporation;
(iii) engage in any material repurchase at a premium,
recapitalization, restructuring or reorganization with respect to
Williams' capital stock;
(iv) acquire in any manner any person or any business or
division of any person, or otherwise acquire any assets, unless such
acquisition or the entering into of a definitive agreement relating
to or the consummation of such transaction would not (a) impose any
material delay in the obtaining of, or materially increase the risk
of not obtaining, any authorizations, consents, orders, declarations
or approvals of any Governmental Entity (as defined in the Merger
Agreement) necessary to consummate the Offer, the Merger or the
expiration or termination of any applicable waiting period, (b)
materially increase the risk of any Governmental Entity entering an
order prohibiting the consummation of the Offer or the Merger or (c)
increase the risk of not being able to remove any such order on
appeal or otherwise; or
(v) enter into any contract or agreement to do any of the
foregoing.
Purchaser's Conduct of Business Pending the Merger. Through the
Effective Time, Purchaser will not engage in any activity of any nature
except as provided in or contemplated by the Merger Agreement.
Voting of Shares. Williams has agreed to vote all Shares
beneficially owned by it or its subsidiaries, including Purchaser, and
including Shares purchased in the Offer, in favor of approval and adoption
of the Merger.
COVENANTS OF BARRETT RESOURCES. Pursuant to the Merger Agreement, Barrett
Resources has agreed to comply with various covenants, including:
Conduct of Business. Prior to the earlier of (i) the Effective
Time or (ii) such time as Williams' designees constitute a majority of the
Board of Directors of Barrett Resources, Barrett Resources will, and will
cause each of its subsidiaries to, except as contemplated by the Merger
Agreement, carry on its business in the ordinary course. During such
period, except as otherwise contemplated by the Merger Agreement, Barrett
Resources will not, and will not permit any of its subsidiaries to, among
other things, without the prior written consent of Williams (which consent
shall not be unreasonably withheld or delayed):
(i) (a) pay any dividends on, or make any other distributions
in respect of, any of its capital stock, except for dividends by a
subsidiary of Barrett Resources to its parent or (b) split, combine
or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock;
(ii) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible
securities, other than (a) the issuance of Shares upon exercise of
Company Stock Options (as defined in the
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Merger Agreement) outstanding on the date hereof or (b) purchase,
redeem or otherwise acquire any shares of capital stock of Barrett
Resources or any of its subsidiaries or any other securities thereof
or any rights, warrants or options to acquire any such shares or
other securities;
(iii) amend its organizational documents;
(iv) except in accordance with certain pre-existing
obligations, acquire, or agree to acquire any business or assets,
other than transactions that are in the ordinary course of business,
or which involve assets having a purchase price not in excess of $5
million individually or $10 million in the aggregate;
(v) make or agree to make any new capital expenditure other
than expenditures approved by the Board of Directors of Barrett
Resources and within Barrett Resources' capital budget for fiscal
2001; provided, however, that no individual capital expenditure
pursuant to a single authority for expenditure may exceed $2.5
million;
(vi) except in accordance with certain pre-existing
obligations, sell, lease, license, encumber or otherwise dispose of,
or agree to sell, lease, license, encumber or otherwise dispose of,
any of its assets, other than transactions that are in the ordinary
course of business or which involve assets having a current value not
in excess of $1 million individually or $5 million in the aggregate;
(vii) except as required by applicable law or as provided in
the Merger Agreement, materially alter the terms of employment of any
director, officer or employee;
(viii) except as may be required as a result of a change in
law or in generally accepted accounting principles, make any material
change in its method of accounting;
(x) make any material Tax (as defined in the Merger Agreement)
election (unless required by law) or enter into any settlement or
compromise of any material Tax liability that could reasonably be
expected to have a Material Adverse Effect on Barrett Resources;
(xi) except in the ordinary course of business consistent with
past practice or pursuant to existing contracts or commitments (a)
mortgage or otherwise encumber or subject to any Lien (as defined in
the Merger Agreement) Barrett Resources' or its subsidiaries',
properties or assets, or (b) license any of Barrett Resources'
Intellectual Property (as defined in the Merger Agreement);
(xii) except in the ordinary course of business consistent
with past practice and for certain liabilities set forth in the
Merger Agreement, pay, discharge or satisfy any claims, liabilities
or obligations;
(xii) (a) incur any Indebtedness (as defined in the Merger
Agreement) or guarantee any Indebtedness or debt securities of
another Person (as defined in the Merger Agreement), issue or sell
any debt securities or warrants or other rights to acquire any debt
securities of Barrett Resources or any of its subsidiaries, enter
into any "Keep Well" or other agreement to maintain any financial
statement condition of another Person or enter into any arrangement
having the economic effect of any of the foregoing, except for
borrowings incurred in the ordinary course of business (or to refund
existing or maturing indebtedness) consistent with past practice and
except for intercompany indebtedness between Barrett Resources and
any of its wholly-owned subsidiaries or between such subsidiaries and
except for Indebtedness, guarantees and similar commitments which do
not exceed $10 million in the aggregate, or (b) make any loans,
advances or capital contributions to, or investments in, any other
Person, except in the ordinary course of business or pursuant to an
agreement existing on the date hereof or loans, advances, capital
contributions or investments which do not exceed $10 million in the
aggregate; or
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(xiii) enter into or authorize any contract, agreement or
binding commitment to do any of the foregoing.
Barrett Resources Shareholder Meeting and Shareholder
Approval. Barrett Resources will call and hold the Barrett Resources
Special Meeting for the purpose of voting on the approval and adoption of
the Merger Agreement and the Merger. Barrett Resources will use its
reasonable best efforts to solicit proxies in favor of the Merger
Agreement and the Merger and will take all other actions reasonably
necessary to secure the vote or consent of stockholders to effect the
Merger.
No Solicitation; Acquisition Proposals. Until the Effective Time
or the termination of the Merger Agreement, (a) Barrett Resources will,
and will cause its subsidiaries to, immediately cease and terminate any
existing solicitation, initiation, knowing encouragement, discussion or
negotiation with any Third Party (as defined in the Merger Agreement)
conducted by Barrett Resources, its Subsidiaries or their respective
representatives with respect to any Acquisition Proposal (as defined
below) and (b) Barrett Resources will not, and Barrett Resources will
cause and its subsidiaries' not to, directly or indirectly, (i) solicit,
initiate or knowingly encourage, or knowingly take any other action to
facilitate, any inquiries or the making or submission of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal; (ii) enter into any agreement with respect to any Acquisition
Proposal or enter into any agreement requiring Barrett Resources to
abandon, terminate or fail to consummate the acquisition of Shares; (iii)
participate or engage in any discussions or negotiations with, or disclose
or provide any non-public information relating to Barrett Resources or its
subsidiaries to any Third Party relating to an Acquisition Proposal
(except as required by legal process), or knowingly facilitate any effort
to make an Acquisition Proposal or accept an Acquisition Proposal; or (iv)
enter into any letter of intent, agreement or similar document relating to
any Acquisition Proposal.
Notwithstanding the immediately preceding paragraph, if, prior to
the acquisition of Shares pursuant to the Offer, (a) Barrett Resources has
received an unsolicited proposal from a Third Party relating to an
Acquisition Proposal (under circumstances in which Barrett Resources has
complied in all material respects with its obligations) and (b) the Board
of Directors of Barrett Resources concludes in good faith (after
consultation with a financial advisor, and on advice of counsel) (i) that
such Acquisition Proposal may reasonably constitute a Superior Proposal
(as defined below) and (ii) that the failure to provide such information
or participate in such negotiations or discussions would result in a
breach of its fiduciary duties, Barrett Resources may, subject to its
giving Williams 24 hours prior written notice of the identity of such
Third Party and, to the extent known, the terms and conditions of such
Acquisition Proposal and of Barrett Resources intention to furnish
nonpublic information to, or enter into discussions or negotiations with,
such Third Party, (x) furnish information with respect to Barrett
Resources and its subsidiaries to any Third Party pursuant to a customary
confidentiality agreement containing terms not materially less restrictive
than the terms of the Confidentiality Agreement between Barrett Resources
and Williams and (y) participate in discussions or negotiations regarding
such proposal or take certain actions described in the Merger Agreement.
Barrett Resources shall within 24 hours notify and advise Williams
of any Acquisition Proposal and the terms and conditions of such
Acquisition Proposal. Barrett Resources will inform Williams on a prompt
and current basis of the status of any discussions with a Third Party and,
as promptly as practicable, of any change in the price, structure or form
of the consideration or material terms of and conditions regarding such
Acquisition Proposal.
For purposes of the Merger Agreement, "Acquisition Proposal" means
any inquiry, offer, proposal, indication of interest, signed agreement or
completed action, as the case may be, by any Third Party which relates to
a transaction or series of transactions involving Barrett Resources or the
issuance or acquisition of 20% or more of the outstanding Shares or any
tender or exchange offer that if consummated would result in any Person,
together with all affiliates thereof, beneficially owning 20% or more of
the outstanding Shares, or the acquisition, license, purchase or other
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disposition of a substantial portion of the business or assets of Barrett
Resources outside the ordinary course of business.
For purposes of the Merger Agreement, "Superior Proposal" means any
bona fide written Acquisition Proposal (provided that for the purposes of
this definition, the applicable percentages in the definition of
Acquisition Proposal shall be fifty percent (50%) as opposed to twenty
percent (20%)), on its most recently amended or modified terms, which the
Board of Directors of Barrett Resources determines in its good faith
judgment, (i) would, if consummated, result in a transaction that is more
favorable to Barrett Resources' stockholders, from a financial point of
view, than the transactions contemplated by the Merger Agreement and (ii)
is reasonably capable of being completed.
Modification to Recommendations. Except as expressly permitted in
Section 6.6 of the Merger Agreement, neither the Board of Directors of
Barrett Resources nor any committee thereof will (i) withdraw, qualify,
modify or amend, in a manner adverse to Williams, the Recommendations
described above or make any public statement, filing or release
inconsistent with such Recommendations (provided, however, that following
the Barrett Resources Board of Directors' consideration and evaluation of
an Acquisition Proposal, it is understood that for the purposes of the
Merger Agreement, if Barrett Resources adopts a neutral position or no
position with respect to the Acquisition Proposal, it will be considered
an adverse modification of the Recommendations), (ii) approve or
recommend, or propose publicly to approve or recommend, any Acquisition
Proposal or (iii) cause Barrett Resources to enter into any acquisition
agreement or other similar agreement related to any Acquisition Proposal
(each, a "Subsequent Determination"), provided that if prior to the
consummation of the Offer the Board of Directors of Barrett Resources
determines in good faith (after it has received a Superior Proposal and
after receipt of advice from its counsel) that the failure to make a
Subsequent Determination would result in a breach by the Board of
Directors of Barrett Resources of its fiduciary duties to its
stockholders, the Board of Directors of Barrett Resources may inform
Barrett Resources' stockholders that it no longer believes that the Offer
and the Merger and the other transactions contemplated by the Merger
Agreement are advisable, but only after 72 hours after delivery by Barrett
Resources to Williams of a written notice (a "Subsequent Determination
Notice") (i) advising Williams that the Board of Directors of Barrett
Resources has received a Superior Proposal, (ii) specifying the terms and
conditions of such Superior Proposal, (iii) identifying the person making
such Superior Proposal and (iv) stating that Barrett Resources intends to
make a Subsequent Determination. After providing such notice, Barrett
Resources will provide a reasonable opportunity to Williams to make such
adjustments in the terms and conditions of the Merger Agreement as would
enable Barrett Resources to proceed with its Recommendations to its
stockholders without a Subsequent Determination.
Standstill Agreements. Through the Effective Time, Barrett
Resources will enforce and will not terminate, amend, modify or waive any
standstill provision of any confidentiality or standstill agreement
between Barrett Resources and other parties entered into prior to the date
of the Merger Agreement in connection with the process to solicit
acquisition proposals for Barrett Resources.
Rights Plan. Except as expressly required by the Merger Agreement
or in order to delay the occurrence of a Distribution Date (as defined in
the Barrett Resources Rights Agreement) in response to the public
announcement of an Acquisition Proposal, Barrett Resources will not,
without the prior written consent of Williams, amend the Barrett Resources
Rights Agreement or take any other action with respect to, or make any
determination under, the Barrett Resources Rights Agreement.
Bank Debt. Barrett Resources has agreed to use its reasonable best
efforts to seek the consent of its bank lenders and the issuers of letters
of credit to Barrett Resources to permit the consummation of the
transactions contemplated by the Merger Agreement, without requiring
repayment of Barrett Resources' indebtedness to such lenders or
replacement of the letters of credit.
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MUTUAL COVENANTS. Pursuant to the Merger Agreement, Barrett Resources,
Williams and Purchaser have agreed to comply with various mutual covenants,
including:
Notice of Certain Matters. Williams and Barrett Resources have
agreed to notify each other promptly of any notices or communications
received from any governmental or regulatory agency or authority in
connection with the transactions contemplated by the Merger Agreement and
of certain other events. Additionally, the parties will provide one
another with copies of all filings made by them with any Governmental
Entity in connection with the Merger Agreement and the transactions
contemplated thereby.
Preparation of Form S-4 and Proxy Statement/Prospectus. Williams
and Barrett Resources will, as soon as practicable following the
acceptance of Shares pursuant to the Offer, prepare and Barrett Resources
will file with the SEC a Proxy Statement (as defined in the Merger
Agreement). Williams and Barrett Resources will also prepare and Williams
will file with the SEC a registration statement on Form S-4 (the "Form
S-4") for the offer and sale of the Williams Common Stock pursuant to the
Merger. Barrett Resources and Williams will use all reasonable efforts to
have the Form S-4 declared effective. Williams will also take any action
(other than qualifying to do business in any jurisdiction in which it is
not currently qualified or filing a general consent to service of process)
required to be taken under any applicable state securities laws in
connection with the issuance of Williams Common Stock in the Merger and
Barrett Resources will furnish all information concerning itself and the
holders of its capital stock as may be reasonably requested in connection
with any such action and the preparation, filing and distribution of the
Proxy Statement.
Access. Upon reasonable notice and subject to the Confidentiality
Agreement between Barrett Resources and Williams, Barrett Resources and
Williams will, and will cause their subsidiaries to, afford to the other
party and its representatives reasonable access, during normal business
hours to properties, books, contracts, commitments, records and
representatives.
Public Announcements. Except as may be required by applicable law
or a listing agreement with a securities exchange, Barrett Resources and
Williams have agreed to consult with each other regarding the timing and
content of any press release and public statements with respect to the
Merger Agreement.
Antitrust Filings. Williams and Barrett Resources will (i)
promptly make or cause to be made the filings required under the HSR Act
and any other antitrust laws with respect to the Offer, the Merger and the
other transactions contemplated by the Merger Agreement, (ii) comply at
the earliest practicable date with any request under the HSR Act or such
other antitrust laws for additional information, documents, or other, and
(iii) cooperate with the other party in connection with any such filing
and in connection with resolving any investigation or other inquiry of any
governmental entity under any antitrust laws with respect to any such
filing, the Offer, the Merger or such other transactions. Williams and
Barrett Resources will promptly inform each other of any communication
with, and any proposed understanding, undertaking, or agreement with, any
governmental entity regarding any such filings, the Offer, the Merger or
such other transactions.
CONDITIONS TO THE MERGER. The Merger Agreement provides that the
respective obligations of Williams, Purchaser and Barrett Resources to effect
the Merger will be subject to the fulfillment at or prior to the Effective Time
of the following conditions:
(i) the Barrett Resources Stockholder Approval will have been
obtained; provided, however that Williams and Purchaser will vote all of
their Shares in favor of the Merger;
(ii) no statute, rule, regulation, executive order, decree,
temporary restraining order, preliminary or permanent injunction or other
order issued by any court of competent jurisdiction or other Governmental
Entity preventing the consummation of the Merger will be in effect;
provided, however, that each of the parties will have used their
reasonable best efforts to prevent the entry of any such temporary
restraining order, injunction or other order and to appeal any injunction
or other order that may be entered;
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(iii) Purchaser will have previously accepted for payment and paid
for Shares pursuant to the Offer; provided, however, that this condition
will be deemed satisfied if Williams or Purchaser fails to accept for
payment and pay for Shares pursuant to the Offer in violation of the terms
of the Merger Agreement and/or the Offer;
(iv) the Form S-4 will have become effective under the Securities
Act and will not be the subject of any stop order or proceedings seeking a
stop order; and
(v) the shares of Williams Common Stock to be issued in the Merger
will have been approved for listing on the NYSE.
TERMINATION. The Merger Agreement may be terminated at any time prior to
the Effective Time:
(i) by mutual written consent of Williams and Barrett Resources; or
(ii) by either of Williams or Barrett Resources:
(a) if the Offer has expired or been terminated in accordance
with the terms of the Merger Agreement without Williams or Purchaser
having accepted for payment any Shares pursuant to the Offer, unless
the failure to consummate the Offer is the result of a willful and
material breach of the Merger Agreement by the party seeking to
terminate the Merger Agreement; or
(b) if the Offer has not been consummated on or before August
31, 2001, unless the failure to consummate the Offer is the result of
a willful and material breach of the Merger Agreement by the party
seeking to terminate the Merger Agreement; or
(c) if the Merger has not been consummated as a result of any
Offer Conditions being incapable of being satisfied; or
(d) if any statute, rule, regulation, injunction or decree
having the effects imposing certain specified material restrictions
on the Offer or the Merger is in effect and has become final and
nonappealable; or
(iii) by Williams, if Barrett Resources has provided Williams with
a Subsequent Determination Notice, or the Board of Directors of Barrett
has made a Subsequent Determination or has modified its Recommendations in
a manner adverse to Williams or has resolved to do any of the foregoing;
or
(iv) by Barrett Resources, if Barrett Resources makes a Subsequent
Determination in compliance with the terms of the Merger Agreement,
provided Barrett Resources has paid or concurrently pays Williams the sums
required by the Merger Agreement; or
(v) by Barrett Resources (a) if Purchaser or Williams has breached
in any material respect any of their respective covenants, obligations or
other agreements under the Merger Agreement, or (b) if the representations
and warranties of Williams and Purchaser set forth in the Merger Agreement
are not true and correct as of the date of the Merger Agreement and as of
the expiration of the date of termination of the Merger Agreement, except
to the extent expressly made as of an earlier date, in which case as of
such date (subject to limitations regarding the materiality of such
breach); provided, that the breach of the covenant, obligation, agreement,
representation or warranty is incapable of being or has not been cured by
Williams or Purchaser within 10 calendar days following written notice by
Barrett Resources to Williams of such breach or failure to perform; or
(vi) by Williams (a) if Barrett Resources has breached in any
material respect any of its covenants, obligations or other agreements
under the Agreement, or (b) if Barrett Resources' representations and
warranties in the Merger Agreement are not true and correct as of the date
of the Merger Agreement and as of the expiration of the date of
termination of the Merger Agreement, except to the extent expressly made
as of an earlier date, in which case as of such date
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(subject to limitations regarding the materiality of such breach);
provided, that the breach of the covenant, obligation, agreement,
representation or warranty is incapable of being or has not been cured by
Barrett Resources within 10 calendar days following written notice by
Williams to Barrett Resources of such breach or failure to perform.
EMPLOYEE BENEFITS. The Merger Agreement provides that employees of
Barrett Resources and its subsidiaries will remain employed immediately
following the consummation of the Merger, generally will receive credit for
co-payments, deductible, unused vacation and unused sick leave and generally
will receive service credit for purposes of eligibility and vesting under each
benefit plan (and for purposes of determination of benefits under certain
benefit plans) in which they are eligible to participate following consummation
of the Offer. With respect to welfare plans, Williams generally will waive or
cause to be waived limitations as to pre-existing conditions exclusions and
waiting periods with respect to such employees. Williams will honor or cause to
be honored all employment agreements, bonus agreements, severance agreements,
severance plans and non-competition agreements with the directors, officers and
employees of Barrett Resources and its subsidiaries.
OPTIONS. The Merger Agreement provides that, subject to certain
exceptions described below, each option to acquire Barrett Resources common
stock (a "Barrett Resources Stock Option") that is outstanding immediately prior
to the consummation of the Offer (the "Offer Consummation Date") will vest and
become fully exercisable at such time. On the Offer Consummation Date (with
respect to Barrett Resources Stock Options held by persons who are not subject
to the reporting requirements of Section 16(a) of the Exchange Act) and at the
Effective Time (with respect to Barrett Resources Stock Options held by persons
who are subject to the reporting requirements of Section 16(a) of the Exchange
Act), each Barrett Resources Stock Option will be adjusted to represent an
option to purchase the number of shares of Barrett Resources common stock (a
"Barrett Resources Adjusted Option") (rounded down to the nearest full share)
determined by multiplying (i) the number of shares of Barrett Resources Common
Stock subject to such Barrett Resources Stock Option immediately prior to the
Offer Consummation Date (with respect to Barrett Resources Stock Options held by
persons who are not subject to the reporting requirements of Section 16(a) of
the Exchange Act) and immediately prior to the Effective Time (with respect to
Barrett Resources Stock Options held by persons who are subject to the reporting
requirements of Section 16(a) of the Exchange Act) by (ii) 0.5, at an exercise
price per share of Barrett Resources common stock equal to the exercise price
per share of Barrett Resources common stock immediately prior to the Offer
Consummation Date.
In addition, promptly following the Offer Consummation Date (with respect
to holders of Barrett Resources Stock Options who are not subject to the
reporting requirements of Section 16(a) of the Exchange Act), and promptly
following the Effective Time (with respect to holders of Barrett Resources Stock
Options who are subject to the reporting requirements of Section 16(a) of the
Exchange Act), Williams will pay to the holder of each Barrett Resources Stock
Option an amount of cash (rounded up to the nearest cent) equal to the product
of (A) (x) $73.00 minus (y) the exercise price per share of Barrett Resources
common stock immediately prior to the Offer Consummation Date and (B) the number
of shares of Barrett Resources common stock subject to such option multiplied by
0.5 (rounded up to the nearest full share).
At the Effective Time, each Barrett Resources Adjusted Option will be
assumed by Williams and become and represent an option to purchase the number of
Williams Common Stock (rounded to the nearest full share, or if there is not be
a nearest share, the next greater full share) determined by multiplying (i) the
number of shares of Barrett Resources Common Stock subject to such Barrett
Resources Adjusted Option immediately prior to the Effective Time by (ii) 1.767,
at an exercise price per share of Williams Common Stock (rounded up to the
nearest tenth of a cent) equal to (A) the exercise price per share of Barrett
Resources common stock immediately prior to the Effective Time divided by 1.767.
Each Barrett Resources Adjusted Option so converted will be exercisable upon the
same terms and conditions as under the applicable plan under which it was
granted and the applicable option agreement issued thereunder, except as
otherwise provided in the Merger Agreement.
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At the Effective Time, Williams will assume the Barrett Resources stock
plans, with the result that all obligations of Barrett Resources under the
Barrett Resources stock plans, including with respect to Barrett Resources
Adjusted Options outstanding at the Effective Time, will be obligations of
Williams following the Effective Time.
The Merger Agreement provides that, notwithstanding anything in the
foregoing to the contrary, to the extent an option holder holds any
unexercisable incentive stock options ("Unvested ISOs") on the Offer
Consummation Date that do not become exercisable upon consummation of the Offer
pursuant to the terms of the option plan under which they were granted, then, to
the extent possible, each such Unvested ISO will be converted into the right to
receive cash in full and the other options held by such option holder will be
appropriately adjusted so that the aggregate amount of cash payable to such
option holder in respect of all of his or her Barrett Resources Stock Options
pursuant to the terms of the Merger Agreement is not increased because of the
treatment of Unvested ISOs under the Merger Agreement.
STAY BONUSES; SEVERANCE. Prior to the Effective Time, Barrett Resources
will be permitted to award bonuses to employees of Barrett Resources or any of
its subsidiaries in an aggregate amount not to exceed $2,000,000, with such
bonuses to be allocated at the direction of its Chief Executive Officer with the
consent of Williams, which consent will not be unreasonably withheld or delayed.
Such bonuses will be paid upon the earlier of 90 days following the Effective
Time and 30 days following the termination of the Merger Agreement (the "Payment
Date") to each employee to whom such a bonus has been awarded and who continues
to be employed by Barrett Resources (or any successor or affiliate of Barrett
Resources) on the Payment Date or whose employment terminates prior to the
Payment Date due to death, Disability, termination by Barrett Resources (or any
successor or affiliate of Barrett Resources) without Cause, or termination by
the employee with Good Reason (as such capitalized terms are defined in Barrett
Resources' Severance Protection Plan). However, no such bonus will be paid to
any employee who has entered into a Severance Protection Agreement with Barrett
Resources and whose employment terminates prior to the Payment Date entitling
such employee to a severance payment pursuant to Section 3.1(b) of such
Severance Protection Agreement.
Williams will maintain or cause to be maintained the Barrett Resources
severance policy as in effect on the date of the Merger Agreement or will
replace such policy with a policy providing equal or more favorable
compensation, for a period of at least two years from the Effective Time. Each
employee of Barrett Resources or any of its subsidiaries whose employment is
terminated upon, or within 18 months following, the consummation of the Offer,
other than an employee who has entered into a Severance Protection Agreement
with Barrett Resources, will receive a cash payment from Barrett Resources or
Williams in the amount of $8,000 which may, in the sole discretion of such
employee, be used to obtain outplacement services, to assist in the transition
to subsequent employment or for any other purpose.
TAX TREATMENT. The Merger Agreement is intended to constitute a "plan of
reorganization" with respect to the Offer and the Forward Merger for United
States federal income tax purposes. From and after the date of the Merger
Agreement, each party is required to use its reasonable best efforts to cause
the Offer and the Forward Merger to qualify, and may not, without prior written
consent, knowingly take any actions, or cause any actions to be taken, which
could reasonably be expected to prevent the Offer and the Forward Merger from
qualifying as a reorganization.
BOARD OF DIRECTORS. Subject to compliance with Section 14(f) of the
Exchange Act, promptly after Purchaser purchases Shares pursuant to the Offer
(subject to the satisfaction of the Minimum Condition), Purchaser will be
entitled to designate up to the number of directors, rounded to the nearest
whole number, of Barrett Resources' Board of Directors, as will make the
percentage of Barrett Resources' directors designated by Purchaser equal to the
aggregate voting power of the shares of Barrett Resources Common Stock held by
Williams or any of its subsidiaries. However, in the event that Purchaser's
designees are elected to the Board of Directors of Barrett Resources, until the
Effective Time, such Board of Directors will have at least two directors who are
directors on the date of the Merger Agreement and who are not officers of
Barrett Resources (the "Independent Directors"). If the number of Independent
Directors is reduced below two for any reason whatsoever, the remaining
Independent Directors will
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designate a person to fill such vacancy who will be deemed to be an Independent
Director or, if no Independent Directors then remain, the other directors will
designate two persons to fill such vacancies who will not be officers or
affiliates of Barrett Resources, Williams or any of their subsidiaries.
Following the election or appointment of Purchaser's designees, a
concurrence will be required of a majority of the Independent Directors for (a)
any amendment, or waiver of any term or condition, of the Merger Agreement or
the Restated Certificate of Incorporation or Bylaws of Barrett Resources and (b)
any termination of the Merger Agreement by Barrett Resources, any extension by
Barrett Resources of the time for the performance of any of the obligations or
other acts of Purchaser or waiver or assertion of any of Barrett Resources'
rights under the Merger Agreement, and any other consent or action by Barrett
Resources' Board of Directors with respect to the Merger Agreement. As a result
of the purchase of Shares by Purchaser pursuant to the Offer, it is contemplated
that Purchaser's designees will represent at least one-half of Barrett
Resources' Board of Directors after the purchase of Shares until the Effective
Time.
INDEMNIFICATION. Williams will, or will cause the Surviving Corporation
to, honor for a period of not less than six years from the Effective Time (or,
for matters occurring at or prior to the Effective Time that have not been
resolved, until such matters are finally resolved), all rights to
indemnification or exculpation, existing in favor of a director, officer,
employee or agent (an "Indemnified Person") of Barrett Resources or any of its
subsidiaries relating to actions or events through the Effective Time. The
Surviving Corporation, however, will not be required to indemnify any
Indemnified Person for any proceeding to the extent involving any claim
initiated by such Indemnified Person unless such proceeding was authorized by
the Board of Directors of Barrett Resources or was brought to enforce rights
under this Merger Agreement. In the event that any Indemnified Person becomes
involved in any actual or threatened action, suit, claim, proceeding or
investigation after the Effective Time, Williams will, or will cause the
Surviving Corporation to, promptly advance to such Indemnified Person his or her
expenses, subject to such Indemnified Person undertaking to reimburse all
advances amounts in the event of a non-appealable determination that such
Indemnified Person is not entitled thereto.
DIRECTORS AND OFFICERS INSURANCE. Prior to the Effective Time, Barrett
Resources will have the right to obtain and pay for in full a "tail" coverage
directors' and officers' liability insurance policy ("D&O Insurance") covering a
period of at least six years after the Effective Time. If Barrett Resources is
unable to obtain such insurance, the Surviving Corporation will maintain Barrett
Resources' D&O Insurance for a period of at least six years after the Effective
Time. However, the Surviving Corporation may substitute policies of similar
coverage and amounts with terms no less advantageous. Nevertheless, Barrett
Resources will not, without Williams' consent, expend in excess of 300% of the
last annual premium paid to procure the coverage and neither Williams nor the
Surviving Corporation will be required to expend in excess of 300% of the last
annual premium paid.
FEES AND EXPENSES. If the Offer has not been accepted, Barrett Resources
will pay Williams a fee equal to $75.5 million as a result of the occurrence of
any of the following events (each of which is a "Trigger Event"):
(i) Barrett Resources has received an Acquisition Proposal (other
than the cash tender offer by SRM Acquisition Corp. (an affiliate of
Shell), pursuant to the Shell Offer, dated March 12, 2001, as amended to
the date of the Merger Agreement, at a purchase price of $60 per Share, it
being understood that Barrett Resources will be deemed to have received an
Acquisition Proposal (x) if SRM Acquisition Company amends its tender
offer by increasing its tender offer price above $60 per Share, or (y) if
an acquisition proposal other than the Shell Offer is made by any other
affiliate of Shell) after the date of the Merger Agreement (but prior to
the termination of the Merger Agreement), and at any time prior to, or
within 12 months after, the termination of the Merger Agreement (unless
terminated without the fault of any party or due to Williams' or
Purchaser's default), or Barrett Resources has entered into, or has
publicly announced its intention to enter into, an agreement or an
agreement in principle with respect to any Acquisition Proposal;
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(ii) Barrett Resources has provided Williams with a Subsequent
Determination Notice or the Board of Directors of Barrett Resources (or
any committee thereof) (a) has made a Subsequent Determination, (b) has
included in the Schedule 14D-9 its Recommendations with modification or
qualification in a manner adverse to Williams, or (c) has resolved to, or
publicly announced an intention to, take any of the actions as specified
in the Merger Agreement; or
(iii) (a) as of the final expiration date of the Offer, all
conditions to the consummation of the Offer have been met or waived except
for satisfaction of the Minimum Condition, (b) there has been made
subsequent to the date of the Merger Agreement (but before such expiration
date of the Offer) an Acquisition Proposal (other than the cash tender
offer by SRM Acquisition Corp, it being understood that Barrett Resources
will be deemed to have received an Acquisition Proposal (x) if SRM
Acquisition Company amends its tender offer by increasing its tender offer
price above $60 per Share, or (y) if an Acquisition Proposal other than
the Shell Offer is made by any other affiliate of Shell) and (c) at any
time prior to, or within 12 months after, the expiration or termination of
the Offer, Barrett Resources has entered into, or has publicly announced
its intention to enter into, an agreement or agreements in principle with
respect to any Acquisition Proposal.
Except as otherwise specified above, all fees and expenses incurred
in connection with the Offer and the Merger, the Merger Agreement and the
transactions contemplated by the Merger Agreement will be paid by the
party incurring such fees or expenses, whether or not the Offer or the
Merger is consummated:
(i) provided, that if the Merger Agreement is terminated as a
result of the occurrence of a Trigger Event, Barrett Resources will
also reimburse Williams for all out-of-pocket fees payable and
expenses reasonably incurred by Williams up to a maximum of $15
million.
(ii) provided, that if Barrett Resources has breached or
failed to perform in any material respect any of its representations,
warranties, covenants or other agreements contained in the Merger
Agreement, which breach or failure to perform (A) would cause Barrett
Resources to breach or fail to perform any of its covenants,
obligations or agreements under the Merger Agreement, or cause any of
the representations and warranties of Barrett Resources that are not
qualified as to materiality not to be true and correct, and (B) is
incapable of being or has not been cured by Barrett Resources prior
to or on the earlier of (x) ten days immediately following written
notice by Williams to Barrett Resources of such breach or failure to
perform and (y) the expiration or termination of the Offer in
accordance with the terms of the Merger Agreement Barrett Resources
will reimburse Williams for all out-of-pocket fees payable and
expenses reasonably incurred by Williams up to a maximum of $15
million.
(iii) provided, that if Barrett Resources has terminated the
Merger Agreement as a result of the breach by Williams or Purchaser
of any material representation, warranty, covenant or other agreement
under the Merger Agreement, and such breach of a representation,
warranty, covenant or other agreement is incapable of being or has
not been cured by Williams within 10 calendar days following written
notice of such breach or failure to perform, Williams will reimburse
Barrett Resources for all out-of-pocket fees payable and expenses
reasonably incurred by Barrett Resources up to a maximum of $15
million.
AMENDMENTS. Subject to certain customary restrictions, including, among
other things, a restriction on Purchaser's right to waive the Minimum Condition,
the Merger Agreement may be amended at any time, but after the Barrett Resources
Stockholder Approval has been obtained, no amendment which requires approval by
Barrett Resources' stockholders will be made without obtaining such approval.
GOVERNING LAW. The Merger Agreement is governed by, and construed in
accordance with Delaware law, regardless of the laws that might otherwise govern
under applicable principles of conflicts of laws thereof.
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Effects of Inability to Consummate the Merger
If each of the Offer and the Merger is consummated, stockholders of
Barrett Resources who elected not to tender their Shares in the Offer, or had
fewer Shares accepted than tendered in the Offer as a result of proration, will
have each of those Shares that they continue to hold following consummation of
the Offer converted in the Merger into 1.767 shares of Williams Common Stock.
If, following the consummation of the Offer, the Merger is not
consummated, Purchaser will control the number of Shares purchased by it in the
Offer. Under the Merger Agreement, subject to satisfaction of the Minimum
Condition, Purchaser will be entitled to representation on the Barrett Resources
Board of Directors in the same proportion as the number of Shares then
beneficially owned by Purchaser bears to the total number of Shares outstanding,
rounded up to the nearest whole number. As a result of its ownership of such
Shares and its representation on the Barrett Resources Board, Purchaser may be
able to influence and potentially control decisions of the Barrett Resources
Board of Directors.
Following consummation of the Offer (including if the Merger is not
consummated), Williams and Purchaser reserve the right to acquire additional
Shares through private purchases, market transactions, tender or exchange offers
or otherwise on terms and at prices that may be more or less favorable than
those of the Offer or, subject to any applicable legal restrictions, to dispose
of any or all Shares acquired by Purchaser and Williams.
Statutory Requirements
In general, under the DGCL a merger of two Delaware corporations requires
the adoption of a resolution by the board of directors of each of the
corporations desiring to merge approving an agreement of merger containing
provisions with respect to certain statutorily specified matters and the
approval of such agreement of merger by the stockholders of each corporation by
the affirmative vote of the holders of a majority of all the outstanding shares
of stock entitled to vote on such merger. The respective Boards of Directors of
Williams, Purchaser and Barrett Resources have each approved the Merger
Agreement and the Merger.
The Merger Agreement and the Merger are subject to the Barrett Resources
Stockholder Approval.
Appraisal Rights
No appraisal rights are available in connection with the Offer or the
Merger.
Plans for Barrett Resources
Williams and Purchaser intend to conduct a review of Barrett Resources and
its subsidiaries and their respective assets, businesses, corporate structure,
capitalization, operations, properties, policies, management and personnel.
Based on this review, Williams and Purchaser may take actions or make changes
that they consider desirable and reserve the right to effect such actions or
changes. Williams' and Purchaser's decisions could be affected by information
hereafter obtained, changes in general economic or market conditions or in the
business of Barrett Resources or its subsidiaries, actions by Barrett Resources
or its subsidiaries and other factors.
Williams currently anticipates that Barrett Resources' principal offices
in Denver, Colorado will serve as the Rocky Mountain principal offices for
Williams' oil and gas exploration operations after the consummation of the
Merger.
Except as described in this Section 11 or elsewhere in this Offer to
Purchase, Barrett Resources has no present plans or proposals that would relate
to or would result in (a) an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving Barrett Resources or any of its
subsidiaries, (b) a purchase, sale or transfer of a material amount of assets of
Barrett Resources or any of its subsidiaries, (c) any change in the present
Board of Directors or management of Barrett Resources, (d) any material change
in the present capitalization or dividend policy of Barrett Resources, (e) any
material change in Barrett Resources' corporate structure or business, (f)
causing a class of securities of Barrett Resources to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association or
(g) a class of
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equity securities of Barrett Resources becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act.
Confidentiality Agreements.
On March 9, 2001, Williams signed the Confidentiality Agreement which
provides that, subject to the terms of the Confidentiality Agreement, Williams
will keep confidential certain nonpublic information furnished by Barrett
Resources. In addition, subject to the terms of the Confidentiality Agreement,
Williams agreed not to, among other things, (i) acquire any assets, businesses
or securities of Barrett Resources, (ii) solicit proxies or consents with regard
to Barrett Resources or (iii) otherwise seek control of Barrett Resources, in
each case without the consent of Barrett Resources, until the close of business
on May 11, 2001. A copy of the Confidentiality Agreement is filed as Exhibit
(d)(2) hereto and is incorporated herein by reference. The foregoing description
of the Confidentiality Agreement is qualified in its entirety by reference to
such Exhibit.
In connection with its due diligence review of Williams, on May 6, 2001,
Barrett Resources signed a nondisclosure agreement (the "Nondisclosure
Agreement") providing that, among other things subject to the terms of the
Nondisclosure Agreement, Barrett Resources will keep confidential certain
nonpublic information furnished by Williams. A copy of the Nondisclosure
Agreement is filed as Exhibit (d)(3) hereto and is incorporated herein by
reference. The foregoing description of the Nondisclosure Agreement is qualified
in its entirety by reference to such Exhibit.
"Going Private" Transactions
The SEC has adopted Rule 13e-3 under the Exchange Act which is applicable
to certain "going private" transactions and which may under certain
circumstances be applicable to the Merger. However, Rule 13e-3 would be
inapplicable to the Merger because holders of Shares will receive only shares of
Williams Common Stock in the Merger (exclusive of cash in lieu of fractional
shares), and the Williams Common Stock is registered under Section 12 of the
Securities Act and is listed on the NYSE. If applicable, Rule 13e-3 would
require, among other things, that certain financial information concerning the
fairness of the proposed transaction and the consideration offered to minority
stockholders in such transaction be filed with the SEC and disclosed to
stockholders prior to the consummation of the transaction.
12. SOURCE AND AMOUNT OF FUNDS.
Purchaser estimates that the total amount of funds required to purchase
16,730,502 Shares pursuant to the Offer and to pay related fees and expenses
will be approximately $1.23 billion. In addition, Barrett Resources has agreed
in the Merger Agreement to seek the consent of its bank lenders under its credit
agreement to permit it to consummate the transactions contemplated by the Merger
Agreement without repaying the indebtedness under the credit agreement. If such
bank consents are not obtained, Williams would need approximately an additional
$145 million to repay the indebtedness under the credit agreement (the
"Refinancing"). Purchaser intends to fund the purchase of Shares pursuant to the
Offer and the Refinancing, if required, from capital contributions by Williams.
Williams currently has sufficient liquidity available through the unused portion
of its existing commercial paper program and revolving credit agreements to make
such capital contributions to Purchaser. In addition, Williams may choose to
establish a bridge loan facility to fund all or part of such capital
contributions. Finally, Williams may choose to review other funding options such
as volumetric production payments, convertible debt or equity or other
structured alternatives in order to make the required capital contributions to
Purchaser.
Williams' commercial paper program involves the private placement of
unsecured, commercial paper notes with maturities of up to 270 days. The
commercial paper generally has an effective interest rate approximating the then
market rate of interest for commercial paper of similar rating, currently
approximately 5.28%. Williams may refinance any commercial paper borrowings used
to finance the purchase of Shares pursuant to the Offer and the Refinancing, if
any, through private placements of additional commercial paper, borrowings under
its credit agreements or, depending on market or business conditions, through
such other financing as Williams may deem appropriate.
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13. DIVIDENDS AND DISTRIBUTIONS.
If on or after the date of the Merger Agreement, Barrett Resources (a)
splits, combines or otherwise changes the Shares or its capitalization, (b)
acquires Shares or otherwise causes a reduction in the number of Shares, (c)
issues or sells additional Shares (other than the issuance of Shares reserved
for issuance as of the date of the Merger Agreement under option and employee
stock purchase plans in accordance with their terms as publicly disclosed as of
the date of the Merger Agreement) or any shares of any other class of capital
stock, other voting securities or any securities convertible into or
exchangeable for, or rights, warrants or options, conditional or otherwise, to
acquire, any of the foregoing or (d) discloses that it has taken such action,
then, without prejudice to Williams' and Purchaser's rights under Section 14 of
this document, Williams and Purchaser, in their sole discretion, may make such
adjustments in the purchase price and other terms of the Offer as they deem
appropriate to reflect such split, combination or other change or action,
including, without limitation, the Minimum Condition or the number or type of
securities offered to be purchased. Barrett Resources has agreed in the Merger
Agreement not to take any of the foregoing actions without Williams' consent.
If on or after the date of the Merger Agreement, Barrett Resources
declares or pays any dividend on the Shares or any distribution (including,
without limitation, the issuance of additional Shares pursuant to a stock
dividend or stock split, the issuance of other securities or the issuance of
rights for the purchase of any securities) with respect to the Shares that is
payable or distributable to stockholders of record on a date prior to the
transfer into the name of Purchaser or its nominees or transferees on Barrett
Resources' stock transfer records of the Shares purchased pursuant to the Offer,
and if Shares are purchased in the Offer, then, without prejudice to Purchaser's
rights under Section 14 of this document, (a) the purchase price per Share
payable by Purchaser pursuant to the Offer shall be reduced by the amount of any
such cash dividend or cash distribution and (b) any such non-cash dividend,
distribution, issuance, proceeds or rights to be received by the tendering
stockholders will (i) be received and held by the tendering stockholders for the
account of Purchaser and will be required to be promptly remitted and
transferred by each tendering stockholder to the Depositary for the account of
Purchaser, accompanied by appropriate documentation of transfer or (ii) at the
direction of Purchaser, be exercised for the benefit of Purchaser, in which case
the proceeds of such exercise will promptly be remitted to Purchaser. Pending
such remittance and subject to applicable law, Purchaser will be entitled to all
rights and privileges as owner of any such non-cash dividend, distribution,
issuance, proceeds or rights and may withhold the entire purchase price or
deduct from the purchase price the amount or value thereof, as determined by
Purchaser in its sole discretion. Barrett Resources has agreed in the Merger
Agreement not to take any of the foregoing actions without Williams' consent.
14. CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, subject to the terms of
the Merger Agreement, Purchaser shall not be required to accept for payment or
pay for (subject to any applicable rules and regulations of the SEC, including
Rule 14e-1(c) under the Exchange Act (relating to Purchaser's obligation to pay
for or return tendered Shares after the termination or withdrawal of the Offer))
any Shares tendered, if by the expiration of the Offer (as it may be extended in
accordance with the requirements of the Merger Agreement), (1) there shall not
have been validly tendered and not withdrawn CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, subject to the terms of
the Merger Agreement, Purchaser shall not be required to accept for payment or
pay for (subject to any applicable rules and regulations of the SEC, including
Rule 14e-1(c) under the Exchange Act (relating to Purchaser's obligation to pay
for or return tendered Shares after the termination or withdrawal of the Offer))
any Shares tendered, if by the expiration of the Offer (as it may be extended in
accordance with the requirements of the Merger Agreement), (1) there shall not
have been validly tendered and not withdrawn prior to the expiration of the
Offer 16,730,502 Shares, (2) the applicable waiting period under the HSR Act and
any other applicable antitrust laws shall not have expired or been terminated,
or (3) at any time
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on or after the date of the Merger Agreement and prior to the acceptance for
payment of Shares pursuant to the Offer, any of the following conditions exist:
(i) there shall be instituted or pending any action or proceeding
by any Governmental Entity:
(a) challenging or seeking to make illegal, to delay
materially or otherwise directly or indirectly to restrain or
prohibit the making of the Offer or the Merger, the acceptance for
payment of, or the payment for, some of or all the Shares by Williams
or Purchaser or the consummation by Williams or Purchaser of the
Merger or seeking to obtain material damages,
(b) seeking to restrain or prohibit Williams' or Purchaser's
ownership or operation (or that of their respective subsidiaries or
affiliates) of all or any material portion of the business or assets
of Barrett Resources and its subsidiaries, taken as a whole, or of
Williams and its subsidiaries, taken as a whole, or to compel
Williams or any of its subsidiaries or affiliates to dispose of or
hold separate all or any material portion of the business or assets
of Barrett Resources and its subsidiaries, taken as a whole, or of
Williams and its subsidiaries, taken as a whole,
(c) seeking to impose material limitations on the ability of
Williams or any of its subsidiaries effectively to exercise full
rights of ownership of the Shares, including, without limitation, the
right to vote any Shares acquired or owned by Williams or any of its
subsidiaries or affiliates on all matters properly presented to
Barrett Resources' stockholders, or
(d) seeking to require divestiture by Williams or any of its
subsidiaries of any Shares; or
(ii) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree enacted, enforced, promulgated,
issued or deemed applicable to the Merger Agreement, the Offer or the
Merger, by any governmental entity that is reasonably likely, directly or
indirectly, to result in any of the consequences referred to in clauses
(a) through (d) of paragraph (i) above, subject thereto; or
(iii) Barrett Resources shall have breached or failed to perform in
any material respect any of its covenants, obligations or agreements under
the Merger Agreement; or
(iv) the representations and warranties of Barrett Resources set
forth in the Merger Agreement that are qualified as to materiality shall
not be true and correct as of the date of the Merger Agreement and as of
the expiration of the Offer (including any extension thereof) (except to
the extent expressly made as of an earlier date, in which case as of such
earlier date), or any of the representations and warranties set forth in
the Merger Agreement that are not so qualified as to materiality shall not
be true and correct in any material respect as of the date of the Merger
Agreement and as of the expiration of the Offer (except to the extent
expressly made as of an earlier date, in which case as of such earlier
date); provided that this condition shall not be deemed to exist unless
any such breaches of representation or warranty (without regard to any
"Materiality" or "Material Adverse Effect" or similar qualifier or
threshold), individually or in the aggregate, has had or could reasonably
be expected to have, a Material Adverse Effect (as defined in the Merger
Agreement) on Barrett Resources; or
(v) the Merger Agreement shall have been terminated in accordance
with its terms; or
(vi) the Board of Directors of Barrett Resources (or any committee
thereof) shall have made a Subsequent Determination (as defined in the
Merger Agreement) with respect to an Acquisition Proposal (as defined in
the Merger Agreement);
which, in the good faith judgment of Williams, in any such case, makes it
inadvisable to proceed with acceptance for payment, or payment for, Shares in
the Offer.
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The foregoing conditions are for the sole benefit of Williams and
Purchaser and may, subject to the terms of the Merger Agreement, be waived by
Williams and Purchaser in their reasonable discretion in whole at any time or in
part from time to time. The failure by Williams or Purchaser at any time to
exercise its rights under any of the foregoing conditions shall not be deemed a
waiver of any such right; the waiver of any such right with respect to
particular facts and circumstances shall not be deemed a waiver with respect to
any other facts and circumstances, and each such right shall be deemed an
ongoing right which may be asserted at any time or from time to time.
A public announcement may be made of a material change in, or waiver of,
such conditions and the Offer may, in certain circumstances, be extended in
connection with any such change or waiver. Purchaser may not waive the Minimum
Condition without the written consent of Barrett Resources.
Purchaser acknowledges that the SEC believes that (a) if Purchaser is
delayed in accepting the Shares it must either extend the Offer or terminate the
Offer and promptly return the Shares and (b) the circumstances in which a delay
in payment is permitted are limited and do not include unsatisfied conditions of
the Offer, except with respect to most required regulatory approvals.
15. LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.
GENERAL. Based upon an examination of publicly available information with
respect to Barrett Resources and the representations and warranties of Barrett
Resources contained in the Merger Agreement, neither Purchaser nor Williams is
aware of any license or other regulatory permit that is material to the business
of Barrett Resources and its subsidiaries, taken as a whole, which might be
adversely affected by the acquisition of Shares by Purchaser pursuant to the
Offer or the Merger, or, except as set forth below, of any approval or other
action by any domestic (federal or state) or foreign governmental,
administrative or regulatory authority or agency which would be required prior
to the acquisition of Shares by Purchaser pursuant to the Offer or the Merger.
Should any such approval or other action be required, it is Purchaser's and
Williams' present intention to seek such approval or action. Purchaser does not
currently intend, however, to delay the purchase of Shares tendered pursuant to
the Offer pending the outcome of any such action or the receipt of any such
approval. There is no assurance (i) that any such approval or other action, if
needed, would be obtained without substantial conditions, (ii) that adverse
consequences might not result to the business of Barrett Resources, Purchaser or
Williams, (iii) that certain parts of the businesses of Barrett Resources,
Purchaser or Williams might not have to be disposed of or held separate or (iv)
that other substantial conditions complied with in order to obtain such approval
or other action or in the event that such approval was not obtained or such
other action was not taken. Purchaser's obligation under the Offer to accept for
payment and pay for Shares is subject to certain conditions, including
conditions relating to the legal matters discussed in this Section 15. See
Section 14, "Conditions of the Offer."
STATE TAKEOVER LAWS. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable to
attempts to acquire securities of corporations that are incorporated or have
assets, stockholders, executive offices or places of business in those states.
In 1982, in Edgar v. MITE Corp., the Supreme Court of the United States held
that the Illinois Business Takeover Act, which involved state securities laws
that made the takeover of certain corporations more difficult, imposed a
substantial burden on interstate commerce and was therefore unconstitutional.
However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court
of the United States held that a state may, as a matter of corporate law and, in
particular, those laws concerning corporate governance, constitutionally
disqualify a potential acquirer from voting on the affairs of a target
corporation without prior approval of the remaining stockholders; provided that
the laws were applicable only under certain conditions.
Section 203 of the DGCL limits the ability of a Delaware corporation to
engage in business combinations with "interested stockholders" (defined
generally as any person that directly or indirectly beneficially owns 15% or
more of the outstanding voting stock of the subject corporation) for three years
following the date such person became an "interested stockholder," unless, among
other things, the board of directors of the subject corporation has given its
prior approval of either the transaction in which such
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person became an interested stockholder or the business combination. Barrett
Resources has represented in the Merger Agreement that it approved the Merger
Agreement and the transactions contemplated thereby, including the Offer and the
Merger, and has taken all appropriate action so that neither Williams nor
Purchaser will be an "interested stockholder" within the meaning of Section 203
of the DGCL by virtue of Williams, Purchaser and Barrett Resources entering into
the Merger Agreement and consummating the transactions contemplated thereby.
Barrett Resources, directly or through subsidiaries, conducts business in
a number of states throughout the United States, some of which have enacted
takeover laws. Purchaser does not know whether any of these laws will, by their
terms, apply to the Offer or the Merger and has not attempted to comply with any
such laws. Should any person seek to apply any state takeover law, Purchaser
will take such action as then appears desirable, which may include challenging
the validity or applicability of any such statute in appropriate court
proceedings. In the event it is asserted that one or more state takeover laws is
applicable to the Offer or the Merger, and an appropriate court does not
determine that it is inapplicable or invalid as applied to the Offer, Purchaser
might be required to file certain information with, or receive approvals from,
the relevant state authorities. In addition, if enjoined, Purchaser might be
unable to accept for payment any Shares tendered pursuant to the Offer, or be
delayed in continuing or consummating the Offer and the Merger. In such case,
Purchaser may not be obligated to accept for payment any Shares tendered. See
Section 14, "Conditions of the Offer."
BARRETT RESOURCES BYLAWS. Article IV of the Barrett Resources Bylaws
restricts certain business combinations involving Interested Persons (as defined
in the Barrett Resources Bylaws). On May 7, 2001, the Barrett Resources Board
waived such restrictions by Independent Director Approval (as defined in the
Barrett Resources Bylaws), such that the restrictions do not and will not apply
with respect to or as a result of the Merger Agreement or the transactions
contemplated thereby, including the Offer and the Merger.
ANTITRUST. Under the HSR Act and the rules that have been promulgated
thereunder by the Federal Trade Commission (the "FTC"), certain acquisition
transactions may not be consummated unless certain information has been
furnished to the Antitrust Division of the Department of Justice (the "Antitrust
Division") and the FTC and certain waiting period requirements have been
satisfied. The acquisition of Shares by Purchaser pursuant to the Offer is
subject to such requirements.
Barrett Resources and Williams expect to file Premerger Notification and
Report Forms in connection with the purchase of Shares pursuant to the Offer
with the Antitrust Division and the FTC on or about May 16, 2001. Under the
provisions of the HSR Act applicable to the Offer, the purchase of Shares
pursuant to the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by Williams. Accordingly, if
the forms are filed on May 16, 2001, the waiting period under the HSR Act
applicable to the purchase of Shares pursuant to the Offer will expire at 11:59
p.m., eastern time, on May 31, 2001, unless such waiting period is earlier
terminated by the FTC and the Antitrust Division or extended by a request from
the FTC or the Antitrust Division for additional information or documentary
material prior to the expiration of the waiting period. If the acquisition of
Shares is delayed pursuant to a request by the FTC or the Antitrust Division for
additional information or documentary material pursuant to the HSR Act, the
purchase of and payment for Shares will be deferred until 10 days after the
request is substantially complied with, unless the extended period expires on or
before the date when the initial 15-day period would otherwise have expired, or
unless the waiting period is sooner terminated by the FTC and the Antitrust
Division. Only one extension of such waiting period pursuant to a request for
additional information is authorized by the HSR Act and the rules promulgated
thereunder, except by court order. Any such extension of the waiting period will
not give rise to any withdrawal rights not otherwise provided for by applicable
law. See Section 4, "Withdrawal Rights". It is a condition to the Offer that the
waiting period applicable under the HSR Act to the Offer expire or be
terminated. See Section 14, "Conditions of the Offer". So long as the Merger
Agreement is in effect and any applicable waiting period under the HSR Act has
not expired or been terminated, Purchaser is obligated to extend the Offer from
time to time for a period or successive periods.
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The FTC and the Antitrust Division frequently scrutinize the legality
under the antitrust laws of transactions such as the proposed acquisition of
Shares by Purchaser pursuant to the Offer and the Merger. At any time before or
after the purchase of Shares pursuant to the Offer by Purchaser, the FTC or the
Antitrust Division could take such action under the antitrust laws as they deem
necessary or desirable in the public interest, including seeking to enjoin the
purchase of Shares pursuant to the Offer or seeking the divestiture of Shares
purchased by Purchaser or the divestiture of substantial assets of Williams,
Barrett Resources or their respective subsidiaries. Private parties and state
attorneys general may also bring legal action under federal or state antitrust
laws under certain circumstances. Based upon an examination of information
available to Williams relating to the businesses in which Williams, Barrett
Resources and their respective subsidiaries are engaged, Williams and Purchaser
believe that the Offer will not violate the applicable antitrust laws.
Nevertheless, there can be no assurance that a challenge to the Offer on
antitrust or competition grounds will not be made or, if such a challenge is
made, what the final result would be. See Section 14, "Conditions of the Offer".
In addition, the antitrust and competition laws of certain foreign
jurisdictions require (or, in some instances, provide for on a voluntary basis)
notification of the transaction and the observance of pre-consummation waiting
periods. Barrett Resources and Williams will make any such required filings, if
any (and, if deemed in Barrett Resources' and Williams' interests, any such
voluntary filings), with the appropriate antitrust and competition authorities
contemporaneously with their filings under the HSR Act or shortly thereafter.
Based upon an examination of information available to Williams relating to the
businesses in which Williams, Barrett Resources and their respective
subsidiaries are engaged, Williams and Purchaser believe that the Offer will not
violate any such foreign antitrust and competition laws. Nevertheless, there can
be no assurance that a challenge to the Offer will not be made on antitrust or
competition grounds or, if such a challenge were made, what the final result
would be.
16. FEES AND EXPENSES.
Williams and Purchaser retained Merrill Lynch to act as Dealer Manager in
connection with the Offer, for which Merrill Lynch will be paid $250,000 upon
execution of the agreement with respect to Merrill Lynch's engagement as Dealer
Manager, and an additional $250,000 upon completion of the Offer in addition to
reimbursement for reasonable out-of-pocket expenses. Williams has also retained
Merrill Lynch to render financial advisory services to Williams and Purchaser
concerning the acquisition of Barrett Resources, including rendering a fairness
opinion to the Board of Directors of Williams, for which Merrill Lynch will
receive customary compensation. Williams has also agreed to indemnify Merrill
Lynch against certain liabilities and expenses in connection with its
engagement, including liabilities under the federal securities laws.
Merrill Lynch has provided financial advisory and financing services to
Williams and its affiliates in the past and may continue to render such
services, for which they have received and may continue to receive customary
compensation from Williams and its affiliates. In the ordinary course of
business, Merrill Lynch and its affiliates are engaged in securities trading and
brokerage activities as well as investment banking and financial advisory
services. In the ordinary course of their trading and brokerage activities,
Merrill Lynch and its affiliates may hold positions, for their own account and
for the accounts of customers, in equity, debt or other securities of Williams
or Barrett Resources.
We have retained Georgeson Shareholder Communications, Inc. as Information
Agent in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, telex, telegraph and personal interview and may
request brokers, dealers and other nominee stockholders to forward material
relating to the Offer to beneficial owners of Shares. We will pay the
Information Agent reasonable and customary compensation for these services in
addition to reimbursing the Information Agent for its reasonable out-of-pocket
expenses. We have agreed to indemnify the Information Agent against certain
liabilities and expenses in connection with the Offer, including certain
liabilities under the federal securities laws.
In addition, we have retained EquiServe as the Depositary. We will pay the
Depositary reasonable and customary compensation for its services in connection
with the Offer, will reimburse the Depositary
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for its reasonable out-of-pocket expenses and will indemnify the Depositary
against certain liabilities and expenses, including certain liabilities under
the federal securities laws.
Except as set forth above, we will not pay any fees or commissions to any
broker, dealer or other person for soliciting tenders of Shares pursuant to the
Offer. We will reimburse brokers, dealers, commercial banks and trust companies
and other nominees, upon request, for customary clerical and mailing expenses
incurred by them in forwarding offering materials to their customers.
17. MISCELLANEOUS.
We are not aware of any jurisdiction where the making of the Offer is
prohibited by any administrative or judicial action pursuant to any valid state
statute. If we become aware of any valid state statute prohibiting the making of
the Offer or the acceptance of the Shares, we will make a good faith effort to
comply with that state statute. If, after a good faith effort, we cannot comply
with the state statute, we will not make the Offer to, nor will we accept
tenders from or on behalf of, the holders of Shares in that state. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Purchaser by the Dealer Manager or one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
We have filed with the SEC a Tender Offer Statement on Schedule TO,
together with exhibits, furnishing certain additional information with respect
to the Offer, and may file amendments to our Schedule TO. Our Schedule TO and
any exhibits or amendments may be examined and copies may be obtained from the
SEC in the same manner as described in Section 8 with respect to information
concerning Barrett Resources, except that copies will not be available at the
regional offices of the SEC.
WE HAVE NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON OUR BEHALF NOT CONTAINED IN THIS OFFER TO PURCHASE OR IN THE
LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, YOU SHOULD NOT RELY ON ANY SUCH
INFORMATION OR REPRESENTATION AS HAVING BEEN AUTHORIZED.
Neither the delivery of the Offer to Purchase nor any purchase pursuant to
the Offer will under any circumstances create any implication that there has
been no change in the affairs of Williams, Purchaser, Barrett Resources or any
of their respective subsidiaries since the date as of which information is
furnished or the date of this Offer to Purchase.
Resources Acquisition Corp.
May 14, 2001
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF WILLIAMS AND PURCHASER
A. DIRECTORS AND EXECUTIVE OFFICERS OF WILLIAMS. The following table
sets forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years of each
director and executive officer of Williams. None of the directors and officers
of Williams listed below has, during the past five years, (i) been convicted in
a criminal proceeding or (ii) been a party to any judicial or administrative
proceeding that resulted in a judgment, decree or final order enjoining the
person from future violations of, or prohibiting activities subject to, federal
or state securities laws, or a finding of any violation of federal or state
securities laws. Unless otherwise indicated below, each occupation set forth
opposite each person refers to employment with Williams. The business address of
each such person is c/o The Williams Companies, One Williams Center, Tulsa, OK
74172, and each such person is a citizen of the United States of America.
1. DIRECTORS OF WILLIAMS
DIRECTOR OF CURRENT
WILLIAMS TERM CURRENT POSITION AND PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND AGE SINCE EXPIRES MATERIAL POSITIONS HELD DURING LAST FIVE YEARS
- ------------ ----------- ------- --------------------------------------------------------
Hugh M. Chapman, 68.................. 1999 2002 Director of Williams since 1999. Chairman of the Board
of Nations Bank South until 1997. Director of SCANA
Corporation, West Point Stevens and Print Pack, Inc.
Frank T. MacInnis, 54................ 1998 2002 Director of Williams since 1998. Chairman and Chief
Executive Officer of EMCOR Group, Inc. since 1994.
Chairman of the Board of ComNet Communications, Inc. and
director of UTT Corporation.
Peter C. Meinig, 61.................. 1993 2002 Director of Williams since 1993. Chairman and Chief
Executive Officer of HM International, Inc. Chairman of
Windsor Food Company, Ltd. and Ninth House, Inc.
Janice D. Stoney, 60................. 1999 2002 Director of Williams since 1999. Director of Whirpool
Corporation and Bridges Investment Fund.
Keith E. Bailey, 59.................. 1998 2003 Director of Williams since 1988. Chairman of the Board
of Williams since 1994. President of Williams since
1992. Chief Executive Officer of Williams since 1994.
Chairman of the Board of Williams Communication Group,
Inc. until April 23, 2001. Director of Purchaser since
2001.
William E. Green, 64................. 1998 2003 Director of Williams since 1998. Founder of and Attorney
at William Green and Associates, a California law firm,
and Vice President, General Counsel and Secretary of
Information Network Radio Inc.
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DIRECTOR OF CURRENT
WILLIAMS TERM CURRENT POSITION AND PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND AGE SINCE EXPIRES MATERIAL POSITIONS HELD DURING LAST FIVE YEARS
- ------------ ----------- ------- --------------------------------------------------------
W.R. Howell, 65...................... 1997 2003 Director of Williams since 1997. Chairman of the Board
and Chief Executive Officer of J.C. Penney until 1996.
Chairman Emeritus of J.C. Penney Company, Inc. Director
of Exxon Mobil Corporation, Warner-Lambert Company,
Bankers Trust, Halliburton Company and Central
Southwest.
James C. Lewis, 68................... 1978 2003 Director of Williams since 1978. Chairman of the Board
of Optimus Corporation. Director of CFT.
George A. Lorch, 59.................. 2001 2003 Director of Williams since 2001. Chairman Emeritus of
Armstrong Holdings, Inc. Chairman of the Board and Chief
Executive Officer of Armstrong World Industries, Inc.
until 2000. Board member of Pfizer, Household
International and R.R. Donnelly.
Glenn A. Cox, 71..................... 1992 2004 Director of Williams since 1992. Director of Helmerich
and Payne, Inc.
Thomas H. Cruikshank, 69............. 1990 2004 Director of Williams since 1990. Chairman of and Chief
Executive Officer of Halliburton Company until 1996.
Director of Goodyear Tire & Rubber Company and Lehman
Bros. Holding, Inc.
Charles M. Lillis, 59................ 2000 2004 Director of Williams since 2000. Co-founder and
principal of LoneTree Partners. Chairman of the Board
and Chief Executive Officer of MediaOne Group from 1995
until 2000. Director of SUPERVALU Inc. and Agilera, Inc.
Gordon R. Parker, 65................. 1987 2004 Director of Williams since 1987. Director of
Caterpillar, Inc. and Phelps Dodge Corporation.
Joseph H. Williams, 67............... 1969 2004 Director of Williams since 1969. Director of The
Prudential Insurance Co. of America.
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2. EXECUTIVE OFFICERS OF WILLIAMS
Except as set forth below, all of the officers of Williams have been employed by
Williams or its subsidiaries as officers or otherwise for more than five years
and have had no other employment during the period.
OFFICER OF
WILLIAMS CURRENT POSITION AND PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND AGE SINCE MATERIAL POSITIONS HELD DURING LAST FIVE YEARS
- ------------ ---------- --------------------------------------------------------
Keith E. Bailey, 59.................. 1994 Director of Williams since 1988. Chairman of the Board
of Williams since 1994. President of Williams since
1992. Chief Executive Officer of Williams since 1994.
Chairman of the Board of Williams Communications Group,
Inc. until April 23, 2001. Director of Purchaser since
2001.
Michael P. Johnson, Sr., 53.......... 2000 Executive Officer of Williams since 2000. Senior Vice
President of Human Resources of Williams. Director of
Williams Communications Group, Inc. until April 23,
2001. Prior to 2000 and for more than five year prior to
joining Williams held various officer positions with
Amoco Corporation.
Jack D. McCarthy, 58................. 1992 Executive Officer of Williams since 1992. Senior Vice
President of Finance (Principal Financial Officer) of
Williams. Director of Williams Communications Group,
Inc. until April 23, 2001.
William G. von Glahn, 57............. 1996 Executive Officer of Williams since 1996. Senior Vice
President and General Counsel of Williams.
Gary R. Belitz, 51................... 1992 Executive Officer of Williams since 1992. Controller
(Principal Accounting Officer) of Williams.
Steven J. Malcolm, 52................ 1998 Executive Officer of Williams since 1998. Executive Vice
President of Williams since March 2001. President and
Chief Executive Officer of Williams Energy Services, LLC
since 1998. Director of Williams Communications Group,
Inc. until April 23, 2001. Director of Purchaser since
2001.
Cuba Wadlington, Jr., 57............. 2000 Executive Officer of Williams since 2000. President and
Chief Executive Officer of Williams Gas Pipeline Company
LLC since 2000. Director of Williams Communications
Group, Inc. until April 23, 2001.
B. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The following table
sets forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years of each
director and executive officer of Purchaser. None of the directors and officers
of Purchaser listed below has, during the past five years, (i) been convicted in
a criminal proceeding or (ii) been a party to any judicial or administrative
proceeding that resulted in a judgment, decree or final order enjoining the
person from future violations of, or prohibiting activities subject to, federal
or state securities laws, or a finding of any violation of federal or state
securities laws. Unless otherwise indicated below, each occupation set forth
opposite each person refers to employment with Williams. The business address of
each such person is c/o The Williams Companies, One Williams Center, Tulsa, OK
74172, and each such person is a citizen of the United States of America.
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1. DIRECTORS OF PURCHASER
DIRECTOR OF
PURCHASER CURRENT POSITION AND PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND AGE SINCE MATERIAL POSITIONS HELD DURING LAST FIVE YEARS
- ------------ ----------- --------------------------------------------------------
Keith E. Bailey, 59.................. May 2001 Director of Purchaser since 2001. Director of Williams
since 1988. Chairman of the Board of Williams since
1994. President of Williams since 1992. Chief Executive
Officer of Williams since 1994. Chairman of the Board of
Williams Communications Group, Inc. until April 23,
2001.
Stephen J. Malcolm, 52............... May 2001 Director of Purchaser since 2001. Executive Vice
President of Williams since March 2001. Executive
Officer of Williams since 1998. President and Chief
Executive Officer of Williams Energy Services, LLC since
1998. Director of Williams Communications Group, Inc.
until April 23, 2001.
Ralph A. Hill, 41.................... May 2001 Director of Purchaser since 2001. Senior Vice President
of Williams Energy Services, LLC since 1998. General
Manager of Exploration and Production of Williams Energy
Services, LLC since 1996.
2. EXECUTIVE OFFICERS OF PURCHASER
DIRECTOR OF
PURCHASER CURRENT POSITION AND PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND AGE SINCE MATERIAL POSITIONS HELD DURING LAST FIVE YEARS
- ------------ ----------- --------------------------------------------------------
Steven J. Malcolm, 52................ May 2001 President of Purchaser since 2001. Executive Vice
President of Williams since March 2001. Executive
Officer of Williams since 1998. President and Chief
Executive Officer of Williams Energy Services, LLC since
1998. Director of Purchaser since 2001. Director of
Williams Communications Group, Inc. until April 23,
2001.
James G. Ivey, 49.................... May 2001 Treasurer of Purchaser since 2001. Treasurer of Williams
since 1995.
Ralph A. Hill, 41.................... May 2001 Senior Vice President of Purchaser since 2001. Director
of Purchaser since 2001. Senior Vice President of
Williams Energy Services, LLC since 1998. General
Manager of Exploration and Production of Williams Energy
Services, LLC since 1996.
Bryan K. Guderian, 41................ May 2001 Vice President of Purchaser since 2001. Vice President
of Williams Production Company, LLC since 1998. Director
of Land & Gas Management, Williams Production Company,
1996-1998.
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Facsimile copies of Letters of Transmittal, properly completed and duly
executed, will be accepted. The appropriate Letter of Transmittal, certificates
for Shares and any other required documents should be sent or delivered by each
stockholder of Barrett Resources or his broker, dealer, commercial bank, trust
company or other nominee to the Depositary at one of its addresses set forth
below:
The Depositary for the Offer is:
EQUISERVE TRUST COMPANY, N.A.
By Mail: By Overnight Courier: By Hand:
Attn: Corporate Actions Attn: Corporate Actions Attn: Corporate Actions
P.O. Box 43025 40 Campanelli Drive Securities Transfer & Reporting
Providence, RI 02940-3025 Braintree, MA 02184 Services, Inc.
c/o EquiServe
100 William Street, Galleria
New York, NY 10038
By Facsimile:
(for Eligible Institutions only)
(781) 575-4826
Confirm Facsimile By Telephone:
(781) 575-4816
You may direct questions and requests for assistance to the Information
Agent or the Dealer Manager at their respective telephone numbers and addresses
set forth below. You may obtain additional copies of this Offer to Purchase, the
Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer
materials from the Information Agent as set forth below and they will be
furnished promptly at our expense. You may also contact your broker, dealer,
commercial bank, trust company or other nominee for assistance concerning the
Offer.
The Information Agent for the Offer is:
[Georgeson Shareholder logo]
17 State Street, 10th Floor
New York, New York 10004
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (800) 223-2064
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
Four World Financial Center
New York, New York 10080
Call Collect: (212) 236-3790