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EXHIBIT (a)(1)(A)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the associated Preferred Stock Purchase Rights)
of
BARRETT RESOURCES CORPORATION
at
$55.00 Net Per Share
by
SRM ACQUISITION COMPANY,
an indirect wholly owned subsidiary of
SHELL OIL COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON APRIL 6, 2001, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE THAT NUMBER OF
SHARES THAT, TOGETHER WITH ANY SHARES OWNED BY THE PURCHASER, SHELL OR SHELL'S
OTHER DIRECT OR INDIRECT SUBSIDIARIES, WOULD REPRESENT AT LEAST A MAJORITY OF
ALL OUTSTANDING SHARES ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE (THE
"MINIMUM TENDER CONDITION"), (2) THE COMPANY'S PREFERRED STOCK PURCHASE RIGHTS
HAVING BEEN REDEEMED BY THE BOARD OF DIRECTORS OF THE COMPANY, OR THE PURCHASER
BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE RIGHTS HAVE BEEN INVALIDATED
OR ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER (AS DEFINED
HEREIN) (THE "RIGHTS CONDITION"), (3) THE ACQUISITION OF SHARES PURSUANT TO THE
OFFER AND THE PROPOSED MERGER HAVING BEEN APPROVED PURSUANT TO SECTION 203 OF
THE DELAWARE GENERAL CORPORATION LAW ("SECTION 203"), OR THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT THE PROVISIONS OF SECTION 203 ARE
OTHERWISE INAPPLICABLE TO THE ACQUISITION OF SHARES PURSUANT TO THE OFFER AND
THE PROPOSED MERGER (THE "BUSINESS COMBINATION CONDITION"), (4) THE PURCHASER
BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE PROVISIONS OF ARTICLE IV OF
THE COMPANY'S BYLAWS ARE INAPPLICABLE TO THE ACQUISITION OF SHARES PURSUANT TO
THE OFFER AND THE PROPOSED MERGER (THE "BYLAWS CONDITION"), AND (5) THE WAITING
PERIODS UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976 (THE "HSR
ACT") APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED
OR BEEN TERMINATED (THE "HSR CONDITION"). SEE SECTIONS 14 AND 15.
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IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
shares (and the associated preferred stock purchase rights) should either (i)
complete and sign the letter of transmittal (or a facsimile thereof) in
accordance with the instructions in the letter of transmittal, have such
stockholder's signature thereon guaranteed if required by Instruction 1 to the
letter of transmittal, mail or deliver the letter of transmittal (or such
facsimile), or, in the case of a book-entry transfer effected pursuant to the
procedure set forth in section 2, an agent's message (as defined therein), and
any other required documents to the depositary and either deliver the
certificates for such shares and, if separate, the certificate(s) representing
the associated preferred stock purchase rights to the depositary along with the
letter of transmittal (or facsimile) or deliver such shares (and associated
preferred stock purchase rights, if applicable) pursuant to the procedure for
book-entry transfer set forth in section 2 or (ii) request such stockholder's
broker, dealer, bank, trust company or other nominee to effect the transaction
for such stockholder. A stockholder having shares and, if applicable, associated
preferred stock purchase rights registered in the name of a broker, dealer,
bank, trust company or other nominee must contact such broker, dealer, bank,
trust company or other nominee if such stockholder desires to tender such shares
and, if applicable, associated preferred stock purchase rights. Unless the
Rights Condition (as defined herein) is satisfied, stockholders will be required
to tender one associated preferred stock purchase right for each share tendered
in order to effect a valid tender of shares.
If a stockholder desires to tender shares and associated preferred stock
purchase rights and such stockholder's certificates for shares (or associated
preferred stock purchase rights, if applicable) are not immediately available or
the procedure for book-entry transfer cannot be completed on a timely basis, or
time will not permit all required documents to reach the depositary prior to the
expiration date (as defined herein), such stockholder's tender may be effected
by following the procedure for guaranteed delivery set forth in section 2.
Questions and requests for assistance or for additional copies of this offer
to purchase, the letter of transmittal and the notice of guaranteed delivery may
be directed to Morrow & Co., Inc. (the "information agent") or to Lehman
Brothers Inc. (the "dealer manager") at their respective addresses and telephone
numbers set forth on the back cover of this offer to purchase.
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The Dealer Manager for the Offer is:
LEHMAN BROTHERS
March 12, 2001
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TABLE OF CONTENTS
PAGE
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SECTION 1. TERMS OF THE OFFER.......................................... 9
SECTION 2. PROCEDURE FOR TENDERING SHARES AND RIGHTS................... 10
SECTION 3. WITHDRAWAL RIGHTS........................................... 14
SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT.......................... 14
SECTION 5. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES................ 15
SECTION 6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES.......... 16
SECTION 7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; SHARE
QUOTATION; EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.... 17
SECTION 8. CERTAIN INFORMATION CONCERNING THE COMPANY.................. 18
SECTION 9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND ITS
AFFILIATES.................................................. 22
SECTION 10. SOURCE AND AMOUNT OF FUNDS.................................. 23
SECTION 11. CONTACTS AND TRANSACTIONS WITH THE COMPANY; BACKGROUND OF
THE OFFER................................................... 23
SECTION 12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY................. 28
SECTION 13. DIVIDENDS AND DISTRIBUTIONS................................. 30
SECTION 14. CERTAIN CONDITIONS OF THE OFFER............................. 31
SECTION 15. CERTAIN LEGAL MATTERS....................................... 34
SECTION 16. FEES AND EXPENSES........................................... 36
SECTION 17. MISCELLANEOUS............................................... 36
SCHEDULE I -- DIRECTORS AND EXECUTIVE OFFICERS OF SHELL, THE PURCHASER,
SHELL PETROLEUM INC., ROYAL DUTCH PETROLEUM COMPANY AND THE
"SHELL" TRANSPORT AND TRADING COMPANY, P.L.C. .............
S-1
SCHEDULE II -- SHELL OIL COMPANY'S INTERESTS IN THE COMPANY'S SHARES;
RECENT TRANSACTIONS IN THE COMPANY'S SHARES................ S-10
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SUMMARY TERM SHEET
SRM Acquisition Company, to which this offer to purchase refers as the
"Purchaser," is offering to purchase all outstanding shares of common stock of
Barrett Resources Corporation, to which this offer to purchase refers as the
"Company," for $55.00 per share in cash. The following are some questions you,
as a stockholder of the Company, may have and answers to those questions. We
urge you to read the remainder of this offer to purchase and the letter of
transmittal carefully because the information in this summary 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 SHARES?
The Purchaser, SRM Acquisition Company, is a Delaware corporation formed to
make this tender offer. It is an indirect wholly owned subsidiary of Shell Oil
Company, a Delaware corporation, to which this offer to purchase refers as
"Shell." See section 9 of this offer to purchase -- "Certain Information
Concerning the Purchaser and its Affiliates."
WHAT SHARES ARE YOU SEEKING IN THIS OFFER?
The Purchaser is offering to purchase all the outstanding shares of common
stock of the Company that Shell or its subsidiaries do not already own. The
Purchaser, Shell and SWEPI LP, an indirect wholly owned subsidiary of Shell,
together own 107,100 shares, or less than 1 percent of the outstanding shares.
See "Introduction" and section 1 of this offer to purchase -- "Terms of the
Offer."
WHAT ARE THE "ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS"?
The associated preferred stock purchase rights were issued to all
stockholders of the Company, but currently are not represented by separate
certificates. Instead, these rights are represented by the certificates for your
shares. Unless the rights are distributed to stockholders, a tender of your
shares will include a tender of the associated rights. If the rights are
distributed, a holder will need to tender one right with each share tendered. We
will not pay any additional consideration for the tender of a right.
WHY ARE YOU MAKING THIS OFFER?
We are making the offer because Shell wants to acquire control of, and the
entire equity interest in, the Company. If the offer is consummated, we intend
to effect a follow-on merger with the Company in which the Company will become
an indirect wholly owned subsidiary of Shell and all shares of the Company that
are not purchased in the offer will be exchanged for an amount in cash per share
equal to the same price per share we pay under the offer. We sometimes refer to
this offer together with the proposed merger as "the transaction."
WHAT ARE THE MOST IMPORTANT CONDITIONS TO THE OFFER?
The following are the most important conditions to the offer:
- The Company stockholders must validly tender and not withdraw before
expiration of the offer the number of shares of common stock of the
Company (including the associated rights) that, when added to the number
of shares then owned by Shell or Shell's other direct and indirect
subsidiaries, would represent at least a majority of the outstanding
shares on a fully diluted basis;
- The Company's board of directors must redeem the rights, or we, in our
sole discretion, must be satisfied that the rights have been invalidated
or are otherwise inapplicable to the transaction;
- The Company's board of directors must approve the offer and the proposed
follow-on merger under section 203 of the Delaware General Corporation Law
(the "DGCL") or we, in our sole discretion, must be satisfied that the
provisions of section 203 are otherwise inapplicable to the offer and the
proposed merger;
- We must be satisfied, in our sole discretion, that the provisions of
article IV of the Company's bylaws are inapplicable to this transaction;
and
- The waiting periods under the HSR Act applicable to the purchase of shares
under this offer must have expired or been terminated.
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The offer is also subject to a number of other conditions. See section 14 of
the offer to purchase -- "Certain Conditions of the Offer."
WHAT DOES MANAGEMENT OF THE COMPANY THINK OF THIS OFFER?
On March 8, 2001, the Company's board of directors rejected an earlier
proposal by us for a transaction providing consideration of $55.00 per share in
cash for all the Company's outstanding shares of common stock. The Company's
board of directors has not approved this offer as of the date of this offer to
purchase. Within 10 business days after the date of this offer to purchase, the
Company is required by law to publish, send or give to you (and file with the
Securities and Exchange Commission (the "SEC")) a statement as to whether it
recommends acceptance or rejection of the offer, has no opinion with respect to
the offer or is unable to take a position with respect to the offer.
HOW MUCH ARE YOU OFFERING TO PAY, WHAT IS THE FORM OF PAYMENT AND WILL I HAVE TO
PAY ANY FEES OR COMMISSIONS?
We are offering to pay $55.00 per share, net to you, in cash. If you are the
record owner of your shares and you tender your shares to us in the offer, you
will not have to pay brokerage fees or similar expenses. 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. See
"Introduction" and section 1 of this offer to purchase -- "Terms of the Offer."
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
Yes. Shell will provide us with sufficient funds from cash on hand and
readily available funds to acquire all shares in this transaction. The offer is
not conditioned on any financing arrangements. See section 10 of this offer to
purchase -- "Source and Amount of Funds."
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
We do not think our financial condition is relevant to your decision whether
to tender shares and accept the offer because:
- the offer is being made for all outstanding shares solely for cash;
- the offer is not subject to any financing condition; and
- if we consummate the offer, we will cash out all remaining shares in the
merger and convert these shares into cash at the price per share we have
paid pursuant to the offer.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have at least until 12:00 midnight, New York City time, on April 6,
2001, to decide whether to tender your shares in the offer. Further, if you
cannot deliver everything that is required in order to make a valid tender by
that time, you may be able to use a guaranteed delivery procedure, which this
offer to purchase discusses. See sections 1 and 2 of this offer to
purchase -- "Terms of the Offer" and -- "Procedure for Tendering Shares and
Rights -- Guaranteed Delivery."
CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
Yes. We may extend the offer if at the time the offer is scheduled to
expire, including at the end of an earlier extension, any of the offer
conditions is not satisfied, or waived by us, or if we are required to extend
the offer by the rules of the SEC. See section 1 of this offer to
purchase -- "Terms of the Offer."
We may also elect to provide a "subsequent offering period" for the offer. A
subsequent offering period, if we include one, will be an additional period of
time beginning after we have purchased shares tendered during the offer, during
which stockholders may tender their shares and receive the offer consideration.
If we decide to provide a subsequent offering period we will make a public
announcement of our decision at least five business days in advance. We do not
currently intend to include a subsequent offering period, although we reserve
the right to do so. See section 1 of this offer to purchase -- "Terms of the
Offer."
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HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If we extend the offer, we will inform Wilmington Trust Company, which is
the depositary for the offer, of that fact and will make a public announcement
of the extension, by not later than 9:00 a.m., New York City time, on the day
after the day on which the offer was scheduled to expire.
HOW DO I TENDER MY SHARES?
To tender shares, you must deliver the certificates representing your
shares, together with a completed letter of transmittal and any other documents
required, to Wilmington Trust Company, the depositary for the offer, not later
than the time the offer expires. If your shares are held in street name, the
shares can only be tendered by your nominee through The Depository Trust
Company. If you cannot deliver something that is required to the depositary by
the expiration of the offer, you may get a little extra time to do so 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 trading days.
The depositary must receive the missing items within that three trading day
period for the tender to be valid. See section 2 of this offer to
purchase -- "Procedure for Tendering Shares and Rights."
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
You can withdraw shares at any time until the offer has expired and, if we
have not by May 10, 2001 agreed to accept your shares for payment, you can
withdraw them at any time after that time until we accept shares for payment. If
we decide to provide a subsequent offering period, we will accept shares
tendered during that period immediately and thus you will not be able to
withdraw shares tendered in the offer during any subsequent offering period. See
sections 1 and 3 of this offer to purchase -- "Terms of the Offer" and
"Withdrawal Rights."
If for any reason we increase the offering price for your shares at any time
after March 12, 2001, we will pay that price to all stockholders who have
already tendered their shares to us. In that circumstance, you will not be
required to withdraw and re-tender your shares in order to receive the increased
price.
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary while you
still have the right to withdraw the shares. See sections 1 and 3 of this offer
to purchase -- "Terms of the Offer" and "Withdrawal Rights."
WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE SHARES ARE NOT TENDERED
IN THE OFFER?
If the Purchaser purchases in the offer at least the number of shares that,
when added to the shares then owned by Shell or Shell's direct or indirect
subsidiaries, equals at least a majority of the shares of the Company
outstanding on a fully diluted basis, the Purchaser will be merged with the
Company. If that merger takes place, Shell and its affiliates will own all the
shares of the Company, and all other stockholders of the Company will receive
the same price we have paid in the offer, that is, $55.00 per share in cash, or
any other higher price per share we paid in the offer. See "Introduction" and
section 12 of this offer to purchase -- "Purpose of the Offer; Plans for the
Company." There are no appraisal rights available in connection with the offer.
If the merger takes place, however, stockholders who have not sold their shares
in the offer and do not vote for, or consent to, that merger will have appraisal
rights under Delaware law. See section 15 of this offer to purchase -- "Certain
Legal Matters -- Appraisal Rights."
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
If you and your fellow stockholders do not tender shares that, when added to
the number of shares then owned by Shell or Shell's direct or indirect
subsidiaries, equal at least a majority of the shares of the Company outstanding
on a fully diluted basis, we may not purchase any shares pursuant to our offer
or, if we do purchase shares pursuant to our offer, the merger may not take
place. If the merger takes place, stockholders who do not tender in the offer
will receive in the merger the same amount of cash per share they would have
received had they tendered their shares in the offer. Therefore, if the merger
takes place, the only difference to you between tendering shares and not
tendering shares is that you will be paid earlier if you tender your shares. If
we consummate our offer, then, until the merger takes place, or if for some
reason it were never to take place, the number of stockholders of the Company
and the shares of the Company that are still in the hands of the public
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may be so small that an active public trading market, or, possibly, any public
trading market, for the shares no longer will exist. Also in that event, the
shares may no longer be eligible to be traded through the NYSE or any other
securities exchange, and the Company may cease making filings with the SEC or
otherwise cease being required to comply with the SEC's rules relating to
publicly held companies. See sections 7 and 11 of this offer to
purchase -- "Effect of the Offer on the Market for the Shares; Share Quotation;
Exchange Act Registration; Margin Regulations" and "Purpose of the Offer; Plans
for the Company."
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On February 28, 2001, the last trading day before Shell delivered to the
Company its letter offering a price of $55.00 per share, the last sale price of
the shares reported by the NYSE was $44.25 per share. A $55.00 per share price
represents a 24 percent premium over the February 28, 2001 last sale price. On
March 6, 2001, the last trading day before the first public announcement of our
intention to commence the offer, the last sale price of the shares reported by
NYSE was $45.62 per share. On March 7, 2001, prior to the commencement of
trading, Shell issued a press release announcing its proposal to acquire all
outstanding shares of the Company for a price of $55.00 a share. On March 9,
2001, which was the last full trading day before commencement of the offer, the
last reported sale price of the shares on the NYSE was $62.52 per share. We
advise you to obtain a recent price for shares in deciding whether to tender
your shares. If the rights are distributed and begin to trade separately from
the shares, stockholders should be able to obtain, and should obtain, a current
market price for the rights. See section 6 of this offer to purchase -- "Price
Range of the Shares; Dividends on the Shares."
WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
You may call Morrow & Co., Inc., which is acting as the information agent,
or Lehman Brothers Inc., which is acting as the dealer manager, for our offer.
See the back cover page of this offer to purchase.
MORROW & CO., INC.
Call Collect: (212) 754-8000
Banks and Brokerage Firms, Please Call: (800) 654-2468
Stockholders Please Call: (800) 607-0088
E-mail: barrett.info@morrowco.com
LEHMAN BROTHERS
Call Collect:
(212) 526-4867 or (713) 236-3965
E-mail: barrett.info@lehman.com
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To the Holders of Common Stock (Including the Associated Rights) of Barrett
Resources Corporation:
INTRODUCTION
SRM Acquisition Company, a Delaware corporation (the "Purchaser") and an
indirect wholly owned subsidiary of Shell Oil Company, a Delaware corporation
("Shell"), hereby offers to purchase all outstanding shares of common stock, par
value $.01 per share (the "shares"), of Barrett Resources Corporation, a
Delaware corporation (the "Company"), together with the associated preferred
stock purchase rights (the "Rights") outstanding under the Rights Agreement
dated as of August 5, 1997, as amended (the "Rights Agreement"), between the
Company and BankBoston, N.A., as Rights Agent (the "Rights Agent"), at a
purchase price of $55.00 per share (and the associated Right), net to the seller
in cash, without interest thereon, on the terms and subject to the conditions
set forth in this offer to purchase and in the related letter of transmittal
(which, together with any amendments or supplements hereto or thereto,
collectively constitute the "offer"). All references herein to Rights include
all benefits that may inure to holders of the Rights under the Rights Agreement
and, unless the context otherwise requires, all references herein to shares
include the Rights. In this offer to purchase, references to sections are to
sections hereof unless otherwise indicated.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the letter of
transmittal, transfer taxes on the purchase of shares under the offer. The
Purchaser will pay all fees and expenses that Lehman Brothers Inc. ("Lehman
Brothers"), which is acting as dealer manager, Wilmington Trust Company, which
is acting as the depositary, and Morrow & Co., Inc., which is acting as the
information agent, incur in connection with the offer. See section 16.
The purpose of the offer is to enable Shell to acquire control of, and the
entire equity interest in, the Company. The offer, as the first step in Shell's
acquisition of the Company, is intended to facilitate the acquisition of all
outstanding shares of the Company. Shell currently intends, as soon as
practicable following consummation of the offer, to effect a merger or similar
business combination of the Company with the Purchaser or another direct or
indirect wholly owned subsidiary of Shell (the "proposed merger"). The Company
would become an indirect wholly owned subsidiary as a result of this merger.
When this merger takes place, each then outstanding share (other than shares
owned by Shell or its direct or indirect subsidiaries, including the Purchaser,
shares held in the treasury of the Company and shares owned by stockholders who
perfect available appraisal rights under the Delaware General Corporation Law
(the "DGCL")) would convert into the right to receive an amount in cash equal to
the price per share the Purchaser has paid pursuant to the offer. In this offer
to purchase, the term "transaction" refers to both the offer and the proposed
merger.
On March 8, 2001, after the Company's chief executive officer declined
Shell's attempts to meet with the Company, the Company's board of directors
rejected a proposal by Shell for a transaction providing consideration of $55.00
per share in cash for all the Company's outstanding shares. See section 11.
Because the Company currently has in place a number of antitakeover measures
that would render the transaction economically unfeasible and difficult to
complete, Shell and the Purchaser are taking the following steps, in addition to
the offer, to bring the transaction to the Company's stockholders:
- by a letter dated March 7, 2001, Shell urged the Company's board of
directors to take action to remove the impediments to its acquisition
proposal that are contained in the Company's poison pill rights plan and
bylaws (see section 11);
- on March 7, 2001, Shell commenced the state court litigation described
below against the Company;
- on March 12, 2001, Shell amended the complaint in the state litigation
previously commenced on March 7, 2001, the Purchaser joined as a plaintiff
in that litigation and Shell commenced the federal court litigation
described below; and
- on March 12, 2001, the Purchaser filed preliminary consent solicitation
materials with the SEC for use in connection with the solicitation of
written consents from the stockholders (the "Consent Solicitation") for
the purposes described below.
IN CONNECTION WITH ITS REJECTION OF SHELL'S OFFER, THE COMPANY'S BOARD OF
DIRECTORS AUTHORIZED MANAGEMENT TO PURSUE STRATEGIC ALTERNATIVES, INCLUDING
SEEKING PROPOSALS FROM A NUMBER OF QUALIFIED PARTIES, RATHER THAN COMMENCING
NEGOTIATIONS WITH SHELL ALONE. SHELL HAS CHOSEN TO TAKE ITS OFFER
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DIRECTLY TO THE STOCKHOLDERS OF THE COMPANY RATHER THAN PARTICIPATE IN THE
AUCTION PROCESS PROPOSED BY THE COMPANY'S BOARD OF DIRECTORS. SHELL AND THE
PURCHASER PRESENTLY REMAIN WILLING TO NEGOTIATE WITH THE COMPANY WITH RESPECT TO
SHELL'S ACQUISITION OF THE COMPANY. IF THOSE NEGOTIATIONS OCCUR AND RESULT IN A
DEFINITIVE MERGER AGREEMENT BETWEEN THE COMPANY AND SHELL, THE OFFER PRICE OR
TERMS OF THE OFFER COULD CHANGE FROM THE PRICE AND TERMS THIS OFFER TO PURCHASE
DESCRIBES, AND THE CONSIDERATION TO BE RECEIVED BY HOLDERS OF SHARES COULD
INCLUDE OR CONSIST OF SECURITIES, CASH OR ANY COMBINATION THEREOF. ACCORDINGLY,
THOSE NEGOTIATIONS COULD RESULT IN, AMONG OTHER THINGS, TERMINATION OF THE OFFER
(SEE SECTION 14) AND SUBMISSION OF A DIFFERENT ACQUISITION PROPOSAL TO THE
COMPANY'S STOCKHOLDERS FOR THEIR APPROVAL.
In the Consent Solicitation, the Company will be seeking written consents
from stockholders of the Company for the following purposes: (1) to remove
without cause all members of the board of directors of the Company who are in
office immediately prior to that removal, and (2) to elect Messrs. Francis L.
Durand, R. W. Leftwich and J. Hugh Roff Jr. (the "Nominees") to serve as
directors of the Company. The effectiveness of the proposal to remove the
Company's board of directors is not subject to, or conditioned on, the
effectiveness of the proposal to elect the Nominees. Absent judicial relief,
which Shell and the Purchaser are seeking, or action by the Company's board of
directors, a Company bylaw requiring advance notice of stockholder nominations
for directors to be elected by written consent of the stockholders could delay
the election of the Nominees. If such a delay were to occur following the
removal of the entire board in accordance with the removal proposal, section 223
of the DGCL provides a mechanism for the election of new directors of the
Company. That section provides that if a Delaware corporation should at any time
have no directors in office, various persons, including any of the corporation's
officers and stockholders, may apply to the Delaware Court of Chancery for a
decree summarily ordering an election of directors pursuant to section 211 of
the DGCL provides.
The principal reason the Purchaser is seeking to replace the Company's board
with the Nominees is the willingness of the Nominees to consider, consistent
with their fulfillment of their fiduciary duties under Delaware law, whether to
take such actions as they may deem necessary or appropriate to expedite the
prompt consummation of our transaction, including:
- redeeming the Rights or amending the Rights Agreement to make the Rights
inapplicable to the offer and proposed merger, thereby satisfying one of
the Purchaser's conditions to the consummation of the offer;
- approving the offer and the proposed merger before Shell and the Purchaser
become "interested stockholders" under section 203, thereby satisfying
another of the Purchaser's conditions to the consummation of the offer;
and
- rendering inapplicable, if otherwise applicable, article IV of the
Company's bylaws to our transaction, thereby satisfying the Bylaws
Condition;
or, if a proposal has been made respecting a transaction that is determined to
be superior to our transaction for the Company's stockholders, whether to take
such actions as they may deem necessary or appropriate to facilitate that
proposed transaction. The adoption of the proposals by the Company's
stockholders would expedite the prompt consummation of the transaction. This
adoption would require the affirmative written consent of the holders of a
majority of the outstanding shares of the Company's common stock and either the
amendment or waiver by the Company's board of directors of one or more
provisions in the Company's bylaws or the invalidation of those provisions by,
or other relief from, a court.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF CONSENTS FROM THE COMPANY'S
STOCKHOLDERS. ANY SUCH SOLICITATION (INCLUDING THE CONSENT SOLICITATION) WILL BE
MADE ONLY BY SEPARATE CONSENT SOLICITATION MATERIALS COMPLYING WITH THE
REQUIREMENTS OF SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 (THE
"EXCHANGE ACT").
On March 7, 2001, Shell commenced litigation against the Company in the
Chancery Court, New Castle County, Delaware seeking declaratory and injunctive
relief to invalidate certain of the Company's bylaw provisions on grounds that
the provisions are improper limitations on the ability of the Company's
stockholders to act by written consent and to enjoin the Company from enforcing
those provisions. On March 12, 2001, the Purchaser joined Shell as a plaintiff
in this lawsuit, and they amended the original complaint to add the present
members of the Company's board of directors as defendants.
In addition, on March 12, 2001, Shell and the Purchaser commenced litigation
against the Company in the United States District Court for the District of
Delaware seeking declaratory and injunctive relief to (1) declare
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that the Schedule TO documents and exhibits thereto, including this offer to
purchase, and the Consent Solicitation materials filed with the SEC by Shell and
the Purchaser are proper and comply with all applicable securities laws, rules
and regulations and (2) enjoin the Company from commencing litigation relating
to the transaction other than in state and federal court in Delaware.
Section 5 describes various federal income tax consequences of the sale of
shares pursuant to the offer.
The offer is subject to the fulfillment of a number of conditions including,
without limitation, the following:
Minimum Tender Condition. THE OFFER IS CONDITIONED ON THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE THAT NUMBER OF SHARES,
THAT WHEN ADDED TO THE NUMBER OF SHARES THEN OWNED BY SHELL OR SHELL'S DIRECT OR
INDIRECT SUBSIDIARIES (THE "MINIMUM NUMBER OF SHARES"), WOULD REPRESENT AT LEAST
A MAJORITY OF ALL OUTSTANDING SHARES ON A FULLY DILUTED BASIS ON THE DATE OF
PURCHASE, WITHOUT GIVING EFFECT TO ANY DILUTION THAT MIGHT ARISE FROM EXERCISE
OF THE RIGHTS. THE PURCHASER RESERVES THE RIGHT (SUBJECT TO THE APPLICABLE RULES
AND REGULATIONS OF THE SEC), WHICH IT PRESENTLY HAS NO INTENTION OF EXERCISING,
TO WAIVE OR REDUCE THE MINIMUM TENDER CONDITION AND TO ELECT TO PURCHASE,
PURSUANT TO THE OFFER, FEWER THAN THE MINIMUM NUMBER OF SHARES. SEE SECTIONS 1
AND 14.
According to the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2000 (the "Company 2000 10-Q"), as of November 8, 2000,
there were 33,055,586 shares outstanding. According to the Company's Annual
Report on Form 10-K for the year ended December 31, 1999 (the "Company 1999
10-K"), as of December 31, 1999, there were 2,710,824 shares under option.
According to a press release issued by the Company on March 1, 2001, there were
33,394,063 shares outstanding as of December 31, 2000. For purposes of the
offer, "fully diluted basis" assumes that all outstanding stock options are
presently exercisable. The actual minimum number of shares will depend on the
facts as they exist on the date of purchase.
Rights Condition. THE OFFER IS CONDITIONED ON THE RIGHTS HAVING BEEN
REDEEMED BY THE BOARD OF DIRECTORS OF THE COMPANY OR THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT THE RIGHTS HAVE BEEN INVALIDATED OR ARE
OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER. THE RIGHTS ARE
DESCRIBED IN THE COMPANY'S AMENDED REGISTRATION STATEMENT ON FORM 8-A DATED
MARCH 17, 1999 (THE "COMPANY FORM 8-A") AND EXHIBIT 4.1B TO THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998 (THE "COMPANY 10-K
EXHIBIT"), AND A SUMMARY OF THOSE DESCRIPTIONS IS PROVIDED BELOW AND IN SECTION
8.
The Rights Agreement provides that, until the Distribution Date (as defined
in section 8), the Rights will be evidenced by the certificates for shares.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
the surrender for transfer of any certificates for shares will also constitute
the surrender for transfer of the Rights associated with the shares represented
by those certificates. The Rights Agreement further provides that, as soon as
practicable following the Distribution Date, separate certificates representing
the Rights will be mailed to holders of record of shares as of the close of
business on the Distribution Date.
The Rights Agreement provides that at any time prior to the acquisition by a
person or group of affiliated or associated persons of beneficial ownership of
15 percent or more of the outstanding shares, the board of directors of the
Company may redeem the Rights, in whole but not in part, at a redemption price
of $.001 per Right. The redemption of the Rights may be made effective at such
time, on such basis and with such conditions as the board of directors, in its
sole discretion, may establish. On any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of holders of Rights will
be to receive that redemption price.
Unless the Company's board of directors redeems the Rights, amends the
Rights Agreement to make the Rights inapplicable to the offer or delays the
Distribution Date, the Purchaser believes that, as a result of Shell's
announcement on March 7, 2001 of its intention to commence the offer, the
Distribution Date may occur as early as March 21, 2001. On the basis of publicly
available information, the Purchaser believes that, as of March 12, 2001, the
Rights were not exercisable, certificates for Rights had not yet been issued and
the Rights were evidenced by the certificates for shares.
UNLESS THE RIGHTS CONDITION IS SATISFIED, STOCKHOLDERS WILL BE REQUIRED TO
TENDER ONE RIGHT FOR EACH SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF
SHARES IN ACCORDANCE WITH THE PROCEDURES THAT SECTION 2 SETS FORTH. UNLESS THE
DISTRIBUTION DATE OCCURS, A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF
THE ASSOCIATED RIGHTS.
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The Purchaser believes that under the circumstances of the offer, and under
applicable law, the board of directors of the Company has a fiduciary obligation
to redeem the Rights (or amend the Rights Agreement to make the Rights
inapplicable to the transaction), and the Purchaser is hereby requesting that
the board do so. There can be no assurance that the board of directors of the
Company will redeem the Rights (or amend the Rights Agreement).
By means of the Consent Solicitation, the Purchaser expects to seek to
remove without cause the Company's entire board of directors and to replace them
with the Nominees. If elected to the board, the Nominees may redeem the Rights
(or amend the Rights Agreement to make the Rights inapplicable to the
transaction), thereby satisfying the Rights Condition.
Business Combination Condition. THE OFFER IS CONDITIONED ON THE ACQUISITION
OF SHARES PURSUANT TO THE OFFER AND THE PROPOSED MERGER HAVING BEEN APPROVED
UNDER SECTION 203 OF THE DGCL, OR THE PURCHASER BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT THE PROVISIONS OF SECTION 203 ARE OTHERWISE INAPPLICABLE TO THE
PURCHASE OF SHARES IN THE OFFER AND THE PROPOSED MERGER. THE PROVISIONS OF
SECTION 203 ARE DESCRIBED MORE FULLY IN SECTION 15.
Section 203, in general, prohibits a Delaware corporation such as the
Company from engaging in a "Business Combination" with an "Interested
Stockholder" for a period of three years following the time that such person
became an Interested Stockholder unless (i) prior to the time that such person
became an Interested Stockholder, the board of directors of the corporation
approved either the Business Combination or the transaction that resulted in the
stockholder becoming an Interested Stockholder, (ii) on consummation of the
transaction that resulted in the stockholder becoming an Interested Stockholder,
the Interested Stockholder owned at least 85 percent of the voting stock of the
corporation outstanding at the time the transaction commenced, excluding stock
held by directors who are also officers of the corporation and employee stock
plans that do not provide employees with the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or exchange
offer, or (iii) at or subsequent to the time such person became an Interested
Stockholder, the Business Combination is approved by the board of directors of
the corporation and authorized at a meeting of stockholders, and not by written
consent, by the affirmative vote of the holders of at least 66 2/3 percent of
the outstanding voting stock of the corporation not owned by the Interested
Stockholder. See section 15.
The Purchaser is hereby requesting that the Company's board of directors
adopt a resolution approving the offer and the proposed merger for purposes of
section 203. There can be no assurance that the board will do so.
By means of the Consent Solicitation, the Purchaser expects to seek to
remove without cause the members of the current board of directors of the
Company and to replace them with the Nominees. If elected to the board, the
Nominees may approve the transaction under section 203, thereby satisfying the
Business Combination Condition.
Bylaws Condition. THE OFFER IS CONDITIONED ON THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT THE PROVISIONS OF ARTICLE IV OF THE
COMPANY'S BYLAWS ARE INAPPLICABLE TO THE ACQUISITION OF SHARES IN THE
TRANSACTION.
Article IV of the Company's bylaws provides that a stockholder who becomes
the beneficial owner of 15 percent or more of the outstanding voting stock of
the Company (an "interested person") may not, with specified exceptions, acquire
additional shares of voting stock of the Company unless this restriction is
waived by nonemployee directors who are not affiliated with and were not
nominated by that interested person after the time it became an interested
person. See section 15.
By means of the Consent Solicitation, the Purchaser expects to seek to
remove without cause the members of the current board of directors of the
Company and to replace them with the Nominees. If elected to the board, the
Nominees may waive the applicability, if any, of article IV to the transaction,
thereby satisfying the Bylaws Condition.
HSR Condition. THE OFFER IS CONDITIONED ON THE WAITING PERIODS UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976 APPLICABLE TO THE PURCHASE
OF SHARES UNDER THE OFFER HAVING EXPIRED OR BEEN TERMINATED. SECTION 15
DISCUSSES VARIOUS ANTITRUST MATTERS.
Section 5 describes various U.S. federal income tax consequences of the sale
of shares pursuant to the offer and the conversion of shares in the proposed
merger.
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THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT YOU SHOULD READ BEFORE MAKING ANY DECISION RESPECTING
THE OFFER.
THE TENDER OFFER
SECTION 1. TERMS OF THE OFFER
On the terms and subject to the conditions of the offer, the Purchaser will
accept for payment and pay for all shares validly tendered prior to the
expiration date and not theretofore withdrawn in accordance with section 3. The
term "expiration date" means 12:00 midnight, New York City time, on April 6,
2001, unless and until the Purchaser, in its sole discretion, shall have
extended the period of time during which the offer is open, in which event the
term "expiration date" will mean the latest time and date on which the offer, as
so extended by the Purchaser, will expire.
THE OFFER IS CONDITIONED ON SATISFACTION OF THE MINIMUM TENDER CONDITION,
THE RIGHTS CONDITION, THE BUSINESS COMBINATION CONDITION, THE BYLAWS CONDITION,
THE HSR CONDITION AND THE SATISFACTION OF THE OTHER CONDITIONS SET FORTH IN
SECTION 14.
Subject to the applicable rules and regulations of the SEC, the Purchaser
reserves the right (but will not be obligated except as described below), in its
sole discretion, at any time and from time to time, and regardless of whether or
not any of the events or facts section 14 sets forth shall have occurred, (i) to
extend the period of time during which the offer is open, and thereby delay
acceptance for payment of and the payment for any shares, by giving oral or
written notice of that extension to the depositary, (ii) to elect to provide a
subsequent offering period for the offer in accordance with Exchange Act Rule
14d-11, and (iii) to amend the offer in any other respect by giving oral or
written notice of that amendment to the depositary. UNDER NO CIRCUMSTANCES WILL
THE PURCHASER PAY INTEREST ON THE PURCHASE PRICE FOR TENDERED SHARES, WHETHER OR
NOT IT EXERCISES ITS RIGHT TO EXTEND THE OFFER.
If by 12:00 midnight, New York City time, on April 6, 2001 (or any date or
time then set as the expiration date), any or all of the conditions to the offer
have not been satisfied or waived, the Purchaser reserves the right (but will
not be obligated except as described below), subject to the applicable rules and
regulations of the SEC, (i) to terminate the offer and not accept for payment or
pay for any shares and return all tendered shares to tendering stockholders,
(ii) to elect to provide a subsequent offering period for the offer in
accordance with Exchange Act Rule 14d-11, (iii) to waive all the unsatisfied
conditions and accept for payment and pay for all shares validly tendered prior
to the expiration date and not theretofore withdrawn, (iv) to extend the offer
and, subject to the right of stockholders to withdraw shares until the
expiration date, retain the shares that have been tendered during the period or
periods for which the offer is extended or (v) to amend the offer.
There can be no assurance that the Purchaser will exercise its right to
extend the offer. Any extension, waiver, amendment or termination will be
followed as promptly as practicable by a public announcement thereof. In the
case of an extension, Exchange Act Rule 14e-1(d) requires that the announcement
be issued no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date in accordance with the public
announcement requirements of Exchange Act Rule 14d-4(c). Subject to applicable
law (including Exchange Act Rules 14d-4(c) and 14d-6(d), which require that any
material change in the information published, sent or given to stockholders in
connection with the offer be promptly disseminated to stockholders in a manner
reasonably designed to inform stockholders of that change) and without limiting
the manner in which the Purchaser may choose to make any public announcement,
the Purchaser will not have any obligation to publish, advertise or otherwise
communicate any such public announcement other than by making a release to the
Dow Jones News Service. As used in this offer to purchase, "business day" has
the meaning Exchange Act Rule 14d-1 sets forth.
If the Purchaser extends the offer, is delayed in its acceptance for payment
of or payment (whether before or after its acceptance for payment) for shares or
is unable to pay for shares pursuant to the offer for any reason, then, without
prejudice to the Purchaser's rights under the offer, the depositary may retain
tendered shares on behalf of the Purchaser, and those shares may not be
withdrawn except to the extent tendering stockholders are entitled to withdrawal
rights as section 3 describes. However, the ability of the Purchaser to delay
the payment for shares that the Purchaser has accepted for payment is limited by
Exchange Act Rule 14e-l(c), which requires that a bidder pay the consideration
offered or return the securities deposited by or on behalf of holders of
securities promptly after the termination or withdrawal of that bidder's offer.
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If the Purchaser makes a material change in the terms of the offer or the
information concerning the offer or waives a material condition of the offer, it
will disseminate additional tender offer materials and extend the offer to the
extent Exchange Act Rules 14d-4(c), 14d-6(d) and 14e-1 require. The minimum
period during which an offer must remain open following material changes in its
terms or the information concerning it, other than a change in price or the
percentage of securities sought, will depend upon the facts and circumstances
then existing, including the relative materiality of the changed terms or
information. With respect to a change in price or a change in the percentage of
securities sought, a minimum period of 10 business days is generally required to
allow for adequate dissemination to stockholders and investor response.
Under Exchange Act Rule 14d-11, the Purchaser may, subject to certain
conditions, provide a subsequent offering period of from three to 20 business
days in length following the expiration of the offer on the expiration date. A
subsequent offering period would be an additional period of time, following the
expiration of the offer and the purchase of shares in the offer, during which
stockholders may tender shares not tendered into the offer. A subsequent
offering period, if one is included, is not an extension of the offer, which
already will have been completed.
During a subsequent offering period, tendering stockholders will not have
withdrawal rights, and the Purchaser will promptly purchase and pay for any
shares tendered at the same price it paid in the offer. Exchange Act Rule 14d-11
provides that the Purchaser may provide a subsequent offering period so long as,
among other things, the initial 20 business day period of the offer has expired
and the Purchaser (i) offers the same form and amount of consideration for
shares in the subsequent offering period as in the initial offer, (ii) accepts
and promptly pays for all securities tendered during the offer prior to its
expiration, (iii) announces the results of the offer, including the approximate
number and percentage of shares deposited in the offer, no later than 9:00 a.m.,
New York City time, on the next business day after the expiration date and
immediately begins the subsequent offering period and (iv) immediately accepts
and promptly pays for shares as they are tendered during the subsequent offering
period. The Purchaser will be able to include a subsequent offering period, if
it satisfies the conditions above, after April 6, 2001. In a public release, the
SEC has expressed the view that the inclusion by a bidder of a subsequent
offering period would constitute a material change in the terms of its offer
which would require it to disseminate new information to its offerers in a
manner reasonably calculated to inform them of that change sufficiently in
advance of the expiration date of the offer (generally five business days). If
the Purchaser elects to include a subsequent offering period, it will notify
stockholders of the Company consistent with the requirements of the SEC.
THE PURCHASER DOES NOT CURRENTLY INTEND TO INCLUDE A SUBSEQUENT OFFERING
PERIOD IN THE OFFER, ALTHOUGH IT RESERVES THE RIGHT TO DO SO IN ITS SOLE
DISCRETION. UNDER EXCHANGE ACT RULE 14D-7, NO WITHDRAWAL RIGHTS APPLY TO SHARES
AND RIGHTS TENDERED DURING A SUBSEQUENT OFFERING PERIOD AND NO WITHDRAWAL RIGHTS
APPLY DURING THE SUBSEQUENT OFFERING PERIOD WITH RESPECT TO SHARES AND RIGHTS
TENDERED IN THE OFFER AND ACCEPTED FOR PAYMENT. THE PURCHASER WILL PAY THE SAME
CONSIDERATION TO STOCKHOLDERS TENDERING SHARES IN THE OFFER OR IN A SUBSEQUENT
OFFERING PERIOD, IF IT INCLUDES ONE.
Requests are being made to the Company under Exchange Act Rule 14d-5 and
section 220 of the DGCL for the use of the Company's stockholder lists and
security position listings for the purpose of disseminating the offer and
consent solicitation materials to holders of shares. This offer to purchase, the
related letter of transmittal and other relevant materials will be mailed to
record holders of shares, and will be furnished to brokers, dealers, banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder lists, or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of shares, by the Purchaser following receipt
of such lists or listings from the Company, or by the Company if it so elects.
SECTION 2. PROCEDURE FOR TENDERING SHARES AND RIGHTS
Valid Tender. For a stockholder validly to tender shares and Rights
pursuant to the offer, either (i) a letter of transmittal (or a facsimile
thereof), properly completed and duly executed, together with any required
signature guarantees, or, in the case of a book-entry transfer, an agent's
message (as defined below), and any other required documents, must be received
by the depositary at one of its addresses set forth on the back cover of this
offer to purchase prior to the expiration date and either certificates for
tendered shares and Rights must be received by the depositary at one of those
addresses or those shares and Rights must be delivered in accordance with the
procedures for book-entry transfer set forth below (and a book-entry
confirmation (as defined below) must be received by the depositary), in each
case prior to the expiration date, or (ii) the tendering stockholder must comply
with the guaranteed delivery procedures described below.
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UNLESS THE RIGHTS CONDITION IS SATISFIED, STOCKHOLDERS WILL BE REQUIRED TO
TENDER ONE RIGHT FOR EACH SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF
SHARES. ACCORDINGLY, STOCKHOLDERS WHO SELL THEIR RIGHTS SEPARATELY FROM THEIR
SHARES AND DO NOT OTHERWISE ACQUIRE RIGHTS MAY NOT BE ABLE TO SATISFY THE
REQUIREMENTS OF THE OFFER FOR A VALID TENDER OF SHARES. As section 8 describes
further, the Rights Agreement provides that until the Distribution Date, the
Rights will be evidenced by the certificates for the shares and may be
transferred with and only with the shares. The Rights Agreement further provides
that, as soon as practicable following the Distribution Date, separate
certificates representing the Rights are to be mailed by the Company or the
Rights Agent to holders of record of shares as of the close of business on the
Distribution Date. UNLESS THE DISTRIBUTION DATE OCCURS, A TENDER OF SHARES WILL
ALSO CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS.
If the Distribution Date occurs and the Company or the Rights Agent
distributes separate certificates representing the Rights to a holder of shares
prior to the time that holder tenders shares pursuant to the offer, certificates
representing a number of Rights equal to the number of shares tendered must be
delivered to the depositary, or, if available, a book-entry confirmation must be
received by the depositary with respect thereto, in order for those shares to be
validly tendered. If the Distribution Date occurs and separate certificates
representing the Rights are not distributed prior to the time shares are
tendered pursuant to the offer, Rights may be tendered prior to a stockholder
receiving the certificates for Rights by use of the guaranteed delivery
procedure described below. A tender of shares constitutes an agreement by the
tendering stockholder to deliver certificates representing a number of Rights
equal to the number of shares tendered pursuant to the offer to the depositary
prior to expiration of the period permitted by those guaranteed delivery
procedures for delivery of certificates for, or a book-entry confirmation with
respect to, Rights (the "Rights Delivery Period"). After expiration of the
Rights Delivery Period, the Purchaser may elect to reject as invalid a tender of
shares with respect to which certificates for, or a book-entry confirmation with
respect to, an equal number of Rights have not been received by the depositary.
Nevertheless, the Purchaser will be entitled to accept for payment shares
tendered by a stockholder prior to receipt of the certificates for the Rights
required to be tendered with those shares, or a book-entry confirmation with
respect to those Rights, and either (i) subject to complying with applicable
rules and regulations of the SEC, withhold payment for those shares pending
receipt of the certificates for, or a book-entry confirmation with respect to,
such Rights or (ii) make payment for shares accepted for payment pending receipt
of the certificates for, or a book-entry confirmation with respect to, those
Rights in reliance on the agreement of a tendering stockholder to deliver Rights
and those guaranteed delivery procedures. The Purchaser will make any
determination to make payment for shares in reliance on that agreement and these
guaranteed delivery procedures or, after expiration of the Rights Delivery
Period, to reject a tender as invalid in its sole and absolute discretion.
Book-Entry Transfer. The depositary will establish accounts with respect to
the shares at The Depository Trust Company (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 book-entry
transfer facility's system may make book-entry delivery of shares by causing the
book-entry transfer facility to transfer those shares into the depositary's
account in accordance with the book-entry transfer facility's procedures for
that transfer. Although delivery of shares may be effected through book-entry
transfer into the depositary's account at the book-entry transfer facility, the
letter of transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or an agent's message, and any
other required documents, must, in any case, be transmitted to, and received by,
the depositary at one of its addresses set forth on the back cover of this offer
to purchase prior to the expiration date, or the tendering stockholder must
comply with the guaranteed delivery procedures described below. If the
Distribution Date occurs, the depositary will also make a request to establish
an account with respect to the Rights at the book-entry transfer facility, but
no assurance can be given that book-entry delivery of Rights will be available.
If book-entry delivery of Rights is available, the foregoing book-entry transfer
procedures will also apply to Rights. If book-entry delivery of Rights is not
available and the Distribution Date occurs, a tendering stockholder will be
required to tender Rights by means of physical delivery to the depositary of
certificates for Rights (in which event references in this offer to purchase to
book-entry confirmations with respect to Rights will be inapplicable). The
confirmation of a book-entry transfer of shares or Rights into the depositary's
account at the book-entry transfer facility as described above is referred to
herein as a "book-entry confirmation." 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.
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-entry
transfer facility tendering the shares that the participant has received and
agrees to be bound by the terms of the letter of transmittal and that the
Purchaser may enforce such agreement against the participant.
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THE METHOD OF DELIVERY OF SHARES, RIGHTS, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL
BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN
THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Signature Guarantees. No signature guarantee is required on the letter of
transmittal (i) if the letter of transmittal is signed by the registered
holder(s) (which term, for purposes of this section 2, includes any participant
in the book-entry transfer facility's system whose name appears on a security
position listing as the owner of the shares) of shares and Rights tendered
therewith and that registered holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the letter of transmittal or (ii) if those shares and Rights
are tendered for the account of a financial institution (including most
commercial banks, savings and loan associations and brokerage houses) that is a
participant in the Security Transfer Agents Medallion Program, the NYSE
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each such participant, an "eligible institution"). In all other cases, all
signatures on the letter of transmittal must be guaranteed by an eligible
institution. See Instructions 1 and 5 to the letter of transmittal. If the
certificates for shares or Rights are registered in the name of a person other
than the signer of the letter of transmittal, or if payment is to be made or
certificates for shares or Rights not tendered or not accepted for payment are
to be returned to a person other than the registered holder of the certificates
surrendered, the tendered certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names of
the registered holders or owners appear on the certificates, with the signatures
on the certificates or stock powers guaranteed as aforesaid. See Instructions 1
and 5 to the letter of transmittal.
Guaranteed Delivery. If a stockholder desires to tender shares and Rights
pursuant to the offer and that stockholder's certificates for shares or Rights
are not immediately available (including because certificates for Rights have
not yet been distributed) or the procedures for book-entry transfer cannot be
completed on a timely basis or time will not permit all required documents to
reach the depositary prior to the expiration date, that stockholder's tender may
be effected if all the following conditions are met:
(i) such tender is made by or through an eligible institution;
(ii) a properly completed and duly executed notice of guaranteed
delivery, substantially in the form provided by the Purchaser, is received
by the depositary, as provided below, prior to the expiration date; and
(iii) the certificates for all tendered shares and/or Rights, in proper
form for transfer (or a book-entry confirmation with respect to all those
shares and/or Rights), together with a letter of transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or, in the case of a book-entry transfer, an agent's message,
and any other required documents are received by the depositary within (a)
in the case of shares, three trading days after the date of execution of
that notice of guaranteed delivery or (b) in the case of Rights, a period
ending on the later of (1) three trading days after the date of execution of
that notice of guaranteed delivery or (2) three business days (as defined
above) after the date certificates for Rights are distributed to
stockholders. A "trading day" is any day on which the NYSE is open for
business.
The notice of guaranteed delivery may be delivered by hand to the depositary
or transmitted by telegram, facsimile transmission or mail to the depositary and
must include a guarantee by an eligible institution in the form that notice of
guaranteed delivery sets forth.
Notwithstanding any other provision hereof, payment for shares accepted for
payment pursuant to the offer will in all cases be made only after timely
receipt by the depositary of (i) certificates for (or a timely book-entry
confirmation with respect to) those shares and, if the Distribution Date occurs,
certificates for (or a timely book-entry confirmation, if available, with
respect to) the associated Rights (unless the Purchaser elects to make payment
for those shares pending receipt of the certificates for, or a book-entry
confirmation with respect to, those Rights as described above), (ii) a letter of
transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or, in the case of a book-entry transfer, an
agent's message, and (iii) any other documents required by the letter of
transmittal. Accordingly, tendering stockholders may be paid at different times
depending on when certificates for shares (or Rights) or book-entry
confirmations with respect to shares (or Rights, if available) are actually
received by the depositary. UNDER NO CIRCUMSTANCES WILL THE
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PURCHASER PAY INTEREST ON THE PURCHASE PRICE OF THE SHARES IT PURCHASES,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING THAT PAYMENT.
If the Rights Condition is satisfied, the guaranteed delivery procedures
with respect to certificates for Rights and the requirement for the tender of
Rights will no longer apply.
The valid tender of shares and, if applicable, Rights in accordance with one
of the procedures described above will constitute a binding agreement between
the tendering stockholder and the Purchaser on the terms and subject to the
conditions of the offer.
Appointment. By executing a letter of transmittal (or a facsimile thereof),
a tendering stockholder will irrevocably appoint designees of the Purchaser as
that stockholder's attorneys-in-fact and proxies in the manner set forth in the
letter of transmittal, each with full power of substitution, to the full extent
of that stockholder's rights with respect to the shares and Rights tendered by
that stockholder and accepted for payment by the Purchaser and with respect to
any and all other shares, Rights or other securities or rights issued or
issuable in respect of those shares on or after March 12, 2001. All such proxies
will be considered coupled with an interest in the tendered shares and Rights.
This appointment by a tendering stockholder will be effective when, and only to
the extent that, the Purchaser accepts for payment shares tendered by that
stockholder as provided herein. On that appointment, all prior powers of
attorney, proxies and consents given by the appointing stockholder with respect
to its shares accepted for payment (except for any consents issued under the
Consent Solicitation), Rights or other securities or rights will, without
further action, be revoked and no subsequent powers of attorney, proxies,
consents or revocations may be given (and, if given, will not be effective). The
designees of the Purchaser will thereby be empowered to exercise all voting and
other rights with respect to those shares, Rights and other securities or rights
in respect of any annual, special or adjourned meeting of the Company's
stockholders, actions by written consent without any such meeting or otherwise,
as they in their sole discretion deem proper. The Purchaser reserves the right
to require that, in order for shares and Rights to be deemed validly tendered,
the Purchaser must be able, immediately on the Purchaser's acceptance for
payment of those shares and Rights, to exercise full voting, consent and other
rights with respect to those shares, Rights and other securities or rights,
including voting at any meeting of stockholders or acting by written consent
without such a meeting.
Determination of Validity. The Purchaser will decide, in its sole
discretion, all questions as to the validity, form, eligibility (including time
of receipt) and acceptance of any tender of shares or Rights, and each such
decision will be final and binding. The Purchaser reserves the absolute right to
reject any or all tenders it determines not to be in proper form or the
acceptance for payment of or payment for which may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute right
to waive any defect or irregularity in the tender of any shares or Rights of any
particular stockholder whether or not it waives similar defects or
irregularities in the case of other stockholders. No tender of shares will be
deemed to have been validly made until all defects or irregularities relating
thereto have been cured or waived. None of the Purchaser, Shell, the depositary,
the information agent, the dealer manager or any other person will be under any
duty to give notification of any defects or irregularities in tenders or incur
any liability for failure to give any such notification. The Purchaser's
interpretation of the terms and conditions of the offer (including the letter of
transmittal and the instructions thereto) will be final and binding.
Backup U.S. Federal Income Tax Withholding. Under the U.S. federal income
tax laws, payments in connection with the transaction may be subject to "backup
withholding" at a rate of 31 percent unless a stockholder that holds shares (i)
provides a correct taxpayer identification number (which, for an individual
stockholder, is the stockholder's social security number) and any other required
information or (ii) is a corporation or comes within certain other exempt
categories and, when required, demonstrates this fact and otherwise complies
with applicable requirements of the backup withholding rules. A stockholder that
does not provide a correct taxpayer identification number may be subject to
penalties imposed by the Internal Revenue Service. To prevent backup U.S.
federal income tax withholding on cash payable under the offer or in the
proposed merger, as the case may be, each stockholder should provide the
depositary with his or her correct taxpayer identification number and certify
that he or she is not subject to backup U.S. federal income tax withholding by
completing the Substitute Internal Revenue Service Form W-9 the letter of
transmittal includes. Noncorporate foreign stockholders should complete and sign
an Internal Revenue Service Form W-8, Certificate of Foreign Status, a copy of
which may be obtained from the depositary, in order to avoid backup withholding.
See Instruction 9 to the letter of transmittal.
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SECTION 3. WITHDRAWAL RIGHTS
Except as this section 3 otherwise provides, tenders of shares and Rights
will be irrevocable. Shares and Rights tendered pursuant to the offer may be
withdrawn pursuant to the procedures set forth below at any time prior to the
expiration date and, unless theretofore accepted for payment and paid for by the
Purchaser pursuant to the offer, may also be withdrawn at any time after May 10,
2001.
For a withdrawal to be effective, a written notice of withdrawal must be
received in a timely manner by the depositary at one of its addresses set forth
on the back cover of this offer to purchase and must specify the name of the
person having tendered the shares and Rights to be withdrawn, the number of
shares and Rights to be withdrawn and the name of the registered holder of the
shares and Rights to be withdrawn, if different from the name of the person who
tendered the shares and Rights. If certificates for shares or Rights have been
delivered or otherwise identified to the depositary, then, prior to the physical
release of those certificates, the serial numbers shown on those certificates
must be submitted to the depositary and, unless such shares or Rights have been
tendered by an eligible institution, the signatures on the notice of withdrawal
must be guaranteed by an eligible institution. If shares or Rights have been
delivered pursuant to the procedures for book-entry transfer section 2
describes, any 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 or Rights and otherwise comply with the book-entry transfer facility's
procedures. Withdrawals of tenders of shares and Rights may not be rescinded,
and any shares and Rights properly withdrawn will thereafter be deemed not
validly tendered for purposes of the offer. Withdrawn shares and Rights may be
retendered at any time prior to the expiration date by again following one of
the procedures section 2 describes. Rights may not be withdrawn unless the
related shares are also withdrawn.
The Purchaser will decide, in its sole discretion, all questions as to the
form and validity (including time of receipt) of notices of withdrawal, and each
such decision will be final and binding. None of the Purchaser, Shell, the
depositary, the information agent, the dealer manager or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
If the Purchaser provides a subsequent offering period following the offer,
no withdrawal rights will apply to shares and Rights tendered during that
subsequent offering period or to shares and Rights tendered in the offer and
accepted for payment.
SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT
On the terms and subject to the conditions of the offer (including, if the
offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will accept for payment and will pay promptly after
the expiration date for all shares validly tendered prior to the expiration date
and not properly withdrawn in accordance with section 3. The Purchaser will
decide, in its sole discretion, all questions as to the satisfaction of such
terms and conditions, and each such decision will be final and binding. See
sections 1 and 14. The Purchaser expressly reserves the right, in its sole
discretion, to delay acceptance for payment of or payment for shares in order to
comply in whole or in part with any applicable law, including, without
limitation, the HSR Act. It will effect any such delays in compliance with
Exchange Act Rule 14e-1(c) (which relates to the obligation of a bidder to pay
for or return tendered securities promptly after the termination or withdrawal
of its offer).
Shell, on behalf of Royal Dutch Petroleum Company, filed a Notification and
Report Form with respect to the offer under the HSR Act on March 12, 2001. The
waiting period under the HSR Act with respect to the offer will expire at 11:59
p.m., New York City time, on March 27, 2001 unless the Antitrust Division of the
Department of Justice or the Federal Trade Commission extends the waiting period
by requesting additional information or documentary material from Shell and its
affiliates. If such a request is made, the waiting period will expire at 11:59
p.m., New York City time, on the 10th day after substantial compliance by Shell
and its affiliates with that request. See section 15 for additional information
concerning the HSR Act and the applicability of United States antitrust laws to
the offer.
In all cases, payment for shares accepted for payment pursuant to the offer
will be made only after timely receipt by the depositary of (i) certificates for
(or a timely book-entry confirmation with respect to) those shares and, if the
Distribution Date occurs, certificates for (or a timely book-entry confirmation,
if available, with respect to) the associated Rights (unless the Purchaser
elects to make payment for those shares pending receipt of the certificates for,
or a book-entry confirmation with respect to, those Rights as section 2
describes), (ii) a letter of transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature
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guarantees, or, in the case of a book-entry transfer, an agent's message, and
(iii) any other documents required by the letter of transmittal. The per share
consideration paid to any stockholder pursuant to the offer will be the highest
per share consideration paid to any other stockholder pursuant to the offer.
Accordingly, tendering stockholders may be paid at different times depending on
when certificates for shares or book-entry confirmations with respect to shares
are actually received by the depositary.
For purposes of the offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, shares properly tendered to the Purchaser and
not withdrawn as, if and when the Purchaser gives oral or written notice to the
depositary of the Purchaser's acceptance for payment of those shares. Payment
for shares accepted for payment pursuant to the offer will be made by deposit of
the purchase price therefor with the depositary, which will act as an agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering stockholders. UNDER NO CIRCUMSTANCES WILL
THE PURCHASER PAY INTEREST ON THE PURCHASE PRICE OF THE SHARES IT PURCHASES,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING THAT PAYMENT.
If the Purchaser is delayed in its acceptance for payment of or payment for
shares or is unable to accept for payment or pay for shares pursuant to the
offer for any reason, then, without prejudice to the Purchaser's rights under
the offer (but subject to its compliance with Exchange Act Rule 14e-1(c)), the
depositary may, nevertheless, on behalf of the Purchaser, retain tendered
shares, and such shares may not be withdrawn except to the extent tendering
stockholders are entitled to exercise, and duly exercise, the withdrawal rights
section 3 describes.
If any tendered shares are not purchased pursuant to the offer for any
reason, certificates for those shares and the associated Rights will be
returned, without expense to the tendering stockholder (or, in the case of
shares or Rights delivered by book-entry transfer of those shares or Rights into
the depositary's account at the book-entry transfer facility pursuant to the
procedures section 2 describes, such shares or Rights will be credited to an
account maintained at the book-entry transfer facility), as promptly as
practicable after the expiration or termination of the offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Shell, or to one or more direct or indirect wholly
owned subsidiaries of Shell, the right to purchase shares tendered pursuant to
the offer, but any such transfer or assignment will not relieve the Purchaser of
its obligations under the offer and will in no way prejudice the rights of
tendering stockholders to receive payment for shares validly tendered and
accepted for payment pursuant to the offer.
SECTION 5. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash pursuant to the offer or the proposed merger will be a
taxable transaction for U.S. federal income tax purposes under the Internal
Revenue Code of 1986 (the "Code"), and may also be a taxable transaction under
applicable state, local or foreign income or other tax laws.
Generally, for U.S. federal income tax purposes, a stockholder will
recognize gain or loss equal to the difference between the amount of cash
received by the stockholder pursuant to the offer or in the proposed merger and
the aggregate tax basis in the shares (together with the Rights) tendered by the
stockholder and purchased pursuant to the offer or converted into cash in the
proposed merger, as the case may be. Gain or loss will be calculated separately
for each block of shares and Rights tendered and purchased pursuant to the offer
or converted into cash in the proposed merger, as the case may be.
If shares (and associated Rights) are held by a stockholder as capital
assets, gain or loss recognized by the stockholder will be capital gain or loss,
which will be long-term capital gain or loss if the stockholder's holding period
for the shares (and associated Rights) exceeds one year. In the case of a
noncorporate stockholder, long-term capital gains will be eligible for a maximum
federal income tax rate of 20 percent. In addition, under present law the
ability to use capital losses to offset ordinary income is limited.
The foregoing discussion may not be applicable with respect to (i) shares
(and associated Rights) received on the exercise of employee stock options or
otherwise as compensation or (ii) holders of shares (and associated Rights) who
are subject to special tax treatment under the Code, such as non-U.S. persons,
life insurance companies, tax-exempt organizations and financial institutions.
In addition, the foregoing discussion may not apply to a holder of shares (and
associated Rights) in light of individual circumstances, such as holding shares
as a hedge or as part of a straddle or a hedging, constructive sale, integrated
or other risk-reduction transaction.
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STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE SPECIFIC
TAX CONSEQUENCES TO THEM OF THE OFFER AND THE PROPOSED MERGER, INCLUDING THE
APPLICABILITY AND EFFECT OF U.S. FEDERAL, STATE, LOCAL AND FOREIGN INCOME AND
OTHER TAX LAWS IN THEIR PARTICULAR CIRCUMSTANCES.
Backup Withholding. Certain noncorporate stockholders may be subject to
backup withholding at a 31 percent rate on cash payments received in connection
with the offer and the proposed merger. Backup withholding will not apply,
however, to a stockholder who (i) furnishes a correct taxpayer identification
number and certifies that it is not subject to backup withholding on the
Substitute Internal Revenue Service Form W-9 or successor form the letter of
transmittal includes, (ii) provides a certification of foreign status on
Internal Revenue Service Form W-8 or successor form or (iii) is otherwise exempt
from backup withholding.
If a stockholder does not provide a correct taxpayer identification number,
that stockholder may be subject to penalties imposed by the IRS. Any amount paid
as backup withholding does not constitute an additional tax and will be
creditable against a stockholder's U.S. federal income tax liability provided
the required information is given to the IRS. If backup withholding results in
an overpayment of tax, a refund can be obtained by the stockholder by filing a
U.S. federal income tax return. Stockholders should consult their own tax
advisors as to their qualification for exemption from withholding and the
procedure for obtaining the exemption.
SECTION 6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
The shares are traded on the NYSE under the symbol "BRR." The following
table sets forth, for each of the periods indicated, the high and low sales
prices per share as reported by the NYSE based on published financial sources.
HIGH LOW
------ ------
FISCAL YEAR ENDED DECEMBER 31, 1999:
First Quarter............................................. $28.00 $15.44
Second Quarter............................................ $39.81 $24.25
Third Quarter............................................. $41.25 $32.25
Fourth Quarter............................................ $37.31 $23.06
FISCAL YEAR ENDED DECEMBER 31, 2000:
First Quarter............................................. $34.44 $19.19
Second Quarter............................................ $41.63 $27.25
Third Quarter............................................. $39.19 $26.69
Fourth Quarter............................................ $59.81 $35.63
FISCAL YEAR ENDED DECEMBER 31, 2001:
First Quarter (through March 6, 2001)..................... $58.19 $42.75
On February 28, 2001, the last trading day before Shell delivered to the
Company its letter offering a price of $55.00 per share, the last sale price of
the shares reported by the NYSE was $44.25. A $55.00 per share price represents
an approximately 24 percent premium over the February 28, 2001 last sale price.
On March 6, 2001, the last full trading day before the first public announcement
of Shell's intention to commence the offer, the last reported sale price of the
shares on the NYSE was $45.62 per share. On March 7, 2001, prior to the
commencement of trading, Shell issued a press release announcing its proposal to
acquire all outstanding shares of the Company for a price of $55.00 per share.
On March 9, 2001, which was the last full trading day before commencement of the
offer, the last reported sale price of the shares on the NYSE was $62.52 per
share. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET PRICE FOR THE SHARES.
According to the Company 1999 10-K, the Company has never paid any dividends
on the shares.
As of the date of this offer to purchase, the Rights are attached to the
shares and are not traded separately. As a result, the sales prices per share
set forth above are also the high and low sales prices per share and associated
Right during those periods. On the occurrence of the Distribution Date, the
Rights are to detach, and may trade separately, from the shares. See section 8.
Unless the Company's board of directors redeems the Rights, amends the Rights
Agreement to make the Rights inapplicable to the offer or delays the
Distribution Date, the Purchaser believes that, as a result of Shell's
announcement on March 7, 2001 of its intention to commence the offer, the
Distribution Date may occur as early as March 21, 2001. On the basis of publicly
available information, the Purchaser believes that, as of March 12, 2001, the
Rights were not exercisable, certificates for Rights had not yet
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been issued and the Rights were evidenced by the certificates for shares. IF THE
RIGHTS BEGIN TO TRADE SEPARATELY FROM THE SHARES, STOCKHOLDERS SHOULD ALSO
OBTAIN A CURRENT MARKET PRICE FOR THE RIGHTS.
SECTION 7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; SHARE QUOTATION;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS
Market for the Shares. The purchase of shares pursuant to the offer will
reduce the number of holders of shares and the number of shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining shares the public holds.
Share Quotation. Depending on the number of shares purchased pursuant to
the offer, the shares may no longer meet the requirements for continued listing
on the NYSE. In that event, the market for the shares could be adversely
affected. According to the NYSE's published guidelines, the NYSE would consider
delisting the outstanding shares if, among other things, (i) the number of
publicly held shares (exclusive of holdings of officers, directors and members
of their immediate families and other concentrated holdings of 10 percent or
more) falls below 600,000, (ii) the number of record holders of 100 or more
shares falls below 400 (or below 1,200 if the average monthly trading volume for
the most recent 12 months is below 100,000 shares) or (iii) the aggregate market
value of publicly held shares falls below $5 million.
If the NYSE delists the shares, it is possible that the shares would trade
on another securities exchange or in the over-the-counter market and that price
quotations would be reported by other sources. The extent of the public market
for the shares and the availability of those quotations would, however, depend
on the number of the remaining holders of shares, the interests in maintaining a
market in shares on the part of securities firms, the possible termination of
registration of the shares under the Exchange Act, as described below, and other
factors. The Purchaser cannot predict whether the reduction in the number of
shares that might otherwise trade publicly would have an adverse or a 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. That registration may be terminated on application of the Company
to the SEC if the shares are neither listed on a national securities exchange
nor held by 300 or more holders of record. Termination of that registration
would substantially reduce the information the Company would have to provide to
its stockholders and to the SEC and would make various provisions of the
Exchange Act no longer applicable to the Company, such as the short-swing profit
recovery provisions of section 16(b) of the Exchange Act, the requirement of
furnishing a proxy statement under section 14(a) of the Exchange Act in
connection with stockholders' meetings and the related requirement of furnishing
an annual report to stockholders and the requirements of Exchange Act Rule 13e-3
with respect to "going private" transactions. Furthermore, the ability of
"affiliates" of the Company and persons holding "restricted securities" of the
Company to dispose of those securities under Rule 144 or 144A under the
Securities Act of 1933 may be impaired or eliminated. The Purchaser intends to
seek to cause the Company to apply for termination of registration of the shares
under the Exchange Act as soon after the completion of the offer as the
requirements for that termination are met.
According to publicly available information, the Rights are registered under
the Exchange Act, but are attached to the shares and are not currently
separately transferable. Unless the Company's board of directors redeems the
Rights, amends the Rights Agreement to make the Rights inapplicable to the offer
or delays the Distribution Date, the Purchaser believes that, as a result of
Shell's announcement on March 7, 2001 of its intention to commence the offer,
the Distribution Date may occur as early as March 21, 2001. On the basis of
publicly available information, the Purchaser believes that, as of March 12,
2001, the Rights were not exercisable, certificates for Rights had not yet been
issued and the Rights were evidenced by the certificates for shares. See section
8. According to the Company Form 8-A, as soon as possible after the occurrence
of the Distribution Date, certificates for Rights will be sent to all holders of
Rights and the Rights will become transferable apart from the shares. If the
Distribution Date occurs and the Rights separate from the shares, the foregoing
discussion with respect to the effect of the offer on Exchange Act registration
would apply to the Rights in a similar manner.
If registration of the shares is not terminated prior to the proposed
merger, the shares will be delisted from all stock exchanges and the
registration of the shares and Rights under the Exchange Act will be terminated
following the consummation of the proposed merger.
Margin Regulations. The shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System, which has
the effect, among others, of allowing brokers to extend credit on the collateral
of the shares. Depending on factors similar to those described above regarding
listing and
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market quotations, it is possible that, following the offer, the shares would no
longer constitute "margin securities" under the margin regulations of the
Federal Reserve Board and therefore could no longer be used as collateral for
brokers' loans.
SECTION 8. CERTAIN INFORMATION CONCERNING THE COMPANY
General. The following summary description of the Company does not purport
to be complete and is qualified in its entirety by reference to the Company 1999
Form 10-K, the Company's Exchange Act reports and its press release issued March
1, 2001, including such other documents and all financial information (including
any related notes) contained or incorporated therein. The Company 1999 Form 10-K
and the Company's Exchange Act reports are available for inspection and copies
thereof are obtainable in the manner set forth below under "-- Available
Information." The information contained in the following summary specific to
1999 was excerpted from information in the Company 1999 10-K and the information
contained in the summary specific to 2000 was excerpted from the Company's March
1, 2001 press release.
The Company is a Delaware corporation with its executive offices at 1515
Arapahoe Street, Tower 3, Suite 1000, Denver, Colorado, and its telephone number
at that address is (303)572-3900.
The Company is an independent natural gas and crude oil exploration and
production company that is also involved in natural gas gathering, marketing and
trading activities. The Company's properties are primarily focused in the Rocky
Mountain region of Colorado, Wyoming and Utah, the Mid-Continent region of
Kansas and Oklahoma, and the Gulf of Mexico region of offshore Texas and
Louisiana. At December 31, 1999, the Company's estimated proved reserves were
1,134 billion cubic feet of gas equivalent (Bcfe) and total production for 1999
was 103.5 Bcfe. At December 31, 2000, the Company's estimated proven reserves
were 1,372 Bcfe, comprised of 1,323 billion cubic feet of natural gas and 8.1
million barrels of crude oil and condensate. The Rocky Mountain region, the
focus of the Company's natural gas exploration and development activity,
represented 88 percent of the Company's proven reserves in 2000, an increase
from 81 percent in 1999. The Company added 356 Bcfe of proven reserves in 2000,
replacing 302 percent of 2000 production of 118 Bcfe at an all-in finding cost
of $0.82 per thousand cubic feet of gas equivalent. The Company's reserve life
is 11.7 years at December 31, 2000. The Company's average daily production was
307 million cubic feet of natural gas and 2,385 barrels of oil for the year
ended December 31, 2000. Natural gas production increased 18 percent in 2000
compared to 1999, while total production increased 14 percent in 2000 compared
to 1999. In 2000, gas production accounted for 96 percent of the Company's total
production on an energy equivalent basis.
The Company concentrates its activities in core areas in which it has
accumulated detailed geologic knowledge and developed significant management
expertise: the Piceance Basin in northwestern Colorado, the Wind River Basin in
central Wyoming, the Powder River Basin of northeastern Wyoming and the Raton
Basin in southern Colorado. The Company also has significant interests in the
Hugoton Embayment in southwestern Kansas, the Niobrara play in northeastern
Colorado, and the Anadarko Basin in Oklahoma. The Company also owns and operates
natural gas gathering assets, interests in pipelines and a natural gas
processing plant.
The Company markets all of its own natural gas and oil production from wells
that it operates. In addition, the Company engages in natural gas marketing and
trading activities, which involve purchasing from, and sales to, third parties.
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Set forth below is certain selected financial information with respect to
the Company excerpted from the information contained in the Company's press
release dated March 1, 2001 and the Company 1999 10-K. More comprehensive
financial information is included in the Company's press release and the Company
1999 10-K, and the following summary is qualified in its entirety by reference
to such press release, the Company 1999 10-K, the Company 2000 10-Q and such
other documents and all financial information (including any related notes)
contained or incorporated by reference therein. The Company 1999 10-K is
available for inspection and copies thereof are obtainable in the manner set
forth below under "-- Available Information."
BARRETT RESOURCES CORPORATION
SELECTED HISTORICAL FINANCIAL INFORMATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
YEAR ENDED DECEMBER 31,
-----------------------------------
2000
(UNAUDITED) 1999 1998
----------- --------- ---------
INCOME AND CASH FLOW DATA
Net income........................................ $ 27,674 $ 20,828 $(93,743)
Net income per share and common share
equivalent-diluted.............................. 0.83 0.64 (2.95)
Cash flows from operations........................ 178,510 112,230 116,970
BALANCE SHEET DATA
Total assets...................................... $1,253,833 $884,301 $838,879
Total long-term debt(1)........................... 398,000 350,000 325,000
Stockholders' equity.............................. 412,792 363,648 333,252
- ---------------
(1) Includes long-term debt and long-term bonds payable according to the
Company's press release issued March 1, 2001 and the Company 1999 10-K.
Available Information. The Company is subject to the informational
requirements of the Exchange Act and, in accordance therewith, is required to
file reports relating to its business, financial condition and other matters.
Information as of particular dates concerning the Company's directors and
officers, their remuneration, stock options and other matters, the principal
holders of the Company's securities and any material interest of those persons
in transactions with the Company is required to be disclosed in the Company's
proxy statements distributed to the Company's stockholders and filed with the
SEC. That information should be available for inspection at the public reference
facilities of the SEC at 450 Fifth Street, N.W., Washington, DC 20549, and at
the regional offices of the SEC located at Seven World Trade Center, 13th Floor,
New York, NY 10048 and Citicorp Center, 500 West Madison Street (Suite 1400),
Chicago, IL 60661. Copies of that information should be obtainable, by mail,
upon payment of the SEC's customary charges, by writing to the SEC's principal
office at 450 Fifth Street, N.W., Washington, DC 20549. The SEC maintains a web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with it. Those
reports, proxy and information statements and other information may be found on
the SEC's web site address, http://www.sec.gov. That material should also be
available for inspection at the offices of the NYSE at 20 Broad Street, New
York, New York 10005.
Except as otherwise stated herein, the information concerning the Company
contained herein has been taken from or based on publicly available documents on
file with the SEC and other publicly available information. Although the
Purchaser and Shell do not have any knowledge that any such information is
untrue, neither the Purchaser nor Shell takes any responsibility for the
accuracy or completeness of that information or for any failure by the Company
to disclose events that may have occurred and may affect the significance or
accuracy of any such information.
The Rights. Set forth below is a summary description of the Rights and the
Rights Agreement derived from the Company Form 8-A and the Company 10-K Exhibit.
On August 4, 1997, the board of directors of the Company declared a dividend
distribution of one Right for each outstanding share of common stock, par value
$.01 per share, of the Company, payable to the holders of record of the common
stock as of the close of business on August 20, 1997. On February 25, 1999, the
board of
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directors of the Company adopted certain amendments to the terms of the Rights.
Except as set forth below, each Right, when it becomes exercisable, entitles the
registered holder to purchase from the Company one one-thousandth of a share of
a series of preferred stock, designated as Series A Junior Participating
Preferred Stock, par value $.001 per share, at a price of $150.00 per one
one-thousandth of a share, subject to adjustment.
Until the earlier to occur of (i) a public announcement that, without the
prior consent of the board of directors of the Company, a person or group,
including any affiliates or associates of such person or group (an "Acquiring
Person"), has acquired, or obtained the right to acquire, beneficial ownership
of 15 percent or more of the outstanding common stock (the "Stock Acquisition
Date") or (ii) 10 business days (or such later date as the board may determine)
following the commencement of, or announcement of an intention (which is not
subsequently withdrawn) to make, a tender offer or exchange offer that would
result in any person or group (and related persons) having beneficial ownership
of 15 percent or more of the outstanding common stock without the prior consent
of the board of directors (the earlier of such dates being called the
"Distribution Date"), the Rights will be attached to all common stock
certificates and will be evidenced by the common stock certificates. The Rights
Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with the common stock certificate. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any common stock certificates will also constitute the
transfer of the Rights associated with the common stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the common stock as of the close of business on the
Distribution Date, and the separate Rights certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on August 4, 2007, unless earlier redeemed by the Company as described
below.
Unless the Company's board of directors redeems the Rights, amends the
Rights Agreement to make the Rights inapplicable to the offer or delays the
Distribution Date, the Purchaser believes that, as a result of Shell's
announcement on March 7, 2001 of its intention to commence the offer, the
Distribution Date may occur as early as March 21, 2001. On the basis of publicly
available information, the Purchaser believes that, as of March 12, 2001, the
Rights were not exercisable, certificates for Rights had not yet been issued and
the Rights were evidenced by the certificates for shares.
The preferred stock purchasable upon exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock the Company may
issue (unless otherwise provided in the terms of such stock). Each share of
preferred stock will have a preferential quarterly dividend in an amount equal
to the greater of $10.00 or 1,000 times the dividend declared on each share of
the Company common stock. In the event of liquidation, the holders of preferred
stock will receive a preferred liquidation payment per share equal to the
greater of $5,000 or 1,000 times the payment made per share of common stock.
Each share of preferred stock will have one vote, voting together with the
common stock. In the event of any merger, consolidation or other transaction in
which shares of common stock are exchanged, each share of preferred stock will
be entitled to receive 1,000 times the amount and type of consideration received
per share of common stock. The rights of the preferred stock as to dividends,
liquidation and voting, and in the event of mergers and consolidations, are
protected by customary anti-dilution provisions. Fractional shares of preferred
stock in integral multiples of one one-thousandth of a share of preferred stock
will be issuable; however, the Company may elect to distribute depositary
receipts in lieu of such fractional shares. In lieu of fractional shares other
than fractions that are multiples of one one-thousandth of a share, an
adjustment in cash will be made based on the market price of the preferred stock
on the last trading date prior to the date of exercise.
In the event that any person becomes an Acquiring Person, each holder of a
Right generally will thereafter have the right for a 60-day period after the
later of the date of such event or the effectiveness of an appropriate
registration statement (or such other longer period set by the board of
directors) to receive upon exercise of the Right that number of units of one
one-thousandth of a share of preferred stock (or, under certain circumstances,
common stock or other securities) having an average market value during a
specified time period (immediately prior to the occurrence of a person becoming
an Acquiring Person) of two times the exercise price of the Right (such right
being called the "Subscription Right"). Notwithstanding the foregoing, following
the occurrence of a person becoming an Acquiring Person, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by the Acquiring Person or any affiliate or associate thereof
will be null and void.
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In the event that, at any time following the Stock Acquisition Date, the
Company is acquired in a merger or other business combination transaction or 50
percent or more of the Company's assets or earning power are sold (in one
transaction or a series of transactions), proper provision shall be made so that
each holder of a Right (except a Right voided as set forth above) shall
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
the acquiring company (or, in the event there is more than one acquiring
company, the acquiring company receiving the greatest portion of the assets or
earning power transferred) which at the time of such transaction would have a
market value of two times the exercise price of the Right (such right being
called the "Merger Right"). The holder of a Right will continue to have the
Merger Right whether or not such holder exercises the Subscription Right.
The purchase price payable, the number of Rights and the number of units of
one one-thousandth of a share of preferred stock or shares of common stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the preferred
stock, (ii) upon the grant to holders of the preferred stock of certain rights
or warrants to subscribe for preferred stock, certain convertible securities or
securities having the same or more favorable rights, privileges and preferences
as the preferred stock at less than the current market price of the preferred
stock or (iii) upon the distribution to holders of the preferred stock of
evidences of indebtedness or assets (excluding regular quarterly cash dividends
out of earnings or retained earnings and dividends payable in common stock) or
of subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the purchase price will be
required until cumulative adjustments require an adjustment of at least 1
percent in such purchase price. No fractional shares will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
preferred stock on the last trading date prior to the date of exercise.
The number of outstanding Rights associated with each share of common stock
and the voting and economic rights of each one one-thousandth of a share of
preferred stock issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the common stock or a stock dividend
on the common stock payable in common stock or subdivisions, consolidations or
combinations of the common stock occurring, in any such case, prior to the
Distribution Date.
At any time prior to the earlier to occur of (i) the close of business on
the Stock Acquisition Date or (ii) the expiration of the Rights, the board of
directors of Company may redeem the Rights in whole, but not in part, at a price
of $.001 per Right (the "Redemption Price"), which redemption shall be effective
upon the action of the board of directors. Additionally, following the Stock
Acquisition Date and the expiration of the period during which the Subscription
Right is exercisable, the Company may redeem the then outstanding Rights in
whole, but not in part, at the Redemption Price, provided that such redemption
is in connection with a merger or other business combination transaction or
series of transactions involving the Company in which all holders of common
stock are treated alike but not involving an Acquiring Person (or any person who
was an Acquiring Person) or its affiliates or associates. Upon the effective
date of the redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends.
Except as set forth above, the terms of the Rights may be amended by the
board of directors of the Company, (i) prior to the Distribution Date in any
manner, and (ii) on or after the Distribution Date to cure any ambiguity, to
correct or supplement any provision of the Rights Agreement which may be
defective or inconsistent with any other provisions, or in any manner not
adversely affecting the interests of the holders of the Rights (other than any
Acquiring Person), or, subject to certain limitations, to shorten or lengthen
any time period under the Rights Agreement.
The foregoing summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement
and other documents included in the Company Form 8-A and the Company 10-K
Exhibit. The Company Form 8-A and the Company 10-K Exhibit should be available
for inspection and copies thereof should be obtainable in the manner set forth
below under -- "Available Information."
BY THE RIGHTS CONDITION, THE OFFER IS CONDITIONED ON THE RIGHTS HAVING BEEN
REDEEMED BY THE BOARD OF DIRECTORS OF THE COMPANY OR THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT THE RIGHTS HAVE BEEN INVALIDATED OR ARE
OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER.
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UNLESS THE RIGHTS CONDITION IS SATISFIED, STOCKHOLDERS WILL BE REQUIRED TO
TENDER ONE RIGHT FOR EACH SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF
SHARES IN ACCORDANCE WITH THE PROCEDURES SECTION 2 SETS FORTH. UNLESS THE
DISTRIBUTION DATE OCCURS, A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF
THE ASSOCIATED RIGHTS.
The Purchaser believes that under the circumstances of the offer, and under
applicable law, the board of directors of the Company has a fiduciary obligation
to redeem the Rights (or amend the Rights Agreement to make the Rights
inapplicable to the offer and the proposed merger), and the Purchaser is hereby
requesting that the Company's board of directors do so. However, there can be no
assurance that the board of directors of the Company will redeem the Rights (or
amend the Rights Agreement).
By means of the Consent Solicitation, the Purchaser expects to seek to
remove without cause the members of the current board of directors of the
Company and to replace them with the Nominees. If elected to the board, the
Nominees may redeem the Rights (or amend the Rights Agreement to make the Rights
inapplicable to the transaction), thereby satisfying the Rights Condition.
SECTION 9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND ITS AFFILIATES
General. The Purchaser, a Delaware corporation, was formed to acquire the
Company and has not conducted any unrelated activities since its organization.
Its principal office is located at P.O. Box 8985, Wilmington, Delaware 19899 and
its telephone number is (713) 241-6161. Shell indirectly owns all outstanding
shares of capital stock of the Purchaser.
Shell is a Delaware corporation with its principal offices located at One
Shell Plaza, 910 Louisiana, Houston, Texas 77002; and its telephone number is
(713) 241-6161. Shell is wholly owned by Shell Petroleum Inc., a Delaware
corporation, whose shares are directly or indirectly owned 60 percent by Royal
Dutch Petroleum Company, The Hague, The Netherlands, and 40 percent by The
"Shell" Transport and Trading Company, p.l.c., London, England. Royal Dutch
Petroleum Company and The "Shell" Transport and Trading Company, p.l.c., are
holding companies which together directly or indirectly own securities of
companies of the Royal Dutch/ Shell Group of Companies, the members of which are
severally engaged throughout the greater part of the world in all of the
principal aspects of the oil and natural gas industry. They also have
substantial interests in chemicals and additional interests in power generation,
renewable resources (chiefly in forestry and solar energy), coal and other
businesses.
Shell and its subsidiaries and entities in which it holds ownership
interests are engaged, principally in the United States, in the exploration for,
and development, production, purchase, transportation and marketing of, crude
and natural gas, and the purchase, manufacture, transportation and marketing of
oil and chemical products. In addition, subsidiaries of Shell are engaged in the
exploration for, and production of, crude oil and natural gas outside the United
States on a limited and selected basis.
Shell's oil and gas exploration and production operating segment, including
its ownership interest in companies accounted for using the equity method of
accounting, is engaged principally in the United States in the exploration for
and production of crude oil and natural gas. The Gulf of Mexico, California and
Texas are the principal areas of activity.
Except as described in this offer to purchase, including the schedules
hereto, (i) none of the Purchaser, Shell or, to the best of their knowledge, any
of the persons listed in Schedule I to this offer to purchase, or any associate
or majority-owned subsidiary of Shell or the Purchaser or, to the best of their
knowledge, any associate or majority-owned subsidiary of any of the persons
listed in Schedule I to this offer to purchase, beneficially owns or has any
right to acquire, directly or indirectly, any equity securities of the Company,
and (ii) none of the Purchaser, Shell or, to the best of their knowledge, any of
the persons listed in Schedule I to this offer to purchase has effected any
transaction in such equity securities during the past 60 days. The Purchaser and
Shell disclaim beneficial ownership of any shares owned by any pension plans of
Shell or the Purchaser or any pension plans of any associate or majority-owned
subsidiary of the Purchaser or Shell.
Except as described in this offer to purchase, none of the Purchaser, Shell
or, to the best of their knowledge, any of the persons listed in Schedule I to
this offer to purchase has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement, understanding
or relationship concerning the transfer or voting of such securities, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving
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or withholding of proxies. Except as set forth in this offer to purchase, during
the past two years, none of the Purchaser, Shell or, to the best of their
knowledge, any of the persons listed on Schedule I hereto has had any business
relationship or transaction with the Company or any of its executive officers,
directors or affiliates that is required to be reported under the rules and
regulations of the SEC applicable to the offer. Except as set forth in this
offer to purchase, during the past two years, there have been no contacts,
negotiations or transactions between any of the Purchaser, Shell or any of their
subsidiaries or, to the best knowledge of the Purchaser and Shell, any of the
persons listed in Schedule I to this offer to purchase, on the one hand, and the
Company or its affiliates, on the other hand, concerning a merger, consolidation
or acquisition, tender offer or other acquisition of securities, an election of
directors or a sale or other transfer of a material amount of assets.
Available Information. Shell is no longer subject to the informational
requirements of the Exchange Act, and has ceased to file reports and other
information with the SEC. However, Royal Dutch Petroleum Company and The "Shell"
Transport and Trading Company, p.l.c. are each subject to the informational
requirements of the Exchange Act and, in accordance therewith, are required to
file annual reports on Form 20-F with the SEC relating to their business,
financial condition and other matters. Such reports and other information should
be available for inspection at the public reference facilities of the SEC at 450
Fifth Street, NW, Washington, DC 20549, and at the regional offices of the SEC
located at Seven World Trade Center, 13th Floor, New York, NY 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661. Copies of such
information should be obtainable, by mail, on payment of the SEC's customary
charges, by writing to the SEC's principal office at 450 Fifth Street, NW,
Washington, DC 20549.
SECTION 10. SOURCE AND AMOUNT OF FUNDS
The offer is not conditioned on any financing arrangements.
The Purchaser estimates that the total amount of funds required to purchase
pursuant to the offer the number of shares that are outstanding on a fully
diluted basis and to pay fees and expenses related to the offer and the Consent
Solicitation will be approximately $1.98 billion. The Purchaser plans to obtain
all funds needed for the offer through a capital contribution or intercompany
loan which will be made by Shell to the Purchaser at the time the Purchaser
accepts for payment shares tendered pursuant to the offer.
Shell intends to use cash on hand or available to it to make this capital
contribution or intercompany loan. As of December 31, 2000, Shell and its
consolidated subsidiaries had total assets in excess of $30 billion.
SECTION 11. CONTACTS AND TRANSACTIONS WITH THE COMPANY; BACKGROUND OF THE OFFER
On February 23, 2001, at the request of Shell, a representative of Lehman
Brothers, Shell's financial advisor, telephoned Mr. Peter A. Dea, the chairman
and chief executive officer of the Company, to discuss a potential meeting
between Mr. Dea and Mr. Walter van de Vijver, the president and chief executive
officer of Shell Exploration and Production Company. On February 26, 2001, Mr.
Dea returned the call and the Lehman Brothers representative expressed Mr. van
de Vijver's interest in meeting with Mr. Dea to discuss a possible business
arrangement between Shell and the Company. Mr. Dea responded that he was not
interested in meeting with Shell.
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On March 1, 2001, Mr. van de Vijver telephoned Mr. Dea to propose Shell's
acquisition of the Company at a price of $55.00 per share in cash. Mr. Dea
expressed his thanks for Shell's interest but further responded that the Company
had no interest beyond executing its existing strategy. Mr. Dea indicated that
he would notify the Company's board of directors of Shell's offer. Thereafter,
Mr. van de Vijver confirmed Shell's proposal by delivering the following letter
to Mr. Dea:
March 1, 2001
Board of Directors
Barrett Resources Corporation
1515 Arapahoe Street
Tower 3, Suite 1000
Denver, CO 80202
Attention: Peter A. Dea, Chairman and Chief Executive Officer
Dear Peter:
I enjoyed our telephone conversation this morning. Thanks for your
complimentary remarks about Shell. As I said to you, Shell has a strong interest
in establishing a presence in the Rockies, and we envision Barrett serving as
the cornerstone of this new growth oriented core area. We are committed to
pursuing a transaction with Barrett. While we would prefer to negotiate and
announce a definitive agreement between our companies in the very near term, we
are prepared to go forward unilaterally by taking our proposal directly to your
shareholders.
If you are prepared to negotiate, we and our advisors are ready to meet with
you promptly with a goal of entering into a merger agreement with Barrett that
would provide for a two step acquisition transaction. In the first step, a Shell
subsidiary would make a tender offer for all outstanding Barrett shares at a
price of $55.00 per share in cash. The tender offer would be subject to a
minimum tender condition of at least 50.1% of the outstanding shares. In the
second step, our acquisition subsidiary and Barrett would merge in a transaction
in which all remaining Barrett shares would be acquired for the same cash price
per share of $55.00. We contemplate that all currently outstanding Barrett
employee stock options would be entitled to cash payments based on the spread
between the acquisition price offered and the exercise price of the options. The
merger agreement would not be conditioned upon engaging in any due diligence but
would be subject to customary conditions, including, among other things, the
receipt of required regulatory approvals, the satisfaction of a minimum share
tender condition in the tender offer and the removal of your anti-takeover
defenses. You are hereby advised that we have sufficient cash on hand to
complete the transaction. We are eager to move ahead and look forward to your
prompt response to our offer to negotiate a merger proposal.
If, on the other hand, you are unwilling to engage in substantive
negotiations, we intend to commence the cash tender offer outlined above within
the next several days.
Shell has devoted significant resources to studying the Rocky Mountain
region, and we share your enthusiasm for this area. Barrett has built a strong
position in the area and Barrett's employees have been a critical part of the
region's development. Given Shell's commitment to this region, it is our strong
desire to retain substantially all of Barrett's employees. Since we currently
have no physical E&P presence in the region, we would also expect to make Denver
our new base of operations for expansion and growth in the Rockies. We believe
that our desire to retain Barrett employees will help minimize much of the
personnel disruption that often results from acquisition transactions. We
believe that with Barrett's people and Shell's technology and capital strength,
we can continue to grow reserves and production.
We believe that our fully funded cash offer at the attractive price we have
proposed would be well received by your shareholders. We hope that your
employees will be excited about the prospect of working with Shell to continue
to develop the region. We hope you share our enthusiasm for this transaction,
and I would appreciate hearing from you by the close of business on Monday,
March 5, 2001 with your response.
Very truly yours,
/s/ Walter van de Vijver
Walter van de Vijver
President and CEO
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On March 5, 2001, Mr. van de Vijver attempted to telephone Mr. Dea to offer
to meet to discuss Shell's proposal to acquire the Company. In response, Mr. Dea
sent the following letter to Mr. van de Vijver:
March 5, 2001
Shell Exploration & Production Co.
One Shell Plaza
P.O. Box 2463
Houston, Texas 77252-2463
Attention: Walter van de Vijver, President and CEO
Dear Walter:
We received your March 1st letter and proposal for a transaction. We have
discussed your letter over the weekend in a telephonic meeting of our Board and
plan to discuss it further at our regularly scheduled Board meetings on March 7
and 8. A matter of this significance merits very careful consideration by our
Board. We expect to respond to your letter no later than the close of business
on Friday, March 9.
Very truly yours,
/s/ Peter A. Dea
Peter A. Dea
Chairman of the Board
and Chief Executive Officer
After receiving Mr. Dea's letter, on March 5, 2001, Mr. van de Vijver
telephoned Mr. Dea to again offer to meet to discuss Shell's proposal to acquire
the Company set forth in his March 1 letter. Mr. Dea informed Mr. van de Vijver
that he would discuss a possible meeting with other directors of the Company and
would telephone Mr. van de Vijver on the morning of March 6, 2001 with a
response.
On March 6, 2001, Mr. Dea telephoned Mr. van de Vijver to state that he was
not interested in a meeting at that time and that the Company would consider
Shell's offer at its regularly scheduled board meetings on March 7-8.
On March 7, 2001, Shell released the text of its March 1, 2001 letter and
issued the following press release:
SHELL OIL COMPANY ANNOUNCES PROPOSAL TO ACQUIRE BARRETT
RESOURCES FOR $55 PER SHARE IN CASH
HOUSTON (MARCH 7, 2001) -- Shell Oil Company (Shell), a wholly owned member
of the Royal Dutch/ Shell Group, today announced that on March 1, 2001, it made
a proposal to the Board of Directors of Barrett Resources Corporation (NYSE:
BRR) to acquire all of the outstanding shares of Barrett common stock at a price
of $55.00 per share in cash. The price offered represents a 24 percent premium
over the Feb. 28, 2001, closing price of $44.25, the day before Shell first made
its acquisition proposal. This offer represents an aggregate purchase price of
approximately $1.8 billion plus the assumption of Barrett's debt of
approximately $400 million.
Barrett has advised Shell that the Barrett Board of Directors will consider
the proposal at its regularly scheduled meeting on March 7 and 8, 2001, and will
respond to Shell's proposal no later than Friday, March 9, 2001.
"Shell appreciates the seriousness with which Barrett's Board is approaching
our proposal, and we are hopeful that the Barrett Board will respond favorably,"
said Mr. Walter van de Vijver, president and CEO of Shell Exploration &
Production Company, the exploration and production arm of Shell Oil Company. "We
are standing by and are ready to negotiate a merger agreement promptly so that
Barrett's shareholders can consider our $55.00 per share cash offer. However,
absent a positive response from Barrett's Board, Shell intends to commence a
fully funded, all cash tender offer for all outstanding Barrett shares.
"The acquisition of Barrett will give Shell an immediate material presence
in the Rocky Mountain region, the second largest natural gas basin in the U.S.,
as well as significant additional natural gas production and reserves," said Mr.
van
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de Vijver. "This transaction will strengthen and diversify our asset portfolio
and will enhance Shell's natural gas position with tangible growth opportunities
outside our existing core areas. We also look forward to adding substantially
all of Barrett's talented employee base to the Shell team."
Shell's tender offer would be conditioned on, among other things, the
acquisition of at least a majority of the outstanding Barrett shares. The offer
would not be contingent on the receipt of financing. The terms and conditions of
the offer would be set forth in tender offer materials which Shell would file
with the Securities and Exchange Commission (SEC) and mail to Barrett's
shareholders. In conjunction with any such tender offer, Shell would also file
preliminary consent solicitation materials with the SEC.
Also, on March 7, 2001, Mr. van de Vijver delivered the following letter to
Mr. Dea:
March 7, 2001
Mr. Peter A. Dea
Chairman and Chief Executive Officer
Board of Directors
Barrett Resources Corporation
1515 Arapahoe Street
Tower 3, Suite 1000
Denver, CO 80202
Dear Peter:
I wanted you to know that this morning we are issuing a press release
announcing Shell's proposal to acquire Barrett Resources under the terms we
discussed. While we are gratified that your board will give careful
consideration to our proposal today, to the extent you may also be considering
other alternative transactions, we felt the market and your shareholders should
be aware of our commitment to making this acquisition. Nonetheless, I am
anxiously awaiting the board's response to our proposal, and I want you to know
that my advisors and I can meet with you and your advisors on very short notice
any time during the next two or three days.
In connection with your board meeting, I urge your board to take action to
remove the impediments to our acquisition proposal that are presently contained
in Barrett's poison pill rights plan and in Barrett's bylaws. This action would
insure that Barrett's stockholders would be able to consider and respond to our
offer themselves.
I also wanted to inform you that, as a Barrett shareholder, Shell Oil
Company will today commence a declaratory judgment action in Delaware Chancery
Court seeking invalidation of certain provisions of Barrett's bylaws which could
be used as impediments to our proposal. While we hope that the Barrett board
will act to remove the invalid bylaw provisions that purport to limit
shareholder rights, out of an abundance of caution, we have proceeded with the
suit.
As I have said before, we prefer to proceed on a negotiated basis, but if
your board chooses a different course, we intend to take our proposal directly
to the Barrett stockholders.
I look forward to talking with you promptly after your board meeting.
Very truly yours,
/s/ Walter van de Vijver
Walter van de Vijver
President and CEO
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On March 8, 2001, Mr. Dea delivered the following letter to Mr. van de
Vijver:
March 8, 2001
Mr. Walter van de Vijver
President and Chief Executive Officer
Shell Exploration & Production Company
One Shell Plaza
P.O. Box 2463
Houston, Texas 77252-2463
Dear Walter:
The Board of Directors of Barrett Resources Corporation has fully considered
and rejected Shell's proposal to acquire Barrett. As reflected in the attached
press release, which is being concurrently issued, we are initiating a process
to maximize shareholder value. Because of your stated desire to negotiate a
friendly acquisition of Barrett, we invite you to participate in the process.
Our financial advisors, Goldman Sachs and Petrie Parkman, will be contacting
Lehman Brothers to encourage your participation.
Sincerely yours,
/s/ Peter A. Dea
Peter A. Dea
Chairman and Chief Executive Officer
Also on March 8, 2001, the Company released the text of its March 8, 2001
letter and issued the following press release:
BARRETT RESOURCES TO PURSUE STRATEGIC ALTERNATIVES,
INCLUDING A POSSIBLE SALE OF THE COMPANY
DENVER, (MARCH 8, 2001) -- Barrett Resources Corporation (NYSE: BRR) today
announced that its Board of Directors has reviewed, considered and rejected
Shell Oil Company's unsolicited proposal to acquire the Company. The Board has
determined that, in light of the Shell proposal and relevant industry
conditions, it is appropriate to take all necessary steps to maximize
shareholder value. Accordingly, it has authorized management to pursue strategic
alternatives, including seeking proposals from a number of qualified parties,
rather than commencing negotiations solely with Shell under artificial deadlines
that only serve Shell's interests. The process initiated by the Board will be
designed to facilitate a full appreciation of the value of Barrett's assets and
to create a competitive situation in which Shell is being invited to participate
along with others.
Barrett noted that Shell's proposal was based on publicly available
information without the benefit of any due diligence with the Company. Barrett
believes that, in properly valuing the Company, Shell and other potential
parties would find it highly important to consider confidential, nonpublic
information regarding the Company's focused natural gas potential in the Rocky
Mountain region.
The Company's management and advisors will promptly assemble materials to be
shared with qualified parties, subject to an appropriate confidentiality
agreement. These participants will be given access to a data room and provided
with other detailed due diligence information. Final proposals will be requested
by Barrett after the participants have had an opportunity to conduct their due
diligence. The Company reserves the right to modify this process at any time. No
assurance can be given that a sale of the Company will occur, or on what terms.
"We are inviting Shell to participate in this process," said Peter A. Dea,
Chairman and Chief Executive Officer of Barrett. "If Shell attempts to bypass
this orderly process designed to maximize shareholder value, the Board will
consider that action in due course. In the meantime, the Board urges
shareholders to take no action with respect to their holdings of the Company."
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Goldman, Sachs & Co. and Petrie Parkman & Co. are acting as the Company's
financial advisors and Sidley & Austin is acting as the Company's legal counsel.
Following the receipt of the Company's press release and letter on March 8,
2001, a representative of Goldman, Sachs & Co. ("Goldman Sachs"), the Company's
financial advisor, and a representative of Lehman Brothers had a telephone
conversation in which they discussed the Company's rejection of Shell's proposal
and the auction process announced in the Company's press release. The Goldman
Sachs representative indicated that the Company's board of directors is
committed to reviewing the Company's strategic alternatives but that the process
will not necessarily result in a sale of the Company. In that conversation, the
Goldman Sachs representative indicated that the process announced in the press
release would probably not result in any negotiations respecting any transaction
for at least 60 days. The Lehman Brothers representative requested, on behalf of
the Purchaser and Shell, a copy of the Company's confidentiality agreement for
its proposed auction process in connection with the review of the strategic
options available to Shell, and a copy was provided.
On Monday, March 12, Shell issued the following press release and commenced
the offer:
SHELL OIL COMPANY COMMENCES TENDER OFFER FOR BARRETT RESOURCES AT $55 PER SHARE
IN CASH
HOUSTON (MARCH 12, 2001) -- Shell Oil Company (Shell), a wholly-owned member
of the Royal Dutch/Shell Group, today announced that it has commenced a tender
offer for all outstanding shares of Barrett Resources Corporation (Barrett) at
$55 per share in cash. The offer price for the Common Stock represents a 24
percent premium over Barrett's market price of $44.25 per share on Feb. 28,
2001, the last trading day prior to Shell's initial acquisition proposal.
"We consider it a positive sign that Peter Dea and Barrett's Board of
Directors have said they are considering strategic alternatives, but it is not
clear that they are committed to the sale of the company," said Walter van de
Vijver, president and CEO of Shell Exploration & Production Company, the
exploration and production arm of Shell Oil Company. "That is why Shell has
chosen to take its offer directly to the Barrett shareholders rather than
participate in the auction process proposed by Barrett's Board. We continue to
believe that the best choice is to accept our fully funded cash offer.
"We also note that Barrett's board has not said that our $55 per share offer
is inadequate, so we assume that they and their advisors have concluded that our
offer is in an appropriate range," he continued. "We have decided to make our
tender offer available to shareholders today because we continue to believe that
our fully funded cash offer represents a full and fair value for the company.
"We are concerned, as their shareholders also may be, that the prolonged
auction process could be a distraction to Barrett's employees and have an
adverse impact on their ability to effectively operate the business. Under the
auction process Barrett has established, it could take over two months before
Barrett shareholders know whether or not they have any further options," Mr. van
de Vijver added.
Shell's tender offer is conditioned upon, among other things, the
acquisition of at least a majority of the outstanding shares. The tender offer
and withdrawal rights will expire at midnight (EDT) on April 6, 2001, unless
extended. The offer is not contingent on the receipt of financing. The terms and
conditions of the offer will be set forth in tender offer materials being filed
today with the Securities and Exchange Commission to be mailed promptly to
Barrett shareholders.
Lehman Brothers Inc. is acting as Dealer Manager for the Shell offer, and
Morrow & Co., Inc. is acting as Information Agent.
SECTION 12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY
Purpose. The purpose of the offer is to enable Shell to acquire control of,
and the entire equity interest in, the Company. The offer, as the first step in
Shell's acquisition of the Company, is intended to facilitate the acquisition of
all the shares. Shell currently intends to effect the proposed merger, as soon
as practicable following consummation of the offer. The Company would become an
indirect wholly owned subsidiary of Shell as a result of this merger. When the
proposed merger takes place, each then outstanding share (other than shares
Shell indirectly owns through the Purchaser or any other of its direct or
indirect wholly owned subsidiaries, shares the Company holds as its treasury
shares and shares of stockholders who perfect available appraisal rights under
the DGCL) would convert into the right to receive an amount in cash equal to the
price per share the Purchaser has paid pursuant to the offer.
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Except in the case of a "short-form" merger, the DGCL will require the
approval of the Company's board of directors and the affirmative vote of holders
of a majority of the outstanding shares (including any shares owned by the
Purchaser) in order to effect the proposed merger. If the Purchaser acquires,
through the offer or otherwise, at least a majority of the outstanding shares,
which would be the case if the Minimum Tender Condition were satisfied and the
Purchaser were to accept for payment shares tendered pursuant to the offer, it
would have sufficient voting power to effect the proposed merger without the
vote of any other stockholder of the Company.
The DGCL provides that if one corporation owns at least 90 percent of the
outstanding shares of each class of another corporation, the two corporations
may merge in a "short-form" merger without a vote of the subsidiary's minority
stockholders. Accordingly, if, as a result of the offer or otherwise, the
Purchaser acquires at least 90 percent of the outstanding shares, the Purchaser
could, and intends to, effect the proposed merger as a "short-form" merger
without prior notice to, or any action by, any other stockholder of the Company.
If the proposed merger does not take place, the Purchaser or an affiliate of
the Purchaser may, either immediately following the consummation or termination
of the offer (whether or not the Purchaser purchases shares under the offer), or
from time to time thereafter, seek to acquire additional shares through open
market purchases, privately negotiated transactions, a tender offer or exchange
offer or otherwise, on such terms and at such prices as it may determine, which
may be more or less than the price the Purchaser is offering to pay under the
offer.
The timing of the consummation of the offer and the proposed merger will
depend on a variety of factors and legal requirements, the actions of the
Company's board of directors, the number of shares, if any, the Purchaser
acquires under the offer and whether the conditions to the offer have been
satisfied or waived. Shell can give no assurance that the proposed merger will
be consummated or as to the timing of the proposed merger if it is consummated.
In the Consent Solicitation, the Company will be seeking written consents
from stockholders of the Company for the following purposes: (i) to remove
without cause all members of the board of directors of the Company who are in
office immediately prior to that removal and (ii) to elect Messrs. Francis L.
Durand, R. W. Leftwich and J. Hugh Roff Jr. (the "Nominees") to serve as
directors of the Company.
The principal reason the Purchaser is seeking to elect the Nominees to the
Company's board is their willingness to consider, consistent with their
fulfillment of their fiduciary duties under Delaware law, whether to take such
actions as they may deem necessary or appropriate to expedite the prompt
consummation of our transaction, including:
- redeeming the Rights or amending the Rights Agreement to make the Rights
inapplicable to the offer and the proposed merger, thereby satisfying the
Rights Condition to the consummation of the offer;
- approving the offer and the proposed merger before Shell and the Purchaser
become "interested stockholders" under section 203, thereby satisfying the
Business Combination Condition to the consummation of the offer; and
- rendering inapplicable, if otherwise applicable, article IV of the
Company's bylaws to our transaction, thereby satisfying the Bylaws
Conditions;
or, if a proposal has been made respecting a transaction that is determined to
be superior to our transaction for the Company's stockholders, whether to take
such actions as they may deem necessary or appropriate to facilitate that
proposed transaction. The adoption of the proposals by the Company's
stockholders would expedite the prompt consummation of the offer and the
proposed merger. This adoption would require the affirmative written consent of
the holders of a majority of the outstanding shares of the Company's common
stock and either the amendment or waiver by the Company's board of one or more
provisions in the Company's bylaws or the invalidation of those provisions by,
or other relief from, a court.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF CONSENTS FROM THE COMPANY'S
STOCKHOLDERS. ANY SUCH SOLICITATION, INCLUDING THE CONSENT SOLICITATION, WILL BE
MADE ONLY BY SEPARATE CONSENT SOLICITATION MATERIALS COMPLYING WITH THE
REQUIREMENTS OF SECTION 14(a) OF THE EXCHANGE ACT.
Plans for the Company. The Purchaser and Shell expect that, initially
following the consummation of the transaction, the business and operations of
the Company will, except as described in this offer, be continued substantially
as they are currently being conducted. Shell has not made any decisions with
respect to the
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composition of the Company's management team following the consummation of the
transaction. Shell will continue to evaluate the business and operations of the
Company during the pendency of the offer and after the consummation of the
transaction and will take such actions as it deems appropriate under the
circumstances then existing. It intends to seek additional information about the
Company during this period. Thereafter, it intends to review that information as
part of a comprehensive review of the Company's business, assets, operations,
capitalization, dividend policy, management and personnel, with a view to
optimizing development of the Company's potential in conjunction with the
Company's current and future business. Following that review, Shell may consider
replacing certain of the Company's management and/or personnel or divesting
certain of the Company's non-strategic, non-core assets.
Except as described above or elsewhere in this offer to purchase, the
Purchaser and Shell have no present plans or proposals that would relate to or
result in (i) any extraordinary corporate transaction involving the Company
(such as a merger, reorganization or liquidation) (ii) any purchase, sale or
transfer of a material amount of the Company's assets, (iii) any change in the
Company's board of directors or management personnel, except as the Consent
Solicitation contemplates, (iv) any material change in the Company's
indebtedness, capitalization or dividend policy, (v) any other material change
in the Company's corporate structure or business, (vi) a class of securities of
the Company being delisted from a national securities exchange or ceasing to be
authorized to be quoted in an automated quotations system operated by a national
securities association, (vii) a class of equity securities of the Company
becoming eligible for termination of registration under section 12(g) of the
Exchange Act, (viii) the acquisition or disposition of securities of the Company
or (ix) changes in the Company's certificate of incorporation or bylaws, unless
the Company is the surviving entity in connection with the proposed merger
described herein.
Appraisal Rights. The holders of shares will not have appraisal rights as a
result of the offer. If the proposed merger is consummated, however, holders of
shares at the effective time of that merger who do not vote in favor of, or
consent to, the merger will have rights under section 262 of the DGCL to demand
appraisal of their shares. Under section 262, stockholders who demand appraisal
and comply with the applicable statutory procedures will be entitled to receive
a judicial determination of the fair value of their shares (exclusive of any
element of value arising from the accomplishment or expectation of the proposed
merger) and to receive payment of that fair value in cash, together with a fair
rate of interest, if any. Any such judicial determination of the fair value of
shares could be based upon factors other than, or in addition to, the price per
share to be paid in the proposed merger or the market value of the shares. The
value so determined could be more or less than the price per share to be paid in
the proposed merger.
The foregoing summary of section 262 does not purport to be complete and is
qualified in its entirety by reference to section 262. FAILURE TO FOLLOW THE
STEPS SECTION 262 REQUIRES FOR PERFECTING APPRAISAL RIGHTS MAY RESULT IN THE
LOSS OF THOSE RIGHTS.
"Going Private" Transactions. Exchange Act Rule 13e-3 applies to various
types of "going private" transactions. The Purchaser does not believe that this
rule would apply to the proposed merger unless it takes place more than one year
after the termination of the offer. If applicable, Rule 13e-3 requires, among
other things, that financial information concerning the fairness of the proposed
transaction and the consideration offered to public stockholders in that
transaction be filed with the SEC and disclosed to those stockholders prior to
the consummation of that transaction.
SECTION 13. DIVIDENDS AND DISTRIBUTIONS
If, on or after March 12, 2001, the Company should (i) split, combine or
otherwise change the shares or its capitalization (other than by redemption of
the Rights in accordance with their terms as publicly disclosed prior to March
12, 2001), (ii) acquire or otherwise cause a reduction in the number of
outstanding shares or other securities (other than as aforesaid) or (iii) issue
or sell additional shares (other than the issuance of shares under option prior
to March 12, 2001, in accordance with the terms of those options as publicly
disclosed prior to March 12, 2001), 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, then, subject to the provisions of section 14, the Purchaser, in its
sole discretion, may make such adjustments as it deems appropriate in the offer
price and other terms of the offer, including, without limitation, the number or
type of securities offered to be purchased.
If, on or after March 12, 2001, the Company should declare or pay any cash
dividend on the shares or other distribution on the shares, or issue with
respect to the shares any additional shares, shares of any other class of
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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, payable or distributable to stockholders of
record on a date prior to the transfer of the shares purchased under the offer
to the Purchaser or its nominee or transferee on the Company's stock transfer
records, then, subject to the provisions of section 14, (i) the offer price may,
in the sole discretion of the Purchaser, be reduced by the amount of any such
cash dividend or cash distribution and (ii) the whole of any such noncash
dividend, distribution or issuance to be received by the tendering stockholders
will (a) be received and held by the tendering stockholders for the account of
the Purchaser and will be required to be promptly remitted and transferred by
each tendering stockholder to the depositary for the account of the Purchaser,
accompanied by appropriate documentation of transfer, or (b) at the direction of
the Purchaser, be exercised for the benefit of the Purchaser, in which case the
proceeds of that exercise will promptly be remitted to the Purchaser. Pending
such remittance and subject to applicable law, the Purchaser will be entitled to
all rights and privileges as owner of any such noncash dividend, distribution,
issuance or proceeds and may withhold the entire offer price or deduct from the
offer price the amount or value thereof, as determined by the Purchaser in its
sole discretion.
SECTION 14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other term or provision of the offer, and in addition to
(and not in limitation of) the Purchaser's rights to extend and amend the offer
at any time, in its sole discretion, the Purchaser will not be required to
accept for payment or, subject to any applicable rules and regulations of the
SEC, including Exchange Act Rule 14e-1(c) (relating to the Purchaser's
obligation to pay for or return tendered shares promptly after the termination
or withdrawal of the offer), to pay for, and may delay the acceptance for
payment of and accordingly the payment for, any tendered shares if, in the sole
judgment of Purchaser, (i) the Minimum Tender Condition shall not have been
satisfied, (ii) the Rights Condition shall not have been satisfied, (iii) the
Business Combination Condition shall not have been satisfied, (iv) the Bylaws
Condition shall not have been satisfied, or (v) any waiting period under the HSR
Act applicable to the purchase of shares under the offer shall not have expired
or been terminated. Furthermore, notwithstanding any other term or provision of
the offer, the Purchaser will not be required to accept for payment or, subject
as aforesaid, to pay for any shares not theretofore accepted for payment or paid
for, and may terminate or amend the offer if, at any time on or after March 12,
2001, and before the acceptance of those shares for payment or the payment
therefor, any of the following events or facts shall have occurred:
(a) there shall be threatened, instituted or pending any action,
proceeding, application or counterclaim by any government or governmental,
regulatory or administrative authority or agency, domestic, foreign or
supranational (each, a "Governmental Entity"), or by any other person,
domestic or foreign, before any court or Governmental Entity, (i) (A)
challenging or seeking to, or which is reasonably likely to, make illegal,
delay or otherwise directly or indirectly restrain or prohibit, or seeking
to, or which is reasonably likely to, impose voting, procedural, price or
other requirements, in addition to those the federal securities laws and the
DGCL (each as in effect on the date of this offer to purchase) require, in
connection with, the making of the offer, the acceptance for payment of, or
payment for, some of or all the shares by the Purchaser, Shell or any other
affiliate of Shell or the consummation by the Purchaser, Shell or any other
affiliate of Shell of a merger or other similar business combination with
the Company, (B) seeking to obtain material damages or (C) otherwise
directly or indirectly relating to the transactions contemplated by the
offer, the proposed merger or any such merger or business combination, (ii)
seeking to prohibit the ownership or operation by the Purchaser, Shell or
any other affiliate of Shell of all or any portion of the business or assets
of the Company and its subsidiaries or of the Purchaser, Shell or any other
affiliate of Shell or to compel the Purchaser, Shell or any other affiliate
of Shell to dispose of or hold separate all or any portion of the business
or assets of the Company or any of its subsidiaries or of the Purchaser,
Shell or any other affiliate of Shell or seeking to impose any limitation on
the ability of the Purchaser, Shell or any other affiliate of Shell to
conduct such business or own such assets, (iii) seeking to impose or confirm
limitations on the ability of the Purchaser, Shell or any other affiliate of
Shell effectively to exercise full rights of ownership of the shares or
Rights, including, without limitation, the right to vote any shares acquired
or owned by the Purchaser, Shell or any other affiliate of Shell on all
matters properly presented to the Company's stockholders, (iv) seeking to
require divestiture by the Purchaser, Shell or any other affiliate of Shell
of any shares, (v) seeking any material diminution in the benefits expected
to be derived by the Purchaser, Shell or any other affiliate of Shell as a
result of the transactions contemplated by the offer or any merger or other
similar business combination with the Company, (vi) which otherwise directly
or indirectly relating to the offer or which otherwise, in the sole judgment
of the Purchaser, might materially adversely affect the Company or any of
its subsidiaries or the Purchaser, Shell or any other affiliate of Shell or
the value
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of the shares or (vii) in the sole judgment of the Purchaser, materially
adversely affecting the business, properties, assets, liabilities,
capitalization, stockholders' equity, condition (financial or otherwise),
operations, licenses or franchises, results of operations or prospects of
the Company or any of its subsidiaries;
(b) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction proposed,
enacted, enforced, promulgated, amended, issued or deemed applicable to (i)
the Purchaser, Shell or any other affiliate of Shell or the Company or any
of its subsidiaries or (ii) the offer or the proposed merger or any merger
or other similar business combination by the Purchaser, Shell or any other
affiliate of Shell with the Company, by any government, legislative body or
court, domestic, foreign or supranational, or Governmental Entity, other
than the routine application of the waiting period provisions of the HSR Act
to the offer, that, in the sole judgment of the Purchaser, might, directly
or indirectly, result in any of the consequences referred to in clauses (i)
through (vii) of paragraph (a) above;
(c) any change shall have occurred or been threatened (or any condition,
event or development shall have occurred or been threatened involving a
prospective change) in the business, properties, assets, liabilities,
capitalization, stockholders' equity, condition (financial or otherwise),
operations, licenses or franchises, results of operations or prospects of
the Company or any of its subsidiaries that, in the sole judgment of the
Purchaser, is or may be materially adverse to the Company or any of its
subsidiaries, or the Purchaser shall have become aware of any facts that, in
the sole judgment of the Purchaser, have or may have material adverse
significance with respect to either the value of the Company or any of its
subsidiaries or the value of the shares to the Purchaser, Shell or any other
affiliate of Shell;
(d) there shall have occurred or been threatened (i) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the United
States for a period in excess of three hours (excluding suspensions or
limitations resulting solely from physical damage or interference with any
such exchange or market not related to market conditions), (ii) any
extraordinary or material adverse change in the financial markets or major
stock exchange indices in the United States or abroad in the market price of
shares, (iii) any change in the general political, market, economic or
financial conditions in the United States or abroad that could, in the sole
judgment of the Purchaser, have a material adverse effect upon the business,
properties, assets, liabilities, capitalization, stockholders' equity,
condition (financial or otherwise), operations, licenses or franchises,
results of operations or prospects of the Company or any of its subsidiaries
or the trading in, or value of, the shares, (iv) any material change in
United States currency exchange rates or any other currency exchange rates
or a suspension of, or limitation on, the markets therefor, (v) a
declaration of a banking moratorium or any suspension of payments in respect
of banks in the United States, (vi) any limitation (whether or not
mandatory) by any government, domestic, foreign or supranational, or
Governmental Entity on, or other event that, in the sole judgment of the
Purchaser, might affect the extension of credit by banks or other landing
institutions, (vii) a commencement of a war or armed hostilities or other
national or international calamity directly or indirectly involving the
United States or (viii) in the case of any of the foregoing existing at the
time of the commencement of the offer, a material acceleration or worsening
thereof;
(e) the Company or any of its subsidiaries shall have (i) split,
combined or otherwise changed, or authorized or proposed a split,
combination or other change of, the shares or its capitalization (other than
by redemption of the Rights in accordance with their terms as publicly
disclosed prior to March 12, 2001), (ii) acquired or otherwise caused a
reduction in the number of, or authorized or proposed the acquisition or
other reduction in the number of, outstanding shares or other securities
(other than as aforesaid), (iii) issued or sold, or authorized or proposed
the issuance, distribution or sale of, additional shares (other than the
issuance of shares under option prior to March 12, 2001, in accordance with
the terms of those options as publicly disclosed prior to March 12, 2001),
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, (iv)
declared or paid, or proposed to declare or pay, any dividend or other
distribution, whether payable in cash, securities or other property, on or
with respect to any shares of capital stock of the Company, (v) altered or
proposed to alter any material term of any outstanding security (including
the Rights) other than to amend the Rights Agreement to make the Rights
inapplicable to the offer and the proposed merger, (vi) incurred any debt
other than in the ordinary course of business or any debt containing
burdensome covenants, (vii) authorized, recommended, proposed or entered
into an agreement with respect to any merger, consolidation, liquidation,
dissolution, business combination, acquisition of assets, disposition of
assets, release or relinquishment of any material contractual or other right
of the Company or any of its subsidiaries or any comparable event not in the
ordinary course of business,
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(viii) authorized, recommended, proposed or entered into, or announced its
intention to authorize, recommend, propose or enter into, any agreement or
arrangement with any person or group that in the sole judgement of the
Purchaser could adversely affect either the value of the Company or any of
its subsidiaries or the value of the shares to the Purchaser, Shell or any
other affiliate of Shell, (ix) entered into any employment, severance of
similar agreement, arrangement or plan with or for the benefit of any of its
employees other than in the ordinary course of business or entered into or
amended any agreements, arrangements or plans so as to provide for increased
or accelerated benefits to the employees as a result of or in connection
with the transactions the offer contemplates, (x) except as applicable law
may require, taken any action to terminate or amend any employee benefit
plan (as defined in section 3(2) of the Employee Retirement Income Security
Act of 1974) of the Company or any of its subsidiaries or the Purchaser
shall have become aware of any such action that was not disclosed in
publicly available filings prior to March 12, 2001 or (xi) amended, or
authorized or proposed any amendment to, its certificate of incorporation or
bylaws (other than an amendment to the bylaws effected at the request of
Shell), or the Purchaser shall become aware that the Company or any of its
subsidiaries shall have proposed or adopted any such amendment that was not
disclosed in publicly available filings prior to March 12, 2001;
(f) a tender or exchange offer for any shares shall have been made or
publicly proposed to be made by any other person (including the Company or
any of its subsidiaries or affiliates), or it shall have been publicly
disclosed or the Purchaser shall have otherwise learned that (i) any person,
entity (including the Company or any of its subsidiaries) or "group" (within
the meaning of section 13(d)(3) of the Exchange Act) shall have acquired or
proposed to acquire beneficial ownership of more than five percent of any
class or series of capital stock of the Company (including the shares),
through the acquisition of stock, the formation of a group or otherwise, or
shall have been granted any right, option or warrant, conditional or
otherwise, to acquire beneficial ownership of more than 5 percent of any
class or series of capital stock of the Company (including the shares),
other than acquisitions for bona fide arbitrage purposes only and other than
as disclosed in a Schedule 13G on file with the SEC prior to March 12, 2001,
(ii) any such person, entity or group that, prior to March 12, 2001, had
filed such a schedule with the SEC has acquired or proposes to acquire,
through the acquisition of stock, the formation of a group or otherwise,
beneficial ownership of 1 percent or more of any class or series of capital
stock of the Company (including the shares), or shall have been granted any
right, option or warrant, conditional or otherwise, to acquire beneficial
ownership of 1 percent or more of any class or series of capital stock of
the Company (including the shares), (iii) any person or group shall have
entered into a definitive agreement or an agreement in principle or made a
proposal with respect to a tender offer or exchange offer or a merger,
consolidation or other business combination with or involving the Company or
(iv) any person (other than Shell on behalf of Royal Dutch Petroleum
Company) shall have filed a Notification and Report Form under the HSR Act
(or amended a prior filing to increase the applicable filing threshold set
forth therein) or made a public announcement reflecting an intent to acquire
the Company or any assets or subsidiaries of the Company; or
(g) any approval, permit, authorization, favorable review or consent of
any Governmental Entity (including those described or referred to in section
15) shall not have been obtained on terms satisfactory to Purchaser in its
sole discretion; or
(h) the Purchaser shall have reached an agreement or understanding with
the Company providing for the termination of the offer, or the Purchaser,
Shell or any other affiliate of Shell shall have entered into a definitive
agreement or announced an agreement in principle with the Company providing
for a merger or other business combination with the Company or the purchase
of stock or assets of the Company; or
(i) (a) any material contractual right of the Company or any of its
subsidiaries or affiliates shall be impaired or otherwise adversely affected
or any material amount of indebtedness of the Company or any of its
subsidiaries, joint ventures or partnerships shall become accelerated or
otherwise become due before its stated due date, in either case, with or
without notice or the lapse of time or both, as a result of the transactions
the offer or the proposed merger contemplates or (b) any covenant, term or
condition in any of the instruments or agreements, alone or in the
aggregate, of the Company or any of its subsidiaries, joint ventures or
partnerships, in the sole judgment of the Purchaser, may have a material
adverse effect on (1) the business, properties, assets, liabilities,
capitalization, stockholders' equity, condition (financial or otherwise),
operations, licenses or franchises, results of operations or prospects of
the Company or any of its subsidiaries, joint ventures or partnerships or
(2) the value of the shares in the hands of the Purchaser (including, but
not limited to, any event of default that may ensue as a result of the
consummation of the offer or the proposed merger or the acquisition by Shell
of control of the Company);
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which, in the sole judgement of the Purchaser in any such case, and regardless
of the circumstances (including any action or inaction by the Purchaser, Shell
or any other affiliate of Shell) giving rise to any such condition, makes it
inadvisable to proceed with the offer and/or with such acceptance for payment or
payment.
The foregoing conditions are for the sole benefit of the Purchaser and Shell
and may be asserted by the Purchaser regardless of the circumstances (including
any action or omission by the Purchaser) giving rise to any such condition or
may be waived by the Purchaser (in its sole discretion) in whole or in part at
any time and from time to time in its sole discretion. The failure by the
Purchaser at any time to exercise any of the foregoing rights will not be deemed
a waiver of any such right, the waiver of any such right with respect to
particular facts and circumstances will not be deemed a waiver with respect to
any other facts and circumstances and each such right will be deemed an ongoing
right that the Purchaser may assert at any time and from time to time. Any
determination by the Purchaser concerning the events described in this section
14 will be final and binding on all parties.
SECTION 15. CERTAIN LEGAL MATTERS
Except as this section 15 describes, on the basis of a review of publicly
available filings made by the Company with the SEC and other publicly available
information concerning the Company, neither the Purchaser nor Shell or any of
its other affiliates is aware of any license or regulatory permit that appears
to be material to the business of the Company and its subsidiaries, taken as a
whole, that might be adversely affected by the Purchaser's acquisition of shares
(and the indirect acquisition of the stock of the Company's subsidiaries) as
this offer to purchase contemplates or of any approval or other action by any
Governmental Entity that would be required or desirable for the acquisition or
ownership of shares by the Purchaser as this offer to purchase contemplates.
Should any such approval or other action be required or desirable, the Purchaser
and Shell currently contemplate that such approval or other action will be
sought, except as described below under -- "State Takeover Laws." While (except
as this section 15 otherwise expressly describes) the Purchaser does not
presently intend to delay the acceptance for payment of or payment for shares
tendered pursuant to the offer pending the outcome of any such matter, there can
be no assurance that any such approval or other action, if needed, would be
obtained or would be obtained without substantial conditions or that failure to
obtain any such approval or other action might not result in consequences
adverse to the Company's business or that certain parts of the Company's
business might have to be disposed of if such approvals were not obtained or
such other actions were not taken or in order to obtain any such approval or
other action. If certain types of adverse action are taken with respect to the
matters discussed below, the Purchaser could decline to accept for payment or
pay for any shares tendered. See section 14 for a description of various
conditions to the offer.
State Takeover Laws. A number of states in the United States have in place
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 Edgar
v. MITE Corp., the United States Supreme Court held that an Illinois statute of
this type, which involved state securities laws that made the takeover of
various corporations more difficult, imposed a substantial burden on interstate
commerce and therefore was unconstitutional. In CTS Corp. v. Dynamics Corp. of
America, however, that court held that a state may, as a matter of corporate law
and, in particular, those laws concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without prior approval of the remaining stockholders, provided that
those laws were applicable only under certain conditions. Subsequently, a number
of other federal courts ruled that various state takeover statutes were
unconstitutional insofar as they apply to corporations incorporated outside the
state of enactment.
Except as described herein, the Purchaser has not attempted to comply with
any state takeover statutes in connection with the offer. It reserves the right
to challenge the validity or applicability of any state law allegedly applicable
to the offer, and nothing in this offer to purchase nor any action taken in
connection herewith is intended as a waiver of that right. If any state takeover
statute is found applicable to the offer, the Purchaser might be unable to
accept for payment or pay for shares tendered pursuant to the offer or be
delayed in continuing or consummating the offer.
Section 203 of the DGCL. Section 203, in general, prohibits a Delaware
corporation such as the Company from engaging in a "Business Combination"
(defined as a variety of transactions, including mergers) with an "Interested
Stockholder" (defined generally as a person that is the beneficial owner of 15
percent or more of a corporation's outstanding voting stock) for a period of
three years following the time that such person became an Interested Stockholder
unless (i) prior to the time such person became an Interested Stockholder, the
board of directors of the corporation approved either the Business Combination
or the transaction that resulted in the
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37
stockholder becoming an Interested Stockholder, (ii) on consummation of the
transaction that resulted in the stockholder becoming an Interested Stockholder,
the Interested Stockholder owned at least 85 percent of the voting stock of the
corporation outstanding at the time the transaction commenced, excluding stock
held by directors who are also officers of the corporation and employee stock
ownership plans that do not provide employees with the right to determine
confidentially whether shares held subject to the plan will be tendered in a
tender or exchange offer or (iii) at or subsequent to the time such person
became an Interested Stockholder, the Business Combination is approved by the
board of directors of the corporation and authorized at a meeting of
stockholders, and not by written consent, by the affirmative vote of the holders
of at least 66 2/3 percent of the outstanding voting stock of the corporation
not owned by the Interested Stockholder.
Neither the Purchaser nor any of its affiliates presently is an "Interested
Stockholder" with respect to the Company, but Shell and the Purchaser would
become "Interested Stockholders" with respect to the Company if they consummate
the offer. The restrictions that section 203 thereafter would impose on Shell's
ability to manage the business of the Company are unacceptable to Shell.
Consequently, by the Business Combination Condition, the Purchaser has
conditioned the offer on the offer and the proposed merger having been approved
by the Company's board before Shell and the Purchasers become "Interested
Stockholders" under section 203 or the Purchaser being satisfied, in its sole
discretion, that the provisions of section 203 are otherwise inapplicable to the
acquisition of shares in the offer and the proposed merger.
Bylaws Condition. The Purchaser has conditioned the offer on the Purchaser
being satisfied, in its sole discretion, that the provisions of article IV of
the Company's bylaws are inapplicable to the acquisition of shares in the
transaction.
Article IV of the Company's bylaws states that after an "Interested Person"
has become an "Interested Person," it shall not become the "beneficial owner" of
any additional shares of "Voting Stock" except "as part of (a) the transaction
that results in that Person first becoming an Interested Person, or (b) pursuant
to a Business Combination entered into in accordance with the certificate of
incorporation of the [Company]." Article IV defines "Interested Person" to
include any person that, as of any particular date, is the "beneficial owner" of
more than 15% of the outstanding shares. It defines "Business Combination" to
include a merger of the Company with or into any Interested Person or affiliate
of an Interested Person or any other entity, whether or not it is an Interested
Person if, after that merger, the surviving entity would be an affiliate of an
Interested Person.
Antitrust. Under the provisions of the HSR Act applicable to the offer, the
acquisition of shares under the offer may be consummated after the expiration of
a 15-calendar day waiting period commenced by the filing by Shell on behalf of
Royal Dutch Petroleum Company, of a Notification and Report Form with respect to
the offer, unless Shell receives a request for additional information or
documentary material from the Justice Department's Antitrust Division or the FTC
or unless early termination of the waiting period is granted. Shell on behalf of
Royal Dutch Petroleum Company made this filing on March 12, 2001. If, within the
initial 15-day waiting period, either the Antitrust Division or the FTC requests
additional information or material from Shell and its affiliates concerning the
offer, the waiting period will be extended and would expire at 11:59 p.m., New
York City time, on the 10th calendar day after the date of substantial
compliance by Shell and its affiliates with that request. The HSR Act authorizes
only one extension of the waiting period pursuant to a request for additional
information. Thereafter, the waiting period may be extended only by court order
or with the consent of Shell. In practice, complying with a request for
additional information or material can take a significant amount of time. In
addition, if the Antitrust Division or the FTC raises substantive issues in
connection with a proposed transaction, the parties frequently engage in
negotiations with the relevant governmental agency concerning possible means of
addressing those issues and may agree to delay consummation of the transaction
while such negotiations continue. Expiration or termination of the applicable
waiting period under the HSR Act is a condition to the Purchaser's obligation to
accept for payment and pay for shares tendered pursuant to the offer.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed acquisition
of the Company. At any time before or after the Purchaser's acquisition of
shares pursuant to the offer, the Antitrust Division or the FTC could take such
action under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of shares pursuant to the
offer or the consummation of the proposed merger or seeking the divestiture of
shares acquired by the Purchaser or the divestiture of substantial assets of the
Company or its subsidiaries or Shell or its subsidiaries. Private parties may
also bring legal action under the antitrust laws under various circumstances.
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38
There can be no assurance that a challenge to the offer on antitrust grounds
will not be made or, if such a challenge is made, of the result thereof.
SECTION 16. FEES AND EXPENSES
Lehman Brothers is acting as dealer manager in connection with the offer and
as financial advisor to the Purchaser and Shell in connection with Shell's
effort to acquire the Company. Under an engagement letter dated November 20,
2000, between Shell and Lehman Brothers, fees totaling $500,000.00 are currently
payable to Lehman Brothers. An additional fee of $6 million will be payable to
Lehman Brothers if the offer is consummated. Shell has also agreed to reimburse
Lehman Brothers for its reasonable out-of-pocket expenses, including the fees
and expenses of its counsel and any other advisor it retains in connection with
its engagement, and to indemnify Lehman Brothers and related persons against
various liabilities and expenses, including various liabilities and expenses
under federal securities laws.
In the ordinary course of its business, Lehman Brothers engages in
securities trading, market-making and brokerage activities and may, at any time,
hold long or short positions and may trade or otherwise effect transactions in
securities of the Company. As of March 9, 2001, Lehman Brothers did not hold any
shares of the Company for its own accounts.
The Purchaser and Shell have retained Morrow & Co., Inc. to act as the
information agent and Wilmington Trust Company to serve as the depositary in
connection with the offer. The information agent and the depositary each will
receive reasonable and customary compensation for their services, be reimbursed
for certain reasonable out-of-pocket expenses and be indemnified against various
liabilities and expenses in connection therewith, including various liabilities
and expenses under the U.S. federal securities laws.
Neither the Purchaser nor Shell will pay any fees or commissions to any
broker or dealer or other person (other than the dealer manager and the
information agent) in connection with the solicitation of tenders of shares
pursuant to the offer. The Purchaser will reimburse brokers, dealers, banks and
trust companies on their request for customary mailing and handling expenses
they incur in forwarding material to their customers.
SECTION 17. MISCELLANEOUS
The offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of shares in any jurisdiction in which the making of the
offer or the acceptance thereof would not comply with the laws of that
jurisdiction. Neither the Purchaser nor Shell is aware of any jurisdiction in
which the making of the offer or the acceptance thereof would not comply with
the laws of that jurisdiction. To the extent the Purchaser or Shell becomes
aware of any state law that would limit the class of offerees in the offer, it
will amend the offer and, depending on the timing of that amendment, if any,
will extend the offer to provide adequate dissemination of such information to
holders of shares prior to the expiration of the offer. In any jurisdiction the
securities, blue sky or other laws of which require the offer to be made by a
licensed broker or dealer, the offer is being made on behalf of the Purchaser by
the dealer manager or one or more registered brokers or dealers licensed under
the laws of that jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR SHELL NOT CONTAINED HEREIN OR IN
THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, THAT INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The Purchaser and Shell have filed with the SEC a Schedule TO under Exchange
Act Rule 14d-3, together with exhibits, furnishing additional information with
respect to the offer, and may file amendments thereto. That schedule and any
amendments thereto, including exhibits, should be available for inspection and
copies should be obtainable in the manner section 8 sets forth (except that such
material will not be available at the regional offices of the SEC).
SRM Acquisition Company
March 12, 2001
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF SHELL,
THE PURCHASER, SHELL PETROLEUM INC., ROYAL DUTCH
PETROLEUM COMPANY AND THE "SHELL" TRANSPORT AND
TRADING COMPANY, P.L.C.
1. DIRECTORS AND EXECUTIVE OFFICERS OF SHELL. The name, present principal
occupation or employment and five-year employment history of each of the
directors and executive officers of Shell are set forth below. All these
directors and executive officers listed below are citizens of the United States
except Sir Mark Moody-Stuart, who is a British citizen. The principal business
address of each director or executive officer is Shell Oil Company, One Shell
Plaza, 910 Louisiana, Houston, Texas 77002, except for Sir Mark Moody-Stuart,
whose principal business address is Shell Centre, London SE1, 7NA.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---- --------------------------------------------------
Steven L. Miller..................... Chairman, President and CEO of Shell since 1999 and a Shell
director since 1998. Mr. Miller joined Shell in 1967 and in
1996 became Group Managing Director of Royal Dutch Petroleum
Company and a Group Managing Director of the Royal
Dutch/Shell Group of Companies. Mr. Miller is a director of
Shell Petroleum Inc., Applied Materials, Inc. and Equilon
Enterprises LLC. He is also a director for the American
Petroleum Institute, the National Urban League, and the
Points of Light Foundation. He is a member of the National
Petroleum Council and the Business Roundtable. He serves on
Rice University's board of trustees and the board of
advisors for Rice's James A. Baker III Institute for Public
Policy. Mr. Miller serves on the board of directors of the
Greater Houston Partnership and he is a trustee for the
United Way of the Texas Gulf Coast, currently serving as
chairman of its annual fundraising campaign.
Joseph E. Antonini................... Director of Shell since 1991. Mr. Antonini is the retired
Chairman, President and CEO of Kmart Corp. Mr. Antonini
served in that capacity at Kmart Corporation from 1985
through 1995. He currently serves as director and chairman
of AWG, Ltd. and as a director of Ziebart International and
of My-Turn.com.
Rand V. Araskog...................... Director of Shell since 1987. Mr. Araskog is the retired
Chairman and CEO of ITT Corporation, a position he held from
1985 through 1998. Mr. Araskog serves on the board of
directors of Dow Jones & Co., Inc., ITT Educational Services
Inc., ITT Industries, Hartford Financial Services Group and
Ravonier Inc.
Robert F. Daniell.................... Director of Shell since 1988. Mr. Daniell is the retired
Chairman of United Technologies Corporation. Mr. Daniell
served in such capacity from 1994 through his retirement in
1997, and currently serves on the board of directors of
Verizon Corporation.
Vilma S. Martinez.................... Director of Shell since 1998. Ms. Martinez is a partner in
the Los Angeles law firm Munger, Tolles & Olson, LLP, and
has been a partner at such firm during the past five years.
Ms. Martinez serves on the board of directors of
Anheuser-Busch Companies, Inc., Burlington Northern Santa Fe
Corp., Fluor Corporation and Sanwa Bank California.
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PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---- --------------------------------------------------
Sir Mark Moody-Stuart................ Director of Shell since 1997. Sir Mark Moody-Stuart has
served as Managing Director of Shell International Limited
since 1995. He has been a Managing Director since 1991, and
Chairman since 1997, of The "Shell" Transport and Trading
Company, p.l.c. and The Shell Petroleum Company Limited. He
has served as Group Managing Director of the Royal
Dutch/Shell Group Companies since 1991. He has also served
as Chairman and President since 1997, and Director since
1991, of Shell Petroleum Inc. He currently serves as a
director of Liverpool School of Tropical Medicine, Shell
Canada Limited, Shell International B.V., Shell Investments
Limited, Shell Integrated Gas Ventures p.l.c., and Shell
Petroleum N.V. Within the past five years, he has served on
the boards of The South Bank Foundation Limited, Shell
International Research Maatschappij B.V., Shell Upstream
Investments p.l.c., and Montell N.V.
Harold A. Poling..................... Director of Shell since 1991. Mr. Poling is the retired
Chairman and CEO of Ford Motor Company. Mr. Poling is a
member of the Donaldson, Lufkin and Jenrette Investment
Banking Advisory Board, a member of The Business Council and
is chairman of Eclipse Aviation Corporation. In addition,
Mr. Poling currently serves on the boards of directors of
Flint Ink Corporation, ArvinMeritor Inc., Monmouth College
Senate, Thermadyne Holdings Corporation and William Beaumont
Hospital.
General Gordon R. Sullivan........... Director of Shell since 1995. General Sullivan retired as
the Chief of Staff of the U.S. Army in 1995, served as
President of Coleman Federal from 1995 to 1998 and currently
is President of the Association of the U.S. Army. General
Sullivan is a director of Newel Rubbermaid Corporation.
John F. Woodhouse.................... Director of Shell since 1992. Mr. Woodhouse was appointed
Senior Chairman of SYSCO Corporation in 1999 and was the
Chairman from 1995 to 1999. Mr. Woodhouse joined SYSCO in
1969 as chief financial officer and a founding director, and
was CEO of the company from 1985 to 1995. Mr. Woodhouse
serves on the board of directors of SYSCO Corporation,
Harvard Business School Associates, Mount Holyoke College
and from 1993 to 1999 was a director of Winrock
International Institute for Agricultural Development.
Susan M. Borches..................... Vice President (Corporate Affairs) of Shell since 1998.
Prior to joining Shell, Ms. Borches served as director,
corporate communications, at the U.S. headquarters of
Zurich-based ABB Group. Prior to that, she was director of
public affairs at the U.S. Department of Commerce under
Secretary C. William Verity. Ms. Borches serves as
vice-chair of the United Way of the Texas Gulf Coast's
annual fundraising campaign. She also serves on the board of
the Houston Museum of Fine Arts and is a member of the
Arthur W. Page Society and the Public Affairs Council.
Nick J. Caruso, Jr. ................. Vice President-Finance and Chief Financial Officer of Shell
since 2000. He was named Chief Financial Officer in 1999 and
appointed Vice President-Finance in 2000. Mr. Caruso joined
Shell in 1969. In 1995 he assumed the position of Controller
and in 1997 accepted additional responsibilities as General
Auditor resulting in the position of Controller and General
Auditor.
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PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---- --------------------------------------------------
Patrick M. Dreckman.................. Vice President and General Tax Counsel of Shell since 2000.
Mr. Dreckman joined Shell in 1980. In 1995, he served as
General Tax Counsel-Oil Products, and in 1998 was named Tax
Director of the Alliance among Shell, Texaco and Saudi
Aramco.
Catherine A. Lamboley................ Vice President, General Counsel and Corporate Secretary of
Shell since 2000. Ms. Lamboley joined Shell in 1979. In 1995
she was named Associate General Counsel, Natural
Resources/Environmental, and in 1996 was named Vice
President-Commercial Products for Shell Oil Products
Company. In 1998 she was named Vice President Commercial
Marketing & Services of Equilon LLC, the newly formed Shell/
Texaco venture. In 1999 she was named General Manager and
Associate General Counsel-Oil Products and Services. Ms.
Lamboley serves on the boards of the Hospice at the Texas
Medical Center, the Houston Area Women's Center and the
American Leadership Forum Houston/ Gulf Coast Chapter. She
is chair of the United Way of the Texas Gulf Coast Women's
Initiative Committee.
Stephen E. Ward...................... Vice President (Government Affairs) of Shell since 1991.
Prior to his appointment, he was vice-president of the
Mid-Continent Oil and Gas Association for seven years. Mr.
Ward served on the personal staff of Senator Lloyd Bentsen
from 1977 until 1981. He was Senator's Bentsen's designee on
the Senate Select Committee on Intelligence from 1981 to
1984.
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The name, present
principal occupation or employment and five-year employment history of each of
the directors and executive officers of the Purchaser are set forth below. All
such directors and executive officers listed below are citizens of the United
States, except Mr. van de Vijver, who is a Dutch citizen, and Mr. Berget, who is
a Norwegian citizen. The business address of each is SRM Acquisition Company in
care of Shell Oil Company, One Shell Plaza, 910 Louisiana, Houston, Texas 77002,
(713) 241-6161.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---- --------------------------------------------------
Walter van de Vijver................. Director, Chairman, President and CEO. Mr. van de Vijver
joined Shell in 1979, and was appointed General Manager
Brent Business Unit in Shell UK Exploration in 1993. In
1997, he became Chief Executive of Shell International Gas
and Shell Coal International in London, a position he held
until 1998 when he was named to his present position as
President and Chief Executive Officer of Shell Exploration &
Production Company and Chairman of the Board of Coral
Energy. Mr. van de Vijver is a member of the board of
directors of InterGen, a Shell/Bechtel owned international
independent power producer, as well as a board member of the
American Petroleum Institute.
Jeri R. Eagan........................ Director, Vice President-Finance and Chief Financial
Officer. Ms. Eagan joined Shell in 1976 and currently serves
as Vice President-Finance and Commercial Operations for
Shell Exploration & Production Company. Prior to her present
position, she served on various assignments for Shell
International Company while based in London.
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PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---- --------------------------------------------------
David T. Lawrence.................... Director and Vice President-Exploration and Development. Mr.
Lawrence joined Shell in 1984. In 1997 he was named
Exploration Manager for the Shelf, Exploration and
Development Manager for the Shelf in 1998 and Exploration
and Development Manager for the Shelf and Deepwater in 1999.
In December 1999, he assumed his current position of Vice
President, Exploration and Development, for Shell
Exploration & Production Company. Mr. Lawrence is a member
of the New Orleans Business Council and has served as an
AAPG Distinguished Lecturer.
Jorn A. Berget....................... Director and Vice President-Production and Surveillance. In
2000, Mr. Berget was named Vice President and General
Manager for Production for Shell Exploration & Production
Company. He served as General Manager of the Northern
Business Unit for Shell Expro in the U.K. from 1995 to 2000.
He serves as a member of the Boards of directors of
Enterprise Products GP, LLC and Enventure Global Tech-
nologies.
Marvin E. Odum....................... Director and Vice President-Development and Technology. Mr.
Odum joined Shell in 1982 and from 1995 to 1997 was Manager,
Engineering and Operation for Onshore. From 1997 to 1999 he
served as Vice President, Operations for Altura Energy Ltd.,
a Shell/Amoco joint venture and from 1999 to 2000 he was
Manager, Business Development and Strategy Planning at Shell
Exploration & Production Company. In 2000, he assumed his
present position as Vice President, Business Development and
Technology, of Shell Exploration & Production Company.
Kenneth T. Jarvi..................... Vice President-Legal. Mr. Jarvi was Senior Vice President
and General Counsel of MidCon Corporation from 1995 to 1998.
From 1998 to 2000, Mr. Jarvi served as Vice President and
General Counsel at McMurry Oil Company and, upon joining
Shell in 2000, was named Associate General
Counsel-Exploration and Production. Mr. Jarvi served on the
Board of Directors at MidCon Corporation from 1996 to 1998.
W.T. Mooney.......................... Vice President-Tax. Mr. Mooney served as Regional Counsel
for Shell from 1994 until 2000, when he assumed his current
position as Associate General Tax Counsel at Shell.
3. DIRECTORS AND OFFICERS OF SHELL PETROLEUM INC., ROYAL DUTCH PETROLEUM
COMPANY AND THE "SHELL" TRANSPORT AND TRADING COMPANY, P.L.C. Shell and the
Purchaser are both wholly owned subsidiaries of Shell Petroleum Inc., a Delaware
corporation, whose shares are directly or indirectly owned 60 percent by Royal
Dutch Petroleum Company, The Hague, The Netherlands and 40 percent by The
"Shell" Transport and Trading Company, p.l.c., London, England. Royal Dutch
Petroleum Company and The "Shell" Transport and Trading Company, p.l.c. are
holding companies which together directly or indirectly own securities of
companies of the Royal Dutch/Shell Group of Companies, the members of which are
severally engaged throughout the greater part of the world in all of the
principal aspects of the oil and natural gas industry. They also have
substantial interests in chemicals and additional interests in power generation,
renewable resources (chiefly in forestry and solar energy), coal and other
businesses.
The name, present principal occupation or employment and five-year
employment history of each of the directors and officers of each of Shell
Petroleum Inc., Royal Dutch Petroleum Company and The "Shell" Transport and
Trading Company, p.l.c. are set forth below. Unless otherwise indicated, the
principal business address of each director or officer of Shell Petroleum Inc.
is P.O. Box 8985, Wilmington, Delaware 19899.
S-4
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Unless otherwise indicated, the principal business address of each director or
executive officer of Royal Dutch Petroleum Company is 30, Carel van Bylandtlaan,
2596 HR The Hague, The Netherlands, and the principal business address of each
director or executive officer of The "Shell" Transport and Trading Company,
p.l.c. is Shell Centre, London SE1 7NA, England.
SHELL PETROLEUM INC.
All of the directors and executive officers listed below are citizens of the
United States, except Sir Mark Moody-Stuart, who is a British citizen.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---- --------------------------------------------------
Sir Mark Moody-Stuart................ Chairman and President since 1997, and Director since 1991,
of Shell Petroleum Inc. Director of Shell since 1997. Sir
Mark Moody-Stuart has served as Managing Director of Shell
International Limited since 1995. He has been a Managing
Director since 1991, and Chairman since 1997, of The "Shell"
Transport and Trading Company, p.l.c. and The Shell
Petroleum Company Limited. He has served as Group Managing
Director of the Royal Dutch/Shell Group Companies since
1991. He currently serves as a director of Liverpool School
of Tropical Medicine, Shell Canada Limited, Shell
International B.V., Shell Investments Limited, Shell
Integrated Gas Ventures p.l.c., and Shell Petroleum N.V.
Within the past five years, he has served on the boards of
The South Bank Foundation Limited, Shell International
Research Maatschappij B.V., Shell Upstream Investments
p.l.c., and Montell N.V.
Steven L. Miller..................... Director of Shell Petroleum, Inc. since 1996. Chairman,
President and CEO of Shell since 1999 and a Shell director
since 1998. Mr. Miller joined Shell in 1967 and in 1996
became Group Managing Director of Royal Dutch Petroleum
Company and a Managing Director of the Royal Dutch/Shell
Group of Companies. Mr. Miller is a director of Shell
Petroleum Inc., Applied Materials, Inc. and Equilon Enter-
prises LLC. He is also a director for the American Petroleum
Institute, the National Urban League, and the Points of
Light Foundation. He is a member of the National Petroleum
Council and the Business Roundtable. He serves on Rice
University's board of trustees and the board of advisors for
Rice's James A. Baker III Institute for Public Policy. Mr.
Miller serves on the board of directors of the Greater
Houston Partnership and he is a trustee for the United Way
of the Texas Gulf Coast, currently serving as chairman of
its annual fundraising campaign.
Nick J. Caruso, Jr. ................. Director, Treasurer and Controller of Shell Petroleum Inc.
Vice President-Finance and Chief Financial Officer of Shell.
He was named Chief Financial Officer in 1999 and appointed
Vice President Finance in 2000. Mr. Caruso joined Shell in
1969. In 1995 he assumed the position of Controller and in
1997 accepted additional responsibilities as General Auditor
resulting in the position of Controller and General Auditor.
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PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---- --------------------------------------------------
Catherine A. Lamboley................ Director and Corporate Secretary of Shell Petroleum Inc.
Vice President, General Counsel and Corporate Secretary of
Shell since 2000. Ms. Lamboley joined Shell in 1979. In 1995
she was named Associate General Counsel, Natural
Resources/Environmental, and in 1996 was named Vice
President Commercial Products for Shell Oil Products
Company. In 1998 she was named Vice President Commercial
Marketing & Services of Equilon LLC, the newly formed
Shell/Texaco venture. In 1999 she was named General Manager
and Associate General Counsel-Oil Products and Services. Ms.
Lamboley serves on the boards of the Hospice at the Texas
Medical Center, the Houston Area Women's Center and the
American Leadership Forum Houston/ Gulf Coast Chapter. She
is chair of the United Way of the Texas Gulf Coast Women's
Initiative Committee.
Patrick M. Dreckman.................. Vice President-Tax of Shell Petroleum Inc. Vice President
and General Tax Counsel of Shell since 2000. Mr. Dreckman
joined Shell in 1980. In 1995, he served as General Tax
Counsel-Oil Products, and in 1998 was named Tax Director of
the Alliance among Shell, Texaco and Saudi Aramco.
ROYAL DUTCH PETROLEUM COMPANY
All of the directors and executive officers listed below are Dutch citizens
except for Professor Milberg, who is a German citizen.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---- --------------------------------------------------
J. van der Veer...................... Managing Director since 1997 and President since July 2000.
From 1995 to 1997, he was President and Chief Executive
Officer of Shell Chemical Company in the USA. Mr. van der
Veer has been a Group Managing Director since 1997. He is a
member of the Supervisory Board of De Nederlandsche Bank.
H. J. M. Roels....................... Managing Director of Royal Dutch Petroleum Company and a
Group Managing Director since 1999. Mr. Roels joined Royal
Dutch Petroleum Company in 1971. From 1994 to 1996, he was
Area Coordinator for a number of Latin American countries.
From 1996 to 1998, he was Regional Business Director Middle
East and Africa, Exploration and Production. In 1998 he
became General Manager of the Nederlandse Aardolie
Maatschappij B.V. and a Managing Director of Shell Neder-
land B.V.
L. C. van Wachem..................... Chairman of the Supervisory Board since 1992. Mr. van Wachem
was a Managing Director of Royal Dutch Petroleum Company
from 1977 to 1992; President from 1982 to 1992 and a Group
Managing Director from 1977 to 1992. He is Chairman of the
Supervisory Board of Royal Philips Electronics,
Vice-Chairman of the Board of Directors of Zurich Financial
Services and a member of the Supervisory Board of Akzo
Nobel, BMW and Bayer and a member of the Board of Directors
of IBM and Atco (Canada)
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PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---- --------------------------------------------------
M. A. van den Bergh.................. Member of the Supervisory Board since July 2000. Mr. van den
Bergh was a Managing Director of Royal Dutch Petroleum
Company from 1992 to 2000; President from 1998 to 2000 and a
Group Managing Director from 1992 to 2000. He is Chairman
designate of the Board of Directors of Lloyds TSB and a
member of the Board of Directors of British Telecom.
A. G. Jacobs......................... Member of the Supervisory Board since 1998. Mr. Jacobs was
formerly Chairman of the Executive Board of ING Group. He is
Chairman of the Supervisory Board of Joh. Enschede and
Vice-Chairman of the Supervisory Board of Buhrmann and VNU
and a member of the Supervisory Board of Euronext, IHC
Caland, ING Group, Nederlandse Spoorwegen and Strukton
Groep.
Jonkheer A. A. Loudon................ Member of the Supervisory Board since 1997. Jonkheer A. A.
Loudon is formerly Chairman of the Board of Management of
Akzo Nobel. He is Chairman of the Supervisory Board of Akzo
Nobel, ABN AMRO Bank and HBG Hollandsche Beton Groep, a
member of the Board of Directors of Corus Group and a member
of the International Advisory Board of Allianz. He is also a
former member of the First Chamber of the Dutch Parliament.
Professor J. Milberg................. Member of the Supervisory Board of Royal Dutch Petroleum
since July 2000. Professor Milberg is presently, and has
been during the past five years, a member of the Board of
Management of BMW. Since February 1999, he has been Chairman
of the Board of Management of BMW.
H. de Ruiter......................... Member of the Supervisory Board since 1994. Mr. de Ruiter
was a Managing Director of Royal Dutch Petroleum Company
from 1983 to 1994. He is Chairman of the Supervisory Board
of Royal Ahold, Beers and Wolters Kluwer, Vice-Chairman of
the Board of Directors of Corus Group, Vice-Chairman of the
Supervisory Board of Aegon and a member of the Supervisory
Board of Heineken and Royal Vopak.
J. D. Timmer......................... Member of the Supervisory Board since 1996. Mr. Timmer was
formerly President and Chairman of the Board of Management
of Royal Philips Electronics. He is Chairman of the
Supervisory Board of Nederlandse Spoorwegen and PSV, a
member of the Supervisory Board of ING Group and NPM Capital
and a member of the Advisory Board of KPMG.
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THE "SHELL" TRANSPORT AND TRADING COMPANY, P.L.C.
All of the directors and executive officers listed below are British
citizens except Mr. Alireza who is a citizen of Saudi Arabia, Professor O'Neill
who is a citizen of Australia, and Mr. Giusti who is a citizen of Venezuela.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---- --------------------------------------------------
Sir Mark Moody-Stuart................ Managing Director since 1991, and Chairman since 1997, of
The "Shell" Transport and Trading Company, p.l.c. and The
Shell Petroleum Company Limited. Sir Mark Moody-Stuart has
served as Director of Shell since 1997 and Managing Director
of Shell International Limited since 1995. He has served as
Group Managing Director of the Royal Dutch/Shell Group
Companies since 1991. He has also served as Chairman and
President since 1997, and Director since 1991, of Shell
Petroleum Inc. He currently serves as a director of
Liverpool School of Tropical Medicine, Shell Canada Limited,
Shell International B.V., Shell Investments Limited, Shell
Integrated Gas Ventures p.l.c., and Shell Petroleum N.V.
Within the past five years, he has served on the boards of
The South Bank Foundation Limited, Shell International
Research Maatschappij B.V., Shell Upstream Investments
p.l.c., and Montell N.V.
P. D. Skinner........................ Managing Director since January 1, 2000. Mr. Skinner is
Chief Executive, Oil Products. He was Director, Strategy and
Business Services, Oil Products from 1996 to 1998, and was
President, Shell Europe Oil Products from 1998 to 1999. He
is currently a member of the Board of INSEAD, the
European/Asian business school.
P. B. Watts.......................... Managing Director since 1997. Chief Executive, Exploration
and Production. He was named Coordinator, Europe in 1994 and
was appointed Director Planning, Environment and External
Affairs, Shell International in 1996. He is currently a
member of the International Chamber of Commerce's (ICC)
Executive Board and Chairman of ICC UK's governing body. He
is also a member of the Executive Committee of the World
Business Council for Sustainable Development.
Teymour A. Alireza................... Director since 1997. Mr. Alireza is President and Deputy
Chairman, The Alireza Group, Chairman of National Pipe
Company Ltd, Saudi Arabia, Director, Arabian Gulf
Investments (Far East) Ltd, Hong Kong and a member of the
International Board of Trustees of the World Wide Fund for
Nature.
Dr. Eileen Buttle.................... Director since 1998. Dr. Buttle retired in 1994 from a
career of public scientific appointments. She is the UK
member of the European Environment Agency's Scientific
Committee and Chairman of the UK Arctic Consultative Forum.
Dr. Buttle is a member of a number of Government and
Research Council scrutiny committees of environmental
aspects of national and European research and is Chairman of
a review of long-term environmental monitoring for the
Natural Environment Research Council.
Sir Peter Holmes..................... Director since 1982. Sir Peter Holmes was Chairman from 1985
to 1993 and a Group Managing Director from 1982 to 1993.
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PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---- --------------------------------------------------
Sir John Jennings.................... Director since 1987. Sir John Jennings was Chairman from
1993 to 1997 and a Group Managing Director from 1987 to
1997. He is a Director of Det Norske Veritas, The MITIE
Group and Robert Fleming Holdings and a member of Board of
Counsellors of Bechtel Corporation and of International
Advisory Board of Toyota Corporation.
Professor Robert J. O'Neill.......... Director since 1992. Since 1987 Professor O'Neill has been
the Chichele Professor of the History of War, All Souls
College, Oxford. He is Chairman of the International
Institute for Strategic Studies, Co-Director of the All
Souls Foreign Policy Studies Programme at Oxford, a Director
of Capital Income Builder Inc. and the Capital World Growth
and Income Fund, and an Advisory Board Member of the
Investment Company of America.
Lord Oxburgh......................... Director since January 1996. Lord Oxburgh was Chief
Scientific Adviser, Ministry of Defense from 1987 to 1993
and has been Rector, Imperial College of Science, Technology
and Medicine, since 1993.
Sir William Purves................... Director since 1993. Sir William Purves retired from the
Chairmanship of HSBC Holdings plc in May 1998 after 44 years
service. He is Chairman of Hakluyt & Company Ltd, Deputy
Chairman of Alstom s.a., Trustee of Reuters Founders Share
Company Ltd, Director of Scottish Medicine plc, Trident
Safeguards Ltd and World Shipping and Investment Co Ltd. He
is also a member of Hong Kong Chief Executive's
International Advisory Council and a member of Textron Inc
International Advisory Council.
Luis E. Giusti....................... Director since 2001. From 1999 to the present, Mr. Giusti
has been the Senior Advisor for the Center for Strategic and
International Studies. From 1994 to 1999, he was the
Chairman and CEO of Petroleos de Venezuela, S.A.
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SCHEDULE II
SHELL OIL COMPANY'S INTERESTS IN THE COMPANY'S SHARES;
RECENT TRANSACTIONS IN THE COMPANY'S SHARES
The Purchaser, Shell and SWEPI LP, an indirect wholly owned subsidiary of
Shell ("SWEPI"), together beneficially own 107,100 shares of the Company, or
less than 1 percent of the outstanding shares. Except as disclosed below, Shell
and its affiliates have not engaged in any transactions in the Company's shares
during the 60 days prior to the date of this offer to purchase.
On March 1, 2001, SWEPI purchased 30,000 shares of the Company at an average
price per share of $43.78. Such shares were purchased in the open market through
purchases executed on the NYSE. The prices SWEPI paid for the shares ranged from
$43.55 to $44.25 per share.
On March 2, 2001, SWEPI purchased 37,100 shares of the Company at an average
price per share of $44.26. Such shares were purchased in the open market through
purchases executed on the NYSE. The prices SWEPI paid for the shares ranged from
$43.70 to $44.70 per share.
On March 6, 2001, SWEPI purchased 40,000 shares of the Company at a price
per share of $45.65. Such shares were purchased in the open market through a
single block purchase executed on the NYSE.
On March 9, 2001, SWEPI transferred 100 shares of the Company to each of the
Purchaser and Shell.
S-10
49
Facsimile copies of the letter of transmittal, properly completed and duly
executed, will be accepted. The letter of transmittal, certificates for shares
and/or Rights and any other required documents should be sent or delivered by
each stockholder of the Company or his broker, dealer, commercial bank, trust
company or other nominee to the depositary as follows:
The Depositary for the offer is:
WILMINGTON TRUST COMPANY
By Mail: By Facsimile Transmission: By Hand or Overnight Delivery:
Corporate Trust (for eligible institutions only) Wilmington Trust Company
Reorganization Services (302) 651-1079 1105 North Market Street, 1st
Wilmington Trust Company For Confirmation Telephone: Floor
P.O. Box 8861 (302) 651-8869 Wilmington, Delaware 19801
Wilmington, Delaware 19899-8861 Attn: Corporate Trust
Reorganization Services
Questions and requests for assistance or for additional copies of this offer
to purchase, the letter of transmittal and the notice of guaranteed delivery may
be directed to the information agent or to the dealer manager at their
respective telephone numbers and location listed below. You may also contact
your broker, dealer, bank, trust company or other nominee for assistance
concerning the offer.
The Information Agent for the offer is:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
Call Collect: (212) 754-8000
Banks and Brokerage Firms, Please Call: (800) 654-2468
Stockholders Please Call: (800) 607-0088
E-mail: barrett.info@morrowco.com
The Dealer Manager for the offer is:
LEHMAN BROTHERS
Three World Financial Center
200 Vesey Street
New York, New York 10285
Call Collect: (212) 526-4867 or (713) 236-3965
E-mail: barrett.info@lehman.com